EXHIBIT 5
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger
by and among
3D Systems, Corporation,
a Delaware corporation,
Tiger Deals, Inc.,
a Delaware corporation,
and
DTM Corporation,
a Texas corporation
Dated April 2, 2001
Exhibit 5 - 1
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS........................................................................................ 5
ARTICLE 2. THE TENDER OFFER................................................................................... 14
2.1 The Tender Offer.................................................................................. 14
2.2 Company Actions................................................................................... 16
2.3 Board of Directors................................................................................ 18
ARTICLE 3. THE MERGER......................................................................................... 19
3.1 The Merger........................................................................................ 19
3.2 Merger Consideration And Cancellation Of Shares................................................... 20
3.3 Payment of Cash for Shares........................................................................ 20
3.4 Dissenting Shares................................................................................. 22
3.5 Stock Options..................................................................................... 23
3.6 The Closing....................................................................................... 24
3.7 Deliveries at the Closing......................................................................... 24
ARTICLE 4. REPRESENTATIONS AND WARRANTIES CONCERNING PARENT AND BUYER......................................... 24
4.1 Entity Status..................................................................................... 24
4.2 Power and Authority; Enforceability............................................................... 25
4.3 Consents and Approvals; No Defaults............................................................... 25
4.4 Capitalization.................................................................................... 25
4.5 Litigation........................................................................................ 26
4.6 Share Ownership................................................................................... 26
4.7 Buyer's Operations................................................................................ 26
4.8 Brokers' Fees..................................................................................... 26
4.9 Ability to Consummate the Transactions............................................................ 26
4.10 Statements True and Correct....................................................................... 27
4.11 Regulatory Approvals.............................................................................. 27
ARTICLE 5. REPRESENTATIONS AND WARRANTIES CONCERNING THE ACQUIRED ENTITIES.................................... 27
5.1 Corporate Status.................................................................................. 27
5.2 Power and Authority; Enforceability............................................................... 27
5.3 Consents and Approvals; No Defaults............................................................... 28
5.4 Brokers' Fees..................................................................................... 28
5.5 Capitalization.................................................................................... 29
5.6 Records........................................................................................... 29
5.7 Acquired Subsidiaries............................................................................. 29
5.8 Company Reports and Financial Statement........................................................... 30
5.9 Subsequent Events................................................................................. 31
5.10 Intentionally Deleted............................................................................. 31
5.11 Legal Compliance.................................................................................. 31
Exhibit 5 - 2
5.12 Tax Matters....................................................................................... 31
5.13 Title to Assets................................................................................... 32
5.14 Real Property and Leaseholds...................................................................... 32
5.15 Intellectual Property............................................................................. 32
5.16 Inventory......................................................................................... 35
5.17 Material Contracts; Defaults...................................................................... 35
5.18 Receivables....................................................................................... 36
5.19 Insurance......................................................................................... 36
5.20 Litigation........................................................................................ 36
5.21 Product Warranty.................................................................................. 36
5.22 Product Liability................................................................................. 37
5.23 Labor; Employees.................................................................................. 37
5.24 Employee Benefits................................................................................. 37
5.25 Environmental, Health, and Safety Matters......................................................... 39
5.26 Statements True and Correct....................................................................... 40
5.27 Regulatory Approvals.............................................................................. 40
5.28 Vote Required..................................................................................... 40
5.29 Opinion of Financial Advisor...................................................................... 40
5.30 Takeover Statutes................................................................................. 41
5.31 Representations Complete.......................................................................... 41
ARTICLE 6. PRE-CLOSING COVENANTS.............................................................................. 41
6.1 Notices and Consents.............................................................................. 41
6.2 Operation of Business............................................................................. 41
6.3 Access to Information............................................................................. 44
6.4 Acquisition Proposal.............................................................................. 45
6.5 Charges, Fees, and Prepayment Obligations......................................................... 47
6.6 Financing......................................................................................... 47
6.7 Covenants to Satisfy Conditions................................................................... 47
6.8 Disclosure Prior to Closing....................................................................... 48
6.9 Publicity......................................................................................... 48
6.10 Preparation of the Company Proxy Statement; Company Shareholders Meeting; Merger Without a Company
Shareholders Meeting............................................................................. 48
6.11 Indemnification and Directors' and Officer's Insurance............................................ 49
6.12 Employee Benefits................................................................................. 50
6.13 Works in Progress/Finished Goods.................................................................. 51
ARTICLE 7. INTENTIONALLY DELETED.............................................................................. 51
ARTICLE 8. CLOSING CONDITIONS................................................................................. 52
8.1 General Conditions................................................................................ 52
ARTICLE 9. TERMINATION........................................................................................ 52
9.1 Termination of Agreement.......................................................................... 52
9.2 Manner and Effect of Termination.................................................................. 54
9.3 Certain Payments Upon Termination................................................................. 54
Exhibit 5 - 3
ARTICLE 10. MISCELLANEOUS..................................................................................... 55
10.1 Disclosure Letters................................................................................ 55
10.2 Entire Agreement.................................................................................. 55
10.3 Successors........................................................................................ 56
10.4 Assignments....................................................................................... 56
10.5 Notices........................................................................................... 56
10.6 Specific Performance.............................................................................. 57
10.7 Time.............................................................................................. 57
10.8 Counterparts...................................................................................... 57
10.9 Headings.......................................................................................... 57
10.10 Governing Law..................................................................................... 57
10.11 Amendments and Waivers............................................................................ 57
10.12 Severability...................................................................................... 58
10.13 Expenses.......................................................................................... 58
10.14 Construction...................................................................................... 58
10.15 Non-Survival of Representations and Warranties.................................................... 58
ATTACHMENTS
Exhibits
Exhibit A Tender Agreement
Exhibit B Certificates of Merger
Exhibit C Form of the Company's Officers' Certificate
Exhibit D Form of the Company's Secretary's Certificate
Exhibit E Form of Parent's Officers' Certificate
Exhibit F Form of Parent's Secretary's Certificate
Exhibit G Form of Buyer's Officer's Certificate
Exhibit H Form of Buyer's Secretary's Certificate
Annex A Offer Conditions
Exhibit 5 - 4
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as of
April 2, 2001 by and among 3D Systems Corporation, a Delaware corporation
("Parent"), Tiger Deals, Inc., a Delaware corporation and an indirect wholly-
owned subsidiary of Buyer ("Buyer"), and DTM Corporation, a Texas corporation
(the "Company," and together with its Subsidiaries from time to time (except as
the context herein may otherwise require), the "Acquired Entities"), with
respect to the facts and circumstances set forth below. Capitalized terms used
herein without definition have the meanings set forth in ARTICLE 1 or elsewhere
in this Agreement.
RECITALS
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WHEREAS, the Company Board and the respective Board of Directors of each of
Parent and Buyer each has approved and determined that it is fair, advisable and
in the best interests of its respective stockholders to effect a merger of Buyer
with and into the Company, with the Company as the surviving corporation,
pursuant to the Certificates of Merger and upon the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Buyer shall, promptly
following receipt by Parent of commitments in customary form from financial
institutions or other equity or debt sources sufficient in amount to allow Buyer
to consummate the Transactions (the "Financing Commitments"), commence a tender
offer (the "Offer") to acquire any and all of the outstanding shares of Company
Common Stock at a price of $5.80 per share (such amount, or any greater amount
per share paid pursuant to the Offer, being hereinafter referred to as the
"Offer Price"), net to the seller in cash, without interest, less any required
withholding taxes, in accordance with the terms and subject to the conditions
provided herein; and
WHEREAS, concurrently with the execution and delivery of this Agreement and
as a condition and inducement to the willingness of Parent and Buyer to enter
into this Agreement, certain Company Shareholders have entered into Tender and
Voting Agreements, dated as of the date of this Agreement, in the form attached
hereto as Exhibit A (the "Tender Agreement"), pursuant to which those
shareholders have agreed to tender to Buyer all shares of Common Stock
beneficially owned by those shareholders and to vote, if necessary, all voting
securities of the Company beneficially owned by them in favor of approval and
adoption of this Agreement and the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants contained herein and intending to be
legally bound, the parties hereto agree as follows:
Section 13.
DEFINITIONS
"14F-1 Information Statement" is defined in Section 1.1(f).
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Exhibit 5 - 5
"Acquired Entities" is defined in the Preamble hereto.
"Acquired Subsidiary" means each wholly-owned subsidiary of the Company.
"Acquisition Proposal" is defined in Section Section 18(d).
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"Action" means any action, appeal, petition, plea, charge, complaint,
claim, suit, litigation, arbitration, mediation, hearing, inquiry, investigation
or similar event, occurrence or proceeding.
"Affiliate" with respect to any specified Person, means a Person that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person.
"Affiliated Group" means any affiliated group under Code Section 1504(a) or
any similar group defined under provisions of applicable Law.
"Balance Sheet Date" is defined in Section Section 17(h).
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"Basis" means any past or current fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction about which the relevant Person has Knowledge
that forms the Basis for any specified consequence.
"Breach" means any Breach, inaccuracy, failure to perform, failure to
comply, conflict with, default, violation, acceleration, termination,
cancellation, modification, or required notification.
"Business Day" means any day other than a day on which the NASDAQ is closed
for trading.
"Buyer" is defined in the preamble to this Agreement.
"Buyer Medical Plans" is defined in Section 1.4(ppp).
"Cash Amount" is defined in Section 1.1(z)
"Certificates of Merger" is defined in Section 1.1(i).
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"Closing" is defined in Section Section 15(f).
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"Closing Date" is defined in Section Section 15(f).
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"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined in the preamble to this Agreement.
"Company Board" means the Board of Directors of the Company.
"Company Common Stock" means the Company's common stock, $.0002 par value.
Exhibit 5 - 6
"Company Disclosure Letter" is defined in Section 17.
"Company Option" is defined in Section 3.5.
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"Company Proxy Statement" is defined in Section 1.4(fff).
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"Company Reports" is defined in Section Section 17(h).
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"Company Shareholders" means the shareholders of the Company as they may be
constituted from time-to-time.
"Confidentiality Agreement" is defined in Section 1.4(eee).
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"Confidential Information" means any non-public information concerning the
businesses and affairs of Parent or any Acquired Entity.
"Consent" means any consent, approval, notification, waiver, or other
similar action required pursuant to a Contract.
"Contract" means any Enforceable contract, agreement, arrangement,
commitment, letter of intent, memorandum of understanding, promise, obligation,
right, instrument, document, or other similar understanding, whether written or
oral.
"Copyrights" means all copyrights in both published works and unpublished
works including any registrations and applications therefor and whether
registered or unregistered.
"Credit Facility" is defined in Section 6.3(f).
"Damages" means all damages (including incidental and consequential
damages), losses (including any diminution in value), Liabilities, payments,
amounts paid in settlement, obligations, fines, penalties, costs, expenses
(including reasonable fees and expenses of outside attorneys, accountants and
other professional advisors and of expert witnesses and other costs (including
the allocable portion of the Indemnitee's internal costs) of investigation,
preparation and litigation in connection with any Action or Threatened Action)
of any kind or nature whatsoever.
"Developers" is defined in Section 1.4(f).
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"Disclosure Letters" means the Company Disclosure Letter and the Parent
Disclosure Letter.
"Dissenting Shares" is defined in Section Section 15(d).
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"DGCL" means the Delaware General Corporation Law.
"Effective Time" is defined in Section 1.1(i).
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"Employee Benefit Plans" means all employee benefit plans or arrangements
of any kind, including without limitation, bonus deferred compensation,
incentive compensation, equity
Exhibit 5 - 7
compensation, equity purchase, equity option, equity appreciation rights,
restricted equity, severance or termination pay, fringe benefit, vacation,
hospitalization, medical, life or other insurance, supplemental unemployment
benefits, profit-sharing, savings, pension, retirement, or supplemental
retirement plan, program, agreement or arrangement, whether or not a plan
described in Section 3(3) of ERISA.
"Employee Pension Benefit Plan" is defined in ERISA Section 3.2.
"Employee Welfare Benefit Plan" is defined in ERISA Section 3.1.
"Encumbrance" means any Order, Security Interest, Contract, easement,
covenant, community property interest, equitable interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other general attribute of
ownership.
"Enforceable" - a Contract is "Enforceable" if it is the legal, valid, and
binding obligation of the applicable Person, enforceable against such Person in
accordance with its terms, except as such enforceability may be subject to the
effects of bankruptcy, insolvency, reorganization, moratorium, or other Laws
relating to or affecting the rights of creditors, and general principles of
equity.
"Environment" means soil, land surface or subsurface strata, waters
(including, navigable ocean, stream, pond, reservoirs, drainage, basins,
wetland, ground, and drinking), sediments, ambient air (including indoor), plant
life, animal life, and all other environmental media or natural resources.
"Environmental, Health, and Safety Requirements" means all Orders,
Contracts and Laws concerning or relating to public health and safety,
worker/occupational health and safety, and pollution or protection of the
environment, including those relating to the presence, use, manufacturing,
refining, production, generation, handling, transportation, treatment, transfer,
storage, disposal, labeling, testing, processing, discharge, release, control,
or other action or failure to act involving cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls or radiation, each as amended and as now in effect and
in effect at Closing.
"Equity Commitment" means (a) options, warrants, convertible securities,
exchangeable securities, subscription rights, conversion rights, exchange
rights, or other Contracts that could require a Person to issue any of its
Equity Interests or to sell any Equity Interests it owns in another Person; (b)
any other securities convertible into, exchangeable or exercisable for, or
representing the right to subscribe for any Equity Interest of a Person or owned
by a Person; (c) statutory pre-emptive rights or pre-emptive rights granted
under a Person's Organizational Documents; and (d) stock appreciation rights,
phantom stock, profit participation, or other similar rights with respect to a
Person.
"Equity Interest" means (a) with respect to a corporation, any and all
shares of capital stock and any Equity Commitments with respect thereto, (b)
with respect to a partnership, limited liability company, trust or similar
Person, any and all units, interests or other
Exhibit 5 - 8
partnership/limited liability company interests, and any Equity Commitments with
respect thereto, and (c) any other direct equity ownership or participation in a
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each business or entity which is a member of a
"controlled group of corporations," under "common control" or an "affiliated
service group" with any Acquired Entity within the meaning of Sections 414(b),
(c) or (m) of the Code, or required to be aggregated with any Acquired Entity
under Section 414(o) of the Code, or is under "common control" with any Acquired
Entity, within the meaning of Section 4001(a)(14) of ERISA.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" is defined in Section Section 21(a).
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"Expiration Date" is defined in Section 0.
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"Financial Advisor" is defined in Section 1.1(b).
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"Financial Statements" is defined in Section Section 17(h).
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"Financing Commitments" is defined in the Recitals to this Agreement.
"Funding Date" is defined in Section 1.4(fff).
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"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" means any legislature, agency, bureau, branch,
department, division, commission, court, tribunal, magistrate, justice, multi-
national organization, quasi-governmental body, or other similar recognized
organization or body of any federal, state, county, municipal, local, or foreign
government or other similar recognized organization or body exercising similar
powers or authority.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Indemnified Liabilities" is defined in Section 1.4(hhh).
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"Indemnified Persons" is defined in Section 1.4(hhh).
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"Independent Directors" is defined in Section 1.1(g).
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"Insurance Policies" is defined in Section Section 17(r).
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"Insured Parties" is defined in Section Section 18(k).
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"Intellectual Property" means any Marks, Patents, Copyrights, Trade Secrets
or rights, licenses, liens, security interests, charges, encumbrances, equities
and other claims that any Person may have to claim ownership, authorship or
invention, to use, to object to or prevent the
Exhibit 5 - 9
modification of, to withdraw from circulation or control the publication or
distribution of any Marks, Patents, Copyrights, or Trade Secrets.
"Knowledge" (i) when used in this Agreement with reference to the Company,
shall be deemed to mean and refer to the actual knowledge of the Company's
executive officers and directors after the Company's Chief Executive Officer and
Chief Financial Officer have made due and diligent inquiry of those managerial
employees of the Company whom such executive officers reasonably believe would
have knowledge of the matters presented, and (ii) when used in this Agreement
with reference to Parent or Buyer, shall be deemed to mean and refer to the
actual knowledge of Parent's executive officers and directors after Parent's
Chief Executive Officer and Chief Financial Officer have made due and diligent
inquiry of those managerial employees of Parent whom such executive officers
reasonably believe would have knowledge of the matters presented.
"Law" means any law (statutory, common, or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, executive order, or other
similar authority enacted, adopted, promulgated, or applied by any Governmental
Entity, each as amended and now in effect.
"Leased Real Estate" is defined in Section 1.4(b).
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"Liability" means any liability or obligation, whether known or unknown,
asserted or unasserted, absolute or contingent, matured or unmatured,
conditional or unconditional, latent or patent, accrued or unaccrued, liquidated
or unliquidated, or due or to become due.
"Marks" means all fictitious business names, trading names, corporate
names, registered and unregistered trademarks, service marks, designs and
general intangibles of like nature and applications, together with all goodwill
related to the foregoing.
"Material Adverse Change (or Effect)" means a change (or effect) that is
materially adverse to the condition (financial or otherwise), properties,
assets, Liabilities, rights, obligations, operations, results of operations or
business of a Person, which in the case of the Company or Parent shall be viewed
together with its respective Subsidiaries on a consolidated basis (other than,
in the case of the Company, the following in and of themselves, either alone or
in combination: (i) any effect or change occurring as a result of (A) general
economic or financial conditions or (B) conditions affecting the Company's
industry as a whole; (ii) any change or effect resulting from any announcement
of the Agreement or Merger or the transactions contemplated in connection
therewith, except that the termination or asserted termination or modification
in any manner adverse to the Company, to any material Contract of the Company
shall not fall within this subsection (ii); (iii) a change in the market price
or trading volume of Company Common Stock; and (iv) a failure by the Company to
meet the revenue or earnings predictions of equity analysts as reflected in any
consensus estimate, or any other revenue or earnings predictions or expectations
(other than those earnings predictions or expectations which have been disclosed
publicly by the Company), for any period ending (or for which earnings are
released) on or after the date of this Agreement and on or prior to the Closing
Date).
Exhibit 5 - 10
"Merger" is defined in Section 1.1(h).
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"Merger Consideration" means the cash paid to the holders of the Shares
pursuant to Section 15 hereof.
"Multi-employer Plan" is defined in ERISA Section 3(37).
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" is defined in Section 1.1(aa).
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"Order" means any Order, ruling, decision, verdict, decree, writ, subpoena,
mandate, precept, command, directive, consent, approval, award, judgment,
injunction, or other similar determination or finding by, before, or under the
supervision of any Governmental Entity, arbitrator or mediator.
"Offer" is defined in the Recitals hereof.
"Offer Conditions" is defined in Section 0.
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"Offer Documents" is defined in Section 1.1(a).
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"Offer Price" is defined in the Recitals hereof.
"Options" means the options to purchase shares of capital stock of the
Company.
"Ordinary Course of Business" means, with respect to any Person, that
Person's ordinary course of business consistent with past custom and practice
(including with respect to quantity, quality and frequency).
"Organizational Documents" means the articles of incorporation, certificate
of incorporation, charter, bylaws, articles of formation, regulations, operating
agreement, certificate of limited partnership, partnership agreement, and all
other similar documents, instruments or certificates executed, adopted, or filed
in connection with the creation, formation, or organization of a non-natural
Person, including any amendments thereto.
"Owned Real Estate" is defined in Section 1.4(a)
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"Parent" is defined in the preamble to this Agreement
"Parent Common Stock" means Parent's common stock, $.001 par value.
"Parent Disclosure Letter" is defined in Section 17 below.
"Parties" means Parent, Buyer and the Company.
"Patents" means all (A) patents and patent applications and any
continuations, continuations in part, renewals and applications therfor, and (B)
any inventions and discoveries that may be patentable.
Exhibit 5 - 11
"Paying Agent" is defined in Section 1.1(r).
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"Permit" means any permit, license, certificate, approval, consent, notice,
waiver, franchise, registration, filing, accreditation, or other similar
authorization required by any Law or Governmental Entity.
"Per Share Amount" is defined in Section 1.1(n)
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"Person" means any individual, partnership, limited liability company,
corporation, association, joint stock company, trust, entity, joint venture,
labor organization, unincorporated organization, or Governmental Entity.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Prohibited Transactions" is defined in ERISA Section 406 and Code Section
4975.
"Receivables" means all receivables of the Acquired Entity, including all
Contracts in transit, manufacturers warranty receivables, notes receivable,
accounts receivable, trade account receivables, and insurance proceeds
receivable.
"Release" means any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other release into the Environment.
"Retained Employees" means those employees of the Company who are employed
by the Company just prior to the Effective Time and who have not given or been
given by the Company written notice of their termination or severance from the
employ of the Company.
"Schedule 14D-9" is defined in Section 1.1(c).
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"Schedule TO" is defined in Section 1.1(a).
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"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Laws" is defined in Section Section 17(h)
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"Security Interest" means any security interest, deed of trust, mortgage,
pledge, lien, charge, claim, or other similar interest or right except for (i)
liens for taxes, assessments, governmental charges, or claims which are not yet
due and payable or are being duly contested in good faith by appropriate
Actions, (ii) statutory liens of landlords and warehousemen's, carriers',
mechanics', suppliers', materialmen's, repairmen's, or other like liens
(including Contractual landlords' liens) arising in the Ordinary Course of
Business or with respect to amounts not yet delinquent and being contested in
good faith by appropriate Actions; and (iii) liens incurred or deposits made in
the Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other similar types of social security.
"Severance Arrangements" is defined in Section 1.4(nnn).
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Exhibit 5 - 12
"Share" means any share of the Company Common Stock.
"Share Certificates" is defined in Section 1.1(r).
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"Software" means any and all (i) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code; (ii) testing, validation, verification and quality
assurance materials; (iii) databases, conversion, interpreters and compilations,
including any and all data and collections of data, whether machine readable or
otherwise; (iv) descriptions, schematics, flow-charts and other work product
used to design, plan, organize and develop any of the foregoing; (v) software
development processes, practices, methods and policies recorded in permanent
form, relating to any of the foregoing; (vi) performance metrics, sightings, bug
and feature lists, build, release and change control manifests recorded in
permanent form, relating to any of the foregoing; and (vii) all documentation,
including user manuals, web materials, and architectural and design
specifications and training materials, relating to any of the foregoing.
"Stock Option Plans" is defined in Section 3.5.
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"Subsidiary" means, with respect to any Person: (a) any corporation of
which more than 10% of the total voting power of all classes of the Equity
Interests entitled (without regard to the occurrence of any contingency) to vote
in the election of directors is owned by such Person directly or through one or
more other Subsidiaries of such Person and (b) any Person other than a
corporation of which at least a 10% of the Equity Interest (however designated)
entitled (without regard to the occurrence of any contingency) to vote in the
election of the governing body, partners, managers or others that will control
the management of such entity is owned by such Person directly or through one or
more other Subsidiaries of such Person.
"Surviving Corporation" is defined in Section 1.1(h).
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"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs, ad valorem, duties, capital stock, franchise, profits, withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to any Taxes required to be filed with
any Governmental Entity, including any schedule or attachment thereto, and
including any amendment thereof.
"TBCA" means the Texas Business Corporation Act.
"Tender Agreement" is defined in the Recitals hereof.
"Termination Fee" is defined in Section 1.4(cccc).
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Exhibit 5 - 13
"Threatened" means a demand or statement has been made (orally or in
writing) or a notice has been given (orally or in writing), has been or is
likely to be asserted, commenced, or otherwise taken.
"Trade Secrets" means all know-how, trade secrets, confidential
information, customer lists, Software, databases, works of authorship, mask
works, technical information, data, process technology, plans, drawings, blue
prints know-how, proprietary processes, formulae, algorithms, models, user
interfaces, inventions, discoveries, concepts, ideas, techniques, methods,
methodologies and, with respect to all of the foregoing, related confidential
data or information.
"Transaction Documents" means this Agreement and the Tender Agreement.
"Transactions" means all of the transactions contemplated by this
Agreement, including: (a) the sale of the Shares to Buyer and Buyer's delivery
of the Merger Consideration therefor; (b) the execution, delivery, and
performance of all of the documents, instruments and agreements to be executed,
delivered, and performed in connection herewith, including each Transaction
Document; and (c) the performance by Parent, Buyer and the Company of their
respective covenants and obligations (pre- and post-Closing) under this
Agreement.
"Treas. Reg." means the proposed, temporary and final regulations
promulgated under the Code.
"Year 2000 Financial Statement" is defined in Section Section 17(h).
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Section 14. THE TENDER OFFER
(a) The Tender Offer. Provided that this Agreement has not been terminated
in accordance with Section 21 and none of the events referred to in Annex A has
occurred or is existing (and shall not have been waived by Parent), as promptly
as practicable, but in no event later than five (5) Business Days after receipt
by Parent of the Financing Commitments, Buyer shall (and Parent shall cause
Buyer to) commence (within the meaning of Rule 14d-2 under the Exchange Act) the
Offer for any and all the Shares at the Offer Price, net to the seller in cash,
without interest, less any required withholding taxes. The Offer initially shall
expire at 12:00 midnight Eastern time on the twentieth Business Day following
the date of commencement of the Offer (such date and time, as extended in
accordance with the terms hereof, the "Expiration Date"). The obligation of
Parent and Buyer to commence the Offer, accept for payment, purchase, and pay
for any Shares validly tendered and not withdrawn pursuant to the Offer shall be
subject only to the conditions set forth in Annex A hereto (the "Offer
Conditions"). Buyer specifically reserves the right to increase the Offer Price
and to make any other changes in the terms and conditions of the Offer; provided
that, unless previously approved by the Company in writing, no change may be
made that (i) decreases the Offer Price, (ii) changes the form of consideration
to be paid in the Offer, (iii) reduces the maximum number of Shares to be
purchased in the Offer, (iv) imposes conditions to the Offer in addition to the
Offer Conditions, (v) except as expressly provided in this Section (a)0, extends
------------
the Offer (vi) amends any other term of the Offer in any manner adverse to the
holders of the Shares or (vii) amends or waives the Minimum Condition. Subject
to the provisions of ARTICLE 9 hereof, if on the initial Expiration Date of the
Offer, all of the Offer conditions are not then satisfied or waived, Buyer
Exhibit 5 - 14
may, from time to time, in its sole discretion, extend the Expiration Date.
Without limiting the generality of the foregoing, Buyer may, without the consent
of the Company, extend any then scheduled Expiration Date of the Offer for any
period required by applicable rules, regulations, interpretations or positions
of the SEC or the staff thereof applicable to the Offer or for any period
required by applicable law. Notwithstanding the foregoing, Buyer shall be
obligated to extend the Offer from time to time until a date which is no more
than sixty days after the date of the commencement of the Offer, if, at the
Expiration Date as initially scheduled, or any extension thereof, the Offer
conditions have not been satisfied or waived, provided, however, that Buyer
shall not be required to extend the Offer as provided in this sentence unless,
in Parent's reasonable judgment, (i) each such condition is reasonably capable
of being satisfied; (ii) the Company is in material compliance with all of its
covenants in this Agreement, and (iii) the failure of such condition to be
satisfied shall not result from a Breach by the Company of any of its covenants
and agreements contained in this Agreement.
The Parties agree that the conditions set forth in Annex A are for the
sole benefit of Buyer and may be asserted by Buyer regardless of the
circumstances giving rise to any such condition or may be waived by Buyer, in
whole or in part, at any time and from time to time, in its sole discretion. The
failure by Buyer at any time to exercise any of the foregoing rights shall not
be deemed a waiver of any such right, the waiver of any such right with respect
to particular facts and circumstances shall not be deemed a waiver with respect
to other facts or circumstances, and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time. Any determination
(which will be made in good faith after consultation with the Company) by Buyer
with respect to any of the foregoing conditions (including, without limitation,
the satisfaction of such conditions) shall be final and binding on all parties.
Buyer may provide a "subsequent offering period" (as contemplated by
Rule 14d-11 of the Exchange Act) of not less than three Business Days following
its acceptance of and payment for the Shares in the Offer. Subject to the terms
and conditions of the Offer and this Agreement, Buyer shall (and Parent shall
cause Buyer to) accept for payment, and pay for, all Shares validly tendered and
not withdrawn pursuant to the Offer that Buyer becomes obligated to accept for
payment and pay for pursuant to the Offer, as promptly as practicable after the
expiration of the Offer.
(a) As soon as practicable on the date of commencement of the Offer,
Parent and Buyer shall file or cause to be filed with the SEC a Tender Offer
Statement on Schedule TO (together with all amendments and supplements thereto
and including the exhibits thereto, the "Schedule TO"). The Schedule TO shall
contain or shall incorporate by reference the offer to purchase, related letter
of transmittal, summary advertisement and other ancillary offer documents and
instruments pursuant to which the Offer will be made (such Schedule TO and the
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents") with respect
to the Offer. Parent and Buyer will take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of the
Shares, in each case as and to the extent required by applicable federal
securities laws. Parent and Buyer agree that the Offer Documents shall comply as
to form in all material respects with the Exchange Act and the rules and
regulations promulgated thereunder. The Offer Documents, on the date first
published, sent or given to the
Exhibit 5 - 15
Company Shareholders, shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation or warranty is
made by Parent or Buyer with respect to information supplied by the Company or
any of its shareholders specifically for inclusion or incorporation by reference
in the Offer Documents and not subsequently corrected prior to filing. Each of
Parent, Buyer and the Company agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect.
Parent and Buyer each further agrees to take all steps necessary to cause the
Schedule TO as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to the Company Shareholders, in
each case as and to the extent required by applicable Law. The Company and its
counsel shall be given an opportunity to review and comment upon the Offer
Documents (and shall provide any comments thereon as soon as practicable to
counsel for Buyer) prior to their filing with the SEC or dissemination to the
Company Shareholders. Parent and Buyer each agrees to provide the Company and
its counsel any comments Parent, Buyer or their counsel may receive from the SEC
or its staff with respect to the Offer Documents promptly after the receipt of
such comments.
(b) Company Actions The Company hereby represents and warrants that the
Company Board, at a meeting duly called and held at which all directors were
present, duly and unanimously: (i) determined that this Agreement and the
Transactions are fair to, advisable and in the best interests of, the Company
and the Company Shareholders; (ii) resolved subject to Section Section 18(d)
---------------------
hereof to recommend that the Company Shareholders accept the Offer, tender their
Shares pursuant to the Offer and approve the Merger; and (iii) approved the
execution, delivery and performance of this Agreement, such approval
constituting approval of the foregoing for purposes of Section 5.03 of the TCBA
and approved the acquisition of Shares by Buyer pursuant to the Offer and the
Transactions. The Company also represents and warrants that its Board of
Directors has received the written opinion of Xxxx Xxxxxxxxx Xxxxxxxx & Co. (the
"Financial Advisor") that, as of the date hereof, the proposed consideration to
be offered to the Company Shareholders pursuant to the Offer and the Merger is
fair to the Company Shareholders from a financial point of view. The Company
further represents and warrants that it has been authorized by the Financial
Advisor to permit, subject to prior review and consent by the Financial Advisor
(such consent not to be unreasonably withheld), and the Company hereby consents
to, the inclusion of such fairness opinion (or a reference thereto) in the Offer
Documents and in the Schedule 14D-9 referred to below. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations of the
Company Board described in this Section 1.1(b) (subject to the right of the
--------------
Board of Directors to modify or withdraw such recommendation in accordance with
Section Section 18(d)).
---------------------
(c) The Company shall file with the SEC concurrently with the
commencement of the Offer or as promptly thereafter as practicable a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
schedules, amendments and supplements, the "Schedule 14D-9") containing the
recommendations of the Company Board in favor of the Offer and the Merger
(subject to the right of the Board of Directors to modify or withdraw such
recommendation in accordance with Section Section 18(d)) and the opinion of the
---------------------
Financial Advisor referred to in Section 1.1(b). The Schedule 14D-9 shall comply
as to form in all material respects with the
Exhibit 5 - 16
requirements of the Exchange Act and the rules and regulations promulgated
thereunder. The Company shall cause the Schedule 14D-9 to be mailed to the
Company Shareholders promptly after commencement of the Offer and at the same
time the Offer Documents are first mailed to the Company Shareholders. On the
date filed with the SEC and on the date first published, sent or given to the
Company Shareholders, the Schedule 14D-9 shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is made by the Company with respect to information
supplied by Parent or Buyer specifically for inclusion in the Schedule 14D-9.
Each of the Company, Parent and Buyer agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented
to be filed with the SEC and disseminated to the Company Shareholders, in each
case as and to the extent required by applicable Law. Parent, Buyer and their
counsel shall be given an opportunity to review and comment upon the Schedule
14D-9 (and shall provide any comments thereon as soon as practicable to counsel
for the Company) prior to its filing with the SEC or dissemination to Company
Shareholders. The Company agrees to provide Parent, Buyer and their counsel any
comments the Company or its counsel may receive from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments.
(d) In connection with the Offer and the Merger, the Company shall
promptly furnish or cause its transfer agent to promptly furnish Buyer with
mailing labels containing the names and addresses of the record holders of
Shares as of the latest practicable date and of those Persons becoming record
holders subsequent to such date, together with copies of all lists of
stockholders, security position listings and computer files and all other
information in the Company's possession or control regarding the beneficial
owners of Shares, and shall furnish to Parent such information and assistance
(including updated lists of stockholders, security position listings and
computer files) as Parent may reasonably request in communicating the Offer and
the Merger to the Company Shareholders. Subject to the requirements of
applicable Law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Parent, Buyer and their agents shall hold in confidence the information
contained in any such labels, listings and files, and will use such information
only in connection with the Offer and the Merger. In connection with the Offer,
the Company will furnish Parent with such information (which will be treated and
held in confidence by Parent) and assistance as Parent or its officers,
employees, accountants, counsel and other representatives may reasonably request
in connection with the preparation of the Offer and communicating the Offer to
the record and beneficial holders of shares of Common Stock. If this Agreement
is terminated, Parent and Buyer will upon the written request of the Company
promptly deliver or cause to be delivered to the Company all copies of any such
information provided under this paragraph then in its possession or in the
possession of its agents or representatives.
Exhibit 5 - 17
(c) Board of Directors.
(e) Effective upon the purchase by Buyer pursuant to the Offer of
such number of Shares which represents at least 67% of the outstanding shares of
Common Stock on a fully diluted basis (as defined in Annex A), and from time to
time thereafter, Parent shall be entitled to designate up to that number of
directors of the Company, rounded up to the next whole number as will make the
percentage of the Company's directors designated by Parent equal to the
percentage of outstanding shares of Common Stock held by Parent and any of its
wholly owned Subsidiaries (including Buyer), including shares of Company Common
Stock accepted for payment pursuant to the Offer. The Company shall take all
action necessary to cause the designees of Parent to be elected to or appointed
by the Company Board, including, without limitation, increasing the number of
directors, amending its bylaws, or using its best efforts to obtain resignations
of incumbent directors, subject in all cases to Section 14 (f) of the Exchange
Act. Upon written request by Parent, the Company shall use its best efforts to
cause the designees of Parent to constitute the same percentage of
representation as is on the Company Board after giving effect to this Section
-------
Section 14(c) on (i) each committee of the Company Board; (ii) the Board of
-------------
Directors of each of the Acquired Entities; and (iii) each committee of each
such board. The provisions of this Section Section 14(c) are in addition to and
---------------------
shall not limit any rights that Parent, or any of its affiliates may have as a
holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
(f) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under Section 1.1(e), including mailing to
--------------
shareholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Parent's designees to be elected or appointed to the
Company's Board (the "14f-1 Information Statement"). Parent shall supply the
Company and be solely responsible for any information with respect to it and its
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The 14f-1 Information Statement, on the date filed with the SEC and
on the date first published, sent or given to the Company Shareholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in Order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation or warranty is made by the Company
with respect to information supplied by Parent specifically for inclusion in the
14f-1 Information Statement.
(g) Following the election or appointment of Parent's designees to
the Company Board, and prior to the Effective Time (as defined in Section
-------
1.1(i)), the Company Board shall have at least two directors who are directors
-------
on the date hereof and who are not officers of the Company or affiliates of
Parent or Buyer (the "Independent Directors"), provided that, in such event, if
the number of Independent Directors shall be reduced below two for any reason
whatsoever, any remaining Independent Directors (or Independent Director, if
there be only one remaining) shall be entitled to designate persons to fill such
vacancies who shall be deemed to be Independent Directors for purposes of this
Agreement or, if no Independent Director then remains, the other directors shall
designate two persons to fill such vacancies who shall not be affiliates of
Parent or Buyer or officers of the Company and such persons shall be deemed to
be Independent Directors for purposes of this Agreement. Notwithstanding
anything in this Agreement to the contrary, following the election or
appointment of Parent's designees to the
Exhibit 5 - 18
Company Board, and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (a) amend or
terminate this Agreement by the Company or (b) exercise or waive any of the
Company's rights, benefits or remedies hereunder.
Section 15. THE MERGER
(a) The Merger.
(h) Subject to the terms and conditions hereof, and in
accordance with the DGCL and the TBCA, Buyer shall be merged with and into the
Company at the Effective Time (the "Merger"). Upon consummation of the Merger,
the separate existence of Buyer shall cease and the Company shall be the
surviving corporation (the "Surviving Corporation") and an indirect wholly-owned
subsidiary of Parent.
(i) As soon as practicable after satisfaction of (or, to the
extent permitted hereunder, waiver of) all conditions to the Merger, the Company
and Buyer will file a certificate of merger with the Secretary of State of the
State of Delaware and deliver articles of merger to the Secretary of State of
the State of Texas in accordance with the DGCL and TBCA (in the forms attached
hereto as Exhibit B) and make all other filings or recordings required by
---------
applicable Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is filed with the Secretary of State
of the State of Delaware and a certificate of merger is issued to the Surviving
Corporation by the Secretary of State of the State of Texas or at such later
time as is specified in the respective certificates of merger (the "Effective
Time"). The certificates and articles of merger filed with the Secretary of
States of of the States of Delaware and Texas are referred to throughout the
remainder of this Agreement as the "Certificates of Merger."
(j) At the Effective Time, the effect of the Merger shall be as
provided in 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 Buyer
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Buyer shall become the debts, liabilities and duties of the
Surviving Corporation.
(k) The Articles of Incorporation of the Surviving Corporation
shall be amended and restated to read the same as the Certificate of
Incorporation of Buyer in effect at the Effective Time until amended in
accordance with applicable Law, provided however, that Section I of the amended
----------------
and restated Articles of Incorporation of the Company as the Surviving
Corporation, instead of reading the same as Section I of the Certificate of
Incorporation of Buyer, shall read as follows: "The name of the corporation is
DTM Corporation." The bylaws of the Surviving Corporation shall be amended and
restated to read the same as the bylaws of Buyer in effect at the Effective Time
until amended in accordance with applicable Law, except that all references in
such Bylaws to Buyer shall be changed to refer to DTM Corporation.
(l) The directors of Buyer at the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and bylaws of the Surviving
Corporation until such director's successor is duly elected or
Exhibit 5 - 19
appointed and qualified or until such director's earlier death, resignation or
removal in accordance with the Certificate of Incorporation and bylaws of the
Surviving Corporation.
(m) The officers of Buyer at the Effective Time shall be the
initial officers of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and bylaws of the Surviving Corporation
until such officer's successor is duly elected or appointed and qualified or
until such officer's earlier death, resignation or removal in accordance with
the Certificate of Incorporation and bylaws of the Surviving Corporation.
(b) Merger Consideration And Cancellation Of Shares.
At the Effective Time, pursuant to this Agreement and by virtue
of the Merger and without any action on the part of Parent, Buyer, the Company,
or the holders of any of the following securities:
(n) Each Share issued and outstanding immediately prior to the
Effective Time (including shares of Common Stock issued upon exercise of Options
and other convertible securities of the Company, but excluding any Dissenting
Shares, and shares to be cancelled pursuant to Section 1.1(o)), shall be
--------------
converted automatically into the right to receive an amount in cash equal to the
Offer Price (the "Per Share Amount"), without interest, payable to the holder
thereof, less any required withholding taxes, upon surrender of the certificate
formerly representing such share of Common Stock in the manner provided in
Section Section 15(c).
---------------------
(o) Each Share held in the treasury of the Company or held by
Parent or Buyer or any other Subsidiary of Parent, if any, immediately prior to
the Effective Time, shall be cancelled without any conversion thereof and no
payment or distribution shall be made with respect thereto.
(p) Each outstanding share of common stock of Buyer shall be
converted into one (1) share of common stock of the Surviving Corporation.
(q) If between the date of this Agreement and the Effective Time
the number of outstanding shares of capital stock of the Company shall have been
changed into a different number of shares or a different class, by reason of any
stock dividend, subdivision, reclassification, recapitalization, split-up,
combination, exchange of shares or the like other than pursuant to the Merger,
the Per Share Amount payable to each holder of Shares shall be correspondingly
adjusted.
(c) Payment of Cash for Shares.
(r) At the Effective Time, the Surviving Corporation shall
irrevocably deposit or cause to be deposited with a paying agent appointed by
Buyer and reasonably acceptable to the Company (the "Paying Agent"), as agent
for the holders of Shares to be cancelled in accordance with Section Section
---------------
15(b), cash in the aggregate amount required to pay the Merger Consideration in
-----
respect of such securities outstanding immediately prior to the Effective Time.
Pending distribution pursuant to Section 1.1(s) hereof of the cash deposited
--------------
with the Paying Agent, such cash shall be held in trust for the benefit of the
holders of the Shares converted
Exhibit 5 - 20
pursuant to the Merger and such cash shall not be used for any other purposes.
Promptly after the Effective Time, the Surviving Corporation shall cause the
Paying Agent to mail to each Person who was, at the Effective Time, a holder of
record of Shares entitled to receive the Per Share Amount pursuant to Section
-------
Section 15(b) hereof, a form of letter of transmittal (which shall specify that
-------------
delivery shall be effected, and risk of loss and title to the certificates
evidencing the Shares (the "Share Certificates") shall pass, only upon proper
delivery of the Share Certificate to the Paying Agent) and instructions for use
in effecting the surrender of the Share Certificate pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Share Certificate, together
with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, and such other documents as may be
required pursuant to such instructions, the holder of such Share Certificate
shall be entitled to receive in exchange therefor the Per Share Amount for each
Share formerly evidenced by such Share Certificate, and such Share Certificate
shall thereupon be cancelled. No interest shall accrue or be paid on the Per
Share Amount payable upon the surrender of any Share Certificate for the benefit
of the holder of such Share Certificate and any required withholding taxes on
the Per Share Amount may be withheld by Buyer or the Paying Agent. All interest
accrued in respect of the cash deposited with the Paying Agent shall accrue to
the benefit of and be paid to the Surviving Corporation.
(s) After surrender to the Paying Agent of any Share Certificate or
other instrument which prior to the Effective Time shall have represented any
Shares, the Paying Agent shall promptly distribute to the Person in whose name
such Share Certificate or other instrument shall have been registered, a check
representing the Merger Consideration that such Person has the right to receive
pursuant to the provisions of this Section 15. Until so surrendered and
cancelled, each such Share Certificate or other instrument shall, after the
Effective Time, be deemed to represent only the right to receive the Per Share
Amount, and until such surrender and cancellation, no cash shall be paid to the
holder of such outstanding Share Certificate or other instrument in respect
thereof. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease, except for Dissenting
Shares and otherwise as required by law, to have any rights with respect to such
Shares, other than the right to receive the Per Share Amount as provided in this
Agreement.
(t) If payment is to be made to a Person other than the registered
holder of the Shares represented by the Share Certificate or other instrument so
surrendered in exchange therefor, it shall be a condition to such payment that
the Share Certificate or other instrument so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay to the Paying Agent any transfer or other
taxes required as a result of such payment to a Person other than the registered
holder of such Shares or establish to the satisfaction of the Paying Agent that
such tax has been paid or is not payable.
(u) After the Effective Time, there shall be no further transfers on
the stock transfer books of the Company of the Shares that were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Share
Certificates representing the Shares are presented to the Surviving Corporation,
they shall be cancelled and exchanged for the Per Share Amount provided for, and
in accordance with the procedures set forth in this Section 15.
Exhibit 5 - 21
(v) If any cash deposited with the Paying Agent for purposes of
payment in exchange for the Shares remains unclaimed six months after the
Effective Time, such cash shall be returned to the Surviving Corporation, upon
demand, and any such holder who has not converted the Shares into the Per Share
Amount or otherwise received the Per Share Amount pursuant to this Agreement
prior to that time shall thereafter look only to the Surviving Corporation for
payment of the Per Share Amount. Notwithstanding the foregoing, the Surviving
Corporation shall not be liable to any holder of Shares for any amount paid to a
public official pursuant to applicable unclaimed property laws. Any amounts
remaining unclaimed by holders of Shares seven (7) years after the Effective
Time (or such earlier date immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Entity) shall, to
the extent permitted by applicable Law, become the property of the Surviving
Corporation, free and clear of any claims or interest of any Person previously
entitled thereto.
(w) Any portion of the Merger Consideration made available to the
Paying Agent to pay for Shares for which dissenters' rights have been perfected
as provided in Section Section 15(d) hereof shall be returned to the Surviving
---------------------
Corporation upon demand.
(x) No dividends or other distributions with respect to capital stock
of the Company with a record date after the Effective Time shall be paid to the
holder of any unsurrendered certificate for the Shares.
(y) In the event that any Share Certificate or other instrument
representing Shares shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such certificate or other
instrument to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such holder of a bond in such reasonable amount as
the Surviving Corporation may direct as indemnity against any claim that may be
made against it with respect to such Share Certificate or other instrument, the
Paying Agent will issue in exchange for and in lieu of such lost, stolen or
destroyed certificate or other instrument representing the Shares, the Per Share
Amount, and unpaid dividends and distributions on Shares deliverable in respect
thereof, pursuant to this Agreement and the Merger, without interest and less
any required withholding taxes.
(d) Dissenting Shares.
Notwithstanding any other provisions of this Agreement, Shares which
are issued and outstanding immediately prior to the Effective Time and which are
held by a holder who has not voted such shares of capital stock of the Company
in favor of the Merger and who has otherwise complied with the relevant
provisions of Article 5.12 of the TBCA and who, as of the Effective Time, shall
not have effectively withdrawn or lost such right to relief as a dissenting
stockholder ("Dissenting Shares") shall not be converted into a right to receive
the Per Share Amount. The holders thereof shall be entitled only to such rights
as are granted by Article 5.12 of the TBCA. Each holder of Dissenting Shares who
becomes entitled to payment for such Dissenting Shares pursuant to Article 5.12
of the TBCA shall receive payment therefor from the Surviving Corporation in
accordance with the TBCA; provided, however, that if any such holder of
Dissenting Shares (i) shall have failed to establish his entitlement to relief
as a dissenting stockholder as provided in Article 5.12 of the TBCA, (ii) shall
have effectively withdrawn his
Exhibit 5 - 22
demand for relief as a dissenting stockholder with respect to such Dissenting
Shares or lost his right to relief as a dissenting stockholder and payment for
his Dissenting Shares under Article 5.12 of the TBCA, or (iii) shall have failed
to file a complaint with the appropriate court seeking relief as to
determination of the value of all Dissenting Shares within the time provided in
Article 5.12 of the TBCA, such holder shall forfeit the right to relief as a
dissenting stockholder with respect to such Dissenting Shares and each such
Dissenting Share shall be converted into the right to receive the Per Share
Amount from the Surviving Corporation as provided in Section Section 15(b). The
---------------------
Company shall give Parent prompt notice of any demands received by the Company
prior to the Effective Time any attempted withdrawals of such demands and any
other instruments served pursuant to the TBCA and received by the Company
relating to stockholders' rights appraisal, and Parent shall have the right to
direct all negotiations and proceedings with respect to such demands. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
(e) Stock Options.
(z) At the Effective Time, each outstanding and unexercised
option to purchase Shares (a "Company Option") pursuant to the existing and duly
administered 1996, 1998 and 1999 stock option plans of the Company (the "Company
Option Plans"), whether vested or unvested, shall be converted into an
obligation of the Company to pay, and the right of the holder thereof to
receive, in full satisfaction of each Company option, the "Cash Amount." with
respect to such Company Option. The "Cash Amount" for any Company Option shall
equal the product of (1) the excess, if any, of the Per Share Offer Amount over
the exercise price per Share of such Company Option and (2) the number of Shares
underlying such Company Option. Company shall take all actions necessary to
cause the Company's employees and directors to consent, to the extent required,
to the transactions contemplated by this Section 5.5 no later than immediately
-----------
prior to the Effective Time. Except as may be otherwise agreed to by Parent or
Buyer and the Company, as of the Effective Time, (A) the Company Option Plans
shall terminate, (B) the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any or the Acquired Subsidiaries shall be
deleted and (C) no holder of Company Options or any participant in the Company
Option Plans or any other plans, programs or arrangements shall have any rights
thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof. All Company Options outstanding as of the
date of this Agreement and the price at which they are exercisable are listed on
Section 3.5(a) of the Company Disclosure Letter. The Company and Parent agree
that the Cash Amounts are the sole payments that will be made with respect to or
in relation to the Company Options.
(aa) All warrants and other convertible securities to purchase
shares of Company Common Stock shall be canceled as of the Closing Date. At or
before the Effective Time, the Company shall take all actions, in a manner
reasonably satisfactory to Parent, necessary or advisable to give effect to the
foregoing provisions of this Section 3.5.
-----------
Exhibit 5 - 23
(bb) As soon as practicable following the Effective Time, Parent
shall cause to be mailed to the holder of each Company Option, the Cash Amount
payable with respect to such Company Option to such holder pursuant to Section
-------
(e)(z) hereof.
------
(f) The Closing.
The closing of the Merger (the "Closing") shall take place (i) at
the offices of Akin, Gump, Strauss, Xxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxx Xxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 9:00 A.M. (Los Angeles time) on the Business
Day on which the Parties hereto designate as the closing date following the
fulfillment or waiver of the conditions set forth in Section 20 hereof in
accordance with this Agreement or (ii) at such other place and time and/or on
such other date as the Company and Parent may agree (the "Closing Date").
(g) Deliveries at the Closing.
At the Closing:
(cc) The Company will deliver to Parent:
(i) An Officers' certificate, substantially in the form of
Exhibit C, duly executed on the Company's behalf.
---------
(ii) A Secretary's certificate, substantially in the form of
Exhibit D, duly executed on the Company's behalf.
---------
(dd) Parent and Buyer will deliver to the Company:
(i) Officers' certificates, substantially in the form of
Exhibits E and G, duly executed on Parent's and Buyer's behalf, respectively.
----------------
(ii) Secretary's certificates, substantially in the form of
Exhibit F and H, duly executed on Parent's and Buyer's behalf, respectively.
---------------
Section 16.
REPRESENTATIONS AND WARRANTIES
CONCERNING PARENT AND BUYER
Parent and Buyer each represent and warrant to the Company that the
statements contained in this are correct and complete, except as set forth in
the disclosure letter delivered at or prior to the execution of this Agreement
(the "Parent Disclosure Letter") prepared in accordance with Section 10.1
hereof.
(a) Entity Status.
Parent and Buyer each is a corporation duly created, formed or
organized, validly existing and in good standing under the Laws of the State of
Delaware. Parent and Buyer each has the requisite power and authority to own or
lease its properties and to carry on its business as
Exhibit 5 - 24
currently conducted. Parent and Buyer each are qualified to do business in all
jurisdictions where such qualification is required. There is no pending or
Threatened Action (or Basis therefor) for the dissolution, liquidation,
insolvency, or rehabilitation of Parent or Buyer.
(b) Power and Authority; Enforceability.
Parent and Buyer each has the relevant entity power and authority
to execute and deliver each Transaction Document to which it is party, and to
perform and consummate the Transactions. The execution, delivery and performance
by Parent and Buyer of this Agreement and the consummation of the Merger and the
other Transactions have been duly authorized by the boards of directors of each
of Parent and Buyer and by the sole stockholder of Buyer, and no other corporate
action on the part of Parent or Buyer is necessary to authorize the execution
and delivery by Parent and Buyer of this Agreement or the consummation of the
Transactions. Each Transaction Document to which Parent and Buyer is a party has
been duly authorized, executed and delivered by, and is Enforceable against,
Parent and Buyer, respectively.
(c) Consents and Approvals; No Defaults.
(ee) No consents or approvals of, or filings or registrations
with, any Governmental Entity or with any third party are required to be made or
obtained by Parent or Buyer in connection with the execution, delivery or
performance by Parent or Buyer of this Agreement except for (i) filings of
applications, registrations, statements, reports or notices (and expiration of
any applicable notice periods) with the United States Department of Justice, the
Federal Trade Commission, the NASD, the SEC and state securities authorities,
(ii) the filing of the Certificates of Merger with the Secretary of State of the
States of Delaware and Texas and (iii) consents, approvals, filings, or
registrations, the absence of which would not, individually or in the aggregate,
have a Material Adverse Effect on Parent or Buyer or adversely affect or delay
any of the Transactions.
(ff) Subject to receipt of the approvals referred to in the
preceding paragraph, and the expiration of related waiting periods, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby, and compliance with the provisions hereof do
not and will not (i) result in any Breach of the terms, conditions, or
provisions of the Organizational Documents of Parent or Buyer; (ii) result in a
Breach of any provisions of, or result in the creation or imposition of (or the
obligation to create or impose) any Encumbrance under, any of the terms,
conditions or provisions of any Contract, Order or Permit to which Parent or
Buyer is a party or by which it or any of its properties or assets may be bound
or affected; or (iii) to the Knowledge of Parent or Buyer, violate any Law or
Order applicable to Parent or Buyer, except for any Breach, or Encumbrance which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent or Buyer or adversely affect or delay any of
the Transactions.
(d) Capitalization.
The authorized capital stock of Parent at March 30, 2001 consists
of (a) 25,000,000 shares of Parent Common Stock $0.001 par value per share, of
which 12,304,572
Exhibit 5 - 25
shares outstanding; and 225,000 shares are held in treasury and (b) 5,000,000
shares of Preferred Stock, $0.001 par value per share, of which no shares are
issued and outstanding. As of the date hereof, (i) all of the issued and
outstanding shares of Parent Common Stock are duly authorized, validly issued,
fully paid and non-assessable and were not issued in violation of any preemptive
rights or any federal or state securities laws, (ii) no shares of Parent Common
Stock are held by Subsidiaries of Parent, and (iii) 2,306,309 shares of Parent
Common Stock are reserved for future issuance under outstanding Options.
(e) Litigation.
Section 4.5 of the Parent Disclosure Letter sets forth each
-----------
instance in which Parent or Buyer (a) is subject to any outstanding Order or (b)
is a party or is Threatened to be made a party to any Action. No Action required
to be set forth in Section 4.5 of the Parent Disclosure Letter questions the
-----------
Enforceability of this Agreement or the Transactions, or could result in any
Material Adverse Change with respect to Parent, and Buyer and Parent do not have
any Basis to believe that any such Action may be brought against Parent or
Buyer.
(f) Share Ownership.
To the Knowledge of Parent, none of Parent, Buyer or any of their
respective Affiliates or associates beneficially owns more than 100 in the
aggregate.
(g) Buyer's Operations.
Buyer was formed solely for the purpose of engaging in the
Transactions and has not engaged in any business activities or conducted any
operations other than in connection with the Transactions.
1.2 Brokers' Fees.
Neither Parent nor Buyer has any liability to pay any
compensation to any broker, finder, or agent with respect to the Transactions.
1.3 Ability to Consummate the Transactions.
Based on existing cash on hand and anticipated sources of equity
or debt financing, Parent and Buyer have a good faith reasonable belief that
Buyer will have the means to purchase the Shares and to consummate the
Transactions.
Exhibit 5 - 26
(h) Statements True and Correct.
None of the information (including this Agreement) supplied or
to be supplied by Parent or Buyer to any Governmental Entity in connection with
the Transactions will, at the respective time such documents are supplied, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or omit to state any
material fact necessary to correct any statement in any earlier communication to
any Governmental Entity.
(i) Regulatory Approvals.
Neither Parent nor Buyer has taken any action or has any
Knowledge of any fact or circumstance that is reasonably likely to materially
impede or delay receipt of any consents of a Governmental Entity necessary in
connection with the consummation of the Merger, which if not obtained,
individually or in the aggregate, would be reasonably expected to have a
Material Adverse Effect on Parent or Buyer or materially alter or delay the
Transactions.
Section 17.
REPRESENTATIONS AND WARRANTIES
CONCERNING THE ACQUIRED ENTITIES
The Company represents and warrants to Parent and Buyer that the
statements contained in this Section 17 are correct and complete, except as set
forth in the disclosure letter delivered at or prior to the execution of this
Agreement (the "Company Disclosure Letter") prepared in accordance with Section
10.1 hereof.
(a) Corporate Status.
Each Acquired Entity is an entity duly created, formed or
organized, validly existing, and in good standing under the Laws of the
jurisdiction of its creation, formation, or organization. Each Acquired Entity
is duly authorized to conduct its business and is in good standing under the
laws of each jurisdiction where such qualification is required. Each Acquired
Entity has the requisite power and authority necessary to own or lease its
properties and to carry on its businesses as currently conducted and in which it
currently proposes to engage. Section 5.1 of the Company Disclosure Letter lists
each Acquired Entity's directors and officers. Each Acquired Entity has
delivered to Parent correct and complete copies of each Acquired Entity's
Organizational Documents, as amended to date. No Acquired Entity is in Breach of
any provision of its Organizational Documents. There is no pending or Threatened
Action (or Basis therefor) for the dissolution, liquidation, insolvency, or
reorganization of any Acquired Entity.
(b) Power and Authority; Enforceability.
Exhibit 5 - 27
Each Acquired Entity has the relevant entity power and
authority necessary to execute and deliver each Transaction Document to which it
is a party and to perform and consummate the Transactions. The execution,
delivery and performance by the Company of this Agreement and the consummation
of the Merger and the other Transactions have been duly authorized by the
Company Board, and no other corporate action on the part of the Company (other
than approval by the Company's Shareholders of the Merger) or any Acquired
Entity is necessary to authorize the execution and delivery by each Acquired
Entity of this Agreement or the consummation of the Transactions. Each
Transaction Document to which any Acquired Entity is a party has been duly
authorized, executed and delivered by, and is Enforceable against, each Acquired
Entity.
(c) Consents and Approvals; No Defaults.
(a) No consents or approvals of, or filings or registrations
with, any Governmental Entity or with any third party are required to be made or
obtained by any Acquired Entity in connection with the execution, delivery or
performance by any Acquired Entity of this Agreement except for (i) filings of
applications, registrations, statements, reports or notices (and expiration of
any applicable notice periods) with the United States Department of Justice, the
Federal Trade Commission, the NASD, the NASDAQ, the SEC and state securities
authorities, (ii) the requisite approval of this Agreement by the holders of the
capital stock of the Company entitled to vote thereon, (iii) the filing of the
Certificates of Merger with the Secretary of State of the States of Delaware and
Texas and (iv) consents, approvals, filings, or registrations, the absence of
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company or adversely affect or delay any of the Transactions.
(b) Subject to receipt of the approvals referred to in the
preceding paragraph, and the expiration of related waiting periods, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby, and compliance with the provisions hereof do
not and will not (i) result in any Breach of the terms, conditions, or
provisions of, the respective Organizational Documents of the Acquired Entities;
(ii) result in a Breach of any provisions of, or result in the creation or
imposition of (or the obligation to create or impose) any Encumbrance upon any
of the properties or assets of an Acquired Entity under, any of the terms,
conditions or provisions of any Contract, Order or Permit to which an Acquired
Entity is a party or by which it or any of its properties or assets may be bound
or affected so as in any such case to result in a Material Adverse Effect on the
Company; or (iii) to the Knowledge of the Company, violate any Law or Order
applicable to an Acquired Entity except for any Breach, or Encumbrance which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or adversely effect or delay any of the
Transactions.
(d) Brokers' Fees.
No Acquired Entity has any Liability to pay any compensation
to any broker, finder, or agent with respect to the Transactions.
Exhibit 5 - 28
(e) Capitalization.
The Company's authorized capital stock consists of (a)
60,000,000 Shares of Company Common Stock, of which 7,090,989 Shares are issued
and outstanding as of April 2, 2001 and no Shares are held in treasury, and (b)
3,000,000 shares of preferred stock, $.001 par value per share, of which none
are issued and outstanding. All of the issued and outstanding Shares: (a) have
been duly authorized and are validly issued, fully paid, and nonassessable, (b)
were issued in compliance with all applicable state and federal securities Laws,
and (c) were not issued in Breach of any Equity Commitments. No Equity
Commitments exist with respect to any Equity Interest of the Company, and no
such Equity Commitments will arise in connection with the Transactions. There
are no Contracts with respect to the voting or transfer of the Company's Equity
Interests. The Company is not obligated to redeem or otherwise acquire any of
its outstanding Equity Interests.
(f) Records.
The copies of the Acquired Entities' Organizational Documents
that were provided to Parent are accurate and complete and reflect all
amendments made through the date hereof. The Acquired Entities' minute books and
other records made available to Parent for review were correct and complete as
of the date of such review, no further entries have been made through the date
of this Agreement, such minute books and records contain the true signatures of
the persons purporting to have signed them, and such minute books and records
contain an accurate record of all actions of the shareholders and directors of
the Acquired Entities taken by written consent, at a meeting, or otherwise since
formation.
(g) Acquired Subsidiaries.
Set forth in Section 5.7 of the Company Disclosure Letter for
-----------
each Acquired Subsidiary is (a) its name and jurisdiction of creation,
formation, or organization, (b) if such Acquired Subsidiary is a corporation,
(i) the number of authorized Equity Interests of each class of its Equity
Interests, (ii) the number of issued and outstanding Equity Interests of each
class of its Equity Interests, the names of the holders thereof, and the number
of Equity Interests held by each such holder, and (iii) the number of Equity
Interests held in treasury, and (c) if such Acquired Subsidiary is not a
corporation, (i) the class of Equity Interests created under such Acquired
Subsidiary's Organizational Documents and (ii) the holder(s) of such Equity
Interests. All of the issued and outstanding Equity Interests of each Acquired
Subsidiary (A) that is a corporation have been duly authorized and are validly
issued, fully paid, and nonassessable and (B) that is not a corporation have (i)
been duly created pursuant to the Laws of the jurisdiction of such Acquired
Subsidiary, (ii) have been issued and paid for in accordance with the
Organizational Documents governing such Acquired Subsidiary, and (iii) except as
expressly contemplated by the Organizational Documents governing such Acquired
Subsidiary, are fully paid and non-assessable and require no further capital
contribution. The Acquired Entities hold of record and own beneficially all of
the outstanding Equity Interests of the Acquired Subsidiaries, free and clear of
any Encumbrances (other than restrictions under the Securities Act and state
securities Laws). No Equity Commitments exist with respect to any Equity
Interests of such Acquired Subsidiaries and no such Equity Commitments will
arise in connection with the
Exhibit 5 - 29
Transactions. There are no outstanding or authorized Equity Commitments with
respect to any Acquired Subsidiary or its Equity Interests. There are no
Contracts with respect to the voting or transfer of any Acquired Subsidiary's
Equity Interests. No Acquired Subsidiary is obligated to redeem or otherwise
acquire any of its Equity Interests. No Acquired Entity controls, directly or
indirectly, or has any direct or indirect Equity Interest in any Person that is
not an Acquired Subsidiary.
(h) Company Reports and Financial Statement.
The Company has filed with the SEC all forms, reports,
registration statements, proxy statements and other documents (collectively, the
"Company Reports") required to be filed by the Company under the Securities Act,
the Exchange Act, and the rules and regulations promulgated thereunder
(collectively, the "Securities Laws"), except failures to file which,
individually or collectively, do not have a Material Adverse Effect on the
Company. The Company has heretofore made available (which, for these purposes,
shall include items available in the XXXXX database) to Parent true and complete
copies of all Company Reports filed as of the date hereof. As of their
respective dates, or, if amended, as of the date of the last such amendment and
prior to the date of this Agreement, or, in the case of registration statements,
as of their effective dates, all of the Company Reports, including all exhibits
and schedules thereto and all documents incorporated by reference therein, (i)
complied as to form in all material respects with the requirements of the
Securities Laws applicable thereto, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements, in light of the
circumstances under which they were made, not misleading. The Company has filed
with the SEC all documents and agreements which were required to be filed as
exhibits to the Company Reports, except failures to file, if any, which,
individually or collectively, do not have a Material Adverse Effect on the
Company. The audited consolidated financial statements and unaudited interim
consolidated financial statements of the Company included or incorporated by
reference in the Company Reports (collectively, the "Financial Statements") have
been prepared in accordance with GAAP applied on a consistent basis (except as
may be indicated therein or in the notes thereto) and fairly present in all
material respects the financial position of the Company as of and at the dates
thereof and the results of operations and cash flows for the periods then ended,
subject in the case of the unaudited interim financial statements, to normal,
recurring year-end adjustments and any other adjustments described therein,
which were not and are not expected to be material in amount or effect. Except
as set forth or reflected in the Financial Statement at December 31, 2000 (the
"Year 2000 Financial Statement"), neither the Company nor any Acquired
Subsidiary, has any liabilities or obligations of any kind or nature (whether
accrued, absolute, contingent or otherwise) which would be required to be
reflected or reserved against in any balance sheet of the Company or any
Acquired Subsidiary, or in the notes thereto, prepared in accordance with GAAP
consistently applied, except liabilities arising since December 31, 2000 (the
"Balance Sheet Date") either (i) in the Company's Ordinary Course of Business;
or (ii) which, individually or collectively, would not have a Material Adverse
Effect on the Company.
Exhibit 5 - 30
(i) Subsequent Events.
Except (a) as disclosed in the Financial Statements and (b)
for liabilities and obligations incurred in the Ordinary Course of Business
since the Balance Sheet Date, neither the Company nor any of its Subsidiaries
has any Liabilities that have had, or could reasonably be expected to have, a
Material Adverse Effect on the Company. Since the Balance Sheet Date, the
business of the Company and each of its Subsidiaries has been conducted only in
the Ordinary Course of Business. Since the Balance Sheet Date, the Company has
not experienced a Material Adverse Change.
1.4 Intentionally Deleted
(j) Legal Compliance.
Each Acquired Entity (i) is in compliance with all Laws and
Orders applicable thereto or to the business of the Acquired Entity, except
where the failure to so comply would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company; (ii)
has all Permits, Orders and approvals of, and has made all filings, applications
and registrations with, all Governmental Entities that are required in order to
permit them to own or lease their properties and to conduct their businesses as
presently conducted; all such Permits, Orders and approvals are in full force
and effect and, to the Knowledge of the Company no suspension or cancellation of
any of them is Threatened, other than such failure to obtain or maintain the
same would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company; and (iii) has not received any
notification or communication, from any Governmental Entity (a) asserting that
any Acquired Entity is not in compliance with any of the statutes, regulations
or ordinances which such Governmental Entity enforces or (b) Threatening to
revoke any license, franchise, permit or governmental authorization (nor, to the
Knowledge of the Company, does a Basis for any of the foregoing exist), except
such notifications or communications which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(k) Tax Matters.
(i) All Tax Returns that are required to be filed (taking into
account any extensions of time within which to file) by or with respect to any
Acquired Entity have been duly filed, (ii) each Acquired Entity has paid all
Taxes shown as due and payable on such Tax Returns or adequate reserves for such
Taxes are reflected on the Year 2000 Financial Statement, (iii) all deficiencies
asserted or assessments made as a result of an examination by any taxing
authority have been paid in full or adequate reserves therefor are reflected on
the Year 2000 Financial Statement, (iv) in connection with the examination of
any of the Tax Returns referred to in clause (i), no issues have been raised by
any taxing authority that are currently pending, and (v) there are no
outstanding or pending waivers of statutes of limitation that have been given by
or requested with respect to any Taxes of any Acquired Entity. The Company has
made available to Parent true and correct copies of the United States federal
income Tax Returns filed by each Acquired Entity for each of the three most
recent fiscal years ended on or before December 31, 2000. None of the Acquired
Entities has any liability with respect to income, franchise or similar
Exhibit 5 - 31
Taxes that accrued on or before the end of the most recent period covered by the
Financial Statement included in the Company Reports filed prior to the date
hereof in excess of the amounts accrued with respect thereto that are reflected
in such Financial Statements. No Acquired Entity is a party to any Tax
allocation or sharing agreement (other than agreements among members of the
affiliated group of which the Company is the common parent), is or has been a
member of an affiliated group filing consolidated or combined Tax Returns (other
than a group the common parent of which is or was the Company is the common
parent) or otherwise has any liability for the Taxes of any Person (other than
an Acquired Entity).
(l) Title to Assets.
Each Acquired Entity holds good and marketable title to, or a
valid leasehold, consignment or License in each item of material tangible
personal property owned or used by or in the possession of that Acquired Entity.
(m) Real Property and Leaseholds.
(a) The Company owns all material parcels of real property
currently indicated as owned in fee by the Company on the Financial Statements
(the "Owned Real Estate"). The Company holds marketable and legal title to each
of the real properties constituting Owned Real Estate, free and clear of all
Encumbrances, except for Encumbrances the existence of which would not have a
Material Adverse Effect on the Company.
(b) The Company holds valid and subsisting leasehold interests
in all material parcels of real property leased or subleased to the Company
(collectively, the "Leased Real Estate"), free and clear of all Encumbrances,
except for Encumbrances the existence of which would not have a Material Adverse
Effect on the Company.
(n) Intellectual Property.
(c) Section 5.15(a) of the Company Disclosure Letter lists and
---------------
contains the title and registration or application number, if applicable, of
each Acquired Entity's issued Patents and patent applications.
(d) Section 5.15(b) of the Company Disclosure Letter lists
---------------
each Acquired Entity's Marks. All such Marks that have been registered with the
United States Patent and Trademark Office or with a corresponding state office
are (or trademark office of the applicable foreign country) currently in
compliance with all formal legal requirements (including the timely post-
registration filing of affidavits of use and incontestability and renewal
applications), are valid and Enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within 90 days after the Closing Date. No
such Xxxx has been or is now involved in any opposition, invalidation, or
cancellation and no such action is Threatened with the respect to any such Xxxx.
The Company has taken made all reasonable efforts to ensure that all products
and materials containing such a Xxxx xxxx the proper legal notice where
permitted by Law.
Exhibit 5 - 32
(e) Section 5.15(c) of the Company Disclosure Letter lists
---------------
each Acquired Entity's registered Copyrights. All such registered Copyrights are
currently in compliance with formal legal requirements, are valid and
Enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within 90 days after the Closing Date. All works encompassed by such
Copyrights have been marked with the proper copyright notice.
(f) Section 5.15(d) of the Company Disclosure Letter lists all
---------------
Software developed by or for the Company. After Closing, the Acquired Entities
will have at least a non-exclusive right to use any such Software and there are
no third-party rights to such Software that will materially interfere with any
Acquired Entity's ownership and use of such Software. The Software owned or
purported to be owned by any Acquired Entity was either (i) developed within the
scope of their employment by employees of an Acquired Entity who have assigned
to the Company all rights to such software; (ii) developed by independent
contractors who have assigned their rights to the Company or any of its
subsidiaries pursuant to written agreements; or (iii) otherwise acquired by the
Company or a subsidiary from a third party. The Software does not contain any
programming code, documentation or other materials or development environments
that embody Intellectual Property rights of any Person other than the Acquired
Entities, except for any code incorporated into such Software that was not
specifically written or developed for use in such Software and with respect to
which the Company has all rights as are necessary to use such code as it is
currently used and proposed to be used, the ownership of which was retained by
the author or licensor, and with respect to which the Company has all rights as
are necessary to use such code as it is currently used and proposed to be used,
and such materials or development environments obtained by the Acquired Entities
from other Persons who make such materials or development environments generally
available to all interested purchasers or end-users on standard commercial
terms.
(g) Each of the Acquired Entities has taken all reasonable
steps to protect their respective rights in Trade Secrets. The Acquired Entities
have taken all required steps to protect their respective rights in the Trade
Secrets of third parties in accordance with the terms of any Contracts relating
to such third-party Trade Secrets to which any Acquired Entity is a party.
(h) The Acquired Entities own or have the right to use
pursuant to a valid Contract, free and clear of any Encumbrances (other than
those specified in the Contract), all Intellectual Property used by each
Acquired Entity immediately prior to the Closing or necessary to the operation
of the business of the Acquired Entities as currently proposed to be conducted.
Each item of Intellectual Property owned or used by each Acquired Entity
immediately prior to the Closing will be owned or available for use by such
Acquired Entity on identical terms and conditions immediately subsequent to the
Closing. Each Acquired Entity has taken all necessary action to maintain and
protect each item of Intellectual Property that is material to its business that
it owns or uses. No such Intellectual Property is subject to any adverse claim
of title. No adverse claim of title has been Threatened with respect to such
Intellectual Property and there is no Basis therefor.
(i) Section 5.15(g) of the Company Disclosure Letter
---------------
identifies each Contract pursuant to which any Acquired Entity has granted to a
third party rights under or with respect to any of its Intellectual Property
(together with any exceptions other than Software, as to which reference is made
to Section (n)(l) below). The Company has delivered to Parent correct and
Exhibit 5 - 33
complete copies of all written documentation in its possession or control
evidencing ownership and prosecution (if applicable) of each item of
Intellectual Property of the Acquired Entities. With respect to each item of
Intellectual Property required to be identified in Sections 5.15(a), 5.15(b),
---------------- -------
5.15(c) and 5.15(d) of the Company Disclosure Letter:
------- -------
(i) An Acquired Entity possesses all right, title, and
interest in and to the item, free and clear of any Encumbrance;
(ii) the item is not subject to any outstanding Order;
(iii) no Action is pending or Threatened (and there is
no Basis therefor) which challenges the validity, Enforceability, use, or
ownership of the item; and
(iv) no Acquired Entity has ever agreed to indemnify
any Person for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
(j) No Acquired Entity has interfered with, infringed upon,
(whether directly, or by contribution or inducement), misappropriated, or
otherwise come into conflict with any other Person's Intellectual Property, and
no Acquired Entity has ever received any notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that each
Acquired Entity must license or refrain from using any other Person's
Intellectual Property), other than allegations set forth in the complaint filed
on December 15, 2000, case number SA CV 00-1230 DOC (EEX). No third Person has
any Intellectual Property that interferes or would be likely to interfere with
any Acquired Entity's use of any of its Intellectual Property. No Acquired
Entity will interfere with, infringe upon, misappropriate, or otherwise come
into conflict with, any Intellectual Property rights of any other Person as a
result of the continued operation of its businesses as currently conducted and
as currently proposed to be conducted. To the Company's Knowledge, no other
Person has interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Acquired Entity's Intellectual Property.
(k) Section 5.15(i) of the Company Disclosure Letter
---------------
identifies each item of Software, other than readily available "shrink wrap"
Software, that any other Person owns and that is material to the conduct of
business of any Acquired Entity. The Company has delivered to Parent correct and
complete copies of all Contracts with respect to such use as amended to date.
With respect to the Contracts related to each item of Intellectual Property
required to be identified in Section 5.15(i) of the Company Disclosure Letter:
---------------
(i) the Contract is Enforceable;
(ii) the Contract will continue to be Enforceable on
substantially the same terms 3following the consummation of the Transaction;
(iii) no party to the Contract is in Breach, and no
event has occurred which with notice or lapse of time would constitute a Breach
thereunder;
(iv) no party to the Contract has repudiated any
provision thereof;
Exhibit 5 - 34
(v) with respect to each sublicense Contract the
representations and warranties set forth in Sections 1.4(k)(i) through
------------------
1.4(k)(iv) are true and correct with respect to the underlying license Contract;
----------
(vi) to the Company's Knowledge, the underlying item of
Intellectual Property is not subject to any outstanding Order;
(vii) no Action is pending or Threatened (and to the
Company's Knowledge, there is no Basis therefor) which challenges the validity
or Enforceability of the underlying item of Intellectual Property; and
(viii) no Acquired Entity has granted any sublicense or
similar Contract with respect to the Contract.
(l) All former and current employees of any Acquired Entity
have executed written Contracts with the applicable Acquired Entity that assign
to such Person all rights to any inventions, improvements, discoveries or
information relating to any Acquired Entity's business. No employee of any
Acquired Entity has entered into any Contract that restricts or limits in any
way the scope or type of work in which the employee may be engaged or requires
the employee to transfer, assign, or disclose information concerning his work or
her to any Person other than the Acquired Entities.
(m) Prior to December 14, 2000, neither the Company, nor any
officer or director of the Company, had actual notice of any alleged
infringement of US Patent No. 554,336.
(n) The Sinterstation equipment does not expose the build
material in first and second patterns of exposure that at least partially
overlap and does not twice expose the same layer of build material with a
repeated pattern of exposure.
(o) Inventory.
The Acquired Entities' inventory whether reflected on the
Financial Statements or not, consists of raw materials and supplies,
manufactured and processed parts, goods in process, and finished goods, all of
which is merchantable and fit for the purpose for which it was procured or
manufactured, and, except as has been written down on the Year 2000 Financial
Statement, none of which is slow-moving, obsolete, damaged, or defective. There
has been no change in inventory valuation standards or methods with respect to
the inventory in the prior three years. The quantities of any kind of inventory
are reasonable in the current (and the currently foreseeable) circumstances of
the Acquired Entities. No Acquired Entity holds any items of inventory on
consignment from other Persons and no other Person holds any items of inventory
on consignment from any Acquired Entity.
(p) Material Contracts; Defaults.
(o) Section 5.17 of the Company Disclosure Letter lists all
------------
Contracts that provide for an aggregate payment from an Acquired Entity in
excess of $150,000 in any Contract year other than (i) Contracts that can or in
reasonable probability will be completed within 90 days of
Exhibit 5 - 35
the Closing Date or can be terminated within such 90 day period without payment
of a penalty, (ii) Contracts for goods and services purchased in the Ordinary
Course of Business of the Company, and (iii) Contracts reflected on the
Financial Statements included as part of the Company Reports or disclosed in the
Company Reports.
(p) The Company is not in Breach of any Contract except for
such Breaches that would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. None of the Contracts of the Company contain any
provisions that upon a change in control of the Company would have a Material
Adverse Effect on the Company.
(q) Receivables.
All of the Receivables are Enforceable, represent bona fide
transactions, and arose in the Ordinary Course of Business of the Acquired
Entities, and are reflected properly in their books and records. All of the
Receivables are good and collectible receivables, are current, and will be
collected in accordance with past practice and the terms of such receivables
(and in any event within six months following the Closing Date), without set off
or counterclaims, subject only to the reserve for bad debts set forth on the
face of the Year 2000 Financial Statement (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
Ordinary Course of Business of the Acquired Entities, consistent with GAAP.
(r) Insurance.
The Company has provided a list, which is attached to Section
-------
5.19 of the Company Disclosure Letter of the insurance policies, binders, or
----
bonds maintained by any Acquired Entity or on which any Acquired Entity is named
as a beneficiary or loss payable ("Insurance Policies"). All the Insurance
Policies are in full force and effect; no Acquired Entity is in material default
thereunder; and all claims thereunder have been filed in due and timely fashion.
The Company has never made any material claim on or in respect of an insurance
policy or bond insurer or insurers.
(s) Litigation.
No Acquired Entity (a) is subject to any outstanding Order or
(b) is a party or is Threatened to be made a party to any Action. No Action
required to be set forth in Section 5.20 of the Company Disclosure Letter
questions the Enforceability of this Agreement or the Transactions, or would
result in any Material Adverse Change with respect to any Acquired Entity, and
the Company does not have any Basis to believe that any such Action may be
brought against any Acquired Entity.
(t) Product Warranty.
Each product manufactured, sold, leased, or delivered by the
Acquired Entities has been in material conformity with all applicable Law,
Contracts, and all express and implied warranties, and no Acquired Entity has
any material Liability (and there is no Basis for any
Exhibit 5 - 36
present or future Action against any of them giving rise to any Liability) for
replacement or repair thereof or other Damages in connection therewith, subject
only to the reserve for product warranty claims set forth in the Year 2000
Financial Statement as adjusted for the passage of time through the Closing Date
in accordance with the Acquired Entities' Ordinary Course of Business. No
product designed, manufactured, sold, leased, or delivered by any Acquired
Entity is subject to any guaranty, warranty, or other indemnity or similar
Liability beyond the applicable standard terms and conditions of sale or lease.
Section 5.21 of the Company Disclosure Letter includes copies of the standard
terms and conditions of sale or lease for each Acquired Entity (containing
applicable guaranty, warranty, and similar Liability indemnity provisions).
(u) Product Liability.
No Acquired Entity has any Liability (and there is no Basis
for any present or future Action against any of them giving rise to any
Liability) arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any product designed, manufactured, sold,
leased, or delivered by any Acquired Entity.
(v) Labor; Employees.
To the Company's Knowledge, no executive, key employee, or
group of employees has any current plans to terminate employment with any
Acquired Entity. No Acquired Entity is a party to or bound by any collective
bargaining Contract, nor have any of them experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining disputes. No
Acquired Entity has committed any unfair labor practice. The Company does not
have any Knowledge of any organizational effort currently being made or
Threatened by or on behalf of any labor union with respect to employees of any
Acquired Entity.
(w) Employee Benefits.
(q) Section 5.24(a) of the Company Disclosure Letter lists
---------------
each Employee Benefit Plan under which any ERISA Affiliate has or in the future
could have directly, or indirectly, any Liability with respect to any Acquired
Entity's or ERISA Affiliate's current or former employees.
(r) Each such Employee Benefit Plan (and each related trust,
insurance Contract, or fund) complies in form and in operation in all respects
with the applicable requirements of ERISA, the Code, and other Laws.
(s) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, and Summary Plan Descriptions) have been
filed or distributed appropriately with respect to each such Employee Benefit
Plan. The requirements of Part 6 of Title I of ERISA and of Code Section 4980B
have been met with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan that provides group health benefits.
Exhibit 5 - 37
(t) All contributions and premiums required of any Acquired
Entity by any legal requirement or by the terms of any of its Employee Benefit
Plans or any Contract relating thereto have been timely made (without regard to
any waivers granted with respect thereto) or accrued. All obligations of the
Acquired Entities with respect to each of their Employee Benefit Plans have been
paid or performed. All such amounts properly accrued through the Closing with
respect to the current plan year thereof will be paid by the Company or another
Acquired Affiliate at or prior to Closing, or will be properly recorded on the
Company Statements.
(u) Each such Employee Benefit Plan that is an Employee
Pension Benefit Plan meets the requirements to be a "qualified plan" under Code
Section 401(a) and has a current favorable determination letter (or similar
ruling) from the Internal Revenue Service.
(v) The market value of assets under each such Employee
Benefit Plan that is an Employee Pension Benefit Plan that is subject to Title
IV of ERISA(other than any Multiemployer Plan) equals or exceeds the present
value of all vested and nonvested Liabilities thereunder determined in
accordance with PBGC methods, factors, and assumptions applicable to an Employee
Pension Benefit Plan terminating on the date for determination.
(w) The Company has delivered to Parent correct and complete
copies of the plan Contracts and summary plan descriptions, the most recent
determination letter or similar ruling received from the Internal Revenue
Service, the Form 5500 Annual Report (if applicable) for the three (3) most
recent years available, and all related trust, insurance, and other funding
Contracts which implement each such Employee Benefit Plan.
(x) With respect to each Employee Benefit Plan that each
Acquired Entity, and the ERISA Affiliates which includes the Acquired Entities,
maintains or ever has maintained or to which any of them contributes, ever has
contributed, or ever has been required to contribute:
(i) no such Employee Benefit Plan is an Employee
Pension Benefit Plan that is subject to the provisions of Title IV of ERISA.
(ii) there have been no Prohibited Transactions with
respect to any such Employee Benefit Plan;
(iii) no Fiduciary has any Liability for Breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any such Employee Benefit Plan;
and
(iv) no Action with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits or related to qualified domestic relations Orders (within
the meaning of Code Section 414(p)) is pending or Threatened (and there is no
Basis therefor), and no Acquired Entity has incurred, and no Acquired Entity has
any reason to expect that each Acquired Entity will incur, any Liability to the
PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to any such
Employee Benefit Plan that is an Employee Pension Benefit Plan.
Exhibit 5 - 38
(y) No Acquired Entity, and the other members of the ERISA
Affiliates that includes the Acquired Entities, contributes to, ever has
contributed to, or ever has been required to contribute to any Multiemployer
Plan or has any Liability (including withdrawal Liability) under any
Multiemployer Plan.
(z) No Acquired Entity maintains or ever has maintained or
contributes, ever has contributed, or ever has been required to contribute, to
any Employee Welfare Benefit Plan providing post-employment medical, health, or
life insurance or other welfare-type benefits for current or future retired or
terminated employees, their spouses, or their dependents (other than in
accordance with Code Section 4980B and Part 6 of Title I of ERISA) or applicable
state law or pursuant to employment of severance agreements.
Notwithstanding anything in this Section 5.24 to the contrary, Breaches of this
------------
Section 5.24 shall only be taken into account to the extent that they,
individually or in the aggregate, would have a Material Adverse Effect on the
Company.
(x) Environmental, Health, and Safety Matters.
(aa) Each Acquired Entity and its respective predecessors and
Affiliates are in compliance with all Environmental, Health, and Safety
Requirements.
(bb) Without limiting Section 5.25 of the Company Disclosure
------------
Letter, each Acquired Entity and its respective Affiliates has obtained and is
in compliance with all Permits that are required pursuant to Environmental,
Health, and Safety Requirements for the occupation of its facilities and the
operation of its business. A list of all such Permits is set forth in Section
-------
5.25(b) of the Company Disclosure Letter. Such Permits are in full force and
-------
effect, free from Breach, and will not be adversely affected by the
Transactions.
(cc) No Acquired Entity nor any of its respective predecessors
or Affiliates has received any written or oral notice, report or other
information regarding any actual or alleged violation of Environmental, Health,
and Safety Requirements or any Liabilities, including any investigatory,
remedial or corrective Liabilities, relating to any of them or its facilities
arising under Environmental, Health, and Safety Requirements.
(dd) None of the following exists at any property or facility
owned or operated by the Acquired Entities: (i) under or above-ground storage
tanks, (ii) asbestos containing material in any form or condition, (iii)
materials or equipment containing polychlorinated biphenyls, or (iv) landfills,
surface impoundments, or disposal areas.
(ee) No Acquired Entity nor any of its respective predecessors
or Affiliates has treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled, or Released any substance, including any
hazardous substance, or owned or operated any property or facility (and no such
property or facility is contaminated by any such substance) in a manner that has
given or would give rise to any Damages, including any Damages for response
costs, corrective action costs, personal injury, property damage or natural
resources damages, pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Solid Waste Disposal
Act, as amended, or any other Environmental, Health, and Safety Requirements.
Exhibit 5 - 39
(ff) The Transactions will not result in any Liabilities for
site investigation or cleanup, or require the Consent of any Person, pursuant to
any of the so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
(gg) No Acquired Entity nor any of their predecessors or
Affiliates has, either expressly or by operation of Law, assumed or undertaken
any Liability, including any obligation for corrective or remedial action, of
any other Person relating to Environmental, Health, and Safety Requirements
which would have a Material Adverse Effect on the Company. No facts, events or
conditions relating to the past or present facilities, properties or operations
of the Acquired Entities, nor any of their respective predecessors or
Affiliates, will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any Damages
pursuant to Environmental, Health, and Safety Requirements, or give rise to any
other Liabilities pursuant to Environmental, Health, and Safety Requirements.
Notwithstanding anything in this Section 5.25 to the contrary, Breaches of this
------------
Section 5.25 shall only be taken into account to the extent that they,
------------
individually or in the aggregate, would have a Material Adverse Effect on the
Company.
(y) Statements True and Correct.
None of the information (including this Agreement) supplied or
to be supplied by any Acquired Entity to any Governmental Entity in connection
with the transactions contemplated hereby will, at the respective time such
documents are supplied, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication to any Governmental Entity.
(z) Regulatory Approvals.
No Acquired Entity has taken any action or has any Knowledge
of any fact or circumstance that is reasonably likely to materially impede or
delay receipt of any consents of a Governmental Entity necessary in connection
with the consummation of the Offer and the Merger, which if not obtained,
individually or in the aggregate, would be reasonably expected to have a
Material Adverse Effect on the Company or materially alter or delay the
Transactions.
(aa) Vote Required.
The affirmative vote of the holders of a majority of the
outstanding Shares is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve and adopt the Merger.
(bb) Opinion of Financial Advisor.
The Company has received the written opinion of the Financial
Advisor, dated as of the date of this Agreement, to the effect that the Per
Share Amount to be received in the Offer
Exhibit 5 - 40
and the Merger by the holders of the shares of Common Stock is fair to such
holders from a financial point of view.
(cc) Takeover Statutes.
TBCA Article 13. Assuming the accuracy of Parent's
---------------
representation contained in Section 4.6, the Board of Directors of the Company
has approved the transactions to be effected in accordance with this Agreement
pursuant to Article 13.03A(1) of the TBCA, and determined that such approval
satisfies the requirements of Article 13.03A(1) of the TBCA and, as a result,
renders the other provisions of Article 13.03 of the TBCA inapplicable to the
Offer, the Merger and this Agreement.
(dd) Representations Complete.
None of the representations or warranties made by the Company
in this Agreement, in the Company Disclosure Letter or any statement made in any
Schedule or certificate furnished by the Company pursuant to this Agreement
contains or will contain at the Effective Time, any untrue statement of a
material fact, or omits or will omit at the Effective Time to state any material
fact necessary in Order to make the statements contained herein or therein, in
the light of the circumstances under which made, not misleading.
Section 18.
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the earlier of the Closing and the Termination
Date:
(a) Notices and Consents.
Each of the Company, Parent and Buyer, will give any notices
to third parties, and will use its best efforts to obtain any third party
Consents listed in Sections 4.3 and Section 17(c) of the Company Disclosure
------------------------------
Letter and the Parent Disclosure Letter, respectively. Each Party will give any
notices to, make any filings with, and use its reasonable best efforts to obtain
any Consents of Governmental Authorities, if any, required or reasonably deemed
advisable pursuant to any applicable Law in connection with the Transactions
including in connection with the matters referred to in Sections 4.3 and Section
------------------------
17(c), respectively, and to use such Party's reasonable best efforts to agree
-----
jointly on a method to overcome any objections by any Governmental Entity to the
Transactions. Nothing in this Section (a) will require that Parent or its
-----------
Affiliates divest, sell, or hold separately any of its assets or properties, nor
will this Section Section 18(a) require that Parent, its Affiliates, or the
---------------------
Acquired Entities take any actions that could affect the normal and regular
operations of Parent, its Affiliates, or the Acquired Entities after the
Closing.
(b) Operation of Business.
Exhibit 5 - 41
Except as set forth in Section 6.2 of the Company Disclosure
Letter or otherwise expressly contemplated by this Agreement during the period
from the date hereof to the Effective Time, the Company will and will cause each
of the Acquired Subsidiaries to (i) conduct its operations in the Ordinary
Course of Business and, to the extent consistent therewith, with no less
diligence and effort than would be applied in the absence of this Agreement,
(ii) use its best efforts to preserve intact its current business organizations,
keep available the service of its current officers and employees and preserve
its relationships with customers, suppliers, distributors, lessors, creditors,
employees, contractors and others having business dealings with it with the
intention that its goodwill and ongoing businesses shall be unimpaired at the
Effective Time, and (iii) continue to take all reasonable action that may be
necessary or advisable to protect and preserve its Intellectual Property.
Without limiting the generality of the foregoing, except as otherwise expressly
provided in this Agreement, prior to the Effective Time, neither the Company nor
any of the Acquired Subsidiaries will, without the prior written consent of
Parent:
(hh) amend its Organizational Documents;
(ii) authorize for issuance, issue, sell, deliver or agree to
commit to issue, sell or deliver (whether through the issuance or granting of
Equity Commitments or otherwise) any stock of any class or any other debt or
equity securities or equity equivalents (including any stock options or stock
appreciation rights), except for the issuance and sale of Shares pursuant to the
exercise of Options granted prior to the date hereof;
(jj) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect of
its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities or any
securities of any of the Acquired Subsidiaries;
(kk) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of any Acquired Entity (other than the Merger);
(ll) alter through merger, liquidation, reorganization,
restructuring or any other fashion the corporate structure of any Acquired
Subsidiary;
(mm) (i) incur or assume any long-term or short-term debt or
issue any debt securities in each case, except for borrowings under existing
lines of credit in the Company's Ordinary Course of Business, or modify or agree
to any amendment of the terms of any of the foregoing; (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person except for
obligations of an Acquired Subsidiary incurred in the Company's Ordinary Course
of Business; (iii) make any loans, advances or capital contributions to or
investments in any other Person (other than to an Acquired Subsidiary) or
customary loans or advances to employees in each case in the Ordinary Course of
Business ; (iv) pledge or otherwise create or suffer to exist any Encumbrance
with respect to shares of capital stock of the Company or an Acquired Subsidiary
(other than
Exhibit 5 - 42
pursuant to Security Interests pursuant to certain existing lines of credit
under the Loan and Security Agreement(s) dated June 8, 2000 between the Company
and Silicon Valley Bank, as amended (the "Credit Facility")), or (v) mortgage or
pledge any of its assets, tangible or intangible, or create or suffer to exist
any other Encumbrance thereupon other than pursuant to Security Interests under
the Credit Facility;
(nn) except for (i) increases in salary, wages and benefits of
employees of the Company or its Subsidiaries (other than officers and directors
of the Company) in accordance with past practices and (ii) increases in salary,
wages and benefits granted to employees of the Company or its Subsidiaries
(other than officers and directors of the Company) in conjunction with
promotions or other changes in job status consistent with past practice or
required under existing agreements, except as may be required by applicable Law,
enter into, adopt or amend or terminate any bonus, special remuneration,
compensation, severance, stock option, stock purchase agreement, retirement,
health, life, or disability insurance, severance or other employee benefit plan
agreement, trust, fund or other arrangement for the benefit or welfare of any
director, officer, employee or consultant in any manner or increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including the granting of stock appreciation rights or
performance units);
(oo) grant any severance or termination pay to any director,
officer, employee or consultant, except payments made pursuant to written
agreements outstanding on the date hereof, the terms of which are completely and
correctly disclosed in the Company Disclosure Letter and copies of which have
been provided to Parent, or as required by applicable federal, state or local
law or regulations;
(pp) exercise its discretion or otherwise voluntarily
accelerate the vesting of any Option as a result of the Merger, or otherwise;
(qq) (i) acquire, sell, lease, license, transfer or otherwise
dispose of any material assets in any single transaction or series of related
transactions (including in any transaction or series of related transactions
having a fair market value in excess of Twenty-Five Thousand Dollars ($25,000)
in the aggregate), other than sales of its products in the Ordinary Course of
Business, (ii) enter into any exclusive license, distribution, marketing, sales
or other agreement, or (iii) sell, transfer (other than non-exclusive licenses
entered into in the Ordinary Course of Business of the applicable Acquired
Entity) or otherwise dispose of any Intellectual Property;
(rr) except as may be required as a result of a change in
applicable Law or in GAAP, change any of the accounting principles, practices or
methods used by it;
(ss) revalue in any material respect any of its assets,
including writing down the value of inventory or writing-off notes or accounts
receivable;
(tt) (i) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other entity or division
thereof or any equity interest therein; (ii) enter into any Contract having a
term in excess of six (6) months, or any other material Contract; (iii)
Exhibit 5 - 43
amend, modify or waive any material right under any material Contract of the
Company or any of the Acquired Subsidiaries; (iv) modify, in any material
respect, its standard warranty terms for its products or amend or modify any
product warranties in effect as of the date hereof in any manner that is adverse
to the Company or any of the Acquired Subsidiaries; (v) authorize any new
capital expenditure or expenditures in excess of Twenty-Five Thousand Dollars
($25,000) in the aggregate in any calendar quarter; or (vi) authorize any new or
additional manufacturing capacity expenditure or new expenditures for any
manufacturing capacity Contracts or arrangements;
(uu) make or revoke any material tax election or settle or
compromise any income tax liability in excess of Twenty-Five Thousand Dollars
($25,000) or permit any Insurance Policy to expire, or to be canceled or
terminated, unless a comparable insurance policy reasonably acceptable to Parent
is obtained and in effect;
(vv) fail to file any Tax Returns when due (or, alternatively,
fail to file for available extensions) or fail to cause such Tax Returns when
filed to be complete and accurate in all material respects;
(ww) fail to pay any Taxes or other material debts when due
unless being contested in good faith and promptly disclosed to Parent;
(xx) settle or compromise any pending or Threatened suit,
action or claim that (i) relates to the Transactions contemplated hereby or (ii)
the settlement or compromise of which would involve more than Fifteen Thousand
Dollars ($15,000) or (iii) that (A) would otherwise be material to the Company
and the Acquired Subsidiaries or (B) relates to any Intellectual Property
matters;
(yy) except for this Agreement and the transactions expressly
contemplated hereby, take any action or fail to take any action that could (i)
limit the utilization of any of the net operating losses, built-in losses, tax
credits or other similar items of the Acquired Entities under Section 382, 383,
384 or 1502 of the Code and the Treasury Regulations thereunder, or (ii) cause
any transaction in which any Acquired Entity was a party that was intended to be
treated as a reorganization under Section 368(a) of the Code to fail to qualify
as a reorganization under Section 368(a) of the Code;
(zz) accelerate the collection of receivables or defer the
payment of payables, or modify the payment terms of any receivables or payables,
other than immaterial changes in a manner consistent with prudent business
practice and after prior consultation with Parent;
(aaa) sell, securitize, factor or otherwise transfer any
accounts receivable; or
(bbb) take or agree in writing or otherwise to take any of the
actions described in Sections 1.4(hh) through 1.4(aaa) (and it shall not take
any action that would make any of the representations or warranties of the
Company contained in this Agreement (including the exhibits hereto) untrue or
incorrect).
(c) Access to Information.
Exhibit 5 - 44
(ccc) Upon reasonable prior notice, the Company shall afford
reasonable access to the officers, employees, accountants, counsel and other
representatives of Parent and Buyer (including financing sources and their
employees, accountants, counsel and other representatives), during normal
business hours during the period prior to the Effective Time, to all its
properties, books, Contracts, and records; provided that the Company will not be
required to provide such information to the extent that, in the opinion of the
Company's legal counsel, such disclosure would constitute a waiver of the
attorney-client privilege with respect to the subject matter of underlying the
information sought to be disclosed or materially and adversely prejudice the
Company in any material Action.
(ddd) During the period prior to the Effective Time, the
Company shall promptly furnish to Parent and Buyer (i) a copy of each report,
schedule, registration statement and other document in advance of filing it with
the SEC, and shall provide Parent and Buyer a reasonable opportunity to review
and comment upon such document, during such period, (ii) a copy of each document
received by it from the SEC, during such period, and (iii) all other information
concerning its business, properties and personnel as Parent and Buyer may
reasonably request.
reasonably request.
(eee) That certain Confidentiality Agreement dated March 17,
2001, by and between the Company and Parent (the "Confidentiality Agreement")
shall apply with respect to the information furnished pursuant to this Section
-------
Section 18(c) and otherwise pursuant to this Agreement.
-------------
(d) Acquisition Proposal.
(a) The Company shall not, nor shall it authorize or permit any Company
Subsidiary to, nor shall it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor, agent or
representative (collectively, "Representatives") of, the Company or any Company
Subsidiary to, (i) directly or indirectly solicit, initiate or encourage the
submission of, any Acquisition Proposal (as defined below), (ii) enter into any
agreement with respect to any Acquisition Proposal or (iii) directly or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal; provided, however,
that nothing in this Section 6.4 or elsewhere in this Agreement shall prohibit
-----------
the Company Board from complying with Rules 14d-9 and 14e-2 under the Exchange
Act with regard to a tender or exchange offer not made in violation of this
Section 6.4; and provided, further, that nothing in this Section 6.4 or
-----------
elsewhere in this Agreement shall prohibit the Company, before the expiration of
the Offer or adoption of this Agreement by the Company Shareholders, if
applicable, from furnishing information regarding the Company or entering into
negotiations or discussions with, any person in response to an Acquisition
Proposal made, submitted, or announced by such person (and not withdrawn) or
endorsing and/or recommending, or simultaneously with a termination of this
Agreement pursuant to Section 9.1(c), entering into an agreement accepting or
--------------
providing for, a Superior Proposal, and any such actions enumerated in this
provision shall not be considered a Breach of this Agreement if and to the
extent that each of the following conditions is satisfied: (1) such Acquisition
Proposal is not attributable to a Breach by the Company of this Section 6.4(a)
--------------
or Section 6.4(b); (2) the Board of Directors of the Company concludes in good
--------------
faith, after consultation with its outside legal counsel, that it is reasonably
Exhibit 5 - 45
likely that the failure to take such action would constitute a Breach of its
fiduciary duties to the Company Shareholders under applicable Law; (3) prior to
furnishing any such information to, or entering into discussions or negotiations
with, such person, the Company gives Parent written notice of the identity of
such person, the terms and conditions of such Acquisition Proposal and the
Company's intention to furnish information to, or enter into discussions or
negotiations with, such Person; (4) the Company receives from such Person an
executed confidentiality agreement which shall not in any way restrict the
Company from complying with its disclosure obligations under this Agreement and
which shall contain customary limitations on the use and disclosure of all
nonpublic written and oral information furnished to such Person by or on behalf
of the Company, restrictions on trading and hostile take-over activities and
other terms no less favorable to the Company than those set forth in the
Confidentiality Agreement; and (5) contemporaneously with furnishing any such
information to such Person, the Company furnishes such information to Parent (to
the extent that such information has not been previously furnished by the
Company to Parent). Subject to the foregoing provisions of this Section 6.4(a),
--------------
the Company shall, and shall cause its Representatives to, cease immediately all
existing activities, discussions and negotiations with Persons other than Parent
and Buyer regarding any proposal that constitutes, or may reasonably be expected
to lead to, a Acquisition Proposal, and will take the necessary steps to inform
the Persons referred to above of the obligations undertaken in this Section (d).
-----------
(b) Neither the Company Board nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Buyer, the approval or recommendation by the Company Board or any such
committee of this Agreement, the Offer or the Merger, (ii) approve any letter of
intent, agreement in principle, acquisition agreement or similar agreement
relating to any Acquisition Proposal, or (iii) approve or recommend, or propose
to approve or recommend, any Acquisition Proposal. Notwithstanding the
foregoing, if, prior to the acceptance for payment of Shares pursuant to the
Offer, the Company receives a Superior Proposal and a majority of the directors
of the Company determine in good faith, after consultation with outside legal
counsel, that it is reasonably likely that the failure to do so would constitute
a Breach of their fiduciary duties to Company Shareholders imposed by applicable
Law, the Company Board may withdraw its approval or recommendation of the Offer,
the Merger and this Agreement and, in connection therewith, approve or recommend
such Superior Proposal, provided, that the Company Board shall give Parent two
Business Days notice prior to withdrawing its recommendation or entering into an
agreement with respect to or recommending a Superior Proposal; and pay to Parent
the Termination Fee Provided for in Section 9.3(a) pursuant to Section 9.3(d).
-------------- --------------
(c) The Company promptly shall advise Parent of any Acquisition
Proposal or any inquiry with respect to or that could lead to any Acquisition
Proposal, the identity of the person or group making any such Acquisition
Proposal or inquiry and the material terms of any such Acquisition Proposal or
inquiry. The Company shall (i) keep Parent fully informed of the status,
including any change to the details, of any such Acquisition Proposal or inquiry
and (ii) provide to Parent as soon as practicable after receipt or delivery
thereof with copies of all correspondence with other written material sent or
provided (unless previously provided) to the Company from any third party in
connection with any Acquisition Proposal or sent or provided by the Company to
any third party in connection with any Acquisition Proposal.
Exhibit 5 - 46
(d) Nothing contained in this Section (d) shall prohibit the Company
------------
from taking and disclosing to its Shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any required
disclosure to the Company's Shareholders if, in the good faith judgment of the
Company Board, after receiving advice from outside legal counsel, the failure so
to disclose would constitute a Breach of its fiduciary duties under applicable
law.
(e) For purposes of this Agreement:
"Acquisition Proposal" means any offer or proposal (other than an offer
or proposal by Parent or an Affiliate of Parent) for (i) a merger, acquisition
consolidation, or similar transaction involving any equity security of the
Company or (ii) the acquisition (other than an acquisition by Parent or an
Affiliate of Parent) of all or substantially all of the assets of the Company.
"Superior Proposal" means an unsolicited bona fide Acquisition Proposal
made by a third party that the Board of Directors of the Company determines in
good faith has the good faith intent to proceed with negotiations, and financial
and other capabilities to consummate such Acquisition Proposal, taking into
account, among other things, the legal, financial, regulatory and other aspects
of such Acquisition Proposal, (i) on terms that a majority of the directors of
the Company Board determines in its good faith judgment to represent superior
value for the holders of the Shares than the Transactions (based on the written
opinion, with only customary qualifications, of an independent financial advisor
as to such proposal's financial superiority), and (ii) that is reasonably
capable of being completed, taking into account all financial, regulatory, legal
and other aspects of such proposal.
(e) Charges, Fees, and Prepayment Obligations.
The Company will, prior to the Closing, take such commercially
reasonable steps as are necessary to ensure that (i) no sums are owed or payable
by the Acquired Entities to any Person in the nature of a transfer charge or
processing fee with respect to any Contracts of the Acquired Entities, and (ii)
no sums are owed or payable as a prepayment penalty if Parent or the Acquired
Entities elect to prepay any Liability of the Acquired Entities that is
outstanding as of the Closing Date.
(f) Financing.
Parent agrees to use its reasonable best efforts to obtain, as
promptly as practical, on terms reasonably satisfactory to Parent, the Financing
Commitments. Parent will consult with and provide periodic reports at reasonable
intervals to the Company regarding the status of such financing. Such
consultation and reports may be made orally, by email or other communications at
the convenience of the Parties.
(g) Covenants to Satisfy Conditions.
Each of the Company and Parent will use reasonable best
efforts to ensure, and to cause their respective Affiliates to ensure, that the
conditions set forth in Annex A and Section 20 hereof are satisfied, insofar as
such matters are within the control of such party. Parent and the Company
further covenant and agree, with respect to any pending or Threatened Action,
Exhibit 5 - 47
preliminary or permanent injunction or other Order, that would adversely affect
the ability of the Parties to consummate the Transactions, to use reasonable
best efforts to prevent or lift the entry, enactment or promulgation thereof, as
the case may be.
(h) Disclosure Prior to Closing.
In the event that, at any time prior to the Closing, the
Company or Parent becomes aware of any matter that, if existing or known as of
the date of this Agreement, would have been required to be set forth or
described in the Company Disclosure Letter or the Parent Disclosure Letter
hereto or would otherwise have rendered any representation or warranty false, or
would materially alter or delay the Transaction, such Party shall promptly
provide written notice of such matters to the other Party. However, no such
notice provided under this Section (h) shall be deemed to cure any Breach of any
representation or warranty made in this Agreement whether for purposes of
determining whether or not the conditions set forth in Section 20 hereof have
been satisfied or otherwise. In addition, the Company shall promptly provide
written notice of any events occurring after the date hereof and prior to the
Closing that individually or in the aggregate have had or are reasonably
expected to have a Material Adverse Effect on the Company.
(i) Publicity.
The initial press release relating to this Agreement shall be
a joint press release in a form mutually agreeable to Parent and the Company and
Parent and the Company shall, subject to their respective legal obligations of
public companies, use reasonable efforts to agree upon the text of any other
press release before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any federal or state governmental or regulatory agency or with
any national securities exchange with respect thereto.
(j) Preparation of the Company Proxy Statement; Company Shareholders
Meeting; Merger Without a Company Shareholders Meeting.
(fff) If adoption of this Agreement is required by applicable
Law, the Company will, as soon as practicable following the acceptance for
payment of and payment for Shares by Buyer in the Offer, duly call, give notice
of, convene and hold a meeting of the Company Shareholders for the purpose of
adopting this Agreement or, in lieu of such meeting, Parent and Buyer, as soon
as practicable following the Funding Date (as defined below), shall cause this
Agreement to be adopted by written consent of stockholders. At such stockholders
meeting (or in connection with any consent in lieu thereof), Parent shall cause
all of the Shares then owned by Parent or Buyer to be voted in favor, or
consented to, the adoption of this Agreement. In the event that adoption of this
Agreement requires a meeting of the Company Shareholders, then the Company and
Parent will, as soon as practicable following the acceptance for payment of and
payment for the Shares by Buyer in the Offer (the date on which such acceptance
and payment shall occur shall be referred to herein as the "Funding Date"),
prepare and file a Proxy Statement (the "Company Proxy Statement") in
preliminary form with the SEC. The Company agrees that Parent shall be given
reasonable opportunity to review and comment on the
Exhibit 5 - 48
Company Proxy Statement and such other materials and to approve the Company
Proxy Statement and such other materials prior to their filing and thereafter to
participate in discussions concerning the comments of the SEC staff and to
approve all responses thereto. The Company will use all reasonable efforts to
respond to all SEC comments with respect to the Company Proxy Statement and to
cause the Company Proxy Statement to be mailed the Company Shareholders at the
earliest practicable date. Parent will provide the Company with the information
concerning Parent and Buyer required to be included in the Company Proxy
Statement.
(ggg) Notwithstanding the foregoing clause (a), in the event
that Parent and Buyer shall acquire in the aggregate at least 90% of the Shares
in the Offer, the Parties agree to take all necessary and appropriate action to
cause the Merger to become effective, as soon as practicable after the
expiration of the Offer, without a meeting of the Company Shareholders, in
accordance with Section 5.03.G.of the TCBA.
(k) Indemnification and Directors' and Officer's Insurance.
(hhh) After the acceptance of Shares for payment in the Offer,
the Company shall indemnify and hold harmless (and shall also advance expenses
as incurred to the fullest extent permitted under applicable Law to), to the
extent not covered by insurance, each person who is now or has been prior to the
date hereof or who becomes prior to the Effective Time an officer or director of
the Company or any of the Acquired Subsidiaries (the "Indemnified Persons")
against (i) all losses, claims, damages, costs, expenses (including counsel fees
and expenses), settlement, payments or liabilities arising out of or in
connection with any claim, demand, action, suit, proceeding or investigation
based in whole or in part on or arising in whole or in part out of the fact that
such person is or was an officer or director of the Company or any of the
Acquired Subsidiaries, whether or not pertaining to any matter existing or
occurring at or prior to the Effective Time and whether or not asserted or
claimed prior to or at or after the Effective Time ("Indemnified Liabilities");
and (ii) all Indemnified Liabilities based in whole or in part on or arising in
whole or in part out of or pertaining to this Agreement or the transactions
contemplated hereby, in each case to the fullest extent required or permitted
under applicable Law. Nothing contained herein shall make Parent, Buyer, the
Company or the Surviving Corporation, an insurer, a co-insurer or an excess
insurer in respect of any insurance policies which may provide coverage for
Indemnified Liabilities, nor shall this Section Section 18(k) relieve the
obligations of any insurer in respect thereto. The parties hereto intend, to the
extent not prohibited by applicable Law, that the indemnification provided for
in this Section Section 18(k) shall apply without limitation to negligent acts
or omissions by an Indemnified Person. Each Indemnified Person is intended to be
a third party beneficiary of this Section Section 18(k) and may specifically
enforce its terms. This Section Section 18(k) shall not limit or otherwise
adversely affect any rights any Indemnified Person may have under any agreement
with the Company or under the Company's Organizational Documents as presently in
effect.
(iii) 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 as of or prior to the date hereof (or
indemnification agreements in the Company's customary form for directors joining
the Company Board prior to the Effective Time) and any indemnification
provisions
Exhibit 5 - 49
under the Company's Organizational Documents as in effect immediately prior to
the Effective Time. The Surviving Corporation's aggregate obligation to
indemnify and hold harmless all Indemnified Persons for all matters to which
such Indemnified Persons may be entitled to be indemnified or held harmless
under subsections (a) and (b) of this Section Section 18(k) shall in no event
exceed the net worth of the Company at the Effective Time.
(jjj) For a period of six (6) years after the Effective Time,
Parent will maintain or cause the Surviving Corporation to maintain in effect,
if available, directors' and officers' liability insurance covering those
persons who, as of immediately prior to the Effective Time, are covered by the
Company's directors' and officers' liability insurance policy (the "Insured
Parties") on terms no less favorable to the Insured Parties than those of the
Company's present directors' and officers' liability insurance policy; provided
however, that in no event will Parent or the Company be required to expend in
excess of two hundred percent (200%) of the annual premium currently paid by the
Company for such coverage (or such coverage as is available for two hundred
percent (200%) of such annual premium); provided further, that, in lieu of
maintaining such existing insurance as provided above, Parent, at its election,
may cause coverage to be provided under any policy maintained for the benefit of
Parent or any of its subsidiaries, so long as the terms are not materially less
advantageous to the intended beneficiaries thereof than such existing insurance.
(kkk) Neither Parent nor any of its affiliates shall be
obligated to guarantee the payment or performance of the Company's obligations
under clauses (a) or (b) of this Section Section 18(k) so long as the Company
---------------------
honors such obligations to the extent of its shareholders' equity at the
Effective Time, and neither Parent nor any such affiliate shall have any
liability or obligation to any Indemnified Person arising from the Company's
Breach of, or inability to perform its obligations under, such clauses in excess
of the difference between the shareholders' equity of the Company at the
Effective Time and the aggregate of all amounts paid by the Company in
satisfaction of such obligations. The provisions of this Section 6.11 are
------------
intended to be for the benefit of, and will be Enforceable by, each Indemnified
Person and the heirs and representatives of such Indemnified Person. Parent will
not permit the Company to merge or consolidate with any other Person unless the
Company will ensure that the surviving or resulting entity assumes the
obligations imposed by this Section Section 18(k).
---------------------
(lll) If any Action is brought for the enforcement of the
provisions of this Section 6.11 by any Indemnified Party, as a condition to
bringing such Action, such Indemnified Party shall agree that the successful or
prevailing party in any such Action shall be entitled to recover, in addition to
any other relief to which he or it may be entitled, all of his or its actual out
of pocket costs and expenses (including attorneys fees) incurred in connection
with such Action.
(l) Employee Benefits.
(mmm) Parent and Buyer agree that, effective as of the
Effective Time, all Retained Employees shall become eligible employees and
entitled to all benefits under Employee Benefit Plans of Parent generally
available to all employees of Parent and its Subsidiaries
Exhibit 5 - 50
(nnn) Prior to the Effective Time, the Company shall adopt
severance plans and/or enter into Severance Agreements substantially as provided
in Section 6.12(b) of the Company Disclosure Letter (collectively referred to as
the "Severance Arrangements"). Parent and Buyer agree to honor, and cause the
Surviving Corporation to honor, without modification, all Severance
Arrangements. Parent and Buyer acknowledge that the consummation of the Offer
shall constitute a "Change in Control") for purpose of the Severance
Arrangements.
(ooo) Subject to the terms of any Employee Benefit Plan and
ERISA, if any employee of the Company, or any of its Subsidiaries becomes a
participant in any Employee Benefit Plan, of Parent or the Surviving
Corporation, such employee shall be given credit under such plan for all service
prior to the Effective Time with the Company and its Subsidiaries, or any
predecessor employer (to the extent such credit was given by the Company), for
purposes of eligibility and vesting (but not for benefit accrual purposes) for
which such service is either taken into account or recognized.
(ppp) To the extent practicable, Parent and the Surviving
Corporation shall administer their medical plans ("Buyer Medical Plans") so as
to coordinate deductibles, out-of-pocket maximums, and maximum benefit
restrictions so that: (i) Retained Employees receive credit under the Buyer
Medical Plans toward any deductibles under the Buyer Medical Plans for
deductibles paid under any of the medical, dental and prescription drug plans
maintained by the Company or any Acquired Entities ("Company Medical Plans") on
or prior to the Closing which, had the Retained Employees been covered by the
Buyer Medical Plans at that time, would have been taken into account by the
Buyer Medical Plans, (ii) Retained Employees receive credit for their eligible
out-of-pocket costs with respect to eligible claims incurred under the Company
Medical Plans on or prior to the Closing which, had the Retained Employee been
covered by the Buyer Medical Plans at that time would have been. taken into
account by the Buyer Medical Plans toward any out-of-pocket maximums under the
Buyer Medical Plans, and (iii) Retained Employees are credited with benefits
received under the Company Medical Plans on or prior to the Closing which, had
the Retained Employee been covered by the Buyer Medical Plans at that time,
would have been taken into account by the Buyer Medical Plans for purposes of
applying the maximum benefit restrictions under the Buyer Medical Plans.
(m) Works in Progress/Finished Goods.
The Company shall take all commercially reasonable actions
agreed to in consultation with Parent in order to minimize the amount of work in
process and inventory that any Acquired Entity shall have in its possession or
control (whether in inventory or otherwise) as of the Effective Time.
Section 19.
INTENTIONALLY DELETED
Exhibit 5 - 51
Section 20.
CLOSING CONDITIONS
(a) General Conditions.
The obligations of the parties to effect the Closing shall be
subject to the satisfaction or waiver, in whole or in part, at or prior to the
closing, of each of the following conditions unless waived in writing by Parent
and the Company:
(qqq) No Law Or Orders. No Law or Order shall have been
----------------
enacted, entered, issued or promulgated by any Governmental Entity (and be in
effect) which declares this Agreement invalid or unenforceable in any material
respect or which prohibits consummation of the Merger or the Transactions, and
all governmental consents, Orders and approvals required for the consummation of
the Merger and the Transactions contemplated hereby shall have been obtained and
shall be in effect at the Effective Time.
(rrr) Purchase of Shares in Offer. Buyer shall have purchased
---------------------------
all Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however that neither Parent nor Buyer may invoke this condition if Buyer shall
have failed to purchase Shares so tendered and not withdrawn in violation of the
terms of this Agreement or the Offer.
(sss) HSR. Any applicable waiting period under the HSR Act or
---
other applicable antitrust or similar Law shall have expired or have been
terminated with respect to the Transactions.
(ttt) Legal Proceedings. No Governmental Entity shall have
------------------
initiated proceedings to restrain or prohibit the Merger or force rescission,
unless such Governmental Entity shall have withdrawn and abandoned any such
proceedings prior to the time which otherwise would have been the Closing Date
and there shall not have been any Law or Order which would require the
divestiture by the Acquired Entities of a material portion of their respective
businesses, assets or properties, taken as a whole, or impose any material
limitation on the ability of the Acquired Entities, taken as a whole, to conduct
their respective businesses and own their assets and properties, taken as a
whole, following the Closing.
(uuu) Shareholder Approval. The Merger shall have been
--------------------
approved by the requisite vote of the holders of the outstanding capital stock
of the Company entitled to vote thereon.
Section 21.
TERMINATION
(a) Termination of Agreement.
Anything herein or elsewhere to the contrary notwithstanding,
this Agreement may be terminated and the Transactions abandoned at any time
prior to the Effective Time, whether before or after stockholder or shareholder
approval of the Merger:
Exhibit 5 - 52
(vvv) Mutual Consent. By mutual written consent of the
--------------
Parties;
(www) Either Party. By either of the Company or the Parent (in
------------
each case acting pursuant to a valid Board action):
(i) if (x) Parent shall not have received the Financing
Commitments on or prior to May 3, 2001, or (y) Buyer shall not have accepted for
payment the Shares tendered pursuant to the Offer on or prior that date that is
65 days following the commencement of the Offer; provided, however, that the
-------- -------
right to terminate this Agreement under this Section 1.4(www)(i) shall not be
-------------------
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of Buyer to obtain
the Financing Commitments or purchase or accept for payment Shares pursuant to
the Offer; or
(ii) if any Governmental Entity shall have issued an
Order, or taken any action which permanently restrains, enjoins or otherwise
prohibits the acceptance for payment of, or payment for, Shares pursuant to the
Offer or the Merger and such Order or Action shall have become final and non-
appealable; provided, however, the party seeking to terminate this Agreement
shall have used its reasonable best efforts to remove or lift such Order or
Action.
(xxx) by Parent, if (i) the Company Board (A) withdraws,
modifies or changes (including by amendment of the Schedule 14D-9) its
recommendation of the Offer, this Agreement or the Merger in a manner adverse to
Parent or shall have resolved pursuant to valid Board action to do any of the
foregoing, (B) shall have recommended to the Company Shareholders any
Acquisition Proposal or resolved by valid Board action to do so or (C) shall
have failed to reaffirm publicly and unconditionally its recommendation to the
Company Shareholders that they tender their Shares in the Offer, which public
reaffirmation must be made within five days after Parent's reasonable written
request to do so; or (ii) the Minimum Condition (as defined in Annex A) shall
not have been satisfied by the Expiration Date and (A) a third party shall have
made or caused to be made an Acquisition Proposal or (B) any "group" (as defined
in Section 13(d)(3) of the Exchange Act) or Person (including the Company or any
of its Affiliates), other than Parent or any of its Affiliates, shall have
become the beneficial owner of more than 50% of the Common Shares; provided,
however, the current ownership of Shares by the Company Shareholders who are
party to the Tender Agreement shall not be deemed to trigger this clause (B);
(yyy) by the Company, if, prior to the acceptance of and
payment for the Shares pursuant to the Offer, (x) the Company shall have entered
into an agreement with respect to a Superior Proposal or the Company Board shall
have recommended to the Company Shareholders any Superior Proposal or, in either
case, resolved by valid Board action to do so and (y) the Company first makes
the payment of the Termination Fee as required by Section 6.4(b); provided,
however, the Company may not terminate this Agreement pursuant to this Section
9.1(d) if the Company has Breached the provisions of Section 6.4 hereof with
respect to the Superior Proposal that is the subject of the termination;
(zzz) by the Company if there has been a material Breach by
Parent or Buyer of any representation, warranty, covenant or agreements set
forth in this Agreement which Breach
Exhibit 5 - 53
(if susceptible of cure) has not been cured in all material respects within five
Business Days following receipt of notice of such Breach; and
(aaaa) by Parent, if the Company shall have Breached any of
its representations and warranties, which Breach shall have given rise to the
failure of the condition set forth in clause (e) of Annex A hereto to be
satisfied or if, prior to the consummation of the Offer, the Company shall have
failed to perform its covenants of other agreements continued in this Agreement
which failure to perform would give rise to the failure of the condition set
forth in clause (f) to be satisfied, which breach or failure to perform is
incapable of being cured in all material respects within five Business Days
following receipt of notice of such Breach.
(b) Manner and Effect of Termination.
(bbbb) Termination shall be effected by the giving of written
notice to that effect by the party seeking termination. If this Agreement is
validly terminated and the transactions contemplated hereby are not consummated,
this Agreement shall become null and void and of no further force and effect and
no party shall be obligated to the others hereunder; provided, however, that
-------- -------
termination shall not affect (i) the rights and remedies available to a party as
a result of the Breach by the other party or parties hereunder, (ii) the
provisions of Sections Section 22(b), 0, and Section 22(m) hereof, or (iii) the
--------------------------------------------
obligations of the Parties pursuant to Section 9.3 below.
-----------
(c) Certain Payments Upon Termination.
(cccc) In the event that: (A) the Company terminates this
Agreement under Section (yyy) or (B) Parent terminates this Agreement under
Section 9.1(c)(i), the Company shall pay to Parent a termination fee equal to
$1,025,000 plus all actual out of pocket expenses (including, but not limited
to, fees of legal counsel, accountants and financial and other advisors)
incurred by Parent and any of its Affiliates in connection with the negotiation
and execution of this Agreement and the exhibits hereto and the planned
consummation of the necessary financing therefor and the Transactions ("Parent
Expenses"), provided that such fee shall not exceed Two Million and No/100
Dollars ($2,000,000) in the aggregate (the "Termination Fee").
(dddd) In the event that (A) a Termination Fee is not
otherwise payable to Parent pursuant to Section 1.4(cccc) and (B) (i) Parent
-----------------
terminates this Agreement under Section 9.1(f), or (ii) this Agreement is
--------------
terminated due to a failure of the condition set forth in Section 1.4(uuu), the
----------------
Company shall pay to Parent an amount equal to the Parent Expenses; provided,
however, the amount payable pursuant to this Section 9.3 (b) shall not exceed
$500,000.
(eeee) In the event that the Company terminates this Agreement
under Section 9.1(e), Parent shall pay to Company all actual out of pocket
--------------
expenses (including, but not limited to, fees of legal counsel, accountants and
financial and other advisors) incurred by Company and any of its Affiliates in
connection with the negotiation and execution of this Agreement and the exhibits
hereto and the planned consummation of the Transactions ("Company Expenses");
provided, however, the amount payable pursuant to this Section 9.3(c) shall not
exceed $500,000.
Exhibit 5 - 54
(ffff) All payments required to be made hereunder shall be
made by wire transfer of immediately available funds within five (5) Business
Days of the event giving rise to the payment of such Expenses. Each of Parent
and the Company acknowledges that the agreements contained in this Section
-------
Section 21(c) are an integral part of the Transactions and that, without said
-------------
agreements, neither Parent nor the Company would have entered into this
Agreement; accordingly, if either Party fails promptly to pay the Termination
Fee or Expenses due pursuant to this Section Section 21(c), and, in order to
---------------------
obtain such payment, the other Party commences an Action which results in a
judgment against the Party who has failed to make such payments, the non-
prevailing Party will pay to the prevailing Party, its reasonable expenses
(including attorneys' fees and expenses) in connection with such Action,
together with interest on the amounts due hereunder at the legal rate determined
by the court rendering such judgment.
Section 22.
MISCELLANEOUS
(a) Disclosure Letters.
(gggg) The disclosures in the Disclosure Letters, and those in
any supplement thereto, relate only to the representations and warranties in the
Section or paragraph of the Agreement to which they expressly relate and not to
any other representation or warranty in this Agreement.
(hhhh) If there is any inconsistency between the statements in
the body of this Agreement and those in the Disclosure Letters (other than an
exception expressly set forth as in the Disclosure Letters with respect to a
specifically identified representation or warranty), the statements in the body
of this Agreement will control.
(iiii) Nothing in the Disclosure Letters will be deemed
adequate to disclose an exception to a representation or warranty made herein,
unless the Disclosure Letters identify the exception with reasonable
particularity and describes the relevant facts in reasonable detail.
(jjjj) The mere listing (or inclusion of a copy) of a document
or other item in a Disclosure Letter will not be deemed adequate to disclose an
exception to a representation or warranty made in this Agreement (unless the
representation or warranty pertains to the existence of the document or other
item itself).
(b) Entire Agreement.
This Agreement, together with the Exhibits, Annexes and
Disclosure Letters hereto and the certificates, documents, instruments and
writings that are delivered pursuant hereto, and the Confidentiality Agreement,
constitutes the entire agreement and understanding of the Parties in respect of
its subject matters and supersedes all prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof or the Transactions.
Exhibit 5 - 55
(c) Successors.
All of the terms, agreements, covenants, representations,
warranties, and conditions of this Agreement are binding upon, and inure to the
benefit of and are Enforceable by, the Parties and their respective successors.
(d) Assignments.
No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of Parent and the Company; provided, however, that Parent may (a) assign any or
all of its rights and interests hereunder to one or more of its wholly owned
direct or indirect Subsidiaries and (b) designate one or more of its wholly
owned direct or indirect Subsidiaries to perform its obligations hereunder (in
any or all of which cases Parent nonetheless will remain responsible for the
performance of all of its obligations hereunder).
(e) Notices.
All notices, requests, demands, claims and other
communications hereunder will be in writing. Any Party may send any notice,
request, demand, claim, or other communication hereunder to the intended
recipient at the address set forth below using any other means (including
personal delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request, demand, claim,
or other communication will be deemed to have been duly given unless and until
it actually is received by the intended recipient.
If to Parent and after Closing to the Acquired Entities:
3D Systems Corporation
00000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Service
Fax: (000) 000-0000
Copy to (which will not constitute notice):
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Company and before Closing to the Acquired Entities:
DTM Corporation
0000 Xxxxxxx Xxxxxx, Xxxx. 0
Xxxxxx, Xx 00000
Attn: Xxxx X. Xxxxxxxxx , III
Fax: (000) 000-0000
Exhibit 5 - 56
Copy to (which will not constitute notice):
Xxxxxxx, Phleger & Xxxxxxxx LLP
4801 Plaza on the Lake
Xxxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxx, P.C.
Fax: (000) 000-0000
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(f) Specific Performance.
Each Party acknowledges and agrees that the other Parties
would be damaged irreparably if any provision of this Agreement is not performed
in accordance with its specific terms or is otherwise Breached. Accordingly,
each Party agrees that the other Parties will be entitled to an injunction or
injunctions to prevent Breaches of the provisions of this Agreement and to
enforce specifically this Agreement and its terms and provisions in any Action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, subject to Section 0, in addition
---------
to any other remedy to which they may be entitled, at Law or in equity.
(g) Time.
Time is of the essence in the performance of this Agreement.
(h) Counterparts.
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original but all of which together will constitute one
and the same instrument.
(i) Headings.
The article and section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
(j) Governing Law.
This Agreement and the performance of the Transactions and obligations
of the Parties hereunder will be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to any choice of Law
principles.
(k) Amendments and Waivers.
Exhibit 5 - 57
No amendment, modification, replacement, termination or cancellation
of any provision of this Agreement will be valid, unless the same will be in
writing and signed by Parent and the Company. No waiver by any Party of any
default, misrepresentation, or Breach of warranty or covenant hereunder, whether
intentional or not, may be deemed to extend to any prior or subsequent default,
misrepresentation, or Breach of warranty or covenant hereunder or affect in any
way any rights arising because of any prior or subsequent such occurrence.
(l) Severability.
The provisions of this Agreement will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or
enforceability of the other provisions hereof; provided that if any provision of
this Agreement, as applied to any Party or to any circumstance, is adjudged by a
Governmental Entity, arbitrator, or mediator not to be Enforceable in accordance
with its terms, the Parties agree that the Governmental Entity, arbitrator, or
mediator making such determination will have the power to modify the provision
in a manner consistent with its objectives such that it is Enforceable, and/or
to delete specific words or phrases, and in its reduced form, such provision
will then be Enforceable and will be enforced.
(m) Expenses.
Except as otherwise expressly provided in this Agreement, each Party
will bear its own costs and expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Transactions
including all fees and expenses of agents, representatives, financial advisors,
legal counsel and accountants.
(n) Construction.
The Parties have participated jointly in the negotiation and drafting
of this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the Parties
and no presumption or burden of proof will arise favoring or disfavoring any
Party because of the authorship of any provision of this Agreement. The word
"including" means "including without limitation." Pronouns in masculine,
feminine, and neuter genders will be construed to include any other gender, and
words in the singular form shall be construed to include the plural and vice
versa, unless the context otherwise requires. The words "this Agreement,"
"herein," "hereof," "hereby," "hereunder," and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. The Parties intend that each representation, warranty, and covenant
contained herein will have independent significance. If any Party has Breached
any representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the Party has not Breached will not detract from or mitigate the fact that the
Party is in Breach of the first representation, warranty, or covenant.
1.5 Non-Survival of Representations and Warranties.
Exhibit 5 - 58
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement will survive the Effective Time.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
DTM Corporation, a Texas corporation
By:
-----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer and President
3D Systems Corporation, a Delaware corporation
By:
-----------------------------------------
Name: Xxxxx X. Service
Title: Chief Executive Officer and President
Tiger Deals, Inc., a Delaware corporation
By:
-----------------------------------------
Name: Xxxxx X. Service
Title: Chief Executive Officer and President
Exhibit 5 - 59
ANNEX A
OFFER CONDITIONS
Capitalized terms used in this Annex A have the meanings set forth in the
attached Agreement, except that the term "Merger Agreement" shall be deemed to
refer to the attached Agreement.
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) Parent's rights to extend and amend the Offer at any time
in its sole discretion (subject to the provisions of the Merger Agreement),
Buyer shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Parent's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may postpone the
acceptance for payment of and payment for any tendered Shares, and may terminate
or amend the Offer if as of the expiration of the Offer (as the Offer may have
been extended pursuant to Section 2.1(a) of the Merger Agreement) (i) a number
of Shares which constitutes at least 67% of the Shares outstanding on a fully
diluted basis shall not have been validly tendered and not withdrawn prior to
the expiration of the Offer (the "Minimum Condition") (for purposes hereof
"fully diluted basis" means issued and outstanding Shares plus Shares subject to
issuance under outstanding Equity Commitments then currently exercisable into
Shares); (ii) any applicable approvals or consents listed in Section 5.3 of the
Disclosure Letter have not been obtained, or waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
or (iii) at any time on or after the date of the Merger Agreement and prior to
the acceptance for payment for Shares, any of the following events shall occur
or shall be determined by Parent to have occurred:
(a) there shall have been any Action, Law or Order enacted or entered
into, issued or instituted or promulgated, or Threatened by any Governmental
Entity (i) challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain or prohibit or make materially more costly the
making of the Offer, the acceptance for payment of, or payment for, any Shares
by Buyer or any Affiliate of Buyer, or the consummation of any other
Transaction, or seeking to obtain material damages in connection with the Offer,
the Merger or any Transaction; (ii) seeking to prohibit or limit materially the
ownership or operation by Parent, Buyer or any Acquired Entity of all or any
material portion of the business or assets of the Company and Subsidiaries,
taken as a whole, or to compel the Company, Parent or any of their respective
Subsidiaries to dispose of or hold separate all or any portion of the business
or assets of the Company, Parent or any of their respective Subsidiaries, as a
result of the Offer, the Merger or any of the Transactions; (iii) seeking to
impose or confirm limitations on the ability of Parent or any affiliate of
Parent to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by Parent
pursuant to the Offer or otherwise on all matters properly presented to the
Company Shareholders, including, without limitation, the approval and adoption
of this Agreement and the Merger; (iv) seeking to require divestiture by Parent
or any Affiliate of Parent of any Shares; or (v) which otherwise has a Material
Adverse Effect on the Company;
(b) there shall be any Law or Order enacted, entered, enforced,
promulgated or deemed applicable to the Offer or the Merger, or any other action
shall be taken by any
Exhibit 5 - 60
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under the HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the NASDAQ SmallCap Market System, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States, (iv) any limitation (whether or not mandatory) by
any United States or foreign governmental authority on the extension of credit
by banks or other financial institutions, (v) a change in general financial,
bank or capital market conditions which materially adversely affects the ability
of financial institutions in the United States to extend credit or syndicate
loans or (vi) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any Material Adverse Change (or any
development that, insofar as reasonably can be foreseen, is reasonably likely to
result in any Material Adverse Change) in the consolidated financial condition,
businesses, or results of operations of the Acquired Entities, taken as a whole;
(e) (i) it shall have been publicly disclosed that the beneficial
ownership (determined for the purposes of this paragraph (e) as set forth in
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the outstanding
Shares has been acquired by any Person other than Parent and Buyer and except
for any Person having such beneficial ownership as of the date of the Merger
Agreement, (ii) the Board of Directors of the Company (A) withdraws, modifies or
changes (including by amendment of the Schedule 14D-9) its recommendation of the
Offer, this Agreement or the Merger in a manner adverse to Parent, (B) shall
have recommended to the Shareholders of the Company any Acquisition Proposal, or
(C) shall have failed to reaffirm publicly and unconditionally its
recommendation to the Company's Shareholders that they tender their Shares in
the Offer, which public reaffirmation must be made within five days after
Parent's written request to do so, (iii) a third party shall have entered into a
definitive agreement or a written agreement in principle with the Company with
respect to an Acquisition Proposal, or (iv) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the foregoing;
(f) (i) any of the representations and warranties of the Company set
forth in Sections Section 17(e) and Section 17(g) of the Merger Agreement shall
not be true and correct as if such representations and warranties were made at
the time of such determination (except as to any such representation or warranty
that speaks as of a specific date, which must be untrue or incorrect as of such
date); or (ii) any of the other representations and warranties of the Company
set forth in the Merger Agreement, when read without any exception or
qualification as to materiality or reference to Material Adverse Effect, shall
not be true and correct as if such representations and warranties were made at
the time of such determination (except as to any such representation and
warranty which speaks as of a specific date, which must be untrue or incorrect
as of such date) except where the failure to be so true and correct would not
Exhibit 5 - 61
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect on the Company;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Merger Agreement, which Breach has not been cured in all material
respects within five (5) Business Days following receipt by the Company of
written notice of such Breach; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms or the Company and Buyer and Parent shall have reached an agreement
that the Offer or Merger Agreement be terminated;
(i) Parent shall have made or obtained all financing necessary to fund all
financial obligations arising in connection with the consummation of the Offer,
Merger and other Transactions.
The foregoing conditions are for the benefit of Parent and Buyer and may be
asserted by Parent or Buyer regardless of the circumstances giving rise to any
such conditions and other than clauses (i) and (ii) of the paragraph of this
Annex A may be waived by Parent or Buyer, in whole or in part, at any time and
from time to time in their reasonable discretion, in each case, subject to the
terms or the Merger Agreement. The conditions in clauses (i) and (ii) of the
second paragraph of this Annex A may not be waived without the written consent
of the Company. The failure by Parent or Buyer at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
Exhibit 5 - 62
