AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this
"AGREEMENT"), dated as of November 1, 2002, is among Parentech, Inc., a Delaware
corporation (the "COMPANY"), Premier Classic Art, Inc., a Delaware corporation
("PCA") and Premier Classic Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of PCA ("MERGER SUB"). Certain capitalized and
non-capitalized terms used herein are defined in Section 8.13.
RECITALS
WHEREAS, the Boards of Directors of the Company, PCA and Merger Sub
each have, in light of and subject to the terms and conditions set forth herein,
approved this Agreement and the transactions contemplated hereby, including the
Merger, and declared the Merger advisable and fair to, and in the best interests
of, their respective stockholders;
WHEREAS, pursuant to the Merger, among other things, and subject to
the terms and conditions of this Agreement, all of the issued and outstanding
shares of capital stock of the Company shall be converted into and exchangeable
for the right to receive shares of PCA Common Stock, par value $0.001 per share,
(the "PCA COMMON STOCK");
WHEREAS, as an inducement to the Company to enter this Agreement,
all officers, directors and certain stockholders of PCA have, at the Effective
Time, entered into lock-up agreements in the form attached hereto as EXHIBIT A
("LOCK-UP AGREEMENT") pursuant to which, among other things, such stockholders
agreed to refrain from selling shares of PCA Common Stock during a specified
period of time following consummation of the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "CODE"); and
WHEREAS, the Company, PCA and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger as set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, PCA and Merger Sub hereby
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and in accordance with the
applicable provisions of the Delaware General Corporation Law ("DELAWARE LAW"),
Merger Sub shall be merged with and into the Company (the "MERGER"). Following
the Merger, the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION"), and the separate corporate existence of Merger Sub
shall cease.
Section 1.2 Effective Time. Subject to the provisions of this Agreement,
the Company, PCA and Merger Sub shall cause the Merger to be consummated by
filing an appropriate certificate of merger in the form attached hereto as
EXHIBIT B and other appropriate documents (the "CERTIFICATE OF MERGER") with the
Secretary of State of the State of Delaware in such form as required by, and
executed in accordance with, the relevant provisions of Delaware Law, on the
Closing Date (as defined below) or as soon thereafter as practicable. The Merger
shall become effective upon the filing of the Certificate of Merger (the
"EFFECTIVE TIME").
Section 1.3 Closing of the Merger. The closing of the Merger (the
"CLOSING") will take place at a time and on a date to be specified by the
parties (the "CLOSING DATE"), which shall be no later than the third business
day after satisfaction or waiver of the conditions set forth in ARTICLE VI
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), at the
offices of Xxxx Xxxx Xxxx & Freidenrich LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000,
Xxx Xxxxx, XX 00000-0000 or at such other time, date or place as agreed to in
writing by the parties hereto.
Section 1.4 Effects of the Merger. The Merger shall have the effects set
forth in this Agreement, the Certificate of Merger and the applicable provisions
of Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all of the properties, rights, privileges,
powers and franchises of the Merger Sub shall vest in the Surviving Corporation,
and all debts, liabilities and duties of the Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
Section 1.5 Directors and Officers of Surviving Corporation. At the
Effective Time, the Board of Directors and the Officers of the Company existing
prior to the Effective Time shall be the Board of Directors and Officers of the
Surviving Corporation. The officers of the Surviving Corporation shall hold
office in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation until their successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal.
Section 1.6 Certificate of Incorporation and Bylaws.
(a) PCA. The certificate of incorporation and bylaws of PCA in
effect immediately prior to the Effective Time shall remain in full force and
effect after the Effective Time.
(b) Surviving Corporation. Effective immediately following the
Merger, the Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation. Effective immediately following the
Merger, the Bylaws of the Company, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until amended
in accordance with applicable law.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Shares.
(a) At the Effective Time, each outstanding share of common stock of
Merger Sub shall, by virtue of the Merger and without any action on the part of
the Company, PCA or Merger Sub, be converted into one fully paid and
non-assessable share of common stock of the Surviving Corporation.
(b) At the Effective Time, each share of the Company's Series A
Preferred Stock and Series B Preferred Stock (collectively, "COMPANY PREFERRED
STOCK"), issued and outstanding immediately prior to the Effective Time
(individually, a "PREFERRED SHARE" and collectively, the "PREFERRED SHARES") ")
(other than Dissenting Shares (as hereinafter defined)) shall, by virtue of the
Merger and without any action on the part of PCA, the Company or Merger Sub or
any holder thereof, be converted into and be exchangeable for the right to
receive one and one-half (1.5) fully paid and non-assessable shares of PCA
Common Stock.
(c) At the Effective Time, each share of Company's common stock, par
value $0.000001 (the "COMPANY COMMON STOCK"), issued and outstanding immediately
prior to the Effective Time (individually, a "COMMON SHARE" and collectively,
the "COMMON SHARES" and together with the Preferred Shares, the "SHARES") (other
than Dissenting Shares (as hereinafter defined)) shall, by virtue of the Merger
and without any action on the part of PCA or the Company or any holder thereof,
be converted into and be exchangeable for the right to receive one and one-half
(1.5) (the "EXCHANGE RATIO") fully paid and non-assessable shares of PCA Common
Stock. All such shares of PCA Common Stock issued pursuant to Sections 2.1(b)
and 2.1(c) are referred to herein as the "MERGER CONSIDERATION."
(d) If, between the date of this Agreement and the Effective Time,
the outstanding shares of PCA Common Stock shall have been changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, or any similar event, the calculation of the number of shares of PCA
Common Stock for which the Company Common Stock shall be exchanged shall be
correspondingly adjusted to the extent necessary to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, or such similar event.
Section 2.2 Stock Options. At the Effective Time, the Company Stock
Options, whether vested or unvested, will be assumed by PCA ("ASSUMED STOCK
OPTIONS"). Section 2.2 of the Company Disclosure Schedule (as defined in Article
III) sets forth a true and complete list as of the date hereof of all holders of
outstanding options to purchase shares of Company Common Stock ("COMPANY STOCK
OPTIONS"), including the number of shares of Company Common Stock subject to
each such option, the exercise or vesting schedule, the exercise price per share
and the term of each such option. On the Closing Date, the Company shall deliver
to PCA an updated Section 2.2 of the Company Disclosure Schedule (as defined in
Article III) current as of such date. Each such option so assumed by PCA under
this Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in the Company
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Stock Option Plan ("COMPANY OPTION PLAN") and any other document governing such
option immediately prior to the Effective Time, except that (a) such option will
be exercisable for that number of whole shares of PCA Common Stock equal to one
and one-half (1.5) times that number of shares of Company Common Stock that were
issuable upon exercise of such option immediately prior to the Effective Time,
(b) the per share exercise price for the shares of PCA Common Stock issuable
upon exercise of such assumed option will be equal to the exercise price per
share of Company Common Stock at which such option was exercisable immediately
prior to the Effective Time divided by the Exchange Ratio and rounded up to the
nearest whole cent (the "ADJUSTED EXERCISE PRICE") and (c) any restriction on
the exercisability of such Company Stock Option shall continue in full force and
effect, and the term, exercisability, vesting schedule and other provisions of
such Company Stock Option shall remain unchanged. If the foregoing calculation
of the Adjusted Exercise Price results in an Assumed Stock Option being
exercised for a fraction of a share of PCA Common Stock, then the number of
shares of PCA Common Stock subject to that option will be rounded to the nearest
whole number of shares of PCA Common Stock (rounded down, in the case of the
Company Stock Options that are Incentive Stock Options under Section 422 of the
Code). Continuous employment with the Company shall be credited to an optionee
of the Company for purposes of vesting of the Assumed Stock Option. Consistent
with the terms of the Company Option Plan and the documents governing the
outstanding options, the Merger will not terminate any of the outstanding
options under the Company Option Plan or accelerate the exercisability or
vesting of such options or the shares of PCA Common Stock which will be subject
to those options upon PCA's assumption of the options in the Merger. It is the
intention of the parties that the options so assumed by PCA following the
Effective Time will remain incentive stock options as defined in Section 422 of
the Code to the extent such options qualified as incentive stock options prior
to the Effective Time, and the parties hereto shall use their commercially
reasonable efforts to carry out such intention. Within ten (10) business days
after the Effective Time, PCA will issue to each person who, immediately prior
to the Effective Time was a holder of an outstanding option under the Company
Option Plan, a document in form and substance reasonably satisfactory to the
Company evidencing the foregoing assumption of such option by PCA.
Section 2.3 Exchange Agent. Prior to the Effective Time, the Company shall
appoint an exchange agent hereunder for the purpose of exchanging Shares for the
Merger Consideration (the "EXCHANGE AGENT"). At or prior to the Effective Time,
PCA shall deposit with the Exchange Agent, in trust for the benefit of holders
of Shares, certificates representing the PCA Common Stock issuable pursuant to
Section 2.1. in exchange for outstanding Shares.
Section 2.4 Exchange Procedures. As soon as reasonably practicable after
the Effective Time (and in any event within three business days after the
Effective Time), PCA and the Surviving Corporation shall use their commercially
reasonable efforts, and PCA shall provide any assistance reasonably requested by
the Surviving Corporation, to cause the Exchange Agent to mail to each holder of
a certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "CERTIFICATES") (a) a letter of transmittal
which shall specify that delivery shall be effective, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which letter shall be in customary form and have such other
provisions as PCA may reasonably specify; and (b) instructions for effecting the
surrender of such Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate to the Exchange Agent together with such letter
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of transmittal, duly executed and completed in accordance with the instructions
thereto, and such other documents as may reasonably be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive in exchange
therefor shares of PCA Common Stock representing, in the aggregate, the whole
number of shares that such holder has the right to receive pursuant to Section
2.1. (after taking into account all Shares then held by such holder), and the
Shares formerly represented by such Certificate and the Certificate so
surrendered shall forthwith be canceled. Until surrendered as contemplated by
this Article II, each Certificate shall be deemed at any time after the
Effective Date to represent only the right to receive the Merger Consideration
payable upon surrender of the Certificates. In the event of a transfer of
ownership of Shares which is not registered in the transfer records of the
Company, shares of PCA Common Stock, in the aggregate, the proper number of
shares of PCA Common Stock may be issued with respect to such Shares to such a
transferee if the Certificate representing such Shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and to evidence that any applicable Transfer Taxes have been paid.
Section 2.5 Distributions with Respect to Unsurrendered Certificates. No
dividends or other distributions declared or made with respect to shares of PCA
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of PCA Common
Stock that such holder would be entitled to receive upon surrender of such
Certificate until such holder shall surrender such Certificate in accordance
with Section 2.4. Subject to the effect of applicable Laws (as hereinafter
defined), following surrender of any such Certificate, there shall be paid to
such holder of shares of PCA Common Stock issuable in exchange therefor, without
interest, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such shares of PCA Common
Stock.
Section 2.6 No Further Ownership Rights in Company Common Stock. All
shares of PCA Common Stock issued upon conversion of the Shares in accordance
with the terms of ARTICLE I and this ARTICLE II shall be deemed to have been
issued or paid in full satisfaction of all rights pertaining to the Shares.
Section 2.7 No Fractional Shares of PCA Common Stock. No certificates or
scrip of shares of PCA Common Stock representing fractional shares of PCA Common
Stock or book-entry credit of the same shall be issued upon the surrender for
exchange of Certificates. All fractional shares of PCA Common Stock to be issued
to holders of Shares will be rounded up to the nearest whole number of shares of
PCA Common Stock.
Section 2.8 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity by such
person against any claim that may be made against the Surviving Corporation with
respect to such Certificate, the Exchange Agent will deliver in exchange for
such lost, stolen or destroyed Certificate the applicable Merger Consideration
with respect to the Shares formerly represented thereby, pursuant to this
Agreement.
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Section 2.9 Tax Consequences. It is intended by the parties hereto that
the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code. Each party hereto shall use its commercially reasonable
efforts to cause the Merger to be so qualified, shall report the transactions
contemplated by this Agreement in a manner consistent with such reorganization
treatment and will not take any position inconsistent therewith in any Tax
Return (as hereinafter defined), refund claim, litigation or otherwise unless
required to do so by law. The Merger shall be treated as a purchase for
accounting purposes.
Section 2.10 Stock Transfer Books. The stock transfer books of the Company
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or PCA for any reason shall be converted into the Merger
Consideration with respect to the Shares formerly represented thereby.
Section 2.11 Affiliates. Notwithstanding anything to the contrary herein,
no shares of PCA Common Stock shall be delivered to a person who may be deemed
an "affiliate" of the Company for purposes of Rule 145 under the Securities Act
of 1933, as amended (the "SECURITIES ACT"), until such person has executed and
delivered to PCA the written agreement contemplated by Section 5.8.
Section 2.12 Appraisal Rights. Notwithstanding anything in this Agreement
to the contrary, Shares that are issued and outstanding immediately prior to the
Effective Time and which are held by stockholders who did not vote in favor of
the Merger (the "DISSENTING SHARES"), which stockholders comply with all of the
relevant provisions of Delaware Law (the "DISSENTING STOCKHOLDERS"), shall not
be converted into or be exchangeable for the right to receive the Merger
Consideration, unless and until such holders shall have failed to perfect or
shall have effectively withdrawn or lost their rights to appraisal under
Delaware Law. If any Dissenting Shareholder shall have failed to perfect or
shall have effectively withdrawn or lost such right, such holder's Shares shall
thereupon be converted into and become exchangeable for the right to receive, as
of the Effective Time, the Merger Consideration without any interest thereon.
The Company shall give PCA (a) prompt notice of any written demands for
appraisal of any Shares, attempted withdrawals of such demands and any other
instruments served pursuant to Delaware Law and received by the Company relating
to stockholders' rights of appraisal, and (b) the opportunity to direct, in its
reasonable business judgment, all negotiations and proceedings with respect to
demands for appraisal under Delaware Law. Neither the Company nor the Surviving
Corporation shall, except with the prior written consent of PCA, voluntarily
make any payment with respect to, or settle or offer to settle, any such demand
for payment. If any Dissenting Shareholder shall fail to perfect or shall have
effectively withdrawn or lost the right to dissent, the Shares held by such
Dissenting Shareholder shall thereupon be treated as though such Shares had been
converted into the right to receive the Merger Consideration pursuant to Section
2.1.
Section 2.13 Legends.
(a) The shares represented by the Merger Consideration issued
pursuant to this Section 2 have not been registered under the Securities Act and
shall be characterized as "restricted securities" under the federal securities
laws. Under such laws, the shares represented
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by the Merger Consideration may not be resold without registration under the
Securities Act or in reliance on an exemption therefrom.
Each certificate evidencing shares represented by the Merger
Consideration issued pursuant to this Section 2 shall bear the following legend
(in addition to any legend required under applicable state securities laws):
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE
IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE CORPORATION RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE CORPORATION STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule delivered by the Company to PCA
and Merger Sub in connection with the execution and delivery of this Agreement
(the "COMPANY DISCLOSURE SCHEDULE"), the Company hereby represents and warrants
to PCA and Merger Sub, and except as set forth in the disclosure schedules
delivered by PCA and Merger Sub to the Company in connection with the execution
and delivery of this Agreement (the "PCA DISCLOSURE SCHEDULE"), PCA and Merger
Sub hereby represent and warrant to the Company, in each case as set forth in
this ARTICLE III, with the party making such representations and warranties
being referred to as the "REPRESENTING PARTY" and such Representing Party's
Disclosure Schedule as the "REPRESENTING PARTY'S DISCLOSURE SCHEDULE."
Notwithstanding the foregoing, any representation or warranty which expressly
refers to PCA or its Subsidiaries is being made solely by PCA and Merger Sub and
any representation or warranty which expressly refers to the Company or its
Subsidiaries is being made solely by the Company. As used in this Agreement,
"MATERIAL ADVERSE EFFECT" means any change, effect, event, occurrence, state of
facts or developments that (i) materially adversely affects the assets,
liabilities, business, results of operations, condition (financial or otherwise)
or prospects of the Representing Party and its Subsidiaries, taken as a whole or
(ii) adversely affects or delays the ability of the Representing Party to
consummate the transactions contemplated by this Agreement.
Section 3.1 Organization, Qualification.
(a) The Representing Party is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority required for it to own
its properties and assets and to carry on its business as it is now being
conducted. The Representing Party is duly qualified to do business and is in
good standing in each jurisdiction in which the ownership of its properties or
the conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so
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qualified or in good standing would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on the Representing Party or
substantially delay consummation of the transactions contemplated by this
Agreement or otherwise prevent the Representing Party from performing its
obligations hereunder.
(b) Each of the Representing Party's Subsidiaries is listed in
Section 3.1 of the Representing Party's Disclosure Schedule and is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the Representing Party's
Subsidiaries has the corporate power and authority required for it to own its
properties and assets and to carry on its business as it is now being conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party, taken as a whole. All the outstanding shares of capital
stock of, or other ownership interests in, the Representing Party's Subsidiaries
are duly authorized, validly issued, fully paid and non-assessable and, with
respect to such shares or ownership interests that are owned by the Representing
Party and its Subsidiaries, are owned free and clear of all liens, claims,
mortgages, encumbrances, pledges and security interests of any kind. All the
outstanding shares of capital stock of, or other ownership interests in, the
Representing Party's Subsidiaries are wholly owned by the Representing Party,
directly or indirectly.
Section 3.2 Capital Stock.
(a) Section 3.2(a) of the Representing Party's Disclosure Schedule
sets forth, as of May 31, 2002 with respect to PCA, as of September 4, 2002 with
respect to Merger Sub and as of June 30, 2002 with respect to the Company: (i)
the number of authorized shares of each class or series of capital stock of the
Representing Party; (ii) the number of shares of each class or series of capital
stock of the Representing Party which are issued and outstanding; (iii) the
number of shares of each class or series of capital stock which are held in the
treasury of such Representing Party; (iv) the number of shares of each class or
series of capital stock of the Representing Party which are reserved for
issuance, indicating each specific reservation; and (v) the number of shares of
each class or series of capital stock of such Representing Party which are
subject to employee stock options or other rights to purchase or receive capital
stock granted under such Person's stock option or other stock based employee or
non-employee director benefit plans, indicating the name of the plan, the date
of grant, the number of shares and the exercise price thereof.
(b) All the outstanding shares of capital stock of the Representing
Party are, and all shares of PCA Common Stock to be issued in the Merger will
be, when issued in accordance with the terms of this Agreement, duly authorized,
validly issued, fully paid and non-assessable and issued in compliance with all
applicable state and federal securities laws. Except for the transactions
contemplated by this Agreement, (i) there are no shares of capital stock of the
Representing Party authorized, or as of the date of this Agreement, issued or
outstanding, (ii) as of the date of this Agreement there are no authorized or
outstanding options, warrants, calls, preemptive rights, subscriptions or other
rights, agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Representing Party or any of
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its Subsidiaries, obligating the Representing Party or any of its Subsidiaries
to issue, transfer or sell or cause to be issued, transferred or sold any shares
of capital stock or other equity interest in the Representing Party or any of
its Subsidiaries or securities convertible into or exchangeable for such shares
or equity interests, or obligating the Representing Party or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
subscription or other right, agreement, arrangement or commitment, (iii) there
are no outstanding contractual obligations of the Representing Party or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Representing Party or any Subsidiary of the Representing
Party or to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary of the Representing Party or other
entity, and (iv) there are no shareholder agreements, voting trusts or other
agreements to which the Representing Party is a party or to which it is bound
relating to the voting of any shares of the capital stock of the Representing
Party.
Section 3.3 Corporate Authority Relative to this Agreement; No Violation.
(a) The Company has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of the
Company and, except for obtaining the requisite approval of the stockholders of
the Company (the "COMPANY STOCKHOLDER APPROVAL"), as contemplated in Section 5.1
and the filing of the Certificate of Merger, no other corporate proceedings on
the part of the Company are necessary to authorize the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes a
valid and binding agreement of PCA, constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as may be limited by (i) bankruptcy laws and other similar laws affecting
creditor's rights generally and (ii) general principles of equity.
(b) Each of PCA and Merger Sub has the corporate power and authority
to enter into this Agreement and to carry out its respective obligations
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Boards of Directors of PCA and Merger Sub, and other than the obtaining the
requisite approval of the stockholders of Merger Sub through action by written
consent (the "MERGER SUB STOCKHOLDER APPROVAL") and the filing of the
Certificate of Merger no other corporate proceedings on the part of PCA and
Merger Sub are necessary to authorize the consummation of the transactions
contemplated hereby. The Boards of Directors of PCA and Merger Sub have taken
all appropriate action so that Section 203 of Delaware Law will not be
applicable to the Company or to PCA for any purpose. This Agreement has been
duly and validly executed and delivered by PCA and Merger Sub and, assuming this
Agreement constitutes a valid and binding agreement of the Company, constitutes
a valid and binding agreement of PCA and Merger Sub, enforceable against PCA and
Merger Sub in accordance with its terms, except as may be limited by (i)
bankruptcy laws and other similar laws affecting creditor's rights generally and
(ii) general principles of equity.
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(c) Except as may be required under, and other applicable
requirements of, the Securities Act, the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "EXCHANGE
ACT"), state securities or blue sky laws, and the rules and regulations of
Nasdaq, and the filing of the Certificate of Merger under Delaware Law, none of
the execution, delivery or performance of this Agreement by the Representing
Party, the consummation by the Representing Party of the transactions
contemplated hereby or compliance by the Representing Party with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation, bylaws or similar organizational
documents of the Representing Party or any of its Subsidiaries, (ii) require any
filing with, or permit, authorization, consent or approval of, any federal,
regional, state or local court, arbitrator, tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency,
whether U.S. or foreign (a "GOVERNMENTAL ENTITY"), (iii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Representing Party or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, or (iv) violate any order, writ, injunction, decree,
judgment, permit, license, ordinance, law, statute, rule or regulation ("LAW")
applicable to the Representing Party, any of its Subsidiaries or any of their
properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv)
such filings, permits, authorizations, consents, approvals, violations, breaches
or defaults which are not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on the Representing Party or prevent or
substantially delay the consummation of the transactions contemplated hereby.
Section 3.4 Reports and Financial Statements.
(a) PCA has previously furnished or otherwise made available (by
electronic filing or otherwise) to the Company true and complete copies of: (i)
Annual Reports on Form 10-K filed with the SEC for each of the fiscal years
ended May 31, 2001 and 2002; and (ii) each Quarterly Report on Form 10-Q filed
with the SEC for the three fiscal quarters occurring since the Annual Report on
Form 10-K for the fiscal year ended May 31, 2001.
As of their respective dates, such reports, proxy statements and prospectuses
filed with the SEC by PCA (collectively with, and giving effect to, all
amendments, supplements and exhibits thereto, the "SEC REPORTS") (i) complied as
to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, 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 therein, in the light of the
circumstances under which they were made, not misleading. None of PCA's
Subsidiaries is required to file any forms, reports or other documents with the
SEC. The audited consolidated financial statements and unaudited consolidated
interim financial statements included in the SEC Reports (including any related
notes and schedules) fairly present in all material respects the financial
position of PCA and its consolidated Subsidiaries as of the dates thereof and
the results of operations and cash flows for the periods or as of the dates then
ended (subject, in the case of the unaudited interim financial statements, to
normal recurring adjustments), in each case in accordance with past practice and
GAAP consistently applied during the periods involved (except as otherwise
disclosed in the
- 10 -
notes thereto). Since it first became required to file reports under the
Exchange Act, PCA has timely filed all reports, registration statements and
other filings required to be filed by it with the SEC under the rules and
regulations of the SEC, and the PCA Common Stock is registered under the
Exchange Act.
(b) The Company has delivered to PCA copies of the audited balance
sheets of the Company as of December 31, 2001, together with the related audited
statements of income, stockholders' equity and changes in cash flow for the
calendar year ended December 31, 2001, and the notes thereto (such audited
financial statements being hereinafter referred to as the "FINANCIAL
STATEMENTS"). The Financial Statements, including the notes thereto, (i) were
prepared in accordance with GAAP throughout the periods covered thereby, and
(ii) present fairly in all material respects the financial position, results of
operations and changes in cash flow of the Company and its consolidated
Subsidiaries as of such dates and for the periods then ended.
Section 3.5 No Undisclosed Liabilities. Neither the Representing Party nor
any of its Subsidiaries has any liabilities or obligations of any nature
required to be set forth on a balance sheet of the Representing Party under
GAAP, whether or not accrued, contingent or otherwise, and there is no existing
condition, situation or set of circumstances which would be expected to result
in such a liability or obligation, except (a) liabilities or obligations with
respect to PCA reflected in the SEC Reports and with respect to the Company
reflected in the Financial Statements or (b) liabilities and obligations which
are not, individually or in the aggregate, reasonably expected to have a
Material Adverse Effect on the Representing Party.
Section 3.6 No Default; Compliance with Applicable Laws. The businesses of
the Representing Party and each of its Subsidiaries is not in conflict with, or
in default or violation of, any term, condition or provision of (i) its
respective certificate of incorporation or bylaws or similar organizational
documents, (ii) any Company Material Contracts or PCA Material Contracts, as
applicable, or (iii) any federal, state, local or foreign statute, Law,
concession, grant, franchise, Permit or other governmental authorization or
approval applicable to the Representing Party or any of its Subsidiaries,
excluding from the foregoing clauses (ii) and (iii), defaults or violations
which would not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Representing Party.
Section 3.7 Environmental Matters.
(a) Each of the Representing Party and its Subsidiaries has obtained
all licenses, permits, authorizations, approvals and consents from Governmental
Entities which are required under any applicable Environmental Law and necessary
for it to carry on its business or operations as now conducted ("ENVIRONMENTAL
PERMITS"), except for such failures to have Environmental Permits which,
individually or in the aggregate, are not reasonably expected to have a Material
Adverse Effect on the Representing Party. Each of such Environmental Permits is
in full force and effect, and each of the Representing Party and its
Subsidiaries is in compliance with the terms and conditions of all such
Environmental Permits and with all applicable Environmental Laws, except for
such failures to be in full force and effect or to be in compliance which,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect on the Representing Party.
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(b) There are no Environmental Claims pending, or to the knowledge
of the Representing Party, threatened, against the Representing Party or any of
its Subsidiaries, or, to the knowledge of the Representing Party, any Person
whose liability for any such Environmental Claim the Representing Party or any
of its Subsidiaries has or may have retained or assumed either contractually or
by operation of law for which reserves have not been established in accordance
with GAAP, that, individually or in the aggregate, would have a Material Adverse
Effect on the Representing Party.
(c) There are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
threatened release or presence of any Hazardous Material, that would form the
basis of any Environmental Claim against the Representing Party or any of its
Subsidiaries, or for which the Representing Party or any of its Subsidiaries is
liable, except for such liabilities which, individually or in the aggregate, are
not reasonably likely to have a Material Adverse Effect on the Representing
Party.
(d) As used in this Agreement: (i) "ENVIRONMENTAL CLAIM" means any
claim, action, lawsuit or proceeding by any Person which seeks to impose
liability (including, without limitation, liability for investigatory costs,
cleanup costs, governmental response costs, natural resources, damages, property
damages, personal injuries or penalties) arising out of, based on or resulting
from (A) the presence, or release or threatened release, of any Hazardous
Materials at any location, whether or not owned or operated by the Representing
Party or any of its Subsidiaries, or (B) circumstances which would give rise to
any violation, or alleged violation, of any Environmental Law; (ii)
"ENVIRONMENTAL Law" means any law or order of any Governmental Entity relating
to (A) the generation, treatment, storage, disposal, use, handling,
manufacturing, transportation or shipment of, or (B) the environment or to
emissions, discharges, releases or threatened releases of, Hazardous Materials,
into the environment; (iii) "HAZARDOUS MATERIALS" means (A) any petroleum or
petroleum products, radioactive materials or friable asbestos; (B) any chemicals
or other materials or substances which are now defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
or "toxic pollutants" under any Environmental Law; and (C) pesticides.
Section 3.8 Litigation. Except as set forth at Section 3.8 of the
Company's Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the Representing Party's knowledge, threatened
against the Representing Party, its Subsidiaries or any of its assets or
properties which (a) has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Representing
Party or its Subsidiaries, or (b) questions the validity of this Agreement or
any action to be taken by the Representing Party in connection with the
consummation of the transactions contemplated hereby or could otherwise prevent
or materially delay the consummation of the transactions contemplated by this
Agreement. The Representing Party and its Subsidiaries are not subject to any
outstanding order, writ, injunction or decree which has had or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Representing Party and its Subsidiaries. There is no action, suit,
proceeding or investigation pending or, to the Representing Party's knowledge,
threatened against any current or former officer, director, employee,
consultant, contractor or agent of the Representing Party (in his or her
capacity as
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such) which gives rise or could reasonably be expected to give rise to a claim
for contribution or indemnification against the Representing Party.
Section 3.9 Permits. The Representing Party holds, and has at all times
held, all permits, licenses, variances, exemptions, orders, and approvals of all
Governmental Entities necessary for the lawful conduct of its business (the
"PERMITS"), except for such Permits the absence of which would not reasonably be
expected to have a Material Adverse Effect on the Representing Party. The
Representing Party is in material compliance with the terms of the Representing
Party Permits. No investigation or review by any Governmental Entity in respect
of the Representing Party is pending or, to the Representing Party's knowledge,
threatened, nor has the Representing Party received notice from any Governmental
Entity of its intention to conduct the same.
Section 3.10 Employee Plans.
(a) Section 3.10(a) of the Representing Party's Disclosure Schedule
sets forth a true, correct and complete list of:
(i) all "employee benefit plans," as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
which the Representing Party has any obligation or liability, contingent or
otherwise (the "BENEFIT PLANS");
(ii) all employees, consultants and independent contractors
of the Representing Party; and
(iii) all employment, consulting, termination, profit sharing,
severance, change of control, individual compensation or indemnification
agreements, and all bonus or other incentive compensation, deferred
compensation, salary continuation, disability, stock award, stock option, stock
purchase, educational assistance, legal assistance, club membership, employee
discount, employee loan, credit union or vacation agreements, policies or
arrangements under which the Representing Party has any obligation or liability
(contingent or otherwise) in respect of any current or former officer, director,
employee, consultant or contractor of the Representing Party (the "EMPLOYEE
ARRANGEMENTS").
Benefit Plans and Employee Arrangements which cover current or former employees,
consultants, contractors, officers, or directors (or their equivalent) of the
Representing Party are separately identified, by the applicable country, on
Section 3.10(a) of the Representing Party's Disclosure Schedule.
(b) None of the Benefit Plans or Employee Arrangements is subject to
Title IV of ERISA, constitutes a defined benefit retirement plan or is a
multi-employer plan described in Section 3(37) of ERISA, and the Representing
Party does not have any obligation or liability (contingent or otherwise) in
respect of any such plans. The Company is not a member of a group of trades or
businesses under common control or treated as a single employer pursuant to
Section 414 of the Code.
(c) The Benefit Plans and Employee Arrangements have been maintained
and administered in all material respects in accordance with their terms and
applicable Laws. In
- 13 -
particular, no individual who has performed services for the Representing Party
has been improperly excluded from participation in any Benefit Plan or Employee
Arrangement.
(d) There are no pending or, to the Representing Party's knowledge,
threatened actions, claims, or proceedings against or relating to any Benefit
Plan or Employee Arrangement (other than routine benefit claims by persons
entitled to benefits thereunder), and, to the knowledge of the Representing
Party, there are no facts or circumstances which could form the basis for any of
the foregoing.
(e) The Representing Party does not have any obligation or liability
(contingent or otherwise) to provide post-retirement life insurance or health
benefits coverage for current or former officers, directors, employees,
consultants or contractors of the Representing Party except (i) as may be
required under Part 6 of Title I of ERISA at the sole expense of the participant
or the participant's beneficiary, (ii) a medical expense reimbursement account
plan pursuant to Section 125 of the Code, or (iii) through the last day of the
calendar month in which the participant terminates employment with the
Representing Party.
(f) None of the assets of any Benefit Plan is stock of the
Representing Party or any of its affiliates, or property leased to or jointly
owned by the Representing Party or any of its affiliates.
(g) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee, consultant or contractor (current, former,
or retired) of the Representing Party, (ii) increase any benefits under any
Benefit Plan or Employee Arrangement or (iii) result in the acceleration of the
time of payment of, vesting of, or other rights in respect of any such benefits
(except as which may be required by the partial or full termination of any
Benefit Plan intended to be qualified under Section 401 of the Code).
Section 3.11 Labor Matters.
(a) The Representing Party is not a party to any labor or collective
bargaining agreement, and no employees of the Representing Party are represented
by any labor organization. Within the preceding three years, there have been no
representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the Representing Party's knowledge,
threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority. Within the preceding
three years, to the Representing Party's knowledge, there have been no
organizing activities involving the Representing Party in respect of any group
of employees of the Representing Party.
(b) There are no strikes, work stoppages, slowdowns, lockouts,
material arbitrations or material grievances or other material labor disputes
pending or, to the knowledge of the Representing Party, threatened against or
involving the Representing Party. There are no unfair labor practice charges,
grievances or complaints pending or, to the Representing Party's knowledge,
threatened by or on behalf of any employee or group of employees of the
Representing Party and, to the knowledge of the Representing Party, there are no
facts or circumstances which could form the basis for any of the foregoing.
- 14 -
(c) There are no complaints, charges or claims against the
Representing Party pending or, to the Representing Party's knowledge, threatened
to be brought or filed with any Governmental Entity or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual by the Representing Party, and, to
the knowledge of the Representing Party, there are no facts or circumstances
which could form the basis for any of the foregoing.
(d) The Representing Party is in material compliance with all Laws
relating to the employment of labor, including all such Laws relating to wages,
hours, the Worker Adjustment and Retraining Notification Act, as amended
("WARN"), collective bargaining, discrimination, civil rights, safety and
health, workers' compensation and the collection and payment of withholding
and/or Social Security Taxes and any similar Tax.
(e) There has been no "mass layoff" or "plant closing" as defined by
WARN in respect of the Representing Party within the six months prior to the
date hereof.
Section 3.12 Absence of Certain Changes or Events.
Since the end of the period covered by each Party's audited
financial statements provided under this Agreement, (i) the businesses of the
Representing Party and its Subsidiaries have been conducted in all material
respects in the ordinary course and (ii) there has not been:
(a) a material adverse change in the assets, liabilities, business,
results of operations, condition (financial or otherwise) or prospects of the
Representing Party and its Subsidiaries, taken as a whole, or any event,
occurrence or development which has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Representing
Party and its Subsidiaries, taken as a whole;
(b) any declaration, setting aside or payment of any dividend or
other distribution in respect of any shares of capital stock of the Representing
Party, or any repurchase, redemption or other acquisition by the Representing
Party of any Representing Party securities;
(c) any incurrence or assumption by the Representing Party of any
indebtedness for borrowed money (or any renewals, replacements, or extensions
that do not increase the aggregate commitments thereunder) except (i) in the
ordinary and usual course of business consistent with past practice or (ii) in
connection with any capital expenditure permitted by Section 4.1 or Section 4.2,
as applicable, or (iii) any guarantee, endorsement, or other incurrence or
assumption of liability (whether directly, contingently or otherwise) by the
Representing Party for the obligations of any other person;
(d) any creation or assumption by the Representing Party of any
material Lien on any material asset of the Representing Party other than
Permitted Liens;
(e) any making of any loan, advance or capital contribution to or
investment in any person by the Representing Party other than loans or advances
to employees, contractors or consultants of the Representing Party made in the
ordinary and usual course of business consistent with past practice;
- 15 -
(f) (i) any contract or agreement entered into by the Representing
Party on or prior to the date hereof relating to any material acquisition or
disposition of any assets or business or (ii) any modification, amendment,
assignment, termination or relinquishment by the Representing Party of any
contract, license or other right (including, any insurance policy naming it as a
beneficiary or a loss payable payee) that does or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Representing Party, other than those contemplated by this Agreement;
(g) any (i) grant of any severance or termination pay to any
director, officer, employee, consultant or contractor of the Representing Party;
(ii) entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any director,
officer, employee, consultant or contractor of the Representing Party; (iii)
increase in benefits payable under any existing severance or termination pay
policies or employment agreements; or (iv) increase in compensation, bonus or
other benefits payable to directors, officers, employees, consultants or
contractors of the Representing Party other than, in the case of clause (iv)
only, increases prior to the date hereof in compensation, bonus or other
benefits payable to employees, consultants or contractors of the Representing
Party in the ordinary and usual course of business consistent with past practice
or merit increases in salaries of employees, consultants or contractors at
regularly scheduled times in customary amounts consistent with past practices;
(h) any adoption, entering into, amendment, alteration or
termination of (partially or completely) any Benefit Plan or Employee
Arrangement except as contemplated by this Agreement or to the extent required
by applicable Law;
(i) any (i) making or revoking of any material election relating to
Taxes (as hereinafter defined), (ii) settlement or compromise of any material
claim, action, suit, litigation, proceeding, arbitration, investigation, audit
or controversy relating to Taxes, or (iii) change to any material methods of
reporting income or deductions for federal income tax purposes;
(j) any capital expenditures in excess of $25,000 individually and
in excess of $100,000 in the aggregate;
(k) any lease, license or grant to any Person of any rights in any
of the Representing Party's assets or properties;
(l) any amendment of the certificate of incorporation or bylaws of
the Representing Party;
(m) any sufferance of any material damage, destruction or loss
(whether or not covered by insurance) to any material assets of the Representing
Party; or
(n) any strike, slowdown or demand for recognition by a labor
organization by or with respect to any of the employees of the Representing
Party.
- 16 -
Section 3.13 Tax Matters.
(a) For purposes of this Agreement: (i) "TAXES" means any and all
federal, state, local, foreign or other taxes of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without limitation,
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation or
net worth, and taxes or other charges in the nature of excise, withholding, ad
valorem or value added, and (ii) "TAX RETURN" means any return, report or
similar statement (including the attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
(b) All federal, state, local and foreign Tax Returns required to be
filed by or on behalf of the Representing Party, each affiliated, combined,
consolidated or unitary group of which the Representing Party is a member (an
"AFFILIATED GROUP") have been timely filed or requests for extensions have been
timely filed and any such extension has been granted and has not expired, and
all such filed Tax Returns are complete and accurate except to the extent any
failure to file or any inaccuracies in filed Tax Returns would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect on
the Representing Party. All Taxes due and owing by the Representing Party or any
Representing Party's Affiliated Group, including estimates and withheld Taxes,
have been paid, or adequately reserved in accordance with GAAP, except to the
extent any failure to pay or reserve for would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party. There is no audit or examination in process or pending and
there has been no notification of any request for such audit or other
examination and there is no deficiency, refund litigation, proposed adjustment
or matter in controversy with respect to any Taxes due and owing by the
Representing Party or any Representing Party's Affiliated Group which if
determined adversely would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on the Representing Party. All
assessments for Taxes due and owing by the Representing Party or any
Representing Party's Affiliated Group with respect to completed and settled
examinations or concluded litigation have been paid, except to the extent that
any failures to pay would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on the Representing Party.
(c) The Representing Party has not (i) entered into a closing
agreement or other similar agreement with a taxing authority relating to Taxes
of the Representing Party or any Representing Party's Affiliated Group with
respect to a taxable period for which the statute of limitations is still open,
or (ii) with respect to U.S. federal income Taxes, granted any waiver of any
statute of limitations with respect to, or any extension of a period for the
assessment of, any income Tax, in either case, that is still outstanding. There
are no Liens relating to material Taxes upon the assets of the Representing
Party or any Representing Party's Affiliated Group other than Liens relating to
Taxes not yet due and Liens that would not, individually or in the aggregate,
have a Material Adverse Effect on the Representing Party. Neither the
Representing Party nor any Representing Party's Affiliated Group is a party to
or is bound by any Tax sharing agreement, Tax indemnity obligation or similar
agreement in respect of Taxes (other than with respect to agreements solely
between or among members of the consolidated group of which the
- 17 -
Representing Party is the common parent and agreements and obligations that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Representing Party).
(d) Neither the Representing Party nor any Representing Party's
Affiliated Group has taken any action or knows of any fact, agreement, plan or
other circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(e) Neither the Representing Party nor any Affiliated Group has
requested or received any private letter ruling from the Internal Revenue
Service or comparable rulings from other taxing authorities.
(f) Neither the Representing Party nor any member of any Affiliated
Group has any employment, severance or termination agreements, other
compensation arrangements, or Benefit Plans currently in effect which provide
for the payment of any amount (whether in cash or property or the vesting of
property) as a result of any of the transactions contemplated by this Agreement
that individually or collectively (either alone or upon the occurrence of any
additional or subsequent event), could give rise to a payment which is
nondeductible by reason of Section 280G of the Code.
(g) Neither the Representing Party nor any member of any Affiliated
Group has filed any consent agreement under Section 341(f) of the Code or agreed
to have Section 341(f)(4) applied to any disposition of assets owned by the
Representing Party or any Affiliated Group.
(h) Neither the Representing Party nor any member of any Affiliated
Group has been at any time a United States Real Property Holding Corporation
within the meaning of Section 897(c)(2) of the Code.
Section 3.14 Absence of Questionable Payments. Neither the Representing
Party nor, to the Representing Party's knowledge, any director, officer, agent,
employee, consultant, contractor or other person acting on behalf of the
Representing Party, has used any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of the
Foreign Corrupt Practices Act of 1977, as amended, or any other domestic or
foreign Law. Neither the Representing Party nor, to the Representing Party's
knowledge, any director, officer, agent, employee, consultant, contractor or
other person acting on behalf of the Representing Party, has accepted or
received any unlawful contributions, payments, gifts or expenditures.
Section 3.15 Title and Related Matters. The Representing Party or one of
its Subsidiaries has good and valid title to, or a valid leasehold or
contractual interest in, all of the properties and assets reflected in the
latest balance sheet included, in the case of the Company in the Financial
Statements and, in the case of PCA, in the SEC Reports, or acquired after the
date thereof (except for properties or assets sold or otherwise disposed of
since the date thereof), free and clear of all Liens, statutory Liens securing
payments not yet due or delinquent or the validity of which is being contested
in good faith by appropriate proceedings, and such imperfections or
- 18 -
irregularities in title that do not materially and adversely affect the current
use of the properties or assets subject thereto or affected thereby, affect the
ability to convey title thereto or otherwise materially impair the business
operations currently conducted at such properties. As of the date hereof,
Section 3.15 of the Representing Party's Disclosure Schedule contains a complete
and correct list of all real property owned or leased by the Representing Party
or any of its Subsidiaries, and a complete and correct list of each title
insurance policy insuring title to any of such real properties.
Section 3.16 Material Contracts.
(a) Company Contracts.
(i) Section 3.16 of the Company Disclosure sets forth a list
of all agreements the Company would be required to file as material contracts
under Item 601 of Regulation S-K were the Company subject to the Exchange Act
and the disclosure requirements of Regulation S-K (the "COMPANY MATERIAL
CONTRACTS"). The Company has heretofore made available to PCA true, correct and
complete copies of all Company Material Contracts. The Company is not a party to
nor bound by any severance or other agreement with any employee, consultant or
contractor pursuant to which such person would be entitled to receive any
additional compensation or an accelerated payment of compensation as a result of
the consummation of the transactions contemplated hereby.
(ii) Each of the Company Material Contracts constitutes the
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, and is in full force and effect, except as may be limited by (A)
bankruptcy laws and other similar laws affecting creditors' rights generally and
(B) general principles of equity. The Company is not in breach or default in any
material respects of any provisions of any Company Material Contract and, to the
Company's knowledge, no event has occurred which with notice or lapse of time
would constitute a material breach or default by the Company or permit
termination, modification or acceleration thereunder, and which with respect to
each of the foregoing, could not be timely cured by the Company. The Company
does not have any knowledge of any termination or material breach of anticipated
termination or material breach by the other parties to any Company Material
Contract or commitment to which it is a party or to which any of its assets are
subject.
(iii) No party to any such Company Material Contract has
given notice to the Company of or made a claim against the Company in respect of
any breach or default thereunder.
(iv) No terms and conditions of any Company Material Contract
or other arrangement or understanding between the Company and any other Person
in effect on the date of this Agreement prevent, delay or materially restrict
the Company's ability to deploy any material portion of its assets or resources
as it deems appropriate, and after the Closing shall prevent, delay or
materially restrict the Company's ability to deploy any material portion of its
assets or resources as it deems appropriate.
(b) PCA Contracts.
- 19 -
(i) The SEC Reports contain true and accurate copies of all of
the agreements required to be filed as material contracts under Item 601 of
Regulation S-K under the Securities Act (the "PCA MATERIAL CONTRACTS"). PCA is
not a party to nor bound by any severance or other agreement with any employee,
consultant or contractor pursuant to which such person would be entitled to
receive any additional compensation or an accelerated payment of compensation as
a result of the consummation of the transactions contemplated hereby.
(ii) Each of the PCA Material Contracts constitutes the valid
and legally binding obligation of PCA, enforceable in accordance with its terms,
and is in full force and effect, except as may be limited by (A) bankruptcy laws
and other similar laws affecting creditors' rights generally and (B) general
principles of equity. PCA is not in breach or default in any material respects
of any provisions of any PCA Material Contract and, to PCA's knowledge, no event
has occurred which with notice or lapse of time would constitute a material
breach or default by PCA or permit termination, modification or acceleration
thereunder, and which with respect to each of the foregoing, could not be timely
cured by PCA. PCA does not have any knowledge of any termination or material
breach or anticipated termination or material breach by the other parties to any
PCA Material Contract or commitment to which it is a party or to which any of
its assets are subject.
(iii) No party to any such PCA Material Contract has given
notice to PCA of or made a claim against PCA in respect of any breach or default
thereunder.
(iv) No terms and conditions of any PCA Material Contract or
other arrangement or understanding between PCA and any other Person in effect on
the date of this Agreement prevent, delay or materially restrict PCA's ability
to deploy any material portion of its assets or resources as it deems
appropriate, and after the Closing shall prevent, delay or materially restrict
PCA's ability to deploy any material portion of its assets or resources as it
deems appropriate.
Section 3.17 Insurance. Section 3.17 of the Representing Party's
Disclosure Schedule sets forth a true and complete list and brief summary
description (including information on the premiums payable in connection
therewith and the scope and amount of the coverage provided thereunder) of
directors and officers liability and general liability insurance policies
maintained by the Representing Party. Such policies have been issued by insurers
which, to the Representing Party's knowledge, are reputable and financially
sound and provide coverage for the operations conducted by the Representing
Party of a scope and coverage consistent with customary industry practice. All
such policies are in full force and effect and no notice of cancellation has
been given with respect to any such policy. All premiums due thereon have been
paid in a timely manner. There are no pending claims or, to the knowledge of the
Representing Party, threatened claims, under any of the Representing Party's
insurance policies.
Section 3.18 Subsidies. No grants, subsidies or similar arrangements exist
directly or indirectly between or among the Representing Party, on the one hand,
and any domestic or foreign Governmental Entity or any other person, on the
other hand. The Representing Party has not requested, sought, applied for or
entered into any grant, subsidy or similar arrangement directly or indirectly
from or with any domestic or foreign Governmental Entity or any other person.
- 20 -
Section 3.19 Intellectual Property.
(a) For purposes of this Agreement, "INTELLECTUAL PROPERTY" means:
(i) all issued patents, reissued or reexamined patents,
revivals of patents, utility models, certificates of invention, registrations of
patents and extensions thereof, regardless of country or formal name
(collectively, "ISSUED PATENTS");
(ii) all published or unpublished nonprovisional and
provisional patent applications, reexamination proceedings, invention
disclosures and records of invention (collectively "PATENT APPLICATIONS" and,
with the Issued Patents, the "PATENTS");
(iii) all copyrights, copyrightable works, semiconductor
topography and mask work rights, including all rights of authorship, use,
publication, reproduction, distribution, performance transformation, moral
rights and rights of ownership of copyrightable works, semiconductor topography
works and mask works, and all rights to register and obtain renewals and
extensions of registrations, together with all other interests accruing by
reason of international copyright, semiconductor topography and mask work
conventions (collectively, "COPYRIGHTS");
(iv) common law trademarks, registered trademarks,
applications for registration of trademarks, common law service marks,
registered service marks, applications for registration of service marks, trade
names, registered trade names and applications for registrations of trade names
and trade dress (collectively, "TRADEMARKS");
(v) all technology, ideas, inventions, designs, proprietary
information, manufacturing and operating specifications, know-how, formulae,
trade secrets, technical data, computer programs, hardware, software and
processes related to the business of the Representing Party as such business is
currently conducted and as its business is proposed to be conducted;
(vi) all domain names registered by the Representing Party;
and
(vii) all other intangible intellectual property assets,
properties and rights (whether or not appropriate steps have been taken to
protect, under applicable law, such other intangible assets, properties or
rights).
(b) The Representing Party owns and has good and marketable title
to, or possesses legally enforceable rights to use, all Intellectual Property
used or currently proposed to be used in the business of the Representing Party
as currently conducted or as proposed to be conducted by the Representing Party
(the "REPRESENTING PARTY'S INTELLECTUAL PROPERTY"), free and clear of all liens,
claims or encumbrances. The Representing Party's Intellectual Property
constitutes all of the Intellectual Property necessary to enable the
Representing Party to conduct its business as such business is currently being
conducted and as its business is proposed to be conducted. No current or former
officer, director, stockholder, employee, consultant or independent contractor
has asserted any right, claim or interest in or with respect to any Representing
Party Intellectual Property and the Representing Party is not aware of a basis
for any such claim. There is no unauthorized use, disclosure or misappropriation
of any Representing Party Intellectual Property by any employee or, to the
Representing Party's
- 21 -
knowledge, former employee of the Representing Party or, to the Representing
Party's knowledge, by any other third party. There are no royalties, fees or
other payments payable by the Representing Party to any third person under any
written or oral contract or understanding by reason of the ownership, use, sale
or disposition of Representing Party Intellectual Property.
(c) To the knowledge of the Representing Party, there is no
unauthorized use, disclosure, infringement or misappropriation of any
Representing Party Intellectual Property, including any license, sublicense and
other agreements to which the Representing Party is a party and pursuant to
which the Representing Party is authorized to use any Intellectual Property
owned by any third party, excluding "off the shelf" or other software at a cost
not exceeding $10,000 and widely available through regular commercial
distribution channels on standard terms and conditions ("THIRD PARTY
INTELLECTUAL PROPERTY") by any third party, including any employee or former
employee of the Representing Party. Other than in respect of agreements with the
Representing Party's officers and directors, the Representing Party has not
entered into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in standard sales or agreements to end users arising in the ordinary
course of business. There are no royalties, fees or other payments payable by
the Representing Party to any Person by reason of the ownership, use, sale or
disposition of Intellectual Property.
(d) The Representing Party is not in breach of any license,
sublicense or other agreement relating to the Representing Party Intellectual
Property or Third Party Intellectual Property Rights. Neither the execution,
delivery or performance of this Agreement or any ancillary agreement
contemplated hereby nor the consummation of the Merger or any of the
transactions contemplated by this Agreement will contravene, conflict with or
result in an infringement on the Representing Party Intellectual Property,
including any Third Party Intellectual Property.
(e) All Patents, registered Trademarks, registered service marks and
registered Copyrights held by the Representing Party are valid and subsisting.
All maintenance and annual fees have been fully paid and all fees paid during
prosecution and after issuance of any patent comprising or relating to such item
have been paid in the correct entity status amounts. The Representing Party is
not infringing, misappropriating or making unlawful use of, or received any
notice or other communication (in writing or otherwise) of any actual, alleged,
possible or potential infringement, misappropriation or unlawful use of any
proprietary asset owned or used by any third party. There is no proceeding
pending or, to the Representing Party's knowledge, threatened nor has any claim
or demand been made, which challenges the legality, validity, enforceability or
ownership of any item of the Representing Party Intellectual Property or Third
Party Intellectual Property or alleges a claim of infringement of any Patents,
Trademarks, service marks, Copyrights or violation of any trade secret or other
proprietary right of any third party. The Representing Party has not brought a
proceeding alleging infringement of the Representing Party Intellectual Property
or breach of any license or agreement involving Intellectual Property against
any third party.
(f) All current and former officers and employees of the
Representing Party have executed and delivered to the Representing Party an
agreement (containing no exceptions or exclusions from the scope of its
coverage) regarding the protection of proprietary information
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and the assignment to the Representing Party of any Intellectual Property
arising from services performed for the Representing Party by such persons. All
current and former consultants and independent contractors to the Representing
Party involved in the development, modification, marketing and servicing of the
Representing Party's products, and/or the Representing Party Intellectual
Property have executed and delivered to the Representing Party an agreement
(containing no exceptions or exclusions from the scope of its coverage)
regarding the protection of proprietary information and the assignment to the
Representing Party of any Intellectual Property arising from services performed
for the Representing Party by such persons. To the Representing Party's
knowledge, no employee or independent contractor of the Representing Party is in
violation of any term of any patent disclosure agreement or employment contract
or any other contract or agreement relating to the relationship of any such
employee or independent contractor with the Representing Party.
(g) The Representing Party has taken all commercially reasonable and
customary measures and precautions necessary to protect and maintain the
confidentiality of all the Representing Party Intellectual Property (except such
Representing Party Intellectual Property whose value would be unimpaired by
public disclosure) and otherwise to maintain and protect the full value of all
Intellectual Property it owns or uses. All Intellectual Property not otherwise
protected by Patents or Copyrights ("CONFIDENTIAL INFORMATION") owned by the
Representing Party used by or disclosed to a third party has been pursuant to
the terms of a written agreement between the Representing Party and such third
party.
(h) No product liability claims have been communicated in writing to
or, to the Representing Party's knowledge, threatened against the Representing
Party.
(i) The Representing Party is not subject to any proceeding or
outstanding decree, order, judgment, or stipulation restricting in any manner
the use, transfer, or licensing thereof by the Representing Party, or which may
affect the validity, use or enforceability of such Representing Party
Intellectual Property. The Representing Party is not subject to any agreement
which restricts in any material respect the use, transfer, or licensing by the
Representing Party of the Representing Party Intellectual Property or
Representing Party Products.
Section 3.20 Minute Books; Stock Record Books. True and correct copies of
the Representing Party's minute books and, in the case of the Company, stock
record books have been made available to the other. The minute books of the
Representing Party contain true and complete originals or copies of all minutes
of meetings of and actions by the stockholders, Board of Directors and all
committees of the Board of Directors of the Representing Party, and accurately
reflect in all material respects all corporate actions of the Representing Party
which are required by law to be passed upon by the Board of Directors or
stockholders of the Representing Party. The stock record books accurately
reflect all transactions in shares of the Company's capital stock.
Section 3.21 Bank Accounts; Powers of Attorney. Section 3.21 of the
Representing Party's Disclosure Schedule hereto sets forth a complete and
correct list showing: (a) all banks in which the Representing Party maintains a
bank account or safe deposit box (collectively, "BANK ACCOUNTS"), together with,
as to each such Bank Account, the account number, the names of all signatories
thereof and the authorized powers of each such signatory and, with respect to
- 23 -
each such safe deposit box, the number thereof and the names of all persons
having access thereto; and (b) the names of all persons holding powers of
attorney from the Representing Party, true and correct copies thereof which have
been delivered to the other.
Section 3.22 Disclosure. The representations and warranties by the
Representing Party in this Agreement and the statements contained in the
schedules, certificates and other writings furnished and to be furnished by the
Representing Party to the other party pursuant to this Agreement, when
considered as a whole and giving effect to any supplements or amendments thereof
prior to the time of signing on the date hereof, do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact necessary to make the statements herein, in light of the
circumstances under which they were or shall be made, not misleading, it being
understood that as used in this Section 3.22 "material" means material to the
Representing Party and its Subsidiaries, taken as a whole. The Representing
Party has provided to the other copies of all contracts and agreements that can
be reasonably construed as material to the business of the Representing Party.
Section 3.23 Brokers or Finders.
(a) The Company represents, as to itself, its Subsidiaries and its
affiliates, that no agent, broker, investment banker, financial advisor or other
firm or person is or will be entitled to any brokers' or finder's fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement; and the Company agrees to indemnify and hold PCA
harmless from and against any and all claims, liabilities or obligations with
respect to any other fees, commissions or expenses asserted by any person on the
basis of any act or statement alleged to have made by such party or its
affiliates.
(b) PCA represents, as to itself, Merger Sub, its Subsidiaries and
its affiliates, that no agent, broker, investment banker, financial advisor or
other firm or person is or will be entitled to any brokers' or finder's fee or
any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement; and PCA agrees to indemnify and hold the Company
harmless from and against any and all claims, liabilities or obligations with
respect to any other fees, commissions or expenses asserted by any person on the
basis of any act or statement alleged to have been made by such party or its
affiliates.
Section 3.24 No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby, PCA
represents and warrants that Merger Sub has neither incurred any obligation or
liability nor engaged in any business or activity of any type or kind whatsoever
or entered into any agreement or arrangement with any person.
ARTICLE IV
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business of the Company. Except as contemplated by
this Agreement, during the period from the date hereof to the Effective Time,
the Company will conduct its operations in the ordinary and usual course of
business consistent with past practice and, to the extent consistent therewith,
with no less diligence and effort than would be applied in
- 24 -
the absence of this Agreement, use commercially reasonable efforts to preserve
intact its current business organizations, keep available the service of its
current officers and employees, preserve its relationships with customers,
suppliers and others having business dealings with it and preserve the goodwill
of the Company through the Effective Time. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this Agreement or
in Schedule 4.1, prior to the Effective Time, the Company will not, without the
prior written consent of PCA:
(a) amend its certificate of incorporation or bylaws (or other
similar organizational or governing instruments), as each such document is in
effect on the date hereof;
(b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities convertible into or exchangeable for any
stock or any equity equivalents (including, any stock options or stock
appreciation rights), except for: (i) the issuance or sale of Shares pursuant to
outstanding Company Stock Options and (ii) the authorization for issuance(s)
after the Closing of the Merger of (x) up to 8,000,000 shares of PCA Common
Stock at a price of $0.30 per share and (y) warrants exercisable for up to an
additional 4,000,000 shares of PCA Common Stock to certain prospective financial
investors (the "INVESTORS")
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) 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; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire, directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of the Company (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue
any debt securities; (ii) assume, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or otherwise) for the obligations
of any other person; (iii) make any loans, advances or capital contributions to,
or investments in, any other person (other than customary loans or advances to
employees, consultants or contractors in the ordinary and usual course of
business consistent with past practice and in amounts not material to the maker
of such loan or advance); (iv) pledge or otherwise encumber shares of capital
stock of the Company; or (v) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any Lien thereupon, other
than as disclosed in the schedules hereto and Permitted Liens;
(f) (i) except as may be required by Law or as contemplated by this
Agreement, enter into, adopt or amend or terminate (partially or completely) any
Benefit Plan, Employee Arrangement (including, the repricing of any stock
options or the acceleration or vesting of any stock options), stock appreciation
right, restricted stock, performance unit, stock equivalent or stock purchase
agreement for the benefit or welfare of any director, officer,
- 25 -
employee, consultant or contractor in any manner, (ii) except as required under
existing agreements, increase in any manner the compensation or fringe benefits
of any director, officer, employee, consultant or contractor 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) or
grant any completion bonuses or change of control payments in respect of the
Merger or that will be affected thereby; or (iii) hire, promote or change the
classification or status in respect of any employee or individual; provided,
however, that PCA shall not unreasonably withhold or delay any consent sought to
hire, promote or change the classification or status of any employee or
individual.
(g) acquire, sell, lease or dispose of any assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to the Company, enter into any
commitment or transaction outside the ordinary and usual course of business
consistent with past practice or grant any exclusive distribution rights, except
for any rights that may be sold or granted in connection with the proposed
transactions with the Investors;
(h) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein;
(i) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(j) take any action (including, any action otherwise permitted by
this Section 4.2) that would prevent or impede the Merger from qualifying as a
"reorganization" under Section 368(a) of the Code;
(k) fail to comply in any material respect with any Law applicable
to the Company or its assets which would reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect on the Company;
(l) dispose of or permit to lapse any rights to the use of any
patent, trademark, trade name, copyright or other intangible asset that is
material to the Company, or dispose of or disclose to any Person any trade
secret, formula, process or know-how not theretofore a matter of public
knowledge unless, in respect of disclosure, such Person has executed a
confidentiality agreement in form acceptable to the Company;
(m) sell or dispose of any Company Intellectual Property;
(n) change any of the banking or safe deposit arrangements described
in Section 3.21 hereto, except in the ordinary course of business;
(o) fail to maintain its books, accounts and records in the usual,
regular and ordinary manner on a basis consistent with prior years; or
(p) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Section 4.1(a) through Section 4.1(o) or any
action which would make any
- 26 -
of the representations or warranties of the Company contained in this Agreement
untrue, incomplete or incorrect.
Section 4.2 Conduct of Business of PCA. Except as contemplated by this
Agreement, during the period from the date hereof to the Effective Time, PCA
will conduct its operations in the ordinary and usual course of business
consistent with past practice and, to the extent consistent therewith, with no
less diligence and effort than would be applied in the absence of this
Agreement, use commercially reasonable efforts to preserve intact its current
business organizations, keep available the service of its current officers and
employees, preserve its relationships with customers, suppliers and others
having business dealings with it and preserve the goodwill of PCA through the
Effective Time. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement or in Schedule 4.2, prior to the
Effective Time, PCA will not, without the prior written consent of Company:
(a) amend its certificate of incorporation or bylaws (or other
similar organizational or governing instruments), as each such document is in
effect on the date hereof;
(b) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities convertible into or exchangeable for any
stock or any equity equivalents (including, any stock options or stock
appreciation rights), except for the issuance or sale of PCA Common Stock
pursuant to outstanding PCA Stock Options, and except for the issuance of PCA
Stock Options to purchase up to an aggregate of no shares of PCA Common Stock to
employees, consultants and directors pursuant to PCA's Stock Option Plans and
consistent with past practices;
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) 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; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire, directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of PCA (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue
any debt securities; (ii) assume, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or otherwise) for the obligations
of any other person; (iii) make any loans, advances or capital contributions to,
or investments in, any other person (other than customary loans or advances to
employees, consultants or contractors in the ordinary and usual course of
business consistent with past practice and in amounts not material to the maker
of such loan or advance); (iv) pledge or otherwise encumber shares of capital
stock of PCA or Merger Sub; or (v) mortgage or pledge any of its material
assets, tangible or intangible, or create or suffer to exist any Lien thereupon,
other than as disclosed in the schedules hereto and Permitted Liens;
- 27 -
(f) (i) except as may be required by Law or as contemplated by this
Agreement, enter into, adopt or amend or terminate (partially or completely) any
Benefit Plan, Employee Arrangement (including, the repricing of any stock
options or the acceleration or vesting of any stock options), stock appreciation
right, restricted stock, performance unit, stock equivalent or stock purchase
agreement for the benefit or welfare of any director, officer, employee,
consultant or contractor in any manner, (ii) except as required under existing
agreements, increase in any manner the compensation or fringe benefits of any
director, officer, employee, consultant or contractor 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) or
grant any completion bonuses or change of control payments in respect of the
Merger or that will be affected thereby; or (iii) hire, promote or change the
classification or status in respect of any employee or individual; provided,
however, that the Company shall not unreasonably withhold or delay any consent
sought to hire, promote or change the classification or status of any employee
or individual.
(g) acquire, sell, lease or dispose of any assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to PCA, enter into any commitment or
transaction outside the ordinary and usual course of business consistent with
past practice or grant any exclusive distribution rights;
(h) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein;
(i) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(j) take any action (including, any action otherwise permitted by
this Section 4.2) that would prevent or impede the Merger from qualifying as a
"reorganization" under Section 368(a) of the Code;
(k) fail to comply in any material respect with any Law applicable
to PCA or its assets which would reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect on PCA;
(l) dispose of or permit to lapse any rights to the use of any
patent, trademark, trade name, copyright or other intangible asset that is
material to PCA, or dispose of or disclose to any Person any trade secret,
formula, process or know-how not theretofore a matter of public knowledge
unless, in respect of such disclosure, such Person has executed a
confidentiality agreement in form acceptable to PCA;
(m) sell or dispose of any PCA Intellectual Property;
(n) change any of the banking or safe deposit arrangements described
in Section 3.21 hereto, except in the ordinary course of business;
(o) fail to maintain its books, accounts and records in the usual,
regular and ordinary manner on a basis consistent with prior years; or
- 28 -
(p) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Section 4.2(a) through Section 4.2(o) or any
action which would make any of the representations or warranties of PCA
contained in this Agreement untrue, incomplete or incorrect.
Section 4.3 Conduct of Business of Merger Sub. Except as contemplated by
this Agreement, during the period from the date hereof to the Effective Time,
Merger Sub will not, without the prior written consent of Company, take any
action unless in furtherance of the Merger.
Section 4.4 Access to Information.
(a) Between the date hereof and the Effective Time, the Company, PCA
and Merger Sub will each give the authorized representatives (including counsel,
financial advisors and auditors) of the other reasonable access to all its
employees, consultants, contractors, plants, offices, warehouses and other
facilities and to all its books and records, will permit the other to make such
inspections and investigations as each may require. Each of the Company, PCA and
Merger Sub will cause its officers to furnish the other with such financial and
operating data and other information in respect of its business, properties and
personnel as each may from time to time reasonably request, provided that no
investigation pursuant to this Section 4.4(a) shall affect or be deemed to
modify any of the representations or warranties made by each of the Company, PCA
and Merger Sub.
(b) Each of the Company, PCA and Merger Sub will hold and will cause
its authorized representatives to hold in confidence all documents and
information concerning the other furnished in connection with the transactions
contemplated by this Agreement.
Section 4.5 Continuation of Insurance Coverage. From the date hereof to
the Closing, each of the Company and PCA shall keep in full force and effect
insurance coverage for its assets and operations comparable in amount and scope
to the coverage now maintained covering its assets and operations.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Company Written Consent. The Company shall take all action
necessary under all applicable Laws to obtain approval for the actions
contemplated by this agreement through action by written consent of its
stockholders.
Section 5.2 Merger Sub Written Consent. The Merger Sub shall take all
action necessary under all applicable Laws to obtain approval for the actions
contemplated by this agreement through action by written consent of its
stockholders.
Section 5.3 PCA Management.
(a) PCA Board of Directors. Prior to the Effective Time, the PCA
Board of Directors in place immediately prior to the Effective Time will elect
those individuals listed on Section 5.3(a) of the Company Disclosure Schedule to
be directors of PCA, with such elections
- 29 -
to take effect at the Effective Time. After electing the individuals listed on
Section 5.3(a) of the Company Disclosure Schedule to be PCA directors as set
forth in this Section 5.3(a) and after electing the individuals listed on
Section 5.3(b) of the Company Disclosure Schedule as PCA officers as set forth
in Section 5.3(b), the members of the PCA Board of Directors in place
immediately prior to the Effective Time will resign as members of the PCA Board
of Directors, with such resignations to take effect at the Effective Time.
(b) PCA Officers. Prior to the Effective Time, and prior to the time
that the members of the PCA Board of Directors tender resignations as set forth
in Section 5.3(a), the officers of PCA in place immediately prior to the
Effective Time will resign as officers of PCA, with such resignations to take
effect at the Effective Time. The PCA Board of Directors in place immediately
prior to the Effective Time will elect those individuals listed on Section
5.3(b) of the Company Disclosure Schedule to those positions set forth opposite
their names, with such elections to take effect at the Effective Time. The
officers of PCA at the Effective Time shall hold office in accordance with the
certificate of incorporation and bylaws of PCA until their successors are duly
elected or appointed and qualified or until their earlier death, resignation or
removal.
Section 5.4 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each
party will use commercially reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate the Merger and the other
transactions contemplated by this Agreement. Neither the Company, PCA nor Merger
Sub will take, agree to take or knowingly permit to be taken any action or do or
knowingly permit to be done anything in the conduct of the business of the
companies, or otherwise, which would be contrary to or in breach of any of the
terms or provisions of this Agreement.
(b) In furtherance and not in limitation of the covenants of the
parties contained in Sections 5.1 and 5.2, each of PCA, Merger Sub and the
Company shall use commercially reasonable efforts to resolve such objections, if
any, as may be asserted by a Governmental Entity or other person in respect of
the transactions contemplated hereby, including, without limitation, under any
antitrust or other Law, or by any Dissenting Stockholder in respect of
Dissenting Shares. In connection with the foregoing, if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement, each of PCA, Merger Sub and the Company shall
cooperate in all respects with each other and use its respective commercially
reasonable efforts to contest and resist any such action or proceeding and to
have vacated, lifted, reversed or overturned any decree, judgment, injunction,
or other order, whether temporary, preliminary or permanent, that is in effect
and that prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, nothing in this Section 5.4(b) shall (i) limit a
party's right to terminate this Agreement pursuant to Section 7.2 so long as
such party has up to then complied in all material respects with its obligations
under this Section 5.4(b), or (ii) require PCA to dispose or hold separate any
part of its or the Company's business or
- 30 -
operations (or a combination of PCA's and the Company's business or operations),
or comply with any other material restriction affecting its business or
operations.
(c) The Company and PCA agree that in connection with any litigation
which may be brought against the Company or its directors or PCA or its
directors relating to the transactions contemplated hereby, the party subject to
such litigation will keep the other, and any counsel which the other may retain
at its own expense, informed of the course of such litigation, to the extent the
other is not also a party thereto. The parties agree that they will consult with
each other prior to entering into any settlement or compromise of any such
litigation, and that no such settlement or compromise will be entered into by
either party without the prior written consent of the other party, which consent
shall not be unreasonably withheld.
Section 5.5 Public Announcements. Each of PCA, Merger Sub and the Company
will consult with one another before issuing any press release or otherwise
making any public statements in respect of the transactions contemplated by this
Agreement, including, the Merger, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable Law, as determined by PCA, Merger Sub or the Company, as
the case may be, a copy of which shall be sent simultaneously to the other party
upon such release.
Section 5.6 Timely Filing of PCA Periodic Reports. PCA shall timely file
all required reports with the SEC as required by the Exchange Act and rules and
regulations of the SEC, including, but not limited to, its Annual Report on Form
10-K.
Section 5.7 Employee Matters.
(a) PCA will cause the Surviving Corporation to honor the
obligations of the Company under the provisions of all Benefit Plans and
Employee Arrangements set forth in the Company's Disclosure Schedule, subject to
PCA's right to amend or terminate any such Benefit Plan or Employee Arrangement
in accordance with its terms. After the Effective Time, the employees of the
Company will be eligible to participate in the Company's Benefit Plans or, if so
determined by PCA, PCA's applicable Benefit Plans, as such plans may be in
effect from time to time, and, at PCA's sole discretion, will become employees
of PCA. With respect to each such employee of the Company, service with the
Company may be counted for purposes of determining periods of eligibility to
participate or to vest in benefits under any applicable Benefit Plan of PCA. At
PCA's sole discretion, administrative functions, including but not limited to
payroll processing, may be transferred to processors of PCA's choosing.
(b) At the Closing, PCA may cause the Surviving Corporation to
deposit with an escrow agent reasonably acceptable to all parties hereto and
pursuant to the terms of a mutually acceptable escrow agreement, an amount
sufficient to pay any amount due pursuant to retention agreements disclosed in
the PCA Disclosure Schedule.
Section 5.8 Affiliate Agreements. Section 5.8 of the Company Disclosure
Schedule sets forth a list of all persons who are, and all persons who to the
Company's knowledge will be at the Closing Date, "affiliates" of the Company for
purposes of Rule 145 under the Securities Act. The Company will cause such list
to be updated promptly through the Closing Date. No
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later than 15 days after the date of this Agreement (but in any event prior to
the Effective Time), the Company shall cause its "affiliates" to deliver to PCA
an Affiliate Agreement in substantially the form attached hereto as Exhibit C.
Section 5.9 Lock-up Agreements. Section 5.9 of the PCA Disclosure Schedule
sets forth a list of certain of PCA's officers, directors and stockholders who
hold a substantial number of shares of PCA Common Stock (the "PCA AFFILIATES").
Prior to the Effective Time, PCA shall cause all PCA Affiliates to deliver to
PCA a Lock-up Agreement.
Section 5.10 Cancellation of Outstanding PCA Options, Warrants and
Conversion Rights under Outstanding Convertible Notes. Section 5.10 of the PCA
Disclosure Schedule sets forth a list of all PCA stock options, warrants and
convertible notes which have conversion rights outstanding as of August 1, 2002
("PCA RIGHTS"). Prior to the Effective Time, PCA agrees to enter into agreements
with all holders of PCA Rights to cancel such PCA Rights as of a date prior to
the Effective Time.
Section 5.11 Satisfaction of Certain PCA Obligations. The Company shall
use all reasonable efforts to enter into agreements with certain PCA creditors
to pay to such creditors certain amounts due them by PCA in satisfaction of
certain PCA obligations and liabilities (the "PCA OBLIGATIONS"), as set forth in
Section 5.11 of the Company Disclosure Schedule.
Section 5.12 Antitakeover Statutes. If any antitakeover statute is or may
become applicable to the Merger, each of PCA and the Company shall take such
actions as are necessary so that the transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise act to eliminate or minimize the effects of any antitakeover
statute on the Merger.
Section 5.13 Third Party Consents.
(a) Each of PCA, Merger Sub and the Company shall use its
commercially reasonable efforts to obtain at the earliest practicable date all
consents of third parties (including, but not limited to, such as are listed on
Section 3.3 of the Company Disclosure Schedule or PCA Disclosure Schedule, as
applicable) and Governmental Entities necessary to the consummation of the
transactions contemplated hereby (the "THIRD PARTY CONSENTS") and will provide
to the other parties hereto copies of each such Third Party Consent promptly
after it is obtained. Each of PCA, Merger Sub and the Company agrees to
cooperate fully with the other parties hereto in connection with the obtaining
of the Third Party Consents; provided, however, that no party shall be required
to pay any additional sums to secure such Third Party Consents of the other
parties hereto.
(b) In furtherance and not in limitation of the covenants of the
parties contained in Section 5.13(a), if any administrative or judicial action
or proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement, each of PCA, Merger Sub and the Company shall cooperate in all
respects with each other and use its respective commercially reasonable efforts
to contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or
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permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
(c) If any objections are asserted with respect to the transactions
contemplated hereby or if any suit is instituted by any Governmental Entity or
any private party challenging any of the transactions contemplated hereby as
violative of any regulatory Law, each of PCA, Merger Sub and the Company shall
use its commercially reasonable efforts to resolve any such objections or
challenge as such Governmental Entity or private party may have to such
transactions under such regulatory Law so as to permit consummation of the
transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions to Each Party's Obligations to Effect the Merger.
The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all of which may be
waived in whole or in part by the party being benefited thereby, to the extent
permitted by applicable Law:
(a) This Agreement shall have been approved and adopted by the
Company's stockholders and by Merger Sub's stockholders.
(b) The Company, PCA and Merger Sub shall have timely obtained from
each Governmental Entity all approvals, waivers and consents, if any, necessary
for consummation of or in connection with the transactions contemplated hereby,
including such approvals, waivers and consents as may be required under the
Securities Act and under blue sky laws, if any, except for such authorizations,
consents or approvals, the failure of which to have been made or obtained does
not and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(c) There shall not be in effect any Law of any Governmental Entity
of competent jurisdiction restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement and no
Governmental Entity shall have instituted any proceeding which continues to be
pending seeking any such Law.
Section 6.2 Conditions to the Obligations of PCA and Merger Sub. The
obligations of PCA and Merger Sub to consummate the transactions contemplated by
this Agreement are subject to the fulfillment at or prior to the Effective Time
of each of the following additional conditions, any or all of which may be
waived in whole or part by PCA and Merger Sub to the extent permitted by
applicable Law:
(a) The representations and warranties of the Company contained
herein shall be true (for the purposes of this Section 6.2(a), without regard to
any materiality or Material Adverse Effect qualifier contained therein), except
where the failure to be true, individually or in the aggregate, has not had or
is not reasonably expected to have a Material Adverse Effect on the
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Company, in each case on and as of the Closing (except for representations and
warranties made as of a specified date, which shall speak only as of the
specified date);
(b) The Company shall have performed or complied in all material
respects with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the time of the Closing; or
(c) The Company shall have delivered to PCA a certificate, dated the
date of the Closing, signed by the President of the Company (but without
personal liability thereto), certifying as to the fulfillment of the conditions
specified in Section 6.2(a) and Section 6.2(b).
(d) The Company shall have entered into any additional agreements
provided for under Article V to which the Company is a party and, to the extent
performance of any such additional agreements is to have occurred prior to the
Effective Time, the Company and the other parties thereto shall have fully
performed their respective obligations under those additional agreements.
Section 6.3 Conditions to the Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Effective Time of each of the
following conditions, any or all of which may be waived in whole or in part by
the Company to the extent permitted by applicable Law:
(a) The representations and warranties of PCA and Merger Sub
contained herein shall be true (for the purposes of this Section 6.3(a), without
regard to any materiality or Material Adverse Effect qualifier contained
therein), except where the failure to be true, individually or in the aggregate,
has not had or is not reasonably expected to have a Material Adverse Effect on
PCA, in each case on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall speak only as of the
specified date).
(b) PCA and Merger Sub shall have performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing.
(c) PCA shall have performed and complied in all respects with the
obligations set forth in Section 5.3.
(d) PCA shall have delivered to the Company a certificate, dated the
date of the Closing, signed by an executive officer of PCA (but without personal
liability thereto), certifying as to the fulfillment of the conditions specified
in Section 6.3(a) and Section 6.3(b).
(e) The Company shall have completed to its satisfaction, as
determined by the Company in its sole discretion, a due diligence examination of
PCA and its assets and business.
(f) Prior to the Closing, there shall not have occurred any Material
Adverse Effect on PCA.
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(g) The Merger Sub and PCA shall have entered into any additional
agreements provided for under Article V to which they are a party and, to the
extent performance of any such additional agreements is to have occurred prior
to the Effective Time, they and the other parties thereto shall have fully
performed their respective obligations under those additional agreements.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination by Mutual Agreement. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Stockholder Approval and Merger Sub Stockholder Approval referred to in Section
6.1(a), by mutual written consent of the Company, PCA and Merger Sub by action
of their respective boards of directors.
Section 7.2 Termination by either PCA or the Company. This Agreement may
be terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the board of directors of either PCA or the Company if:
(a) the Merger shall not have been consummated by October 31, 2002,
whether such date is before or after the date of approval of the Merger by the
Company Stockholder Approval and Merger Sub Stockholder Approval (the
"TERMINATION DATE"); provided, however, that if any condition of Closing set
forth in Section 6.1 that remains reasonably capable of satisfaction has not
been fulfilled or waived prior to October 31, 2002, the Termination Date shall
be automatically extended to November 30, 2002;
(b) after the Company solicits approval for the actions contemplated
by this agreement through action by written consent of its stockholders, the
Company Stockholder Approval shall not have been obtained;
(c) the Merger Sub Stockholder Approval shall not have been
obtained;
(d) the PCA Affiliates have not entered into a Lock-up Agreement; or
(e) any Law permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
(whether before or after the approval of the Merger by the Company Stockholder
Approval and Merger Sub Stockholder Approval); provided, however, that the right
to terminate this Agreement pursuant to this Section 7.2 shall not be available
to any party that has breached in any material respect its obligations under
this Agreement in any manner that shall have proximately contributed to the
occurrence of the failure of the Merger to be consummated.
Section 7.3 Termination by the Company. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval of the Merger by the Company Stockholder Approval
and Merger Sub Stockholder Approval referred to in Section 6.1(a), by action of
the Company board of directors, if:
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(a) (i) any of PCA's representations and warranties shall have been
inaccurate as of the date of this Agreement, such that the condition set forth
in Section 6.3 would not be satisfied, or (ii) if (A) any of PCA's
representations and warranties become inaccurate as of a date subsequent to the
date of this Agreement (as if made on such subsequent date), such that the
condition set forth in Section 6.3 would not be satisfied and (B) such
inaccuracy has not been cured by PCA within ten (10) business days after its
receipt of written notice thereof and remains uncured at the time notice of
termination is given, or (iii) PCA's representation and warranties with respect
to its capitalization are inaccurate such that there are shares or rights to
obtain shares outstanding in addition to those initially disclosed, or (iv) any
of PCA's covenants contained in this Agreement shall have been breached, such
that the condition set forth in Section 6.3 would not be satisfied;
(b) the board of directors of PCA shall have withdrawn its
recommendation of this Agreement or modified the recommendation in a manner
adverse to the Company or shall have resolved to do the foregoing;
(c) the Company's due diligence examination of PCA and its assets
and business reveals information that varies materially or adversely from the
understandings upon which the Company agreed to proceed with the transactions
contemplated by this Agreement, as determined by the Company in its reasonable
discretion;
(d) since the date of this Agreement, PCA shall have suffered any
Material Adverse Effect.
Section 7.4 Termination by PCA. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after the approval of the Merger by the Company Stockholder Approval and
Merger Sub Stockholder Approval referred to in Section 6.1(a), by action of the
Board of Directors of PCA, if:
(a) (i) any of the Company's representations and warranties shall
have been inaccurate as of the date of this Agreement, such that the condition
set forth in Section 6.2 would not be satisfied, or (ii) if (A) any of the
Company's representations and warranties become inaccurate as of a date
subsequent to the date of this Agreement (as if made on such subsequent date),
such that the condition set forth in Section 6.2 would not be satisfied and (B)
such inaccuracy has not been cured by the Company within ten business days after
its receipt of written notice thereof and remains uncured at the time notice of
termination is given, or (iii) any of the Company's covenants contained in this
Agreement shall have been breached, such that the condition set forth in Section
6.2 would not be satisfied;
(b) the board of directors of the Company shall have withdrawn its
recommendation of this Agreement or modified the recommendation in a manner
adverse to PCA or shall have resolved to do the foregoing; or
(c) if, since the date of this Agreement, there shall have occurred
any Material Adverse Effect on the Company.
Section 7.5 Effect of Termination and Abandonment. In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
ARTICLE VII, this
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Agreement (other than this Section 7.5, Section 4.4(b) and Section 8.2(a)) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, consultants, contractors,
agents, legal and financial advisors, or other representatives); provided,
however, that except as otherwise provided herein, no such termination shall
relieve any party hereto of any liability or damages resulting from any willful
breach of this Agreement.
Section 7.6 Amendment. This Agreement may be amended by action taken by
the Company, PCA and Merger Sub at any time before or after approval of the
Merger by the Company Stockholder Approval and Merger Sub Stockholder Approval
but, after any such approvals, no amendment shall be made which changes the
amount or form of the Merger Consideration. This Agreement may not be amended
except by an instrument in writing signed on behalf of the parties hereto.
Section 7.7 Extension; Waiver. At any time prior to the Effective Time,
each party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document, certificate or writing delivered pursuant hereto, or (c) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of either party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
Section 8.2 Entire Agreement; Assignment.
(a) This Agreement constitutes the entire agreement between the
parties hereto in respect of the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, between the parties
in respect of the subject matter hereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by operation of Law (including, by
merger or consolidation) or otherwise. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.
Section 8.3 Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (a) five business days following sending by registered or
certified mail, postage prepaid, (b) when sent if sent by facsimile; provided,
however, that the facsimile is promptly confirmed by telephone
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confirmation thereof by the intended recipient, (c) when delivered, if delivered
personally to the intended recipient, and (d) one business day following sending
by overnight delivery via a national courier service, and in each case,
addressed to a party at the following address for such party:
if to PCA or Merger Sub, to: Premier Classic Art, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
if to the Company, to: Parentech, Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to: Xxxx Xxxx Xxxx & Freidenrich LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the other in writing in the manner set
forth above.
Section 8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without giving
effect to the choice of Law principles thereof.
Section 8.5 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 8.6 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 8.7 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or
- 38 -
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
Section 8.8 Specific Performance. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, this being in addition
to any other remedy to which they are entitled at Law or in equity.
Section 8.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 8.10 Further Assurances. Each party to this Agreement agrees (a)
to furnish upon request to the other party such further information, (b) to
execute and deliver to the other party such other documents and (c) to do such
other acts and things as the other party reasonably requests for the purpose of
carrying out the intent of this Agreement and the documents and instruments
referred to herein.
Section 8.11 Interpretation.
(a) The words "hereof," "herein," "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit, and schedule references are to the articles,
sections, paragraphs, exhibits, and schedules of this Agreement unless otherwise
specified. Whenever the words "include," "includes," or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." All terms defined in this Agreement shall have the defined meanings
contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument, or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument, or statute as from time to time, amended, qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof," and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to September __, 2002.
(c) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this
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Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
Section 8.12 Definitions. As used herein,
(a) "AFFILIATE" has the meaning given to it in Rule 12b-2 of
Regulation 12B under the Exchange Act.
(b) "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" has the meaning
provided in Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(c) "KNOW" or "KNOWLEDGE" means, (i) in respect of PCA, the
knowledge of PCA's executive officers and (ii) in respect of the Company, the
knowledge of the Company's executive officers.
(d) "LIEN" means, in respect of any asset (including, any security)
any mortgage, lien, pledge, charge, security interest, or encumbrance of any
kind in respect of such asset.
(e) "PERMITTED LIEN" means a statutory Lien not yet delinquent; a
purchase money Lien arising in the ordinary course of business consistent with
past practices; a Lien reflected in the financial statements of the applicable
party; or a Lien which does not materially detract from the value or impair the
use of the asset or property in question.
(f) "PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(g) "SUBSIDIARY" means, in respect of any party, any corporation,
partnership or other entity or organization, whether incorporated or
unincorporated, of which (i) such other party or any other subsidiary of such
party is a general partner (excluding such partnerships where such party or any
subsidiary of such party does not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions in respect of such corporation
or other organization is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one or
more of its subsidiaries.
(h) "TRANSFER TAXES" means any and all state, local, foreign or
provincial sales, use, real property, stock transfer or similar taxes (including
any interest or penalties with respect thereto, but not including any
shareholder level taxes based upon net income) attributable to the transactions
contemplated herein.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed on its behalf as of the date first above written.
PARENTECH, INC.
By:_______________________________
Name: Xxxxx X. Xxxxxx
Title: President
PREMIER CLASSIC ART, INC.
By:_______________________________
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
PREMIER CLASSIC ACQUISITION CORPORATION
By:_______________________________
Name: Xxxxxxx X. Xxxxx
Title: President
THE EXHIBITS TO THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO REGULATION
S-K, ITEM 601(b)(2). THE REPORTING PERSON AGREES TO FURNISH SUPPLEMENTALLY A
COPY OF ANY OF THE OMITTED EXHIBITS TO THE SECURITIES AND EXCHANGE COMMISSION
UPON REQUEST.
