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EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
By and Among
PLASMA-THERM, INC.
OERLIKON-BUHRLE USA, INC.
and
VOLCANO ACQUISITION CORP.
Dated as of December 20, 1999
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TABLE OF CONTENTS
Page
1. The Tender Offer.........................................................................................1
1.1. Tender Offer....................................................................................1
1.2. Tender Offer Statement on Schedule 14D-1........................................................2
1.3. Solicitation/Recommendation Statement on Schedule 14D-9.........................................3
1.4. List of Shareholders............................................................................4
1.5. Changes in Applicable Laws......................................................................4
2. The Merger; Closing; Effective Time......................................................................4
2.1. The Merger......................................................................................4
2.2. Closing.........................................................................................5
2.3. Effective Time..................................................................................5
3. Articles of Incorporation and ByLaws of the Surviving Corporation........................................5
3.1. The Articles of Incorporation...................................................................5
3.2. The Bylaws......................................................................................5
4. Officers and Directors of the Company and the Surviving Corporation......................................5
4.1. Directors.......................................................................................5
4.2. Officers........................................................................................7
5. Effect of the Merger on Capital Stock; Exchange of Certificates..........................................7
5.1. Effect on Capital Stock.........................................................................7
5.2. Surrender of Certificates.......................................................................7
5.3. Dissenters' Rights..............................................................................9
5.4. Adjustments to Prevent Dilution................................................................10
5.5. Merger Without Meeting of Stockholders.........................................................10
6. Representations and Warranties of the Company...........................................................10
6.1. Organization, Good Standing and Qualification..................................................10
6.2. Capital Structure..............................................................................11
6.3. Corporate Authority; Approval and Fairness.....................................................12
6.4. Governmental Filings; No Violations............................................................12
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6.5. Company Reports; Financial Statements..........................................................13
6.6. Absence of Certain Changes.....................................................................14
6.7. Litigation and Liabilities.....................................................................15
6.8. Employee Benefits..............................................................................15
6.9. Compliance with Laws...........................................................................17
6.10. Takeover Statutes..............................................................................18
6.11. Environmental Matters..........................................................................18
6.12. Taxes..........................................................................................19
6.13. Labor Matters..................................................................................20
6.14. Intellectual Property..........................................................................21
6.15. Brokers and Finders............................................................................22
6.16. Year 2000......................................................................................22
6.17. Title to Assets................................................................................23
6.18. Insurance Policies.............................................................................23
6.19. Material Contracts.............................................................................24
6.20. Vote Required..................................................................................25
6.21. Offer Documents................................................................................25
6.22. No other Representations or Warranties.........................................................26
7. Representations and Warranties of Parent and Merger Sub.................................................26
7.1. Ownership of Company Shares....................................................................26
7.2. Capitalization of Merger Sub...................................................................26
7.3. Organization, Good Standing and Qualification..................................................27
7.4. Corporate Authority; Approval and Fairness.....................................................27
7.5. Governmental Filings; No Violations............................................................27
7.6. Compliance with Laws...........................................................................28
7.7. Takeover Statutes..............................................................................28
7.8. Funds..........................................................................................28
7.9. Other Documents................................................................................28
7.10. No other Representations or Warranties.........................................................29
8. Covenants...............................................................................................29
8.1. Interim Operations of the Company..............................................................29
8.2. Acquisition Proposals..........................................................................32
8.3. Filings; Other Actions; Notification...........................................................34
8.4. Access.........................................................................................36
8.5. Stock Exchange De-listing......................................................................36
8.6. Meetings of the Company's Shareholders.........................................................36
8.7. Publicity......................................................................................38
8.8. Benefits.......................................................................................38
8.9. Indemnification; Directors' and Officers' Insurance............................................39
8.10. Takeover Statute...............................................................................41
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8.11. Expenses.......................................................................................41
9. Conditions to Each Party's Obligation to Effect the Merger..............................................41
9.1. Shareholder Approval...........................................................................41
9.2. HSR............................................................................................41
9.3. Litigation.....................................................................................41
9.4. Tender Offer...................................................................................42
10. Termination.............................................................................................42
10.1. Termination by Mutual Consent..................................................................42
10.2. Termination by Either Parent or the Company....................................................42
10.3. Termination by the Company.....................................................................42
10.4. Termination by Parent..........................................................................43
10.5. Effect of Termination and Abandonment..........................................................43
11. Miscellaneous and General...............................................................................44
11.1. Survival.......................................................................................44
11.2. Modification or Amendment......................................................................45
11.3. Waiver of Conditions...........................................................................45
11.4. Counterparts...................................................................................45
11.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL..................................................45
11.6. Notices........................................................................................46
11.7. Entire Agreement; NO OTHER REPRESENTATIONS.....................................................47
11.8. No Third Party Beneficiaries...................................................................47
11.9. Obligations of Parent and of the Company.......................................................47
11.10. Severability...................................................................................47
11.11. Interpretation.................................................................................48
11.12. Assignment.....................................................................................48
11.13. Enforcement of Agreement.......................................................................48
11.14. Glossary of Terms..............................................................................48
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of December 20, 1999, by and among Plasma-Therm, Inc., a Florida
corporation (the "Company"), Oerlikon-Buhrle USA, Inc., a Delaware corporation
("Parent"), and Volcano Acquisition Corp., a Florida corporation and a
wholly-owned subsidiary of Parent ("Merger Sub").
RECITALS
WHEREAS, the respective boards of directors of each of Parent, Merger
Sub and the Company have approved this Agreement and adopted the plan of merger
(the "Plan") set forth herein whereby Merger Sub will merge with and into the
Company upon the terms and subject to the conditions set forth in this Agreement
(the "Merger");
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent and Merger Sub are entering into agreements with Ronald H.
Deferrari, Ronald S. Deferrari, Edmond A. Richards and Stacy L. Wagner pursuant
to which such stockholders of the Company shall agree to take certain actions to
support the transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. THE TENDER OFFER
1.1. Tender Offer.
Provided that this Agreement shall not have been terminated in
accordance with Section 10 hereof and none of the events set forth in paragraphs
(a) through (g) of Annex A hereto shall have occurred or be existing and the
other conditions to the Offer specified in Annex A shall have been satisfied
(together with such events, the "Offer Conditions"), as soon as reasonably
practicable, and in any event within five Business Days after public
announcement of this Agreement, Merger Sub will commence, within the meaning of
Rule 14d-2 under the Exchange Act (as defined below), a tender offer (the
"Offer") for all of the outstanding Shares (as defined below) at a price of
$12.50 per Share in cash, net to the seller, and, subject only to and in
accordance with the terms and conditions of the Offer, accept for payment Shares
that are validly tendered pursuant to the Offer and not withdrawn immediately
following (unless the Offer shall have been extended in accordance with the
terms hereof) the later of (i) the date on which the waiting period under the
HSR Act has expired or has been terminated, (ii) the date on which the waiting
period under the Exon-Florio Amendment to the Omnibus Trade and Competitiveness
Act of 1988 has expired or has been terminated, and (iii)
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the twentieth Business Day after the commencement of the Offer, unless this
Agreement is terminated in accordance with Section 10, in which case the Offer
(whether or not previously extended in accordance with the terms hereof) shall
expire on such date of termination; provided, however, and notwithstanding
anything to the contrary in the foregoing, Parent and Merger Sub agree that
unless the Company is in material breach of this Agreement, if any of the Offer
Conditions specified in paragraphs (a) or (c) of Annex A exists at the time of
the scheduled expiration date of the Offer, Merger Sub shall from time to time
extend the Offer at such times as the Company may request for five Business Days
for each extension, but shall in no event extend the Offer beyond June 30, 2000,
and, provided, further, it is understood and agreed that unless Parent or Merger
Sub is in material breach of this Agreement (A) if any of the Offer Conditions
specified in paragraphs (a) through (h) of Annex A exists at the time of the
scheduled expiration date of the Offer, Merger Sub may extend and re-extend the
Offer on one or more occasions for periods of time (not to exceed ten Business
Days for any particular extension) so that the expiration date of the Offer (as
so extended) is as soon as reasonably practicable or advisable after the date on
which the particular Offer Condition no longer exists, and (B) Merger Sub may
extend and re-extend the Offer on one or more occasions for periods of time (not
to exceed ten Business Days for any particular extension): (i) for any period
required by any rule, regulation, interpretation or position of the SEC (as
defined below) or its staff applicable to the Offer, (ii) for any period
required by applicable law and (C) if on such expiration date there shall have
been validly tendered and not withdrawn more than 50%, but less than 80%, of the
outstanding number of Shares, for an aggregate period of twenty days beyond the
latest expiration date that would be permitted under this sentence; provided,
further, that all extensions of the Offer made by Merger Sub (other than at the
request of the Company) shall not extend the Offer beyond June 30, 2000. Merger
Sub shall not, without the prior written consent of the Company, decrease the
price per Share offered in the Offer, change the form of consideration offered
or payable in the Offer, decrease the numbers of Shares sought in the Offer,
change the conditions to the Offer, impose additional conditions to the Offer,
amend any term of the Offer, in each case, in any manner adverse to the holders
of Shares or waive the Minimum Conditions (as defined in Annex A).
Notwithstanding the above, in the event that Merger Sub has not, on or before
June 30, 2000, accepted pursuant to the Offer for payment more than 50% of the
outstanding Shares of the Company (on a fully diluted basis), then the Agreement
may be terminated by the Board of Directors of either Parent or the Company;
unless such purchase shall not have occurred because of a material breach of
this Agreement by the party seeking to terminate this Agreement.
1.2. Tender Offer Statement on Schedule 14D-1.
As soon as reasonably practicable on the date the Offer is
commenced, Merger Sub shall file a Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") with the SEC with respect to the Offer. The Schedule 14D-l
shall contain an Offer to Purchase and forms of the related letter of
transmittal and other documents relating to the Offer (which Schedule 14D-1,
Offer to Purchase, letter of transmittal and other documents, together with any
supplements or amendments thereto, are referred to herein collectively as the
"Offer Documents"). Parent and Merger Sub agree that the Company and its
counsel shall be given
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an opportunity to review and comment on the Schedule 14D-l before it is filed
with the SEC. Parent, Merger Sub and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents that shall have
become false or misleading in any material respect, and Parent, Merger Sub and
the Company further agree to take all steps necessary to cause the Schedule
14D-1 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. Parent and Merger Sub
also agree that the Offer Documents shall comply as to form in all material
respects with the requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations thereunder, and on the date filed
with the SEC and on the date first published, sent or given to the Company's
stockholders, the Offer Documents shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Merger Sub with respect to information
supplied by the Company for inclusion in the Offer Documents. Parent and Merger
Sub agree to provide the Company and its counsel in writing with any comments
Parent, Merger Sub or their counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments and with
copies of any written responses and telephonic notification of any verbal
responses by Parent, Merger Sub or their counsel.
1.3. Solicitation/Recommendation Statement on Schedule
14D-9.
1.3.(a) Subject to its fiduciary duties, the Company
hereby approves of and consents to the Offer and hereby consents to the
inclusion in the Offer Documents of the recommendation of the Board of Directors
described clause (A) of Section 6.3(b). The Company has been advised by each of
its directors and executive officers holding in excess of 1% of the fully
diluted Shares outstanding that each such person intends to tender all shares of
Common Stock owned by such person pursuant to the Offer, except to the extent of
any restrictions created by Section 16(b) of the Exchange Act.
1.3.(b) The Company shall file a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
with the Securities and Exchange Commission (the "SEC") on the date of the
filing of the Schedule 14D-1 containing the recommendations described in Section
6.3(b) and shall mail the Schedule 14D-9 to the stockholders of the Company;
provided, however, that if the Company's Board of Directors determines
consistent with its fiduciary duties in accordance with Section 8.2 hereof to
amend or withdraw such recommendation, such amendment or withdrawal shall not
constitute a breach of this Agreement. Parent and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9 before it is filed with
the SEC. Parent, Merger Sub and the Company each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 that shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
the applicable federal securities
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laws. The Company also agrees that the Schedule 14D-9 shall comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, and on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, the Schedule 14D-9
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Merger Sub for inclusion in the
Schedule 14D-9. The Company agrees to provide Parent and Merger Sub and their
counsel in writing with any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments and with copies of any written response and telephonic
notification of any verbal responses by the Company or its counsel.
1.4. List of Shareholders.
In connection with the Offer, the Company will promptly cause
its Transfer Agent to furnish to Merger Sub mailing labels containing as of a
recent date, the names and addresses of the record holders of Shares and of
those persons becoming record holders subsequent to such date, together with
copies of all lists of stockholders, security position listings and computer
files in the Company's possession or control regarding the beneficial owners of
Shares, and shall furnish to Merger Sub such information and assistance
(including updated lists of stockholders, security position listings and
computer files) as Merger Sub may reasonably request in communicating the Offer
to the Company's stockholders. For purposes of this Agreement, the term
"Business Day" means any day other than Saturday, Sunday or a federal holiday.
1.5. Changes in Applicable Laws
Subject to the terms and conditions of this Agreement, if
there shall occur a change in law or in a binding judicial interpretation of
existing law which would, in the absence of action by the Company or the Board,
prevent the Merger Sub, were it to acquire a specified percentage of the Shares
then outstanding, from approving and adopting this Agreement by its affirmative
vote as the holder of a majority of issued and outstanding Shares and without
the affirmative vote of any other stockholder, the Company will use its
reasonable best efforts to promptly take or cause such action to be taken.
2. THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger.
Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as hereinafter defined), Merger Sub shall be
merged with and into the Company in accordance with this Agreement and the
separate corporate existence of Merger Sub shall thereupon cease. The Company
shall be the surviving corporation in the Merger (sometimes hereinafter referred
to as the "Surviving Corporation"), and the separate corporate
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existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger, except as set forth in
Section 3. The Merger shall have the effects specified in the Florida Business
Corporation Act (the "FBCA").
2.2. Closing.
The closing of the Merger (the "Closing") shall take place (i)
at the offices of Foley & Lardner, 100 North Tampa Street, Suite 2700, Tampa
Florida 33602 at 10:00 A.M. on the third business day after the last to be
satisfied or waived of the conditions set forth in Section 8 hereof shall be
satisfied or waived in accordance with this Agreement or (ii) at such other
place and time and/or on such other date as the Company and Parent may agree in
writing (the "Closing Date").
2.3. Effective Time.
Simultaneously with the Closing, the Company and Parent will
cause Articles of Merger reflecting the provisions set forth in this Agreement
(the "Articles of Merger") to be executed (by the Company and Merger Sub) and
delivered for filing to the Department of State of the State of Florida (the
"Department") as provided in Section 607.1105 of the FBCA. The Merger shall
become effective at the time when the Articles of Merger have been duly filed
with the Department or at such later time agreed by the parties in writing and
provided in the Articles of Merger (the "Effective Time").
3. ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION
3.1. The Articles of Incorporation.
The articles of incorporation of the Company as in effect
immediately prior to the Effective Time shall be the articles of incorporation
of the Surviving Corporation (the "Articles"), until duly amended as provided
therein or by applicable law, except that Article V of the articles of
incorporation of the Company shall be amended in its entirety to read as
follows: "The total number of shares of all classes of capital stock that the
Corporation shall have authority to issue shall be 1,000 shares of Common Stock,
par value $.01 per share".
3.2. The Bylaws.
The bylaws of the Company in effect at the Effective Time
shall be the bylaws of the Surviving Corporation (the "Bylaws"), until duly
amended as provided therein or by applicable law.
4. OFFICERS AND DIRECTORS OF THE COMPANY AND THE SURVIVING
CORPORATION
4.1. Directors.
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4.1.(a) If requested by Parent, the Company shall to
the extent permitted by law, promptly following the purchase by Merger Sub of
Shares pursuant to the Offer in accordance with the terms hereunder, take, at
its expense, all actions necessary (including calling a special meeting of the
Board of Directors of the Company or, only if necessary, the shareholders of the
Company for this purpose) to cause natural Persons designated by Parent to
become directors of the Company so that the total number of such natural Persons
equals that number of directors, rounded up to the next whole number, which
represents the product of (x) the total number of directors on the board of
directors of the Company multiplied by (y) the percentage that the number of
Shares so accepted for payment plus any shares beneficially owned by Parent or
its affiliates on the date hereof bears to the number of Shares outstanding at
the time of such acceptance for payment; provided, however, that prior to the
Effective Time the total number of directors designated by Parent will not
exceed 75% of the Board of Directors of the Company. At such time, the Company
shall also cause persons designated by Parent to constitute the same percentage
(rounded up to the next whole number) as is on the Company's Board of Directors
of (i) each committee of the Company's Board of Directors; (ii) each board of
directors (or similar body) of each Subsidiary of the Company, and (iii) each
committee (or similar body) of each such board. In furtherance thereof, the
Company will increase the size of the board of directors of the Company, or use
its best efforts to secure the resignation of directors, or both, as is
necessary to permit Parent's designees to be elected to the board of directors
of the Company; provided, however, that prior to the Effective Time, the board
of directors of the Company shall always have at least three members who are
neither officers of Parent nor designees, shareholders or affiliates of Parent
("Parent Insiders"). The Company's obligations to appoint designees to the board
of directors of the Company now shall be subject to Section 14(f) of the
Exchange Act and Rule 14(f)-l thereunder. The Company shall promptly take all
actions required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 4.1 and shall include in the Schedule 14D-9 such
information as is required under such Rule, Section and Schedule. Parent agrees
to furnish to the Company all information concerning Parent's designees which
may be necessary to comply with the foregoing and agrees that such information
will comply with the Exchange Act and the rules and regulations thereunder and
other applicable laws. Notwithstanding anything in this Agreement to the
contrary, in the event that Parent's designees are elected or appointed to the
Board of Directors of the Company after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of
at least a majority of the directors of the Company who are not Parent Insiders
shall be required to (a) amend or terminate this Agreement by the Company, (b)
waive any of the Company's material rights, benefits or remedies hereunder, (c)
extend the time for performance of Parent's and Merger Sub's respective
obligations hereunder, or (d) take any other action by the Company's Board of
Directors under or in connection with this Agreement which would adversely
affect the ability of the shareholders of the Company to receive the Merger
Consideration.
4.1.(b) The directors of Merger Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation as of
the Effective Time and until their successors are duly appointed or elected in
accordance with applicable law.
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4.2. Officers.
The persons listed on Schedule 4.2 shall, from and after the
Effective Time, be the officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Articles and the
Bylaws.
5. EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES
5.1. Effect on Capital Stock.
At the Effective Time, as a result of the Merger and without
any action on the part of the holder of any capital stock of the Company:
5.1.(a) Merger Consideration. Each share of the
voting Common Stock, par value $0.01 per share, of the Company (a "Share" and,
collectively, the "Shares") issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, Merger Sub or any other
direct or indirect Subsidiary of Parent (collectively, the "Parent Companies")
or Shares that are owned by the Company and in each case not held on behalf of
third parties or Shares that are owned by Dissenting Shareholders (collectively,
"Excluded Shares")) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be cancelled, extinguished and converted into the
right to receive, without any interest, an amount in cash equal to $12.50 per
Share (the "Merger Consideration") or such greater amount which may be paid
pursuant to the Offer. As a result of the Merger and without any action on the
part of the holder thereof, at the Effective Time, all Shares shall no longer be
outstanding and shall be cancelled and retired and shall cease to exist, and
each certificate (a "Certificate") formerly representing any of such Shares
(other than Excluded Shares) shall thereafter represent only the right to the
Merger Consideration for each Share upon the surrender of such Certificate in
accordance with Section 5.2 or, with respect to Shares held by Dissenting
Shareholders, the right, if any, to receive payment from the Surviving
Corporation of the "fair value" of such Shares as determined in accordance with
Section 607.1302 of the FBCA.
5.1.(b) Cancellation of Shares. Each Excluded Share
shall cease to be outstanding, shall, by virtue of the Merger, be cancelled and
retired without payment of any consideration therefor and shall cease to exist.
5.1.(c) Merger Sub. Each share of Common Stock, par
value $0.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.
5.2. Surrender of Certificates.
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5.2.(a) Paying Agent. At the Effective Time, Parent
shall deposit, or shall cause to be deposited, with The Bank of New York or such
other party reasonably satisfactory to the Company, to act as paying agent (the
"Paying Agent"), selected by Parent (within 15 days after the date hereof) with
the Company's prior approval for the benefit of the holders of Shares, an amount
in cash sufficient in the aggregate to provide all funds necessary for the
Paying Agent to make payments of the Merger Consideration to all holders of
Shares (such cash being hereinafter referred to as the "Exchange Fund") . To the
extent not required within five Business Days for payment with respect to
surrendered Shares, proceeds in the Exchange Fund may be invested by the Paying
Agent, if and as directed by Parent (as long as such investments do not impair
the rights of holders of Shares) in direct obligations of the United States of
America, obligations for which the faith and credit of the United States of
America is pledged to provide for the payment of principal and interest, or
certificates of deposit issued by a commercial bank having at least $10 billion
in assets, and any net earnings with respect thereto shall be paid to Parent as
and when requested by the Parent; provided that at no time may the amount of the
Exchange Fund be reduced below an amount necessary to make payments of the
Merger Consideration for all Shares not theretofore submitted.
5.2.(b) Exchange Procedures. As soon as practicable
after the Effective Time, the Surviving Corporation shall cause the Paying Agent
to mail to each holder of record of Shares immediately prior to the Effective
Time (other than holders of Excluded Shares) (i) a letter of transmittal
specifying that delivery of the Certificates shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of the Certificates
(or affidavits of loss in lieu thereof) to the Paying Agent, such letter of
transmittal to be in such form and have such other provisions as Parent may
reasonably specify, and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the amounts of cash payable hereunder to a
Person other than the Person in whose name the surrendered Certificate is
registered on the transfer books of the Company. Subject to Section 5.2(e), upon
surrender of a Certificate for cancellation to the Paying Agent together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor a check in an amount equal to (after
giving effect to any required tax withholdings) the Merger Consideration
multiplied by the number of Shares formerly represented by such Certificate and
the Certificate so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on any amount payable upon due surrender of the Certificates. In
the event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, a check in the amount payable hereunder, upon
due surrender of the Certificate, may be paid to such a transferee if the
Certificate formerly representing such Shares is presented to the Paying Agent,
accompanied by all documents reasonably required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid.
For the purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity (as hereinafter defined) or other
entity of any kind or nature.
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5.2.(c) Transfers. At or after the Effective Time,
there shall be no transfers on the stock transfer books of the Company of the
Shares that were outstanding immediately prior to the Effective Time. From and
after the Effective Time, the holders of Certificates evidencing ownership of
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares except as otherwise provided for herein
or by applicable law. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, they shall be canceled and exchanged as provided
in this Section 5.
5.2.(d) Termination of Exchange Fund. Any portion of
the Exchange Fund (including the proceeds of any interest and other income
received by the Paying Agent in respect of all such funds) that remains
unclaimed by the shareholders of the Company for six months after the Effective
Time shall be returned to the Surviving Corporation. Any shareholders of the
Company who have not theretofore complied with this Section 5 shall thereafter
look to the Surviving Corporation for payment of the Merger Consideration
payable upon due surrender of their Certificates (or affidavits of loss in lieu
thereof) in accordance with this Agreement, in each case, without any interest
thereon.
5.2.(e) Lost, Stolen or Destroyed Certificates. In
the event 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 Parent or Surviving
Corporation, the posting by such Person of a bond in a reasonable amount as the
Parent or Surviving Corporation may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the amount of
cash such Persons are entitled to hereunder upon due surrender of the Shares
represented by such Certificate pursuant to this Agreement.
5.3. Dissenters' Rights.
Notwithstanding anything in this Agreement to the contrary, if
required under the FBCA, but only to the extent required thereby, Shares that
are issued and outstanding immediately prior to the Effective Time and which are
held by shareholders ("Dissenting Shareholders") who (A) have not voted in favor
of or consented to the Merger and (B) in the manner provided in Section 607.1320
of the FBCA shall have delivered a written notice of intent to demand payment
for such Shares if the Merger is effectuated in the time and manner provided in
FBCA and (C) shall not have failed to perfect or shall not have effectively
withdrawn or lost their rights to appraisal and payment under the FBCA shall not
be converted into the right to receive the Merger Consideration, but shall, in
lieu thereof, be entitled to receive the consideration as shall be determined
pursuant to Sections 607.1301 through 607.1320 of the FBCA; provided, however,
that any such holder who shall have failed to perfect or shall have effectively
withdrawn or lost his, her or its right to appraisal and payment under the FBCA,
shall thereupon be deemed to have had such Person's Shares converted, at the
Effective Time, into the right to receive the Merger Consideration set forth
herein, without any interest or dividends thereon. Notwithstanding anything to
the contrary contained in this
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Section 5.3, if (i) the Merger is rescinded or abandoned or (ii) the
stockholders of the Company revoke the authority to effect the Merger, then the
right of any Dissenting Shareholder to be paid the fair value of such Dissenting
Shareholder's Shares pursuant to Section 607.1302 of the FBCA shall cease as
provided in the FBCA. The Company will give Parent prompt notice of any demands
received by the Company for appraisals of Shares held by Dissenting
Shareholders. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal or offer to
settle or settle any such demands.
5.4. Adjustments to Prevent Dilution.
The Company shall not, without the prior written consent of
the Parent (which consent shall not be unreasonably withheld), change the number
of Shares, or securities convertible or exchangeable into or exercisable for
Shares, issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), stock dividend or
distribution, recapitalization, merger, subdivision, issuer tender or exchange
offer, or other similar transaction. In the event of any such change, the Merger
Consideration shall be equitably adjusted.
5.5. Merger Without Meeting of Stockholders.
Notwithstanding the foregoing, if Merger Sub, or any other
direct or indirect subsidiary of Parent, shall acquire at least 80 percent of
the outstanding Shares, the parties hereto shall take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a meeting of stockholders
of the Company, in accordance with Section 607.1104 of the FBCA.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth in the disclosure letter delivered to Parent by the
Company on or prior to entering into this Agreement (the "Company Disclosure
Letter"), the Company hereby represents and warrants to Parent and Merger Sub
that (for purposes of the representations and warranties in this Section 6 that
relate to events occurring or conditions existing in the past, references to the
Company shall be deemed to include its previously existing Subsidiary (as such
term is hereinafter defined):
6.1. Organization, Good Standing and Qualification.
The Company has no Subsidiaries (as hereinafter defined). The
Company is a corporation duly organized, validly existing and of active status
under the laws of the State of Florida and has all requisite corporate or
similar power and authority to own, operate and lease its properties and assets
and to carry on its business as presently conducted and is qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the ownership or operation of its properties or conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing, individually or in the
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15
aggregate, would not have a Company Material Adverse Effect (as hereinafter
defined). The Company has delivered to Parent complete and correct copies of the
Company's articles of incorporation and bylaws (or comparable governing
instruments), as amended to the date hereof. The Company's articles of
incorporation and bylaws (or comparable governing instruments) so delivered are
in full force and effect.
As used in this Agreement, the term "Subsidiary" means, with
respect to the Company, Parent or Merger Sub, as the case may be, any entity,
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries or by such party and any one or more of
its respective Subsidiaries.
As used in this Agreement, the term "Company Material Adverse
Effect" means a material adverse effect on the financial condition, properties,
business, assets, operations or results of operations of the Company taken as a
whole; including any such effect resulting from any change in economic or
business conditions generally or in the industries of the Company specifically.
6.2. Capital Structure.
The authorized capital stock of the Company consists of
25,000,000 Shares, of which 11,252,311 Shares were outstanding as of the close
of business on December 20, 1999. No shares of capital stock of the Company are
held by the Company in its treasury or by the Company's Subsidiaries. All of the
issued and outstanding Shares have been duly authorized and are validly issued,
fully paid and nonassessable. The Company has no Shares reserved for or subject
to issuance, except that, as of December 20, 1999, there were 1,732,750 Company
Options (as defined below) to purchase Shares outstanding, 1,732,750 Shares
reserved in the aggregate for issuance upon exercise of such Company Options
pursuant to the 1995 Stock Incentive Plan as Adopted by the Board of Directors
and the Stock Option Committee on March 17, 1995 and as Amended and Restated
Effective as of May 6, 1997 and as Amended and Restated effective as of January
8, 1999 (the "Company Stock Plan"), and 759,117 Shares were reserved for future
grants under the Company Stock Plan. No shares of capital stock of the Company
are held by the Company in its treasury. Except as set forth above, there are no
other shares of capital stock or voting securities of the Company and there are
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock or
other securities of the Company or any securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to subscribe
for or acquire, any securities of the Company, and no securities or obligations
evidencing such rights are authorized, issued or outstanding. The Company does
not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the
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shareholders of the Company on any matter ("Voting Debt") After the Effective
Time, and after giving effect to Section 8.8(a) hereof, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
capital stock of the Company or the Surviving Corporation pursuant to any
Compensation or Benefit Plan (as defined below). There are no voting trusts or
other agreements or understandings to which the Company or any of the Company's
directors or officers is a party with respect to the voting of capital stock of
the Company.
6.3. Corporate Authority; Approval and Fairness.
6.3.(a) The Company has all requisite corporate power
and authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and all agreements and
documents contemplated hereby or executed in connection herewith (the "Ancillary
Documents") and to consummate, subject only to approval of the Merger by the
holders of a majority of the outstanding Shares if required by applicable law
(the "Company Requisite Vote"), the transactions contemplated by this Agreement
and the Ancillary Documents. This Agreement has been and at the time of
execution each Ancillary Document will have been duly executed and delivered by
the Company, and assuming due authorization, execution and delivery of this
Agreement and the Ancillary Documents by Parent and Merger Sub, each is a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles (the
"Bankruptcy and Equity Exception").
6.3.(b) The Board of Directors of the Company (A) at
a meeting duly called and held has duly adopted resolutions (i) approving this
Agreement, the Offer and the Merger (as hereinafter defined), determining that
the Merger is advisable and that the terms of the Offer and Merger are fair to,
and in the best interests of, the Company's stockholders and recommending that
the Company's stockholders accept the Offer and approve the Merger and this
Agreement, and (ii) taking all action necessary to render Sections 607.0901 and
607.0902 of the Florida Business Corporation Act, as amended (the "FBCA")
inapplicable to, and have no adverse effect on, Parent and Merger Sub, the
Offer, the Merger, this Agreement, any of the Ancillary Documents or Offer
Documents, and any of the transactions contemplated hereby and thereby, and (B)
has received the opinion of its financial advisor, CIBC World Markets Corp. (the
"Financial Advisor"), to the effect that, as of the date of this Agreement, the
$12.50 per Share cash consideration to be received in the Offer and the Merger,
taken together, by the holders of Shares (other than Parent and its affiliates)
is fair from a financial point of view to such holders. The Company has been
authorized by the Financial Advisor to permit the inclusion of its opinion in
its entirety and references thereto, subject to prior review and consent by the
Financial Advisor (such consent not to be unreasonably withheld) in the Offer to
Purchase, the Schedule 14D-9 and the Proxy Statement (as hereinafter defined).
6.4. Governmental Filings; No Violations.
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6.4.(a) Other than the filings and/or notices (A)
pursuant to Section 2.3, (B) under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (C) under the Securities Exchange Act
of 1934 (the "Exchange Act"), and (D) under the Exon-Florio Amendment to the
Omnibus Trade and Competitiveness Act of 1988 (the "Exon-Florio Amendment"), no
notices, reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Company from, any governmental or regulatory
authority, agency, commission, body or other governmental entity (each a
"Governmental Entity"), in connection with the execution and delivery of this
Agreement and any of the Ancillary Documents by the Company and the consummation
by the Company of the transactions contemplated hereby or thereby, except for
those that the failure to make or obtain, individually or in the aggregate,
would not have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
6.4.(b) The execution, delivery and performance of
this Agreement and any of the Ancillary Documents by the Company do not, and the
consummation by the Company of the transactions contemplated hereby will not,
constitute or result in (A) a breach or violation of, a conflict with or a
default under, either the articles of incorporation of the Company or bylaws of
the Company or the comparable governing instruments of any of its Subsidiaries,
in each case as amended to date, (B) a breach or violation of, a conflict with,
or a default under, the acceleration of any obligations, the termination or in a
right of termination of, the triggering of any payment or other obligation
pursuant to, there being declared void, voidable, or without further binding
effect, or the creation of a lien, pledge, security interest or other
encumbrance on the assets of the Company (in each case with or without notice,
lapse of time or both) pursuant to, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other commitment or obligation ("Contracts")
not otherwise terminable by the Company thereto on ninety (90) days' or less
notice without payment of any termination fees or other amounts binding upon the
Company or any Law or governmental or non-governmental permit or license to
which the Company is subject or (C) any change in the rights or obligations of
any party under any of the Contracts, except, in the case of clause (B) or (C)
above, for any breach, violation, default, acceleration, creation or change,
that, individually or in the aggregate, would not have a Company Material
Adverse Effect or prevent, materially delay or materially impair the ability of
the Company to consummate the transactions contemplated by this Agreement.
6.5. Company Reports; Financial Statements.
The Company has made available to Parent each registration
statement, report, proxy statement or information statement filed by it since
November 30, 1998 (the "Audit Date") and prior to the date hereof, including (i)
the Company's Annual Report on Form 10-K for the fiscal year ended November 30,
1998, and (ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended February 28, 1999, and May 31, 1999, and August 31, 1999, each in
the form (including exhibits, annexes and any amendments thereto) filed with
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18
the Securities and Exchange Commission (the "SEC") (collectively, including
amendments of any such reports as amended, the "Company Reports"). As of their
respective dates, (i) the Company Reports complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations thereunder, and (ii) none of the Company SEC
Reports contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The consolidated financial statements (including any notes and
related schedules) of the Company included in the Company Reports comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of the unaudited interim financial
statements, as permitted by Form 10-Q of the SEC). Each of the consolidated
balance sheets included in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents the consolidated
financial position of the Company as of its date and each of the consolidated
statements of income and of consolidated statements of cash flow included in or
incorporated by reference into the Company Reports (including any related notes
and schedules) fairly presents the results of operations and cash flows, as the
case may be, of the Company for the periods set forth therein (subject, in the
case of unaudited statements, to the absence of notes and normal year-end audit
adjustments), in each case in accordance with GAAP consistently applied during
the periods involved, except as may be noted therein. The Company has no
liabilities or obligations (whether absolute, accrued, fixed, contingent,
liquidated, unliquidated or otherwise) of any nature, except liabilities,
obligations or contingencies (a) which are reflected on the audited balance
sheet of the Company as at November 30, 1998 (the "Audit Date") (including the
notes thereto), or (b) which (i) individually or in the aggregate, would not
have a Company Material Adverse Effect, or (ii) are disclosed or reflected in
the Company SEC Reports filed after the Audit Date and prior to the date of this
Agreement. The reserves established by the Company in the Company's consolidated
balance sheet as of November 30, 1998 (the "1998 Balance Sheet") are, in the
Company's good faith judgement, adequate to fund the liabilities covered
thereby. Since January 1, 1996, the Company has timely filed with the SEC all
forms, reports and other documents required to be filed prior to the date hereof
pursuant to the Securities Act, the Exchange Act or the rules and regulations
thereunder. This paragraph is qualified in its entirety by those exceptions that
would not have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
6.6. Absence of Certain Changes.
Except as disclosed in the Company Reports or as permitted
hereunder, since the Audit Date, the Company has conducted its business only in,
and has not engaged in any material transaction other than according to, the
ordinary and usual course of such business consistent with past practice and
there has not been (i) any Company Material Adverse Effect; (ii) any material
damage, destruction or other casualty loss with respect to any material asset or
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19
material property owned, leased or otherwise used by the Company, not covered by
insurance; (iii) any declaration, setting aside or payment of any dividend or
other distribution in respect of the capital stock of the Company; or (iv) any
change by the Company in accounting principles, practices or methods which is
not required or permitted by GAAP. Since the Audit Date and through the date
hereof, except as provided for herein or as disclosed in the Company Reports,
there has not been any material increase in the compensation payable or that
could become payable by the Company to officers or key employees or any material
amendment of any of the Compensation and Benefit Plans (as hereinafter defined)
other than increases or amendments in the ordinary course.
6.7. Litigation and Liabilities.
Except as disclosed in the Company Reports, there are no
civil, criminal or administrative actions, suits, claims, hearings,
investigations or proceedings pending or, to the knowledge of the executive
officers of the Company listed on Schedule 6.7, after due inquiry("Knowledge of
the Company"), relating to or threatened against the Company.
6.8. Employee Benefits.
6.8.(a) A true and correct copy of each bonus,
deferred compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock, stock
option, employment, termination, severance, compensation, medical, health or
other plan, agreement, policy or arrangement that covers employees or former
employees of the Company ("Employees"), or directors or former directors of the
Company (the "Compensation and Benefit Plans") including amendments thereto and
(i) any trust agreement or insurance contract forming a part of such
Compensation and Benefit Plans, (ii) the two (2) most recent annual actuarial
valuations, if any, prepared for each Company Benefit Plan; (iii) the two (2)
most recent annual reports (Series 5500 and all schedules thereto), if any,
required under ERISA in connection with each Company Benefit Plan or related
trust; (iv) the most recent determination letter received from the IRS, if any,
for each Company Benefit Plan and related trust which is intended to satisfy the
requirements of Section 401(a) of the Code; (v) if the Company Benefit Plan is
funded, the most recent annual and periodic accounting of Company Benefit Plan
assets; and (vi) the most recent summary plan description together with the most
recent summary of material modifications, if any, required under ERISA with
respect to each Company Benefit Plan have been made available to Parent prior to
the date hereof. The Compensation and Benefit Plans are listed in Section 6.8 of
the Company Disclosure Letter and any Compensation and Benefit Plans containing
"change of control" or similar provisions therein are specifically identified in
Section 6.8 of the Company Disclosure Letter.
6.8.(b) All Compensation and Benefit Plans covering
Employees (the "Plans") are in substantial compliance with all applicable laws,
including the Code and the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to the extent applicable. Each Compensation and Benefit Plan
has been administered in substantial compliance with its terms and the
requirements of ERISA and the Code, to the extent
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applicable. Each Plan that is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA (a "Pension Plan") and that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service (the "IRS") with respect
to "TRA" (as defined in Section 1 of Rev. Proc. 93-39), and to the Knowledge of
the Company there are no circumstances reasonably likely to result in revocation
of any such favorable determination letter. As of the date hereof, there is no
material pending or, to the Knowledge of the Company, threatened litigation,
regulatory inquiry or audit relating to the Compensation and Benefit Plans.
Neither the Company nor any employee, officer or director thereof, nor, to the
Knowledge of the Company, no other third-party with respect to the Plans, has
engaged in a transaction with respect to any Plan that could subject the Company
to any liability under Section 4975 of the Code or Section 502 of ERISA or could
require indemnification by the Company.
6.8.(c) As of the date hereof, no liability under
Subtitle C or D of Title IV of ERISA has been incurred or is reasonably expected
to be incurred by the Company, any Subsidiary or any entity which is considered
one employer with the Company under Section 4001 of ERISA or Section 414 of the
Code (an "ERISA Affiliate") with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them. The Company, its Subsidiaries
and its ERISA Affiliates have not incurred and do not reasonably expect to incur
any termination or withdrawal liability with respect to a multiemployer plan
under Subtitle C or E to Title IV of ERISA. No notice of a "reportable event"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any Pension
Plan or by the Company, any Subsidiary or any ERISA Affiliate within the
12-month period ending on the date hereof or will be required to be filed in
connection with the transactions contemplated by this Agreement.
6.8.(d) All contributions required to be made under
the terms of any Compensation and Benefit Plan as of the date hereof have been
timely made or have been reflected on the most recent consolidated balance sheet
filed or incorporated by reference in the Company Reports. Neither any Pension
Plan nor any single-employer plan of an ERISA Affiliate has an "accumulated
funding deficiency," within the meaning of Section 412 of the Code or Section
302 of ERISA and neither the Company nor any ERISA Affiliate has an outstanding
funding waiver (whether or not waived) as of the last day of the most recent
plan year ended prior to the date hereof. Neither the Company nor any ERISA
Affiliates has provided, or is required to provide, security to any Pension Plan
or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
6.8.(e) Under each Pension Plan which is a single
employer plan, as of the last day of the most recent plan year ended prior to
the date hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001 (a) (16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the Pension
Plan's most recent actuarial valuation), did not exceed the then current value
of the
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assets of such Pension Plan, and there has been no material change in the
financial condition of such Pension Plan since the last day of the most recent
plan year.
6.8.(f) The Company does not have any obligations for
retiree health and life benefits under any Compensation and Benefit Plan. The
Company and its ERISA Affiliates have at all times complied with the
continuation coverage requirements of Code Section 4980B, or similar state law.
6.8.(g) The consummation of the Merger and the other
transactions contemplated by this Agreement will not (x) entitle any Employees
to severance pay, (y) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Compensation and Benefit Plans or (z) result
in any breach or violation of, or a default under, any of the Compensation and
Benefit Plans. No payment or benefit which will or may be made by the Company,
Parent, any Subsidiary or any of their respective affiliates with respect to any
Employee will be characterized as an "excess parachute payment," within the
meaning of Section 280G(b)(1) of the Code.
6.8.(h) Each Compensation and Benefit Plan can be
amended, terminated or otherwise discontinued without liability to the Company,
Parent, any Subsidiary or any ERISA Affiliate.
6.8.(i) Notwithstanding anything to the contrary
contained in this Section 6.8, the representations and warranties contained in
this Section 6.8 shall be deemed to be true and correct unless such failures to
be true and correct are reasonably likely to have a Company Material Adverse
Effect.
6.9. Compliance with Laws.
The business of the Company is not in violation of any
federal, state, local or foreign law, statute, ordinance, rule, regulation,
judgment, order, injunction, decree, arbitration award, agency requirement,
license or permit of any Governmental Entity (collectively, "Laws"), except for
violations that would not have a Company Material Adverse Effect or prevent or
materially burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement. No investigation, audit or
review by any Governmental Entity with respect to the Company is pending or, to
the Knowledge of the Company, threatened, nor has any Governmental Entity
indicated an intention to conduct the same, except for those the outcome of
which, individually or in the aggregate, would not have a Company Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement.
The Company has all permits, licenses, franchises, variances, exemptions, orders
and other governmental authorizations, consents and approvals from Governmental
Entities necessary to conduct its business as presently conducted, except for
those the absence of which would not have a Company Material Adverse Effect or
prevent or materially burden
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22
or materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement. Except (i) as disclosed in Schedule 6.9 of the
Disclosure Letter and (ii) for those the absence of which individually or in the
aggregate would not have a Company Material Adverse Effect or prevent or
materially burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement, there is no judgement, decree,
order, injunction, writ or ruling of any Governmental Entity or any arbitration
outstanding against the Company.
6.10. Takeover Statutes.
As of the date hereof, no "fair price," "moratorium," "control
share acquisition," "interested shareholder" or other similar anti-takeover
statute or regulation (including, without limitation, Sections 607.0901 and
607.0902 of the FBCA) (each a "Takeover Statute") or restrictive provision of
any applicable anti-takeover provision in the articles of incorporation of the
Company or bylaws of the Company is applicable to the Company, the Shares, the
Offer, the Merger, this Agreement, the Ancillary Documents, or any of the other
transactions contemplated by this Agreement, and the Company has received an
opinion to that effect from Foley & Lardner ("Outside Counsel").
6.11. Environmental Matters.
Except as disclosed in the Company Reports and except for such
matters that would not, individually or in the aggregate, have a Company
Material Adverse Effect, the Company: (i) is in compliance with all applicable
Environmental Laws (as hereinafter defined); (ii) has obtained and is in
compliance with all permits, licenses, authorizations, registrations and other
governmental consents required by applicable Environmental Laws (as hereinafter
defined) (collectively, "Environmental Permits"); and the Company has made all
appropriate filings for the issuance or renewal of such Environmental Permits
(other than in connection with the transactions contemplated hereby); (iii) all
of the owned real property, leased real property or any other real property
operated or controlled by the Company (collectively, "Real Property") is free of
any contamination arising out of, relating to, or resulting from the release or
other dissemination by the Company of any Hazardous Substances (as hereinafter
defined), and there has been no release or other dissemination at any time of
any Hazardous Substances at, on, about, under or within any Real Property or any
real property formerly owned, leased, operated or controlled by the Company or
any predecessor thereof (other than pursuant to and in accordance with
Environmental Permits); (iv) there are no notices (including, without
limitation, notices that the Company is or may be a potentially responsible
person or otherwise liable in connection with any waste disposal or other site
containing Hazardous Substances), civil, criminal or administrative actions,
suits, hearings, investigations, inquiries or proceedings pending or threatened
that are based on or related to any Environmental Matters (including, without
limitation, the failure to comply with any Environmental Law or the failure to
have, or to comply with, any Environmental Permits); (v) there are no present or
past conditions, events, circumstances, facts, activities, practices, incidents,
actions, omissions or plans: (1) that are reasonably likely to interfere with or
prevent continued compliance by the
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Company with Environmental Laws or the requirements of Environmental Permits, or
(2) that are reasonably likely to give rise to any liability under any
Environmental Laws; (vi) the Company has not disposed of, transported, or
arranged for the transportation of, any Hazardous Substances to any site which
has been placed on the National Priorities List, the Comprehensive Environmental
Response, Compensation and Liability Information System ("CERCLIS") list, or any
comparable state list of properties to be investigated and/or remediated; and
(vii) the Company has delivered or made available to Parent true and complete
copies and results of any material reports, studies, analyses, tests, or
monitoring in the possession of the Company, in each case relating to any
Environmental Matters with respect to the Company (including without limitation
any Hazardous Substances at, on, about, under or within any Real Property or any
real property formerly owned, leased, operated or controlled by the Company or
any predecessor thereof).
As used herein, the term "Environmental Law" means any
federal, state, local or foreign statute, law, regulation, code, order, decree,
permit, authorization, common law or agency requirement as in effect, as
interpreted as of the date hereof relating to: Environmental Matters, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act ("CERCLA"); the Resource Conservation and Recovery Act of
1976, as amended; the Federal Water Pollution Control Act, as amended; the
Federal Clean Air Act, as amended; the Toxic Substances Control Act, as amended;
the Safe Drinking Water Act, as amended; the Pollution Control Act of 1990, as
amended.
As used herein, the term "Environmental Matter" means any
matter arising out of, relating to, or resulting from pollution, contamination,
protection of the environment, human health or safety, health or safety of
employees, sanitation, and any matters relating to emissions, discharges,
disseminations, releases or threatened releases of Hazardous Substances into the
air (indoor and outdoor), surface water, groundwater, soil, land surface or
subsurface, buildings, facilities, real or personal property or fixtures or
otherwise arising out of, relating to, or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, release or threatened release of Hazardous Substances.
As used herein, the term "Hazardous Substance" means any
substance that is listed, classified or regulated pursuant to any Environmental
Law including any petroleum product or any by-product or fraction thereof,
asbestos or asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive material or radon , urea formaldehyde
foam insulation, natural gas; and any chemicals, materials or substances, which
are defined as "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous substances," "toxic substances," "pollutants,"
"contaminants," or words of similar import under any Environmental Law.
6.12. Taxes.
(i) The Company has duly and timely filed (taking into account
any extension of time within which to file) all Tax Returns (as defined below)
required to be filed and all such
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filed Tax Returns are true, correct and complete in all material respects; (ii)
the Company has paid all Taxes (as defined below) that are shown as due on such
filed Tax Returns or that the Company is obligated to withhold from amounts
owing to any employee, creditor or third party, except with respect to matters
contested in good faith and that would not have a Company Material Adverse
Effect; (iii) the most recent financial statements contained in the reports
filed with the SEC by the Company reflect full reserves for all Taxes payable by
the Company for all Tax periods and portions thereof through the date of such
financial statements, (iv) no deficiency or adjustment for any Taxes has been
proposed, asserted or assessed against the Company that has not been paid or
fully reserved for on the financial statements of the Company, and, to the
Knowledge of the Company, no such deficiency or adjustment has been threatened;
(v) there are no Liens for Taxes upon the assets or property of the Company,
except Liens for current Taxes not yet due; (vi) the Company has withheld and
paid over to the relevant Tax authority all Taxes required to have been withheld
and paid in connection with payments to employees, independent contractors,
creditors, shareholders or other third parties; (vii) the Company is not a party
to any Tax sharing, Tax allocation, Tax indemnity or similar agreement; (viii)
no "consent" within the meaning of Section 341(f) of the Code has been filed
with respect to the Company; and (ix) has not waived any statute of limitations
with respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency, except, in each case, for those failures to file or
pay or those waivers that would not have a Company Material Adverse Effect. As
of the date hereof, there are not pending or, to the Knowledge of the Company,
threatened in writing, any audits, examinations, investigations or other
proceedings in respect of Taxes or Tax matters and there are no outstanding
waivers or pending requests for waivers to extend the statutory period of
limitations to assess any Taxes on the Company.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes", and "Taxable") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
transfer, license, premium, alternative or added minimum, production, value
added, occupancy and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions and including any liability in respect of any Tax as a transferee or
successor, by Law, Contract or otherwise, (ii) the term "Tax Return" includes
all returns and reports (including elections, declarations, disclosures,
schedules, estimates, forms, claims for refund, declaration of estimated Tax and
information returns) required to be supplied to a Tax authority relating to
Taxes and (iii) "Audit" shall mean any audit, assessment of Taxes, other
examination by any Tax authority, proceeding or appeal of such proceeding
relating to Taxes.
6.13. Labor Matters.
The Company is not the subject of any labor dispute (other
than routine individual grievances) or labor arbitration proceeding or any
material proceeding asserting that
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the Company has committed an unfair labor practice nor is there pending or, to
the Knowledge of the Company, threatened, nor since January 1, 1996 has there
been any (i) labor strike, dispute, walk-out, work stoppage, slow-down or
lockout, labor dispute (other than routine individual grievances) or labor
arbitration proceeding or any involving the Company, or (ii) any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company.
6.14. Intellectual Property.
6.14.(a) Company possess all right, title and
interest in and to the Company Intellectual Property, free and clear of any
encumbrances licenses or other restriction, or are properly licensed to use the
Company Intellectual Property , and has the right to require the applicant of
any Company Intellectual Property which is an application, including but not
limited to patent applications, trademark applications, service mark
applications, copyright applications, or mask work applications, to transfer
ownership to the Company of the application and of the registration once it
issues, and to the Knowledge of the Company all registered patents, trademarks,
service marks and copyrights are valid and subsisting and in full force and
effect in each case, except for any failures of the foregoing that, individually
or in the aggregate, would not have a Material Adverse Effect.
6.14.(b) Except as disclosed in the Company
Disclosure Letter:
(i) the Company is not, nor will it be as a
result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in violation of any
licenses, sublicenses and other agreements as to which the
Company is a party as of the date hereof and pursuant to which
the Company is authorized to use any third-party patents,
trademarks, service marks, copyrights, trade secrets or
computer software;
(ii) The Company Intellectual Property is all
the Intellectual Property that is necessary for the ownership,
maintenance and operation of the Company's properties and
assets and the Company have the right to use all of the
Company Intellectual Property in all jurisdictions in which
the Company has conducted its business and the consummation of
the transactions contemplated hereby will not alter or impair
any such rights;
(iii) to the Knowledge of the Company no third
party has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Company Intellectual
Property;
(iv) to the Knowledge of the Company no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand has been made, is pending, or, to
the Knowledge of the Company, is threatened which challenges
the legality, validity, enforceability, use or ownership of
any Company Intellectual Property;
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(v) to the Knowledge of the Company, Company
has not, and the continued operation of the business as
presently conducted will not, interfere with, infringe upon,
misappropriate or otherwise come into conflict with any
intellectual property rights of third parties, and the Company
has not received any charge, complaint, claim, demand or
notice so alleging (including any claim that the Company must
license or refrain from using any intellectual property rights
of any third party);
(vi) the Company has never agreed to indemnify
any person for or against any interference, infringement,
misappropriation or other conflict with respect to any Company
Intellectual Property;
"Company Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereon, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, trade names, domain names, and
corporate names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith, (c) all
copyrights and all applications, registrations and renewals in connection
therewith, (d) all mask works and all applications, registrations and renewals
in connection therewith, (e) all trade secrets and confidential business
information (including ideas, research and development, know-how formulas,
compositions, manufacturing and production processes and techniques, methods,
schematics, technology, technical data, designs, drawings, flowcharts, block
diagrams, specifications, customer and supplier lists, print and cost
information and business and marketing plans and proposals), (f) all computer
software (including data and related documentation), (g) all other proprietary
rights, (h) all copies and tangible embodiments of the foregoing categories of
intellectual property listed in subsections (a) through (g) herein (in whatever
form or medium), and (i) all licenses, sublicenses, agreements, or permissions
related to the foregoing categories of intellectual property listed in
subsections (a) through (g) herein (categories (a) through (i) herein are
collectively referred to as "Intellectual Property") which is owned by or
licensed to Company and is used, or has been used in connection with the
business.
6.15. Brokers and Finders.
Except for CIBC World Markets Corp., the arrangements with
which have been disclosed to Parent prior to the date hereof, neither the
Company nor any of its officers, directors or employees has employed any broker
or finder or has entered into any contract, arrangement or understanding which
may result in the obligation of Parent or the Company to pay any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated by
this Agreement.
6.16. Year 2000.
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6.16.(a) The Company has developed a plan which it
reasonably believes is designed to confirm that all computer software and
systems (including hardware, firmware, operating system software, utilities,
embedded processors and application's software) used in and material to the
business of the Company are designed to operate during and after the calendar
year 2000 to accurately process data (including but not limited to calculating,
comparing and sequencing) from, into and between the twentieth and twenty-first
centuries, including leap year calculations and the Company is not aware of any
flaws in any of the computer software and systems owned by it and used in and
material to the business of the Company that would have a Company Material
Adverse Effect.
6.16.(b) Except for such matter that would not
individually or in the aggregate, have a Company Material Adverse Effect, none
of the computer software, computer firmware, computer hardware (whether general
or special purpose) or other similar or related items of automated, computerized
or software systems that are used or relied on by any Entity in the conduct of
its business, and none of the products and services sold, licensed, rendered, or
otherwise provided by any Entity in the conduct of its business, (collectively,
"Software, Hardware, and Services") will malfunction, cease to function,
generate incorrect data or produce incorrect results when processing, providing
or receiving (i) date-related data from, into and between the twentieth and
twenty-first centuries or (ii) date-related data in connection with any valid
date in the twentieth and twenty-first centuries, provided that the Software,
Hardware, and Services are used in accordance with their product documentation
and provided that all external third party hardware, software, firmware and
services used in combination therewith properly exchange date data with the
Software, Hardware, and Services.
6.17. Title to Assets.
Except as set forth in the 1998 Balance Sheet, the Company has
good and marketable title to all of its real and personal properties and assets
reflected on the 1998 Balance Sheet (other than assets disposed of since
November 30, 1998 in the ordinary course of business consistent with past
practice or acquired since November 30, 1998), in each case free and clear of
all claims, liens, pledges, encumbrances, security interests, options, or other
similar restrictions ("Encumbrances") except for (i) Encumbrances which secure
indebtedness which is properly reflected in the 1998 Balance Sheet or in the
Company Reports, (ii) liens for Taxes accrued but not yet payable; (iii) liens
arising as a matter of law in the ordinary course of business with respect to
obligations incurred after the date of the 1998 Balance Sheet, provided that the
obligations secured by such liens are not delinquent; and (iv) such
imperfections of title and Encumbrances, if any, as would not, individually or
in the aggregate, have a Material Adverse Effect. Except for intellectual
property which is specifically dealt with in Section 6.14 above and except as
set forth in the Company Disclosure Letter, the Company either owns, or has
valid leasehold interests in, all properties and assets used by it in the
conduct of its business except where the absence of such ownership or leasehold
interest would not, individually or in the aggregate, have a Company Material
Adverse Effect.
6.18. Insurance Policies.
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The Company maintains in force insurance policies and bonds in
such amounts and against such liabilities and hazards as are consistent with
industry practice. A complete list of all material insurance policies is set
forth in the Company Disclosure Letter. Except as set forth in the Company
Disclosure Letter, the Company is not now liable, nor will it become liable, for
any retroactive premium adjustment not reflected in the 1998 Balance Sheet. All
such policies are valid and enforceable and in full force and effect, all
premiums owed in respect thereof have been timely paid, and the Company has not
received any notice of premium increase or cancellation with respect to any of
its insurance policies or bonds. Except as set forth in the Company Disclosure
Letter and except for any matters which, individually or in the aggregate, would
not have a Company Material Adverse Effect or prevent or materially burden or
materially impair the ability of the Company to consummate the transaction
contemplated by this Agreement, there are no claims pending as to which the
insurer has denied liability or is reserving its rights, and all claims have
been timely and properly filed. Within the last three years, the Company has not
been refused any insurance coverage sought or applied for, and the Company has
no reason to believe that their existing insurance coverage cannot be renewed as
and when the same shall expire, upon terms and conditions standard in the market
at the time renewal is sought.
6.19. Material Contracts.
6.19.(a) The Company has delivered or made available
to the Parent true and complete copies (or in the case of oral contracts,
summaries), of each of the Company's Material Contracts. For the purposes
hereof, "Material Contracts" means all (i) Contracts for borrowed money or
guarantees thereof, (ii) Contracts to acquire or dispose of any businesses or
any material assets other than sales of the Company's products in the ordinary
course of business and purchases of supplies and equipment in the ordinary
course of business, (iii) Contracts involving any swap or option transaction
relating to commodities, interest rates, foreign exchange, or currency or other
similar transactions customarily known as a derivative ("Derivatives"); (iv)
Contracts containing an agreement by the Company restricting its ability to
engage in any line of business or other activity; (v) Contracts entered into by
the Company, any of its Subsidiaries or their respective predecessors since
January 1, 1996 involving the sale or other disposition by such parties of one
or more business units, divisions or entities (including former Subsidiaries)
with respect to which the Company's surviving liability (including indemnities),
or other obligations (including deferred payment and earn-out obligations),
could reasonably be expected to exceed $100,000, or which require funds to be
held in trust or escrow for the benefit of a third party; (vi) Contracts
involving the investment, including by way of capital contribution, loan or
advance, by the Company or any of its Subsidiaries of more than $10,000 in any
other person, firm or entity; (vii) Contracts to purchase materials, supplies or
other assets, other than purchase orders entered into in the ordinary course of
business, involving obligations of more than $25,000 individually, and $100,000
in the aggregate; (viii) Contracts with any of the Company's top ten customers,
as determined by net sales to such customers for the one-year period ended
November 30, 1998 and (ix) other Contracts which involve the payment or receipt
of $100,000 or more per year.
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6.19.(b) Each Material Contract is in full force and
effect and enforceable in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
6.19.(c) The Company has not received any written
notice of default under any Material Contract, no default (beyond any applicable
grace or cure period) has occurred under any Material Contract on the part of
the Company, or, to the Company's knowledge, on the part of any party thereto,
nor has any event occurred which, with the giving of notice or the lapse of time
or both, would constitute any default on the part of the Company under any
Material Contract nor, to the Company's knowledge, has any event occurred which
with the giving of notice or lapse of time, or both, would constitute any
default on the part of any other party to any Material Contract.
6.19.(d) Except as described in Section 6.18 of the
Disclosure Letter, no consent or approval of any party to any of the Material
Contracts is required for the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby to which
the Company is a party.
6.19.(e) To the knowledge of the Company, except for
Contracts to which the Company is a party, no officer, director or employee of
the Company is bound by any Contract that purports to limit the ability of such
officer, director or employee to (i) engage in or continue any conduct, activity
or practice relating to the business of the Company, or (ii) assign to any
Person any rights to any invention, improvement or discovery.
6.20. Vote Required.
Unless the Merger may be consummated in accordance with
Section 607.1104 of the FBCA, in which case no vote of the holders of the Shares
is required to approve the Merger, this Agreement and the transactions
contemplated hereby, the Company Requisite Vote is the only vote or approval of
the holders of any series or class of the Company's capital stock necessary to
adopt this Agreement and approve the transactions contemplated hereby.
6.21. Offer Documents.
None of the information contained in the Schedule 14D-9, the
information statement, if any, filed by the Company in connection with the Offer
pursuant to Rule 14f-1 under the Exchange Act (the "Information Statement"), any
related schedule required to be filed by the Company with the SEC or any
amendment or supplement thereto, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, contain or will contain any untrue statement of a material fact or
omit or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
Parent or Merger Sub specifically for inclusion in the Schedule 14D-9 or
Information Statement or any schedule, amendment or supplement. None of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer
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Documents will, at the date of filing with the SEC, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to acceptance of the offer and payment for the Shares by Merger Sub, the Company
shall obtain knowledge of any facts with respect to itself, any of its officers
and directors that would require the supplement or amendment to any of the
foregoing documents in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to comply with
applicable Laws, such amendment or supplement shall be promptly filed with the
SEC and, as required by Law, disseminated to the stockholders of the Company,
and in the event Parent shall advise the Company as to its obtaining knowledge
of any facts that would make it necessary to supplement or amend any of the
foregoing documents, the Company shall promptly amend or supplement such
document as required and distribute the same to its stockholders.
6.22. No other Representations or Warranties.
Except for the representations and warranties contained in
this Agreement or in the Ancillary Documents, neither the Company nor any other
Person makes any other express or implied representation or warranty on behalf
of the Company or any of its Affiliates.
7. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
Except as set forth in the disclosure letter delivered to the Company
by Parent on or prior to entering into this Agreement (the "Parent Disclosure
Letter"), Parent and Merger Sub each hereby represent and warrant to the Company
that:
7.1. Ownership of Company Shares.
Neither Parent nor any of its Subsidiaries (i) owns any of the
Shares, and (ii) will acquire any of the Shares except pursuant to the Offer.
7.2. Capitalization of Merger Sub.
The authorized capital stock of Merger Sub consists of 100
shares of Common Stock, par value $.01 per share, of Merger Sub all of which are
validly issued and outstanding. All of the issued and outstanding capital stock
of Merger Sub is, and at the Effective Time will be, owned by Parent, and there
are (i) no other shares of capital stock or voting securities of Merger Sub
authorized, (ii) no securities of Merger Sub convertible into or exchangeable
for shares of capital stock or voting securities of Merger Sub and (iii) no
options or other rights to acquire from Merger Sub, and no obligations of Merger
Sub to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of Merger Sub.
Merger Sub has not conducted any business prior to the date hereof and has no,
and prior to the Effective Time will have no, assets, liabilities or obligations
of any nature
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other than those incident to its formation and pursuant to or in connection with
this Agreement, the Offer and the Merger and the other transactions contemplated
by this Agreement.
7.3. Organization, Good Standing and Qualification.
Each of Parent and Merger Sub is a corporation duly organized,
validly existing and in good standing (or active status) under the laws of its
jurisdiction of organization and has all requisite corporate or similar power
and authority to own, operate and lease its properties and assets and to carry
on its business as presently conducted and is qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the ownership
or operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
individually or in the aggregate, would not have a Parent Material Adverse
Effect (as hereinafter defined). Parent has delivered to the Company a complete
and correct copy of Merger Sub's articles of incorporation and bylaws (or
comparable governing instruments), as amended to the date hereof. Merger Sub's
articles of incorporation and bylaws (or comparable governing instruments) so
delivered are in full force and effect.
As used in this Agreement, the term "Parent Material Adverse
Effect" means a material adverse effect that materially adversely effects the
ability of Parent to consummate the transactions contemplated by this Agreement
or that would prevent or materially delay the consummation of the Merger.
7.4. Corporate Authority; Approval and Fairness.
No vote of holders of capital stock of Parent is necessary to
approve this Agreement, the Offer and the Merger and the other transactions
contemplated hereby. Each of Parent and Merger Sub has all requisite corporate
power and authority and has taken all corporate action necessary in order to
execute, deliver and perform its obligations under this Agreement, and the
Ancillary Documents, and to consummate the transactions contemplated hereby and
thereby. The consummation of the transactions contemplated hereby and thereby
has been duly authorized by the respective Boards of Directors of Parent and
Merger Sub and no other corporate proceeding on the part of Parent or Merger Sub
is necessary to authorize the execution and delivery of this Agreement and the
Ancillary Documents, by Parent and Merger Sub and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been and at the
time of execution each Ancillary Document will have been duly executed and
delivered by Parent and Merger Sub and, assuming due authorization, execution
and delivery of this Agreement and the Ancillary Documents, by the Company, each
is a valid and binding agreement of Parent and Merger Sub, enforceable against
each of Parent and Merger Sub in accordance with its terms, subject to the
Bankruptcy and Equity Exception.
7.5. Governmental Filings; No Violations.
7.5.(a) Other than the filings and/or notices (A)
pursuant to Section 2.3, (B) under the HSR Act, (C) the Exchange Act and (D)
under the Exon-Florio Amendment, no
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notices, reports or other filings are required to be made by Parent or Merger
Sub with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent or Merger Sub from, any
Governmental Entity, in connection with the execution and delivery of this
Agreement and the Ancillary Documents by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the Merger, the Offer and the other
transactions contemplated hereby and thereby, except for those that the failure
to make or obtain, individually or in the aggregate, would not have a Parent
Material Adverse Effect.
7.5.(b) The execution, delivery and performance of
this Agreement and the Ancillary Documents by Parent and Merger Sub do not, and
the consummation by Parent and Merger Sub of the Offer, the Merger or the other
transactions contemplated hereby and thereby will not, constitute or result in a
breach or violation of, or conflict with, or a default under, either the
articles of incorporation or bylaws of Parent and Merger Sub or the comparable
governing instruments of any of Parent's Subsidiaries, in each case as amended
to date.
7.6. Compliance with Laws.
The business of Parent and its Subsidiaries taken as a whole
is not being conducted in violation of any Laws, except for violations that
would not have a Parent Material Adverse Effect.
7.7. Takeover Statutes.
No Takeover Statute or restrictive provision of any applicable
anti-takeover provision in the certificate of incorporation of Parent or bylaws
of Parent is, applicable to Parent, Merger Sub, the Offer, the Merger or any of
the other transactions contemplated by this Agreement.
7.8. Funds.
Parent and Merger Sub will have the funds necessary to
consummate the Offer and the Merger.
7.9. Other Documents.
None of the information contained in the Schedule 14D-1, any
related schedule required to be filed by the Parent or Merger Sub with the SEC
or any amendment or supplement thereto, at the respective times such documents
are filed with the SEC or first published, sent or given to the Company's
stockholders, contain or will contain any untrue statement of a material fact or
omit or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading except that no
representation is made by Parent or Merger Sub with respect to information
supplied by Company specifically for inclusion in the Schedule 14D-1 or any
schedule, amendment or supplement. None of the information supplied
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or to be supplied by Parent or Merger Sub for inclusion or incorporation by
reference in the Schedule 14D-9 or the Information Schedule or related schedule,
amendment or supplement will, at the date of filing with the SEC, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. If at any
time prior to acceptance of the offer and payment for the Shares by Merger Sub,
either Parent or Merger Sub shall obtain knowledge of any facts with respect to
itself, any of its officers and directors or any of its Subsidiaries that would
require the supplement or amendment to any of the foregoing documents in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or to comply with applicable Laws, such
amendment or supplement shall be promptly filed with the SEC and, as required by
Law, disseminated to the stockholders of the Company, and in the event Company
shall advise Parent or Merger Sub as to its obtaining knowledge of any facts
that would make it necessary to supplement or amend any of the foregoing
documents, Parent or Merger Sub shall promptly amend or supplement such document
as required and distribute the same to its stockholders.
7.10. No other Representations or Warranties.
Except for the representations and warranties contained in
this Agreement or in the Ancillary Documents neither Parent nor any other Person
makes any other express or implied representation or warranty on behalf of
Parent or any of its Affiliates.
8. COVENANTS
8.1. Interim Operations of the Company.
From the date hereof through the Effective Time, the Company
covenants and agrees that (i) its operations and business shall be conducted in
the ordinary and usual course and, to the extent consistent therewith, (ii) it
shall use its best reasonable efforts to preserve its business organization
intact and maintain its existing relations and goodwill with customers,
suppliers, distributors, creditors, lessors, employees and business associates,
maintain in effect all existing material qualifications, licenses, permits,
approvals and other authorizations, comply with all applicable Laws, keep
available the services of their officers and employees and maintain satisfactory
relationships with those persons having business relationships with them; (iii)
promptly upon the discovery thereof notify Parent of the existence of any breach
of any representation or warranty contained herein (or, in the case of any
representation or warranty that makes no reference to Material Adverse Effect,
any breach of such representation or warranty in any material respect) or the
occurrence of any event that would cause any representation or warranty
contained herein no longer to be true and correct (or, in the case of any
representation or warranty that makes no reference to Material Adverse Effect,
to no longer be true and correct in any material respect). Without limiting the
generality of the foregoing, except as otherwise set forth in Section 8.1(a) of
the Company Disclosure Letter, the Company covenants and agrees that, from the
date hereof and prior to the Effective Time (unless Parent shall otherwise
approve in writing, which approval shall not be unreasonably
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withheld or delayed, and except as otherwise expressly contemplated by this
Agreement or by Law):
(i) it shall not (x) except to the extent
required by law or the rules and regulations of NASDAQ, amend
its articles of incorporation or bylaws; (y) split, combine or
reclassify its outstanding shares of capital stock; (aa)
declare, set aside or pay any dividend payable in cash, stock
or property in respect of any capital stock or (bb)
repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital
stock (other than Options granted prior to the date hereof, in
accordance with their respective terms as in effect on the
date hereof or as contemplated by this Agreement);
(ii) it shall not (x) issue, sell, pledge,
dispose of or encumber any shares of, or securities
convertible into or exchangeable or exercisable for, or
options, warrants, calls, commitments or rights of any kind to
acquire, any shares of its capital stock of any class or any
Voting Debt or any other property or assets (other than Shares
issuable pursuant to options (whether or not vested)
outstanding on the date hereof under the Company Stock Plan);
(y) lease, license, guarantee, mortgage, pledge, or encumber
any other property or assets which have an aggregate fair
market value in excess of $10,000 or incur or modify any
material indebtedness for borrowed money or guarantee any such
indebtedness in an amount in excess of, in the aggregate,
$10,000; (z) other than in the ordinary and usual course of
business, transfer, sell or dispose of any other property or
assets, which have an aggregate fair market value in excess of
$10,000 or (aa) by any means, make any significant acquisition
of, or investment in, assets or stock (whether by way of
merger, consolidation, tender offer, share exchange or other
activity) of any person in an amount in excess of, in the
aggregate, $10,000;
(iii) it shall not terminate, establish,
adopt, enter into, make any new grants or awards under, amend
or otherwise modify, any Compensation and Benefit Plans, or
increase the salary, wage, bonus or other compensation of any
employees except for grants or awards or increases under
existing Compensation and Benefit Plans occurring in the
ordinary and usual course of business (which shall include
normal periodic performance reviews and related compensation
and benefit increases), annual reestablishment of Compensation
and Benefit Plans and the provision of individual compensation
or benefit plans and agreements for newly hired non-key
employees of the Company hired in the ordinary course of
business consistent with past practices to replace employees
leaving the Company or except for actions necessary to satisfy
existing contractual obligations under Compensation and
Benefit Plans or agreements existing as of the date hereof;
and
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(iv) it shall not enter into any
transaction involving a merger, consolidation, reorganization,
share exchange, or similar transaction involving, or any
purchase of any assets or any securities of it;
(v) it shall not settle or compromise any
pending or threatened Litigation, other than settlements which
involve solely the payment of money (without admission of
liability) not to exceed $100,000 in any one case;
(vi) it shall not assume, guarantee or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other
person;
(vii) it shall not make or forgive any
loans, advances or capital contributions to, or investments
in, any other person in excess of $20,000 in any one case;
(viii) it shall not make any Tax election or
settle any Tax liability;
(ix) it shall not waive, amend or allow to
lapse any term or condition of any confidentiality or
"standstill" agreement to which the Company is a party, unless
such lapse occurs in accordance with such agreements terms;
(x) it shall not grant or amend any stock
related or performance awards except as listed on Schedule
8.1(a)(x);
(xi) it shall not make any material
changes in the type or amount of their insurance coverage or
permit any insurance policy naming the Company or any
Subsidiary as a beneficiary or a loss payee to be canceled or
terminated other than in the ordinary course of business or
except as otherwise provided in this Agreement;
(xii) it shall not make any capital
expenditures in the aggregate for the Company in excess of the
amounts specified in the Company's budget for capital
expenditures, a true and complete copy of which has previously
been delivered to Parent, or otherwise acquire assets not in
the ordinary course of business;
(xiii) it shall not, except as may be
required by law or generally acceptable accounting principles
and with prior written notice to Parent, change any material
accounting principles or practices used by the Company;
(xiv) it shall not enter into any Contracts
for Derivatives;
(xv) it shall not waive, relinquish,
release or terminate any right or claim, including any such
right or claim under any material Contract or
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permit any rights of material value to use any Intellectual
Property to lapse or be forfeited, in each case, except in the
ordinary course of business consistent with the past practice
of the Company;
(xvi) it shall not take any action to cause
the Shares to be delisted from NASDAQ prior to the completion
of the Offer or (if no Offer is made) the Merger; and
(xvii) it will not authorize or enter into
an agreement to do anything prohibited by the foregoing.
8.2. Acquisition Proposals.
8.2.(a) The Company agrees that neither it nor any of
its Subsidiaries nor any of its or its Subsidiaries' officers and directors
shall, and that it shall direct and use its best reasonable efforts to cause its
and its Subsidiaries' employees, agents and other representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) (collectively, "Representatives") not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to an Acquisition Proposal. The Company
further agrees that neither it nor any of its Subsidiaries nor any of its or its
Subsidiaries' officers and directors shall, and that it shall direct and use its
reasonable best efforts to cause its and its Subsidiaries' Representatives not
to, directly or indirectly, engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
Person relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; provided, however, that
nothing contained in this Agreement shall prevent either the Company or any of
its representatives or the Board of Directors of the Company from (A) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal or otherwise complying with the Exchange Act; (B) providing information
in response to a request therefor by a Person who has made an unsolicited
written Acquisition Proposal; (C) engaging in any negotiations or discussions
with any Person who has made an unsolicited Acquisition Proposal or otherwise
facilitating any effort or attempt to implement an Acquisition Proposal if (i)
the Acquisition Proposal is a Superior Proposal and (ii) the Company's Board of
Directors determines, upon advice from outside legal counsel to the Company,
that the failure to engage in the negotiations or discussions or provide the
information would result in a breach of the fiduciary duties of the Board of
Directors of the Company under applicable law. Any information furnished to any
Person in connection with any Acquisition Proposal shall be provided pursuant to
a confidentiality and standstill agreement on customary terms (including without
limitation prohibitions on unsolicited tender offers, acquisitions of equity
interests in the Company, proposals to acquire stock or assets, formation of
Section 13(d) groups, public request for release from the standstill, actions
that would require the Company to make a public announcement, engaging in proxy
contests, etc.). Subject to all of the foregoing requirements, the Company will
immediately notify Parent orally and in writing if any discussions or
negotiations are sought to be initiated, any inquiry
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or proposal is made, or any information is requested by any Person with respect
to any Acquisition Proposal or which could lead to a Acquisition Proposal and
immediately notify Parent of all material terms of any Acquisition Proposal,
including the identity of the Person making the Acquisition Proposal or the
request for information, if known, and thereafter shall inform Parent on a
timely, ongoing basis of the status and content of any discussions or
negotiations with any Person, including immediately reporting any changes to the
terms and conditions of the Acquisition Proposal.
8.2.(b) In the event the Board of Directors of the
Company has determined that a Acquisition Proposal constitutes a Superior
Proposal, (i) the Company shall promptly notify the Parent thereof and (ii) for
a period of three business days after delivery of such notice, the Company and
its representatives, if requested by Parent, shall negotiate in good faith with
Parent to make such adjustments to the terms and conditions of this Agreement as
would enable the Company to proceed with the transactions contemplated hereby on
such adjusted terms. After such three business day period, the Board of
Directors of the Company may then (and only then) withdraw or modify its
approval or recommendation of the Merger and this Agreement and recommend such
Superior Proposal.
8.2.(c) The Company agrees not to release any Person
from, or waive any provision of, any standstill agreement to which it is a party
or any confidentiality agreement between it and another Person who has made, or
who may reasonably be considered likely to make, a Acquisition Proposal, or who
the Company or any of its Representatives have had discussions with regarding a
proposed, potential or contemplated Company Acquisition Transaction unless the
Company's Board of Directors shall conclude, in good faith, that such action
will lead to a Superior Proposal and after considering applicable provisions of
state law, and upon advice from outside legal counsel to the Company, with
respect to whether such action is required for the Board of Directors to act in
a manner consistent with its fiduciary duties under applicable law.
8.2.(d) For purposes of this Agreement:
(i) "Acquisition Proposal" shall mean, with
respect to the Company, any inquiry, proposal or offer from
any Person relating to any (A) direct or indirect acquisition
or purchase of a business of the Company or any of its
Subsidiaries, that constitutes 25% or more of the consolidated
net revenues, net income or assets of the Company and its
Subsidiaries, (B) direct or indirect acquisition or purchase
of 25% or more of any class of equity securities of the
Company or any of its Subsidiaries whose business constitutes
25% or more of the consolidated net revenues, net income or
assets of the Company and its Subsidiaries, (C) tender offer
or exchange offer that if consummated would result in any
person beneficially owning 25% or more of the capital stock of
the Company, or (D) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its
Subsidiaries whose business constitutes
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25% or more of the consolidated net revenues, net income or
assets of the Company and its Subsidiaries.
(ii) Each of the transactions referred to
in clauses (A)-(D) of the definition of Acquisition Proposal,
other than any such transaction to which Parent or any of its
Subsidiaries is a party, is referred to herein as a "Company
Acquisition Transaction"
(iii) "Superior Proposal" means any bona
fide written offer made by a Person to acquire, directly or
indirectly, for consideration consisting of cash and/or
securities, all of the Shares then outstanding or all or
substantially all the assets of the Company (A) on terms that
the Board of Directors of the Company determines in its good
faith judgment (after consultation with a financial advisor of
nationally recognized reputation and taking into account all
the terms and conditions of the offer deemed relevant by such
Board of Directors, including any break-up fees, expense
reimbursement provisions, conditions to consummation, and the
ability of the party making such proposal to obtain financing
for such offer) are materially more favorable from a financial
point of view to its stockholders than the Merger
Consideration; and (B) that constitutes a transaction that, in
such Board of Directors' judgment, is reasonably likely to be
consummated on the terms set forth, taking into account all
legal, financial, regulatory and other aspects of such
proposal.
8.2.(e) Except as expressly permitted by Section
8.2(c), neither the Board of Directors of the Company nor any committee thereof
shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Parent, the approval or recommendation by such Board of
Directors of this Agreement or the Merger, or (ii) approve or recommend, or
propose publicly to approve or recommend, any Acquisition Proposal or Company
Acquisition Transaction. Nothing contained in this Section 8.2 shall prohibit
the Company from taking and disclosing to its shareholders a position
contemplated by Rule 14e-2 promulgated under the Exchange Act. The Company
agrees that it will immediately cease and cause to be terminated any existing
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal.
8.3. Filings; Other Actions; Notification.
8.3.(a) The Company and Parent shall promptly make
their respective filings and thereafter make any other required submissions
under the HSR Act and the Exon-Florio Amendment with respect to the Merger and,
if applicable, the Offer, and cooperate with each other and use (and shall cause
their respective Subsidiaries to use) their respective best reasonable efforts
to take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement and applicable
Laws to consummate the Offer and make effective the Merger and the other
transactions contemplated by this Agreement as soon as practicable, including
preparing and filing as soon as practicable all documentation to effect all
necessary notices, reports and other filings and to obtain as soon
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as practicable all consents, registrations, approvals, permits and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Offer, the Merger or any of
the other transactions contemplated by this Agreement; provided, however, that
Parent shall not be required by any provision of this Agreement to take any
action, including entering into any consent decree, that requires the
divestiture of a material amount of assets of Parent or any of its Subsidiaries.
Each of Parent and the Company shall use its reasonable best efforts to contest
any proceeding seeking a preliminary injunction or other legal impediment to,
and to resolve any objections as may be asserted by any Governmental Entity with
respect to, the Offer and/or the Merger under the HSR Act, provided that the
foregoing shall not require Parent to take any action that could directly or
indirectly (x) impose limitations on the ability of Parent or Merger Sub (or any
of their affiliates or Subsidiaries) effectively to acquire, operate or hold, or
require Parent, Merger Sub or the Company or any of their respective affiliates
or Subsidiaries to dispose of or hold separate, any material portion of their
respective assets or business, (y) restrict any material future business
activity by Parent, Merger Sub, the Company or any of their affiliates or
Subsidiaries or (z) otherwise materially adversely affect Parent, Merger Sub,
the Company or any of their respective affiliates or Subsidiaries. Subject to
applicable Laws relating to the exchange of information, Parent and the Company
shall have the right to review in advance, and to the extent practicable each
will consult the other on, all the information relating to Parent or the
Company, as the case may be, and any of their respective Subsidiaries, that
appear in any filing made with, or written materials submitted to, any third
party and/or any Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the Company and Parent shall act reasonably and as promptly as
practicable.
8.3.(b) The Company and Parent each shall, upon
request by the other, furnish the other with all information concerning itself,
its Subsidiaries, directors, officers and shareholders and such other matters as
may be reasonably necessary or advisable in connection with any statement,
filing, notice or application made by or on behalf of Parent, the Company or any
of their respective Subsidiaries to any third party and/or any Governmental
Entity in connection with the Offer, the Merger and the transactions
contemplated by this Agreement.
8.3.(c) Subject to any confidentiality obligations
and the preservation of any attorney-client privilege, the Company and Parent
each shall keep the other apprised of the status of matters relating to
completion of the transactions contemplated hereby, including promptly
furnishing the other with copies of notices or other communications received by
Parent or the Company, as the case may be, or any of its Subsidiaries, from any
third party and/or any Governmental Entity with respect to the Offer, the Merger
and the other transactions contemplated by this Agreement.
8.3.(d) Without limiting the generality of the
undertakings pursuant to this Section 8.3, each of the Company and Parent agrees
to provide promptly to any and all federal, state, local or foreign courts or
Government Entity with jurisdiction over enforcement of any applicable antitrust
laws ("Government Antitrust Entity") information and documents
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requested by any Government Antitrust Entity or necessary, proper or advisable
to permit consummation of the Offer, the Merger and the transactions
contemplated by this Agreement.
8.4. Access.
Except as may otherwise be required by applicable Law, the
Company shall (and shall cause its Subsidiaries to) afford Parent's officers,
employees, counsel, accountants and other authorized representatives full
access, during normal business hours throughout the period prior to the
Effective Time, to the properties, books, contracts, records, personnel, offices
and other facilities of the Company and its Subsidiaries and their accountants
and accountant's work papers, and permit Parent to make such copies and
inspections thereof as Parent may reasonably request, and, during such period,
the Company shall (and shall cause its Subsidiaries to) furnish promptly to
Parent all information concerning its business, properties and personnel as may
reasonably be requested; provided, that no investigation pursuant to this
Section shall affect or be deemed to modify any representation or warranty made
by the Company and; provided, further, that the foregoing shall not require the
Company to permit any inspection, or to disclose any information, that in the
reasonable judgment of the Company would result in the disclosure of any trade
secrets of third parties or violate any of its obligations with respect to
confidentiality if the Company shall have used reasonable efforts to obtain the
consent of such third party to such inspection or disclosure. All requests for
information made pursuant to this Section shall be directed to an executive
officer of the Company or such Person as may be designated by either of its
executive officers, as the case may be. All such information shall be governed
by the terms of the Confidentiality Agreement.
8.5. Stock Exchange De-listing.
Unless required by the rules of the National Association of
Securities Dealers, subsequent to Merger Sub's payment for Shares and prior to
the Effective Time, the Company shall not take any action to cause the Shares to
be removed from quotation on the NASDAQ National Market System and de-registered
under the Exchange Act.
8.6. Meetings of the Company's Shareholders.
If approval or action in respect of the Merger by the
shareholders of the Company is required by applicable law following expiration
of the Offer and the purchase of Shares thereunder, the Company will promptly
take, consistent with the FBCA and its articles of incorporation and bylaws, all
action necessary to convene a meeting of holders of Shares as promptly as
practicable to consider and vote upon the approval of the Merger and this
Agreement. The record date for the Stockholders Meeting shall be a date
subsequent to the date Parent or Merger Sub becomes a record holder of Shares
purchased pursuant to the Offer. Without limiting the generality of the
foregoing, if required by applicable law, the Company shall immediately
following the purchase of Shares pursuant to the Offer prepare an information or
proxy statement (the "Proxy Statement"), file it with the SEC under the Exchange
Act as promptly as practicable after Merger Sub purchases Shares pursuant to the
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Offer, and use best efforts to have it cleared by the SEC. The Company will
notify Parent of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company and Parent agrees to use its best
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and requests by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the shareholders of the Company as of the record date for
the shareholders' meeting referred to above. If required under applicable law,
the Company and Parent shall prepare the Schedule 13e-3, file it with the SEC
under the Exchange Act as promptly as practicable after Merger Sub purchases
shares pursuant to the Offer and supplement and amend it as shall be required.
The Company will use its best reasonable efforts to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Parent, respond promptly to any comments of the SEC relating
to the preliminary proxy or information statement and to cause the definitive
Proxy Statement to be mailed to its shareholders, all at the earliest practical
time. Whenever any event occurs which should be set forth in an amendment or
supplement to the Proxy Statement or any other filing required to be made with
the SEC, each party will promptly inform the other and cooperate in filing with
the SEC and/or mailing to shareholders such amendment or supplement. The Proxy
Statement and all amendments and supplements thereto shall comply with
applicable law in all material respects and be in form and substance
satisfactory to Parent. Subject to fiduciary requirements of applicable Law of
the Board of Directors as advised by Outside Counsel, the Board of Directors of
the Company shall recommend approval of the Merger, referral to which shall be
included in the Proxy Statement and the Company shall take all lawful action to
solicit such approval. The Company's obligations pursuant to the first sentence
of this Section 8.6 shall not be affected by the withdrawal or modification by
the Board of Directors of its recommendation of the Merger in accordance with
the preceding sentence. At any such meeting of the Company all of the Shares
then owned by the Parent Companies will be, subject to applicable laws, voted in
favor of this Agreement. The Proxy Statement with respect to such meeting of
shareholders, at the respective times filed with the SEC and mailed to
shareholders, shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state a
material fact was made by the Company in reliance upon and in conformity with
written information concerning the Parent Companies furnished to the Company by
Parent for use in the Proxy Statement. Notwithstanding the foregoing, in the
event that Parent or Merger Sub shall acquire at least 80% of the outstanding
shares of each class of capital stock of the Company pursuant to the
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Offer, the parties hereto agree, at the request of Parent, to take all
appropriate and necessary action to cause the Merger to become effective, as
soon as practicable after the expiration or termination of the Offer and the
transactions contemplated hereby, without a meeting of shareholders of the
Company, in accordance with the FBCA.
8.7. Publicity.
The initial press release shall be a joint press release and
thereafter the Company and Parent each shall consult with the other prior to
issuing any press releases or otherwise making public announcements with respect
to the Offer, the Merger and the other transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement without the prior consent of the other party, which consent shall not
be unreasonably withheld or delayed and prior to making any filings with any
third party and/or any Governmental Entity (including any national securities
exchange or national market systems) with respect thereto, except as may be
required by law or by obligations pursuant to any listing agreement with or
rules of any national securities exchange or national market system.
8.8. Benefits.
8.8.(a) Stock Options.
(i) The Company shall take all necessary
actions to cause (including plan amendments) prior to the
Effective Time each outstanding option to purchase Shares
which had not vested immediately prior to such time to become
vested and fully exercisable.
(ii) Prior to the Effective Time, the
Company shall take all necessary actions to cause each then
outstanding option granted under the Stock Plans to purchase
Shares (a "Company Option"), whether vested or unvested, to be
cancelled, with the holder thereof becoming entitled to
receive an amount of cash equal to the product of (x) the
amount, if any, by which the Merger Consideration exceeds the
exercise price per Share subject to such Company Option
(whether vested or unvested) and (y) the number of Shares
issuable pursuant to the unexercised portion of such Option,
less any required withholding of taxes (such amount being
hereinafter referred to as the "Option Consideration") . The
Option Consideration shall be paid as soon as practicable
following the Effective Time, but in any event within five (5)
days following the Effective Time. The cancellation of a
Company Option in exchange for the Option Consideration shall
be deemed a release of any and all rights the holder had or
may have had in respect of such Company Option, and any
required consents received from Company Option holders shall
so provide.
8.8.(b) Employee Benefits. Except for the Company's
Stock Option Plan, Parent agrees that, during the period commencing at the
Effective Time and ending on
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the first anniversary thereof, the employees of the Company and its Subsidiaries
will continue to be provided with benefits under employee benefit plans that are
no less favorable in the aggregate than the Plans currently provided by the
Company and its Subsidiaries to such employees. Following the Effective Time,
Parent shall cause service by employees of the Company and its Subsidiaries (and
any predecessor entities) to be taken into account for all purposes (including,
without limitation, eligibility to participate, eligibility to commence
benefits, vesting, benefit accrual and severance) under any benefit plans of
Parent or its Subsidiaries (including the Surviving Corporation) . From and
after the Effective Time, Parent shall (i) cause to be waived any pre-existing
condition limitations under benefit plans of Parent or its Subsidiaries in which
employees of the Company or its Subsidiaries participate and (ii) cause to be
credited to any deductible or out of pocket expense of Parent's plans any
deductibles and out-of-pocket expenses incurred by such employees and their
beneficiaries and dependents during the portion of the calendar year prior to
participation in the benefit plans provided by Parent and its Subsidiaries.
Parent shall, and shall cause the Surviving Corporation to, honor all employee
benefit obligations to current and former employees under the Compensation and
Benefit Plans and all employee severance plans and all employment or severance
agreements entered into by the Company or adopted by the Board of Directors of
the Company prior to the date hereof.
8.9. Indemnification; Directors' and Officers' Insurance.
8.9.(a) The Articles of Incorporation and Bylaws
shall contain the provisions with respect to indemnification set forth in
Article IV of the bylaws of the Company on the date of this Agreement and shall
provide for indemnification to the fullest extent permitted by and in accordance
with the FBCA, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time (or, in the case of
matters known prior to the Effective Time which have not been resolved prior to
the sixth anniversary of the Effective Time, until such matters are finally
resolved) in any manner that would adversely affect the rights thereunder of
individuals who at any time prior to the Effective Time were directors or
officers of the Company in respect of actions or omissions occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement) .
8.9.(b) Following the Effective Time, Surviving
Corporation shall indemnify and hold harmless, to the fullest extent permitted
under applicable law (and Surviving Corporation shall also advance expenses as
incurred to the fullest extent permitted under applicable law, provided that the
person to whom the expenses are advanced provides an undertaking to repay such
advance if it is ultimately determined that such person is not entitled to
indemnification), each present and former director, officer of the Company
(collectively, the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to acts or
omissions by them in their capacity as such
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existing or occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement.
8.9.(c) Any Indemnified Party wishing to claim
indemnification under paragraph (b) of this Section 8.9, upon receiving written
notification of any such claim, action, suit, proceeding or investigation, shall
promptly notify Parent thereof, but the failure to so notify shall not relieve
Parent of any liability it may have to such Indemnified Party if such failure
does not materially and irreversibly prejudice Parent. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) Surviving Corporation shall have the right within
ten days following the notification of Parent by the Indemnified Person of such
claim, action, suit, proceeding or investigation to assume the defense thereof
and Surviving Corporation shall not be liable to such Indemnified Parties for
any legal expenses of other counsel subsequently incurred by such Indemnified
Parties in connection with the defense thereof, except that if Surviving
Corporation elects not to assume such defense, counsel for the Indemnified
Parties advises that there are issues which raise conflicts of interest between
Surviving Corporation and the Indemnified Parties or the Indemnified Parties
have defenses available to them that are not available to Surviving Corporation,
the Indemnified Parties may retain counsel satisfactory to them and reasonably
acceptable to the Surviving Corporation, and Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties,
provided, however, that the Surviving Corporation shall not be obligated to pay
the reasonable fees and expenses of more than one counsel for all Indemnified
Parties in any single Action except to the extent that, in the opinion of
counsel for the Indemnified Parties, two or more of such Indemnified Parties
have conflicting interests in the outcome of such Action. The Surviving
Corporation shall not be liable for any settlement effected without its written
consent, which consent shall not unreasonably be withheld. If such indemnity is
not available with respect to any Indemnified Party, then Surviving Corporation
and the Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect the relative faults and benefits of the
Company or Surviving Corporation (in the case of Surviving Corporation) and the
Indemnified Parties. No settlements shall be made on behalf of an Indemnified
Party without such Indemnified Party's consent (which consent shall not be
unreasonably withheld) unless such settlement provides for a full release of
such Indemnified Party.
8.9.(d) The Surviving Corporation shall maintain the
Company's existing officers' and directors' liability insurance ("D&O
Insurance") until July 31, 2002 and shall agree to indemnify the directors and
officers of Company to the fullest extent permitted by Florida law for acts or
omissions by them in their capacity as such existing or occurring at or prior to
the Effective Time, including the transactions contemplated by this Agreement.
8.9.(e) If the Surviving Corporation or any of its
successors or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual, corporation or
other entity, then, and in each such case, proper provisions shall be made so
that the
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successors and assigns of the Surviving Corporation shall assume all of the
obligations set forth in this Section 8.9.
8.9.(f) The provisions of this Section are intended
to be for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives and shall be in addition to any
other rights to indemnification (e.g. any assumed indemnification obligations)
listed in the Company Disclosure Letter.
8.10. Takeover Statute.
If any Takeover Statute is or may become applicable to the
Shares, the Offer, the Merger or the other transactions contemplated by this
Agreement, each of Parent and the Company and their respective Board of
Directors shall grant such approvals and take such actions as are reasonably
necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger and
otherwise act to eliminate or minimize the effects of such statute or regulation
on such transactions.
8.11. Expenses.
Parent shall pay all charges and expenses, including those of
the Paying Agent, in connection with the transactions contemplated in Section 5.
Except as otherwise provided in this Agreement, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement,
the Offer and the Merger and the other transactions contemplated by this
Agreement shall be paid by the party incurring such expense.
9. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger
is subject to the satisfaction or waiver at or prior to the Effective Time of
each of the following conditions:
9.1. Shareholder Approval.
If required by the FBCA, the Merger, this Agreement and the
plan of merger shall have been duly approved by holders of a majority of the
outstanding Shares in accordance with applicable law and the articles of
incorporation and bylaws of the Company.
9.2. HSR.
The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been earlier terminated.
9.3. Litigation.
No court or Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, law,
ordinance, rule, regulation,
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judgment, decree, injunction or other order that is in effect and permanently
enjoins or otherwise prohibits consummation of the Merger (collectively, an
"Order")
9.4. Tender Offer.
Merger Sub (or one of the Parent Companies) shall have
purchased Shares in an amount equal to at least the Minimum Conditions pursuant
to the Offer.
10. TERMINATION
10.1. Termination by Mutual Consent.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after the
approval by shareholders of the Company referred to in Section 9.1, by mutual
written consent of the Company, Merger Sub and Parent by action of their
respective Boards of Directors.
10.2. Termination by Either Parent or the Company.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time by action of the Board of
Directors of either Parent or the Company (i) if any Order restraining,
enjoining or otherwise prohibiting consummation of the Offer and/or the Merger
shall become final and non-appealable after the parties have used their
respective reasonable best efforts to have such Order removed, repealed or
overturned (whether before or after the approval by the shareholders of the
Company) (ii) if the Offer shall have expired or terminated without any Shares
being purchased therein, provided, however, that the right to terminate this
Agreement under this Section 10.2(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger Sub to purchase Shares in the Offer; or
(iii) if the Effective Time shall not occur by June 30, 2000, unless the
Effective Time shall not have occurred because of a material breach of this
Agreement by the party seeking to terminate this Agreement.
10.3. Termination by the Company.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, by action of the Board of
Directors of the Company:
(i) at any time prior to the time Parent, Merger Sub or
any of their affiliates shall purchase Shares pursuant to the Offer, upon three
business days' prior notice to Parent if, as a result of a Superior Proposal,
(A) the Board of Directors shall have concluded in good faith, after considering
applicable provisions of state law and after consultation with outside counsel,
that the failure to accept such Superior Proposal could reasonably be expected
to constitute a breach by its Board of Directors of its fiduciary duties; (B)
the Company shall have complied with all its obligations under Section 8.2; and
(C) during the three business days
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prior to any such termination, the Company shall, and shall cause its respective
financial and legal advisors to, in good faith, seek to negotiate with Parent to
make such adjustment in the terms and conditions of this Agreement as would
enable the Company to proceed with the transactions contemplated herein; or
(ii) if, prior to the purchase of Shares pursuant to the
Offer, there has been a material breach or failure to perform by Parent or
Merger Sub of any of their respective material covenants or agreements contained
in this Agreement, which breach or failure to perform is not curable, or if
curable, has not been cured within five days after written notice of such breach
or failure is given by the Company to the party committing such breach or
failure, except, in any case, such breaches or failures which are not reasonably
likely to materially and adversely affect Parents' or Merger Sub's ability to
consummate the Offer or the Merger.
10.4. Termination by Parent.
10.4.(a) This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by Parent:
(i) if, due to an occurrence that, if
occurring after the commencement of the Offer, would result in
a failure to satisfy any of the conditions set forth in Annex
A hereto, Parent, Merger Sub, or any of their affiliates shall
have failed to commence the Offer on or prior to five business
days following the date of the initial public announcement of
the Offer; provided, that Parent may not terminate this
Agreement pursuant to this Section 10.4(a)(i) if Parent is in
material breach of this Agreement; or
(ii) if, prior to the purchase of Shares
pursuant to the Offer, the Board of Directors of the Company
shall have withdrawn, or modified or changed in a manner
adverse to Parent or Merger Sub its approval or recommendation
of the Offer, this Agreement or the Merger or shall have
recommended a Superior Proposal or shall have resolved to do
either of the foregoing; or
(iii) if, prior to the purchase of Shares
pursuant to the Offer, there has been a material breach or
failure to perform by the Company of any of its material
covenants or agreements contained in this Agreement, which
breach or failure to perform is not curable, or if curable,
has not been cured within five days after written notice of
such breach or failure is given by Parent to the Company.
10.5. Effect of Termination and Abandonment.
10.5.(a) In the event of termination of this
Agreement and the abandonment of the Merger pursuant to this Section 10, written
notice thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such
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termination is made; and this Agreement shall become void and of no effect with
no liability on the part of any party hereto (or of any of its directors,
officers, employees, agents, legal and financial advisors or other
representatives) except as provided in 10.5(b); provided, however, (i) no such
termination shall relieve any party hereto of any liability or damages resulting
from any fraud or willful breach of this Agreement and (ii) notwithstanding (i)
above, in the event this Agreement is terminated by Parent because of a willful
breach of a representation or warranty of the Company then Parent may recover
under this Section 10.5(a) (such recovery not to limit any other rights Parent
may have under 10.5(b)) a reimbursement of its out-of-pocket expenses not to
exceed $1,500,000.
10.5.(b) In the event that (I) (a) an Acquisition
Proposal (other than pursuant to this Agreement) shall have been made to the
Company or any Person (other than Parent or any of its Affiliates) shall have
publicly announced an intention (whether or not conditional) to make an
Acquisition Proposal with respect to the Company and thereafter this Agreement
is terminated by the Company under Section 10.3(i) or Parent pursuant to Section
10.4(a)(ii) and (b) the Person making the Acquisition Proposal which was
outstanding at the time of the termination (the "Acquiring Party") has entered
into an agreement with the Company to consummate such Acquisition Proposal
within nine months of such termination, and such Acquisition Proposal is
consummated, or (II) any Person within nine months of termination of this
Agreement has acquired, by purchase, merger, consolidation, sale, assignment,
lease, transfer or otherwise, in one transaction or any related series of
transactions a majority of the voting power of the outstanding securities of the
Company or all or substantially all of the assets of the Company, then, in the
event the circumstances described in (I) or (II) has occurred then the Company
shall promptly, pay Parent a termination fee of $6,000,000 in same day funds to
an account previously designated by Parent to the Company in writing; provided,
however, that in the event the Company has already reimbursed the out-of-pocket
expenses of Parent pursuant to the last sentence of 10.5(a), then, in such
event, the termination fee payable pursuant to this sentence shall be $6,000,000
less the amount of such reimbursement. The Company's payment of this termination
fee shall be the sole and exclusive remedy of Parent and Merger Sub against the
Company and its respective directors, officers, employees, agent, advisors or
other representatives in the event this Agreement is terminated and the
termination fee is payable.
11. MISCELLANEOUS AND GENERAL
11.1. Survival.
This Section 11 and the agreements of the Company, Parent and
Merger Sub contained in Sections 8.6 (De-listing), 8.8 (Benefits), 8.9
(Indemnification; Directors' and Officers' Insurance), and 8.11 (Expenses) shall
survive the consummation of the Merger. This Section 11, the agreements of the
Company, Parent and Merger Sub contained in Section 8.11 (Expenses), Section
10.5 (Effect of Termination and Abandonment) and the Confidentiality Agreement
shall survive the termination of this Agreement. All other representations,
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warranties, covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
11.2. Modification or Amendment.
Subject to the provisions of the applicable law, at any time
prior to the Effective Time, the parties hereto may modify or amend this
Agreement, by written agreement executed and delivered by duly authorized
officers of the respective parties; provided, that, in the case of the Company
any such modification or amendment must be approved by a majority of the
directors who are not Parent Insiders.
11.3. Waiver of Conditions.
The conditions to each of the parties' obligations to
consummate the Merger are for the sole benefit of such party and may be waived
by such party in whole or in part to the extent permitted by applicable law,
except that the following approval by the shareholders of the Company there
shall be no amendment or supplement which by Law requires further approval by
such shareholders without further approval by the shareholders of the Company;
provided, that, in the case of the Company any such waiver must be approved by a
majority of the directors who are not Parent Insiders.
11.4. Counterparts.
This Agreement may be executed in any number of counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
11.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. The parties hereby irrevocably submit to the jurisdiction of the
Federal courts of the United States of America located in the State of Florida
solely in respect of the interpretation and enforcement of the provisions of
this Agreement and of the documents referred to in this Agreement, and in
respect of the transactions contemplated hereby, and hereby waive, and agree not
to assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or of any such document, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a State of Florida or Federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection
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with any such action or proceeding in the manner provided in Section 11.6 or in
such other manner as may be permitted by law shall be valid and sufficient
service thereof.
11.6. Notices.
Any notice, request, instruction or other document to be given
hereunder by any party to the others shall be in writing and shall be deemed
delivered if delivered personally or sent by registered or certified mail
(return receipt requested) or nationally recognized overnight courier service
(with proof of service), postage prepaid, or by confirmed facsimile, and such
notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed:
if to Parent or Merger Sub
c/o Oerlikon-Buhrle Holding AG
Hofwiesenstrasse 135
CH-8021 Zurich
Switzerland
Attention: Heinz A. Kundert
Fax: 011-41-1-363-4092
with a copy to
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Allen I. Isaacson, P.C.
Fax: (212) 859-4000
if to the Company
Plasma-Therm, Inc.
10050 16th Street North
St. Petersburg, Florida 33716
Attention:Stacy Wagner
Fax: (727) 577-7035
with a copy to
Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Attention: Martin A. Traber
Fax: (813) 225-4210
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or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
11.7. Entire Agreement; NO OTHER REPRESENTATIONS.
This Agreement (including any exhibits hereto), the Company
Disclosure Letter, the Parent Disclosure Letter and the Confidentiality
Agreement (the "Confidentiality Agreement") constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE
COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS
ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
11.8. No Third Party Beneficiaries.
Except as provided in Section 8.8 (Benefits), and in Section
8.9 (Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
11.9. Obligations of Parent and of the Company.
Whenever this Agreement requires a Subsidiary of Parent to
take any action, such requirement shall be deemed to include an undertaking on
the part of Parent to cause such Subsidiary to take such action. Whenever this
Agreement requires a Subsidiary of the Company to take any action, such
requirement shall be deemed to include an undertaking on the part of the Company
to cause such Subsidiary to take such action and, after the Effective Time, on
the part of the Surviving Corporation to cause such Subsidiary to take such
action.
11.10. Severability.
The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability or the other provisions hereof. If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement
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and the application of such provision to other Persons or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
11.11. Interpretation.
The table of contents and headings herein are for convenience
of reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof. Where a
reference in this Agreement is made to a Section or Exhibit, such reference
shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
11.12. Assignment.
This Agreement shall not be assignable by operation of law or
otherwise.
11.13. Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court, this being in addition to any other remedy to
which they are entitled at law or in equity.
11.14. Glossary of Terms.
The following sets forth the location of definitions of
capitalized terms defined in the body of this Agreement:
"1998 Balance Sheet" - Section 6.5.
"Acquiring Party" - Section 10.5.(b)
"Acquisition Proposal" - Section 8.2.(d)(i)
"Ancillary Documents" - Section 6.3.(a)
"Articles" - Section 3.1.
"Articles of Merger" - Section 2.3.
"Audit" - Section 6.12.
"Audit Date" - Section 6.5.
"Bankruptcy and Equity Exception" - Section 6.3.(a)
"Business Day" - Section 1.4.
"Bylaws" - Section 3.2.
"CERCLA" - Section 6.11.
"CERCLIS" - Section 6.11.
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"Certificate" - Section 5.1.(a)
"Closing" - Section 2.2.
"Closing Date" - Section 2.2.
"Company Acquisition Transaction" - Section 8.2.(d)(ii)
"Company Disclosure Letter" - Section 6.
"Company Intellectual Property" - Section 6.14.(b)
"Company Material Adverse Effect" - Section 6.1.
"Company Option" - Section 8.8.(a)(ii)
"Company Reports" - Section 6.5.
"Company Requisite Vote" - Section 6.3.(a)
"Company Stock Plan" - Section 6.2.
"Compensation and Benefit Plans" - Section 6.8.(a)
"Confidentiality Agreement" - Section 11.7.
"Contracts" - Section 6.4.(b)
"Costs" - Section 8.9.(b)
"D&O Insurance" - Section 8.9.(d)
"Department" - Section 2.3.
"Dissenting Shareholders" - Section 5.3.
"Effective Time" - Section 2.3.
"Employees" - Section 6.8.(a)
"Environmental Laws" - Section 6.11.
"Environmental Permits" - Section 6.11.
"ERISA" - Section 6.8.(b)
"ERISA Affiliate" - Section 6.8.(c)
"Exchange Act" - Section 1.2. and Section 6.4.(a)
"Exchange Fund" - Section 5.2.(a)
"Excluded Shares" - Section 5.1.(a)
"Exon-Florio Amendment" - Section 6.4.(a)
"FBCA" - Section 2.1. and Section 6.3.(b)
"Financial Advisor" - Section 6.3.(b)
"Government Antitrust Entity" - Section 8.3.(d)
"Governmental Entity" - Section 6.4.(a)
"HSR Act" - Section 6.4.(a)
"Indemnified Parties" - Section 8.9.(b)
"Information Statement" - Section 6.21.
"Intellectual Property" - Section 6.14.(b)
"IRS" - Section 6.8.(b)
"Knowledge of the Company" - Section 6.7.
"Laws" - Section 6.9.
"Material Contracts" - Section 6.19.
"Merger Consideration" - Section 5.1.(a)
"Offer" - Section 1.1.
"Offer Conditions" - Section 1.1.
"Offer Documents" - Section 1.2.
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"Option Consideration" - Section 8.8.(a)(ii)
"Order" - Section 9.3.
"Outside Counsel" - Section 6.10.
"Parent Disclosure Letter" - Section 7.
"Parent Companies" - Section 5.1.(a)
"Parent Insiders" - Section 4.1.(a)
"Parent Material Adverse Effect" - Section 7.3.
"Paying Agent" - Section 5.2.(a)
"Pension Plan" - Section 6.8.(b)
"Person" - Section 5.2.(b)
"Plans" - Section 6.8.(b)
"Proxy Statement" - Section 8.6.
"Real Property" - Section 6.11.
"Representatives" - Section 8.2.(a)
"Schedule 14D-1" - Section 1.2.
"Schedule 14D-9" - Section 1.3.(b)
"SEC" - Section 1.3.(b) and Section 6.5.
"Share" - Section 5.1.(a)
"Shares" - Section 5.1.(a)
"Subsidiary" - Section 6.1.
"Superior Proposal" - Section 8.2.(d)(iii)
"Surviving Corporation" - Section 2.1.
"Takeover Statute" - Section 6.10.
"Tax" - Section 6.12.
"Tax Return" - Section 6.12.
"Taxable" - Section 6.12.
"Taxes" - Section 6.12.
"Voting Debt" - Section 6.2.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
COMPANY
By: /s/ Ronald S. Deferrari
-------------------------------------------
Name: Ronald S. Deferrari
-------------------------------------
Title: President
------------------------------------
OERLIKON-BUHRLE USA, INC.
By: /s/ Beat Baumgartner
-------------------------------------------
Name: Beat Baumgartner
-------------------------------------
Title: Chairman and President
------------------------------------
VOLCANO ACQUISITION CORP.
By: /s/ Heinz Kundert
-------------------------------------------
Name: Heinz Kundert
-------------------------------------
Title: Chairman and President
------------------------------------
[Signature Page to Merger Agreement]
56
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer, but subject to the terms of the Merger Agreement, Merger Sub shall
not be required to accept for payment or, subject to any applicable rules and
regulation of the SEC, pay for any Shares, and may terminate or amend (subject
to the last sentence of Section 1.1 of this Agreement) the Offer (i) if prior to
the expiration of the Offer (or, if extended, by the expiration of the Offer, as
so extended) a number of Shares which together with any Shares owned by Parent,
Merger Sub and the Parent Companies, constitutes more than 50% of the
outstanding Shares (on a fully-diluted basis) (the "Minimum Conditions") shall
not have been validly tendered pursuant to the Offer and not properly withdrawn,
(ii) if all applicable waiting periods under the HSR Act or the Exon-Florio
Amendment shall not have expired or been terminated, or (iii) at any time prior
to acceptance for payment for any such Shares, any of the following events shall
occur; provided that in each such case Merger Sub shall not be permitted to
terminate the Offer (except pursuant to paragraph (e)(ii), e(iii) or (g) below)
if prior to the then scheduled expiration of the Offer the Offer shall have been
extended:
(a) there shall have occurred (i) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory), (ii) a formal declaration of war or
national or international calamity directly or indirectly involving the United
States, (iii) any limitation (whether or not mandatory) by any United States
governmental authority on the extension of credit by banks or other financial
institutions that materially affects the extension of credit by banks or other
lending institutions, (iv) any general suspension of, or limitation on prices
for, trading in securities on the NASDAQ National Market or the over the counter
market, or (v) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(b) the Company shall have breached or failed to
perform any of its obligations, covenants or agreements under the Merger
Agreement in a manner permitting Parent to terminate the Merger Agreement, or
any representation or warranty of the Company set forth in the Merger Agreement
shall not have been true and correct in all respects when made, or shall
thereafter have ceased to be true and correct in all respects as if made on such
later date (other than representations and warranties made as of a specified
date); provided that any such representations and warranties that are not
qualified by Material Adverse Effect shall be deemed to be true and correct in
all respects unless the failure of such representations and warranties to be so
true and correct in all respects would have a Company Material Adverse Effect or
would prevent the Company from consummating the transactions contemplated by the
Merger Agreement;
(c) there shall be instituted or pending any action,
litigation, proceeding, investigation or other application (hereinafter, an
"Action") before any court or other Governmental Entity: (i) challenging the
acquisition by Parent or Merger Sub of Shares, seeking to restrain or prohibit
the consummation of the transactions contemplated by the
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Merger Agreement; (ii) seeking to prohibit, or impose any limitations on,
Parent's or Merger Sub's acquisition, ownership or operation of all or any
portion of their or the Company's business or assets (including the business or
assets of their respective affiliates and subsidiaries); (iii) seeking to make
the acceptance for payment, purchase of, or payment for, some or all of the
Shares illegal; (iv) seeking to impose limitations on the ability of Parent or
Merger Sub effectively to acquire or hold or to exercise full rights of
ownership of the Shares including, without limitation, the right to vote the
Shares purchased by them on an equal basis with all other shares on all matters
properly presented to the shareholders; or (v) that, in any event, would have a
Company Material Adverse Effect;
(d) any statute, rule, regulation, order or injunction
shall be enacted, promulgated, entered, enforced or become applicable to the
Offer or the Merger, or any other action shall have been taken by any court or
other Governmental Entity other than the application to the Offer or the Merger
of the waiting period under the HSR Act, that would result in any of the effects
of, or have any of the consequences sought to be obtained or achieved in, any
Action referred to in clauses (i) through (v) of paragraph (c) above;
(e) any person (as such term is defined in Section
13(d) (3) of the Exchange Act (other than Parent or any of its affiliates)) (i)
commences a tender or exchange offer for a majority or more of the outstanding
Shares at a price per Share greater than the Merger Consideration; (ii) shall
have become the beneficial owner of more than 25% of the outstanding Shares
(other than for bona fide arbitrage purposes); or (iii) shall have entered into
a definitive agreement to acquire all or substantially all of the Shares or to
effect a merger, consolidation or other business combination with or involving
the Company;
(f) there shall have occurred an event which has
caused a Company Material Adverse Effect;
(g) the Board of Directors of the Company shall have
amended, modified or withdrawn its recommendation of the Offer or the Merger in
a manner adverse to Parent, or shall have endorsed, approved or recommended any
other Acquisition Proposal, or shall have resolved to do any of the foregoing or
shall have failed to confirm within five business days of the Parent's request
therefore its recommendation of the Offer or the Merger; or
(h) the Merger Agreement shall have been terminated by
the Company or Parent in accordance with its terms;
which, in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances giving rise to any such conditions, makes it reasonably
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
The foregoing conditions other than the Minimum Conditions are for the
sole benefit of Parent and may be asserted by Parent or Merger Sub regardless of
the circumstances giving rise to such condition or may be waived by Parent other
than the Minimum Conditions, by
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express and specific action to that effect, in whole or in part at any time and
from time to time in its sole discretion. The failure by the Parent or Merger
Sub at any time to exercise any of the foregoing rights will not be deemed a
waiver of any right, the waiver of such right with respect to any particular
facts or circumstances shall not be deemed a waiver with respect to any other
facts or circumstances, and each right will be deemed an ongoing right which may
be asserted at any time and from time to time.
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