AGREEMENT AND PLAN OF MERGER
dated as of
June 12, 2000
among
BRUNSWICK TECHNOLOGIES, INC.,
CERTAINTEED CORPORATION
and
VA ACQUISITION CORPORATION
TABLE OF CONTENTS
Page
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ARTICLE 1 Definitions.................................................................. 1
Section 1.1. Definitions.................................................................. 1
ARTICLE 2 The Offer.................................................................... 4
Section 2.1. The Offer.................................................................... 4
Section 2.2. Company Action............................................................... 5
Section 2.3. Directors.................................................................... 6
ARTICLE 3 The Merger................................................................... 7
Section 3.1. The Merger................................................................... 7
Section 3.2. Conversion of Shares......................................................... 7
Section 3.3. Surrender and Payment........................................................ 8
Section 3.4. Dissenting Shares............................................................ 9
Section 3.5. Stock Options................................................................ 9
Section 3.6. Adjustments.................................................................. 9
Section 3.7. Withholding Rights........................................................... 10
Section 3.8. Lost Certificates............................................................ 10
ARTICLE 4 The Surviving Corporation.................................................... 10
Section 4.1. Articles of Incorporation.................................................... 10
Section 4.2. Bylaws....................................................................... 10
Section 4.3. Directors and Officers....................................................... 10
ARTICLE 5 Representations and Warranties of the Company................................ 10
Section 5.1. Corporate Existence and Power................................................ 10
Section 5.2. Corporate Authorization...................................................... 11
Section 5.3. Governmental Authorization................................................... 11
Section 5.4. Non-Contravention............................................................ 11
Section 5.5. Capitalization............................................................... 12
Section 5.6. Subsidiaries................................................................. 12
Section 5.7. SEC Filings.................................................................. 13
Section 5.8. Financial Statements......................................................... 13
Section 5.9. Disclosure Documents......................................................... 14
Section 5.10. Absence of Certain Changes................................................... 14
Section 5.11. No Undisclosed Material Liabilities.......................................... 16
Section 5.12. Compliance with Laws and Court Orders........................................ 16
Section 5.13. Litigation................................................................... 17
Section 5.14. Material Contracts........................................................... 17
Section 5.15. Finders' Fees................................................................ 18
Section 5.16. Employee Benefit Plans....................................................... 18
Section 5.17. Environmental Matters........................................................ 19
Section 5.18. Anti-Takeover Statutes and Rights Agreement.................................. 20
Section 5.19. Title to Real Properties..................................................... 20
Section 5.20. Insurance Coverage........................................................... 20
Section 5.21. Labor Matters................................................................ 21
Section 5.22. Intellectual Property........................................................ 21
ARTICLE 6 Representations and Warranties of Parent..................................... 21
Section 6.1. Corporate Existence and Power................................................ 21
Section 6.2. Corporate Authorization...................................................... 21
Section 6.3. Governmental Authorization................................................... 21
Section 6.4. Non-Contravention............................................................ 22
Section 6.5. Disclosure Documents......................................................... 22
Section 6.6. Finders' Fees................................................................ 23
Section 6.7. Financing.................................................................... 23
Section 6.8. Present Intention............................................................ 23
ARTICLE 7 Covenants of the Company..................................................... 23
Section 7.1. Conduct of the Company....................................................... 23
Section 7.2. Shareholder Meeting; Proxy Material.......................................... 26
Section 7.3. Access to Information........................................................ 26
Section 7.4. No Solicitation; Other Offers................................................ 26
Section 7.5. Notices of Certain Events.................................................... 28
Section 7.6. [Intentionally Omitted.]..................................................... 28
Section 7.7. Interim Financial Statements................................................. 28
Section 7.8. Non-Compete Agreements....................................................... 28
ARTICLE 8 Covenants of Parent.......................................................... 29
Section 8.1. Obligations of Merger Subsidiary............................................. 29
Section 8.2. Voting of Shares............................................................. 29
Section 8.3. Director and Officer Liability............................................... 29
Section 8.4. Employees; Benefits.......................................................... 30
ARTICLE 9 Covenants of Parent and the Company.......................................... 30
Section 9.1. Reasonable Best Efforts...................................................... 30
Section 9.2. Certain Filings.............................................................. 31
Section 9.3. Press Releases............................................................... 31
Section 9.4. Further Assurances........................................................... 31
Section 9.5. Merger Without Meeting of Shareholders....................................... 31
Section 9.6. Adjournment of Special Meeting of Shareholders............................... 31
ARTICLE 10 Conditions to the Merger..................................................... 31
Section 10.1. Conditions to Obligations of Each Party...................................... 31
Section 10.2. Conditions to the Obligations of Parent and Merger Subsidiary................ 32
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ARTICLE 11 Termination................................................................. 33
Section 11.1. Termination................................................................. 33
Section 11.2. Effect of Termination....................................................... 34
ARTICLE 12 Miscellaneous............................................................... 35
Section 12.1. Notices..................................................................... 35
Section 12.2. Survival of Representations and Warranties.................................. 36
Section 12.3. Amendments; No Waivers...................................................... 36
Section 12.4. Expenses.................................................................... 36
Section 12.5. Successors and Assigns...................................................... 37
Section 12.6. Governing Law............................................................... 38
Section 12.7. Waiver of Jury Trial........................................................ 38
Section 12.8. Counterparts; Effectiveness; Benefit........................................ 38
Section 12.9. Entire Agreement............................................................ 38
Section 12.10. Captions.................................................................... 38
Section 12.11. Severability................................................................ 38
Section 12.12. Specific Performance........................................................ 38
Annex I - Conditions to the Offer
Exhibits
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Exhibit A - Form of Shareholder Agreement
Exhibit B - Form of Non-Compete Agreement
Schedules
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Schedule 5.3
Schedule 5.4
Schedule 5.5(a)
Schedule 5.5(b)
Schedule 5.6
Schedule 5.10(l)
Schedule 5.13
Schedule 5.14
Schedule 5.14(a)
Schedule 5.16
Schedule 5.17
Schedule 5.18
Schedule 5.22
Schedule 7.1(h)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 12, 2000 among BRUNSWICK
TECHNOLOGIES, INC., a Maine corporation (the "Company"), CERTAINTEED
CORPORATION, a Delaware corporation ("Parent"), and VA Acquisition Corporation,
a Maine corporation and an indirect, wholly owned subsidiary of Parent ("Merger
Subsidiary").
Background
The respective Boards of Directors of Parent, Merger Subsidiary and
the Company have each determined that it is advisable, on the terms and subject
to the conditions of this Agreement: (i) for Merger Subsidiary to increase its
cash tender offer to purchase all of the outstanding shares of common stock, par
value of $0.0001 per share, including the associated rights to purchase
preferred stock, of the Company to $8.50 net per share, (ii) for the Board of
Directors of the Company to recommend such increased offer to the shareholders
of the Company and (iii) following the tender offer, to merge Merger Subsidiary
and the Company.
Terms
In consideration of the premises and mutual covenants herein contained
and intending to be legally bound hereby the parties hereby agree as follows:
ARTICLE 1 Definitions
Section 1.1. Definitions. The following terms, as used herein, have
the following meanings:
"Acquisition Proposal" means an inquiry, offer or proposal regarding
any of the following involving the Company or any of its Subsidiaries: (i) any
merger, consolidation, share exchange, recapitalization, business combination or
other similar transaction, (ii) any sale, lease, exchange, transfer or other
disposition of all or substantially all the assets of the Company and its
Subsidiaries, taken as a whole, in a single transaction or series of related
transactions or (iii) any tender offer or exchange offer for 25 percent or more
of the outstanding Shares or the filing of a registration statement under the
1933 Act in connection therewith.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"Closing Date" means the date on which the Effective Time occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means common stock of the Company, par value $0.0001
per share.
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"Company Balance Sheet" means the consolidated balance sheet of the
Company as of March 31, 2000 and the footnotes thereto set forth in the Company
10-Q.
"Company Balance Sheet Date" means March 31, 2000.
"Company Data Room" means the data room set up by the Company in May
2000 and made available to Parent.
"Company 10-Q" means the Company's quarterly report on Form 10-Q for
the period ended March 31, 2000.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
"Initial Offer" means the cash tender offer by Merger Subsidiary
pursuant to the Offer to Purchase, dated April 20, 2000, as amended, to purchase
all of the outstanding Shares at $8.00 per share, net to the seller in cash.
"knowledge" of any Person that is not an individual means the
knowledge of such Person's officers after reasonable inquiry.
"Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Maine Law" or "MBCA" means the Maine Business Corporation Act.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect (other than an effect that impacts the Person's industry
generally) on the financial condition, business or results of operations of such
Person and its Subsidiaries, taken as a whole.
"1933 Act" means the Securities Act of 1933.
"1934 Act" means the Securities Exchange Act of 1934.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Right" means, with respect to each outstanding share of Common Stock,
the right to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $10.00 per share, pursuant to the
Rights Agreement.
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"Rights Agreement" means the Rights Agreement, dated as of April 17,
2000 between the Company and State Street Bank and Trust Company.
"Saint-Gobain" means Compagnie de Saint-Gobain, a French corporation.
"SEC" means the Securities and Exchange Commission.
"Shareholder Agreements" means the shareholder agreements between
Merger Subsidiary and each of the directors and executive officers of the
Company and in substantially the form attached hereto as Exhibit A.
---------
"Shares" means collectively, the shares of Common Stock and the
Rights.
"Stock Option" means any stock option, stock appreciation right, or
phantom stock unit.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Transactions" means the transactions contemplated by this Agreement,
including the Offer and the Merger.
(a) Any reference in this Agreement to a statute shall be to
such statute, as amended from time to time, and to the rules and regulations
promulgated thereunder.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
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CERCLA......................................................... 5.17
Certificates................................................... 3.3
Company Disclosure Documents................................... 5.9
Company Material Contract...................................... 5.14
Company Merger Proxy Statement................................. 5.9
Company SEC Documents.......................................... 5.7
Company Securities............................................. 5.5
Company Shareholder Meeting.................................... 7.2
Company Subsidiary Securities.................................. 5.6
Confidentiality Agreement...................................... 7.3
Effective Time................................................. 3.1
Employee Plans................................................. 5.16
Environmental Laws............................................. 5.17
ERISA.......................................................... 5.16
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Term Section
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ERISA Affiliate................................................ 5.16
Exchange Agent................................................. 3.3
GAAP........................................................... 5.8
Hazardous Materials............................................ 5.17
HMTA........................................................... 5.17
Indemnified Person............................................. 8.3
Intellectual Property Rights................................... 5.22
Maine Merger Agreement......................................... 3.1
Merger......................................................... 3.1
Merger Consideration........................................... 3.2
Minimum Condition.............................................. 2.1
Multiemployer Plan............................................. 5.16
Non-Compete Agreements......................................... 7.8
Offer.......................................................... 2.1
Offer Documents................................................ 2.1
Options........................................................ 5.5
RCRA........................................................... 5.17
Schedule TO.................................................... 2.1
Schedule 14D-9................................................. 2.2
Superior Proposal.............................................. 7.4
Surviving Corporation.......................................... 3.1
ARTICLE 2 The Offer
Section 2.1. The Offer.
(a) Provided that nothing shall have occurred that would result
in a failure to satisfy any of the conditions set forth in Annex I hereto, as
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promptly as practicable after the date hereof, Merger Subsidiary shall, and
Parent shall cause Merger Subsidiary to, amend the Initial Offer to offer to
purchase any and all of the outstanding Shares at a price of $8.50 per Share,
net to the seller in cash (the "Offer"). The Offer shall be subject to the
condition that there shall be validly tendered in accordance with the terms of
the Offer, prior to the expiration date of the Offer and not withdrawn, a number
of Shares that, together with the Shares then beneficially owned by Parent,
Merger Subsidiary and Saint-Gobain, represents at least a majority of the total
number of outstanding Shares on a fully diluted basis (including the exercise of
all outstanding options) (the "Minimum Condition") and to the other conditions
set forth in Annex I hereto. Merger Subsidiary expressly reserves the right to
-------
waive any of the conditions to the Offer and to make any change in the terms or
conditions of the Offer, provided that, no change or waiver may be made that,
without the prior written consent of the Company, waives the Minimum Condition,
changes the form of consideration to be paid, decreases the price per Share or
the number of Shares sought in the Offer or imposes conditions to the Offer in
addition to those set forth in
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Annex I. Notwithstanding the foregoing, without the consent of the Company,
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Merger Subsidiary shall have the right to extend the Offer from time to time if,
at the scheduled or extended expiration date of the Offer, any of the conditions
to the Offer shall not have been satisfied or waived, until such conditions are
satisfied or waived; provided that Merger Subsidiary may extend the Offer under
this clause for any period required by any rule, regulation, interpretation or
position of the SEC or the staff thereof applicable to the Offer or any period
required by applicable law. If all of the conditions to the Offer are not
satisfied or waived on any scheduled expiration date of the Offer, Merger
Subsidiary shall extend the Offer from time to time until such conditions are
satisfied or waived (but not beyond July 31, 2000); provided that (w) such
conditions are reasonably capable of being satisfied, (x) the Company exercises
its reasonable best efforts to cause such conditions to be satisfied, (y) an
Acquisition Proposal shall not have been publicly announced and not withdrawn as
of such scheduled expiration date and (z) the Company is in compliance with all
of its covenants in this Agreement. Subject to the foregoing and to the terms
and conditions of the Offer, Merger Subsidiary shall, and Parent shall cause it
to, accept for payment and pay for, as promptly as practicable after the
expiration of the Offer, all Shares properly tendered and not withdrawn pursuant
to the Offer that Merger Subsidiary is obligated to purchase. Parent shall
provide or cause to be provided to Merger Subsidiary on a timely basis the funds
necessary to pay for any Shares that Merger Subsidiary becomes obligated to
accept for payment, and pay for, pursuant to the Offer.
(b) As soon as practicable after the date hereof, Parent and
Merger Subsidiary shall amend their Tender Offer Statement on Schedule TO (the
"Schedule TO") with respect to the Offer, which will contain a supplement to the
offer to purchase and a revised letter of transmittal (the Schedule TO and all
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). Parent and
the Company each 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. Parent and Merger Subsidiary
agree to take all steps necessary to cause the Schedule TO as so corrected to be
filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
an opportunity to review and comment on the amended Schedule TO prior to its
being filed.
Section 2.2. Company Action.
(a) The Company hereby consents to the Offer and represents that
its Board of Directors, at a meeting duly called and held has (i) unanimously
determined that this Agreement and the Transactions, including the Offer and the
Merger, are fair to and in the best interests of the Company's shareholders,
(ii) unanimously approved and adopted this Agreement and the Transactions,
including the Offer and the Merger, in accordance with the requirements of the
Maine Law and (iii) unanimously resolved to recommend acceptance of the Offer
and approval and adoption of this Agreement and the Merger by its shareholders,
provided that, subject to Section 7.4(c), the Board of Directors of the Company
may withdraw, modify or amend such recommendation only to the extent the
Company's Board of Directors shall have
5
determined in good faith, on the basis of advice of its outside legal counsel,
that consistent with its fiduciary duties under applicable law, it must take
such action. The Company further represents that McDonald Investments, Inc. has
delivered to the Company's Board of Directors its written opinion that the
consideration to be paid in the Offer and the Merger is fair to the holders of
Shares from a financial point of view. The Company has been advised that all of
its directors intend to tender their Shares pursuant to the Offer and, if
applicable, to vote in favor of the Merger. The Company will cause its transfer
agent to promptly furnish Parent, upon request, with a list of the Company's
shareholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of Shares and lists of
securities positions of Shares held in stock depositories and to provide to
Parent such additional information (including, without limitation, updated lists
of shareholders, mailing labels and lists of securities positions) and such
other assistance as Parent may reasonably request in connection with the Offer.
(b) As soon as practicable on or after the date the amended
terms of the Offer are announced, the Company shall amend and disseminate to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws, a supplement to its Solicitation/Recommendation
Statement on Schedule 14D-9 originally filed on May 3, 2000 (together with any
amendments or supplements thereto, the "Schedule 14D-9") that shall reflect the
recommendations of the Company's Board of Directors referred to above. The
Company and Parent each agree promptly to correct any information provided by it
for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading in any material respect. The Company agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent and its counsel
shall be given an opportunity to review and comment on the amended Schedule 14D-
9 prior to its being filed with the SEC.
Section 2.3. Directors.
(a) Promptly following the purchase of and payment for a number
of Shares that satisfies the Minimum Condition, Parent shall be entitled to
designate all directors on the Company's Board of Directors and the Company
shall take all action within its power to cause Parent's designees to be elected
or appointed to the Company's Board of Directors, including, without limitation,
increasing the number of directors, and seeking and accepting resignations of
incumbent directors. At such time, the Company will also use its reasonable best
efforts to cause individual directors designated by Parent to constitute all
members of each board of directors of each Subsidiary of the Company.
(b) The Company's obligations to appoint Parent's designees to
the Board of Directors shall be subject to Section 14(f) of the 1934 Act and
Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions,
and shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors, as Section 14(f) and Rule 14f-1 require
in order to fulfill its obligations under this Section. Parent shall supply to
the Company in writing and be solely responsible for any information with
6
respect to itself and its nominees, officers, directors and affiliates required
by Section 14(f) and Rule 14f-1.
ARTICLE 3 The Merger
Section 3.1. The Merger.
(a) At the Effective Time, Merger Subsidiary shall be merged
(the "Merger") with and into the Company in accordance with Maine Law, whereupon
the separate existence of Merger Subsidiary shall cease, and the Company shall
be the surviving corporation (the "Surviving Corporation"); provided that if the
Merger can be effected without a shareholder vote under Section 904 of the MBCA,
then the Company may instead be merged with and into Merger Subsidiary whereupon
the separate existence of the Company shall cease, and the Merger Subsidiary
shall be the Surviving Corporation.
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file an Agreement of Merger among the Company, Parent and
Merger Subsidiary (together with the officers' certificates required by Maine
Law (the "Maine Merger Agreement"), with the Maine Secretary of State and make
all other filings or recordings required by Maine Law in connection with the
Merger. The Merger shall become effective at such time (the "Effective Time") as
the Maine Merger Agreement (or a Plan of Merger therein contained) is duly filed
with the Maine Secretary of State or at such later time as is specified in the
Maine Merger Agreement.
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, powers, privileges and franchises and be subject
to all of the obligations, liabilities, restrictions and disabilities of the
Company and Merger Subsidiary, all as provided under Maine Law.
Section 3.2. Conversion of Shares. At the Effective Time:
(a) except as otherwise provided in Section 3.2(b) or Section
3.4, each Share outstanding immediately prior to the Effective Time shall be
converted into the right to receive $8.50 in cash or any higher price paid for
each Share in the Offer, without interest (the "Merger Consideration");
(b) each Share held by the Company as treasury stock or owned by
Saint-Gobain, Parent or any Subsidiary of Saint-Gobain or Parent immediately
prior to the Effective Time shall be canceled, and no payment shall be made with
respect thereto; and
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the
7
Surviving Corporation. The Surviving Corporation will thereupon become an
indirect, wholly owned subsidiary of Parent.
Section 3.3. Surrender and Payment.
(a) Prior to the Effective Time, Parent shall appoint an agent
reasonably acceptable to the Company (the "Exchange Agent") for the purpose of
exchanging certificates representing Shares (the "Certificates") for the Merger
Consideration. Parent will make available to the Exchange Agent, as and when
needed, the Merger Consideration to be paid in respect of the Shares. Promptly
after the Effective Time, Parent will send, or will cause the Exchange Agent to
send, to each holder of Shares at the Effective Time a letter of transmittal and
instructions (which shall specify that the delivery shall be effected, and risk
of loss and title shall pass, only upon proper delivery of the Certificates to
the Exchange Agent) for use in such exchange.
(b) Each holder of Shares that have been converted into the
right to receive the Merger Consideration will be entitled to receive, upon
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, the Merger Consideration payable for each Share
represented by such Certificate. Until so surrendered, each such Certificate
shall represent after the Effective Time for all purposes only the right to
receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to
a Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such Certificate or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time, Certificates
are presented to the Surviving Corporation, they shall be canceled and exchanged
for the Merger Consideration provided for, and in accordance with the procedures
set forth, in this Article.
(e) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to Section 3.3(a) (and any interest or other income
earned thereon) that remains unclaimed by the holders of Shares nine months
after the Effective Time shall be returned to Parent, upon demand, and any such
holder who has not exchanged them for the Merger Consideration in accordance
with this Section prior to that time shall thereafter look only to the Surviving
Corporation and Parent for payment of the Merger Consideration in respect of
such Shares without any interest thereon. Notwithstanding the foregoing, neither
the Surviving Corporation nor Parent shall be liable to any holder of Shares for
any amount paid to a public official pursuant to applicable abandoned property,
escheat or similar laws. Any amounts remaining unclaimed by holders of Shares
two years after the Effective Time (or such earlier date
8
immediately prior to such time when the amounts would otherwise escheat to or
become property of any governmental authority) shall become, to the extent
permitted by applicable law, the property of Parent and the Surviving
Corporation free and clear of any claims or interest of any Person previously
entitled thereto.
(f) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to Section 3.3(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Parent, upon demand.
Section 3.4. Dissenting Shares. Notwithstanding Section 3.2, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger, if required, or consented thereto, if
required, in writing and who has demanded appraisal for such Shares in
accordance with Maine Law shall not be converted into a right to receive the
Merger Consideration, unless such holder fails to perfect, withdraws or
otherwise loses its right to appraisal. If, after the Effective Time, such
holder fails to perfect, withdraws or loses its right to appraisal, such Shares
shall be treated as if they had been converted as of the Effective Time into a
right to receive the Merger Consideration. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of Shares, and
Parent shall have the right to direct all negotiations and proceedings with
respect to such demands. Except with the prior written consent of Parent, the
Company shall not make any payment with respect to, or settle or offer to
settle, any such demands.
Section 3.5. Stock Options.
(a) At or immediately prior to the Effective Time, each
outstanding Stock Option issued by the Company to purchase Shares, whether or
not vested or exercisable, shall be canceled, and the Company shall pay each
holder of any such option at or promptly after the Effective Time for each such
option surrendered an amount in cash determined by multiplying (i) the excess,
if any, of the Merger Consideration over the applicable exercise price of such
option by (ii) the number of Shares such holder could have purchased (assuming
full vesting of all options) had such holder exercised such option in full
immediately prior to the Effective Time. Such payment shall be reduced by
applicable withholding taxes.
(b) Prior to the Effective Time, the Company shall take all
actions (including, if appropriate, amending the terms of any option plan or
arrangement) that are within its power to give effect to the transactions
contemplated by Section 3.5(a).
Section 3.6. Adjustments. If, during the period between the date of
this Agreement and the Effective Time, any change in the outstanding Shares
shall occur (other than due to the exercise of currently outstanding options),
including by reason of any reclassification, recapitalization, stock split or
combination, exchange or readjustment of Shares, or stock dividend thereon with
a record date during such period, the cash payable pursuant to the Offer, the
Merger Consideration and any other amounts payable pursuant to this Agreement
shall be appropriately adjusted.
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Section 3.7. Withholding Rights. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Article such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which the Surviving Corporation or Parent, as
the case may be, made such deduction and withholding.
Section 3.8. Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article.
ARTICLE 4 The Surviving Corporation
Section 4.1. Articles of Incorporation. The articles of
incorporation of Merger Subsidiary in effect at the Effective Time shall be the
articles of incorporation of the Surviving Corporation until amended in
accordance with applicable law, provided that, at the Effective Time, Article
First of such articles of incorporation shall be amended to read as follows:
"The name of the corporation is Brunswick Technologies, Inc."
Section 4.2. Bylaws. The bylaws of Merger Subsidiary in effect at
the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
Section 4.3. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of Merger Subsidiary at the Effective
Time shall be the directors of the Surviving Corporation and (ii) the officers
of the Merger Subsidiary at the Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE 5 Representations and Warranties of the Company
The Company represents and warrants to Parent that:
Section 5.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maine. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where
10
failure to be so qualified would not have, individually or in the aggregate, a
Material Adverse Effect on the Company.
Section 5.2. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Transactions, are within the Company's corporate powers and, except for
the affirmative vote of the holders of a majority of the outstanding Shares in
connection with the consummation of the Merger (if required by law) or any
applicable shareholder approval required by the Nasdaq National Market System,
have been duly authorized by all necessary corporate action on the part of the
Company. The affirmative vote of the holders of a majority of the outstanding
Shares (if required by law) is the only vote of the holders of any of the
Company's capital stock necessary in connection with the consummation of the
Merger. This Agreement constitutes a valid and binding agreement of the Company.
Section 5.3. Governmental Authorization. Except as set forth on
Schedule 5.3, the execution, delivery and performance by the Company of this
- ------------
Agreement and the consummation by the Company of the Transactions, require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority, domestic or foreign, other than (i) the filing of the
Maine Merger Agreement with respect to the Merger with the Maine Secretary of
State and appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, (ii) compliance with any
applicable requirements of the HSR Act and of any applicable antitrust laws,
(iii) compliance with any applicable requirements of the 1933 Act, the 1934 Act
and any other applicable securities or takeover laws, whether state or foreign,
and (iv) any actions or filings the absence of which would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company or materially to impair the ability of the Company to consummate the
Transactions.
Section 5.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement, and the consummation by the
Company of the Transactions, do not and will not (i) contravene, conflict with,
or result in any violation or breach of any provision of the articles of
incorporation or bylaws of the Company, (ii) assuming compliance with the
matters referred to in Section 5.3, contravene, conflict with, or result in a
violation or breach of any provision of any applicable law, statute, ordinance,
rule, regulation, judgment, injunction, order or decree, (iii) require any
consent or other action by any Person under, constitute a default, or an event
that, with or without notice or lapse of time or both, would become a default,
under, or cause or permit the termination, cancellation, acceleration or other
change of any right or obligation or the loss of any benefit to which the
Company or any of its Subsidiaries is entitled under any provision of any
agreement or other instrument with any financial institution or government
agency binding upon the Company or any of its Subsidiaries (except as set forth
on Schedule 5.4) or any license, franchise, permit, certificate, approval or
------------
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except such contraventions, conflicts and violations referred to in clause (ii)
and such failures to obtain any such consent or other action, default,
termination, cancellation, acceleration, change, loss or Lien referred to in
clauses (iii) or (iv) that could not be reasonably
11
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company or to impair materially the ability of the Company to consummate the
Transactions.
Section 5.5. Capitalization.
(a) The authorized capital stock of the Company consists of
20,000,000 Shares. As of June 9, 2000, there were outstanding 5,234,415 Shares
and stock options issued by the Company (the "Options") to purchase an aggregate
of 819,672 Shares (of which Options to purchase an aggregate of 471,499 Shares
were exercisable). There are and there will be no shares of preferred stock
outstanding. The Company has issued to shareholders Rights to purchase Junior
Participating Preferred Stock of the Company, which Preferred Stock is, under
certain circumstances, convertible into Common Stock of the Company. All
outstanding shares of capital stock of the Company have been, and all shares
that may be issued pursuant to the stock option plans will be, when issued in
accordance with the respective terms thereof, duly authorized and validly issued
and fully paid and nonassessable. Schedule 5.5(a) identifies (v) the holders of
---------------
each of the Options, (vi) the number of Options vested for each holder, (vii)
the option plan under which each Option was issued, (viii) the number of Options
held by such holder and (ix) the exercise price of each of the Options.
(b) Except as set forth in this Section 5.5 or Schedule 5.5(a)
---------------
and except for changes since June 9, 2000 resulting from the exercise of stock
options issued by the Company outstanding on such date, there are no outstanding
(i) shares of capital stock or voting securities of the Company, (ii) securities
of the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company or (iii) options or other rights to acquire
from the Company or other obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (the items in clauses (i), (ii) and
(iii) being referred to collectively as the "Company Securities"). Except as set
forth in Schedule 5.5(b), there are no outstanding obligations of the Company or
---------------
any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Securities.
Section 5.6. Subsidiaries.
(a) All Significant Subsidiaries within the meaning of Regulation
S-X of the Company and their respective jurisdictions of incorporation are
identified in the Company's most recent Form 10-K. Except for such Subsidiaries,
the Company does not directly or indirectly own any capital stock of or other
equity interest in any corporation, partnership or other Person and neither the
Company nor any of its Subsidiaries is a member of or participant in any
partnership, joint venture or similar Person.
(b) Except as set forth on Schedule 5.6, all of the outstanding
------------
capital stock of, or other voting securities or ownership interests in, each
Subsidiary of the Company, is owned by the Company (except for shares of foreign
Subsidiaries of the Company held in nominee names), directly or indirectly, free
and clear of any Lien and free of any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such
12
capital stock or other voting securities or ownership interests). There are no
outstanding (i) securities of the Company or any of its Subsidiaries convertible
into or exchangeable for shares of capital stock or other voting securities or
ownership interests in any Subsidiary of the Company or (ii) options or other
rights to acquire from the Company or any of its Subsidiaries, or other
obligation of the Company or any of its Subsidiaries to issue, any capital stock
or other voting securities or ownership interests in, or any securities
convertible into or exchangeable for any capital stock or other voting
securities or ownership interests in, any Subsidiary of the Company (the items
in clauses (i) and (ii) being referred to collectively as the "Company
Subsidiary Securities"). There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Subsidiary Securities.
Section 5.7. SEC Filings.
(a) The Company has filed (i) the Company's annual reports on
Form 10-K for its fiscal years ended December 31, 1999 and December 31, 1998,
(ii) its quarterly report on Form 10-Q for its fiscal quarter ended March 31,
2000, (iii) its proxy or information statements relating to meetings of, or
actions taken without a meeting by, the shareholders of the Company held after
December 31, 1999, (iv) the Schedule 14D-9 and amendments thereto, and (v) all
of its other reports, statements, schedules and registration statements filed
with the SEC since December 31, 1999 (the documents referred to in this Section
5.7(a), collectively, the "Company SEC Documents").
(b) To the knowledge of the Company, as of the filing date, each
Company SEC Document complied as to form in all material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be.
(c) To the knowledge of the Company, as of its filing date (or,
if amended or superceded by a filing prior to the date hereof, on the date of
such later filing), each Company SEC Document filed pursuant to the 1934 Act did
not, and each such Company SEC Document filed subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
(d) To the knowledge of the Company, each Company SEC Document
that is a registration statement, as amended or supplemented, if applicable,
filed pursuant to the 1933 Act, as of the date such statement or amendment
became effective, did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
Section 5.8. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Documents fairly present, in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company and its consolidated Subsidiaries as
13
of the dates thereof and their consolidated results of operations and cash flows
for the periods then ended (subject to normal year-end adjustments in the case
of any unaudited interim financial statements).
Section 5.9. Disclosure Documents.
(a) Each document required to be filed by the Company with the
SEC or required to be distributed or otherwise disseminated to the Company's
shareholders in connection with the Transactions (the "Company Disclosure
Documents"), including, without limitation, the Schedule 14D-9, the proxy or
information statement of the Company (the "Company Merger Proxy Statement"), if
any, to be filed with the SEC in connection with the Merger, and any amendments
or supplements thereto, when filed, distributed or disseminated, as applicable,
will comply as to form in all material respects with the applicable requirements
of the 1934 Act.
(b) (i) The Company Merger Proxy Statement, as supplemented or
amended, if applicable, at the time such Company Merger Proxy Statement or any
amendment or supplement thereto is first mailed to shareholders of the Company
and at the time such shareholders vote on adoption of this Agreement, and (ii)
any Company Disclosure Document (other than the Company Merger Proxy Statement),
at the time of the filing of such Company Disclosure Document or any supplement
or amendment thereto and at the time of any distribution or dissemination
thereof, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The representations and warranties contained in this Section 5.9(b) will not
apply to statements or omissions included in the Company Disclosure Documents
based upon information furnished to the Company in writing by Parent
specifically for use therein.
(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent in writing specifically for
use in the Offer Documents, at the time of the filing thereof, at the time of
any distribution or dissemination thereof and at the time of the consummation of
the Offer, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
Section 5.10. Absence of Certain Changes. Since the Company Balance
Sheet Date, the business of the Company and its Subsidiaries has been conducted
in the ordinary course consistent with past practices and, except as disclosed
in the Company SEC Documents, there has not been:
(a) except for changes in exchange rates of foreign currencies,
any event, occurrence, development or state of circumstances or facts that has
had or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company;
14
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company or
any repurchase, redemption or other acquisition by the Company or any of its
Subsidiaries of any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or any of its Subsidiaries;
(c) any acquisition by the Company or any of its Subsidiaries of
a material amount of assets, including without limitation stock or other equity
interests, from any Person or any sale, lease, license or other disposition of
assets or property of the Company or any of its Subsidiaries other than in the
ordinary course of business consistent with past practices;
(d) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(e) any incurrence, assumption or guarantee by the Company or any
of its Subsidiaries of any indebtedness for borrowed money (i) exceeding
$1,000,000 in the aggregate or (ii) having a term longer than one year in
duration;
(f) to the knowledge of the Company, any creation or other
incurrence by the Company or any of its Subsidiaries of any Lien on any asset
other than in the ordinary course of business consistent with past practices;
(g) any making of any loan, advance or capital contributions to
or investment in any Person other than loans, advances or capital contributions
to or investments in its wholly owned Subsidiaries made in the ordinary course
of business consistent with past practices;
(h) to the knowledge of the Company, any damage, destruction or
other similar casualty loss (whether or not covered by insurance) affecting the
business or assets of the Company or any of its Subsidiaries that has resulted,
or could reasonably be expected to result, in an aggregate amount in excess of
$500,000;
(i) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any of its Subsidiaries relating to
its assets or business (including the acquisition or disposition of any assets)
or any relinquishment by the Company or any of its Subsidiaries of any contract
or other right, in either case, material to the Company and its Subsidiaries,
taken as a whole, other than transactions and commitments in the ordinary course
of business consistent with past practices and those contemplated by this
Agreement;
(j) any change in any method of accounting, method of tax
accounting or accounting principles or practice by the Company or any of its
Subsidiaries, except for any such change required by reason of a concurrent
change in GAAP or Regulation S-X under the 1934 Act;
15
(k) any tax election, other than those consistent with past
practice, not required by law or any settlement or compromise of any tax
liability in either case that is material to the Company and its Subsidiaries;
(l) except as set forth on Schedule 5.10(l), any (i) grant of any
----------------
severance or termination pay to (or amendment to any existing arrangement with)
any director or officer of the Company or any of its Subsidiaries, (ii) increase
in benefits payable under any existing severance or termination pay policies or
employment agreements, (iii) entering into any employment, deferred compensation
or other similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of the Company or any of its
Subsidiaries, (iv) establishment, adoption or amendment (except as required by
applicable law) of any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of the Company or any of its Subsidiaries or (v) increase in
compensation, bonus or other benefits payable to any director, officer or
employee of the Company or any of its Subsidiaries, other than, in the case of
clause (iii) or (v), in the ordinary course of business consistent with past
practice; or
(m) to the Company's knowledge, any labor dispute, other than
routine individual grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any of its
Subsidiaries, which employees were not subject to a collective bargaining
agreement at the Company Balance Sheet Date, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to such
employees.
Section 5.11. No Undisclosed Material Liabilities. To the knowledge
of the Company, there are no liabilities or obligations of the Company or any of
its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances that could reasonably be expected to result in
such a liability, other than:
(a) liabilities or obligations disclosed and provided for in the
Company Balance Sheet or in the notes thereto or in the Company SEC Documents
filed prior to the date hereof;
(b) liabilities or obligations that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company; and
(c) liabilities or obligations under this Agreement or incurred
in connection with the Transactions.
Section 5.12. Compliance with Laws and Court Orders. The Company and
each of its Subsidiaries are and have been in compliance with, and to the
knowledge of the Company are not under investigation with respect to and have
not been threatened to be charged with or given notice of any violation of, any
applicable law, statute, ordinance, rule, regulation,
16
judgment, injunction, order or decree, except for failures to comply or
violations that have not had and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Section 5.13. Litigation. Except as set forth in the Company SEC
Documents filed prior to the date hereof and on Schedule 5.13, there is no
-------------
action, suit, investigation or proceeding pending against, or, to the knowledge
of the Company, threatened against or affecting, the Company, any of its
Subsidiaries, any present or former officer, director or employee of the Company
or any of its Subsidiaries or any other Person for whom the Company or any such
Subsidiary is liable or any of their respective properties before any court or
arbitrator or before or by any governmental body, agency or official, domestic
or foreign, that (i) the Company believes is reasonably likely to result in a
liability to the Company or any of its Subsidiaries of an amount in excess of
$50,000 or (ii) that in any manner challenges or seeks to prevent, enjoin, alter
or materially delay the Offer or the Merger or any other Transaction.
Section 5.14. Material Contracts. Except for purchase orders and as
set forth on Schedule 5.14, the Company has provided Parent with a complete and
-------------
accurate list of any of the following to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound (each, a "Company Material Contract") and a complete and accurate copy,
except as excluded at Parent's request, of each Company Material Contract was
included in the Company Data Room:
(a) all written management, compensation, employment or other
contracts entered into with any executive officer or director of the Company;
(b) all contracts or agreements under which the Company or any of
its Subsidiaries has any outstanding indebtedness, obligation or liability for
borrowed money or the deferred purchase price of property or has the right or
obligation to incur any such indebtedness, obligation or liability, in each case
in an amount greater than $200,000;
(c) all bonds or agreements of guarantee or indemnification in
which the Company or any of its Subsidiaries acts as surety, guarantor or
indemnitor with respect to any obligation (fixed or contingent) in an amount or
potential amount greater than $100,000, other than any such bonds or agreements
entered into in connection with an asset or stock acquisition or disposition
made by the Company or any of its Subsidiaries and other than any such
guarantees of the obligations of the Company or any of its Subsidiaries;
(d) all noncompete agreements to which the Company or any of its
Affiliates (other than any director of the Company) is a party;
(e) all partnership and joint venture agreements;
(f) each other contract or agreement listed as an exhibit to the
Company's most recent Form 10-K and the Company 10-Q; and
17
(g) all agreements relating to material business acquisitions or
dispositions during the last three years, including any separate tax or
indemnification agreements.
Except as set forth on Schedule 5.14(a), (i) neither the Company nor
----------------
any of its Subsidiaries is in default under the terms of any Company Material
Contract, which default permits the other party to adversely alter or terminate
any rights of the Company or any of its Subsidiaries or accelerate the
obligations of the Company or any of its Subsidiaries under such Company
Material Contract or to collect damages, (ii) to the knowledge of the Company,
no other party thereto is in default in any material respect under the terms of
any Company Material Contract and (iii) each Company Material Contract is in
full force and effect in all material respects.
Section 5.15. Finders' Fees. Except for McDonald Investments, Inc., a
copy of whose engagement agreement has been provided to Parent, there is no
investment banker, broker, finder or other intermediary that has been retained
by or is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission from the Company or any of its
Affiliates in connection with the Transactions.
Section 5.16. Employee Benefit Plans.
(a) The Company Data Room contained a complete and accurate copy
of each material "employee benefit plan", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), each material
employment, severance or similar contract, plan, arrangement or policy and each
other material plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits) which is
maintained, administered or contributed to by the Company or any ERISA Affiliate
and covers any employee or former employee of the Company or its United States
Subsidiary, or with respect to which the Company or its United States Subsidiary
has any liability. Such plans are referred to collectively herein as the
"Employee Plans." For purposes of this Section 5.16, "ERISA Affiliate" of any
Person means any other Person which, together with such Person, would be treated
as a single employer under Section 414 of the Code.
(b) Neither the Company nor any of its ERISA Affiliates currently
contributes to or maintains any plan subject to Title IV of ERISA, other than a
"multiemployer plan" as defined in Section 3(37) of ERISA (a "Multiemployer
Plan"). With respect to any Multiemployer Plan or other plan subject to Title IV
of ERISA which the Company or any of its ERISA Affiliates has contributed to or
maintained during the past five years, neither the Company nor any of its
current ERISA Affiliates has any contingent liability that (i) is reasonably
likely to become a liability of Parent or its ERISA Affiliates after the
Effective Time and (ii) individually or in the aggregate, would have a Material
Adverse Effect on the Company.
18
(c) Except as set forth in Schedule 5.16, neither the Company nor
-------------
its United States Subsidiary has any liability in respect of post-retirement
health, medical or life insurance benefits for retired, former or current
employees of the Company or its United States Subsidiary except as required to
avoid excise tax under Section 4980B of the Code.
(d) All material contributions and payments accrued under each
Employee Plan, determined in accordance with prior funding and accrual practices
have been discharged and paid when due.
(e) To the knowledge of the Company, there is no action, suit,
investigation, audit or proceeding pending against or involving or threatened
against or involving, any Employee Plan before any court or arbitrator or any
state, federal or local governmental body, agency or official other than routine
claims for benefits and other than actions, including qualified domestic
relations orders.
Section 5.17. Environmental Matters.
(a) Except as set forth on Schedule 5.17, neither the Company nor
-------------
any of its Subsidiaries has received any written notice, claim, request for
information or demand from any governmental agency or third party alleging that
any of the Company, its Subsidiaries or the Company Real Properties is in
material violation of, is subject to any administrative or judicial proceeding
pursuant to, or has any material liability under, any Environmental Law.
(b) To the knowledge of the Company, each of the Company and its
Subsidiaries has operated its respective business in compliance with
Environmental Laws except for such non-compliance which, individually or in the
aggregate, is not likely to have a Material Adverse Effect on the Company.
(c) For purposes of this Agreement, "Hazardous Materials" shall
mean asbestos, petroleum products and all other materials on the date hereof
defined as "hazardous substances", "hazardous wastes", "toxic substances",
"solid wastes" or otherwise on or prior to the date hereof listed or regulated
pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. (S)9601 et seq. ("CERCLA"); the
-- ---
Resource Conservation and Recovery Act, 42 U.S.C. (S)(S)6901 et seq. ("RCRA")
-- ---
and any amendments thereto; the Hazardous Materials Transportation Act, 49
U.S.C. (S)(S)1801 et seq. ("HMTA"); the Clean Water Act, the Safe Drinking Water
-- ---
Act; the Atomic Energy Act; the Federal Insecticide, Fungicide, and Rodenticide
Act, the Clean Air Act; or any other similar foreign, federal, state or local
statute, regulation or ordinance or any other law or common law theory of any
foreign, state or federal court, as now in effect, relating to, or imposing
liability or standards of conduct concerning any hazardous or toxic waste,
substance or material.
(d) For purposes of this Agreement, "Environmental Laws" shall
mean any and all foreign, federal, state and local laws (including, without
limitation, common law), statutes, ordinances, rules, regulations, permits,
licenses or other governmental
19
requirements relating to health, pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), the release or threatened release, discharge, emission, of any
Hazardous Materials or materials containing Hazardous Materials or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials or the pollution of the
environment, including, without limitation, CERCLA, RCRA and HMTA.
Section 5.18. Anti-Takeover Statutes and Rights Agreement.
(a) Except as set forth on Schedule 5.18, to the knowledge of the
-------------
Company, no "control share acquisition," "fair price," "moratorium" or other
anti-takeover laws or regulations enacted under any state apply to this
Agreement or any of the Transactions contemplated hereby.
(b) The Company has taken all action necessary to render the
Rights issued pursuant to the terms of the Rights Agreement inapplicable to this
Agreement, the Offer, the Shareholder Agreements and transactions contemplated
thereby, the Merger and any other Transactions.
Section 5.19. Title to Real Properties. To the knowledge of the
Company, the Company and each of its Subsidiaries has good title to, or in the
case of leased property and assets have valid leasehold interests in, all real
property reflected on the Company Balance Sheet or acquired after the Company
Balance Sheet Date, except for properties sold since the Company Balance Sheet
Date in the ordinary course of business consistent with past practices, except
for such imperfections in title and easements, if any, as are not substantial in
character, amount or extent and do not materially detract from the value, or
materially interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Company's business
operations. None of such property is subject to any Lien, except:
(a) Liens disclosed on the Company Balance Sheet;
(b) Liens for taxes not yet due or being contested in good faith
(and for which adequate accruals or reserves have been established on the
Company Balance Sheet); or
(c) Liens which do not materially detract from the value or
materially interfere with any present use of such property or assets.
Section 5.20. Insurance Coverage. The Company and its Subsidiaries
have obtained and maintained in full force and effect public liability
insurance, insurance against claims for personal injury or death or property
damage occurring in connection with the activities of the Company or its
Subsidiaries or any properties owned, occupied or controlled by the Company or
its Subsidiaries and other insurance, in each case, with responsible and
reputable insurance companies or associations in such amounts, on such terms and
covering such risks as reasonably deemed necessary by the Company and its
Subsidiaries.
20
Section 5.21. Labor Matters. The Company has no collective
bargaining agreements which relate to any of the employees of the Company or its
Subsidiaries. The Company does not know of any activity or proceedings of any
labor union (or representatives thereof) to organize any unorganized employees
employed by the Company or its Subsidiaries, or of any strikes, slowdowns, work
stoppages, lockouts or threats thereof, by or with respect to any of the
employees of the Company or its Subsidiaries during the period from the Company
Balance Sheet Date through the date hereof.
Section 5.22. Intellectual Property. The Company and its
Subsidiaries have rights to use, whether through ownership, licensing or
otherwise, all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes that are
material to the conduct of the business of the Company and its Subsidiaries
(collectively the "Intellectual Property Rights"). The patents owned by the
Company or any of its Subsidiaries are valid and enforceable and any patent
issuing from patent applications of the Company or any of its Subsidiaries will
be valid and enforceable, except as such invalidity or unenforceability,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Except as disclosed in Schedule 5.22, to the Company's
-------------
knowledge, there are no infringements by any other party of any of the
Intellectual Property Rights. Except as set forth on Schedule 5.22, to the
-------------
knowledge of the Company, there are no currently pending lawsuits or written
threats thereof against the Company and its Subsidiaries alleging infringement
of any intellectual property right of another Person.
ARTICLE 6 Representations and Warranties of Parent
Parent represents and warrants to the Company that:
Section 6.1. Corporate Existence and Power. Each of Parent and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not have, individually or in the aggregate, a Material
Adverse Effect on Parent. Since the date of its incorporation, Merger Subsidiary
has not engaged in any activities other than in connection with or as
contemplated by this Agreement, the Shareholder Agreements or in connection with
arranging any financing required to consummate the Transactions.
Section 6.2. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, and the
consummation by Parent and Merger Subsidiary of the Transactions, are within the
corporate powers of Parent and Merger Subsidiary and have been duly authorized
by all necessary corporate action. This Agreement constitutes a valid and
binding agreement of each of Parent and Merger Subsidiary.
Section 6.3. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, and the
consummation by Parent and Merger Subsidiary of the Transactions, require no
action by or in respect of, or filing
21
with, any governmental body, agency, official or authority, domestic or foreign,
other than (i) the filing of the Maine Merger Agreement with respect to the
Merger with the Maine Secretary of State and appropriate documents with the
relevant authorities of other states in which Parent is qualified to do
business, (ii) compliance with any applicable requirements of the HSR Act and of
any applicable antitrust laws (as to which the HSR Act filings have been
completed and the applicable waiting periods have expired), (iii) compliance
with any applicable requirements of the 1933 Act, the 1934 Act and any other
applicable securities or takeover laws, whether state or foreign, (iv) the
filing of a written notification pursuant to Section 5021 of the Omnibus Trade
and Competitiveness Act of 1988 (the Exon-Florio Statute) (the filing of which
has been made), and (v) any actions or filings the absence of which would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent or materially to impair the ability of Parent and
Merger Subsidiary to consummate the Transactions.
Section 6.4. Non-Contravention. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, and the
consummation by Parent and Merger Subsidiary of the Transactions, do not and
will not (i) contravene, conflict with, or result in any violation or breach of
any provision of the certificate of incorporation or bylaws of Parent or Merger
Subsidiary, (ii) assuming compliance with the matters referred to in Section
6.3, contravene, conflict with, or result in any violation or breach of any
provision of any applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree or (iii) require any consent or other action by any
Person under, constitute a default, or an event that, with or without notice or
lapse of time or both, would become a default, under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which Parent or Merger Subsidiary is
entitled under any provision of any agreement or other instrument binding upon
Parent or Merger Subsidiary or any license, franchise, permit, certificate,
approval or other similar authorization affecting, or relating in any way to,
the assets or business of Parent or Merger Subsidiary, except for such
contraventions, conflicts and violations referred to in clause (ii) and for such
failures to obtain consent or other action, defaults, terminations,
cancellations, accelerations, changes, losses or Liens referred to in clause
(iii) that could not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent or materially to impair the
ability of Parent and Merger Subsidiary to consummate the Transactions.
Section 6.5. Disclosure Documents.
(a) The information with respect to Parent and any of its
Subsidiaries that Parent furnishes to the Company in writing specifically for
use in any Company Disclosure Document will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading (i) in the case of the Company Merger Proxy Statement,
as supplemented or amended, if applicable, at the time such Company Merger Proxy
Statement or any amendment or supplement thereto is first mailed to shareholders
of the Company and at the time such shareholders vote on adoption of this
Agreement, and (ii) in the case of any Company Disclosure Document other than
the Company Merger Proxy Statement, at
22
the time of the filing of such Company Disclosure Document or any supplement or
amendment thereto and at the time of any distribution or dissemination thereof.
(b) The Offer Documents, when filed, distributed or disseminated,
as applicable, will comply as to form in all material respects with the
applicable requirements of the 1934 Act and, at the time of the filing thereof,
at the time of any distribution or dissemination thereof and at the time of
consummation of the Offer, will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, provided that this representation and warranty will not apply to
statements or omissions included in the Offer Documents based upon information
furnished to Parent or Merger Subsidiary in writing by the Company specifically
for use therein.
Section 6.6. Finders' Fees. Except for Lehman Brothers Inc., whose
fees will be paid by Parent, there is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on behalf
of Parent who might be entitled to any fee or commission from the Company or any
of its Affiliates upon consummation of the Transactions.
Section 6.7. Financing. Parent has, or will have prior to the
expiration of the Offer, sufficient cash, available lines of credit or other
sources of immediately available funds (including, if required or desirable,
funds provided by Saint-Gobain) to enable it to purchase all of the Shares (and
options and other rights to purchase Shares) outstanding (whether in the Offer
or the Merger).
Section 6.8. Present Intention. Parent and Merger Subsidiary have no
present intention to close any of the current facilities of the Company or its
Subsidiaries.
ARTICLE 7 Covenants of the Company
The Company agrees that:
Section 7.1. Conduct of the Company. Except as expressly permitted
by this Agreement or required in furtherance of the Transactions or disclosed in
the Company SEC Documents, from the date hereof until the Effective Time, the
Company and its Subsidiaries shall conduct their business in the ordinary course
consistent with past practice and shall use their commercially reasonable
efforts to preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time:
(a) the Company will not adopt or propose any change to its
articles of incorporation or bylaws;
23
(b) the Company will not, and will not permit any of its Subsidiaries
to, merge or consolidate with any other Person or acquire a material amount of
stock or assets of any other Person;
(c) the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, license or otherwise dispose of any material subsidiary or
material amount of assets, securities or property except (i) pursuant to
existing contracts or commitments and (ii) in the ordinary course consistent of
business with past practice;
(d) the Company will not, and will not knowingly permit any of its
Subsidiaries to, (i) take any action that (A) would make any representation and
warranty of the Company hereunder that is qualified by materiality or Material
Adverse Effect inaccurate in any respect at, or as of any time prior to, the
Effective Time or (B) would make any representation or warranty of the Company
hereunder that is not so qualified to be inaccurate in any material respect at,
or as of any time prior to, the Effective Time or (ii) omit to take any action
necessary to prevent any such representation or warranty from being inaccurate
in any respect or material respect, as the case may be, at any such time;
(e) the Company will not, and will not permit any of its Subsidiaries
to, issue, sell, pledge, dispose of or encumber, or authorize the issuance,
sale, pledge, disposition or encumbrance of, any shares of capital stock of any
class, or any options, warrants, convertible securities or other rights of any
kind to acquire any shares of capital stock, or any other ownership interest of
the Company, any of its Subsidiaries or Affiliates (except for the issuance of
Shares pursuant to the exercise of Options, which Options are outstanding on the
date hereof);
(f) the Company will not, and will not permit any of its Subsidiaries
to, (i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property of any combination thereof) in respect of
its capital stock, and except that any wholly owned Subsidiary of the Company
may declare and pay a dividend to its parent, (ii) 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 (iii) repurchase, redeem or otherwise acquire any of its
securities or any securities of its Subsidiaries, or propose to do any of the
foregoing;
(g) other than in the ordinary course of business consistent with past
practice, the Company will not, and will not permit any of its Subsidiaries to,
sell, transfer, license, sublicense or otherwise dispose of any material
Intellectual Property Rights or amend or modify any existing agreements with
respect to any material Intellectual Property Rights or third party Intellectual
Property Rights;
(h) except as set forth on Schedule 7.1(h), the Company will not, and
---------------
will not permit any of its Subsidiaries to, (i) incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or endorse or
otherwise as an accommodation become responsible for, the obligations of any
other Person or make any loans, advances, or capital contributions to, or
investments in, any other Person (other than to any wholly owned Subsidiary
24
of the Company) other than in the ordinary course of business consistent with
past practice, (ii) enter into or amend any contract or agreement other than in
the ordinary course of business consistent with past practice, (iii) authorize
or make any capital expenditures or purchases of fixed assets that are not
currently budgeted and that in the aggregate exceeds $250,000, (iv) terminate
any Company Material Contract or amend in any material respect any Company
Material Contract or (v) enter into or amend any contract, agreement, commitment
or arrangement to effect any of the matters prohibited hereunder other than in
the ordinary course of business consistent with past practice;
(i) the Company will not, and will not permit any of its Subsidiaries
to, take any action, other than as required by GAAP (applicable in the United
States or United Kingdom), to change accounting policies or procedures or cash
maintenance policies or procedures (including, without limitation, procedures
with respect to revenue recognition, capitalization of development costs,
payments of accounts payable and collection of accounts receivable);
(j) the Company will not, and will not permit any of its Subsidiaries
to, make any Tax election not required by law and inconsistent with past
practice or settle or compromise any Tax liability, except to the extent the
amount of any such settlement or compromise has been reserved for on the
consolidated financial statements contained in the Company SEC Documents, or
would not have a Material Adverse Effect;
(k) the Company will not, and will not permit any of its Subsidiaries
to, pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business consistent with past practice of liabilities reflected or
reserved against in the Company Balance Sheet or incurred in the ordinary course
of business consistent with past practice or other payments, discharges or
satisfactions which in the aggregate do not exceed $100,000, or waive the
benefits of, or agree to modify in any manner, any confidentiality, standstill
or similar agreement to which the Company or any of its Subsidiaries is a party;
(l) except as contemplated by Section 8.4 and as described on Schedule
--------
7.1(h), the Company will not, and will not permit any of its Subsidiaries to
- ------
(i) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, agreement, trust, plan, fund
or other arrangement for the benefit and welfare of any director, officer or
employee,
(ii) increase in any manner the compensation or fringe benefits of
any director, officer or employee (except for increases in the ordinary course
of business consistent with past practice and that, in the aggregate, do not
result in a material increase in benefits or compensation expense to the
Company) or
25
(iii) pay any benefit not required by any currently existing
plan or arrangement (including, without limitation, the granting of stock
options or stock appreciation rights or the removal of existing restrictions in
any benefit plans or agreements); and
(m) the Company will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
Section 7.2. Shareholder Meeting; Proxy Material. The Company shall
cause a meeting of its shareholders (the "Company Shareholder Meeting") to be
duly called and held as soon as reasonably practicable after consummation of the
Offer for the purpose of voting on the approval and adoption of this Agreement
and the Merger, unless Maine Law does not require a vote of shareholders of the
Company for consummation of the Merger. Subject to their fiduciary duties as
advised by outside counsel to the Company, and subject to Section 7.4(c), the
Board of Directors of the Company shall recommend approval and adoption of this
Agreement and the Merger by the Company's shareholders. In connection with such
meeting, the Company will (i) promptly prepare and file with the SEC, will use
its best efforts to have cleared by the SEC and will thereafter mail to its
shareholders as promptly as practicable the Company Merger Proxy Statement and
all other proxy materials for such meeting, (ii) use its best efforts to obtain
the necessary approvals by its shareholders of this Agreement and the
Transactions and (iii) otherwise comply with all legal requirements applicable
to such meeting.
Section 7.3. Access to Information. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality Agreement
dated as of May 17, 2000 between the Company and Parent (the "Confidentiality
Agreement"), the Company shall (i) give Parent, its counsel, financial advisors,
auditors and other authorized representatives full access to the offices,
properties, books and records of the Company and its Subsidiaries, (ii) furnish
to Parent, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request and (iii) instruct the employees, counsel,
financial advisors, auditors and other authorized representatives of the Company
and its Subsidiaries to cooperate with Parent in its investigation of the
Company and its Subsidiaries; provided that in each case appropriate procedures
are implemented to protect the attorney-client privilege to the extent
applicable with respect to any such materials. Any investigation pursuant to
this Section shall be conducted in such manner as not to interfere unreasonably
with the conduct of the business of the Company and its Subsidiaries. No
information or knowledge obtained by Parent or any of its Affiliates in any
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by the Company hereunder.
Section 7.4. No Solicitation; Other Offers.
(a) From the date hereof until the termination hereof, the
Company will not, and will cause its Subsidiaries and the officers, directors,
employees, investment bankers, attorneys, accountants, consultants or other
agents or advisors of the Company and its Subsidiaries not to, directly or
indirectly, (i) take any action to solicit, initiate, facilitate or encourage
the submission of any Acquisition Proposal, (ii) except as permitted in Section
7.4(b),
26
engage in discussions or negotiations with, or disclose any nonpublic
information relating to the Company or any of its Subsidiaries or afford access
to the properties, books or records of the Company or any of its Subsidiaries
to, any Person who the Company has reason to believe may be considering making,
or has made, an Acquisition Proposal or any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, or (iii) grant any waiver or release under any standstill
or similar agreement with respect to any class of equity securities of the
Company. The Company will notify Parent or Parent's outside legal counsel
promptly (but in no event later than 36 hours) after receipt by, or
communication to, the Company of any Acquisition Proposal, any indication that
any Person is considering making an Acquisition Proposal or any request for
nonpublic information relating to the Company or any of its Subsidiaries or for
access to the properties, books or records of the Company or any of its
Subsidiaries by any Person who the Company has reason to believe may be
considering making, or has made, an Acquisition Proposal. The Company shall
provide such notice orally and in writing and shall identify the Person making,
and the terms and conditions of, any such Acquisition Proposal, indication or
request. The Company shall keep Parent fully informed, on a current basis, of
any material changes to the terms thereof. The Company shall, and shall cause
its Subsidiaries and the directors, employees and other agents of the Company
and its Subsidiaries to, cease immediately and cause to be terminated all
activities, discussions and negotiations, if any, with any Persons conducted
prior to the date hereof with respect to any Acquisition Proposal.
(b) Notwithstanding the foregoing, the Company may negotiate or
otherwise engage in substantive discussions with, and furnish nonpublic
information to, any Person who delivers a Superior Proposal if (i) the Company
has complied with the terms of this Section 7.4, including, without limitation,
the requirement in Section 7.4(a) that it notify Parent promptly after its
receipt of any Acquisition Proposal, (ii) the Board of Directors of the Company
determines in good faith by a majority vote, on the basis of advice from its
outside legal counsel, that consistent with its fiduciary duties under
applicable law, it must take such action, (iii) such Person executes a
confidentiality agreement with terms no less favorable to the Company than those
contained in the Confidentiality Agreement, (iv) the Company shall have
delivered to Parent four business days' prior written notice advising Parent
that it intends to take such action and (v) the Offer shall not have closed.
(c) The Board of Directors of the Company shall be permitted to
withdraw, or modify in a manner adverse to Parent, its approval and
recommendation to its shareholders referred to in Sections 2.2 and 7.2 hereof,
but only if (i) the Company has complied with the terms of this Section 7.4,
including, without limitation, the requirement in Section 7.4(a) that it notify
Parent promptly after its receipt of any Acquisition Proposal, (ii) a Superior
Proposal is pending at the time the Company's Board of Directors determines to
take any such action, (iii) the Company's Board of Directors determines in good
faith by a majority vote, on the basis of the advice of its outside legal
counsel, that consistent with its fiduciary duties under applicable law, it must
take such action and (iv) the Company shall have delivered to Parent four
business days' prior written notice advising Parent that it intends to take such
action. For purposes of this Agreement, "Superior Proposal" means any bona fide,
unsolicited written
27
Acquisition Proposal for 50% or more of the outstanding Shares on terms that the
Board of Directors of the Company determines in good faith by a majority vote is
more favorable and provides greater value to the Company's shareholders than as
provided hereunder, and such decision is made on the basis of the advice of a
financial advisor of nationally recognized reputation and takes into account all
the terms and conditions of the Acquisition Proposal, including any break-up
fees, expense reimbursement provisions and conditions to closing. Nothing in
this Section 7.4(c) shall (i) permit the Company to terminate this Agreement
(except as provided in Article 11 hereof) or (ii) affect any other obligations
of the Company under this Agreement.
Section 7.5. Notices of Certain Events. The Company shall promptly
notify Parent of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
Transactions;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Transactions; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 5.12, 5.13 or 5.17, as the case may be, or that relate to
the consummation of the Transactions.
Section 7.6. [Intentionally Omitted.]
Section 7.7. Interim Financial Statements. Until the Effective Date
or, if earlier, the date of termination of this Agreement pursuant to Section
11.1, as soon as practicable but in no event later than 30 days after the end of
each month beginning with May 2000, the Company shall deliver to Parent
unaudited financial information for such month and the corresponding month of
the preceding year as customarily prepared by the Company's management for its
own internal purposes.
Section 7.8. Non-Compete Agreements. The Company shall use its best
efforts to cause each of Messrs. Dubay, Fuller, Chesney, Lee and Wallace to
enter into a non-compete agreement substantially in the form attached hereto as
Exhibit B (each a "Non-Compete Agreement").
- ---------
28
ARTICLE 8 Covenants of Parent
Parent agrees that:
Section 8.1. Obligations of Merger Subsidiary. Parent will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
Section 8.2. Voting of Shares. Parent agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Shareholder Meeting.
Section 8.3. Director and Officer Liability. Parent shall, and shall
cause the Surviving Corporation to, do the following:
(a) For three years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless the present and former officers
and directors of the Company (each an "Indemnified Person") in respect of acts
or omissions occurring at or prior to the Effective Time to the fullest extent
permitted by Maine Law or any other applicable laws or provided under the
Company's articles of incorporation and bylaws in effect on the date hereof,
provided that such indemnification shall be subject to any limitation imposed
from time to time under applicable law.
(b) For three years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering each
such Indemnified Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date hereof.
(c) If Parent, the Surviving Corporation or any of its 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 or conveys all or substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision 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 8.3.
(d) The rights of each Indemnified Person under this Section 8.3
shall be in addition to any rights such Person may have under the articles of
incorporation or bylaws of the Company or any of its Subsidiaries, or under
Maine Law or any other applicable laws or under any agreement between an
Indemnified Person and the Company the form of which agreement and the name of
each Indemnified Person has been furnished to Parent prior to the date hereof.
These rights shall survive consummation of the Merger and are intended to
benefit, and shall be enforceable by, each Indemnified Person as an intended
third party beneficiary.
29
Section 8.4. Employees; Benefits. Parent and Merger Subsidiary shall
honor (i) all employment, severance or similar contractual or benefit plan
arrangements of the Company in accordance with their terms in existence on the
date hereof (including the Employment Agreement of Malcolm Lee effective as of
April 14, 2000, as reasonably adjusted to conform with United Kingdom law, and
the Employment Agreement of Martin Grimnes effective as of April 14, 2000, as
amended by the First Amendment to Employment Agreement dated June 12, 2000) and
(ii) all legally imposed obligations relating to employment matters. After the
Effective Time, Parent and Merger Subsidiary shall comply with applicable law,
including without limitation the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. (S) 2101 et seq. It is the current intention of Parent and Merger
-- ----
Subsidiary to cause the Surviving Corporation to provide benefits to employees
of the Company and its Subsidiaries that are generally comparable in the
aggregate to such employees as those in effect on the date hereof; provided,
however, that the foregoing shall not limit or restrict the right of the
Surviving Corporation or its Subsidiaries to terminate the employment of such
employees or subsequently to modify the benefits or other terms of employment of
such employees, to the extent permitted by applicable law. Notwithstanding the
foregoing, (i) nothing herein shall prohibit Parent from replacing any existing
plan, program or arrangement with a plan, program or arrangement which Parent
reasonably believes will provide such employees with benefits generally
comparable to the benefits that would have been provided under such existing
plan, program or arrangement and (ii) nothing herein shall obligate Parent to
provide such employees with any stock based compensation (including, without
limitation, stock options or stock appreciation rights or the value thereof)
after the Effective Time.
(a) All service credited to each employee by the Company through
the Effective Time shall be recognized by Parent for purposes of eligibility and
vesting under any employee benefit plan provided by the Surviving Corporation or
Parent for the benefit of employees in which such employees of the Company
participate.
(b) From and after the date hereof through the Effective Time,
the Company and Parent shall cooperate in good faith in (i) communicating with
Company employees with regard to the Merger and any personnel or employee
benefits matters related thereto and (ii) facilitating any necessary transitions
in connection with the Merger with respect to Company benefit plans, payroll
administration or similar matters.
ARTICLE 9 Covenants of Parent and the Company.
The parties hereto agree that:
Section 9.1. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, the Company and Parent will use their reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the Transactions.
30
Section 9.2. Certain Filings. The Company and Parent shall cooperate
with one another (i) in connection with the preparation of the Company
Disclosure Documents and the Offer Documents, (ii) in determining whether any
action by or in respect of, or filing with, any governmental body, agency,
official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the Transactions, (iii) in taking such
actions or making any such filings, furnishing information required in
connection therewith or with the Company Disclosure Documents or the Offer
Documents and seeking timely to obtain any such actions, consents, approvals or
waivers, and (iv) in connection with effecting the prompt dismissal of all
litigation between the Company and Parent and its Affiliates.
Section 9.3. Press Releases. Parent and the Company will only issue
joint press releases with respect to this Agreement or the Transactions, except
as may be required by applicable law or any listing agreement with any national
securities exchange.
Section 9.4. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
Section 9.5. Merger Without Meeting of Shareholders. If Parent, Merger
Subsidiary or any other Subsidiary of Parent shall acquire at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, Parent may, subject to
satisfaction or (to the extent permitted hereunder) waiver of all conditions to
the Merger, take all necessary and appropriate action to cause the Merger to be
effective as soon as practicable after the acceptance for payment and purchase
of Shares pursuant to the Offer without a meeting of shareholders of the Company
in accordance with Maine Law.
Section 9.6. Adjournment of Special Meeting of Shareholders. The
Company and Parent agree that Company shall take all action necessary to
postpone or adjourn the special meeting of shareholders of the Company scheduled
for June 16, 2000 to the latest date on which the record date for the special
meeting of shareholders is still valid for such meeting.
ARTICLE 10 Conditions to the Merger
Section 10.1. Conditions to Obligations of Each Party. The obligations
of the Company, Parent and Merger Subsidiary to consummate the Merger are
subject to the satisfaction of the following conditions:
31
(a) if required by Maine Law, this Agreement shall have been
approved and adopted by the shareholders of the Company in accordance with such
Law;
(b) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Merger; and
(c) Merger Subsidiary shall have purchased Shares pursuant to the
Offer.
Section 10.2. Conditions to the Obligations of Parent and Merger
Subsidiary. The obligations of Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:
(a) (i) the Company shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior to
the Effective Time, and (ii) the representations and warranties of the Company
contained in this Agreement and in any certificate or other writing delivered by
the Company pursuant hereto, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, shall be
true and correct in all material respects with only such exceptions as would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on the Company at and as of the date hereof as if made at and as
of such time and at and as of the Effective Time as if made at and as of such
time; and
(b) There shall not be instituted or pending any action,
investigation or proceeding by any government or governmental authority or
agency, domestic or foreign, or by any other Person, before any court or
governmental authority or agency, domestic or foreign, (i) challenging the
acquisition by Parent, Merger Subsidiary or any of their respective Affiliates
of any Shares, seeking to restrain or prohibit the making or consummation of the
Merger or the performance of any of the other Transactions contemplated by this
Agreement or seeking to require the Company, Parent, Merger Subsidiary or any of
their respective Affiliates to pay any damages related to the Merger or the
other Transactions that are material in relation to the Company taken as a
whole, (ii) seeking to impose limitations on the ability of Merger Subsidiary,
or to render Merger Subsidiary unable to accept for payment, pay for or purchase
some or all of the Shares, (iii) seeking to restrain or prohibit Parent's
ownership or operation (or that of its Affiliates) of all or any portion of the
business or assets of the Company and its Subsidiaries or of Parent and its
Affiliates or to compel Parent or any of its Affiliates to dispose of or hold
separate all or any portion of the business or assets of the Company and its
Subsidiaries or of Parent and its Affiliates, (iv) seeking to impose limitations
on the ability of Parent, Merger Subsidiary or any of Parent's other Affiliates
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by Parent,
Merger Subsidiary or any of Parent's other Affiliates on all matters properly
presented to the Company's shareholders, (v) seeking to require divestiture by
Parent, Merger Subsidiary or any of Parent's other Affiliates of any Shares,
(vi) alleging breach of fiduciary duty
32
by the directors of the Company or (vii) that otherwise is reasonably likely to
have a Material Adverse Effect on the Company or Parent.
ARTICLE 11 Termination
Section 11.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the shareholders of the Company):
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) Merger Subsidiary shall not have accepted for payment
at least that number of Shares that will satisfy the Minimum Condition pursuant
to the Offer before August 31, 2000, provided that the right to terminate this
Agreement pursuant to this Section 11.1(b)(i) shall not be available to any
party whose breach of any provision of this Agreement results in the failure of
the acceptance for payment by Merger Subsidiary of any Shares pursuant to the
Offer by such time;
(ii) there shall be any law or regulation that makes
acceptance for payment of, and payment for, the Shares pursuant to the Offer or
consummation of the Merger illegal or otherwise prohibited or any judgment,
injunction, order or decree of any court or governmental body having competent
jurisdiction enjoining Merger Subsidiary from accepting for payment of, and
paying for, the Shares pursuant to the Offer or the Company or Parent from
consummating the Merger and such judgment, injunction, order or decree shall
have become final and nonappealable;
(iii) the Company's shareholders shall have rejected the
Merger and this Agreement at the Company Shareholder Meeting, if required, or at
any adjournment or postponement thereof; or
(iv) the Merger shall not have been consummated by October
31, 2000; provided that the right to terminate this Agreement pursuant to this
Section 11.1(b)(iv) shall not be available to any party whose breach of any
provision of this Agreement results in the failure of the Merger to be
consummated by such time.
(c) by Parent, if, prior to the acceptance for payment of the
Shares under the Offer,
(i) any Person or "group" (as defined in Section 13(d)(3) of
the 1934 Act), other than Parent or any of its Affiliates, shall have acquired
beneficial ownership of more than 15% of the Shares, through the acquisition of
stock, the formation of a group or otherwise, or shall have been granted any
option, right or warrant, conditional or otherwise, to acquire beneficial
ownership of such Shares;
33
(ii) (A) the Board of Directors of the Company shall have
withdrawn, or modified in a manner adverse to Parent, its approval or
recommendation of this Agreement, the Offer or the Merger, or shall have
recommended or publicly announced its intention to enter into, a definitive
agreement or an agreement in principle with respect to an Acquisition Proposal
or shall have failed to reaffirm such approval or recommendation upon Parent's
request (or shall have resolved to do any of the foregoing) or (B) the Company
shall have breached any of its obligations under Section 7.4; or
(iii) the Offer terminates due to the failure of the Minimum
Condition.
(d) by the Company, if (i) prior to the acceptance for payment of
any Shares pursuant to the Offer, (ii) the Company is in compliance with Section
7.4(c), (iii) the Board of Directors of the Company shall have withdrawn or
modified in a manner adverse to Parent its approval or recommendation of this
Agreement, the Offer or the Merger, (iv) the Board of Directors of the Company
authorizes the Company, subject to complying with the terms of this Agreement,
to enter into a binding written agreement concerning a transaction that
constitutes a Superior Proposal and the Company notifies Parent in writing that
it intends to enter into such an agreement, attaching the most current version
of such agreement to such notice, (v) Parent does not make, within four business
days of receipt of the Company's written notification of its intention to enter
into a binding agreement for a Superior Proposal, an offer that the Board of
Directors of the Company determines, in good faith after consultation with its
financial advisors, is at least as favorable, from a financial point of view, to
the shareholders of the Company as the Superior Proposal, and (vi) the Company
simultaneously with such termination pays to Parent in immediately available
funds the fees required to be paid pursuant to Section 12.4. The Company agrees
(x) that it will not enter into a binding agreement referred to in clause (iv)
above until at least the fifth business day after it has provided the notice to
Parent required hereby and (y) to notify Parent promptly if its intention to
enter into the written agreement referred to in its notification shall change at
any time after giving such notification.
(e) The party desiring to terminate this Agreement pursuant to
this Section 11.1 (other than pursuant to Section 11.1(a)) shall give notice of
such termination to the other party.
Section 11.2. Effect of Termination. Subject to Section 12.4, if this
Agreement is terminated pursuant to Section 11.1, this Agreement shall become
void and of no effect with no liability on the part of any party (or any
shareholder, director, officer, employee, agent, consultant or representative of
such party) to the other party hereto, provided that, if such termination shall
result from the willful and knowing (i) failure of either party to fulfill a
condition to the performance of the material obligations of the other party,
(ii) failure of either party to perform a material covenant hereof or (iii)
material breach by either party hereto of any representation or warranty or
agreement contained herein, such party shall be fully liable for any and all
liabilities and damages incurred or suffered by the other party as a result of
such failure or breach. The provisions of Sections 11.2, 12.4, 12.6 and 12.7
shall survive any termination hereof
34
pursuant to Section 11.1. The Confidentiality Agreement also shall survive the
termination of this Agreement.
ARTICLE 12 Miscellaneous
Section 12.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Parent or Merger Subsidiary, to:
Compagnie de Saint-Gobain
Les Miroirs
18, Avenue d'Alsace
92096 Paris La Defense, Cedex 27
France
Fax: 011-33-1-4762-3710
Attention: Jean-Philippe Buisson
and copies to:
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482
Fax: (610) 341-7087
Attention: John R. Mesher, Esq.
Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103
Fax: (215) 981-4750
Attention: Peter O. Clauss, Esq.
if to the Company, to:
Brunswick Technologies, Inc.
43 Bibber Parkway
Brunswick, Maine 04011
Fax: (207) 729-7877
Attention: Martin Grimnes
35
with a copy to:
Gadsby Hannah LLP
225 Franklin Street
Boston, Massachusetts 02110
Fax: (617) 345-7050
Attention: Robert A. Trevisani, Esq.
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a business day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
Section 12.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement, except for the agreements
set forth in Sections 8.3, 8.4, 11.2, 12.4, 12.5, 12.6 and 12.7.
Section 12.3. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this
Agreement or, in the case of a waiver, by each party against whom the waiver is
to be effective, provided that, after the adoption of this Agreement by the
shareholders of the Company and without their further approval, no such
amendment or waiver shall reduce the amount or change the kind of consideration
to be received in exchange for the Shares.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 12.4. Expenses.
(a) Except as otherwise provided in this Section 12.4, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
(b) The Company agrees to pay Parent a fee in immediately
available funds equal to $1,800,000, plus the reasonable expenses of Parent (not
to exceed $1,000,000) incurred in connection with the Initial Offer, this
Agreement and the consummation of the
36
Transactions contemplated hereby if this Agreement shall be terminated (i)
pursuant to Section 11.1(c)(i) (except that for the purposes of this Section
12.4, such Person or "group" must purchase 50% or more of the outstanding
Shares), Section 11.1(c)(ii) or Section 11.1(d); or (ii) pursuant to Section
11.1(b)(i) and, in the case of this clause (ii), prior to the time of such
termination an Acquisition Proposal shall have been publicly announced and not
withdrawn and, within nine months of the date of termination, the Company enters
into an agreement or letter of intent concerning a transaction in respect of
such Acquisition Proposal and such transaction is subsequently consummated.
(c) The fee and expenses reimbursement payment payable (i)
pursuant to subsection (b)(i) above shall be paid by the Company simultaneously
with the termination of this Agreement and (ii) pursuant to subsection (b)(ii)
above shall be paid by the Company on the date on which the transaction referred
to in such subsection shall be consummated.
(d) The Company agrees to pay in immediately available funds
an amount equal to Parent's reasonable expenses (not to exceed $1,250,000)
incurred in connection with the Initial Offer, this Agreement and the
Transactions contemplated hereby, if (x) this Agreement shall have been
terminated pursuant to Section 11.1(b)(i), and (y) the condition in paragraph
(iv)(h) of Annex I shall not have been satisfied in respect of performance or
-------
non-performance of any covenants or agreements due to an intentional act or
omission of the Company. Such payment shall be made promptly, and in no event
later than two business days, after such termination.
(e) If the Company fails promptly to pay any amount due Parent
pursuant to this Section 12.4, the Company shall also pay any costs and expenses
incurred by Parent in connection with a legal action to enforce this Agreement
that results in any judgment or settlement against the Company for such amount.
(f) Parent agrees to pay the Company in immediately available
funds an amount equal to the Company's reasonable expenses (not to exceed
$1,250,000) incurred in connection with the Initial Offer, this Agreement and
the Transactions contemplated hereby if Parent is otherwise required pursuant to
the terms of the Offer to accept for payment and pay for the tendered Shares and
fails to do so within the time period provided in the Offer. Such payment shall
be made promptly, and in no event later than two business days, after such
failure to purchase shares.
Section 12.5. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Parent or Merger
Subsidiary may transfer or assign, in whole or from time to time in part, to one
or more of its Affiliates, the right to purchase all or a portion of the Shares
pursuant to the Offer, but no such transfer or assignment will relieve Parent or
Merger Subsidiary of its obligations
37
under the Offer or prejudice the rights of tendering shareholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
Section 12.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Maine, without regard to
the conflicts of law rules of such state.
Section 12.7. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 12.8. Counterparts; Effectiveness; Benefit. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Section 8.3, no provision of this Agreement is intended to
confer any rights, benefits, remedies, obligations, or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns.
Section 12.9. Entire Agreement. This Agreement and the
Confidentiality Agreement constitute the entire agreement between the parties
with respect to the subject matter of this Agreement and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
Section 12.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 12.11. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the Transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the Transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 12.12. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof,
in addition to any other remedy to which they are entitled at law or in equity.
[SIGNATURE PAGE FOLLOWS]
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BRUNSWICK TECHNOLOGIES, INC.
By: /s/ Alan M. Chesney
----------------------------------
Name: Alan M. Chesney
Title: Chief Financial Officer
CERTAINTEED CORPORATION
By: /s/ George B. Amoss
----------------------------------
Name: George B. Amoss
Title: Vice President - Finance
VA ACQUISITION CORPORATION
By: /s/ George B. Amoss
----------------------------------
Name: George B. Amoss
Title: Vice President
ANNEX I
Notwithstanding any other provision of the Offer, Parent and Merger Subsidiary
shall not be required to accept for payment or pay for any Shares, and may
terminate the Offer, if
(i) the Minimum Condition (as defined in the Merger Agreement) has not
been satisfied or waived (pursuant to the Merger Agreement, including Section
2.1(c)) by the scheduled expiration date,
(ii) the Rights shall not have been redeemed by the Board of Directors of
the Company or Parent or Merger Subsidiary are not satisfied, in their sole
discretion, that the Rights and the Rights Agreement are inapplicable to the
Offer and the Merger,
(iii) Parent and Merger Subsidiary are not satisfied, in their sole
discretion, that the provisions of Section 611-A of the Maine Business
Corporation Act are inapplicable to the acquisition of Shares pursuant to the
Offer and the Merger,
(iv) at any time on or after the date of the Merger Agreement and prior to
the expiration date of the Offer, any of the following conditions exist:
(a) there shall be instituted or pending any action, investigation or
proceeding by any government or governmental authority or agency, domestic or
foreign, or by any other Person, before any court or governmental authority or
agency, domestic or foreign,
(1) challenging the acquisition by Parent or Merger Subsidiary of
any Shares under the Offer, 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 the Merger Agreement or seeking to require the
Company, Parent or Merger Subsidiary to pay any damages related to the Offer,
the Merger or the other Transactions contemplated by the Merger Agreement that
are material in relation to the Company taken as a whole,
(2) seeking to impose limitations on the ability of Merger
Subsidiary, or to render Merger Subsidiary unable to accept for payment, pay for
or purchase some or all of the Shares pursuant to the Offer and the Merger,
(3) seeking to restrain or prohibit Parent's ownership or
operation (or that of its Affiliates) of all or any portion of the business or
assets of the Company and its Subsidiaries or of Parent and its Affiliates or to
compel Parent or any of its Affiliates to dispose of or hold separate all or any
portion of the business or assets of the Company and its Subsidiaries or of
Parent and its Affiliates,
(4) seeking to impose limitations on the ability of Parent,
Merger Subsidiary or any of Parent's other Affiliates effectively to exercise
full rights of ownership of
1
the Shares, including, without limitation, the right to vote any Shares acquired
or owned by Parent, Merger Subsidiary or any of Parent's other Affiliates on all
matters properly presented to the Company's shareholders,
(5) seeking to require divestiture by Parent, Merger Subsidiary
or any of Parent's other Affiliates of any Shares,
(6) alleging breach of fiduciary duty by the directors of the
Company; or
(7) that otherwise is reasonably likely to have a Material
Adverse Effect on the Company; or
(b) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic or foreign, that
is reasonably likely, directly or indirectly, to result in any of the
consequences referred to in paragraph (a) above; or
(c) any Person shall have entered into a definitive agreement or an
agreement in principle with the Company regarding an Acquisition Proposal; or
(d) the Board of Directors of the Company (1) shall have withdrawn,
or modified in a manner adverse to Parent, its approval or recommendation of the
Merger Agreement, the Offer or the Merger, (2) shall have failed to reaffirm
such approval or recommendation upon Parent's request or (3) shall have
recommended or publicly announced its intention to enter into, a definitive
agreement or an agreement in principle with respect to an Acquisition Proposal;
or
(e) it shall have been publicly disclosed or Parent shall have
otherwise learned that any Person or "group" (as defined in Section 13(d)(3) of
the 1934 Act), other than Parent or any of its Affiliates, shall have acquired
beneficial ownership of more than 15% of any class or series of capital stock of
the Company (including the Shares), through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted any option, right
or warrant, conditional or otherwise, to acquire beneficial ownership of more
than 15% of any class or series of capital stock of the Company (including the
Shares); or
(f) a tender or exchange offer for any Shares shall be made or
publicly proposed to be made by any other person (including the Company or any
of its Subsidiaries or Affiliates) or it shall be publicly disclosed, or Parent
or Merger Subsidiary or any of their Affiliates shall otherwise learn that (a)
any Person, entity (including the Company or any of its Subsidiaries) or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) has acquired or
proposes to acquire, through the acquisition of Shares, the formation of a group
or otherwise, beneficial ownership of any other class or series of capital stock
of the Company, or
2
shall have been granted any right, option or warrant, conditional or otherwise,
to acquire beneficial ownership of such class or series of capital stock of the
Company, (b) any person or group shall enter into a definitive agreement or an
agreement in principle or make a proposal with respect to an Acquisition
Proposal or (c) any person shall file a Notification and Report Form under the
HSR Act or make a public announcement of an Acquisition Proposal; or
(g) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity, condition
(financial or otherwise), operations, licenses, franchises, permits, permit
applications, results of operations or prospects of the Company or any of its
Subsidiaries or Affiliates which, in the sole judgement of Parent or Merger
Subsidiary, is or may be materially adverse to the Company or any of its
Subsidiaries or Affiliates, or Parent or Merger Subsidiary shall have become
aware of any fact which, in the sole judgment of any of them, has or may have
material adverse significance with respect to either the value of the Company or
any of its Subsidiaries or the value of the Shares to Parent or Merger
Subsidiary or any other Affiliate thereof; or
(h) the Company shall have breached or 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 the Merger Agreement; or
(i) there shall have occurred or threatened (1) any general suspension
of trading in, or limitation on the prices for, securities on any national
securities exchange or in the over-the-counter market in the United States, (2)
any extraordinary or material adverse change in the financial market or major
stock exchange indices in the United States or abroad or in the market price of
the Shares, (3) any change in the general political, market, economic or
financial conditions in the United States or abroad that could, in the sole
judgment of Parent or Merger Subsidiary, have a material adverse effect upon the
business, properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, licenses or franchises, results
or operations or prospects of the Company or material change in the United
States currency exchange rate or a suspension of, or limitation on, the markets
therefor, (4) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (5) any limitation (whether
mandatory or not mandatory) by any government, domestic, foreign or
supranational, or governmental entity on, or other event that, in the sole
judgment of Parent or Merger Subsidiary, might affect, the extension of credit
by banks or other lending institutions or (6) in the case of any of the
foregoing existing at the time of commencement of the Offer, a material
acceleration or worsening thereof; or
(j) there shall have occurred a commencement of a war or armed
hostilities or other national or international calamity directly or indirectly
involving the United States that is reasonably expected to have a Material
Adverse Effect on the Company; or
(k) each director of the Company shall not have entered into and
complied with his respective Shareholder Agreement; or
3
(l) all outstanding litigation between the Company and Parent and its
Affiliates shall not have been dismissed; or
(m) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the judgment of Parent in any such case, and regardless of the
circumstances (including any action or omission by Parent) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of Parent and Merger
Subsidiary and may, subject to the terms of the Merger Agreement, be waived by
Parent and Merger Subsidiary in whole or in part at any time and from time to
time in their discretion. The failure by Parent or Merger Subsidiary 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 prior to the Effective Time.
4