EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
SOLECTRON CORPORATION
CENTERS ACQUISITION CORPORATION
AND
CENTENNIAL TECHNOLOGIES, INC.
Dated as of January 22, 2001
INDEX OF EXHIBITS
Exhibit A Form of Voting Agreement
Exhibit B Form of Affiliate Agreement
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and
entered into as of January 22, 2001, by and among Solectron Corporation, a
Delaware corporation ("PARENT"), Centers Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent ("MERGER SUB"), and
Centennial Technologies, Inc., a Delaware corporation (the "COMPANY").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement (as
defined in SECTION 1.2 hereof) and in accordance with the Delaware General
Corporation Law ("DELAWARE LAW"), Parent and the Company intend to enter into a
business combination transaction.
B. The Board of Directors of the Company (i) has determined that the
Merger (as defined in SECTION 1.1 hereof) is advisable, and consistent with and
in furtherance of the long-term business strategy of the Company and fair to,
and in the best interests of, the Company and its stockholders, (ii) has
approved this Agreement, the Merger and the other transactions contemplated by
this Agreement and (iii) has determined, subject to the terms of this Agreement,
to recommend that the stockholders of the Company adopt and approve this
Agreement and approve the Merger.
C. Concurrently with the execution of this Agreement, and as a
condition and inducement to Parent's willingness to enter into this Agreement,
the directors and executive officers of the Company are entering into Voting
Agreements with Parent, in the form attached hereto as EXHIBIT A (the "VOTING
AGREEMENTS").
D. As a condition and inducement to Parent's willingness to enter into
this Agreement, certain affiliates of the Company are entering into Affiliate
Agreements with Parent, in the form attached hereto as EXHIBIT B (the "AFFILIATE
AGREEMENTS"), at or prior to the consummation of the Merger.
E. The parties hereto intend, by executing this Agreement, to adopt a
"plan of reorganization" within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "CODE").
F. It is also intended by the parties hereto that the Merger will be
accounted for as a purchase.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and accepted, the
parties agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as defined in SECTION 1.2 hereof)
and upon the terms and subject to the conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
the Company (the "MERGER"), the separate corporate existence of Merger Sub shall
cease and the Company shall continue as the surviving corporation. The Company,
as the surviving corporation of the Merger, is hereinafter sometimes referred to
as the "SURVIVING CORPORATION."
1.2 EFFECTIVE TIME; CLOSING. Upon the terms and subject to the conditions
of this Agreement, the parties hereto shall cause the Merger to be consummated
by filing a certificate of merger (the "CERTIFICATE OF MERGER") with the
Secretary of State of the State of Delaware in accordance with the relevant
provisions of Delaware Law (the time of such filing (or such later time as may
be agreed in writing by the Company and Parent and specified in the Certificate
of Merger) being the "EFFECTIVE TIME") as soon as practicable on or after the
Closing Date (as herein defined). Unless the context otherwise requires, the
term "AGREEMENT" as used herein refers collectively to this Agreement and Plan
of Merger and Reorganization (as the same may be amended from time to time) and
the Certificate of Merger. The closing of the Merger (the "CLOSING") shall take
place at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, One Market, Spear Street Tower, Suite 3300, San Francisco,
California 94105, at a time and date to be specified by the parties hereto,
which shall be no later than the second (2nd) business day after the
satisfaction or waiver of the conditions set forth in ARTICLE VI hereof, or at
such other time, date and location as the parties hereto agree in writing (the
"CLOSING DATE").
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS OF SURVIVING CORPORATION.
(a) CERTIFICATE OF INCORPORATION. As of the Effective Time, by virtue
of the Merger and without any action on the part of Merger Sub or the Company,
the Certificate of Incorporation of the Surviving Corporation shall be amended
and restated to read the same as the Certificate of Incorporation of Merger Sub,
as in effect immediately prior to the Effective Time, until thereafter amended
in accordance with Delaware Law and such Certificate of Incorporation; provided,
however, that as of the Effective Time the Certificate of Incorporation shall
provide that the name of the Surviving Corporation is "Centennial Technologies,
Inc."
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(b) BYLAWS. As of the Effective Time, by virtue of the Merger and
without any action on the part of Merger Sub and the Company, the Bylaws of the
Surviving Corporation shall be amended and restated to read the same as the
Bylaws of Merger Sub, as in effect immediately prior to the Effective Time,
until thereafter amended in accordance with Delaware Law, the Certificate of
Incorporation of the Surviving Corporation and such Bylaws; PROVIDED, HOWEVER,
that all references in such Bylaws to Merger Sub shall be amended to refer to
"Centennial Technologies, Inc."
1.5 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION.
(a) DIRECTORS. The initial directors of the Surviving Corporation shall
be the directors of Merger Sub immediately prior to the Effective Time, until
their respective successors are duly elected or appointed and qualified.
(b) OFFICERS. The initial officers of the Surviving Corporation shall
be the officers of Merger Sub immediately prior to the Effective Time.
1.6 EFFECT ON CAPITAL STOCK. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time, by virtue of the Merger and without
any action on the part of Merger Sub, the Company or the holders of any of the
following securities, the following shall occur:
(a) CONVERSION OF COMPANY COMMON STOCK. Each share of common stock, par
value $0.01 per share, of the Company (the "COMPANY COMMON STOCK") issued and
outstanding immediately prior to the Effective Time, other than any shares of
Company Common Stock to be canceled pursuant to SECTION 1.6(c) hereof, will be
canceled and extinguished and automatically converted (subject to SECTION 1.6(f)
and SECTION 1.6(g) hereof) into the right to receive, upon surrender of the
certificate representing such share of Company Common Stock in the manner
provided in SECTION 1.7 hereof (or in the case of a lost, stolen or destroyed
certificate, upon delivery of an affidavit (and bond, if required) in the manner
provided in SECTION 1.9 hereof), that number (the "EXCHANGE RATIO") of fully
paid and nonassessable shares of Common Stock, par value $0.001 per share, of
Parent ("PARENT COMMON STOCK"), equal to
A divide by (B+C)
Where: A = 2,960,000; PROVIDED, HOWEVER, in the event all of the
outstanding shares of Series B Preferred Stock (as defined in
SECTION 1.6(b)) are not converted into shares of Company Common
Stock at or prior to the Effective Time, and the holders of any
shares of Series B Preferred Stock elect to receive the
Preferred Cash Consideration (as defined in SECTION 1.6(b)
hereof) in exchange for each shares of Series B Preferred Stock
in accordance with the Company's Certificate of Designation of
Series B Preferred Stock and pursuant to SECTION 1.6(b) hereof,
then A above shall equal: (x) 2,960,000 minus (y) (A) $80.00,
multiplied by (B) the number of shares of Series B Preferred
Stock outstanding immediately prior to the Effective Time,
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divided by (C) the average closing price of one share of Parent
Common Stock for the five (5) most recent days that Parent
Common Stock has traded ending on the trading day immediately
prior to the Effective Time, as reported on the New York Stock
Exchange ("NYSE") Composite Transaction Tape (the "Average
Trading Price").
B = the number of shares of Company Common Stock outstanding
immediately prior to the Effective Time (including (i) the
number of shares of Company Common Stock issued upon the
conversion of any shares of Series B Preferred Stock converted
at or prior to the Effective Time, and (ii) any shares of
Company Common Stock issued upon the exercise of all purchase
rights outstanding under the ESPP pursuant to SECTION 5.8(b)
hereof) other than those shares of Company Common Stock to be
canceled pursuant to SECTION 1.6(c) hereof; and
C = the number of shares of Company Common Stock issuable upon
the exercise of Company Stock Options (as defined in SECTION
1.6(d) hereof) outstanding immediately prior to the Effective
Time (whether vested or unvested) (including those options to
purchase shares of Company Common Stock which are granted after
the date hereof and prior to the Effective Time).
For purposes of clarity, assuming (i) that as of the date hereof, there
are 1,626,277 shares of Company Common Stock issuable upon the exercise of
Company Stock Options outstanding on the date hereof (whether vested or
unvested), (ii) that no additional Company Stock Options are granted after the
date hereof and prior to the Effective Time, and (iii) that the Average Trading
Price equals $40.74 (i.e., the closing price of Parent Common Stock on the date
hereof), (A) in the event that the all of the outstanding shares of Series B
Preferred Stock were converted into shares of Company Common Stock at or prior
to the Effective Time, the Exchange Ratio derived from the foregoing formula set
forth in this SECTION 1.6(a) will be 0.536, and (B) in the event that the none
of the outstanding shares of Series B Preferred Stock were converted into shares
of Company Common Stock at or prior to the Effective Time, the Exchange Ratio
derived from the foregoing formula set forth in this SECTION 1.6(a) will be
0.578.
If any shares of Company Common Stock outstanding immediately prior to
the Effective Time are unvested or are subject to a repurchase option, risk of
forfeiture or other condition under any applicable restricted stock purchase
agreement or other agreement with the Company, then the shares of Parent Common
Stock issued in exchange for such shares of Company Common Stock shall also be
unvested and subject to the same repurchase option, risk of forfeiture or other
condition, and the certificates representing such shares of Parent Common Stock
may accordingly be marked with appropriate legends. The Company shall take all
action that may be necessary to ensure that, from and after the Effective Time,
Parent is entitled to exercise any such repurchase option or other right set
forth in any such restricted stock purchase agreement or other agreement.
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(b) CONVERSION OF SERIES B PREFERRED STOCK. Each share of Series B
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Series B Preferred Stock") issued and outstanding immediately prior to the
Effective Time shall be canceled and extinguished and automatically converted
(subject to SECTION 1.6(f) and SECTION 1.6(g) hereof) into the right to receive,
upon surrender of the certificate representing such share of Series B Preferred
Stock in the manner provided in SECTION 1.7 hereof (or in the case of a lost,
stolen or destroyed certificate, upon delivery of an affidavit (and bond, if
required) in the manner provided in SECTION 1.9 hereof) $80.00 (the "PREFERRED
CASH CONSIDERATION") payable (without interest) in U.S. currency in immediately
available funds to the holders of such shares of Series B Preferred Stock.
(c) CANCELLATION OF PARENT-OWNED STOCK. Each share of Company Common
Stock held by the Company or owned by Merger Sub, Parent or any direct or
indirect wholly-owned subsidiary of the Company or Parent immediately prior to
the Effective Time shall be canceled and extinguished without any conversion
thereof.
(d) STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLANS. At the Effective
Time, all options to purchase Company Common Stock (each, a "COMPANY STOCK
OPTION" and collectively, the "COMPANY STOCK OPTIONS") then outstanding under
the Company's 2000 Stock Incentive Plan, 1999 Stock Incentive Plan, 1994 Stock
Option Plan and 1994 Formula Stock Option Plan (each, a "COMPANY OPTION PLAN"
and collectively, the "COMPANY OPTION PLANS") shall be assumed by Parent in
accordance with SECTION 5.8 hereof. Purchase rights outstanding under the
Company's Employee Stock Purchase Plan (the "ESPP") shall be treated as set
forth in SECTION 5.8 hereof.
(e) CAPITAL STOCK OF MERGER SUB. Each share of Common Stock, par value
$0.001 per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of Common Stock, par value
$0.001 per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock immediately prior to the
Effective Time shall evidence ownership of such shares of capital stock of the
Surviving Corporation.
(f) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be adjusted
to reflect appropriately the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
into Parent Common Stock or Company Common Stock), extraordinary cash dividends,
reorganization, recapitalization, reclassification, combination, exchange of
shares or other like change with respect to Parent Common Stock or Company
Common Stock occurring on or after the date hereof and prior to the Effective
Time.
(g) FRACTIONAL SHARES. No fraction of a share of Parent Common Stock
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Company Common Stock who would otherwise be entitled to a fraction of
a share of Parent Common Stock (after aggregating all fractional shares of
Parent Common Stock that otherwise would be received by such holder) shall, upon
surrender of such holder's Certificates(s) (as defined in SECTION 1.7(c) hereof)
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receive from Parent an amount of cash (rounded to the nearest whole cent),
without interest, equal to the product of (i) such fraction, MULTIPLIED by (ii)
the Average Trading Price.
1.7 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Parent shall select a bank or trust company
reasonably acceptable to the Company to act as the exchange agent (the "EXCHANGE
AGENT") in the Merger.
(b) PARENT TO PROVIDE COMMON STOCK. At the Effective Time, Parent shall
make available to the Exchange Agent, for exchange in accordance with this
ARTICLE I, the shares of Parent Common Stock issuable pursuant to SECTION 1.6
hereof in exchange for outstanding shares of Company Common Stock, and cash in
an amount sufficient for (i) payment in lieu of fractional shares pursuant to
SECTION 1.6(g) hereof, (ii) payment of any dividends or distributions to which
holders of shares of Company Common Stock may be entitled pursuant to SECTION
1.7(d) hereof, and (iii) if applicable, for payment in exchange for the
outstanding shares of Series B Preferred Stock in accordance with SECTION 1.6(b)
hereof.
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, (and in no
event more than ten (10) business days following the Effective Time) Parent
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock or Series B Preferred Stock which were converted into the
right to receive shares of Parent Common Stock pursuant to SECTION 1.6 hereof,
cash in lieu of any fractional shares pursuant to SECTION 1.6(g) hereof and any
dividends or other distributions pursuant to SECTION 1.7(d) hereof or Preferred
Cash Consideration, as applicable, (i) a letter of transmittal in customary form
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall contain such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of Parent Common
Stock, cash in lieu of any fractional shares pursuant to SECTION 1.6(g) hereof
and any dividends or other distributions pursuant to SECTION 1.7(d) or Preferred
Cash Consideration, as applicable. Upon surrender of Certificates for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, (i) the
holders of such Certificates formerly representing shares of Company Common
Stock shall be entitled to receive in exchange therefor certificates
representing the number of whole shares of Parent Common Stock into which their
shares of Company Common Stock were converted at the Effective Time (as adjusted
for any stock splits, reverse stock splits, stock dividends or the like with
respect to the shares of Parent Common Stock with a record date after the
Effective Time), payment in lieu of fractional shares which such holders have
the right to receive pursuant to SECTION 1.6(g) hereof and any dividends or
distributions payable pursuant to SECTION 1.7(d) hereof, and (ii) the holders of
such Certificates formerly representing shares of Series B Preferred Stock shall
be entitled to receive in exchange therefor the Preferred Cash Consideration for
each share of Series B Preferred Stock, and the Certificates so surrendered
shall forthwith be canceled. Until so surrendered, outstanding Certificates
shall be deemed from and after the Effective Time, for all corporate purposes,
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subject to SECTION 1.7(d) hereof as to dividends and other distributions, to
evidence only the ownership of the number of full shares of Parent Common Stock
into which such shares of Company Common Stock shall have been so converted and
the right to receive an amount in cash in lieu of the issuance of any fractional
shares in accordance with SECTION 1.6(g) hereof and any dividends or
distributions payable pursuant to SECTION 1.7(d) hereof or the right to receive
Preferred Cash Consideration, as applicable.
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time will
be paid to the holders of any unsurrendered Certificates with respect to the
shares of Parent Common Stock represented thereby until the holders of record of
such Certificates shall surrender such Certificates. Subject to applicable law,
promptly following surrender of any such Certificates, the Exchange Agent shall
deliver to the record holders thereof, without interest, certificates
representing whole shares of Parent Common Stock issued in exchange therefor
along with payment in lieu of fractional shares pursuant to SECTION 1.6(g)
hereof and the amount of any such dividends or other distributions with a record
date after the Effective Time payable with respect to such whole shares of
Parent Common Stock.
(e) TRANSFERS OF OWNERSHIP. If certificates representing shares of
Parent Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Parent or any agent designated by it
any transfer or other taxes required by reason of the issuance of certificates
representing shares of Parent Common Stock in any name other than that of the
registered holder of the Certificates surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax has been paid
or is not payable.
(f) REQUIRED WITHHOLDING. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
(as advised by tax counsel for Parent) to be deducted or withheld therefrom
under the Code or under any provision of state, local or foreign tax law or
under any other applicable legal requirement. To the extent such amounts are so
deducted or withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the person to whom such amounts would otherwise
have been paid.
(g) NO LIABILITY. Notwithstanding anything to the contrary in this
SECTION 1.7, neither the Exchange Agent, Parent, the Surviving Corporation nor
any other party hereto shall be liable to a holder of shares of Parent Common
Stock or Company Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
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1.8 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK OR SERIES B
PREFERRED STOCK. All shares of Parent Common Stock issued in accordance with the
terms hereof (including any cash paid in respect thereof pursuant to SECTION
1.6(g) and SECTION 1.7(d) hereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common Stock,
and the Preferred Cash Consideration issued in accordance with SECTION 1.6(b)
hereof shall be deemed to have been issued in full satisfaction of all rights
pertaining to shares of Series B Preferred Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of shares
of Company Common Stock or Series B Preferred Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this ARTICLE I.
1.9 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of Company
Common Stock represented by such Certificates were converted pursuant to SECTION
1.6 hereof, cash for fractional shares, if any, as may be required pursuant to
SECTION 1.6(g) hereof and any dividends or distributions payable pursuant to
SECTION 1.7(d) hereof or Preferred Cash Consideration, as applicable; PROVIDED,
HOWEVER, that Parent may, in its discretion and as a condition precedent to the
issuance of such certificates representing shares of Parent Common Stock, cash
and other distributions, or Preferred Stock Consideration, as applicable,
require the owner of such lost, stolen or destroyed Certificates to deliver a
bond in such reasonable and customary amount as it may direct as indemnity
against any claim that may be made against Parent, the Surviving Corporation or
the Exchange Agent with respect to the Certificates alleged to have been lost,
stolen or destroyed.
1.10 TAX AND ACCOUNTING CONSEQUENCES.
(a) TAX. It is intended by the parties hereto that the Merger will
constitute a reorganization within the meaning of Section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
(b) ACCOUNTING. It is intended by the parties hereto that the Merger
will be accounted for as a purchase.
1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub will take all such lawful and necessary action.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
As of the date hereof and as of the Closing Date, the Company hereby
represents and warrants to Parent and Merger Sub, subject to such exceptions as
are specifically disclosed in writing in the disclosure letter supplied by the
Company to Parent dated as of the date hereof and certified by a duly authorized
officer of the Company (the "COMPANY SCHEDULE"), which disclosure shall provide
an exception to or otherwise qualify the representations or warranties of the
Company specifically referred to in the Company Schedule and such other
representations and warranties to the extent such disclosure shall reasonably
appear to be applicable to such other representations or warranties, as follows:
2.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each of the Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted, except where the failure to do so
would not, individually or in the aggregate, have a Material Adverse Effect (as
defined in SECTION 8.3 hereof) on the Company. Each of the Company and its
subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders
("APPROVALS") necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being conducted,
except where the failure to have such Approvals would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
(b) The Company has no subsidiaries except for the corporations
identified in SECTION 2.1(b) of the Company Schedule. Neither the Company nor
any of its subsidiaries has agreed nor is obligated to make nor is bound by any
written, oral or other agreement, contract, subcontract, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan, commitment or undertaking of any
nature, as of the date hereof or as may hereafter be in effect (a "CONTRACT")
under which it may become obligated to make, any future investment in or capital
contribution to any other entity. Except as set forth in SECTION 2.1(b) of the
Company Schedule, neither the Company nor any of its subsidiaries directly or
indirectly owns any equity or similar interest in or any interest convertible
into, or exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business, association or
entity.
(c) The Company and each of its subsidiaries is qualified to do
business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions where the nature of their business requires such qualification
and where the failure to be so qualified or in good standing would have a
Material Adverse Effect on the Company.
2.2 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has previously
furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date (together, the "COMPANY CHARTER
DOCUMENTS"). The Company Charter Documents and equivalent organizational
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documents of each subsidiary of the Company are in full force and effect. The
Company is not in violation of any of the provisions of the Company Charter
Documents, and no subsidiary of the Company is in violation of its equivalent
organizational documents.
2.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 50,000,000
shares of Company Common Stock and 1,000,000 shares of Preferred Stock ("COMPANY
PREFERRED STOCK" and together with the Company Common Stock, the "COMPANY
CAPITAL STOCK"), each having a par value of $0.01 per share. At the close of
business on the date of this Agreement (i) 3,295,173 shares of Company Common
Stock were issued and outstanding, all of which are validly issued, fully paid
and nonassessable, (ii) no shares of Company Common Stock were held by
subsidiaries of the Company, (iii) no shares of Company Common Stock were
reserved for issuance upon the exercise of outstanding options to purchase
Company Common Stock under the 2000 Stock Incentive Plan, (iv) 913,996 shares of
Company Common Stock were reserved for issuance upon the exercise of outstanding
options to purchase Company Common Stock under the 1999 Stock Incentive Plan,
(v) 695,406 shares of Company Common Stock were available for future grant under
the 1994 Stock Option Plan, and (vi) 16,875 shares of Company Common Stock were
available for future grant under the 1994 Formula Stock Option Plan. As of the
close of business on the date of this Agreement, 60,000 shares of Company
Preferred Stock were designated as Series B Preferred Stock and were issued or
outstanding and 50,000 shares of Company Preferred Stock were designated as
Series A Junior Participating Preferred Stock, none of which were issued and
outstanding and 50,000 of which were reserved for issuance under the Company
Rights Plan (as defined in SECTION 2.26 hereof). SECTION 2.3(a) of the Company
Schedule sets forth the following information with respect to each Company Stock
Option outstanding as of the date of this Agreement: (i) the name and address of
the optionee; (ii) the particular plan pursuant to which such Company Stock
Option was granted; (iii) the number of shares of Company Common Stock subject
to such Company Stock Option; (iv) the exercise price of such Company Stock
Option; (v) the date on which such Company Stock Option was granted; (vi) the
applicable vesting schedule; (vii) the date on which such Company Stock Option
expires; and (viii) whether the exercisability of such option will be
accelerated in any way by the transactions contemplated by this Agreement, and
indicates the extent of acceleration. The Company has made available to Parent
accurate and complete copies of all stock option plans pursuant to which the
Company has granted such Company Stock Options that are currently outstanding
and the form of all stock option agreements evidencing such Company Stock
Options. All shares of Company Common Stock subject to issuance upon exercise of
such Company Stock Options as aforesaid, upon issuance on the terms and
conditions specified in the instrument pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. Except
as set forth in SECTION 2.3(a) of the Company Schedule, there are no commitments
or agreements of any character to which the Company is bound obligating the
Company to accelerate the vesting of any Company Stock Option as a result of the
Merger. All outstanding shares of Company Common Stock, all outstanding Company
Stock Options, and all outstanding shares of capital stock of each subsidiary of
the Company have been issued and granted in compliance with (i) all applicable
securities laws and other applicable Legal Requirements (as defined below) and
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(ii) all requirements set forth in applicable Contracts. For the purposes of
this Agreement, "LEGAL REQUIREMENTS" means any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issues, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity (as defined in
SECTION 2.5(b) hereof).
(b) Except for shares of capital stock or other similar ownership
interests of subsidiaries of the Company that are owned by certain nominee
equity holders as required by the applicable law of the jurisdiction of
organization of such subsidiaries (which shares or other interests do not
materially affect the Company's control of such subsidiaries), the Company owns
free and clear of all liens, pledges, hypothecations, charges, mortgages,
security interests, encumbrances, claims, infringements, interferences, options,
right of first refusals, preemptive rights, community property interests or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset) directly or indirectly through one or more subsidiaries,
all equity securities, partnership interests or similar ownership interests of
any subsidiary of the Company, and all securities convertible into, or
exercisable or exchangeable for, such equity securities, partnership interests
or similar ownership interests, that are issued, reserved for issuance or
outstanding. Except as set forth in SECTION 2.3(b) of the Company Schedule or
SECTION 2.3(a) hereof, there are no subscriptions, options, warrants, equity
securities, partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership interests
or similar ownership interests of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. Except as set forth in SECTION
2.3(b) of the Company Schedule and as contemplated by this Agreement, there are
no registration rights in respect of Company Capital Stock and, except for the
Company Rights Plan and the Voting Agreements, there are no voting trusts,
proxies, rights plans, antitakeover plans or other agreements or understandings
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries are bound with respect to any equity security
of the Company or with respect to any equity security, partnership interest or
similar ownership interest of any of its subsidiaries. Stockholders of the
Company will not be entitled to dissenters' rights under applicable state law in
connection with the Merger.
2.4 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and, subject to obtaining the approval of the
stockholders of the Company of the Merger, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
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of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than the approval and adoption of this Agreement and
the Merger by holders of a majority of the outstanding shares of Company Capital
Stock in accordance with Delaware Law and the Company Charter Documents). This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and Merger Sub,
constitutes a legal and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
2.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except as set forth in SECTION 2.5(a) of the Company Schedule, the
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Company Charter Documents or the equivalent organizational documents
of any of the Company's subsidiaries, (ii) subject to obtaining the approval of
the Company's stockholders of this Agreement and the Merger and compliance with
the requirements set forth in SECTION 2.5(b) hereof, conflict with or violate in
any material respect any law, rule, regulation, order, judgment or decree
applicable to the Company or any of its subsidiaries or by which its or any of
their respective properties is bound or affected, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or materially impair the Company's or any of
its subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of the Company or any of its subsidiaries pursuant to,
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or its or any of their respective properties are bound or
affected.
(b) The execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or registration or filing with or
notification to, any court, administrative agency, commission, governmental or
regulatory authority, domestic or foreign (a "GOVERNMENTAL ENTITY"), except (i)
for applicable requirements, if any, of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), state securities laws ("BLUE SKY LAWS"), the pre-merger
notification requirements (the "HSR APPROVAL") of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR ACT") and of foreign
Governmental Entities and the rules and regulations thereunder, the rules and
regulations of the National Market System ("NASDAQ"), and the filing and
recordation of the Certificate of Merger as required by Delaware Law, and (ii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or, after the Effective Time, Parent, or prevent consummation of the
Merger or otherwise prevent the parties hereto from performing their obligations
under this Agreement.
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2.6 COMPLIANCE; PERMITS.
(a) Neither the Company nor any of its subsidiaries is in conflict
with, or in default or violation of, (i) any law, rule (including environmental
laws), regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties is bound
or affected, or (ii) any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
is bound or affected, except for any conflicts, defaults or violations that
(individually or in the aggregate) would not cause the Company to lose any
material benefit or incur any material liability. No investigation or review by
any governmental or regulatory body or authority is pending or, to the knowledge
of the Company, threatened against the Company or its subsidiaries, nor has any
governmental or regulatory body or authority indicated to the Company an
intention to conduct the same, other than, in each such case, those the outcome
of which could not, individually or in the aggregate, reasonably be expected to
have the effect of prohibiting or materially any material business practice of
the Company or any of its subsidiaries, any acquisition of material property by
the Company or any of its subsidiaries or the conduct of business by the Company
or any of its subsidiaries in substantially the same manner as currently
conducted.
(b) The Company and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities which
are material to operation of the business of the Company and its subsidiaries
taken as a whole (each, a "COMPANY PERMIT" and collectively, the "COMPANY
PERMITS"). The Company and its subsidiaries are in compliance in all material
respects with the terms of each of the Company Permits.
2.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has made available to Parent a correct and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by the Company with the Securities and Exchange Commission
("SEC") since March 31, 1998 (the "COMPANY SEC REPORTS"), which are all the
forms, reports and documents required to be filed by the Company with the SEC
since March 31, 1998. The Company SEC Reports (A) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and (B) did not at the time they were filed (and if amended or superseded by
a filing prior to the date of this Agreement then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the Company's subsidiaries is required to file any reports
or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports and the
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set of financial statements set forth on SECTION 2.7 of the Company Schedule for
the period ended December 23, 2000, was prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-Q
of the Exchange Act) and each fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal adjustments which were not or are not
expected to be material in amount.
(c) The Company has previously furnished to Parent a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by the Company with the SEC
pursuant to the Securities Act or the Exchange Act.
2.8 NO UNDISCLOSED LIABILITIES.
(a) Except as set forth in SECTION 2.8(a) of the Company Schedule,
neither the Company nor any of its subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations, assets or financial condition
of the Company and its subsidiaries taken as a whole, except (i) liabilities
provided for in the Company's balance sheet as of December 23, 2000 (the "BASE
BALANCE SHEET") or (ii) liabilities incurred since December 23, 2000 (the "BASE
BALANCE SHEET DATE") in the ordinary course of business, none of which is
material to the business, results of operations or financial condition of the
Company and its subsidiaries, taken as a whole.
(b) Except as provided for in the Base Balance Sheet, neither the
Company nor any of its subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) of any kind or nature to Intel Corporation arising out
of the acquisition by the Company of certain assets of Intel Corporation
pursuant to that certain Asset Purchase Agreement, dated as of December 29,
1999, by and between the Company and Intel Corporation.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in SECTION
2.9 of the Company Schedule, since the Base Balance Sheet Date there has not
been: (i) any Material Adverse Effect on the Company, (ii) any declaration,
setting aside or payment of any dividend on, or other distribution (whether in
cash, stock or property) in respect of, any of the Company's or any of its
subsidiaries' capital stock, or any purchase, redemption or other acquisition by
the Company of any of the Company's capital stock or any other securities of the
Company or its subsidiaries or any options, warrants, calls or rights to acquire
any such shares or other securities except for repurchases from employees
following their termination pursuant to the terms of their pre-existing stock
option or purchase agreements, (iii) any split, combination or reclassification
of any of the Company's or any of its subsidiaries' capital stock, (iv) any
granting by the Company or any of its subsidiaries of any increase in
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compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past practice,
or any payment by the Company or any of its subsidiaries of any bonus, except
for bonuses made in the ordinary course of business consistent with past
practice, or any granting by the Company or any of its subsidiaries of any
increase in severance or termination pay or any entry by the Company or any of
its subsidiaries into any currently effective employment, severance, termination
or indemnification agreement or any agreement the benefits of which are
contingent or the terms of which are materially altered upon the occurrence of a
transaction involving the Company of the nature contemplated hereby, (v) entry
by the Company or any of its subsidiaries into any licensing or other agreement
with regard to the acquisition or disposition of any Intellectual Property (as
defined in SECTION 2.19 hereof) other than licenses in the ordinary course of
business consistent with past practice or any amendment or consent with respect
to any licensing agreement filed or required to be filed by the Company with the
SEC, (vi) any material change by the Company in its accounting methods,
principles or practices, except as required by concurrent changes in GAAP, or
(vii) any revaluation by the Company of any of its assets, including, without
limitation, writing down the value of capitalized inventory or writing off notes
or accounts receivable or any sale of assets of the Company other than in the
ordinary course of business.
2.10 ABSENCE OF LITIGATION. Except as set forth in SECTION 2.10 of the
Company Schedule, there are no claims, actions, suits or proceedings pending or,
to the knowledge of the Company, threatened (or, to the knowledge of the
Company, any governmental or regulatory investigation pending or threatened)
against the Company or any of its subsidiaries or any properties or rights of
the Company or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign.
2.11 EMPLOYEE BENEFIT PLANS.
(a) All employee compensation, incentive, fringe or benefit plans,
programs, policies, commitments or other arrangements (whether or not set forth
in a written document and including, without limitation, all "employee benefit
plans" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) covering any active, former
employee, director or consultant of the Company, any subsidiary of the Company
or any trade or business (whether or not incorporated) which is a member of a
controlled group or which is under common control with the Company within the
meaning of Section 414 of the Code (an "AFFILIATE"), or with respect to which
the Company has liability, are listed in Section 2.11(a) of the Company Schedule
(the "PLANS"). The Company has provided to Parent: (i) correct and complete
copies of all documents embodying each Plan including (without limitation) all
amendments thereto, all related trust documents, and all material written
agreements and contracts relating to each such Plan; (ii) the three (3) most
recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Plan; (iii) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Plan; (iv) all Internal Revenue
Service ("IRS") or Department of Labor (the "DOL") determination, opinion,
notification and advisory letters; (v) all material correspondence to or from
any governmental agency relating to any Plan; (vi) all forms and related notices
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under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); (vii) all discrimination tests for each Plan for the most recent
three (3) plan years; (viii) the most recent annual actuarial valuations, if
any, prepared for each Plan; (xi) if the Plan is funded, the most recent annual
and periodic accounting of Plan assets; (x) all material written agreements and
contracts relating to each Plan, including, but not limited to, administrative
service agreements, group annuity contracts and group insurance contracts; (xi)
all material communications to employees or former employees regarding in each
case, relating to any amendments, terminations, establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or other
events which would result in any material liability under any Plan or proposed
Plan; (xii) all policies pertaining to fiduciary liability insurance covering
the fiduciaries for each Plan; and (xiii) all registration statements, annual
reports (Form 11-K and all attachments thereto) and prospectuses prepared in
connection with any Plan.
(b) Each Plan has been maintained and administered in all material
respects in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations, including but not limited
to ERISA and the Code, which are applicable to such Plans. No suit, action or
other litigation (excluding claims for benefits incurred in the ordinary course
of Plan activities) has been brought, or to the knowledge of the Company is
threatened, against or with respect to any such Plan. There are no audits,
inquiries or proceedings pending or, to the knowledge of the Company, threatened
by the IRS or DOL with respect to any Plans. All contributions, reserves or
premium payments required to be made or accrued as of the date hereof to the
Plans have been timely made or accrued. Any Plan intended to be qualified under
Section 401(a) of the Code and each trust intended to qualify under Section
501(a) of the Code (i) has either obtained a favorable determination,
notification, advisory and/or opinion letter, as applicable, as to its qualified
status from the IRS or still has a remaining period of time under applicable
Treasury Regulations or IRS pronouncements in which to apply for such letter and
to make any amendments necessary to obtain a favorable determination, and (ii)
incorporates or has been amended to incorporate all provisions required to
comply with the Tax Reform Act of 1986 and subsequent legislation to the extent
such amendment or incorporation is required as of the Closing Date. The Company
does not have any plan or commitment to establish any new Plan, to modify any
Plan (except to the extent required by law or to conform any such Plan to the
requirements of any applicable law, in each case as previously disclosed to
Parent in writing, or as required by this Agreement), or to enter into any new
Plan. Each Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without liability to Parent, the
Company or any of its Affiliates (other than ordinary administration expenses
and expenses for benefits accrued but not yet paid).
(c) Neither the Company, any of its subsidiaries, nor any of their
Affiliates has at any time ever maintained, established, sponsored, participated
in, or contributed to any plan subject to Title IV of ERISA or Section 412 of
the Code and at no time has the Company or any of its subsidiaries contributed
to or been requested to contribute to any "multiemployer plan," as such term is
defined in ERISA or to any plan described in Section 413(c) of the Code. Neither
the Company, any of its subsidiaries, nor any officer or director of the Company
or any of its subsidiaries is subject to any material liability or penalty under
Section 4975 through 4980B of the Code or Title I of ERISA. No "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406 and
-16-
407 of ERISA, and not otherwise exempt under Section 408 of ERISA, has occurred
with respect to any Plan which could subject the Company or its subsidiaries to
material liabilities.
(d) Neither the Company, any of its subsidiaries, nor any of their
Affiliates has, prior to the Effective Time and in any material respect,
violated any of the health continuation requirements of COBRA, the requirements
of the Family Medical Leave Act of 1993, as amended, the requirements of the
Women's Health and Cancer Rights Act, as amended, the requirements of the
Newborns' and Mothers' Health Protection Act of 1996, as amended, or any similar
provisions of state law applicable to employees of the Company or any of its
subsidiaries. None of the Plans promises or provides retiree medical or other
retiree welfare benefits to any person except as required by applicable law, and
neither the Company nor any of its subsidiaries has represented, promised or
contracted (whether in oral or written form) to provide such retiree benefits to
any employee, former employee, director, consultant or other person, except to
the extent required by statute.
(e) Neither the Company nor any of its subsidiaries is bound by or
subject to (and none of its respective assets or properties is bound by or
subject to) any arrangement with any labor union. No employee of the Company or
any of its subsidiaries is represented by any labor union or covered by any
collective bargaining agreement and, to the knowledge of the Company, no
campaign to establish such representation is in progress. There is no pending
or, to the knowledge of the Company, threatened labor dispute involving the
Company or any of its subsidiaries and any group of its employees nor has the
Company or any of its subsidiaries experienced any labor interruptions over the
past three (3) years, and the Company and its subsidiaries consider their
relationships with their employees to be good. The Company and its subsidiaries
are in compliance in all material respects with all applicable material foreign,
federal, state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and hours.
(f) Except as set forth in SECTION 2.11(f) of the Company Schedule,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any stockholder, director or employee of the Company or any of
its subsidiaries under any Plan or otherwise, (ii) materially increase any
benefits otherwise payable under any Plan, or (iii) result in the acceleration
of the time of payment or vesting of any such benefits.
(g) Each International Employee Plan (as defined below) has been
established, maintained and administered in all material respects in compliance
with its terms and conditions and with the requirements prescribed by any and
all statutory or regulatory laws that are applicable to such International
Employee Plan. Furthermore, no International Employee Plan has material unfunded
liabilities that, as of the Effective Time, will not be offset by insurance or
fully accrued. Except as required by law, no condition exists that would prevent
the Company or Parent from terminating or amending any International Employee
Plan at any time for any reason. For purposes of this Agreement, "INTERNATIONAL
EMPLOYEE PLAN" shall mean each Plan that has been adopted or maintained by the
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Company or any of its subsidiaries, whether informally or formally, for the
benefit of current or former employees of the Company or any of its subsidiaries
outside the United States.
2.12 LABOR MATTERS. (i) There are no material controversies pending or
threatened between the Company or any of its subsidiaries and any of their
respective employees; (ii) as of the date of this Agreement, neither the Company
nor any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by the Company or its
subsidiaries nor does the Company or its subsidiaries know of any activities or
proceedings of any labor union to organize any such employees; and (iii) as of
the date of this Agreement, neither the Company nor any of its subsidiaries has
any knowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
thereof, by or with respect to any employees of the Company or any of its
subsidiaries.
2.13 REGISTRATION STATEMENT; PROXY STATEMENT. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the SEC
by Parent in connection with the issuance of the Parent Common Stock in or as a
result of the Merger (the "S-4") will, at the time the S-4 becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading; and (ii) the proxy statement/prospectus to be
filed with the SEC by the Company pursuant to SECTION 5.1(a) hereof (the "PROXY
STATEMENT/PROSPECTUS") will, at the dates mailed to the stockholders of the
Company, at the times of the stockholders meeting of the Company (the "COMPANY
STOCKHOLDERS' MEETING") in connection with the transactions contemplated hereby
and as of the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement/Prospectus will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations promulgated by the SEC thereunder. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information supplied by Parent or Merger Sub which is contained in any of the
foregoing documents.
2.14 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
commitment, judgment, injunction, order or decree binding upon the Company or
its subsidiaries or to which the Company or any of its subsidiaries is a party
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of the Company or any of its
subsidiaries, any acquisition of property by the Company or any of its
subsidiaries or the conduct of business by the Company or any of its
subsidiaries as currently conducted.
2.15 TITLE TO PROPERTY. Neither the Company nor any of its subsidiaries
owns any material real property. Except as set forth in SECTION 2.15 of the
Company Schedule, the Company and each of its subsidiaries have good and
defensible title to all of their material properties and assets, free and clear
of all liens, charges and encumbrances except liens for taxes not yet due and
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payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or materially interfere with the present
use of the property affected thereby; and all leases pursuant to which the
Company or any of its subsidiaries lease from others material real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of default of the Company or any of its subsidiaries
or, to the Company's knowledge, any other party (or any event which with notice
or lapse of time, or both, would constitute a material default and in respect of
which the Company or subsidiary has not taken adequate steps to prevent such
default from occurring). All the plants, structures and material equipment of
the Company and its subsidiaries, except such as may be under construction, are
in good operating condition and repair, in all material respects.
2.16 TAXES.
(a) DEFINITION OF TAXES. For the purposes of this Agreement, "TAX" or
"TAXES" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor or transferor entity.
(B) TAX RETURNS AND AUDITS.
(i) Except as set forth in SECTION 2.16(b) of the Company Schedule,
the Company and each of its subsidiaries have timely filed all federal, state,
local and foreign returns, forms, estimates, information statements and reports
("RETURNS") relating to Taxes required to be filed by the Company and each of
its subsidiaries with any Tax authority, except such Returns which are not,
individually or in the aggregate, material to the Company. The Company and each
of its subsidiaries have paid all Taxes shown to be due on such Returns.
(ii) The Company and each of its subsidiaries as of the Effective
Time will have withheld with respect to its employees all federal and state
income Taxes, Taxes pursuant to the Federal Insurance Contribution Act, Taxes
pursuant to the Federal Unemployment Tax Act and other Taxes required to be
withheld, except such Taxes which are not, individually or in the aggregate,
material to the Company.
(iii) Except as set forth in SECTION 2.16(b) of the Company
Schedule, neither the Company nor any of its subsidiaries has been delinquent in
the payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against the Company or any of its
subsidiaries, nor has the Company or any of its subsidiaries executed any
unexpired waiver of any statute of limitations on or extension of any the period
for the assessment or collection of any Tax.
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(iv) No audit or other examination of any Return of the Company or
any of its subsidiaries by any Tax authority is presently in progress, nor has
the Company or any of its subsidiaries been notified in writing of any request
for such an audit or other examination.
(v) No adjustment relating to any Returns filed or required to be
filed by the Company or any of its subsidiaries has been proposed in writing,
formally or informally, by any Tax authority to the Company or any of its
subsidiaries or any representative thereof.
(vi) Neither the Company nor any of its subsidiaries has any
liability for any material unpaid Taxes (whether or not shown to be done on any
Return) which has not been accrued for or reserved on the Company balance sheet
dated December 23, 2000 in accordance with GAAP, whether asserted or unasserted,
contingent or otherwise, which is material to the Company, other than any
liability for unpaid Taxes that may have accrued since December 23, 2000 in
connection with the operation of the business of the Company and its
subsidiaries in the ordinary course. There are no liens with respect to Taxes on
any of the assets of the Company or any of its subsidiaries, other than liens
which are not, individually or in the aggregate, material, or customary liens
for Taxes not yet due and payable.
(vii) Except as set forth in SECTION 2.16(b) of the Company
Schedule, there is no contract, agreement, plan or arrangement to which the
Company or any of its subsidiaries is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of the Company or any of its subsidiaries that,
individually or collectively, would reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G,
404 or 162(m) of the Code. Except as set forth in SECTION 2.16(b) of the Company
Schedule, there is no contract, agreement, plan or arrangement to which the
Company or any of its subsidiaries is a party or by which it is bound to
compensate any individual for excise taxes paid pursuant to Section 4999 of the
Code.
(viii) Neither the Company nor any of its subsidiaries has filed
any consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by the Company or any of its
subsidiaries.
(ix) Except as set forth in SECTION 2.16(b) of the Company
Schedule, neither the Company nor any of its subsidiaries is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation agreement or
arrangement. Neither the Company nor any of its subsidiaries has ever been a
member of a group filing a consolidated, unitary, combined or similar Return
(other than Returns which include only the Company and any of its subsidiaries)
under any federal, state, local or foreign law. Neither the Company nor any of
its subsidiaries is party to any joint venture, partnership or other arrangement
that could be treated as a partnership for federal and applicable state, local
or foreign Tax purposes.
(x) None of the Company's or its subsidiaries' assets are tax
exempt use property within the meaning of Section 168(h) of the Code.
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(xi) Neither the Company nor any of its subsidiaries has
distributed the stock of any corporation in a transaction satisfying the
requirements of Section 355 of the Code. The stock of neither the Company nor
any of its subsidiaries has been distributed in a transaction satisfying the
requirements of Section 355 of the Code.
2.17 ENVIRONMENTAL MATTERS.
(a) HAZARDOUS MATERIAL. Except as would not result in material
liability to the Company or any of its subsidiaries, no underground storage
tanks and no amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law to be
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding office and janitorial supplies,
(a "HAZARDOUS MATERIAL") are present (i) as a result of the actions of the
Company or any of its subsidiaries or any affiliate of the Company, or (ii) to
the Company's knowledge, as a result of any actions of any third party or
otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that the Company or any of
its subsidiaries has at any time owned, operated, occupied or leased.
(b) HAZARDOUS MATERIALS ACTIVITIES. Except as would not result in a
material liability to the Company (in any individual case or in the aggregate)
(i) neither the Company nor any of its subsidiaries has transported, stored,
used, manufactured, disposed of, released or exposed its employees or others to
Hazardous Materials in violation of any law in effect on or before the Closing
Date, and (ii) neither the Company nor any of its subsidiaries has disposed of,
transported, sold, used, released, exposed its employees or others to or
manufactured any product containing a Hazardous Material (collectively
"HAZARDOUS MATERIALS ACTIVITIES") in violation of any rule, regulation, treaty
or statute promulgated by any Governmental Entity in effect prior to or as of
the date hereof to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
(c) PERMITS. The Company and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"COMPANY ENVIRONMENTAL PERMITS") necessary for the conduct of the Company's and
its subsidiaries' Hazardous Material Activities and other businesses of the
Company and its subsidiaries as such activities and businesses are currently
being conducted. All such Company Environmental Permits are valid and in full
force and effect. The Company has complied in all material respects with all
covenants and conditions of any such Company Environmental Permit which is or
has been in force with respect to its Hazardous Material Activities. To the
knowledge of the Company, no circumstances exist which could cause any such
Company Environmental Permit to be revoked, modified, or rendered non-renewable
upon payment of the permit fee. All such Company Environmental Permits and all
other consent and clearances required by any Environmental Law or any agreement
to which the Company is bound as a condition to the performance and enforcement
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of this Agreement, have been obtained or will be obtained prior to the Closing
at no cost to Parent.
(d) ENVIRONMENTAL LIABILITIES. No action, proceeding, revocation
proceeding, amendment procedure, writ or injunction is pending, and to the
Company's knowledge, no action, proceeding, revocation proceeding, amendment
procedure, writ or injunction has been threatened by any Governmental Entity
against the Company or any of its subsidiaries in a writing delivered to the
Company or any of its subsidiaries concerning any Company Environmental Permit,
Hazardous Material or any Hazardous Materials Activity of the Company or any of
its subsidiaries. The Company has no knowledge of any fact or circumstance which
could involve the Company or any of its subsidiaries in any environmental
litigation or impose upon the Company any material environmental liability.
(e) REPORTS AND RECORDS. The Company has delivered to Parent or made
available for inspection by Parent and its agents, representatives and employees
all records in the Company's possession concerning the Hazardous Materials
Activities of the Company relating to its business and all environmental audits
and environmental assessments of any facility conducted at the request of, and
in the possession of, the Company. The Company has complied (or will comply
prior to the Closing) with all environmental disclosure obligations imposed by
applicable law with respect to the Merger.
2.18 BROKERS. Except as set forth in SECTION 2.18 of the Company Schedule,
the Company has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders fees or agent's commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
2.19 INTELLECTUAL PROPERTY.
(a) For the purposes of this Agreement, the following terms have the
following definitions:
(i) "INTELLECTUAL PROPERTY" shall mean any or all of the following
and all worldwide common law and statutory rights in, arising out of, or
associated therewith: (i) patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("PATENTS"); (ii) inventions (whether patentable
or not), invention disclosures, improvements, trade secrets, proprietary
information, know how, technology, technical data and customer lists, and all
documentation relating to any of the foregoing; (iii) copyrights, copyrights
registrations and applications therefor, and all other rights corresponding
thereto throughout the world; (iv) domain names, uniform resource locators
("URLs") and other names and locators associated with the Internet ("DOMAIN
NAMES"); (v) industrial designs and any registrations and applications therefor;
(vi) trade names, logos, common law trademarks and service marks, trademark and
service mark registrations and applications therefor; (vii) all databases and
data collections and all rights therein; (viii) all moral and economic rights of
authors and inventors, however denominated, and (ix) any similar or equivalent
rights to any of the foregoing (as applicable).
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(ii) "COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned by, or exclusively licensed to, the Company and it
subsidiaries.
(iii) "REGISTERED INTELLECTUAL PROPERTY" means all Intellectual
Property that is the subject of an application, certificate, filing,
registration or other document issued, filed with, or recorded by any private,
state, government or other legal authority.
(i) "COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the name of, the Company
or any of its subsidiaries.
(b) SECTION 2.19(b) of the Company Schedule contains a complete and
accurate list of all Company Registered Intellectual Property and specifies,
where applicable, the jurisdictions in which each such item of Company
Registered Intellectual Property has been issued or registered and lists any
proceedings or actions before any court or tribunal (including the United States
Patent and Trademark Office (the "PTO") or equivalent authority anywhere in the
world) related to any of the Company Registered Intellectual Property.
(c) SECTION 2.19(c) of the Company Schedule contains a complete and
accurate list (by name and version number) of all products or service offerings
of the Company or any of its subsidiaries ("COMPANY PRODUCTS") that have been
distributed or provided in the one (1) year period preceding the date hereof or
which the Company or any of its subsidiaries currently intends to distribute or
provide in the future, including any products or service offerings under
development.
(d) Except as set forth in SECTION 2.19(d) of the Company Schedule, no
Company Intellectual Property or Company Product is subject to any proceeding or
outstanding decree, order, judgment, contract, license, agreement, or
stipulation restricting in any manner the use, transfer, or licensing thereof by
the Company or any of its subsidiaries, or which may affect the validity, use or
enforceability of such Company Intellectual Property or Company Product.
(e) Each material item of Company Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal fees
currently due in connection with such Company Registered Intellectual Property
have been made and all necessary documents, recordations and certificates in
connection with such Company Registered Intellectual Property have been filed
with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Company Registered Intellectual Property.
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(f) SECTION 2.19(f) of the Company Schedule contains a complete and
accurate list of all material actions that are required to be taken by the
Company within ninety (90) calendar days of the date hereof with respect to any
of the foregoing Company Registered Intellectual Property.
(g) The Company owns and has good and exclusive title to, each material
item of Company Intellectual Property owned by it and used in the business of
the Company as currently conducted and reasonably contemplated to be conducted
or otherwise necessary for the sale and distribution of the Company Product, in
each case free and clear of any lien or encumbrance (excluding non-exclusive
licenses and related restrictions granted in the ordinary course). Without
limiting the foregoing: (i) the Company is the exclusive owner of, or has the
right to use, all trademarks and trade names used in connection with the
operation or conduct of the business of the Company and its subsidiaries,
including the sale, distribution or provision of any Company Products by the
Company or its subsidiaries; (ii) the Company owns exclusively, and has good
title to, all copyrighted works that are Company Products or which the Company
or any of its subsidiaries otherwise purports to own; and (iii) to the extent
that, to the knowledge of the Company, any Patents would be infringed by any
Company Products, the Company is the exclusive owner of such Patents.
(h) To the extent that any material technology, software or
Intellectual Property has been developed or created independently or jointly by
a third party for the Company or any of its subsidiaries or is incorporated into
any of the Company Products, the Company has a written agreement with such third
party with respect thereto and the Company thereby either (i) has obtained
ownership of, and is the exclusive owner of, or (ii) has obtained a perpetual,
non-terminable license (sufficient for the conduct of its business as currently
conducted and as proposed to be conducted) to all such third party's
Intellectual Property in such work, material or invention by operation of law or
by valid assignment, to the fullest extent it is legally possible to do so.
(i) Neither the Company nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any Intellectual
Property that is material Company Intellectual Property, to any third party, or
knowingly permitted the Company's rights in such material Company Intellectual
Property to lapse or enter the public domain.
(j) SECTION 2.19(j) of the Company Schedule contains a complete and
accurate list of all material contracts, licenses and agreements to which the
Company or any of its subsidiaries is a party: (i) with respect to Company
Intellectual Property licensed or transferred to any third party (other than
end-user licenses in the ordinary course); or (ii) pursuant to which a third
party has licensed or transferred any material Intellectual Property to the
Company.
(k) All material contracts, licenses and agreements relating to either
(i) Company Intellectual Property or (ii) Intellectual Property of a third party
licensed to the Company or any of its subsidiaries, are in full force and
effect. Except as set forth in SECTION 2.19(k) of the Company Schedule, the
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination or
-24-
suspension of such contracts, licenses and agreements. Each of the Company and
its subsidiaries is in material compliance with, and has not breached any
material term of any such contracts, licenses and agreements and, to the
knowledge of the Company, all other parties to such contracts, licenses and
agreements are in compliance with, and have not breached any material term of,
such contracts, licenses and agreements. Except as set forth in SECTION 2.19(k)
of the Company Schedule, following the Closing Date, the Surviving Corporation
will be permitted to exercise all of the Company's rights under such contracts,
licenses and agreements to the same extent the Company and its subsidiaries
would have been able to had the transactions contemplated by this Agreement not
occurred and without the payment of any additional amounts or consideration
other than ongoing fees, royalties or payments which the Company would otherwise
be required to pay. Except as set forth in SECTION 2.19(k) of the Company
Schedule, neither this Agreement nor the transactions contemplated by this
Agreement, including the assignment to Parent or Merger Sub by operation of law
or otherwise of any contracts or agreements to which the Company is a party,
will result in (i) either Parent's or the Merger Sub's granting to any third
party any right to or with respect to any material Intellectual Property right
owned by, or licensed to, either of them, (ii) either the Parent's or the Merger
Sub's being bound by, or subject to, any non-compete or other material
restriction on the operation or scope of their respective businesses, or (iii)
either the Parent's or the Merger Sub's being obligated to pay any royalties or
other material amounts to any third party in excess of those payable by Parent
or Merger Sub, respectively, prior to the Closing.
(l) Except as set forth in SECTION 2.19(l) of the Company Schedule, to
the knowledge of the Company, the operation of the business of the Company and
its subsidiaries as such business currently is conducted, including (i) the
Company's and its subsidiaries' design, development, manufacture, distribution,
reproduction, marketing or sale of the Company Products and (ii) the Company's
use of any product, device or process, has not, does not and, to its knowledge,
will not infringe or misappropriate the Intellectual Property of any third party
or constitute unfair competition or trade practices under the laws of any
jurisdiction.
(m) Except as set forth in SECTION 2.19(m) of the Company Schedule, neither the
Company nor any of its subsidiaries has received notice from any third party
that the operation of the business of the Company or any of its subsidiaries or
any act, product or service of the Company or any of its subsidiaries, infringes
or misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction.
(n) To the knowledge of the Company, no person has or is infringing or
misappropriating any Company Intellectual Property.
(o) The Company and each of its subsidiaries has taken reasonable steps
to protect the Company's and its subsidiaries' rights in the Company's
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to the
Company or any of its subsidiaries, and, without limiting the foregoing, each of
the Company and its subsidiaries has and uses commercially reasonable efforts to
enforce a policy requiring each employee and contractor to execute a proprietary
-25-
information/confidentiality agreement substantially in the form provided to
Parent and all current and former employees and contractors of the Company and
any of its subsidiaries have executed such an agreement, except where the
failure to do so is not reasonably expected to be material to the Company.
(p) All of the Company Products (i) will record, store, process,
calculate and present calendar dates falling on and after (and if applicable,
spans of time including) January 1, 2000, and will calculate any information
dependent on or relating to such dates in the same manner, and with the same
functionality, data integrity and performance, as the products record, store,
process, calculate and present calendar dates on or before December 31, 1999, or
calculate any information dependent on or relating to such dates (collectively,
"YEAR 2000 COMPLIANT"), (ii) will lose no functionality with respect to the
introduction of records containing dates falling on or after January 1, 2000,
and (iii) will, to the knowledge of the Company, be interoperable with other
products used and distributed by Parent that may reasonably deliver records to
the Company's or any of its subsidiaries' products or receive records from the
Company's or any of its subsidiaries' products, or interact with the Company's
or any of its subsidiaries' products. All of the Company's or its subsidiaries'
Information Technology (as defined below) is Year 2000 Compliant, and will not
cause an interruption in the ongoing operations of the Company's or any of its
subsidiaries' business on or after January 1, 2000. For purposes of the
foregoing, the term "INFORMATION TECHNOLOGY" shall mean and include all
software, hardware, firmware, telecommunications systems, network systems,
embedded systems and other systems, components and/or services (other than
general utility services including gas, electric, telephone and postal) that are
owned or used by the Company or any of its subsidiaries in the conduct of their
business, or purchased by the Company or any of its subsidiaries from
third-party suppliers.
2.20 AGREEMENTS, CONTRACTS AND COMMITMENTS.
(a) Except as set forth in SECTION 2.20(a) of the Company Schedule,
neither the Company nor any of its subsidiaries is a party to or is bound by:
(i) any employment or consulting agreement, contract or commitment
with any officer, director, the Company employee currently earning an annual
salary in excess of $100,000 or member of the Company's Board of Directors,
other than those that are terminable by the Company or any of its subsidiaries
on no more than thirty (30) calendar days' notice without liability or financial
obligation to the Company;
(ii) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(iii) any material agreement of indemnification or any guaranty
other than any agreement of indemnification entered into in connection with the
sale or license of software products in the ordinary course of business;
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(iv) any material agreement, contract or commitment containing any
covenant limiting in any respect the right of the Company or any of its
subsidiaries to engage in any line of business or to compete with any person or
granting any exclusive distribution rights;
(v) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by the Company or any of its
subsidiaries after the date of this Agreement of a material amount of assets not
in the ordinary course of business or pursuant to which the Company or any of
its subsidiaries has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise other than the Company's
subsidiaries;
(vi) any dealer, distributor, joint marketing or development
agreement currently in force under which the Company or any of its subsidiaries
have continuing material obligations to jointly market any product, technology
or service and which may not be canceled without penalty upon notice of ninety
(90) calendar days or less, or any material agreement pursuant to which the
Company or any of its subsidiaries have continuing material obligations to
jointly develop any intellectual property that will not be owned, in whole or in
part, by the Company or any of its subsidiaries and which may not be canceled
without penalty upon notice of ninety (90) calendar days or less;
(vii) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology that is
material to the Company and its subsidiaries taken as a whole;
(viii) any agreement, contract or commitment currently in force to
license any third party to manufacture or reproduce any Company product, service
or technology or any agreement, contract or commitment currently in force to
sell or distribute any Company products, service or technology except agreements
with distributors or sales representative in the normal course of business
cancelable without penalty upon notice of ninety (90) calendar days or less and
substantially in the form previously provided to Parent;
(ix) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other agreements or instruments relating to
the borrowing of money or extension of credit;
(x) to the knowledge of the Company, any material settlement
agreement entered into within five (5) years prior to the date of this Agreement
which has not yet been fully performed or which contains provisions that
restrict or otherwise govern the conduct of business by the Company or any of
its subsidiaries; or
(xi) any other agreement, contract or commitment that has a value
of $100,000 or more individually or annually.
(b) Neither the Company nor any of its subsidiaries, nor to the
Company's knowledge any other party to a Company Contract (as defined below), is
in breach, violation or default under, and neither the Company nor any of its
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subsidiaries has received written notice that it has breached, violated or
defaulted under, any of the material terms or conditions of any of the
agreements, contracts or commitments to which the Company or any of its
subsidiaries is a party or by which it is bound that are required to be
disclosed in the Company Schedule (any such agreement, contract or commitment, a
"COMPANY CONTRACT") in such a manner as would permit any other party to cancel
or terminate any such Company Contract, or would permit any other party to seek
material damages or other remedies (for any or all of such breaches, violations
or defaults, in the aggregate). The Company has made available to Parent true
and correct copies of any contracts the Company may have with its top ten
customers.
2.21 INSURANCE. The Company maintains insurance policies and/or fidelity
bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of the Company and its subsidiaries
(collectively, the "INSURANCE POLICIES") which are of the type and in amounts
customarily carried by persons conducting businesses similar to those of the
Company and its subsidiaries. There is no material claim by the Company or any
of its subsidiaries pending under any of the material Insurance Policies as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds.
2.22 OPINION OF FINANCIAL ADVISOR. The Company has been advised in writing
by its financial advisor, H.C. Wainwright & Co., that in its opinion, as of the
date of this Agreement, the Exchange Ratio is fair to the stockholders of the
Company from a financial point of view.
2.23 BOARD APPROVAL. The Board of Directors of the Company has, as of the
date of this Agreement unanimously (i) approved, subject to stockholder
approval, this Agreement and the transactions contemplated hereby and thereby,
(ii) determined that the Merger is advisable, in the best interests of the
stockholders of the Company and on terms that are fair to such stockholders and
(iii) recommended that the stockholders of the Company adopt and approve this
Agreement and the Merger.
2.24 VOTE REQUIRED. The affirmative vote of a majority of the votes that
holders of the outstanding shares of Company Common Stock and the holders of the
Series B Preferred Stock, voting together as a single class, are entitled to
vote with respect to the Merger is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve this Agreement and
the transactions contemplated hereby.
2.25 PRIOR POOLING TRANSACTIONS; REORGANIZATION. To its knowledge, based on
consultation with its independent accountants, neither the Company nor any of
its directors, officers or affiliates has taken any action which would interfere
with (i) the ability of Parent, the Surviving Corporation or the Company to
continue to account for as a "pooling of interests" any past acquisition by the
Company currently accounted for by the Company as a "pooling of interests," or
(ii) the ability of the Company, Parent and the stockholders of the Company to
treat the Merger as a "reorganization" within the meaning of Section 368(a) of
the Code for federal income tax purposes.
2.26 COMPANY RIGHTS AGREEMENT. The Company has delivered to Parent a true and
complete copy of the Rights Agreement, dated as of March 16, 1999, by and
between Company and American Securities Transfer & Trust, Inc. (the "COMPANY
RIGHTS PLAN"). The Company has taken all action necessary or appropriate so that
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the execution and delivery of this Agreement by the Company, the Merger and the
other transactions contemplated hereby will not result in a grant of any rights
to any person under the Company Rights Plan.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company, subject to such exceptions as are specifically disclosed
in writing in the disclosure letter and referencing a specific representation
supplied by Parent to Company dated as of the date hereof and certified by a
duly authorized officer of Parent (the "PARENT SCHEDULE"), which disclosure
shall provide an exception to or otherwise qualify the representations or
warranties of the Company specifically referred to in the Parent Schedule and
such other representations and warranties to the extent such disclosure shall
reasonably appear to be applicable to such other representations or warranties,
as follows:
3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of Parent and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted, except
where the failure to do so would not, individually or in the aggregate, have a
Material Adverse Effect on Parent. Each of Parent and its subsidiaries is in
possession of all Approvals necessary to own, lease and operate the properties
it purports to own, operate or lease and to carry on its business as it is now
being conducted, except where the failure to have such Approvals would not,
individually or in the aggregate, have a Material Adverse Effect on Parent. Each
of Parent and its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would
not, either individually or in the aggregate, have a Material Adverse Effect on
Parent.
3.2 CERTIFICATE OF INCORPORATION AND BYLAWS. Parent has previously
furnished to the Company complete and correct copies of its Certificate of
Incorporation and Bylaws as amended to date (together the "PARENT CHARTER
DOCUMENTS"). Such Parent Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Parent is
not in violation of any of the provisions of the Parent Charter Documents, and
no subsidiary of Parent is in violation of any of its equivalent organizational
documents.
3.3 CAPITALIZATION. As of January 10, 2001, the authorized capital stock of
Parent consists of (i) 800,000,000 shares of Parent Common Stock, par value
$0.001 per share, and (ii) 1,200,000 shares of Preferred Stock, par value $0.001
per share ("PARENT PREFERRED STOCK"). At the close of business on January 10,
2001, (i) 646,110,493 shares of Parent Common Stock were issued and outstanding,
(ii) no shares of Parent Common Stock were held in treasury by Parent or by
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subsidiaries of Parent, (iii) 6,486,824 shares of Parent Common Stock were
reserved for future issuance pursuant to Parent's employee stock purchase plan,
(iv) 44,831,803 shares of Parent Common Stock were reserved for issuance upon
the exercise of outstanding options ("PARENT OPTIONS") to purchase Parent Common
Stock. As of the date hereof, no shares of Parent Preferred Stock were issued or
outstanding. The authorized capital stock of Merger Sub consists of 1,000 shares
of common stock, par value $0.001 per share, all of which, as of the date
hereof, are issued and outstanding. All of the outstanding shares of Parent's
and Merger Sub's respective capital stock have been duly authorized and validly
issued and are fully paid and nonassessable. All shares of Parent Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, shall, and the
shares of Parent Common Stock to be issued pursuant to the Merger will be, duly
authorized, validly issued, fully paid and nonassessable. All of the outstanding
shares of capital stock (other than directors' qualifying shares) of each of
Parent's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares (other than directors' qualifying shares) are
owned by Parent or another subsidiary free and clear of all security interests,
liens, claims, pledges, agreements, limitations in Parent's voting rights,
charges or other encumbrances of any nature whatsoever.
3.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and Merger Sub has
all necessary corporate power and authority to execute and deliver this
Agreement, and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Merger Sub and the consummation by Parent and Merger Sub of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Parent and Merger Sub, and no other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement, or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Parent and
Merger Sub and, assuming the due authorization, execution and delivery by the
Company, constitutes a legal and binding obligation of Parent and Merger Sub,
enforceable against Parent and Merger Sub in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights and general principles of equity.
3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance of this Agreement by Parent and Merger Sub will
not, (i) conflict with or violate the Parent Charter Documents or equivalent
organizational documents of Parent or any of Parent's subsidiaries, (ii) subject
to compliance with the requirements set forth in SECTION 3.5(b) hereof, conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Parent or any of its subsidiaries or by which it or their respective
properties are bound or affected, or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair Parent's or any such subsidiary's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Parent
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or any of its subsidiaries pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or any of its subsidiaries is a party
or by which Parent or any of its subsidiaries or its or any of their respective
properties are bound or affected, except to the extent such conflict, violation,
breach, default, impairment or other effect could not in the case of clauses
(ii) or (iii) individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent.
(b) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance of this Agreement by Parent and Merger Sub will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Entity except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws,
the pre-merger notification requirements of the HSR Act and of foreign
governmental entities and the rules and regulations thereunder, the rules and
regulations of Nasdaq, and the filing and recordation of the Certificate of
Merger as required by Delaware Law and (ii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, (x) would not prevent consummation of the Merger or otherwise
prevent Parent or Merger Sub from performing their respective obligations under
this Agreement or (y) could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent.
3.6 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Parent has made available to the Company a correct and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by Parent with the SEC on or after August 25, 2000 (the "PARENT
SEC REPORTS"), which are all the forms, reports and documents required to be
filed by Parent with the SEC since August 25, 2000. The Parent SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of Parent's subsidiaries is required to
file any reports or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-Q
of the Exchange Act) and each fairly presents in all material respects the
consolidated financial position of Parent and its subsidiaries at the respective
dates thereof and the consolidated results of its operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or are subject to normal adjustments which were not or are not expected to
be material in amount.
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3.7 NO MATERIAL ADVERSE EFFECT. Since the date of the balance sheet
included in Parent's Annual Report on Form 10-K filed on November 13, 2000, and
until the date hereof, there has not occurred any Material Adverse Effect on
Parent.
3.8 REGISTRATION STATEMENT; PROXY STATEMENT. None of the information
supplied or to be supplied by Parent for inclusion or incorporation by reference
in (i) the S-4 will, at the time the S-4 becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading; and (ii) the Proxy Statement/Prospectus will, at the dates mailed to
the stockholders of the Company, at the time of the Company Stockholders'
Meeting and as of the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The S-4 will comply as to form in all
material respects with the provisions of the Securities Act and the rules and
regulations promulgated by the SEC thereunder. Notwithstanding the foregoing,
Parent makes no representation or warranty with respect to any information
supplied by the Company which is contained in any of the foregoing documents.
3.9 ABSENCE OF LITIGATION. There are no claims, suits, actions or
proceedings that have a reasonable likelihood of success on the merits pending
or, to the knowledge of Parent, threatened against, relating to or affecting
Parent or any of its subsidiaries, before any court, governmental department,
commission, agency, instrumentality or authority, of any arbitrator that seek to
restrain or enjoin the consummation of the transactions contemplated by this
Agreement.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS BY COMPANY. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company and each of its
subsidiaries shall, (i) except to the extent that Parent shall otherwise consent
in writing, carry on its business, in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance with all
applicable laws and regulations, pay its debts and taxes when due subject to
good faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to (A) preserve intact its present business
organization, (B) keep available the services of its present officers and
employees and (C) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has significant
business dealings, and (ii) notify Parent in writing (or by electronic mail) in
the event that any employee of the Company or any of its subsidiaries is
terminated or resigns from the Company or such subsidiary. In addition, except
as permitted by the terms of this Agreement, and except as provided in SECTION
4.1 of the Company Schedule, without the prior written consent of Parent, during
the period from the date of this Agreement and continuing until the earlier of
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the termination of this Agreement pursuant to its terms or the Effective Time,
the Company shall not do any of the following and shall not permit its
subsidiaries to do any of the following:
(a) waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) grant (whether cash or otherwise) any severance or termination pay
to any officer or employee except pursuant to written agreements outstanding, or
policies existing, on the date hereof and as previously disclosed in writing or
made available to Parent, or adopt any new severance plan, or amend or modify or
alter in any manner any severance plan, agreement or arrangement existing on the
date hereof;
(c) transfer or license to any person or entity or otherwise extend,
amend or modify any rights to the Company Intellectual Property, or enter into
grants to transfer or license to any person future patent rights, other than in
the ordinary course of business consistent with past practices, provided that in
no event shall the Company license on an exclusive basis or sell any Company
Intellectual Property;
(d) declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of the Company or its subsidiaries, except repurchases
of unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(f) issue, deliver, sell, authorize, pledge or otherwise encumber or
propose any of the foregoing with respect to, any shares of capital stock or any
securities convertible into shares of capital stock, or subscriptions, rights,
warrants or options to acquire any shares of capital stock or any securities
convertible into shares of capital stock, or enter into other agreements or
commitments of any character obligating it to issue any such shares or
convertible securities, other than (x) the issuance delivery and/or sale of (i)
shares of Company Common Stock pursuant to the exercise of stock options
outstanding as of the date of this Agreement, and (ii) shares of Company Common
Stock issuable to participants in the ESPP consistent with the terms thereof and
(iii) shares of Company Common Stock issuable upon conversion of the Series B
Preferred Stock and (y) the granting of stock options (and the issuance of
Common Stock upon exercise thereof), in the ordinary course of business and
consistent with past practices, in an amount not to exceed options to purchase
(and the issuance of Company Common Stock upon exercise thereof) 10,000 shares
in the aggregate;
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(g) cause, permit or propose any amendments to the Company Charter
Documents (or similar governing instruments of any of its subsidiaries);
(h) acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
enter into any joint ventures, strategic partnerships or alliances;
(i) sell, lease, license, encumber or otherwise dispose of any
properties or assets except sales of inventory in the ordinary course of
business consistent with past practice, except for the sale, lease or
disposition (other than through licensing) of property or assets which are not
material, individually or in the aggregate, to the business of the Company and
its subsidiaries and except for those assets set forth in SECTION 4.1(i) of the
Company Schedule;
(j) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of the Company,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than in connection with the financing of ordinary
course trade payables consistent with past practice;
(k) adopt or amend any employee benefit plan, policy or arrangement,
any employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than offer letters
and letter agreements entered into in the ordinary course of business consistent
with past practice with employees who are terminable "at will"), pay (whether
cash or otherwise) any bonus or remuneration to any director or employee (other
than any bonus or continuing salary payments which such directors and employees
are entitled to receive as of the date hereof), or increase the salaries or wage
rates or fringe benefits (including rights to severance or indemnification) of
its directors, officers, employees or consultants;
(l) (i) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), or litigation (whether or not commenced prior to the date of this
Agreement) other than the payment, discharge, settlement or satisfaction, in the
ordinary course of business consistent with past practice or in accordance with
their terms, or liabilities recognized or disclosed in the most recent
consolidated financial statements (or the notes thereto) of the Company included
in the Company SEC Reports or incurred since the date of such financial
statements, or (ii) waive the benefits of, agree to modify in any manner,
terminate, release any person from or knowingly fail to enforce any
confidentiality or similar agreement to which the Company or any of its
subsidiaries is a party or of which the Company or any of its subsidiaries is a
beneficiary; provided, however, that Parent's consent to take any such action
shall not be unreasonably withheld;
(m) make any individual or series of related payments (other than
payments of the type described in (a) through (l) above and not prohibited by
(a) through (l)) outside of the ordinary course of business in excess of
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$25,000; provided, however, that Parent's consent to take any such action shall
not be unreasonably withheld;
(n) except in the ordinary course of business consistent with past
practice, modify, amend or terminate any material contract or agreement to which
the Company or any subsidiary thereof is a party or waive, delay the exercise
of, release or assign any material rights or claims thereunder; provided,
however, that Parent's consent to take any such action shall not be unreasonably
withheld;
(o) enter into, renew or materially modify any contracts, agreements,
or obligations relating to the distribution, sale, license or marketing by third
parties of the Company's products or products licensed by the Company other than
renewals of existing nonexclusive contracts, agreements or obligations;
provided, however, that Parent's consent to take any such action shall not be
unreasonably withheld;
(p) except as required by GAAP, revalue any of its assets or make any
change in accounting methods, principles or practices;
(q) incur or enter into any (i) purchase or sales order, agreement,
contract or commitment involving payments in the case of any single order,
agreement, contract or commitment in excess of $250,000 in the aggregate, or
(ii) agreement, contract or commitment (other than a purchase or sales order,
agreement, contract or commitment) involving payments in the case of any single
agreement, contract or commitment in excess of $100,000 in the aggregate;
provided, however, that Parent's consent to take any such action shall not be
unreasonably withheld;
(r) engage in any action that could reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" under Section 368(a) of the
Code, whether or not otherwise permitted by the provisions of this ARTICLE IV;
(s) settle any litigation; provided, however, that Parent's consent to
take any such action shall not be unreasonably withheld;
(t) make any tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the Tax liability
or Tax attributes of the Company or any of its subsidiaries or settle or
compromise any material Tax liability, or consent to any extension or waiver of
any limitation period with respect to Taxes; or
(u) agree in writing or otherwise to take any of the actions described
in SECTION 4.1(a) through SECTION 4.1(t) hereof, inclusive;
PROVIDED, HOWEVER that notwithstanding the foregoing, Parent shall be deemed to
have consented to a request to take any action set forth in SECTION 4.1(a)
through SECTION 4.1(u) hereof, inclusive, if (A) the Company shall have
delivered a written request to take such action to at least one (1) of the
persons set forth in SECTION 4.1 of the Parent Schedule (at the facsimile
numbers set forth thereon or the e-mail addresses set forth thereon), (B) a
representative of the Company shall have made a verbal request to take such
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action by contacting (including by recorded voice message) each of the persons
set forth in SECTION 4.1 of the Parent Schedule (at the telephone numbers set
forth therein), and (C) Parent shall not have responded to the Company's request
within seventy-two (72) hours of the initial written and telephonic request to
take such action (or forty-eight (48) hours with respect to any request to take
any action set forth in SECTION 4.1(q) hereof).
4.2 CONDUCT OF BUSINESS BY PARENT. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, except as permitted by the terms of
this Agreement, without the prior written consent of the Company, Parent shall
not engage in any action that could reasonably be expected to cause the Merger
to fail to qualify as a "reorganization" under Section 368(a) of the Code.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER FILINGS;
BOARD RECOMMENDATIONS.
(a) As promptly as practicable after the execution of this Agreement,
the Company and Parent shall prepare, and file with the SEC, the Proxy
Statement/Prospectus, and Parent shall prepare and file with the SEC the S-4 in
which the Proxy Statement/Prospectus shall be included as a prospectus. Each of
Parent and the Company shall provide promptly to the other such information
concerning its business and financial statements and affairs as, in the
reasonable judgment of the providing party or its counsel, may be required or
appropriate for inclusion in the Proxy Statement/Prospectus and the S-4, or in
any amendments or supplements thereto, and to cause its counsel and auditors to
cooperate with the other's counsel and auditors in the preparation of the Proxy
Statement/Prospectus and the S-4. Each of the Company and Parent shall respond
to any comments of the SEC, and shall use its respective commercially reasonable
efforts to have the S-4 declared effective under the Securities Act as promptly
as practicable after such filing, and the Company shall cause the Proxy
Statement/Prospectus to be mailed to its stockholders at the earliest
practicable time after the S-4 is declared effective by the SEC. As promptly as
practicable after the date of this Agreement, each of the Company and Parent
shall prepare and file any other filings required to be filed by it under the
Exchange Act, the Securities Act or any other Federal, foreign or Blue Sky or
related laws relating to the Merger and the transactions contemplated by this
Agreement (the "OTHER FILINGS"). Each of the Company and Parent shall notify the
other promptly upon the receipt of any comments from the SEC or its staff or any
other government officials and of any request by the SEC or its staff or any
other government officials for amendments or supplements to the S-4, the Proxy
Statement/Prospectus or any Other Filing or for additional information and shall
supply the other with copies of all correspondence between such party or any of
its representatives, on the one hand, and the SEC or its staff or any other
government officials, on the other hand, with respect to the S-4, the Proxy
Statement/Prospectus, the Merger or any Other Filing. Each of the Company and
Parent shall cause all documents that it is responsible for filing with the SEC
or other regulatory authorities under this SECTION 5.1(a) to comply in all
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material respects with all applicable requirements of law and the rules and
regulations promulgated thereunder. Whenever any event occurs which is required
to be set forth in an amendment or supplement to the Proxy Statement/Prospectus,
the S-4 or any Other Filing, the Company or Parent, as the case may be, shall
promptly inform the other of such occurrence and cooperate in filing with the
SEC or its staff or any other government officials, and/or mailing to
stockholders of the Company, such amendment or supplement.
(b) The Proxy Statement/Prospectus shall include the recommendation of
the Board of Directors of the Company in favor of adoption and approval of this
Agreement and approval of the Merger (subject to the terms of SECTION 5.2
hereof).
5.2 MEETING OF COMPANY STOCKHOLDERS.
(a) Promptly after the date hereof, the Company shall take all action
necessary in accordance with Delaware Law and the Company Charter Documents to
convene the Company Stockholders' Meeting to be held as promptly as practicable,
for the purpose of voting upon this Agreement and the Merger. Subject to the
terms of SECTION 5.2(c) hereof, the Company shall use its commercially
reasonable efforts to solicit from its stockholders proxies in favor of the
adoption and approval of this Agreement and the approval of the Merger and shall
take all other action necessary or advisable to secure the vote or consent of
its stockholders required by the rules of Nasdaq or Delaware Law to obtain such
approvals. Notwithstanding anything to the contrary contained in this Agreement,
the Company may adjourn or postpone the Company Stockholders' Meeting to the
extent necessary to ensure that any necessary supplement or amendment to the
Prospectus/Proxy Statement is provided to the Company's stockholders in advance
of a vote on the Merger and this Agreement or, if as of the time for which the
Company Stockholders' Meeting is originally scheduled (as set forth in the
Prospectus/Proxy Statement) there are insufficient shares of Company Common
Stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of the Company Stockholders' Meeting. The
Company shall ensure that the Company Stockholders' Meeting is called, noticed,
convened, held and conducted, and that all proxies solicited by the Company in
connection with the Company Stockholders' Meeting are solicited, in compliance
with Delaware Law, the Company Charter Documents, the rules of Nasdaq and all
other applicable legal requirements. The Company's obligation to call, give
notice of, convene and hold the Company Stockholders' Meeting in accordance with
this SECTION 5.2(a) shall not be limited to or otherwise affected by the
commencement, disclosure, announcement or submission to the Company of any
Acquisition Proposal.
(b) Subject to the terms of SECTION 5.2(c) hereof: (i) the Board of
Directors of the Company shall unanimously recommend that the Company's
stockholders vote in favor of and adopt and approve this Agreement and the
Merger at the Company Stockholders' Meeting; (ii) the Prospectus/Proxy Statement
shall include a statement to the effect that the Board of Directors of the
Company has unanimously recommended that the Company's stockholders vote in
favor of and adopt and approve this Agreement and the Merger at the Company
Stockholders' Meeting; and (iii) neither the Board of Directors of the Company
nor any committee thereof shall withdraw, amend or modify, or propose or resolve
to withdraw, amend or modify in a manner adverse to Parent, the unanimous
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recommendation of the Board of Directors of the Company that the Company's
stockholders vote in favor of and adopt and approve this Agreement and the
Merger. For purposes of this Agreement, said recommendation of the Board of
Directors shall be deemed to have been modified in a manner adverse to Parent if
said recommendation shall no longer be unanimous.
(c) Nothing in this Agreement shall prevent the Board of Directors of
the Company from withholding, withdrawing, amending or modifying its unanimous
recommendation in favor of the Merger if (i) a Superior Offer (as defined in
SECTION 5.4 hereof) is made to the Company and is not withdrawn, (ii) neither
the Company nor any of its representatives shall have violated any of the
restrictions set forth in SECTION 5.4 hereof, and (iii) the Board of Directors
of the Company concludes in good faith, after consultation with its outside
counsel, that, in light of such Superior Offer, the withholding, withdrawal,
amendment or modification of such recommendation is required in order for the
Board of Directors of the Company to comply with its fiduciary duties to the
Company's stockholders under applicable law; provided, however, that prior to
any commencement thereof the Company shall have given Parent at least seventy
two (72) hours notice thereof and the opportunity to meet with the Company and
its counsel. Nothing contained in this SECTION 5.2 shall limit the Company's
obligation to hold and convene the Company Stockholders' Meeting (regardless of
whether the unanimous recommendation of the Board of Directors of the Company
shall have been withdrawn, amended or modified).
5.3 CONFIDENTIALITY; ACCESS TO INFORMATION.
(a) The parties acknowledge that Parent and H.C. Wainwright & Co., as
the representative and agent of the Company, have previously executed a Mutual
Confidentiality Agreement, dated as of September 22, 2000 (the "CONFIDENTIALITY
AGREEMENT"), which Confidentiality Agreement will continue in full force and
effect in accordance with its terms.
(b) ACCESS TO INFORMATION. The Company shall afford Parent and its
accountants, counsel and other representatives reasonable access during normal
business hours, upon reasonable notice, to the properties, books, records and
personnel of the Company during the period prior to the Effective Time to obtain
all information concerning the business, including the status of product
development efforts, properties, results of operations and personnel of the
Company, as Parent may reasonably request. No information or knowledge obtained
by Parent in any investigation pursuant to this SECTION 5.3 will affect or be
deemed to modify any representation or warranty contained herein or the
conditions to the obligations of the parties to consummate the Merger.
5.4 NO SOLICITATION.
(a) From and after the date of this Agreement until the Effective Time
or termination of this Agreement pursuant to ARTICLE VII hereof, the Company and
its subsidiaries shall not, nor will they authorize or permit any of their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them to,
directly or indirectly (i) solicit, initiate, encourage or induce the making,
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submission or announcement of any Acquisition Proposal (as defined in SECTION
5.4(c) hereof), (ii) participate in any discussions or negotiations regarding,
or furnish to any person any non-public information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition Proposal,
(iii) engage in discussions with any person with respect to any Acquisition
Proposal, (iv) subject to the terms of SECTION 5.2(c) hereof, approve, endorse
or recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Transaction (as defined in SECTION 5,4(c)
hereof); PROVIDED, HOWEVER, that the terms of this SECTION 5.4 shall not
prohibit the Company from furnishing nonpublic information regarding the Company
and its subsidiaries to, entering into a confidentiality agreement with or
entering into discussions with, any person or group in response to a Superior
Offer submitted by such person or group (and not withdrawn) if (1) neither the
Company nor any representative of the Company and its subsidiaries shall have
violated any of the restrictions set forth in this SECTION 5.4, (2) the Board of
Directors of the Company concludes in good faith, after consultation with its
outside legal counsel, that such action is required in order for the Board of
Directors of the Company to comply with its fiduciary duties to the Company's
stockholders under applicable law, (3) (x) at least three (3) business days
prior to furnishing any such nonpublic information to, or entering into
discussions or negotiations with, such person or group, the Company gives Parent
written notice of the identity of such person or group and of the Company's
intention to furnish nonpublic information to, or enter into discussions or
negotiations with, such person or group and (y) the Company receives from such
person or group an executed confidentiality agreement containing customary
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such person or group by or on behalf of the Company,
and (4) contemporaneously with furnishing any such nonpublic information to such
person or group, the Company furnishes such nonpublic information to Parent (to
the extent such nonpublic information has not been previously furnished by the
Company to Parent); and PROVIDED FURTHER, HOWEVER, that the terms of this
SECTION 5.4 shall not prohibit the Company from taking any action necessary in
order to comply with Rule 14d-9 or Rule 14e-2 promulgated under the Exchange
Act. The Company and its subsidiaries shall immediately cease any and all
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding two sentences by any officer or director of the Company or any of
its subsidiaries or any investment banker, attorney or other advisor or
representative of the Company or any of its subsidiaries shall be deemed to be a
breach of this SECTION 5.4 by the Company. In addition to the foregoing, the
Company shall (i) provide Parent with at least forty-eight (48) hours prior
notice (or such lesser prior notice as provided to the members of the Company's
Board of Directors but in no event less than eight hours) of any meeting of the
Company's Board of Directors at which the Company's Board of Directors is
reasonably expected to consider a Superior Offer and (ii) provide Parent with at
least three (3) business days prior written notice of a meeting of the Company's
Board of Directors at which the Company's Board of Directors is reasonably
expected to recommend a Superior Offer to its stockholders and together with
such notice a copy of the definitive documentation relating to such Superior
Offer.
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(b) In addition to the obligations of the Company set forth in SECTION
5.4(a) hereof, the Company as promptly as practicable shall advise Parent orally
and in writing of any request received by the Company for non-public information
which the Company reasonably believes would lead to an Acquisition Proposal or
of any Acquisition Proposal, or any inquiry received by the Company with respect
to or which the Company reasonably should believe would lead to any Acquisition
Proposal, the material terms and conditions of such request, Acquisition
Proposal or inquiry, and the identity of the person or group making any such
request, Acquisition Proposal or inquiry. The Company shall use reasonable
efforts to keep Parent informed in all material respects of the status and
details (including material amendments or proposed amendments) of any such
request, Acquisition Proposal or inquiry.
(c) For purposes of this Agreement, (i) "ACQUISITION PROPOSAL" shall
mean any offer or proposal (other than an offer or proposal by Parent) relating
to any Acquisition Transaction. For the purposes of this Agreement, (ii)
"ACQUISITION TRANSACTION" shall mean any transaction or series of related
transactions other than the transactions contemplated by this Agreement
involving: (A) any acquisition or purchase from the Company by any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of more than a fifteen percent (15%) interest in the
total outstanding voting securities of the Company or any of its subsidiaries or
any tender offer or exchange offer that if consummated would result in any
person or "group" (as defined under Section 13(d) of the Exchange Act and the
rules and regulations thereunder) beneficially owning fifteen percent (15%) or
more of the total outstanding voting securities of the Company or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving the Company pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than eighty-five
percent (85%) of the equity interests in the surviving or resulting entity of
such transaction; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than fifteen percent (15%) of the
assets of the Company; or (C) any liquidation or dissolution of the Company, and
(iii) "SUPERIOR OFFER" shall mean an unsolicited, bona fide written offer made
by a third party to consummate any of the following transactions: (A) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company pursuant to which the stockholders
of the Company immediately preceding such transaction hold less than a majority
of the equity interests in the surviving or resulting entity of such
transaction; (B) the acquisition by any person or group (including by way of a
tender or exchange offer or issuance by the Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing a majority of the voting power of the outstanding shares of the
Company's capital stock; or (C) a sale or other disposition by the Company of
substantially all of its assets, in the case of each of clauses (A), (B) and (C)
on terms that the Board of Directors of the Company determines, in its
reasonable judgment (based on advice of a financial advisor of nationally
recognized reputation) to be more favorable to the Company stockholders from a
financial point of view than the terms of the Merger.
5.5 PUBLIC DISCLOSURE. Parent and the Company shall consult with each
other, and to the extent practicable, agree, before issuing any press release or
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otherwise making any public statement with respect to the Merger, this Agreement
or an Acquisition Proposal and shall not issue any such press release or make
any such public statement prior to such consultation, except as may be required
by law or any listing agreement with a national securities exchange. The parties
have agreed to the text of the joint press release announcing the signing of
this Agreement.
5.6 REASONABLE EFFORTS; NOTIFICATION.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all commercially reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, and
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using reasonable efforts to accomplish the following: (i)
the taking of all reasonable acts necessary to cause the conditions precedent
set forth in ARTICLE VI to be satisfied, (ii) the obtaining of all necessary
actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity, (iii) the obtaining of all consents, approvals or waivers
from third parties required as a result of the transactions contemplated in this
Agreement, (iv) the defending of any suits, claims, actions, investigations or
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (v) the execution or delivery of any
additional instruments reasonably necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. In
connection with and without limiting the foregoing, the Company and its Board of
Directors shall, if any state takeover statute or similar statute or regulation
is or becomes applicable to the Merger, this Agreement or any of the
transactions contemplated by this Agreement, use all commercially reasonable
efforts to ensure that the Merger and the other transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger, this Agreement and the transactions
contemplated hereby. Notwithstanding anything herein to the contrary, nothing in
this Agreement shall be deemed to require Parent or the Company or any
subsidiary or affiliate thereof to agree to any divestiture by itself or any of
its affiliates of shares of capital stock or of any business, assets or
property, or the imposition of any material limitation on the ability of any of
them to conduct their business or to own or exercise control of such assets,
properties and stock.
(b) The Company shall give prompt notice to Parent upon becoming aware
that any representation or warranty made by it contained in this Agreement has
become untrue or inaccurate in any material respect, or of any failure of the
Company to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement, in each case, such that the conditions set forth in SECTION 6.3(a) or
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SECTION 6.3(b) hereof would not be satisfied; PROVIDED, HOWEVER, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(c) Parent shall give prompt notice to the Company upon becoming aware
that any representation or warranty made by it or Merger Sub contained in this
Agreement has become untrue or inaccurate, or of any failure of Parent or Merger
Sub to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement, in each
case, such that the conditions set forth in SECTION 6.2(a) or SECTION 6.2(b)
hereof would not be satisfied; PROVIDED, HOWEVER, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.
5.7 THIRD PARTY CONSENTS. As soon as practicable following the date hereof,
Parent and the Company shall each use its commercially reasonable efforts to
obtain any consents, waivers and approvals under any of its or its subsidiaries'
respective agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby.
5.8 STOCK OPTIONS, WARRANTS AND EMPLOYEE BENEFITS.
(a) STOCK OPTIONS. At the Effective Time, each Company Stock Option,
whether or not vested, shall by virtue of the Merger be assumed by Parent. Each
Company Stock Option so assumed by Parent under this Agreement will continue to
have, and be subject to, the same terms and conditions of such options
immediately prior to the Effective Time (including, without limitation, any
repurchase rights or vesting provisions and provisions regarding the
acceleration of vesting on certain transactions), except that (i) each Company
Stock Option will be exercisable (or will become exercisable in accordance with
its terms) for that number of whole shares of Parent Common Stock equal to the
product of the number of shares of Company Common Stock that were issuable upon
exercise of such Company Stock Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, rounded down to the nearest whole number of
shares of Parent Common Stock and (ii) the per share exercise price for the
shares of Parent Common Stock issuable upon exercise of such assumed Company
Stock Option will be equal to the quotient determined by dividing the exercise
price per share of Company Common Stock at which such Company Stock Option was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest whole cent.
(b) ESPP. Outstanding rights to purchase shares of Company Common Stock
shall be exercised in accordance with Section 13(b) of the ESPP, and each share
of Company Common Stock purchased pursuant to such exercise shall by virtue of
the Merger, and without any action on the part of the holder thereof, be
converted into the right to receive a number of shares of Parent Common Stock
equal to the Exchange Ratio, without issuance of certificates representing
issued and outstanding shares of Company Common Stock to participants under the
ESPP. The rights of participants in the ESPP with respect to any offering then
underway under the ESPP shall be determined by treating the last business day
prior to the Effective Time as the last day of such offering and by making such
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other pro rata adjustments as may be necessary to reflect the shortened offering
but otherwise treating such shortened offering as a fully effective and
completed offering for all purposes under the ESPP. As of the Effective Time,
the ESPP shall be terminated. Prior to the Effective Time, the Company shall (i)
provide Parent with evidence that the ESPP has been terminated pursuant to
resolutions of the Board of Directors of the Company (the form and substance of
which shall be subject to prior review and approval of Parent), and (ii) take
such other actions (including, without limitation, if appropriate, amending the
ESPP) that are necessary to give effect to the transaction contemplated by this
Section 5.8(b). Employees of the Company who become employees of Parent shall be
eligible to participate in the employee stock purchase plan of Parent (the
"PARENT ESPP") (subject to such plan's terms and conditions) at the next
regularly scheduled offering period under the Parent ESPP.
(c) EMPLOYEE BENEFITS. As soon as practicable after the Effective Time,
Parent shall provide the employees of the Company and its subsidiaries who
remain employed after the Effective Time (each, a "TRANSFERRED COMPANY EMPLOYEE"
and collectively, the "TRANSFERRED COMPANY EMPLOYEES") with the types and levels
of employee benefits maintained by Parent for similarly situated employees of
Parent. Parent shall treat and cause its applicable benefit plans (including
vacation policies) to treat the service of Transferred Company Employees with
the Company or any subsidiary of the Company prior to the Effective Time as
service rendered to Parent or any affiliate of Parent for purposes of
eligibility to participate, vesting and for other appropriate benefits
(including, without limitation, applicability of minimum waiting periods for
participation (but not for benefit accrual)), provided that such service credit
will not result in the duplication of benefits. Transferred Company Employees
shall also be given credit for any deductible or co-payment amounts paid in
respect of the plan year in which the Closing Date occurs to the extent that,
following the Closing Date, they participate in any plan of Parent or
subsidiaries of Parent for which deductibles and co-payments are requested
(subject to the terms and conditions of such plans and the cooperation of
Parent's insurance carriers).
(d) EMPLOYMENT AGREEMENTS. Following the Effective Time, Parent shall
honor and shall cause its subsidiaries to honor in accordance with their terms
all individual employment, retention, termination, severance, change in control,
post-employment and other compensation agreements, arrangements and plans set
forth in SECTION 5.8(d) of the Company Schedule.
(e) EMPLOYEE TERMINATION. Parent shall not terminate the employment of
any employees of the Company or any of its subsidiaries who are employed by the
Company or any of its subsidiaries immediately prior to the Effective Time and
who accept employment with Parent or any of its subsidiaries, effective as of
the Effective Time, for a period of sixty (60) calendar days immediately
following the Closing Date; PROVIDED, HOWEVER, that notwithstanding the
foregoing, Parent may terminate the employment of any of such employee on the
basis of "cause" without limitation (including within such sixty (60) calendar
day period).
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5.9 FORM S-8. Parent agrees to file, within fifteen (15) business days of
the Effective Time, a registration statement on Form S-8 for the shares of
Parent Common Stock issuable with respect to assumed Company Stock Options.
5.10 INDEMNIFICATION.
(a) From and after the Effective Time, Parent shall cause the Surviving
Corporation to fulfill and honor in all respects the obligations of the Company
pursuant to any indemnification agreements between the Company and its directors
and officers in effect immediately prior to the Effective Time (the "INDEMNIFIED
PARTIES") and any indemnification provisions under the Company Charter Documents
as in effect on the date hereof. The Certificate of Incorporation and Bylaws of
the Surviving Corporation will contain provisions with respect to exculpation
and indemnification that are at least as favorable to the Indemnified Parties as
those contained in the Company Charter Documents as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified for
a period of six (6) years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who, immediately prior to
the Effective Time, were directors, officers, employees or agents of the
Company, unless such modification is required by applicable law.
(b) At or prior to the Effective Time, the Company may purchase a
policy of directors' and officers' insurance approved in advance by Parent, or a
"tail" policy under the Company's existing directors' and officers' insurance
policy, in either case which (i) has an effective term of six (6) years from the
Effective Time, (ii) covers only those persons who are currently covered by the
Company's directors' and officers' insurance policy in effect as of the date
hereof and only for actions and omissions occurring on or prior to the Effective
Time, (iii) contains terms and conditions (including, without limitation,
coverage amounts) that are no more favorable in the aggregate than the terms and
conditions of the Company's existing directors' and officers' insurance policy
in effect as of the date hereof, and (iv) has an aggregate cost of approximately
$335,000.
(c) This SECTION 5.10 is intended for the irrevocable benefit of, and
to grant third party rights to, the Indemnified Parties and shall be binding on
all successors and assigns of Parent, the Company and the Surviving Corporation.
Each of the Indemnified Parties shall be entitled to enforce the covenants
contained in this SECTION 5.10.
(d) In the event that Parent or the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person or entity, then, and in each such
case, proper provision shall be made so that the successors and assigns of
Parent and the Surviving Corporation, as the case may be, assume the obligations
set forth in this SECTION 5.10.
5.11 NYSE LISTING. Parent agrees to cause the listing on the NYSE of the
shares of Parent Common Stock issuable, and those required to be reserved for
issuance, in connection with the Merger, subject to official notice of issuance.
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5.12 AFFILIATE AGREEMENT. SECTION 5.12 of the Company Schedule contains a
complete and accurate list of those persons who may be deemed to be, in the
Company's reasonable judgment, "affiliates" of the Company within the meaning of
Rule 145 promulgated under the Securities Act (each, a "COMPANY AFFILIATE" and
collectively, the "COMPANY AFFILIATES"). The Company shall provide Parent with
such information and documents as Parent reasonably requests for purposes of
reviewing such list. Parent shall be entitled to place appropriate legends on
the certificates evidencing any Parent Common Stock to be received by a Company
Affiliate pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Parent Common Stock,
consistent with the terms of the Affiliate Agreements.
5.13 REGULATORY FILINGS; REASONABLE EFFORTS. As soon as may be reasonably
practicable, the Company and Parent each shall file with the United States
Federal Trade Commission (the "FTC") and the Antitrust Division of the United
States Department of Justice (the "DOJ") Notification and Report Forms relating
to the transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties. The Company and Parent each shall promptly (a) supply the other with
any information which may be required in order to effectuate such filings and
(b) supply any additional information which reasonably may be required by the
FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate; PROVIDED,
HOWEVER, that Parent shall not be required to agree to any divestiture by Parent
or the Company or any of Parent's subsidiaries or affiliates of shares of
capital stock or of any business, assets or property of Parent or its
subsidiaries or affiliates or of the Company, its affiliates, or the imposition
of any material limitation on the ability of any of them to conduct their
businesses or to own or exercise control of such assets, properties and stock.
5.14 401(K) PLAN. Effective as of the day immediately preceding the Closing
Date, the Company and its Affiliates, as applicable, shall each terminate any
and all plans intended to include a Code Section 401(k) arrangement (unless
Parent provides written notice to the Company that such 401(k) plan(s) shall not
be terminated). Unless Parent provides such written notice to the Company, no
later than five (5) business days prior to the Closing Date, the Company shall
provide Parent with evidence that such 401(k) plan(s) have been terminated
(effective as of the day immediately preceding the Closing Date) pursuant to
resolutions of the Board of Directors of the Company. The form and substance of
such resolutions shall be subject to review and approval of Parent. The Company
also shall take such other actions in furtherance of terminating such 401(k)
plan(s) as Parent may reasonably request. In the event that such 401(k) plan(s)
is/are not merged with and into the Parent 401(k) Plan, Transferred Company
Employees who have outstanding loans from such 401(k) plan(s) shall be permitted
to make a direct rollover of their loan balances to the Parent 401(k) Plan,
provided that (i) such rollovers are permitted by the administrator of the
Parent 401(k) Plan and (ii) such rollover includes any such Transferred Company
Employee's entire distribution amount that is an eligible rollover distribution
pursuant to the Parent 401(k) Plan.
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5.15 INVENTORY MATTERS. At least one (1) week prior to the Effective Time,
the Company shall either (i) have returned all of the inventory previously
received from Hitachi and collected a cash refund in respect of the full value
of such inventory, or (ii) (a) written off in accordance with GAAP on its
financial statements, books and records the full value of any Hitachi
controllers previously received from Hitachi, and (b) written down in accordance
with GAAP on its financial statements, books and records the value of any
Hitachi flash memory components previously received from Hitachi to the then
fair market value of such inventory as of the time of such write down.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) COMPANY STOCKHOLDER APPROVAL. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of the Company.
(b) REGISTRATION STATEMENT EFFECTIVE; PROXY STATEMENT. The SEC shall
have declared the S-4 effective. No stop order suspending the effectiveness of
the S-4 or any part thereof shall have been issued and no proceeding for that
purpose, and no similar proceeding in respect of the Proxy Statement/Prospectus,
shall have been initiated or threatened in writing by the SEC.
(c) NO ORDER; HSR ACT. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early and all material
foreign antitrust approvals required to be obtained prior to the Merger in
connection with the transactions contemplated hereby shall have been obtained.
(d) TAX OPINIONS. Parent and the Company shall each have received
written opinions from their respective tax counsel (Wilson Sonsini Goodrich &
Rosati, Professional Corporation, and Goodwin, Procter & Hoar LLP,
respectively), in form and substance reasonably satisfactory to them, to the
effect that the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code and such opinions shall not have been withdrawn;
PROVIDED, HOWEVER, that if the counsel to either Parent or the Company does not
render such opinion, this condition shall nonetheless be deemed to be satisfied
with respect to such party if counsel to the other party renders such opinion to
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such party. The parties to this Agreement agree to make such customary
representations as requested by such counsel for the purpose of rendering such
opinions.
(e) NYSE LISTING. The shares of Parent Common Stock issuable to the
stockholders of the Company pursuant to this Agreement and such other shares
required to be reserved for issuance in connection with the Merger shall have
been authorized for listing on NYSE upon official notice of issuance.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF COMPANY. The obligation of the
Company to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by the Company:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
Parent and Merger Sub contained in this Agreement (i) shall have been true and
correct as of the date of this Agreement and (ii) shall be true and correct on
and as of the Closing Date with the same force and effect as if made on the
Closing Date except (A) in each case, or in the aggregate, as does not
constitute a Material Adverse Effect on Parent and Merger Sub, (B) for changes
contemplated by this Agreement and (C) for those representations and warranties
which address matters only as of a particular date (which representations shall
have been true and correct (subject to the qualifications as set forth in the
preceding clause A) as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties, (i)
all "Material Adverse Effect" qualifications and other qualifications based on
the word "material" or similar phrases contained in such representations and
warranties shall be disregarded and (ii) any update of or modification to the
Parent Schedule made or purported to have been made after the date of this
Agreement shall be disregarded). The Company shall have received a certificate
with respect to the foregoing signed on behalf of Parent by an authorized
officer of Parent.
(b) AGREEMENTS AND COVENANTS. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and the Company shall have received a certificate to such
effect signed on behalf of Parent by an authorized officer of Parent.
(c) MATERIAL ADVERSE EFFECT. No Material Adverse Effect with respect to
Parent shall have occurred since the date of this Agreement.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
the Company contained in this Agreement (i) shall have been true and correct as
of the date of this Agreement and (ii) shall be true and correct on and as of
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the Closing Date with the same force and effect as if made on and as of the
Closing Date except (A) in each case, or in the aggregate, as does not
constitute a Material Adverse Effect on the Company; PROVIDED, HOWEVER, that
such Material Adverse Effect qualifier shall be inapplicable with respect to
representations and warranties set forth in SECTION 2.3 hereof, (B) for changes
contemplated by this Agreement and (C) for those representations and warranties
which address matters only as of a particular date (which representations shall
have been true and correct (subject to the qualifications as set forth in the
preceding clause (A)) as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties, (i)
all "Material Adverse Effect" qualifications and other qualifications based on
the word "material" or similar phrases contained in such representations and
warranties shall be disregarded and (ii) any update of or modification to the
Company Schedule made or purported to have been made after the date of this
Agreement shall be disregarded). Parent shall have received a certificate with
respect to the foregoing signed on behalf of the Company by an authorized
officer of the Company.
(b) AGREEMENTS AND COVENANTS. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of the Company by the Chief Executive Officer and the Chief Financial
Officer of the Company.
(c) MATERIAL ADVERSE EFFECT. No Material Adverse Effect with respect to
the Company and its subsidiaries shall have occurred since the date of this
Agreement.
(d) AFFILIATE AGREEMENTS. Each of the Company Affiliates set forth in
SECTION 5.12 of the Company Schedule shall have entered into the Affiliate
Agreement and each of such agreements will be in full force and effect as of the
Effective Time.
(e) CONSENTS. The Company shall have obtained all consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses or
leases set forth in SECTION 6.3(e) of the Parent Schedule.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the requisite approval of the
stockholders of the Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and the Company;
(b) by either the Company or Parent if the Merger shall not have been
consummated by April 30, 2001 (the "TERMINATION DATE") for any reason; PROVIDED;
HOWEVER, that (i) if the S-4 is reviewed by the SEC, then the Termination Date
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will be June 30, 2001; and (ii) the right to terminate this Agreement under this
SECTION 7.1(b) shall not be available to any party whose action or failure to
act has been a principal cause of or resulted in the failure of the Merger to
occur on or before such date and such action or failure to act constitutes a
breach of this Agreement;
(c) by either the Company or Parent if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case having
the effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action is final and nonappealable;
(d) by either the Company or Parent if the required approval of the
stockholders of the Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
the Company stockholders duly convened therefor or at any adjournment thereof;
provided, however, that the right to terminate this Agreement under this SECTION
7.1(d) shall not be available to the Company where the failure to obtain the
Company stockholder approval shall have been caused by the action or failure to
act of the Company and such action or failure to act constitutes a breach by the
Company of this Agreement;
(e) by the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or if
any representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in SECTION 6.2(a) or SECTION 6.2(b)
hereof would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, PROVIDED, HOWEVER,
that if such inaccuracy in Parent's representations and warranties or breach by
Parent is curable by Parent through the exercise of its commercially reasonable
efforts, then the Company may not terminate this Agreement under this SECTION
7.1(e) for thirty (30) calendar days after delivery of written notice from the
Company to Parent of such breach, provided Parent continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
the Company may not terminate this Agreement pursuant to this paragraph (e) if
it shall have materially breached this Agreement or if such breach by Parent is
cured during such thirty (30) calendar day period);
(f) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company shall have become untrue, in either
case such that the conditions set forth in SECTION 6.3(a) or SECTION 6.3(b)
hereof would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, PROVIDED, HOWEVER,
that if such inaccuracy in the Company's representations and warranties or
breach by the Company is curable by the Company through the exercise of its
commercially reasonable efforts, then Parent may not terminate this Agreement
under this SECTION 7.1(f) for thirty (30) calendar days after delivery of
written notice from Parent to the Company of such breach, provided the Company
continues to exercise commercially reasonable efforts to cure such breach (it
being understood that Parent may not terminate this Agreement pursuant to this
paragraph (f) if it shall have materially breached this Agreement or if such
breach by the Company is cured during such thirty (30) calendar day period);
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(g) by Parent, upon a breach of the provisions of SECTION 5.4 hereof;
(h) by Parent if a Triggering Event (as defined below) shall have
occurred. For the purposes of this Agreement, a "TRIGGERING EVENT" shall be
deemed to have occurred if: (i) the Board of Directors of the Company or any
committee thereof shall for any reason have withdrawn or shall have amended or
modified in a manner adverse to Parent its unanimous recommendation in favor of,
the adoption and approval of the Agreement or the approval of the Merger; (ii)
the Company shall have failed to include in the Proxy Statement/Prospectus the
unanimous recommendation of the Board of Directors of the Company in favor of
the adoption and approval of the Agreement and the approval of the Merger; (iii)
the Board of Directors of the Company or any committee thereof shall have
approved or recommended any Acquisition Proposal; (iv) the Company shall have
entered into any letter of intent or similar document or any agreement, contract
or commitment accepting any Acquisition Proposal; or (v) a tender or exchange
offer relating to securities of the Company shall have been commenced by a
person unaffiliated with Parent and the Company shall not have sent to its
security holders pursuant to Rule 14e-2 promulgated under the Securities Act,
within ten (10) business days after such tender or exchange offer is first
published sent or given, a statement disclosing that the Company recommends
rejection of such tender or exchange offer.
7.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination of this
Agreement under SECTION 7.1 hereof will be effective immediately upon (or, if
the termination is pursuant to SECTION 7.1(f) or SECTION 7.1(g) hereof and the
proviso therein is applicable, thirty (30) calendar days after) the delivery of
written notice of the terminating party to the other parties hereto. In the
event of the termination of this Agreement as provided in SECTION 7.1 hereof,
this Agreement shall be of no further force or effect, except (i) as set forth
in this SECTION 7.2, SECTION 7.3 hereof and ARTICLE VIII hereof, each of which
shall survive the termination of this Agreement, and (ii) nothing herein shall
relieve any party from liability for any intentional or willful breach of this
Agreement. No termination of this Agreement shall affect the obligations of the
parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their terms.
7.3 FEES AND EXPENSES.
(a) GENERAL. Except as set forth in this SECTION 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; PROVIDED, HOWEVER, that (i) Parent shall pay
all fees and expenses (other than the fees and expenses of the Company's
attorneys and accountants) incurred in connection with the filing with the SEC
of the S-4 (and any amendments or supplements thereto), and any filings fees
under the HSR Act, and (ii) the Company shall pay all fees and expenses (other
than the fees and expenses of Parent's attorneys and accountants), incurred in
connection with the printing and mailing of the Proxy Statement/Prospectus (and
any amendments or supplements thereto).
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(b) COMPANY PAYMENTS.
(i) The Company shall pay to Parent in immediately available funds,
within one (1) business day after demand by Parent, an amount equal to
$4,825,000 (the "TERMINATION FEE") if this Agreement is terminated by Parent
pursuant to SECTION 7.1(g) or SECTION 7.1(h) hereof.
(ii) If (A) this Agreement is terminated by Parent or the Company,
as applicable, pursuant to SECTIONS 7.1(b) or SECTION 7.1(d) hereof, (B)
following the date hereof and prior to the termination of this Agreement, a
third party has announced an Acquisition Proposal, and (C) within nine (9)
months following the termination of this Agreement a Company Acquisition (as
defined below) is consummated, then the Company shall pay to Parent in
immediately available funds, within one (1) business day after demand by Parent,
an amount equal to the Termination Fee.
(iii) if (A) this Agreement is terminated by Parent or the Company,
as applicable, pursuant to SECTIONS 7.1(b) or SECTION 7.1(d) hereof, (B)
following the date hereof and prior to the termination of this Agreement, a
third party has announced an Acquisition Proposal, and (C) within nine (9)
months following the termination of this Agreement the Company enters into an
agreement or letter of intent providing for a Company Acquisition, the Company
shall pay to Parent, in immediately available funds, within one (1) business day
following the consummation of the Company Acquisition referred to in the
foregoing clause (C), an amount equal to the Termination Fee.
(iv) The Company hereby acknowledges and agrees that the agreements
set forth in this SECTION 7.3(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent would
not enter into this Agreement. Accordingly, if the Company fails to pay in a
timely manner the amounts due pursuant to this SECTION 7.3(b) and, in order to
obtain such payment, Parent makes a claim that results in a judgment against the
Company for the amounts set forth in this SECTION 7.3(b), the Company shall pay
to Parent its reasonable costs and expenses (including reasonable attorneys'
fees and expenses) in connection with such suit, together with interest on the
amounts set forth in this SECTION 7.3(b) at the prime rate of The Chase
Manhattan Bank in effect on the date such payment was required to be made.
Payment of the fees described in this SECTION 7.3(b) shall not be in lieu of
damages incurred in the event of breach of this Agreement.
(v) Notwithstanding anything to the contrary set forth in this
Agreement, each of the parties hereto hereby expressly acknowledges and hereby
agrees that, with respect to any termination of this Agreement pursuant to
SECTION 7.1 hereof (other than a termination based upon fraud or the willful or
intentional breach of this Agreement) under circumstances in which the
Termination Fee is payable pursuant to SECTION 7.3(b) hereof, payment of the
Termination Fee shall constitute liquidated damages with respect to any claim
for damages or any other claim which Parent or Merger Sub would otherwise be
entitled to assert against the Company or its assets, or against any of the
Company's directors, officers, employees or stockholders, with respect to any
such termination of this Agreement, and shall constitute the sole and exclusive
remedy with respect to any such termination of this Agreement. The parties
hereto expressly acknowledge and agree that, in light of the difficulty of
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accurately determining actual damages with respect to the foregoing upon any
such termination of this Agreement pursuant to SECTION 7.1 hereof (other than a
termination based upon fraud or the willful or intentional breach of this
Agreement) under circumstances in which the Termination Fee is payable pursuant
to SECTION 7.3(b) hereof, the right to such payment: (A) constitutes a
reasonable estimate of the damages that will be suffered by reason of any such
termination this Agreement and (B) shall be in full and complete satisfaction of
any and all damages arising as a result of any such termination of this
Agreement. Except for nonpayment of the Termination Fee pursuant to SECTION
7.3(b) the parties hereto hereby agree that, upon any termination of this
Agreement pursuant to SECTION 7.1 hereof (other than a termination based upon
fraud or the willful or intentional breach of this Agreement) under
circumstances in which the Termination Fee is payable pursuant to SECTION 7.3(b)
hereof, in no event shall Parent or Merger Sub be entitled to seek or to obtain
any recovery or judgment against the Company or any subsidiaries of the Company
or any of their respective assets, or against any of their respective directors,
officers, employees or stockholders for any such termination of this Agreement,
and in no event shall Parent or Merger Sub be entitled to seek or obtain any
other damages of any kind, including, without limitation, consequential,
special, indirect or punitive damages, for any such termination of this
Agreement. Notwithstanding the foregoing, payment of the Termination Fee
pursuant to SECTION 7.3(b) hereof shall not constitute liquidated damages with
respect to any claim for damages or any other claim which Parent or Merger Sub
would be entitled to assert against the Company or its assets, or against any of
the Company's directors, officers, employees or stockholders, with respect to
any such termination of this Agreement based upon fraud or the willful or
intentional breach of any representations, warranties or covenants of the
Company in this Agreement, and shall not constitute the sole and exclusive
remedy with respect to any such termination of this Agreement based upon fraud
or the willful or intentional breach of any of the representations, warranties
or covenants of the Company in this Agreement.
(vi) For the purposes of this Agreement, "COMPANY ACQUISITION"
shall mean any of the following transactions (other than the transactions
contemplated by this Agreement): (i) a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company pursuant to which the stockholders of the Company
immediately preceding such transaction hold less than fifty percent (50%) of the
aggregate equity interests in the surviving or resulting entity of such
transaction; (ii) a sale or other disposition by the Company of assets
representing in excess of fifty percent (50%) of the aggregate fair market value
of the Company's business immediately prior to such sale; or (iii) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by the Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of fifty percent (50%) of the voting power of the then
outstanding shares of capital stock of the Company.
7.4 AMENDMENT. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent and the Company.
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time, any party
hereto may, to the extent legally allowed, (i) extend the time for the
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performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company, Parent and Merger Sub contained in this Agreement
shall terminate at the Effective Time, and only the covenants that by their
terms survive the Effective Time shall survive the Effective Time.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Solectron Corporation
4211 Starboard Drive
Fremont, California 94538
Attention: Ann T. Nguyen
Telephone No.: (510) 644-8118
Telecopy No.: (510) 252-8450
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market, Spear Tower, Suite 3300
San Francisco, California 94105
Attention: Michael J. Kennedy, Esq.
Telephone No.: (415) 947-2000
Telecopy No.: (415) 947-2099
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(b) if to the Company, to:
Centennial Technologies, Inc.
7 Lopez Road
Wilmington, Massachusetts 01887
Attention: Richard J. Pulsifer, CFO
Telephone No.: (978) 805-2117
Telecopy No.: (978) 988-7509
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attn: Raymond C. Zemlin, P.C.
Telephone No.: (617) 570-1512
Telecopy No.: (617) 523-1231
8.3 INTERPRETATION; KNOWLEDGE.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement, the term "KNOWLEDGE" means with
respect to a party hereto, with respect to any matter in question, that any of
the executive officers of such party has actual knowledge of such matter.
(c) For purposes of this Agreement, the term "MATERIAL ADVERSE EFFECT"
when used in connection with an entity means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
changes, events, violations, inaccuracies, circumstances or effects, that is
materially adverse to the business, assets (including intangible assets),
capitalization, financial condition or results of operations of such entity and
its subsidiaries taken as a whole; PROVIDED, HOWEVER, that a "Material Adverse
Effect" shall not be deemed to include any change, event, violation, inaccuracy,
circumstance or effect (i) relating to the United States economy or United
States financial markets in general, (ii) relating to the industry or industries
in which such entity operates or conducts business and not specifically related
to (or having a materially disproportionate effect (relative to most other
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industry participants) on) such entity, or (iii) resulting from any actions
taken by the Company pursuant to SECTION 5.15 hereof.
(d) For purposes of this Agreement, the term "PERSON" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Disclosure Schedule
and the Parent Disclosure Schedule (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder,
except as specifically provided in SECTION 5.10 hereof.
8.6 SEVERABILITY. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
8.7 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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8.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.11 WAIVER OF JURY TRIAL. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger and Reorganization to be executed by their duly authorized
respective officers as of the date first written above.
SOLECTRON CORPORATION
By: /s/ Kevin R. Burns
-----------------------------
Name: Kevin R. Burns
Title: SVP & CMO
CENTERS ACQUISITION CORPORATION
By:/s/ Jack A. Pacheco
------------------------------
Name: Jack A. Pacheco
Title: CFO
CENTENNIAL TECHNOLOGIES, INC.
By:/s/ Richard J. Pulsifer
-------------------------------
Name: Richard J. Pulsifer
Title: Chief Financial Officer
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