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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
Among
CHIPS AND TECHNOLOGIES, INC.,
INTEL CORPORATION
and
INTEL ENTERPRISE CORPORATION
Dated as of July 27, 1997
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TABLE OF CONTENTS
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ARTICLE I
THE OFFER
1.1. The Offer...................................................................................................1
1.2. Company Actions.................................................................................3
1.3. Boards of Directors and Committees; Section 14(f)...............................................4
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger..................................................................................................5
2.2. Closing.........................................................................................6
2.3. Effective Time..................................................................................6
2.4. Options.........................................................................................6
ARTICLE III
CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION; OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1. Certificate of Incorporation................................................................................7
3.2. By-Laws.........................................................................................7
3.3. Directors.......................................................................................7
3.4. Officers........................................................................................7
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES FOR MERGER CONSIDERATION
4.1. Effect on Capital Stock.....................................................................................7
(a) Merger Consideration..............................................................................7
(b) Cancellation of Excluded Shares...................................................................8
(c) Merger Sub........................................................................................8
4.2. Exchange of Certificates for Payment............................................................8
(a) Exchange Agent....................................................................................8
(b) Exchange Procedures...............................................................................8
(c) Transfers.........................................................................................8
(d) Termination of Merger Fund........................................................................9
(e) Return of Consideration...........................................................................9
(f) Lost, Stolen or Destroyed Certificates............................................................9
4.3. Dissenters' Shares..............................................................................9
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company..............................................................10
(a) Organization, Good Standing, Corporate Power and Qualification; Subsidiaries and Other
Interests......................................................................................10
(b) Capital Structure................................................................................10
(c) Corporate Authority; Approval and Fairness.......................................................11
(d) Governmental Filings; No Violations..............................................................12
(e) Company Reports; Financial Statements............................................................12
(f) Absence of Certain Changes.......................................................................13
(g) Litigation and Liabilities.......................................................................14
(h) Employee Benefits................................................................................14
(i) Compliance with Laws.............................................................................16
(j) Takeover Statutes................................................................................16
(k) Environmental Matters............................................................................16
(l) Intellectual Property............................................................................17
(m) Taxes............................................................................................18
(n) Labor Matters....................................................................................19
(o) Insurance........................................................................................19
(p) Rights Agreement.................................................................................19
(q) Brokers and Finders..............................................................................19
(r) Certain Business Practices.......................................................................20
(s) Product Warranties...............................................................................20
(t) Suppliers and Customers..........................................................................20
(u) Backlog Information..............................................................................20
5.2. Representations and Warranties of Parent and Merger Sub........................................20
(a) Organization, Good Standing and Qualification....................................................20
(b) Ownership of Merger Sub..........................................................................21
(c) Corporate Authority..............................................................................21
(d) Governmental Filings; No Violations..............................................................21
(e) Brokers and Finders..............................................................................22
(f) Financing........................................................................................22
ARTICLE VI
COVENANTS
6.1. Interim Operations.............................................................................22
6.2. Third Party Acquisitions.......................................................................24
6.3. Filings; Other Actions; Notification...........................................................26
6.4. Information Supplied...........................................................................27
6.5. Stockholders Meeting...........................................................................27
6.6. Access.........................................................................................28
6.7. Publicity......................................................................................28
6.8. Status of Company Employees; Company Stock Options; Employee Benefits..........................28
6.9. Expenses.......................................................................................29
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6.10. Indemnification; Directors' and Officers' Insurance............................................29
6.11. Other Actions by the Company and Parent........................................................31
(a) Rights...........................................................................................31
(b) Takeover Statutes................................................................................31
6.12. Parent Stock Option; Exercise; Adjustments....................................................31
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect Merger.....................................................32
(a) Stockholder Approval.............................................................................33
(b) Regulatory Consents..............................................................................33
(c) Litigation.......................................................................................33
7.2. Conditions to Obligations of Parent and Merger Sub.............................................33
(a) Representations and Warranties...................................................................33
(b) Performance of Obligations of the Company........................................................33
7.3. Conditions to Obligations of the Company.......................................................34
(a) Representations and Warranties...................................................................34
(b) Performance of Obligations of Parent and Merger Sub..............................................34
ARTICLE VIII
TERMINATION
8.1. Termination Mutual Consent.................................................................................34
8.2. Termination by Either Parent or the Company....................................................34
8.3. Termination by the Company.....................................................................34
8.4. Termination by Parent and Merger Sub...........................................................35
8.5. Effect of Termination and Abandonment..........................................................35
8.6. Procedure for Termination......................................................................36
ARTICLE IX
MISCELLANEOUS
9.1. Survival.......................................................................................36
9.2. Certain Definitions............................................................................36
9.3. No Personal Liability..........................................................................38
9.4. Modification or Amendment......................................................................38
9.5. Waiver of Conditions...........................................................................38
9.6. Counterparts...................................................................................38
9.7. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL..................................................38
9.8. Notices........................................................................................39
9.9. Entire Agreement...............................................................................40
9.10. No Third Party Beneficiaries...................................................................40
9.11. Obligations of the Company and Surviving Corporation...........................................41
9.12. Severability...................................................................................41
9.13. Interpretation.................................................................................41
9.14. Assignment.....................................................................................41
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SCHEDULES
SCHEDULE DESCRIPTION
Schedule 5.1(a) Company Subsidiaries and Other Interests
Schedule 5.1(d) Consents
Schedule 5.1(f) Certain Changes
Schedule 5.1(g) Litigation and Liabilities
Schedule 5.1(h) Outstanding Company Options and Other Benefit Plan Matters
Schedule 5.1(k) Environmental Matters
Schedule 5.1(l)(ii) Outstanding Orders and Judgments on Intellectual
Property Rights
Schedule 5.1(l)(iii) Intellectual Property Material Contracts
Schedule 5.1(m) Certain Tax Matters
Schedule 5.1(s) Product Warranties
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "AGREEMENT"),
dated as of July 27, 1997, among CHIPS AND TECHNOLOGIES, INC., a Delaware
corporation (the "COMPANY"), INTEL CORPORATION, a Delaware corporation
("PARENT"), and INTEL ENTERPRISE CORPORATION, a Delaware corporation and a
direct, wholly-owned subsidiary of Parent ("MERGER SUB"; the Company and Merger
Sub sometimes being hereinafter together referred to as the "CONSTITUENT
CORPORATIONS").
RECITALS
WHEREAS, the respective Boards of Directors of each of Parent, Merger
Sub and the Company have approved the merger of Merger Sub with and into the
Company (the "MERGER") and approved the Merger upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, in furtherance thereof, it is proposed that Parent shall,
within five (5) Business Days after the public announcement hereof, commence a
tender offer (the "OFFER") to acquire all of the outstanding shares of common
stock, par value $.01 per share, of the Company (the "SHARES"), together with
the associated Rights (as defined in Section 4.1(a)), at a price of $17.50 per
Share, net to the seller in cash, less any required withholding taxes (such
amount, or any greater amount per share paid pursuant to the Offer, being
hereinafter referred to as the "OFFER PRICE"), in accordance with the terms and
subject to the conditions provided herein; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1. THE OFFER.
(a) Provided that this Agreement shall not have been terminated
and subject to the terms hereof, as promptly as practicable, but in no event
later than five (5) Business Days after the public announcement of the execution
hereof by the parties, Parent shall commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) ,the
Offer for any and all of the Shares, at the Offer Price. The obligation of
Parent to accept for payment and to pay for any Shares tendered shall be subject
only to (i) the condition that at least a majority of Shares on a fully-diluted
basis (including for purposes of such calculation all Shares issuable upon
exercise of all vested and unvested stock options) be validly tendered (the
"Minimum Condition"), and (ii) the other conditions set forth in Annex A. Parent
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expressly reserves the right to increase the Offer Price or to make any other
changes in the terms and conditions of the Offer (provided that, unless
previously approved by the Company in writing, no change may be made which (i)
decreases the Offer Price, (ii) changes the form of consideration to be paid in
the Offer, (iii) reduces the maximum number of Shares to be purchased in the
Offer, (iv) imposes conditions to the Offer in addition to those set forth in
Annex A, (v) amends the conditions set forth in Annex A to broaden the scope of
such conditions, (vi) amends any other term of the Offer in a manner adverse to
the holders of the Shares, (vii) extends the Offer except as provided in Section
1.1(b)), or (viii) amends the Minimum Condition. It is agreed that the
conditions set forth in Annex A are for the sole benefit of Parent and may be
waived by Parent, in whole or in part at any time and from time to time, in its
sole discretion other than the Minimum Condition, as to which prior written
Company approval is required. The failure by Parent at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time. The Company agrees that no Shares held by the Company or
any of its Subsidiaries (as defined in Section 9.2) will be tendered in the
Offer.
(b) Subject to the terms and conditions thereof, the Offer shall
expire at midnight, New York City time, on the date that is twenty (20) Business
Days after the date the Offer is commenced; PROVIDED, HOWEVER, that without the
consent of the Company's Board of Directors, Parent may (i) from time to time
extend the Offer, if at the scheduled expiration date of the Offer any of the
conditions to the Offer shall not have been satisfied or waived, until such time
as such conditions are satisfied or waived; (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission (the "SEC") or the staff thereof applicable to the
Offer; or (iii) extend the Offer for any reason on one or more occasions for an
aggregate period of not more than twenty (20) Business Days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
this sentence if on such expiration date there shall not have been tendered at
least 90% of the outstanding Shares. Parent agrees that if all of the conditions
to the Offer set forth on Annex A are not satisfied on any scheduled expiration
date of the Offer then, provided that all such conditions are reasonably capable
of being satisfied prior to October 31, 1997, Parent shall extend the Offer from
time to time until such conditions are satisfied or waived, provided that Parent
shall not be required to extend the Offer beyond October 31, 1997. Subject to
the terms and conditions of the Offer and this Agreement, Parent shall accept
for payment, and pay for, all Shares validly tendered and not withdrawn pursuant
to the Offer that Parent becomes obligated to accept for payment and pay for
pursuant to the Offer, as promptly as practicable after the expiration of the
Offer.
(c) As soon as practicable on the date the Offer is commenced,
Parent shall file with the SEC a Tender Offer Statement on SCHEDULE 14D-1
(together with all amendments and supplements thereto, and including all
exhibits thereto, the "SCHEDULE 14D-1") with respect to the Offer. The Schedule
14D-1 shall contain as an exhibit or incorporate by reference the Offer to
Purchase (or portions thereof) and forms of the related letter of transmittal
and summary advertisement. Parent and Merger Sub agree that the Schedule 14D-1,
the Offer to Purchase and all amendments or supplements thereto (which together
constitute the "OFFER DOCUMENTS") shall comply in all material respects with the
Exchange Act and the rules and regulations thereunder and other applicable Laws
(as defined in Section 5.1(i)). Parent and Merger Sub further agree that the
Offer Documents, on the date first published, sent or given to the Company's
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stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is made by
Parent or Merger Sub with respect to information supplied by the Company or any
of its stockholders specifically for inclusion or incorporation by reference in
the Offer Documents. The Company agrees that the information provided by the
Company for inclusion or incorporation by reference in the Offer Documents shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of Parent, Merger Sub and the Company agrees promptly to
correct any information provided by it for use in the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect, and Parent and Merger Sub further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment on the Offer Documents prior to the filing
thereof with the SEC. Parent agrees to provide the Company and its counsel in
writing with any comments Parent or its counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after receipt of such
comments.
1.2. COMPANY ACTIONS.
(a) The Company hereby approves of and consents to the Offer and
represents that its Board of Directors, at a meeting duly called and held, has,
subject to the terms and conditions set forth herein, (i) after evaluating the
Merger in accordance with all of the provisions of Article Ninth of the
Company's certificate of incorporation, determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, taken
together, are at a price and on terms which are adequate and are otherwise in
the best interests of the Company and its stockholders (other than Parent and
its Affiliates), (ii) approved this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, in all respects and such approval
constitutes approval of the Offer, this Agreement and the Merger for purposes of
(x) Section 203 of the Delaware General Corporation Law (the "DGCL"), (y)
similar provisions of any other similar state statutes that might be deemed
applicable to the transactions contemplated hereby and (z) the Rights Agreement
(as defined in Section 5.1(b)), (iii) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
Parent and approve and adopt this Agreement and the Merger, and (iv) in
accordance with the applicable provisions of the Assumed Stock Option Plan (as
defined in Section 2.4), approved the assumption of the Assumed Stock Option
Plan by Parent as contemplated by Section 6.8(c) and the conversion of the
options under the Assumed Stock Option Plan outstanding at the Effective Time of
the Merger. The Company consents to the inclusion of such recommendation and
approval in the Offer Documents. The Company also represents that its Board of
Directors has reviewed the opinion of Xxxxxxxxx & Xxxxx LLC, financial advisor
to the Board of Directors (the "FINANCIAL ADVISOR"), that, as of July 27, 1997,
the consideration to be received pursuant to this Agreement is fair to the
stockholders of the Company (other than Parent and its Affiliates) from a
financial point of view (the "FAIRNESS OPINION"). The Company has been
authorized by the Financial Advisor to permit, subject to the prior review and
consent by the Financial Advisor
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(such consent not to be unreasonably withheld), the inclusion of the fairness
opinion (or a reference thereto) in the Offer Documents, the Schedule 14D-9 and
the Proxy Statement.
(b) The Company shall file with the SEC, concurrently with the
filing of the Schedule 14D-1, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto, and
including all exhibits thereto, the "SCHEDULE 14D-9") containing the
recommendations described in Section 1.2(a) and shall mail the Schedule 14D-9 to
the stockholders of the Company promptly after the commencement of the Offer.
The Company agrees that the Schedule 14D-9 shall comply in all material respects
with the Exchange Act and the rules and regulations thereunder and other
applicable Laws. The Company further agrees that Schedule 14D-9, on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Company
with respect to information supplied by the Parent or Merger Sub specifically
for inclusion or incorporation by reference in Schedule 14D-9. Each of the
Company, Parent and Merger Sub agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 or the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and be
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given reasonable opportunity to review and comment on the Schedule 14D-9 prior
to the filing thereof with the SEC.
(c) In connection with the Offer, the Company shall, or shall
cause its transfer agent to, promptly furnish Parent with such information,
including updated lists of the stockholders of the Company, mailing labels and
updated lists of security positions, and such assistance as Parent or its agents
may reasonably request in communicating the Offer to the record and beneficial
holders of Shares. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Parent and Sub and their agents
shall hold in confidence the information contained in any such labels, listings
and files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will deliver, and will use
their reasonable efforts to cause their agents to deliver, to the Company all
copies and any extracts or summaries from such information then in their
possession or control.
(d) Solely in connection with the tender and purchase of Shares
pursuant to the Offer and the consummation of the Merger, the Company hereby
waives any and all rights of first refusal it may have with respect to Shares
owned by, or issuable to, any Person, other than rights to repurchase unvested
shares, if any, that may be held by Persons following exercise of employee stock
options.
1.3. BOARDS OF DIRECTORS AND COMMITTEES; SECTION 14(f).
(a) Promptly upon the purchase by Parent of Shares pursuant to the
Offer and from time to time thereafter, if the Minimum Condition has been met,
and subject to the second to
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last sentence of this Section 1.3(a), Parent shall be entitled to designate up
to such number of directors, rounded up to the next whole number, on the Board
of Directors of the Company as will give Parent representation on such Board
equal to the product of the number of directors on such Board (giving effect to
any increase in the number of directors pursuant to this Section 1.3) and the
percentage that such number of Shares so purchased bears to the total number of
outstanding Shares on a fully-diluted basis, and the Company shall use its best
efforts to, upon request by Parent, promptly, at the Company's election, either
increase the size of its Board of Directors (subject to the provisions of
Article Sixth of the Company's certificate of incorporation) or secure the
resignation of such number of directors as is necessary to enable Parent's
designees to be elected to such Board and to cause Parent's designees to be so
elected. At such times, and subject to the second to last sentence of this
Section 1.3(a), the Company will use its best efforts to cause persons
designated by Parent to constitute the same percentage as is on the Company's
Board of Directors of (i) each committee of such Board (other than any committee
of such Board established to take action under this Agreement), (ii) each Board
of Directors of each Subsidiary of the Company and (iii) each committee of each
such Board. Notwithstanding the foregoing, the Company shall use its best
efforts to ensure that three of the members of its Board of Directors as of the
date hereof ("Continuing Directors") shall remain members of such Board until
the Effective Time (as defined in Section 2.3). In the event a Continuing
Director resigns from the Company's Board of Directors, Parent, Merger Sub and
the Company shall permit the remaining Continuing Director or Directors to
appoint the resigning director's successor who shall be deemed to be a
Continuing Director.
(b) The Company's obligation to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take all action required
pursuant to such Section and Rule in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.3.
Parent will supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
Affiliates required by such Section and Rule.
(c) Following the election or appointment of Parent's designees
pursuant to this Section 1.3 and prior to the Effective Time, if there shall be
any Continuing Directors, any amendment of this Agreement, any termination of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or any waiver of
any of the Company's rights hereunder, will require the concurrence of a
majority of such Continuing Directors.
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as defined in Section 2.3) Merger Sub
shall be merged with and into the Company and the separate corporate existence
of Merger Sub shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to
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as the "SURVIVING CORPORATION") and shall continue to be governed by the laws of
the State of Delaware, and the separate corporate existence of the Company with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger, except as set forth in Article III. At the election of
Parent, to the extent that such action would not cause a failure of a condition
to the Offer of the Merger, the Merger may be structured so that the Company
shall be merged with and into Merger Sub with the result that Merger Sub shall
become the "Surviving Corporation." The Merger shall have the effects specified
in the DGCL. Parent, as the sole stockholder of Merger Sub, hereby approves the
Merger and this Agreement.
2.2. CLOSING. The closing of the Merger (the "CLOSING") shall take
place (i) at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, One Xxxxxxxxxx Street,
San Francisco, California at 9:00 am., Pacific time, on the first Business Day
after the day on which the last to be fulfilled or waived of the conditions set
forth in Article VII (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) shall be satisfied or waived in accordance with this Agreement or
(ii) at such other place and time and/or on such other date as the Company and
Parent may agree in writing (the "CLOSING DATE").
2.3. EFFECTIVE TIME. As soon as practicable following the Closing, the
Company and Parent will cause a Certificate of Merger (the "DELAWARE CERTIFICATE
OF MERGER") to be executed, acknowledged and filed with the Secretary of State
of Delaware as provided in Section 251 of the DGCL. The Merger shall become
effective at the time when the Delaware Certificate of Merger has been duly
filed with the Secretary of State of Delaware (the "EFFECTIVE TIME").
2.4. OPTIONS. At the Effective Time, options under the Company's
Amended and Restated 1994 Stock Option Plan (the "Assumed Stock Option Plan") to
purchase Shares (each, a "Company Option"), which are then outstanding and
unexercised, shall cease to represent a right to acquire Shares and shall be
converted automatically into options to purchase shares of common stock, par
value $.001 per share, of Parent ("Parent Common Stock"), and Parent shall
assume each such Company Option subject to the terms of the Assumed Stock Option
Plan, in each case as heretofore amended or restated, as the case may be, and
the agreements evidencing grants thereunder; PROVIDED, HOWEVER, that from and
after the Effective Time, (i) the number of shares of Parent Common Stock
purchasable upon exercise of such Company Option shall be equal to the number of
Shares that were purchasable under such Company Option immediately prior to the
Effective Time multiplied by the Exchange Ratio (as hereinafter defined), and
rounding to the nearest whole share, and (ii) the per share exercise price under
each such Company Option shall be adjusted by dividing the per share exercise
price of each such Company Option by the Exchange Ratio, and rounding down to
the nearest cent. The terms of each Company Option shall, in accordance with its
terms, be subject to further adjustment as appropriate to reflect any stock
split, stock dividend, recapitalization or other similar transaction with
respect to Parent Common Stock on or subsequent to the Effective Date.
Notwithstanding the foregoing, each Company Option which is intended to be an
"incentive stock option": (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended, (the "Code")) shall be adjusted in accordance with the
requirements of Section 424 of the Code. Accordingly, with respect to any
incentive stock options, fractional shares shall be rounded down to the nearest
whole number of shares and the per share exercise price shall be rounded down to
the nearest cent. The Exchange Ratio is 0.197656.
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ARTICLE III
CERTIFICATE OF INCORPORATION AND
BY-LAWS OF THE SURVIVING CORPORATION; OFFICERS AND
DIRECTORS OF THE SURVIVING CORPORATION
3.1. CERTIFICATE OF INCORPORATION. 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 (the "CHARTER"), until
duly amended as provided therein or by applicable Law, except that Article
Fourth of the Charter shall be amended to read in its entirety as follows: "The
aggregate number of shares that the Corporation shall have the authority to
issue is 1,000 shares of Common Stock, par value $.01 per share."
3.2. BY-LAWS. The by-laws of Merger Sub in effect at the Effective Time
shall be the by-laws of the Surviving Corporation (the "BY-LAWS"), until
thereafter amended as provided therein or by applicable Law.
3.3. DIRECTORS. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Charter and By-Laws.
3.4. OFFICERS. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and By-Laws.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES FOR MERGER CONSIDERATION
4.1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any Capital Stock (as
defined in Section 9.2) of the Company:
(a) Merger Consideration. Each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by Parent,
Merger Sub or any other direct or indirect Subsidiary of Parent or Shares that
are owned by the Company or any direct or indirect Subsidiary of the Company
(collectively, the "EXCLUDED SHARES")) shall be converted into, and become
exchangeable for the Offer Price, without interest (the "MERGER CONSIDERATION").
Unless the context otherwise clearly requires, each reference in this Agreement
to the Shares shall include the associated "Rights" as defined in and issued
pursuant to the Rights Agreement (the "Rights"). At the Effective Time, all
Shares shall no longer be outstanding and shall be canceled and retired and
shall cease to exist, and each certificate (a "CERTIFICATE") formerly
representing any of such
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Shares (other than Excluded Shares) shall thereinafter represent only the right
to receive the Merger Consideration.
(b) CANCELLATION OF EXCLUDED SHARES. Each Excluded Share issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, cease to be
outstanding, shall be canceled and retired without payment of any consideration
therefor and shall cease to exist.
(c) MERGER SUB. At the Effective Time, each share of Common Stock,
par value $.01 per share, of Merger Sub issued and outstanding immediately prior
to the Effective Time shall be converted into one share of Common Stock of the
Surviving Corporation.
4.2. Exchange of Certificates for Payment.
(a) EXCHANGE AGENT. As of the Effective Time, Parent shall
deposit, or shall cause to be deposited, with an exchange agent selected by
Parent (the "EXCHANGE AGENT"), for the benefit of the holders of Shares, cash in
U.S. dollars in an amount equal to the Merger Consideration multiplied by the
aggregate outstanding Shares (other than Excluded Shares) to be paid pursuant to
Section 4.1(a) in exchange for outstanding Shares upon due surrender of the
Certificates (or affidavits of loss in lieu thereof) pursuant to the provisions
of this Article IV (such aggregate cash amount when paid to the Exchange Agent
being hereinafter referred to as the "MERGER FUND").
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder of
record of Shares (other than holders of Excluded Shares) (i) a letter of
transmittal (which shall, among other matters, specify that delivery of the
Certificates shall be effected, and risk of loss and title to the Certificates
shall pass, only upon actual receipt of the Certificates (or affidavits of loss
in lieu thereof) by the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration due and payable to such holder. Upon surrender of a Certificate
for cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a check in the amount (after giving effect to any required tax
withholdings) of the Merger Consideration due and payable in respect of such
holder's Shares and the Certificate so surrendered shall forthwith be canceled.
No interest will be paid or accrued on any amount payable upon due surrender of
the Certificates. All Merger Consideration paid upon surrender for exchange of
Shares in accordance with the terms of this Agreement shall be deemed to have
been paid in full satisfaction of all rights pertaining to such Shares. In the
event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, a check for the amount of cash to be paid upon
due surrender of the Certificate may be delivered to such a transferee if the
Certificate formerly representing such Shares is presented to the Exchange
Agent, accompanied by all documents required by the Exchange Agent to evidence
and effect such transfer and to evidence that any applicable stock transfer
taxes have been paid.
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(c) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time.
(d) TERMINATION OF MERGER FUND. Any portion of the Merger Fund
(including the proceeds of any investments thereof) that remains unclaimed by
the stockholders of the Company for 180 days after the Effective Time shall be
paid to Parent. Any stockholders of the Company who have not theretofore
complied with this Article IV shall thereafter look only to Parent for payment
of their Merger Consideration payable pursuant to Section 4.1 upon due surrender
of their Certificates (or affidavits of loss in lieu thereof), in each case,
without any interest thereon. Notwithstanding the foregoing, neither Parent, the
Surviving Corporation, the Exchange Agent nor any other Person shall be liable
to any former holder of Shares for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws. Any
amounts remaining unclaimed by holders of Shares on the two (2) year anniversary
of the Effective Time (or such earlier date immediately prior to such time as
such amounts would otherwise escheat to or become property of any Governmental
Entity (as defined in Section 5.1(d)) shall, to the extent permitted by
applicable Law, become the property of Parent, free and clear of any claims or
interest of any Person previously entitled thereto.
(e) RETURN OF CONSIDERATION. Any portion of the Merger Fund
representing Merger Consideration payable in respect of Dissenters' Shares (as
defined in Section 4.3) for which appraisal rights have been perfected shall be
returned to Parent, upon demand.
(f) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in an amount determined by Parent as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration payable pursuant to Section 4.1 upon due surrender of the
Certificate representing such Shares pursuant to this Agreement.
4.3. DISSENTERS' SHARES. Notwithstanding Section 4.1, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with the DGCL ("DISSENTERS'
SHARES") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses such holder's right to appraisal. If after the Effective Time such holder
fails to perfect or withdraws or loses such holder's right to appraisal, such
Dissenters' Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration. The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of Dissenters' Shares, and Parent shall have the right to participate
in all negotiations and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of Parent, make any payment
with respect to, or settle or offer to settle, any such demands.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Parent and Merger Sub as follows:
(a) ORGANIZATION, GOOD STANDING, CORPORATE POWER AND
QUALIFICATION; SUBSIDIARIES AND OTHER INTERESTS.
(i) Each of the Company and its Subsidiaries (x) is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of organization, (y) has all requisite corporate
or similar power and authority to own and operate its properties and assets and
to carry on its business as presently conducted and (z) is qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the ownership or operation of its properties or conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing, individually or in the aggregate, has not had and is not
reasonably likely to have a Company Material Adverse Effect (as defined in
Section 9.2). The Company has made available to Parent a complete and correct
copy of the Company's and its Subsidiaries' certificates of incorporation and
by-laws (or comparable governing documents), each as amended to the date hereof.
The Company's and its Subsidiaries' certificates of incorporation and by-laws
(or comparable governing documents) made available are in full force and effect.
(ii) SCHEDULE 5.1(a) contains a correct and complete list of
each of the Company's Subsidiaries, the jurisdiction where each of such
Subsidiaries is organized and the percentage of outstanding Capital Stock of
such Subsidiaries that is directly or indirectly owned by the Company. The
Company or another Subsidiary of the Company owns its shares of the Capital
Stock of each Subsidiary of the Company free and clear of all Liens except
Permitted Liens (as defined in Section 9.2). SCHEDULE 5.1(a) sets forth a true
and complete list of each equity investment in an amount of $2,000,000 or more
or which represents a 5% or greater ownership interest in the subject of such
investment made by the Company or any of its Subsidiaries in any other Person
other than the Company's Subsidiaries ("OTHER INTERESTS"). The Other Interests
are owned by the Company, by one or more of the Company's Subsidiaries or by the
Company and one or more of its Subsidiaries, in each case free and clear of all
Liens, except for Permitted Liens and Liens that may be created by any
partnership or joint venture agreements for Other Interests.
(b) CAPITAL STRUCTURE. The authorized Capital Stock of the Company
consists of (i) one hundred million (100,000,000) Shares, of which 22,003,195
were outstanding as of the close of business on July 27, 1997, and (ii) five
million (5,000,000) shares of Preferred Stock, par value $.01 per share (the
"PREFERRED SHARES"), none of which is outstanding. All of the outstanding Shares
have been duly authorized and are validly issued, fully paid and nonassessable.
The Company has no Preferred Shares reserved for issuance. SCHEDULE 5.1(h)
contains a correct and complete list as of July 27, 1997 of each outstanding
purchase right or option (each a "Company Option") to purchase Shares, including
all Company Options issued under the Company's Amended and
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Restated Employee Stock Purchase Plan, the Company's Amended and Restated 1994
Stock Option Plan and the Company's First Amended 1988 Nonqualified Stock Option
Plan for Outside Directors, in each case as amended to the date hereof
(collectively, the "STOCK OPTION PLANS"), including the holder, date of grant,
exercise price and number of Shares subject thereto. The Stock Option Plans are
the only plans under which any Company Options are outstanding. As of July 27,
1997, other than (1) the 3,983,598 Shares reserved for issuance upon exercise of
outstanding Company Options and (2) Shares reserved for issuance pursuant to the
Rights Agreement, dated as of August 23, 1989, between the Company and Bank of
America, NT & SA, as Rights Agent (the "RIGHTS AGREEMENT"), there are no Shares
reserved for issuance or any commitments for the Company to issue Shares. Each
of the outstanding shares of Capital Stock or other securities of each of the
Company's Subsidiaries directly or indirectly owned by the Company is duly
authorized, validly issued, fully paid and nonassessable and owned by the
Company or by a direct or indirect Subsidiary of the Company, free and clear of
any limitation or restriction (including any restriction on the right to vote or
sell the same except as may be provided as a matter of Law). Except for Company
Options, there are no preemptive or other outstanding rights, options, warrants,
conversion rights, stock appreciation rights, redemption rights, repurchase
rights, agreements or commitments to issue or sell any shares of Capital Stock
or other securities of the Company or any of its Subsidiaries or any securities
or obligations convertible or exchangeable into or exercisable for, or giving
any Person a right to subscribe for or acquire, any shares of Capital Stock or
other securities of the Company or any of its Subsidiaries, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. The
Company does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible into or
exercisable for securities having the right to vote) with the stockholders of
the Company on any matter ("VOTING DEBT"). If Parent takes the actions provided
for in Section 6.8(c) hereof, after the Effective Time, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
Capital Stock or other securities of the Surviving Corporation pursuant to the
Stock Option Plans. The Shares constitute the only class of securities of the
Company or any of its Subsidiaries registered or required to be registered under
the Exchange Act.
(c) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS.
(i) The Company has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate,
subject (if required by law) only to approval of this Agreement by the holders
of a majority of the outstanding Shares (the "COMPANY REQUISITE VOTE"), the
Merger. Assuming due execution and delivery by Parent and Merger Sub, this
Agreement is a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy laws or creditors' rights generally or by
general principles of equity.
(ii) The Board of Directors of the Company has unanimously
approved this Agreement and the Merger and the other transactions contemplated
hereby including, without limitation, the Offer and the assumption referred to
in Section 6.8(c), has received and reviewed the Fairness Opinion and duly taken
all other actions described in Sections 1.2(a), 5.1(j) and 5.1(p).
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(d) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings and/or notices (A) pursuant to
Section 1.2, (B) with the Delaware Secretary of State, (C) under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and the Exchange Act, (D) to comply with state securities or "blue sky" laws and
(E) with the National Association of Securities Dealers (the "NASD"), no
notices, reports or other filings are required to be made nor are any consents,
registrations, approvals, permits or authorizations (collectively, "GOVERNMENT
CONSENTS") required to be obtained by the Company from any court or other
governmental or regulatory authority, agency, commission, body or other
governmental entity (a "GOVERNMENTAL ENTITY"), in connection with the execution
and delivery of this Agreement by the Company and the consummation by the
Company of the Merger and the other transactions contemplated hereby, except
those that the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement
by the Company does not, and the consummation by the Company of the Merger and
the other transactions contemplated hereby will not, constitute or result in (A)
a breach or violation of or a default under, the certificate of incorporation or
by-laws of the Company or the comparable governing instruments of any of its
Subsidiaries, (B) a breach or violation of, or a default under, the acceleration
of any obligations or the creation of any Lien on the assets of the Company or
any of its Subsidiaries (with or without notice, lapse of time or both) pursuant
to, any agreement, lease, contract, note, mortgage, indenture or other
obligation (a "CONTRACT") binding upon the Company or any of its Subsidiaries or
any order, writ, injunction, decree of any court or any Law or governmental or
non-governmental permit or license to which the Company or any of its
Subsidiaries is subject or (C) any change in the rights or obligations of any
party under any Contract, except, in the case of clause (B) or (C) above, for
any breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect or prevent, materially delay or materially impair the
ability of the Company to consummate the transactions contemplated by this
Agreement. Except as set forth on SCHEDULE 5.1(d), there are no Contracts of the
Company or its Subsidiaries which are material to the Company and its
Subsidiaries, taken as a whole, pursuant to which consents or waivers are or may
be required prior to consummation of the Offer or the Merger and the other
transactions contemplated by this Agreement.
(e) COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has made
available to Parent each registration statement, report, proxy statement or
information statement filed with the SEC by it since June 30, 1996 (the "AUDIT
DATE"), including the Company's Annual Report on Form 10-K for the year ended
June 30, 1996 (the "COMPANY 10-K") in the form (including exhibits, annexes and
any amendments thereto) filed with the SEC (collectively, including any such
reports filed subsequent to the date hereof, the "COMPANY REPORTS"). As of their
respective dates, the Company Reports complied, and any Company Reports filed
with the SEC after the date hereof will comply, as to form in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act of 1933, as amended (the "SECURITIES ACT"), and the Company Reports did not,
and any Company Reports filed with the SEC after the date hereof will
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not, at the time of their filing, 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 made therein, in light of the circumstances in which they
were made, not misleading. Each of the consolidated balance sheets included in
or incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents, or will fairly present, the consolidated
financial position of the Company and its Subsidiaries as of its date and each
of the consolidated statements of income and of changes in financial position
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents, or will fairly present, the
results of operations, retained earnings and changes in financial position, as
the case may be, of the Company and its Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to notes and normal
year-end audit adjustments that will not be material in amount or effect), in
each case in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied during the periods involved, except as
may be noted therein. The Company has heretofore made available or promptly will
make available to Parent a complete and correct copy of all amendments or
modifications which are required to be filed with the SEC but have not yet been
filed with the SEC to the Company Reports, agreements, documents or other
instruments which previously had been filed by the Company with the SEC pursuant
to the Exchange Act. For purposes of this Agreement, "BALANCE SHEET" means the
consolidated balance sheet of the Company as of June 30, 1996 set forth in the
Company 10-K. Except as set forth in Company Reports filed with the SEC prior to
the date hereof or as incurred in the ordinary course of business since the date
of the most recent financial statements included in the Company Reports, neither
the Company nor any of its subsidiaries has any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) which would be
required under GAAP to be set forth on a consolidated balance sheet of the
Company and its subsidiaries taken as a whole and which individually or in the
aggregate would have a Company Material Adverse Effect.
(f) ABSENCE OF CERTAIN CHANGES. Except as disclosed in
SCHEDULE 5.1(f) or in the Company Reports filed prior to the date hereof, since
the Audit Date, the Company and its Subsidiaries have conducted their respective
businesses in all material respects only in, and have not engaged in any
material transaction other than according to, the ordinary and usual course of
such businesses consistent with past practices, and there has not been any (i)
change in the financial condition, properties, business or results of operations
of the Company and its Subsidiaries, except for those changes that, individually
or in the aggregate, have not had and are not reasonably likely to have a
Company Material Adverse Effect; (ii) material damage, destruction or other
casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company or any of its Subsidiaries, not covered by
insurance; (iii) declaration, setting aside or payment of any dividend or other
distribution in respect of the Capital Stock of the Company or any of its
Subsidiaries (other than wholly-owned Subsidiaries) or any repurchase,
redemption or other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of Capital Stock or other securities of, or other ownership
interests in, the Company or any of its Subsidiaries; (iv) amendment of any
material term of any outstanding security of the Company or any of its
Subsidiaries; (v) incurrence, assumption or guarantee by the Company or any of
its Subsidiaries of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent with past
practices;
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(vi) creation or assumption by the Company or any of its Subsidiaries of any
Lien (other than Permitted Liens) on any material asset other than in the
ordinary course of business consistent with past practices; (vii) making of any
loan, advance or capital contributions by the Company or any of its Subsidiaries
to, or investment in, any Person other than (x) loans or advances to employees
in connection with business-related travel (y) loans made to employees
consistent with past practices which are not in the aggregate in excess of
$250,000, and (z) loans, advances or capital contributions to or investments in
wholly-owned Subsidiaries, and in each case made in the ordinary course of
business consistent with past practices; (viii) transaction or commitment made,
or any contract or agreement entered into, by the Company or any of its
Subsidiaries relating to its assets or business (including the acquisition or
disposition of any assets) or any relinquishment by the Company or any of its
Subsidiaries of any Contract or other right, in either case, material to the
Company and its Subsidiaries, taken as a whole, other than transactions and
commitments in the ordinary course of business consistent with past practices
and those contemplated by this Agreement; (ix) labor dispute, other than routine
individual grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any of its
Subsidiaries, or any lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to such employees; or (x) change by the Company or
any of its Subsidiaries in accounting principles, practices or methods. Since
the Audit Date, except as disclosed in the Company Reports filed prior to the
date hereof or increases in the ordinary course of business consistent with past
practices, there has not been any increase in the compensation payable or that
could become payable by the Company or any of its Subsidiaries to (a) officers
of the Company or any of its Subsidiaries or (b) any employee of the Company or
any of its Subsidiaries whose annual cash compensation is $150,000 or more, or
any amendment of any of the Compensation and Benefit Plans (as defined in
Section 5.1(h)).
(g) LITIGATION AND LIABILITIES. Except as disclosed in SCHEDULE
5.1(g) or in the Company Reports filed prior to the date hereof, and except for
matters which, individually or in the aggregate, have not had and are not
reasonably likely to have a Company Material Adverse Effect or prevent, delay or
impair the ability of the Company to consummate the transactions contemplated by
this Agreement, there are no (i) civil, criminal or administrative actions,
suits, claims, hearings, investigations or proceedings pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries or (ii) obligations or liabilities, whether or not accrued,
contingent or otherwise and whether or not required to be disclosed, including
those relating to matters involving any Environmental Law (as defined in Section
5.1(k)) or any other facts or circumstances of which the Company has knowledge
that are reasonably likely to result in any claims against, or material
obligations or liabilities of, the Company or any of its Subsidiaries.
(h) EMPLOYEE BENEFITS.
(i) For purposes of this Agreement, "COMPENSATION AND BENEFIT
PLANS" means, collectively, each bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, compensation, medical, health, or other plan, agreement, policy or
arrangement, whether written or oral, that covers employees or directors of the
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Company or any of its Subsidiaries, or pursuant to which former employees or
directors of the Company or any of its Subsidiaries are entitled to current or
future benefits. The Company has made available to Parent copies of all
"employee pension benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes
referred to herein as "Pension Plans"), "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA) and all other Compensation and Benefit Plans
maintained, or contributed to, by the Company or of its subsidiaries or any
person or entity that, together with the Company and its subsidiaries, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code") (the Company and each
such other person or entity, a "Commonly Controlled Entity") for the benefit of
any current employees, officers or directors of the Company or any of its
subsidiaries. The Company has also made available to Parent true, complete and
correct copies of (1) the most recent annual report on Form 5500 filed with the
Internal Revenue Service with respect to each Compensation and Benefit Plan (if
any such report was required), (2) the most recent summary plan description for
each Compensation and Benefit Plan for which such summary plan description is
required and (3) each trust agreement and group annuity contract related to any
Compensation and Benefit Plan. Except as would not have a material adverse
effect on the Company, each Compensation and Benefit Plan has been administered
in accordance with its terms. Except as would not have a Company Material
Adverse Effect, each of its subsidiaries and all the Compensation and Benefit
Plans are all in compliance with applicable provisions of ERISA and the Code.
(ii) Except as would not have a Company Material Adverse
Effect, all Pension Plans have been the subject of determination letters from
the Internal Revenue Service to the effect that such Pension Plans are qualified
and exempt from Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, and no such determination letter has been revoked nor
has any event occurred since the date of its most recent determination letter or
application therefor that would adversely affect its qualification or materially
increase its costs.
(iii) Neither the Company, nor any of its Subsidiaries, nor
any Commonly Controlled Entity has maintained, contributed or been obligated to
contribute to any Benefit Plan that is subject to Title IV of ERISA.
(iv) Schedule 5.1(h) lists all outstanding Stock Options as of
July 27, 1997, showing for each such option: (1) the number of shares issuable,
(2) the number of vested shares, (3) the date of expiration and (4) the exercise
price.
(v) All contributions required to be made under the terms of
any Compensation and Benefit Plan as of the date hereof have been timely made.
(vi) Except as provided by this Agreement or in SCHEDULE
5.1(h), no employee of the Company or any of its Subsidiaries will be entitled
to any additional compensation or benefits or any acceleration of the time of
payment or vesting of any compensation or benefits under any Benefit Plan as a
result of the transactions contemplated by this Agreement.
(vii) All Compensation and Benefit Plans covering current or
former non-U.S. employees of the Company or any of its Subsidiaries comply in
all material respects with
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applicable local Laws. The Company and its Subsidiaries have no unfunded
liabilities with respect to any Pension Plan that covers such non-U.S.
employees.
(viii) Each Compensation and Benefit Plan complies in all
material respects with all applicable requirements of (i) the Age Discrimination
in Employment Act of 1967, as amended, and the regulations thereunder and (ii)
Title VII of the Civil Rights Act of 1964, as amended, and the regulations
thereunder and all other applicable laws. All amendments and actions required to
bring each of the Employee Benefit Plans into conformity with all of the
applicable provisions of ERISA and other applicable laws have been made or taken
except to the extent that such amendments or actions are not required by law to
be made or taken until a date after the Closing Date and are disclosed on
Schedule 5.1(h).
(ix) Each group medical plan sponsored by the Company
materially complies with the health care continuation provisions of COBRA and
(ii) the Medicare Secondary Payor Provisions of Section 1826 (b) of the Social
Security Act, and the regulations promulgated thereunder.
(i) COMPLIANCE WITH LAWS. Except as set forth in the Company
Reports filed prior to the date hereof, the businesses of each of the Company
and its Subsidiaries have not been, and are not being, conducted in violation of
any law, ordinance, regulation, judgment, order, injunction, decree, arbitration
award, license or permit of any Governmental Entity (collectively, "LAWS"),
except for violations or possible violations that, individually or in the
aggregate, have not had and are not reasonably likely to have a Company Material
Adverse Effect or prevent, materially delay or materially impair the ability of
the Company to consummate the transactions contemplated by this Agreement.
Except as set forth in the Company Reports filed prior to the date hereof, no
investigation or review by any Governmental Entity with respect to the Company
or any of its Subsidiaries is pending or, to the knowledge of the Company,
threatened, nor has any Governmental Entity indicated an intention to conduct
the same, except for those the outcome of which are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
(j) TAKEOVER STATUTES. No "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute or regulation (each a
"TAKEOVER STATUTE") is applicable to the Company, the Shares, the Offer, the
Merger or any of the other transactions contemplated by this Agreement. The
Board of Directors of the Company has approved the Offer, the Merger and this
Agreement, and such approval is sufficient to render inapplicable to the Offer,
the Merger, this Agreement, and the transactions contemplated by this Agreement
the provisions of Section 203 of DGCL to the extent, if any, such Section is
applicable to the Offer, the Merger, this Agreement and the transactions
contemplated by this Agreement.
(k) ENVIRONMENTAL MATTERS.
(i) The term "Environmental Laws" means any Federal, state,
local or foreign statute, treaty, ordinance, rule, regulation, policy, permit,
consent, approval, license, judgment, order, decree or injunction relating to:
(A) Releases (as defined in 42 U.S.C.
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Section 9601(22) and California Health and Safety Code Section 25501(r)) or
threatened Releases of Hazardous Material (as hereinafter defined) into the
environment, (B) the generation, treatment, storage, presence disposal, use,
handling, manufacturing, transportation or shipment of Hazardous Material, (C)
the health or safety of employees in the workplace environment, (D) natural
resources, or (E) the environment, and includes all "Environmental Laws" as they
are defined in any indemnification provision in any contract, lease, or
agreement to which Company is a party. The term "Hazardous Material" means (1)
hazardous substances (as defined in 42 U.S.C. Section 9601(14)) and California
Health and Safety Code Section 25501(o), including "hazardous waste" as defined
in California Health and Safety Code Section 25501(p), (2) petroleum, including
crude oil and any fractions thereof, (3) natural gas, synthetic gas and any
mixtures thereof, (4) asbestos and/or asbestos containing materials, (5) PCBs or
materials containing PCBs and (6) any material regulated as a medical waste or
infectious waste but excludes commonly available office and janitorial supplies,
(7) lead containing paint, (8) radioactive materials, and (9) "Hazardous
Substance" or "Hazardous Material" as those terms are defined in any
indemnification provision in any contract, lease, or agreement to which the
Company is a party.
(ii) During the period of ownership or operation by the
Company and its Subsidiaries of any of their current or previously owned or
leased properties, there have been no Releases of Hazardous Material by the
Company or any of its Subsidiaries in, on, under or affecting such properties or
any surrounding site, and neither the Company nor any of its Subsidiaries has
disposed of any Hazardous Material in a manner that has led, or could reasonably
be anticipated to lead to a Release, except in each case for those which
individually or in the aggregate would not have a Company Material Adverse
Effect, and except as disclosed in the Company Reports. Except as set forth on
Schedule 5.1(k), to the Company's knowledge there have been no Releases of
Hazardous Material by the Company or any of its Subsidiaries in, on, under or
affecting such properties or any surrounding site at times outside of such
periods of ownership, operation, or lease or by any other party except in each
case for those which individually on in the aggregate would not have a Company
Material Adverse Effect. The Company and its Subsidiaries have not received any
written notice of, or entered into any order, settlement or decree relating to:
(A) any violation of any Environmental Laws or the institution or pendency of
any suit, action, claim, proceeding or investigation by any Governmental Entity
or any third party in connection with any alleged violation of Environmental
Laws, (B) the response to or remediation of Hazardous Material at or arising
from any of the Company's properties or any Subsidiary's properties. To the
Company's knowledge there have been no violations of any Environmental Laws
which violations individually or in the aggregate would have a Company Material
Adverse Effect.
(l) INTELLECTUAL PROPERTY.
(i) The Company and its subsidiaries own, or are validly
licensed or otherwise have the right to use all (i) foreign and United States
federal and state patents, trademarks, trade names, service marks and copyright
registrations, (ii) foreign and United States federal and state patent,
trademark, trade name, service xxxx and copyright applications for registration,
(iii) common law claims to trademarks, service marks and trade names, (iv)
claims of copyright which exist although no registrations have been issued with
respect thereto, (v) fictitious business name filings with any state or local
Governmental Entity and (vi) inventions,
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concepts, designs, improvements, original works of authorship, computer
programs, know-how, research and development, techniques, modifications to
existing copyrightable works of authorship, data and other proprietary and
intellectual property rights (whether or not patentable or subject to copyright,
mask work or trade secret protection), in each case which are material to the
conduct of the business of the Company and its Subsidiaries (collectively, the
"INTELLECTUAL PROPERTY RIGHTS"). There are no Liens other than Permitted Liens
on the Intellectual Property Rights. There are no outstanding and, to the
Company's knowledge, no threatened disputes or disagreements with respect to any
Contract in respect of the Intellectual Property Rights.
(ii) Neither the Company nor any of its Subsidiaries is, nor
has it during the three (3) years preceding the date of this Agreement been, a
party to any litigation or arbitral or other proceeding, nor, to the knowledge
of the Company, is any such proceeding threatened as to which there is a
reasonable possibility of a determination adverse to the Company or one of its
Subsidiaries, that involved a claim of infringement by the Company or one of its
Subsidiaries or any other Person (including any Governmental Entity) of any
Intellectual Property Right. No Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof by the Company or any of its Subsidiaries or, in the case of any
Intellectual Property Right owned by the Company or its Subsidiaries licensed to
others, restricting the sale, transfer, assignment or licensing thereof by the
Company or any of its Subsidiaries to any other Person. Except as set forth on
Schedule 5.l(ii), the Company has no knowledge that would cause it to believe
that its or any Subsidiary's use of any Intellectual Property Right conflicts
with, infringes upon or violates any patent, patent license, trademark,
tradename, copyright, service xxxx, brand xxxx or brand name, or any trade
secret of any Person.
(iii) SCHEDULE 5.1(l) (iii) sets forth a complete list of (a)
any material contracts related to the Intellectual Property Rights and (b) all
documents which license or otherwise convey any of the Intellectual Property
Rights owned by the Company or any of its Subsidiaries to a third party.
(iv) All employees and independent contractors of the Company
or any of its Subsidiaries involved with the development of graphics and video
controllers for portable computers, desktop PC motherboard products and other
products and computer software in connection therewith (collectively,
"PRODUCTS") for the Company or any of its Subsidiaries have executed written
agreements with the Company or applicable Subsidiary that assign to the Company
or such Subsidiary all rights to any Intellectual Property Rights and that
otherwise appropriately protect the Intellectual Property Assets.
(m) TAXES. Except as set forth on SCHEDULE 5.1(m), (i) the Company
and its Subsidiaries have timely filed or will timely file all returns and
reports required to be filed by them with any taxing authority with respect to
Taxes for any period ending on or before the date hereof, taking into account
any extension of time to file granted to or obtained on behalf of the Company or
any of its Subsidiaries; (ii) all Taxes shown to be payable on such returns or
reports that are due prior to the date hereof have been timely paid; (iii) as of
the date hereof, no deficiency for any amount of Tax has been asserted or
assessed or, to the Company's knowledge, has been threatened or is likely to be
assessed by a taxing authority against the Company or any of its Subsidiaries
other than deficiencies as to which adequate reserves have been provided for in
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the Company's consolidated financial statements; and (iv) the Company has
provided in accordance with GAAP adequate reserves in its consolidated financial
statements for any Taxes that have not been paid, whether or not shown as being
due on any returns. For purposes of this Agreement, "TAXES" means any and all
taxes, fees, levies, duties, tariffs, imposts and other charges of any kind
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental Entity or
other taxing authority, including 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; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges. Neither the Company nor any of its Subsidiaries is subject to
any Tax sharing agreement. No payments to be made to any of the employees of the
Company or any of its Subsidiaries will, as a direct or indirect result of the
Offer or the consummation of the Merger, be subject to the deduction limitations
of Section 280G of the Code.
(n) LABOR MATTERS. Neither the Company nor any of its Subsidiaries
is a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization, nor is the Company or any of its Subsidiaries the subject of any
proceeding asserting that the Company or any of its Subsidiaries has committed
an unfair labor practice or is seeking to compel it to bargain with any labor
union or labor organization, nor is there pending or, to the knowledge of the
Company, threatened, any labor strike, dispute, walkout, work stoppage,
slow-down or lockout involving the Company or any of its Subsidiaries.
(o) INSURANCE. The Company maintains insurance policies (the
"Insurance Policies") against all risks of a character and in such amounts as
are usually insured against by similarly situated companies in the same or
similar businesses. Each Insurance Policy is in full force and effect and is
valid, outstanding and enforceable, and all premiums due thereon have been paid
in full. None of the Insurance Policies will terminate or lapse (or be affected
in any other materially adverse manner) by reason of the transactions
contemplated by this Agreement. The Company and its Subsidiaries have complied
in all material respects with the provisions of each Insurance Policy under
which it is the insured party. No insurer under any Insurance Policy has
canceled or generally disclaimed liability under any such policy or, to the
Company's knowledge, indicated any intent to do so or not to renew any such
policy. All material claims under the Insurance Policies have been filed in a
timely fashion.
(p) RIGHTS AGREEMENT. The Company has taken all necessary
action to ensure that neither the entering into of this Agreement, the making of
the Offer nor the consummation of the Offer or the Merger will cause the Rights
to become exercisable, cause Parent or Merger Sub to become an "Acquiring
Person" (as defined in the Rights Agreement), or cause there to occur a
"Distribution Date" or a "Section 11(a)(ii) Event" (each as defined in the
Rights Agreement).
(q) BROKERS AND FINDERS. Neither the Company nor any of its
Subsidiaries, officers, directors, or employees or other Affiliates has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Offer, the
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Merger or the other transactions contemplated by this Agreement, except that the
Company has employed the Financial Advisor, the arrangements with which have
been disclosed to Parent prior to the date hereof.
(r) CERTAIN BUSINESS PRACTICES. Neither the Company, any of its
Subsidiaries nor any directors, officers, agents or employees of the Company or
any of its Subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii)
made any other payment prohibited by applicable Law.
(s) PRODUCT WARRANTIES. SCHEDULE 5.1(s) sets forth complete and
accurate copies of the written, and descriptions of all oral, warranties and
guaranties by the Company or any of its Subsidiaries currently in effect with
respect to the Products. There have not been any material deviations from such
warranties and guaranties, and none of the Company's or any of its Subsidiaries'
salesmen, employees, distributors and agents is authorized to undertake
obligations to any customer or to other third parties in excess of such
warranties or guaranties.
(t) SUPPLIERS AND CUSTOMERS. The documents and information
supplied by the Company to Parent, Merger Sub or any of their representatives in
connection with this Agreement with respect to relationships and volumes of
business done with significant suppliers and customers was accurate in all
material respects.
(u) BACKLOG INFORMATION. None of the documents or information
delivered to Parent, Merger Sub or any of their respective counsel, accountants
and other agents and representatives in connection with backlog and billing
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading.
5.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Parent
and Merger Sub each hereby represents and warrants to the Company as follows:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of Parent
and Merger Sub (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (ii) has all requisite
corporate or similar power and authority to own and operate its properties and
assets and to carry on its business as presently conducted and (iii) is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership or operation of its properties or conduct
of its business requires such qualification, except where the failure to be so
qualified or in such good standing, when taken together with all other such
failures, has not had and is not reasonably likely to have a Parent Material
Adverse Effect (as defined in Section 9.2). Parent has made available to the
Company a complete and correct copy of Parent's certificate or incorporation and
by-laws, as amended to the date hereof. Parent's certificate of incorporation
and by-laws so delivered are in full force and effect.
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(b) OWNERSHIP OF MERGER SUB. All of the issued and outstanding
Capital Stock of Merger Sub is, and at the Effective Time will be, owned by
Parent, and there are no (i) other outstanding shares of Capital Stock or other
voting securities of Merger Sub, (ii) securities of Merger Sub convertible into
or exchangeable for shares of Capital Stock or other voting securities of Merger
Sub or (iii) options or other rights to acquire from Merger Sub, and no
obligations of Merger Sub to issue, any Capital Stock, other voting securities
or securities convertible into or exchangeable for Capital Stock or other voting
securities of Merger Sub. Merger Sub was formed solely for the purpose of
engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
(c) CORPORATE AUTHORITY. Each of Parent and Merger Sub has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement and to consummate the Offer and the Merger. Assuming due execution and
delivery by the Company, this Agreement is a valid and binding agreement of
Parent and Merger Sub, enforceable against each of them in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy
laws or creditors' rights generally or by general principles of equity.
(d) GOVERNMENTAL FILINGS; NO VIOLATIONS.
(i) Other than the filings and/or notices (A) pursuant to
Section 1.2, (B) under the HSR Act and the Exchange Act, (C) to
comply with state securities or "blue sky" laws, and (D) required
to be made with the NASD, no notices, reports or other filings are
required to be made by Parent or Merger Sub with, nor are any
Government Consents required to be obtained by Parent or Merger
Sub from, any Governmental Entity, in connection with the
execution and delivery of this Agreement by Parent and Merger Sub,
the Offer and the consummation by Parent and Merger Sub of the
Merger and the other transactions contemplated hereby, except
those that the failure to make or obtain are not, individually or
in the aggregate, reasonably likely to have a Parent Material
Adverse Effect or prevent, materially delay or materially impair
the ability of the Parent or Merger Sub to consummate the
transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement
by Parent and Merger Sub do not, and the consummation by Parent
and Merger Sub of the Merger and the other transactions
contemplated hereby will not, constitute or result in (A) a breach
or violation of, or a default under, the certificate or by-laws of
Parent or Merger Sub, (B) a breach or violation of, or a default
under, the acceleration of or the creation of a Lien, on the
assets of Parent or any of its Subsidiaries (with or without
notice, lapse of time or both) pursuant to, any Contract binding
upon Parent or any of its Subsidiaries or any Law to which Parent
or any of its Subsidiaries is subject or (C) any change in the
rights or obligations of any party under any such Contract,
except, in the case of clause (B) or (C) above, for any breach,
violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to have
a Parent Material Adverse Effect or prevent, materially delay or
materially impair the
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ability of the Parent or Merger Sub to consummate the transactions
contemplated by this Agreement.
(e) BROKERS AND FINDERS. Neither Parent nor Merger Sub, nor any of
their respective officers, directors, employees or other Affiliates, has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Offer, the Merger or the
other transactions contemplated by this Agreement
(f) FINANCING. At the expiration of the Offer and at the Effective
Time, Parent and Merger Sub will have available all the funds necessary for the
acquisition of all Shares pursuant to the Offer and to perform their respective
obligations under this Agreement, including without limitation payment in full
for all Shares validly tendered or outstanding as of the Effective Time.
ARTICLE VI
COVENANTS
6.1. INTERIM OPERATIONS. The Company covenants and agrees as to itself
and its Subsidiaries that, after the date hereof and prior to the Effective Time
(unless Parent shall otherwise approve in writing, which approval shall not be
unreasonably withheld, and except as otherwise expressly contemplated by this
Agreement):
(a) the business of it and its Subsidiaries shall be conducted in
the ordinary and usual course consistent with past practices and, to the extent
consistent therewith, it and its Subsidiaries shall use commercially reasonable
efforts to preserve its business organization intact and maintain its existing
relations and goodwill with customers, suppliers, distributors, creditors,
lessors, employees and business associates;
(b) it shall not, (i) issue, sell otherwise dispose of or subject
to Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock
owned by it; (ii) amend its charter, by-laws or, except for any amendment which
will not hinder, delay or make more costly to Parent the Offer or the Merger;
the Rights Agreement; (iii) split, combine or reclassify its outstanding shares
of Capital Stock; (iv) declare, set aside or pay any dividend payable in cash,
stock or property in respect of any Capital Stock other than the issuance of
Rights in connection with the issuance of Capital Stock upon the exercise of
Company Options; (v) repurchase, redeem or otherwise acquire or permit any of
its Subsidiaries to purchase or otherwise acquire, any shares of its Capital
Stock; or any securities convertible into or exchangeable or exercisable for any
shares of its Capital Stock; or (vi) adopt a plan of complete or partial
liquidation or dissolution, merger or otherwise restructure or recapitalize or
consolidate with any Person other than Merger Sub or another wholly-owned
Subsidiary of Parent;
(c) neither it nor any of its Subsidiaries shall (i) authorize for
issuance or issue, sell or otherwise dispose of or subject to any Lien (other
than Permitted Liens) any shares of, or securities convertible into or
exchangeable or exercisable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its Capital Stock of any class or
any
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Voting Debt (other than Shares issuable pursuant to Company Options outstanding
on the date hereof, the grant of Company Options to newly hired employees in
accordance with a benefit matrix previously provided to Parent and after
notification of Parent and automatic grants of director stock options as
mandated by the Company's First Amended 1988 Nonqualified Stock Option Plan for
Outside Directors); (ii) other than in the ordinary and usual course of business
consistent with past practices, transfer, lease, license, guarantee, sell or
otherwise dispose of or subject to any Lien (other than Permitted Liens) any
other property or assets or incur or modify any material indebtedness or other
liability (except for additional borrowings in the ordinary course under lines
of credit in existence on the date hereof); (iii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person except in the ordinary course
of business consistent with past practices and except for obligations of
Subsidiaries of the Company incurred in the ordinary course of business; (iv)
make any loans to any other Person (other than to Subsidiaries of the Company
or, customary loans or advances to employees in connection with business-related
travel in the ordinary course of business consistent with past practices); or
(v) make any commitments for, make or authorize any capital expenditures other
than in amounts less than $150,000 individually and $3,000,000 in the aggregate
or, by any means, make any acquisition of, or investment in, assets or stock of
any other Person;
(d) except as may be required to comply with applicable law or by
existing contractual commitments, neither it nor any of its Subsidiaries shall
(i) enter into any new agreements or commitments for any severance or
termination pay to, or enter into any employment or severance agreement with,
any of its directors, officers or employees or consultants except for (a)
specific arrangements with ten of the Company's employees and one of its
directors which have been previously disclosed to Parent and (b) reasonable
severance payments made to employees in the ordinary course of business and
consistent with past practices, or (ii) terminate, establish, adopt, enter into,
make any new grants or awards under, amend or otherwise modify, any Compensation
and Benefit Plan or increase or accelerate the salary, wage, bonus or other
compensation of any employees or directors (except for increases occurring in
the ordinary and usual course of business, which shall include normal periodic
performance reviews and related compensation and benefit increases, but not any
general across-the-board increases) or consultants or pay or agree to pay any
pension, retirement allowance or other employee benefit not required by any
existing Compensation and Benefit Plan;
(e) neither it nor any of its Subsidiaries shall, except as may be
required as a result of a change in law or in GAAP, change any of the accounting
principles or practices used by it;
(f) neither it nor any of its Subsidiaries shall revalue in any
respect any of its material assets, including writing down the value of
inventory or writing-off notes or accounts receivable, other than in the
ordinary course of business consistent with past practices;
(g) neither it nor any of its Subsidiaries shall settle or
compromise any material claims or litigation or terminate or materially amend or
modify any of its material Contracts or waive, release or assign any material
rights or claims;
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(h) neither it nor any of its Subsidiaries shall make any Tax
election or permit any insurance policy naming it as a beneficiary or
loss-payable payee to be canceled or terminated;
(i) neither it nor any of its Subsidiaries shall take any action
or omit to take any action that would cause any of its representations and
warranties herein to become untrue in any material respect; and
(j) neither it nor any of its Subsidiaries will authorize or enter
into any agreement to do any of the foregoing.
6.2. THIRD PARTY ACQUISITIONS.
(a) The Company agrees that neither it nor any of its Subsidiaries
nor any of its or its Subsidiaries' employees or directors shall, and it shall
direct and use its best efforts to cause its and its Subsidiaries' agents and
representatives (including the Financial Advisor or any other investment banker
and any attorney or accountant retained by it or any of its Subsidiaries
(collectively, "COMPANY ADVISORS")) not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate any inquiries in respect of, or the
making of any proposal for, a Third Party Acquisition (as defined in Section
6.2(b)). The Company further agrees that neither it nor any of its Subsidiaries
nor any of its or its Subsidiaries' employees or directors shall, and it shall
direct and use its best efforts to cause all Company Advisors not to, directly
or indirectly, engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any Third
Party (as defined in Section 6.2(b)) relating to the proposal of a Third Party
Acquisition, or otherwise facilitate any effort or attempt to make or implement
a Third Party Acquisition; PROVIDED, HOWEVER, that if at any time prior to the
acceptance for payment of Shares pursuant to the Offer, the Board of Directors
of the Company determines in good faith, after consultation with outside
counsel, that it is necessary to do so in order to comply with its fiduciary
duties to the Company's stockholders under applicable law, the Company may, in
response to an inquiry, proposal or offer for a Third Party Acquisition which
was not solicited subsequent to the date hereof, (x) furnish only such
information with respect to the Company to any such person pursuant to a
customary confidentiality agreement as was delivered to Parent prior to the
execution of this Agreement and (y) participate in the discussions and
negotiations regarding such inquiry, proposal or offer; and further PROVIDED,
that nothing contained in this Agreement shall prevent the Company or its Board
of Directors from complying with Rules 14d-9 and 14e-2 promulgated under the
Exchange Act with regard to any proposed Third Party Acquisition. The Company
shall immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Third Parties conducted heretofore with
respect to any of the foregoing. The Company shall take the necessary steps to
promptly inform all Company Advisors of the obligations undertaken in this
Section 6.2(a). The Company agrees to notify Parent promptly if (i) any
inquiries relating to or proposals for a Third Party Acquisition are received by
the Company, any of its Subsidiaries or any of the Company Advisors, (ii) any
confidential or other non-public information about the Company or any of its
Subsidiaries is requested from the Company, any of its Subsidiaries or any of
the Company Advisors, or (iii) any negotiations or discussions in connection
with a possible Third Party Acquisition are sought to be initiated or continued
with the Company, any of its Subsidiaries or any of the Company Advisors
indicating, in connection with such notice, the principal terms and conditions
of any proposals or
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offers, and thereafter shall keep Parent informed in writing, on a reasonably
current basis, on the status and terms of any such proposals or offers and the
status of any such negotiations or discussions. The Company also agrees promptly
to request each Person that has heretofore executed a confidentiality agreement
in connection with its consideration of acquiring the Company or any of its
Subsidiaries, if any, to return all confidential information heretofore
furnished to such Person by or on half of the Company or any of its
Subsidiaries.
(b) Except as permitted by this Section 6.2(b), the Board of
Directors of the Company shall not withdraw its recommendation of the Offer or
the Merger and other transactions contemplated hereby or approve or recommend,
or cause the Company to enter into any agreement with respect to, any Third
Party Acquisition. Notwithstanding the preceding sentence, if the Board of
Directors of the Company determines in its good faith judgment, after
consultation with legal counsel, that it is necessary to do so in order to
comply with its fiduciary duties, the Board of Directors may withdraw its
recommendation of the Offer or the Merger and the other transactions
contemplated hereby, or approve or recommend or cause the Company to enter into
an agreement with respect to a Superior Proposal (as defined below), but in each
case only (i) after providing written notice to Parent (a "NOTICE OF SUPERIOR
PROPOSAL") advising Parent that the Board of Directors has received a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
and identifying the Person making such Superior Proposal and (ii) if Parent does
not, within five (5) Business Days (or within two (2) Business Days with respect
to any amendment to any Superior Proposal which was noticed at least five (5)
Business Days prior to such amendment) after Parent's receipt of the Notice of
Superior Proposal, make an offer which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of the Financial
Advisor or another financial adviser of nationally recognized reputation) to be
as favorable to the Company's stockholders as such Superior Proposal; PROVIDED,
HOWEVER, that the Company shall not be entitled to enter into any agreement with
respect to a Superior Proposal unless this Agreement is concurrently terminated
by its terms pursuant to Section 8.3(b). For purposes of this Agreement, "THIRD
PARTY ACQUISITION" means the occurrence of any of the following events: (i) the
acquisition of the Company by merger or otherwise by any Person (which includes
a "person" as such term is defined in Section 13(d)(3) of the Exchange Act)
other than Parent, Merger Sub or any Affiliate thereof (a "THIRD PARTY"); (ii)
the acquisition by a Third Party of 20% or more of the total assets of the
Company and its Subsidiaries, taken as a whole (other than the purchase of the
Company's products in the ordinary course of business); (iii) the acquisition by
a Third Party of 20% or more of the outstanding Shares; (iv) the adoption by the
Company of a plan of partial or complete liquidation or the declaration or
payment of an extraordinary dividend; (v) the repurchase by the Company or any
of its Subsidiaries of 20% or more of the outstanding Shares; or (vi) the
acquisition by the Company or any of its Subsidiaries by merger, purchase of
stock or assets, joint venture or otherwise of a direct or indirect ownership
interest or investment in any business whose annual revenues, net income or
assets is equal to or greater than 20% of the annual revenues, net income or
assets of the Company and its Subsidiaries, taken as a whole. For purposes of
this Agreement, a "SUPERIOR PROPOSAL" means any bona fide proposal to acquire
directly or indirectly for consideration consisting of cash and/or securities
more than 50% of the Shares then outstanding or all or substantially all the
assets of the Company and its Subsidiaries, taken as a whole, and otherwise on
terms which the Board of Directors of the Company by a majority vote determines
in its good
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faith judgment (based on consultation with the Financial Advisor or another
financial adviser of nationally recognized reputation) to be reasonably capable
of being completed (taking into account all legal, financial, regulatory and
other aspects of the proposal and the Person making the proposal, including the
availability of financing therefor) and more favorable to the Company's
stockholders than the Merger.
6.3. FILINGS; OTHER ACTIONS; NOTIFICATION.
(a) If a vote of the Company's stockholders is required by law,
the Company shall promptly, following the acceptance for payment of Shares by
Parent, pursuant to the Offer, prepare and file with the SEC the Proxy
Statement, which shall include the recommendation of the Board of Directors of
the Company that stockholders of the Company vote in favor of the approval and
adoption of this Agreement and the written opinion of the Financial Advisor that
the cash consideration to be received by the stockholders of the Company
pursuant to the Merger is fair to such stockholders from a financial point of
view. The Company shall use all reasonable efforts to have the Proxy Statement
cleared by the SEC as promptly as practicable after such filing, and promptly
thereafter mail the Proxy Statement to the stockholders of the Company. The
Company shall also use its best efforts to obtain all necessary state securities
law or "blue sky" permits and approvals required in connection with the Merger
and to consummate the other transactions contemplated by this Agreement and will
pay all expenses incident thereto.
(b) Upon and subject to the terms and conditions set forth in this
Agreement, the Company and Parent shall cooperate with each other and use (and
shall cause their respective Subsidiaries to use) all reasonable efforts to take
or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable under this Agreement and applicable Laws to
consummate and make effective the Offer, the Merger and the other transactions
contemplated by this Agreement as soon as practicable, including preparing and
filing as promptly as practicable all documentation to effect all necessary
applications, notices, petitions, filings and other documents and to obtain as
promptly as practicable all permits, consents, approvals and authorizations
necessary or advisable to be obtained from any third party and/or any
Governmental Entity in order to consummate the Offer, the Merger or any of the
other transactions contemplated by this Agreement; PROVIDED, HOWEVER, that
nothing in this Section 6.3 shall require, or be construed to require, Parent to
proffer to, or agree to, sell or hold separate and agree to sell, before or
after the Effective Time, any material assets, businesses or any interest in any
material assets or businesses of Parent, the Company or any of their respective
Affiliates (or to consent to any sale, or agreement to sell, by the Company of
any of its material assets or businesses) or to agree to any material change in
or restriction on the operations of any such assets or businesses; provided
further, that nothing in this Section 6.3 shall require, or be construed to
require, a proffer or agreement that would, in the good faith judgment of
Parent, be likely to have a significant adverse effect on the benefits to Parent
of the transactions contemplated by this Agreement. Subject to applicable Laws
relating to the exchange of information, Parent and the Company shall have the
right to review in advance, and to the extent practicable each will consult the
other on, all the information relating to Parent or the Company, as the case may
be, and any of their respective Subsidiaries, that appears in any filing made
with, or written materials submitted to, any third party and/or any Governmental
Entity in connection with the Offer, the Merger and the other
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transactions contemplated by this Agreement, including the Proxy Statement. In
exercising the foregoing right, the Company and Parent shall act reasonably and
as promptly as practicable.
(c) Each of the Company and Parent shall, upon request by the
other, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such other matters as may
be reasonably necessary or advisable in connection with the Proxy Statement or
any other statement, filing, notice or application made by or on behalf of
Parent, the Company or any of their respective Subsidiaries to any Governmental
Entity or other Person (including the NASD) in connection with the Offer, the
Merger and the other transactions contemplated by this Agreement.
(d) Each of the Company and Parent shall keep the other apprised
of the status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by Parent or the Company, as the case may be, or any of
their respective Subsidiaries, from any third party and/or any Governmental
Entity with respect to the Offer, the Merger and the other transactions
contemplated by this Agreement. Each of the Company and Parent shall give prompt
notice to the other of any change that is reasonably likely to have a Company
Material Adverse Effect or a Parent Material Adverse Effect, respectively.
6.4. INFORMATION SUPPLIED. Each of Parent and the Company agrees, as to
information provided by itself and its Subsidiaries, that none of the
information included or incorporated by reference in the proxy statement
delivered by the Company to its stockholders in connection with the Merger and
any amendment or supplement thereto (the "PROXY STATEMENT") will, at the time
the Proxy Statement is cleared by the SEC, at the date of mailing to
stockholders of the Company, and at the time of the Stockholders Meeting (as
defined in Section 6.5),contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
6.5. STOCKHOLDERS MEETING.
(a) If a vote of the Company's stockholders is required by law,
the Company will, following the acceptance for payment of Shares by Parent
pursuant to the Offer, take, in accordance with applicable Law and its
certificate of incorporation and by-laws, all action necessary to convene a
meeting of holders of Shares (the "STOCKHOLDERS MEETING") as promptly as
practicable after the Proxy Statement is cleared by the SEC to consider and vote
upon the approval of this Agreement. The Proxy Statement shall, include a
statement that the Board approved this Agreement and recommended that
Stockholders vote in favor of this Merger, and the Company shall use all
reasonable and customary efforts to solicit such approval. Notwithstanding the
foregoing, if Parent, Merger Sub and/or any other Subsidiary of Parent shall
acquire at least 90% of the outstanding Shares, the parties shall take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a Stockholders Meeting
in accordance with Section 253 of the DGCL.
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(b) Parent agrees to cause all Shares purchased pursuant to the
Offer and all other Shares owned by Parent or any Subsidiary of Parent to be
voted in favor of the Merger.
6.6. ACCESS. Upon reasonable notice, and except as may otherwise be
required by applicable law or relevant contractual provisions contained in such
agreements, the Company shall (and shall cause its Subsidiaries to) (i) afford
Parent's officers, employees, counsel, accountants and other authorized
representatives (collectively, "REPRESENTATIVES") access, during normal business
hours throughout the period prior to the Effective Time, to its properties,
books, contracts and records and, during such period, (ii) furnish promptly to
Parent all information concerning its business, properties and personnel as may
reasonably be requested; provided, however, that no investigation pursuant to
this Section 6.6 shall affect or be deemed to modify any representation or
warranty made by the Company. All requests for information made pursuant to this
Section 6.6 shall be directed to an executive officer of the Company or such
Person as may be designated by its officers. Notwithstanding the foregoing, the
parties shall comply with, and shall cause their respective Representatives to
comply with, all their respective obligations under the Confidentiality
Agreement, dated July 22, 1997, between the Company and Parent.
6.7. PUBLICITY. The initial press release concerning the Merger has
been approved by Parent and the Company and thereafter the Company and its
Subsidiaries, on the one hand, and Parent and Merger Sub, on the other hand,
shall consult with each other prior to issuing any press releases or otherwise
making public announcements with respect to the Merger and the other
transactions contemplated by this Agreement and prior to making any filings with
any Governmental Entity or other Person (including the NASD) with respect
hereto, except as may be required by law or by obligations pursuant to any
listing agreement with the National Market.
6.8. STATUS OF COMPANY EMPLOYEES; COMPANY STOCK OPTIONS; EMPLOYEE
BENEFITS.
(a) Except as contemplated by this Agreement, Parent agrees that,
for a period of twelve (12) months following the Effective Time, the Surviving
Corporation shall maintain employee benefits plans and arrangements (directly or
in conjunction with Parent) which, in the aggregate, will provide a level of
benefits to Continuing Employees of the Surviving Corporation and its
Subsidiaries similar to those provided under the Compensation and Benefit Plans
as in effect immediately prior to the Effective Time (other than discretionary
benefits); PROVIDED, HOWEVER, that Parent may cause modifications to be made to
such employee benefit plans and arrangements to the extent necessary to comply
with applicable Law or to reflect widespread adjustments in benefits (or costs
thereof) provided to employees under compensation and benefit plans of Parent
and its Subsidiaries, and no specific Compensation and Benefit Plans need be
provided. Parent shall use Continuing Employee's hire date with Company as the
basis for determining eligibility and vesting of Parent's defined benefit and
Supplemental Employee Retirement Medical Account (SERMA) plans. Parent shall use
Effective Time as the basis for determining eligibility under the Parent's
sabbatical plan and for determining benefit accruals under Parent's defined
benefit and SERMA plans. For purposes of determining eligibility and vesting
with respect to all other benefits maintained by Parent, Parent shall use
Continuing Employee's hire date with the Company. Nothing in this Section 6.8(a)
shall be construed or applied to
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restrict the ability of the Surviving Corporation and its Subsidiaries to
establish such types and levels of compensation and benefits as they determine
to be appropriate.
(b) From and after the date hereof, the Company agrees that,
except with respect to grants in connection with offers of employment
outstanding on July 22, 1997, it will not grant additional stock options under
the Assumed Stock Option Plan and its Board of Directors will take all actions
necessary to provide that all options outstanding under the Assumed Stock Option
Plan can be assumed by Parent.
(c) The Board of Directors of Parent will adopt a resolution
assuming on behalf of Parent the obligations and rights of the Company under all
options outstanding under the Assumed Stock Option Plan.
6.9. EXPENSES. The Surviving Corporation shall pay all charges and
expenses, including those of the Exchange Agent, in connection with the
transactions contemplated in Article IV. Except as otherwise provided in
Sections 8.5, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense.
6.10. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) From and after the Effective Time, the Surviving Corporation
shall indemnify, defend and hold harmless each person who is now, or has been at
any time prior to the date of this Agreement or who becomes prior to the
Effective Time a director or officer of the Company or any of its Subsidiaries
(when acting in such capacity) (the "INDEMNIFIED PARTIES"), against any costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, demands, liabilities, damages or liabilities (collectively, "COSTS")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative arising out of matters
existing or occurring prior to or after the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, which is based in whole or in
part on, or arising in whole or in part out of the fact that such person is or
was a director or officer of the Company or any of its Subsidiaries including,
without limitation, all losses, claims, damages, costs, expenses, liabilities,
judgments or settlement amounts based in whole or in part on, or arising in
whole or in part out of, or pertaining to this Agreement or the transactions
contemplated hereby to the fullest extent that the Company would have been
permitted under the DGCL and its certificate of incorporation, by-laws and other
agreements in effect on the date hereof to indemnify such individual.
(b) Any Indemnified Party wishing to claim indemnification under
subsection (a) of this Section 6.l0, upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Parent and the
Surviving Corporation thereof (but the failure so to notify the Surviving
Corporation shall not relieve it from any liability which it may have under this
Section 6.10 except to the extent such failure materially prejudices such
party). In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) the
Surviving Corporation shall have the right to assume the defense
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thereof and the Surviving Corporation shall not be liable to any such
Indemnified Party for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof, (ii) the Indemnified Party will cooperate in all respects as requested
by the Surviving Corporation in the defense of any such matter and (iii) the
Surviving Corporation shall not be liable for any settlement effected without
its prior written consent which consent shall not be unreasonably withheld;
PROVIDED, HOWEVER, that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party if and when a court shall ultimately
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by Law.
(c) Parent and the Surviving Corporation shall maintain the
Company's and its Subsidiaries' existing officers' and directors' liability
insurance ("D&O INSURANCE") for a period of six (6) years after the Effective
Time so long as the annual premium therefor is not in excess of 150% of the last
annual premium paid prior to the date hereof (the "CURRENT PREMIUM"); PROVIDED,
HOWEVER, that if the existing D&O Insurance expires, is terminated or canceled
during such six-year period, the Surviving Corporation will use its commercially
reasonable efforts to obtain as much D&O Insurance as can be obtained for the
remainder of such period for a premium not in excess (on an annualized basis) of
150% of the Current Premium; PROVIDED FURTHER, that, in lieu of maintaining such
existing D&O Insurance as provided above, Parent may cause coverage to be
provided under any policy maintained for the benefit of Parent or any of its
Subsidiaries, so long as the terms are no less advantageous to the intended
beneficiaries thereof than the existing D&O Insurance. In lieu of the purchase
of such insurance by Parent or the Surviving Corporation, the Company may
purchase a six-year extended reporting period endorsement ("reporting tail
coverage") under its existing directors' and liability insurance coverage,
provided that the total cost of the reporting tail coverage shall not exceed
$350,000, and provided that such reporting tail coverage shall extend the
director and officer liability coverage in force as of the date hereof for a
period of six (6) years from the Effective Time for any claims based upon,
arising out of, directly or indirectly resulting from, in consequence of, or in
any way involving wrongful acts or omissions occurring on or prior to the
Effective Time, including without limitation all claims based upon, arising out
of, directly or indirectly resulting from, in consequence of, or in any way
involving the Offer, the Merger and any and all related transactions or related
events.
(d) The provisions of this Section 6.10 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties and
their respective heirs and estates. Nothing in this Section 6.10 shall limit in
any way any other rights to indemnification that any current or former director
or officer of the Company may have by contract or otherwise.
(e) From and after the Effective Time, the Surviving Corporation
shall fulfill, assume and honor in all respects the obligations of the Company
pursuant to the Company's Certificate of Incorporation, Bylaws and any
indemnification agreement between the Company and any of the Company's directors
and officers existing and in force as of the Effective Time. The Company agrees
that the indemnification obligations set forth in the Company's Certificate of
Incorporation and Bylaws, in each case as of the date of this Agreement, shall
survive the Merger (and, as of or prior to the Effective Time, Parent shall
cause the Bylaws of Sub to reflect such previsions) and shall not be amended,
repealed or otherwise modified for a period of six (6) years
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after the Effective Time in any manner that would adversely affect the rights
thereunder of the Indemnified Parties.
(f) If the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other Person and shall not
be the continuing or surviving corporation or Person of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any Person, then and in each such case, proper provisions shall be
made so that the successors and assigns of the Surviving Corporation shall
assume all of the obligations set forth in this Section 6.10.
6.11. OTHER ACTIONS BY THE COMPANY AND PARENT.
(a) RIGHTS AGREEMENT. Prior to the Effective Time, the Board of
Directors of the Company shall take all necessary action to ensure that the
representation and warranty in Section 5.l(p) is true and correct.
(b) TAKEOVER STATUTES. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, each of Parent and the Company and their respective Boards of
Directors shall grant such approvals and take such lawful actions as are
necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger and
otherwise act to eliminate or minimize the effects of such statute, and any
regulations promulgated thereunder, on such transactions.
6.12. PARENT STOCK OPTION; EXERCISE; ADJUSTMENTS.
(a) Subject to the terms and conditions set forth herein, the
Company hereby grants to Parent an irrevocable option (the "PARENT OPTION") to
purchase that number of authorized and unissued shares of Common Stock equal to
19.99% of the outstanding Shares immediately prior to the exercise of the Parent
Option (the "OPTION SHARES") at a purchase price of $17.50 per Option Share (the
"OPTION PRICE"). Subject to the conditions set forth in Subsection (c) below,
the Parent Option may be exercised by Parent, in whole or in part, at any time
or from time to time after the date on which Parent has accepted for payment the
Shares tendered pursuant to the Offer and prior to the termination of this
Agreement pursuant to Article VIII. If Parent wishes to exercise the Parent
Option, Parent shall send a written notice to the Company (the "EXERCISE
NOTICE") specifying a date (not earlier than the next Business Day following the
date such notice is given) for the closing of such purchase and containing a
representation by Parent that upon the issuance and delivery of the Option
Shares, there will be no further conditions precedent that need to be satisfied
for Parent and Merger Sub to effect the Merger, and that Parent and Merger Sub
will take all actions required on their respective parts to effect the Merger.
(b) In the event of any change in the number of issued and
outstanding Shares by reason of any stock dividend, stock split, split-up,
recapitalization, merger or other change in the corporate or capital structure
of the Company, the number of Option Shares and the Option Price shall be
appropriately adjusted to restore Parent to its rights hereunder.
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(c) The Company's obligation to issue and deliver the Option
Shares upon exercise of the Parent Option is subject only to the following
conditions:
(i) No preliminary or permanent injunction or other order
issued by any federal or state court of competent jurisdiction in the United
States prohibiting the delivery of the Option Shares shall be in effect;
(ii) Any applicable waiting periods under the HSR Act, or
other applicable United States or foreign Laws shall have expired or been
terminated; and
(iii) The number of Option Shares plus the number of Shares
accepted for payment by Parent pursuant to the Offer will, upon issuance of the
Option Shares, constitute at least ninety percent (90%) of the Company's issued
and outstanding shares of Common Stock.
(d) Any closing hereunder shall take place on the date specified
by Parent in its Exercise Notice delivered pursuant to subsection (a) above at
9:00 a.m., California time, or the first day thereafter on which all of the
conditions in subsection (c) above are met, at the offices of Parent's counsel,
or at such other time and place as the parties may agree (the "OPTION CLOSING
DATE"). On the Option Closing Date, the Company will deliver to Parent a
certificate or certificates representing the Option Shares in the denominations
designated by Parent in its Exercise Notice and Parent will purchase such Option
Shares from the Company at a price per Option Share equal to the Option Price.
Any payment made by Parent to the Company pursuant to this subsection (d) shall
be made by certified, cashier's or bank check or by wire transfer of immediately
available funds to an account designated by the Company. The certificates
representing the Option Shares may bear an appropriate legend relating to the
fact that such Option Shares have not been registered under the Securities Act.
ARTICLE VII
CONDITIONS
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) STOCKHOLDER APPROVAL. If required by applicable law this
Agreement shall have been duly approved by holders of the number of Shares
constituting at least the Company Requisite Vote.
(b) REGULATORY CONSENTS. The waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated and, other than filing the Delaware Certificate of Merger, all
filings with any Governmental Entity required to be made prior to the Effective
Time by the Company or Parent or any of their respective Subsidiaries, with, and
all Government Consents required to be obtained prior to the Effective Time by
the Company or Parent or any of their respective Subsidiaries in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company, Parent and Merger Sub shall
have been made or obtained (as the case may be), except where the
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failure to so make or obtain will not result in either a Company Material
Adverse Effect or a Parent Material Adverse Effect.
(c) LITIGATION. No court or other Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated by this
Agreement (collectively, an "ORDER"), and no Governmental Entity shall have
instituted any proceeding or formally threatened to institute any proceeding
seeking any such Order and such proceeding or threat remains unresolved.
7.2. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to effect the Merger are also subject to
the satisfaction or waiver by Parent prior to the Effective Time of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date it being
understood that representations and warranties shall be deemed to be true and
correct unless the respects in which the representations and warranties (without
giving effect to any "materiality" limitations or references to "material
adverse effect" set forth therein) are untrue or incorrect in the aggregate is
likely to have a Company Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date.
7.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Merger Sub set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date it
being understood that representations and warranties shall be deemed to be true
and correct unless the respects in which the representations and warranties
(without giving effect to any "materiality" limitations or references to
"material adverse effect" set forth therein) are untrue or incorrect in the
aggregate is likely to have a Parent Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUB. Each of
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date.
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ARTICLE VIII
TERMINATION
8.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after its approval by the Company Requisite Vote, by mutual written
consent of the Company (through the Continuing Directors or their designated
successors), Parent and Merger Sub.
8.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by either Parent or the Company if any Order permanently restraining,
enjoining or otherwise prohibiting the Merger shall be entered (whether before
or after the approval by the stockholders of the Company) and such Order is or
shall have become nonappealable.
8.3. 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 its approval by the Company Requisite Vote, by the Company if:
(a) after October 31, 1997, Parent shall have failed to pay for
Shares pursuant to the Offer; provided, however, that the right to terminate
this Agreement pursuant to this subsection (a) shall not be available to the
Company if it has breached in any material respects its obligations under this
Agreement that in any manner shall have proximately contributed to the failure
referenced in this clause (a);
(b) prior to Parent's purchase of Shares pursuant to the Offer,
(i) the Company enters into a binding written agreement concerning a Superior
Proposal after fully complying with the procedures set forth in Section 6.2 and
(ii) the Company concurrently with such termination pays to Parent in
immediately available funds all expense reimbursements due Parent pursuant to
Section 8.5(a) and the first installment of the Termination Fee pursuant to
Section 8.5(b); or
(c) there has been a material breach by Parent or Merger Sub of
any representation, warranty, covenant or agreement contained in this Agreement
that is not curable or, if curable, is not cured prior to the earlier of (i)
twenty (20) days after written notice of such breach is given by the Company to
Parent and (ii) two (2) Business Days before the date on which the Offer
expires.
8.4. TERMINATION BY PARENT AND MERGER SUB. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after its approval by the Company Requisite Vote, by
Parent and Merger Sub if:
(a) the Merger shall not have been consummated by January 15,
1998; provided, however, that the right to terminate this Agreement pursuant to
this subsection (a) shall not be available to Parent and Merger Sub if either of
them 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 referred to in this subsection;
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(b) the Board of Directors of the Company shall have withdrawn or
adversely modified its approval or recommendation of this Agreement;
(c) there has been a material breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement that
is not curable or, if curable, is not cured within twenty (20) days after
written notice of such breach is given by Parent to the Company and which is
likely to have a Company Material Adverse Effect; or
(d) Parent shall have terminated the Offer in accordance with the
provisions of Annex A; provided, however, that the right to terminate this
Agreement pursuant to this subsection (d) shall not be available to Parent and
Merger Sub if either of them has breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the termination of the Offer.
8.5. EFFECT OF TERMINATION AND ABANDONMENT.
(a) If this Agreement is terminated and the Merger abandoned
pursuant to this Article VIII, this Agreement (other than as set forth in
Section 9.1) shall become void and of no further effect with no liability of any
party hereto (or any of its directors, officers, employees, agents,
stockholders, legal, accounting 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 breach of this Agreement; PROVIDED FURTHER, that the Company
shall reimburse Parent in the amount of $2,000,000 as reimbursement for all of
its costs and expenses in connection with this Agreement, the Offer and the
Merger unless: (i) the Agreement has been terminated by the parties pursuant to
Section 8.1 or by either party pursuant to Section 8.2; (ii) the Company has
terminated this Agreement pursuant to Sections 8.3(a) or 8.3(c); or (iii) the
Parent has terminated this Agreement pursuant to Section 8.4(a) or Section
8.4(d) and, further, the Company has not breached in any material respect its
obligations under this Agreement in any manner which proximately contributed to
the failure to close the Merger or Parent's termination of the Offer,
respectively.
(b)(i) In lieu of any liability or obligation to pay damages
(other than the obligation to reimburse Parent for expenses pursuant to Section
8.5(a)), if (A) there shall be a proposal by a Third Party for a Third Party
Acquisition existing at the time of termination of the Agreement by Parent and
Merger Sub, and (B) Parent and Merger Sub shall have terminated this Agreement
pursuant to Section 8.4(b) or (c) or (d) and, with respect to a termination
pursuant to Section 8.4(d), the Company has breached in any material respect its
obligations under this Agreement in any manner which proximately contributed to
Parent and Merger Sub's termination of the Offer, the Company shall pay to
Parent (i) within two (2) business days after such termination $5,000,000 and
(ii) an additional $8,000,000 upon consummation, if any, of any Third Party
Acquisition with a Person who had proposed a Third Party Acquisition prior to
the time of the termination of this Agreement by the Parent and Merger Sub.
(ii) In lieu of any liability or obligation to pay damages (other
than the obligation to reimburse Parent for expenses pursuant to Section
8.5(a)), (A) if there shall not have been a material breach of any
representation, warranty, covenant or agreement on the part of
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Parent or Merger Sub and (B) the Company shall have terminated this Agreement
pursuant to Section 8.3(b), the Company shall pay to Parent (i) concurrently
with such termination $5,000,000 and (ii) an additional $8,000,000 upon
consummation, if any, of either the Superior Proposal giving right to terminate
this Agreement under Section 8.3 (b) or any Third Party Acquisition with a
Person who had proposed a Third party Acquisition prior to the termination of
this Agreement under section 8.3(b). (Such amounts payable pursuant to Section
8.5(b)(i) or this Section 8.5(b)(ii) are referred to in the aggregate in this
Agreement as the "Termination Fee".)
(c) The Company acknowledges that the agreements contained in
Section 8.5 are an integral part of the transactions contemplated by this
Agreement and that, without these agreements, Parent and Merger Sub would not
enter into this Agreement; accordingly, if the Company fails promptly to pay the
amounts required pursuant to Section 8.5 and, in order to obtain such payment
Parent or Merger Sub commences a suit which results in a final nonappealable
judgment against the Company for such amounts, the Company shall pay to Parent
or Merger Sub (i) its costs and expenses (including attorneys' fees) in
connection with such suit and (ii) if (and only if) this Agreement has been
terminated pursuant to Section 8.3(b) or 8.4(c), interest on the amount at the
rate announced by Bank of America, NT & SA as its "reference rate" in effect on
the date such payment was required to be made.
8.6. PROCEDURE FOR TERMINATION. A termination of this Agreement
pursuant to this Article VIII shall, in order to be effective, require in the
case of Parent, Merger Sub or the Company, action by its Board of Directors.
ARTICLE IX
MISCELLANEOUS
9.1. SURVIVAL. This Article IX and the agreements of the Company,
Parent and Merger Sub contained in Sections 6.8 (Benefits), 6.9 (Expenses) and
6.10 (Indemnification; Directors' and Officers' Insurance) shall survive the
consummation of the Merger. This Article IX and the agreements of the Company,
Parent and Merger Sub contained in Section 6.9 (Expenses) and Section 8.5
(Effect of Termination and Abandonment) shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants in
this Agreement and in any certificate or schedule delivered pursuant hereto
shall not survive the consummation of the Merger or the termination of this
Agreement.
9.2. CERTAIN DEFINITIONS. For the purposes of this Agreement each of
the following terms shall have the meanings set forth below:
(a) "AFFILIATE" means a Person that, directly or indirectly,
through one or more intermediaries controls, is controlled by or is under common
control with the first-mentioned Person.
(b) "BUSINESS DAY" means any day other than a day on which banks
in the State of California are authorized to close or the NASDAQ National Market
is closed.
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(c) "CAPITAL STOCK" means common stock, preferred stock,
partnership interests, limited liability company interests or other ownership
interests entitling the holder thereof to vote with respect to matters involving
the issuer thereof.
(d) "COMPANY MATERIAL ADVERSE EFFECT" means a material adverse
effect on the financial condition, properties, business or results of operations
of the Company and its Subsidiaries, taken as a whole it being understood that
none of the following shall be deemed by itself or by themselves, either alone
or in combination, to constitute a Company Material Adverse Effect: (a) a change
in the market price or trading volume of the Company Common Stock, (b) a failure
by the Company to meet internal earnings or revenue projections or the revenue
or earnings predictions of equity analysts as reflected in the First Call
consensus estimate, or any other revenue or earnings predictions or
expectations, for any period ending (or for which earnings are released) on or
after the date of this Agreement and prior to the Effective Date, (c) conditions
affecting the semi-conductor industry as a whole or the U.S. economy as a whole,
(d) any disruption of customer or supplier relationships arising primarily out
of or resulting primarily from actions contemplated by the parties in connection
with, or which is primarily attributable to, the announcement of this Agreement
and the transactions contemplated hereby, to the extent so attributable.
(e) "LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest, encumbrance, hypothecation, title defect or
adverse claim of any kind in respect of such asset.
(f) "PARENT MATERIAL ADVERSE EFFECT" means a material adverse
effect on the ability of Parent or Merger Sub to conduct the Offer or consummate
the Merger or any of the other material transactions contemplated by this
Agreement
(g) "PERMITTED LIENS" means (i) Liens for Taxes or other
governmental assessments, charges or claims the payment of which is not yet due;
(ii) statutory liens of landlords and liens of carriers, warehousemen,
mechanics, materialmen and other similar Persons and other liens imposed by
applicable Law incurred in the ordinary course of business for sums not yet
delinquent or immaterial in amount and being contested in good faith; (iii)
liens specifically identified as such in the Balance Sheet or the notes thereto;
(iv) liens constituting or securing executory obligations under any lease that
constitutes an "operating lease" under GAAP; and (v) any other Lien arising in
the ordinary course of business, the imposition of which would not constitute a
Company Material Adverse Effect; PROVIDED, HOWEVER, that, with respect to each
of the foregoing clauses (i) through (iv), to the extent that any such lien
arose prior to the Audit Date and relates to, or secures the payment of, a
liability that is required to be accrued on the Balance Sheet under GAAP, such
lien shall not be a Permitted lien unless accruals for such liability have been
established therefor on the Balance Sheet in conformity with GAAP.
Notwithstanding the foregoing, no lien arising under the Code or ERISA with
respect to the operation, termination, restoration or funding of any
Compensation and Benefit Plan sponsored by, maintained by or contributed to by
the Company or any of its ERISA Affiliates or arising in connection with any
excise tax or penalty tax with respect to such Compensation and Benefit Plan
shall be a Permitted lien.
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(h) "PERSON" means an individual, corporation (including
not-for-profit), partnership, limited liability company, association, trust,
unincorporated organization, joint venture, estate, Governmental Entity or other
legal entity.
(i) "SUBSIDIARY" or "SUBSIDIARIES" of the Company, Parent, the
Surviving Corporation or any other Person means any corporation, partnership,
limited liability company, association, trust, unincorporated association or
other legal entity of which the Company, Parent, the Surviving Corporation or
any such other Person, as the case may be, either alone or through or together
with any other Subsidiary, owns, directly or indirectly, 50% or more of the
Capital Stock, the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such corporation
or other legal entity.
9.3. NO PERSONAL LIABILITY. This Agreement shall not create or be
deemed to create any personal liability or obligation on the part of any direct
or indirect stockholder of the Company, Merger Sub or Parent, or any of their
respective officers, directors, employees, agents or representatives.
9.4. MODIFICATION OR AMENDMENT. Subject to the provisions of applicable
Law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
9.5. WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law. The failure of any party hereto to exercise any right, power or
remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon strict compliance by any other party hereto
with its obligations hereunder, and any custom or practice of the parties at
variance with the terms hereof, shall not constitute a waiver by such party of
its rights to exercise any such or other right, power or remedy or to demand
such compliance.
9.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.7. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of Delaware and the Federal courts of the United States
of America located in the State of Delaware solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
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or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware State or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.8 or in such other manner as may
be permitted by applicable Law, shall be valid and sufficient service thereof.
(b) The parties agree that irreparable damage would occur and that
the parties would not have any adequate remedy at law 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 in any Federal court located in the State of Delaware or in Delaware
state court, this being in addition to any other remedy to which they are
entitled at law or in equity.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE INITIAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.7.
9.8. NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be deemed given if in writing
and delivered personally or sent by registered or certified mail (return receipt
requested) or overnight courier (providing proof of delivery), postage prepaid,
or by facsimile (which is confirmed):
IF TO PARENT OR MERGER SUB:
Intel Corporation.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
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with a copy to:
Xxxxxxx X. Strong, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xx. Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
IF TO THE COMPANY:
Chips and Technologies, Inc.
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx X. Rock, Esq.
Xxxx Xxxx Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
9.9. ENTIRE AGREEMENT. This Agreement (including any schedules,
exhibits or annexes hereto) and the Confidentiality Agreement hereto constitute
the entire agreement, and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the parties, with
respect to the subject matter hereof.
9.10. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 6.10
(Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
9.11. OBLIGATIONS OF THE COMPANY AND SURVIVING CORPORATION. Whenever
this Agreement requires a Subsidiary of the Company to take any action, such
requirement shall be deemed to include and undertaking on the part of the
Company to cause such Subsidiary to take such action and, after the Effective
Time, on the part of the Surviving Corporation to cause such Subsidiary to take
such action.
9.12. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision hereof shall
not affect the validity or enforceability of any of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any Person or
any circumstance, is illegal, 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
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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 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.
9.13. INTERPRETATION. The table of contents and Article, Section and
subsection headings herein are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof. Where a reference in this
Agreement is made to a Section, Schedule, Annex or Exhibit, such reference shall
be to a Section of, or Schedule, Annex or Exhibit to, this Agreement, unless
otherwise indicated. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." All terms defined in this Agreement shall have the defined
meanings 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 term. 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, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns and, in
the case of an individual, to his or her heirs and estate, as applicable.
9.14. ASSIGNMENT. This Agreement shall not be assignable by operation
of Law or otherwise and any attempted assignment of this Agreement in violation
of this sentence shall be void; PROVIDED, HOWEVER, that Parent may designate, by
written notice to the Company, another wholly-owned, direct subsidiary to be a
Constituent Corporation in lieu of Merger Sub, in the event of which, all
references herein to Merger Sub shall be deemed references to such other
Subsidiary except that all representations and warranties made herein with
respect to Merger Sub as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other Subsidiary as of
the date of such designation.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by duly authorized officers of the parties hereto as of the date hereof.
CHIPS AND TECHNOLOGIES, INC.
By: _________________________________
Name:
Title:
INTEL CORPORATION
By: _________________________________
Name:
Title:
INTEL ENTERPRISE CORPORATION
By: _________________________________
Name:
Title:
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ANNEX A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or this Agreement, and
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) relating to Parent's obligation to pay for or return tendered shares
after termination of the Offer, Parent shall not be required to accept for
payment or pay for any Shares tendered pursuant to the Offer, shall delay the
acceptance for payment of any Shares and if required by Section 1.1(b) of this
Agreement, shall extend the Offer by one or more extensions until October 31,
1997, and may terminate the Offer at any time after October 31, 1997 if (i) less
than a majority of the outstanding Shares on a fully-diluted basis (including
for purposes of such calculation all Shares issuable upon exercise of all vested
and unvested options) has been tendered pursuant to the Offer by the expiration
of the Offer and not withdrawn; (ii) any applicable waiting period under the HSR
Act has not expired or terminated; (iii) all necessary Government Consents shall
not have been obtained on terms and conditions reasonably satisfactory to
Parent; or (iv) at any time after the date of this Agreement, and before
acceptance for payment of any Shares, any of the following events shall occur
and be continuing on or after October 31, 1997:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any domestic
or foreign court or other Governmental Entity which directly or indirectly (i)
prohibits, or imposes any material limitations on, Parent's ownership or
operation (or that of any of its Subsidiaries or other Affiliates) of all or a
material portion of their or the Company's businesses or assets, or compels
Parent or any of its Subsidiaries or other Affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
and its respective Subsidiaries, in each case taken as a whole, (ii) prohibits,
or makes illegal, the acceptance for payment, payment for or purchase of Shares
or the consummation of the Offer, the Merger or the other transactions
contemplated by this Agreement, (iii) results in the delay in or restricts the
ability of Parent, or renders Parent unable, to accept for payment, pay for or
purchase some or all of the Shares, (iv) imposes material limitations on the
ability of Parent effectively to exercise full rights of ownership of the
Shares, including the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders, or (v) otherwise has a Company
Material Adverse Effect;
(b) (i) the representations and warranties of the Company set forth in
this Agreement shall not be true and correct in any material respect as of the
date of this Agreement and as of consummation of the Offer as though made on or
as of such date (except for representations and warranties made as of a
specified date) but only if the respects in which the representations and
warranties made by the Company (without giving effect to any "materiality"
limitations or references to "material adverse effect" set forth therein) are
inaccurate would in the aggregate have a Company Material Adverse Effect, (ii)
the Company shall have failed to comply with its covenants and agreements
contained in this Agreement in all material respects, or (iii) there shall have
occurred any events or changes which have had or which are likely to have a
Company Material Adverse Effect;
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(c) it shall have been publicly disclosed or Parent shall have
otherwise learned that (i) any Person or "group" (as defined in Section l3(d)(3)
of the Exchange Act) shall have acquired or entered into a definitive agreement
or agreement in principle to acquire beneficial ownership of more than 20% of
the Shares or any other class of Capital Stock of the Company, through the
acquisition of stock, the formation of a group or otherwise, or shall have been
granted any option, right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 20% of the Shares and (ii) such Person or
group shall not have tendered such Shares pursuant to the Offer;
(d) the Board of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Parent (including by amendment of the
Schedule 14D-9), its recommendation of the Offer, this Agreement or the Merger,
or recommended another proposal or offer, or the Board of Directors of the
Company, shall have resolved to do any of the foregoing; or
(e) this Agreement shall have terminated in accordance with its terms;
which in the good faith judgment of Parent, in any such case, and regardless of
the circumstances (including any action or inaction by Parent) giving rise to
such condition makes it inadvisable to proceed with the Offer or the acceptance
for payment of or payment for the Shares.
The foregoing conditions, other than condition (i) above are for the
sole benefit of Parent and may be waived by Parent, in whole or in part at any
time and from time to time, in the sole discretion of Parent. The failure by
Parent at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time.
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