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EXHIBIT 2.1
AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), is made
and entered into as of July 6, 2000, and amended and restated as of October 20,
2000, by and among ADVANCED ENERGY INDUSTRIES, INC., a Delaware corporation
("Parent"), FLOW ACQUISITION CORPORATION, a Colorado corporation and a wholly
owned subsidiary of Parent ("Merger Sub"), and ENGINEERING MEASUREMENTS COMPANY,
a Colorado corporation (the "Company").
RECITALS
A. The Boards of Directors of Parent and the Company each have
determined that a business combination between Parent and the Company would
enable the companies to achieve short-term and long-term strategic and financial
benefits to the benefit of their respective stockholders and, accordingly, for
that and other reasons is in the best interests of their respective
stockholders. Each of such Boards of Directors desires to effect the Merger (as
defined herein), on the terms and subject to the conditions set forth herein.
B. Parent has incorporated and organized Merger Sub solely to
facilitate the Merger.
C. For purposes of this Agreement, the date of this Agreement and the
date of the execution and delivery of this Agreement shall be deemed to be July
6, 2000.
NOW, THEREFORE, in consideration of the mutual covenants and subject to
the terms and conditions set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
"Affiliate" means each "affiliate" as defined in Rule 145 of the rules
and regulations promulgated under the Securities Act.
"Agreement" has the meaning set forth in the preface above.
"Alternative Proposal" has the meaning set forth in Section 6.1(b).
"Articles of Merger" has the meaning set forth in Section 2.3.
"Cash Consideration" has the meaning set forth in Section 3.2(a).
"CBCA" has the meaning set forth in Section 2.1.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Certificate" has the meaning set forth in Section 3.2(b).
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"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission of the United
States of America.
"Company" has the meaning set forth in the preface above.
"Company Benefit Plans" means all employee benefit plans as defined in
Section 3.3 of ERISA and any other plan, contract, program, policy or benefit
arrangements covering employees or former employees of the Company and all
employee agreements providing compensation, severance or other benefits to any
employee or former employee of the Company.
"Company Board" means the Board of Directors of the Company.
"Company Common Stock" means the common stock of the Company.
"Company Contract" has the meaning set forth in Section 4.10.
"Company Disclosure Schedule" means the disclosure schedule delivered
by the Company at or prior to the execution hereof to Parent.
"Company Material Adverse Effect" means a material adverse effect on or
change in the business, prospects, results of operations or financial condition
of the Company and its Subsidiaries, taken as a whole.
"Company Option Plans" has the meaning set forth in Section 3.2(d)(i).
"Company Options" has the meaning set forth in Section 3.2(d)(i).
"Company Personnel" has the meaning set forth in Section 6.10(a).
"Company Real Properties" means all real property ever owned, leased or
occupied by the Company or any Predecessor.
"Company Reports" has the meaning set forth in Section 4.6(a).
"Confidentiality Agreement" has the meaning set forth in Section
8.5(c).
"Copyrights" means any and all of Company's copyrights, copyrightable
works, semiconductor topography and mask work interests, including, without
limitation, all rights of authorship, use, publication, reproduction,
distribution, performance, transformation, moral rights and ownership of
copyrightable works, semiconductor topography works and mask works, and all
rights to register and obtain renewals and extensions of registrations, together
with all other interests accruing by reason of international copyright,
semiconductor topography and mask work conventions.
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"Current Policy" has the meaning provided in Section 6.14(b).
"Dissenting Shareholder" means a holder of Dissenting Shares.
"Dissenting Shares" means shares of Company Common Stock held as of the
Effective Time by a shareholder of the Company who has not voted such shares in
favor of the adoption of this Agreement and the Merger and with respect to which
appraisal shall have been duly demanded and perfected in accordance with Article
113 of the CBCA and not effectively withdrawn or forfeited prior to the
Effective Time.
"Effective Time" has the meaning set forth in Section 2.3.
"Enforceability Exceptions" has the meaning set forth in Section
4.3(c).
"Environmental Requirements" means any applicable laws, regulations,
ordinances or other provisions having the force or effect of law, or any
judicial, governmental, or administrative orders, requests, or determinations,
or any common law requirements relating to the protection of human health or the
environment (both natural and workplace), including without limitation any
Environmental Requirements concerning (A) the use, generation, treatment,
storage, transportation, handling or disposal of Hazardous Materials, (B) the
control of soil, surface or groundwater pollution products, (C) air quality and
emission standards, or (D) health, safety and hazard communication matters.
Environmental Requirements include, without limitation, CERCLA, the Resource
Conservation and Recovery Act, the Hazardous Materials Transportation Act, the
Clean Water Act, the Toxic Substances Control Act, the Clean Air Act, SWDA, the
Atomic Energy Act, the Federal Food Drug and Cosmetic Act, and equivalent state
and local ordinances and statutes and ordinances in countries other than the
United States of America.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any business or entity which is a member of the
same "controlled group of corporations," under "common control" or an
"affiliated service group" with an entity within the meanings of Sections
414(b), (c) or (m) of the Code, or required to be aggregated with the entity
under Section 414(o) of the Code, or is under "common control" with the entity,
within the meaning of Section 4001(a)(14) of ERISA, or any regulations
promulgated or proposed under any of the foregoing Sections.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Future Benefit Plans" has the meaning set forth in Section 6.10(b).
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Hazardous Materials" means any toxic, injurious or hazardous
materials, substances or wastes, toxic pollutants or contaminants, including
petroleum products, crude oil or any by-products or derivatives thereof as any
of the foregoing terms are defined in federal, state and
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local laws applicable to the Company or Parent, as the case may be, but does not
include commercially available office cleaning or janitorial supplies.
"Intellectual Property" means any and all of the following of the
Company and the Company Subsidiaries: (i) Patents; (ii) Trademarks; (iii)
Copyrights; and (iv) any and all technology, ideas, inventions, designs,
proprietary information, unpublished research and development information,
manufacturing and operating information, know-how, formulae, trade secrets and
technical data, computer programs, and all hardware, software and processes.
"IRS" means the federal Internal Revenue Service.
"ISOs" has the meaning set forth in Section 3.2(d)(iii).
"Issued Patents" means any and all issued patents, reissue or
reexamination patents, revivals of patents, utility models, certificates of
invention, registrations of patents, or extensions thereof, regardless of
country or formal name.
"Last Report Date" means April 30, 2000.
"Merger" has the meaning set forth in Section 2.1.
"Merger Consideration" means, with respect to any holder of Company
Common Stock, an amount of cash equal to (i) the number of shares of Company
Common Stock represented by such holder's Certificate at the Effective Time,
multiplied by (ii) the Cash Consideration.
"Merger Sub" has the meaning set forth in the preface above.
"Option Exchange Ratio" has the meaning set forth in Section
3.2(d)(ii).
"Parent" has the meaning set forth in the preface above.
"Parent Common Stock" means the common stock of the Parent.
"Parent Material Adverse Effect" means a material adverse effect on or
change in the business, prospects, results of operations or financial condition
of Parent and its Subsidiaries, taken as a whole.
"Parent Option Plans" has the meaning set forth in Section 3.2(d)(v).
"Parent Reports" has the meaning set forth in Section 5.5.
"Patent Applications" means any and all patent rights, including,
without limitation, all United States and foreign utility and design patents,
and all published or unpublished nonprovisional and provisional patent
applications, including, without limitation, any and all applications of
additions, divisionals, continuations, continuations-in-part, reexaminations,
substitutions, extensions, renewals, utility models, certificates of invention
or reissues thereof or therefor, invention disclosures and records of invention
for abandoned patent applications
"Patents" means the Patent Applications and the Issued Patents.
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"Paying Agent" has the meaning set forth in Section 3.3(a).
"Permits" means all valid and current permits, licenses, orders,
authorizations, registrations, approvals and other analogous instruments.
"Person" includes both natural persons and entities.
"Predecessor" means any Person that owns or has ever owned, leased or
occupied the Company Real Properties.
"Proxy Statement" has the meaning provided in Section 6.7(a).
"Qualified Plan" means each Company Benefit Plan that is intended to be
a "qualified plan" within the meaning of Section 401(a) of the Code, and either
(i) the IRS has issued a favorable determination letter that has not been
revoked, or (ii) an application for a favorable determination letter was timely
submitted to the IRS for which no final action has been taken by the IRS as of
the Closing Date.
"Record Date" means the date determined by the Company Board as the
date as of which a person must be a holder of record of Company Common Stock in
order to be entitled to vote at the Stockholders' Meeting.
"Registration Statement" has the meaning set forth in Section
3.2(d)(v).
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiaries" of a party means Subsidiaries of such party
which constitute "significant subsidiaries" under Rule 405 promulgated by the
Commission under the Securities Act.
"Stock Purchase Plan" has the meaning set forth in Section 3.2(d)(iv).
"Stockholders' Meeting" means the meeting of the holders of Company
Common Stock at which such holders consider adoption and approval of this
Agreement and the Merger.
"Subsidiary" of a party means any corporation or other organization,
whether incorporated or unincorporated, of which such party directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization, or any organization of which such party is a
general partner.
"Substituted Options" has the meaning set forth in Section 3.2(d)(i).
"Surviving Corporation" has the meaning set forth in Section 2.1.
"SWDA" means the Solid Waste Disposal Act, as amended.
"Termination Fee" has the meaning set forth in Section 8.5(a).
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"Trademarks" means any and all of Company's trademarks, registered
trademarks, applications for registration of trademark, service marks,
registered service marks, applications for registration of service marks, trade
names, registered trade names, and applications for registrations of trade
names.
"Transaction" has the meaning provided in Section 6.1(b).
ARTICLE 2
THE MERGER
2.1 THE BASIC TRANSACTION. On the terms and subject to the conditions
of this Agreement, at the Effective Time, Merger Sub shall be merged with and
into the Company in accordance with this Agreement, and the separate corporate
existence of Merger Sub shall thereupon cease (the "Merger"). The Company shall
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation"), and shall become a wholly owned subsidiary of
Parent. The Merger shall have the effects specified in the Colorado Business
Corporation Act (the "CBCA").
2.2 THE CLOSING |HiddenPara|
. Subject to the terms and conditions of this Agreement, the closing of
the Merger (the "Closing") shall take place (a) at the offices of the Company at
10:00 a.m., local time, on the first business day immediately following the day
on which the last to be fulfilled or waived of the conditions set forth in
Article 7 shall be completely fulfilled or waived in accordance herewith, or (b)
at such other time, date or place as Parent and the Company may agree. The date
on which the Closing occurs is hereinafter referred to as the "Closing Date."
2.3 EFFECTIVE TIME. On the Closing Date, Articles of Merger meeting the
requirements of Section 0-000-000 of the CBCA in the form of Exhibit 2.3 (the
"Articles of Merger") shall be executed and filed in the office of the Colorado
Secretary of State, in accordance with the CBCA. The Merger shall become
effective at (a) the time of filing of the Articles of Merger with the Colorado
Secretary of State or (b) such later time as agreed by the parties hereto and
designated in the Articles of Merger as the effective time of the Merger (the
"Effective Time").
2.4 ARTICLES OF INCORPORATION AND BY-LAWS. The Articles of
Incorporation and By-laws of Merger Sub in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and By-laws of the
Surviving Corporation, until duly amended in accordance with applicable law.
2.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors
and officers of Merger Sub immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation until their successors are
duly appointed or elected in accordance with applicable law.
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ARTICLE 3
CONVERSION OF SECURITIES
3.1 MERGER SUB STOCK. At the Effective Time, each share of common stock of
Merger Sub outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
non-assessable share of common stock of the Surviving Corporation.
3.2 COMPANY STOCK; OPTIONS.
(a) CONVERSION OF STOCK. At the Effective Time, each share of Company
Common Stock that is issued and outstanding immediately prior to the Effective
Time, exclusive of shares held by Dissenting Shareholders, shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
converted into the right to receive in cash without interest an amount equal to
(i) U.S. $30,000,000 plus Options Cash divided by (ii) Outstanding Shares (the
"Cash Consideration"). For purposes of this Section 3.2(a), "Options Cash" means
the aggregate of the exercise prices paid in cash by holders of Company Options
on the exercise of any and all Company Options after October 20, 2000 and before
the Closing Date, and "Outstanding Shares" means the number of shares of Company
Common Stock outstanding as of the Effective Time, including shares acquired on
exercise of Company Options after October 20, 2000 and before the Closing Date.
(b) CANCELLATION OF COMPANY COMMON STOCK. At the Effective Time, as a
result of the Merger and without any action on the part of the holders thereof,
all shares of Company Common Stock outstanding at the Effective Time shall cease
to be outstanding, shall be canceled and retired and shall cease to exist, and
each holder of shares of Company Common Stock shall thereafter cease to have any
rights with respect to such shares of Company Common Stock, except the right to
receive upon the surrender of a certificate representing such shares of Company
Common Stock (a "Certificate") an amount equal to (i) the number of shares of
Company Common Stock set forth on the Certificate, multiplied by (ii) the Cash
Consideration.
(c) TREASURY SHARES AND SHARES HELD BY SUBSIDIARIES. At the Effective
Time, as a result of the Merger and without any action on the part of Parent,
Merger Sub or the Company, any and all shares of Company Common Stock issued and
held in the Company's treasury shall cease to be outstanding, shall be canceled
and retired without payment of any consideration therefor and shall cease to
exist.
(d) OPTIONS.
(i) At the Effective Time, as a result of the Merger and without any
action on the part of holder thereof, each option to purchase Company Common
Stock granted by the Company (collectively, "Company Options") under one of its
stock option plans (collectively, "Company Option Plans") that remains
outstanding and unexercised as of the Effective Time, whether or not vested or
exercisable, shall be assumed by Parent and shall be converted into an option to
purchase Parent Common Stock (collectively, "Substituted Options"); provided,
however that, in the event the Option Exchange Ratio (as calculated in
subparagraph (ii) below) is greater than 0.553, Parent shall have the right to
require the Company
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to cause the Company Options granted under the Engineering Measurements Company
1991 Incentive Plan and the Engineering Measurements Company 1997 Incentive Plan
(the "Incentive Plans") that are outstanding immediately prior to the Closing to
be cancelled pursuant to Section 14(e) of each Incentive Plan and to pay the
consideration required by such Sections 14(e) based upon the Cash Consideration.
If Parent requires the Company to cause the Company Options granted under the
Incentive Plans to be cancelled, then (A) Parent shall not be required to assume
the Company Options cancelled, and (B) if the Company does not have sufficient
cash available to pay the consideration required by Section 14(e) of each of the
Incentive Plans, Parent shall advance the necessary funds to the Company.
(ii) Subject to subsection 3.2(d)(iii) below, (A) each Substituted
Option shall be exercisable for the number of shares of Parent Common Stock
(rounded down to the nearest whole share) equal to the product obtained by
multiplying the number of shares of Company Common Stock covered by the related
Company Option immediately prior to the Effective Time by a fraction (the
"Option Exchange Ratio"), the numerator of which is the Cash Consideration and
the denominator of which is the closing price per share of Parent Common Stock
reported on the Nasdaq National Market on the trading day preceding the
Stockholders' Meeting; (B) the option price per share of Parent Common Stock
thereafter shall be equal to the quotient (rounded up to the nearest whole cent)
obtained by dividing the exercise price per share of Company Common Stock
subject to the related Company Option in effect immediately prior to the
Effective Time by the Option Exchange Ratio); and (C) each Substituted Option
shall be exercisable on the same terms and subject to the same conditions as had
been applicable to the related Company Option, except to the extent the number
of shares and exercise price per share have been adjusted pursuant to (A) and
(B), respectively, of this subsection 3.2(d)(ii).
(iii) It is the intention of the parties that Company Options that
qualified as incentive stock options, within the meaning of Section 424 of the
Code ("ISOs"), immediately prior to the Effective Time, be converted, when
assumed by Parent, into Substituted Options that qualify as ISOs immediately
following the Effective Time, to the extent permitted by Section 424 of the Code
and applicable terms of the Company Option Plans. In furtherance of such
intention, the formulae, terms and conditions set forth in subsection 3.2(d)(ii)
above may be applied to, or modified for, such Substituted Options as deemed
reasonably necessary by Parent, so long as any such application or modification
does not materially reduce the benefit of the Substituted Option to the holder
thereof.
(iv) The Company's Employee Stock Purchase Plan (the "Stock
Purchase Plan") shall be terminated prior to the Closing. All funds invested in
the Stock Purchase Plan but not used by employees to purchase stock thereunder
prior to the Effective Time shall be transferred or otherwise credited to
employees of the Company such that, following the Effective Time, each such
employee shall have purchase rights under Parent's stock purchase plans
substantially similar to those existing under the Stock Purchase Plan
immediately prior to the Effective Time.
(v) On or prior to the Effective Time, Parent shall file with the
Commission a Registration Statement on Form S-3 or Form S-8, as determined by
Parent in its sole discretion, relating to the issuance of the Parent Common
Stock underlying the Substituted Options (a "Registration Statement") or shall
cause such Parent Common Stock to be included in
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an effective Registration Statement on Form S-8 relating to one or more of
Parent's stock option plans (collectively, "Parent Option Plans"). So long as
any Substituted Options remain outstanding, Parent shall use its reasonable best
efforts to maintain the effectiveness of any Registration Statement(s) related
to the Substituted Options (and to maintain the current status of the prospectus
or prospectuses related thereto). At or prior to the Effective Time, Parent
shall take all corporate action necessary to reserve for issuance a sufficient
number of shares of Parent Common Stock for delivery upon exercise of the
Substituted Options. To the extent required by the relevant market or exchange,
Parent shall list or qualify all such shares for trading on the principal market
or exchange on which Parent Common Stock is traded from time to time.
3.3 PAYING AGENT.
(a) At or prior to the Effective Time, Parent shall enter into an
agreement with a bank or trust company selected by Parent to act as the paying
agent for the Merger (the "Paying Agent").
(b) At or prior to the Effective Time, Parent shall supply or cause to
be supplied to or for the account of the Paying Agent in trust for the benefit
of the holders of Company Common Stock the funds necessary to make the payments
contemplated in Section 3.2(a). Such funds shall be invested by the Paying Agent
as directed by Parent in accordance with Parent's investment policy. No interest
will be paid or accrued on the cash payable to holders of Company Common Stock.
(c) Promptly after the Effective Time, Parent shall mail or cause to be
mailed to each holder of Company Common Stock a letter of transmittal, in a
typical form (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for surrender of the
Certificates. Upon surrender to the Paying Agent of a holder's Certificate,
together with such letter of transmittal duly executed, such holder of Common
Stock shall be entitled to receive in exchange therefor a cash payment equal to
such holder's Merger Consideration, and such Certificate so surrendered shall
forthwith be canceled.
(d) In the event of a transfer of ownership of Company Common Stock
which is not registered in the transfer records of the Company, the appropriate
Merger Consideration may be issued to such transferee of such Company Common
Stock, if the Certificate representing such Company Common Stock is presented to
the Paying Agent, accompanied by all documents, in form and substance reasonably
satisfactory to Parent and the Paying Agent, required to evidence and effect
such transfer of Company Common Stock and to evidence that any applicable stock
transfer taxes have been paid. There shall be no transfers on the transfer
records of the Company, at or after the Effective Time, of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time.
Until surrendered in accordance with the provisions of this Section 3.3, from
and after the Effective Time each Certificate shall be deemed to represent the
right to receive a cash payment equal to the holder's Merger Consideration.
(e) Any portion of the funds supplied to the Paying Agent which remains
undistributed to the former stockholders of the Company for twelve months after
the Effective
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Time shall be delivered to Parent, upon demand of Parent, and any such former
stockholders who have not theretofore complied with this Section 3.3 shall
thereafter look only to Parent (subject to abandoned property, escheat and other
similar laws) only as general creditors of Parent with respect to any
consideration set forth in Section 3.2(a) that may be payable upon surrender of
their Certificates.
(f) None of Parent, the Company, the Surviving Corporation, the Paying
Agent or any other person shall be liable to any former stockholder of the
Company for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
3.4 LOST CERTIFICATES. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making and delivery of an affidavit (in form and
substance satisfactory to the Surviving Corporation) of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect thereof pursuant to
this Agreement.
3.5 DISSENTING SHARES.
(a) Dissenting Shares shall not be converted into or represent the
right to receive the consideration set forth in Section 3.2(a), unless such
Dissenting Shareholder's right to appraisal shall have ceased in accordance with
Article 113 of the CBCA. If such Dissenting Shareholder has so forfeited or
withdrawn his, her or its right to appraisal of Dissenting Shares, then (i) as
of the occurrence of such event, such holder's Dissenting Shares shall cease to
be Dissenting Shares and shall be converted into and represent the right to
receive the Merger Consideration in respect of such shares of Company Common
Stock pursuant to Section 3.2(a), and (ii) promptly following the occurrence of
such event, and in any case within ten (10) days of such event, Parent shall
deposit with the Paying Agent the amount of Merger Consideration to which such
holder is entitled pursuant to Section 3.2(a).
(b) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any shares of Company Common Stock, withdrawals of such
demands, and any other instruments that relate to such demands received by the
Company, and (ii) after due consultation with the Company, the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal
under the CBCA. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal of shares of
Company Common Stock or offer to settle or settle any such demands.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule, the Company makes
the following representations and warranties to Parent and Merger Sub, as of the
date of this Agreement.
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4.1 ORGANIZATION AND STANDING.
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, (ii)
has all requisite corporate power and authority to own, operate and lease its
properties and carry on its business as now conducted, and (iii) is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the failure to so qualify, or be in good standing,
would have a Company Material Adverse Effect.
(b) The Company does not have any Subsidiaries and, except as set forth
in the Company Disclosure Schedule, does not own any equity securities or
securities convertible into or exchangeable or exercisable for equity securities
of any other company.
(c) The Company has not (i) filed or had filed against it a petition in
bankruptcy or a petition to take advantage of any other insolvency act, (ii)
admitted in writing its inability to pay its debts generally, (iii) made an
assignment for the benefit of creditors, (iv) consented to the appointment of a
receiver for itself or any substantial part of its property, or (v) generally
committed any act of insolvency (including the failure to pay obligations as
they become due) or bankruptcy.
4.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 15,000,000
shares of Company Common Stock. As of April 30, 2000, there were 4,125,259
shares of Company Common Stock issued and outstanding. From such date to the
date of this Agreement, no additional shares of capital stock of the Company
have been issued, except pursuant to the exercise of Company Options. As of
April 30, 2000, Company Options to acquire 338,038 shares of Company Common
Stock were outstanding. From such date to the date of this Agreement, no
additional Company Options have been granted.
(b) All of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid, non-assessable
and free of preemptive or similar rights. Other than Company Options, there are
no existing and outstanding warrants, rights, options, subscriptions,
convertible securities or other agreements or commitments which obligate the
Company to issue, transfer or sell any shares of capital stock of the Company.
(c) The Company does not have any outstanding bonds, debentures, notes
or other obligations pursuant to which the holders thereof have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter.
4.3 AUTHORIZATION; ENFORCEABILITY; NO VIOLATION.
(a) The Company has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
(b) Subject only to the approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company in accordance with the
CBCA, all
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corporate action necessary on the part of the Company for the execution,
delivery and performance of this Agreement has been duly taken.
(c) This Agreement constitutes (assuming this Agreement is a valid and
legally binding obligation of Parent and Merger Sub) a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity and public policy
considerations (the "Enforceability Exceptions").
(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the Articles of
Incorporation or the Bylaws of the Company, (ii) any statute, rule, regulation,
judicial, governmental, regulatory or administrative decree, order or judgment
applicable to the Company, or (iii) any agreement, lease, license, permit or
other instrument to which the Company is a party or to which any of its assets
are subject, except where any such breach, violation, default, termination or
forfeiture would not have or result in a Company Material Adverse Effect.
(e) There is no action, suit, proceeding or investigation pending or,
to the knowledge of the Company, threatened against the Company that questions
the validity of this Agreement or the right of the Company to enter into this
Agreement or to consummate the transactions contemplated hereby.
4.4 NO CONSENTS. Except as set forth in the Company Disclosure Schedule, no
consent, approval, authorization, order, registration, qualification or filing
of or with any court or any regulatory authority or any other governmental or
administrative body is required on the Company's part for the consummation by it
of the transactions contemplated by this Agreement, except (i) notices and
filings required in order to comply with the Securities Act, the Exchange Act,
and state securities or "blue sky" laws, and (ii) the filing of the Articles of
Merger with the Colorado Secretary of State.
4.5 COMPLIANCE WITH LAWS. Except where the failure to so comply would not
have a Company Material Adverse Effect, the Company (i) has all valid and
current Permits, and each Permit is in full force and effect, and (ii) has made
all filings and registrations and the like, necessary or required by law to
conduct its business as currently conducted. The Company has not received any
governmental notice of any violation by it of any laws, rules, regulation or
orders applicable to its business. Except where the failure to comply would not
have a Company Material Adverse Effect, (a) the Company is not in default under
any Permits and is in compliance with the same, and (b) the business and
operations of the Company are in compliance with all applicable foreign,
federal, state, local and county laws, ordinances, regulations, judgments,
orders, decrees or rules of any court, arbitrator or governmental, regulatory or
administrative agency or entity.
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4.6 COMPANY REPORTS.
(a) The Company has filed all reports, forms, registrations, schedules,
statements and other documents required to be filed by it with the Commission
since April 30, 1996 (the "Company Reports"). As of their respective dates, the
Company Reports complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the applicable rules and regulations promulgated thereunder. Except to the
extent that information contained in any Company Report has been amended,
revised or superseded by a Company Report subsequently filed and publicly
available prior to the date of this Agreement, none of the Company Reports, when
filed, contained any untrue statement of a material fact or omitted 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.
(b) Each of the balance sheets of the Company included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) fairly presents in all material respects the financial position
of the Company as of its date, and each of the statements of income, retained
earnings and cash flows of the Company included in or incorporated by reference
into the Company Reports (including any related notes and schedules) fairly
presents in all material respects the results of operations and cash flows of
the Company for the periods set forth therein (subject, in the case of unaudited
statements, to normal year-end audit adjustments which would not be material in
amount or effect), in each case in accordance with GAAP, except as may be noted
therein and subject to the fact that unaudited financial statements do not
contain full notes thereto. The Company has no liabilities or obligations
required to be disclosed in a balance sheet or the notes thereto prepared in
accordance with GAAP, except (i) liabilities or obligations reflected on, or
reserved against in, a balance sheet of the Company or in the notes thereto, and
included in the Company Reports, (ii) liabilities or obligations incurred since
the Last Report Date in the ordinary course of business, consistent with past
practices, or (iii) liabilities disclosed in a Company Report.
4.7 ABSENCE OF LITIGATION, ORDERS, JUDGMENTS.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened which involve transactions of or otherwise
relate to the Company or any of its businesses or properties, at law or in
equity, or before any arbitrator of any kind, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or other instrumentality, domestic or foreign, that are reasonably likely
to have a Company Material Adverse Effect.
(b) There are no outstanding orders, writs, injunctions, decrees,
judgments, awards, determinations or directions, which involve transactions of
or otherwise relate to the Company or any of its businesses or properties, of
any court or arbitrator or under any outstanding order, regulation or demand of
any federal, state, municipal or other governmental instrumentality, domestic or
foreign, that are reasonably likely to have a Company Material Adverse Effect.
4.8 ABSENCE OF CERTAIN CHANGES. Since the Last Report Date, the Company has
conducted its business only in the ordinary course of such business, and there
has not been (i) any Company Material Adverse Effect or any event which is
reasonably likely to result in a Company Material Adverse Effect; (ii) any
declaration, setting aside or payment of any dividend
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or other distribution with respect to its capital stock; or (iii) any material
change in its accounting principles, practices or methods.
4.9 TAXES. The Company (i) has timely filed all material federal, state and
foreign tax returns required to be filed by it for tax years ended prior to the
date of this Agreement or requests for extensions have been timely filed and any
such request shall have been granted and not expired, and all such returns are
complete in all material respects, (ii) has paid or accrued all taxes shown to
be due and payable on such returns and (iii) has properly accrued all such taxes
for such periods subsequent to the periods covered by such returns.
4.10 CONTRACTS. Each (a) agreement, contract and commitment, whether
written or oral, to which the Company is a party or by which it is bound and
which is filed as an exhibit to or described in a Company Report and (b)
material agreement, contract and commitment entered into by the Company, or by
which it became bound, after the Last Report Date (collectively, "Company
Contracts"), is a valid and legally binding obligation of the Company and, to
the knowledge of the Company, the other parties thereto, enforceable against the
Company and, to the knowledge of the Company, the other parties thereto, in
accordance with its terms, subject to the Enforceability Exceptions. The Company
is not, and to the knowledge of the Company no other party to any Company
Contract is, in material default thereof. The Company has not, and to the
knowledge of the Company no other party to any Company Contract has, performed
any act or omitted to perform any act which act or omission, with the giving of
notice or passage of time or otherwise, will become a material default
thereunder.
4.11 INTELLECTUAL PROPERTY.
(a) The Company owns or has the right to use all Intellectual Property
used in the operation of its business as presently conducted, without any
interference or conflict with or misappropriation or infringement of the
Intellectual Property rights of others, other than any interference, conflict,
misappropriation or infringement which is not reasonably likely to result in (i)
a material adverse effect on the Company's ability to manufacture or sell any of
its material products or any material line of products or otherwise to operate
its business, (ii) a material liability of the Company, or (iii) material
redesign or other corrective costs to the Company. The Company has taken
commercially reasonable action to maintain and protect its rights in the
material Intellectual Property that it owns or uses. Each material item of
Intellectual Property owned or used by the Company immediately prior to the
Effective Time hereunder will be owned or available for use by the Surviving
Corporation on substantially identical terms and conditions immediately
subsequent to the Effective Time.
(b) Section 4.11 of the Company Disclosure Schedule sets forth all
Patents, registered Copyrights, registered Trademarks, joint development
agreements, licenses and agreements relating to Intellectual Property owned or
used by the Company (other than agreements or licenses for readily available
"off-the-shelf" software) that require a consent or waiver to consummate the
transactions contemplated by this Agreement.
(c) To its knowledge, the Company has not, within the past four years,
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of others other than any
interference, infringement, misappropriation or conflict
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which did not and is not reasonably likely to result in (i) a material adverse
effect on the Company's ability to manufacture or sell any of its material
products or any material line of products or otherwise to operate its business,
(ii) a material liability of the Company, or (iii) material redesign or other
corrective costs to the Company. The Company has not received, and has no
knowledge of, any charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation, or conflict (including, without
limitation, any claim that the Company must license or refrain from using any
Intellectual Property rights of any other person), or that the Company's use of
the Intellectual Property constitutes unfair competition.
(d) To the knowledge of the Company, no fraud or misrepresentation has
been made by the Company or any of its officers, directors or employees or the
relevant inventors during the prosecution of any of the Patents of the Company,
nor has any fraud or misrepresentation been included in any documentation for or
other disclosure to any governmental agency of the Intellectual Property of the
Company.
4.12 EMPLOYEE BENEFIT PLANS.
(a) The Company does not maintain or contribute to or have any actual
or, to its knowledge, potential liability with respect to any (i) deferred
compensation or bonus or retirement plans or arrangements, (ii) qualified or
nonqualified defined contribution or defined benefit plans or arrangements which
are employee pension benefit plans (as defined in Section 3(2) of ERISA), or
(iii) employee welfare benefit plans, (as defined in Section 3(1) of ERISA),
stock option or stock purchase plans, or material fringe benefit plans or
programs whether in writing or oral and whether or not terminated. The Company
has never contributed to any multiemployer pension plan (as defined in Section
3(37) of ERISA) or has ever maintained or contributed to any defined benefit
plan (as defined in Section 3(35) of ERISA). The Company does not maintain or
contribute to any Company Benefit Plan which provides health, accident or life
insurance benefits to former employees, their spouses or dependents, other than
in accordance with Section 4980B of the Code.
(b) With respect to each Company Benefit Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code, either (i)
the IRS has issued a favorable determination letter that has not been revoked,
or (ii) an application for a favorable determination letter was timely submitted
to the IRS for which no final action has been taken by the IRS. To the knowledge
of the Company, there is no reason that is not susceptible to cure why the
qualified status under Section 401(a) of the Code of any Company Benefit Plan
would be denied or revoked, whether retroactively or prospectively.
(c) To the knowledge of the Company, no Company Benefit Plan, any
fiduciary thereof, nor the Company has incurred any liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA. Except as would not have a
Company Material Adverse Effect, each Company Benefit Plan has been maintained
and administered in all material respects in compliance with its terms and with
ERISA and the Code, to the extent applicable thereto.
(d) To the knowledge of the Company, neither the Company nor any ERISA
Affiliate (during the period of its affiliated status) has any existing
liability currently due and payable that has not been satisfied in full under
Title IV of ERISA or Section 412 of the Code.
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To the knowledge of the Company, there are no current plans to terminate,
whether voluntarily or involuntarily, any materially underfunded pension plan of
the Company or any ERISA Affiliate that is subject to Title IV of ERISA.
(e) To the knowledge of the Company, there is no pending or anticipated
claim, suit, action or other litigation against or otherwise involving any of
the Company Benefit Plans (excluding claims for benefits incurred in the
ordinary course of the Company Benefit Plan activities) except those which would
either have no Company Material Adverse Effect or those which have been
released, dismissed, settled or otherwise satisfied, each of which is set forth
in Section 4.12(e) of the Company Disclosure Schedule.
(f) All material contributions required to be made as of the date
hereof to the Company Benefit Plans have been made or provided for.
(g) Except as set forth in Schedule 4.12 of the Company Disclosure
Schedule and except with respect to the termination of the Stock Purchase Plan,
the execution of, and performance of the transactions contemplated by, this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) constitute an event under any benefit plan, policy,
arrangement or agreement or any trust or loan that will or is reasonably likely
to result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee of the Company.
(h) The Company has not entered into any severance agreements or
adopted any severance policies applicable to the Company or its employees which
would have a Company Material Adverse Effect or which have not either been
satisfied or provided for, and each such severance agreement and policy is set
forth on Section 4.12(h) of the Company Disclosure Schedule.
4.13 NO BROKERS. The Company has not entered into any contract, arrangement
or understanding with any person or firm which will or is reasonably likely to
result in the obligation of the Company, Parent or Merger Sub to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that the Company has retained
Xxxxx Financial, Inc. to render a fairness opinion, the arrangements with which
have been disclosed in writing to Parent prior to the date hereof. Other than
the foregoing arrangements, the Company is not aware of any claim for payment of
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
4.14 PARENT STOCK OWNERSHIP. The Company does not own any shares of Parent
Common Stock or other securities convertible into Parent Common Stock.
4.15 ENVIRONMENTAL MATTERS.
(a) There has not been any violation of any Environmental Requirements
by the Company or, to the knowledge of the Company, any Company Predecessor, nor
to the knowledge of the Company has there been any third party claim or demand
based upon any
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Environmental Requirements against the Company or any Company Predecessor, other
than violations, claims or demands that have not resulted, and are not
reasonably likely to result, in a Company Material Adverse Effect.
(b) The Company has not disposed of, stored or used any Hazardous
Materials on, nor has it transported any Hazardous Materials from, any of the
Company Real Properties in violation of applicable Environmental Requirements
other than a disposal, storage, use or transport which has not resulted in and
is not reasonably likely to result in a Company Material Adverse Effect. To the
knowledge of the Company, no Company Predecessor has disposed of, stored or used
any Hazardous Materials on, nor has any such Company Predecessor transported any
Hazardous Materials from, any of the Company Real Properties in violation of
applicable Environmental Requirements.
(c) To the knowledge of the Company, none of the following exists at
any of the real property currently owned, leased or occupied by the Company or
existed at any of the Company Real Properties at the time the Company or the
Company Predecessor operated there: (i) underground storage tanks, (ii)
asbestos-containing material in any friable or damaged form or condition, (iii)
materials or equipment containing polychlorinated biphenyls (PCBs), or (iv)
landfills or surface impoundments.
(d) To the knowledge of the Company, none of the Company Real
Properties is or has been contaminated by any Hazardous Materials, in a manner
that has given or is reasonably likely to give rise to any material liability on
the part of the Company to any person, including without limitation any
governmental authority, for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant to
CERCLA, or SWDA, or any other Environmental Requirements, whether federal, state
or locally imposed.
4.16 INSURANCE. The Company maintains insurance with financially sound and
reputable insurers, in such amounts, and with such deductibles and covering such
risks as is customarily carried by companies engaged in similar businesses and
owning similar properties in the localities where the Company is located. The
Company Disclosure Schedule contains a list of each insurance policy presently
maintained by the Company.
4.17 PROPRIETARY INFORMATION AND INVENTIONS AND CONFIDENTIALITY AGREEMENT.
Each employee, consultant, service provider, officer and director of the Company
has executed a proprietary information and inventions and confidentiality
agreement, copies of which have been provided to Parent. The Company is not
aware that any of such persons is in violation thereof, and the Company will use
its best efforts to prevent any such violation.
4.18 ACCURACY OF DOCUMENTS AND INFORMATION. The copies of all instruments,
agreements, other documents and written information delivered by the Company to
Parent or its counsel are and will be complete and correct in all material
respects as of the date of delivery thereof. No representations or warranties
made by the Company in this Agreement, nor any document, written information,
statement, financial statement, letter, certificate or exhibit prepared and
furnished or to be prepared and furnished by the Company or its representatives
to Parent pursuant hereto or in connection with the transactions contemplated
hereby, contains or
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will contain any untrue statement of material fact, or omits or will omit to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading. There is no presently existing event, fact or
condition that would have a Company Material Adverse Effect or that could
reasonably be expected to do so, which has not been set forth in this Agreement
or the exhibits hereto or otherwise disclosed by the Company to Parent in
writing in the Company Disclosure Schedule.
4.19 TITLE TO PROPERTIES; ENCUMBRANCES. The Company Disclosure Schedule
contains a complete and accurate list of all real property owned by the Company
and all real property leases to which the Company is a party. Except as listed
in the Company Disclosure Schedule, the Company has good and marketable title to
its properties, interests in properties and assets, real and personal, used in
or necessary for the operation of the business of Company, free and clear of all
liens and encumbrances. The equipment of Company used in the operation of its
business is, taken as a whole, (i) adequate for the business conducted by
Company and (ii) in good operating condition and repair, ordinary wear and tear
excepted. To the knowledge of the Company, all real or personal property leases
to which Company is a party are valid, binding and enforceable against Company
and effective in accordance with their respective terms.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub make the following representations and warranties to
the Company as of the date of this Agreement.
5.1 ORGANIZATION AND STANDING.
(a) Parent and each of its Significant Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, (ii) has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business as
now conducted, and (iii) is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the failure to
so qualify, or be in good standing, would have a Parent Material Adverse Effect.
(b) Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. Merger Sub
was organized for purposes of consummating the transactions contemplated by this
Agreement. Merger Sub has not engaged in any activity other than as provided in,
or contemplated by, this Agreement and, as of the date hereof, has no
liabilities of any nature, contingent or otherwise, other than liabilities or
obligations that may arise from this Agreement or the transactions contemplated
hereby. The authorized capital stock of Merger Sub consists of 1,000 shares of
Merger Sub Common Stock, all of which are validly issued, fully paid and
nonassessable and are owned by Parent.
(c) Neither Parent nor any of its Subsidiaries (including without
limitation Merger Sub) has (i) filed or had filed against it a petition in
bankruptcy or a petition to take advantage of any other insolvency act, (ii)
admitted in writing its inability to pay its debts generally, (iii) made an
assignment for the benefit of creditors, (iv) consented to the appointment of a
receiver for
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itself or any substantial part of its property or (v) generally committed any
act of insolvency (including the failure to pay obligations as they become due)
or bankruptcy.
5.2 AUTHORIZATION; ENFORCEABILITY; NO VIOLATION.
(a) Each of Parent and Merger Sub has full corporate power and
authority to execute and deliver this Agreement, and to perform its respective
obligations hereunder.
(b) All corporate action necessary on the part of Parent and Merger Sub
for the execution, delivery and performance of this Agreement has been duly
taken. No approval of the stockholders of Parent is required by applicable law
or the rules of the Nasdaq National Market in connection with the consummation
by Parent or Merger Sub of the transactions contemplated hereby.
(c) This Agreement constitutes (assuming this Agreement is a valid and
binding obligation of the Company), a valid and legally binding obligation of
each of Parent and Merger Sub, enforceable against Parent and Merger Sub, as
applicable, in accordance with its terms, subject to the Enforceability
Exceptions.
(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the Certificate
of Incorporation or the By-laws of Parent or any of its Subsidiaries (including
without limitation Merger Sub), (ii) any statute, rule, regulation, judicial,
governmental, regulatory or administrative decree, order or judgment applicable
to Parent or any of its Subsidiaries (including without limitation Merger Sub),
or (iii) any agreement, lease, license, permit or other instrument to which
Parent or any of its Subsidiaries (including without limitation Merger Sub) is a
party or to which any of its assets are subject, except where any such breach,
violation, default, termination or forfeiture would not have or result in a
Parent Material Adverse Effect.
(e) There is no action, suit, proceeding or investigation pending or
threatened against Parent or any of its Subsidiaries that questions the validity
of this Agreement or the right of Parent or Merger Sub to enter into this
Agreement or to consummate the transactions contemplated hereby.
(f) The Cash Consideration will be paid from existing cash of Parent.
Parent will not be required to borrow or otherwise seek additional financing to
pay the Cash Consideration. Neither Parent nor Merger Sub require the consent of
any creditor to pay the Cash Consideration.
5.3 NO CONSENTS. No consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or any
other governmental or administrative body is required on the part of Parent or
any of its Subsidiaries for the consummation by Parent and Merger Sub of the
transactions contemplated by this Agreement, except (i) notices and filings
required in order to comply with the Securities Act, the Exchange Act and state
securities or "blue sky" laws, (ii) the filing of the Articles of Merger with
the Colorado Secretary of State and (iii) any notices and filings necessary to
comply with the rules of the Nasdaq National Market System.
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5.4 PARENT REPORTS.
(a) Parent has filed all reports, forms, registrations, schedules,
statements and other documents required to be filed by it with the Commission
since November 17, 1995 (the "Parent Reports"). As of their respective dates,
the Parent Reports complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the applicable rules and regulations promulgated thereunder. Except to the
extent that information contained in any Parent Report has been amended, revised
or superseded by a Parent Report subsequently filed and publicly available prior
to the date of this Agreement, none of the Parent Reports, when filed, contained
any untrue statement of a material fact or omitted 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.
(b) Each of the consolidated balance sheets of Parent included in or
incorporated by reference into the Parent Reports (including the related notes
and schedules) fairly presents in all material respects the consolidated
financial position of Parent and its Subsidiaries as of its date, and each of
the consolidated statements of income, stockholders' equity and cash flows of
Parent included in or incorporated by reference into the Parent Reports
(including any related notes and schedules) fairly presents in all material
respects the income, stockholders' equity and cash flows, as the case may be, of
Parent and its Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments which would
not be material in amount or effect), in each case in accordance with GAAP,
except as may be noted therein and subject to the fact that unaudited financial
statements do not contain full notes thereto. Parent and its Subsidiaries do not
have any liabilities or obligations required to be disclosed in a consolidated
balance sheet or the notes thereto prepared in accordance with GAAP, except (i)
liabilities or obligations reflected on, or reserved against in, a consolidated
balance sheet of Parent or in the notes thereto, and included in the Parent
Reports, (ii) liabilities or obligations incurred since March 31, 2000 in the
ordinary course of business, consistent with past practices, or (iii)
liabilities disclosed in a Parent Report.
5.5 ACCURACY OF DOCUMENTS AND INFORMATION. The copies of all instruments,
agreements, other documents and written information delivered by Parent to the
Company or its counsel are and will be complete and correct in all material
respects as of the date of delivery thereof. No representations or warranties
made by Parent in this Agreement, nor any document, written information,
statement, financial statement, letter, certificate or exhibit prepared and
furnished or to be prepared and furnished by Parent or its representatives to
the Company pursuant hereto or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of material fact, or omits
or will omit to state a material fact necessary to make the statements or facts
contained herein or therein not misleading. There is no presently existing
event, fact or condition that would have a Parent Material Adverse Effect or
that could reasonably be expected to do so, which has not been set forth in this
Agreement or the exhibits hereto.
5.6 COMPANY OPTIONS. Parent acknowledges that the vesting of all Company
Options will accelerate at the Effective Time.
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ARTICLE 6
COVENANTS
6.1 ALTERNATIVE PROPOSALS.
(a) Upon execution and delivery of this Agreement, the Company, its
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, conducted with any parties heretofore with respect to any acquisition of
all or any material portion of the assets of, or any equity interest in, the
Company or any business combination with the Company. Notwithstanding the
foregoing, the Company may issue Company Common Stock issuable upon exercise of
the Company Options outstanding on the date hereof and pursuant to the Stock
Purchase Plan, subject to the limitations set forth in Section 3.2(d)(iv).
(b) Prior to the Closing Date, the Company may, solely in response to
unsolicited requests therefor, furnish non-public information regarding itself
to any corporation, partnership, person or other entity or group in respect of,
and may participate in discussions and negotiate with such entity or group
concerning, a business combination, merger, sale of material assets, sale of
shares of capital stock or similar transaction involving the Company (a
"Transaction"), provided that (i) such entity or group has submitted a written
proposal to the Board of Directors of the Company relating to any such
Transaction (an "Alternative Proposal"), (ii) the entity or group enters into
confidentiality agreements with the Company with respect to such non-public
information, and (iii) the Company Board, by a majority vote, determines in its
good faith judgment, based as to legal matters on the written advice of legal
counsel, that failing to take such action would constitute a breach of the
Company Board's fiduciary duty. The Company Board shall provide a copy of any
such written proposal to Parent and Merger Sub immediately after receipt
thereof, unless prohibited by the terms of such proposal.
(c) Neither the Company nor any of its affiliates, nor any of such
Persons' respective officers, directors, employees, representatives or agents,
shall, directly or indirectly (i) encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent and
Merger Sub, any affiliate or associate of Parent and Merger Sub or any designees
of Parent and Merger Sub) concerning any Transaction, or (ii) authorize, propose
or announce an intention to authorize or propose any Transaction (other than the
Merger), unless and until the Company has received an Alternative Proposal in
writing and the Company Board, by majority vote, has determined in its good
faith judgment, based as to legal matters on the written advice of legal
counsel, that failing to take such action would constitute a breach of the
Company Board's fiduciary duty; provided, however, that nothing herein shall
prevent the Company Board from taking, and disclosing to the Company's
stockholders, a position contemplated by Rules 14d-9 and 14e-2 promulgated under
the Exchange Act with regard to any tender offers; provided, further, that the
Company Board shall not recommend that the stockholders of the Company tender
their shares in connection with any such tender offer unless the Company Board
by a majority vote determines in its good faith judgment, based as to legal
matters on the written advice of legal counsel, that failing to take such action
would constitute a breach of the Company Board's fiduciary duty.
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(d) Nothing in this Section 6.1 shall (i) permit the Company to
terminate this Agreement (except as specifically provided in Article 8 hereof),
(ii) permit the Company to enter into any agreement with respect to a
Transaction during the term of this Agreement (it being agreed that during the
term of this Agreement, the Company shall not enter into any agreement with any
person that provides for, or in any way facilitates, a Transaction, other than a
confidentiality agreement in customary form), or (iii) except as specifically
provided in Article 8, affect any other obligation of the Company under this
Agreement.
6.2 INTERIM OPERATIONS OF THE COMPANY.
(a) Prior to the Effective Time, except as set forth in Section 6.2 of
the Company Disclosure Schedule or as contemplated by any other provision of
this Agreement, unless Parent has consented in writing thereto, the Company:
(i) shall conduct its operations according to their usual, regular
and ordinary course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable efforts to preserve intact its
business organizations and goodwill, keep available the services of its officers
and employees and maintain satisfactory relationships with those persons having
business relationships with them;
(iii) shall not amend its Articles of Incorporation or Bylaws;
(iv) shall promptly notify Parent of (A) any material adverse
change in its condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its business or of its properties, (B) any
material litigation or, to the extent known to the Company, any material
governmental complaints, investigations or hearings against or otherwise
involving the Company (or communications indicating that the same may be
contemplated), or (C) the breach of any representation or warranty of the
Company contained herein;
(v) shall promptly deliver to Parent true and correct copies of
any report, statement or schedule filed by the Company with the Commission
subsequent to the date of this Agreement;
(vi) shall not enter into or amend any employment, severance or
similar agreements or arrangements with any of its directors or executive
officers, except (A) in the ordinary course of business consistent with past
practice, or (B) as otherwise provided in this Agreement;
(vii) shall not authorize, propose or announce an intention to
authorize or propose, or enter into negotiations or an agreement with respect to
any acquisition of assets or securities, any disposition of assets or securities
or any release or relinquishment of any contract rights, which acquisitions,
dispositions, releases or relinquishments would be outside the ordinary course
of business and would involve aggregate consideration in excess of $100,000;
(viii) shall not issue any shares of capital stock or securities,
except as permitted by the last sentence of Section 6.1(a), or effect any stock
split or otherwise change its capitalization;
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(ix) shall not grant, confer or award any options, appreciation
rights, warrants, conversion rights, restricted stock, stock units, performance
shares or other rights, not existing on the date hereof, with respect to any
shares of its capital stock or other securities of the Company;
(x) except as required by applicable law (in which case prompt
notice shall be given by the Company to Parent), shall not amend in any material
respect the terms of the Company Benefit Plans, including without limitation any
employment, severance or similar agreements or arrangements in existence on the
date hereof, or adopt any new employee benefit plans, programs or arrangements
or any employment, severance or similar agreements or arrangements;
(xi) shall not incur, create, assume or otherwise become liable
for borrowed money or assume, guarantee, endorse or otherwise become responsible
or liable for the obligations of any other individual, corporation or other
entity, except in the ordinary course of business;
(xii) shall not make any loans or advances to any other Person,
except in the ordinary course of business;
(xiii) shall not make any material tax election other than in the
ordinary course, or without the consent of Parent, which shall not unreasonably
be withheld, settle or compromise any material tax liability;
(xiv) shall not declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital stock or
other ownership interests;
(xv) shall not directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock, or make any commitment for
any such action; provided that cashless exercises of stock options shall not be
in violation of this clause (xv); and
(xvi) shall not agree, in writing or otherwise, to take any of the
foregoing actions or take any action which would make any representation or
warranty in Article 4 hereof untrue or incorrect in any material respect as of
the Closing Date.
6.3 MEETING OF STOCKHOLDERS. The Company will take all action necessary in
accordance with applicable law and its Articles of Incorporation and Bylaws to
convene (and adjourn and reconvene, if required to permit a stockholder vote on
this Agreement, as amended) the Stockholders' Meeting as promptly as practicable
to consider and vote upon the approval of this Agreement and the transactions
contemplated hereby. Unless the Company Board by a majority vote determines in
its good faith judgment, based as to legal matters on the written advice of
legal counsel, that taking such action would constitute a breach of the Company
Board's fiduciary duty, the Company Board shall recommend such approval, and the
Company shall take all lawful action to solicit such approval, including,
without limitation, timely mailing the Proxy Statement.
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6.4 FILINGS; OTHER ACTIONS. Subject to the terms and conditions herein
provided, the Company and Parent shall: (a) use all reasonable efforts to
cooperate with one another in (i) determining which filings are required to be
made prior to the Effective Time with, and which other consents, approvals,
permits or authorizations are required to be obtained prior to the Effective
Time from, governmental or regulatory authorities of the United States, the
several states and foreign jurisdictions in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and (ii) timely making all such filings and timely seeking all such
consents, approvals, permits or authorizations; and (b) use all reasonable
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by this Agreement.
6.5 INSPECTION OF RECORDS. From the date hereof to the Effective Time, each
of the Company and Parent shall (a) allow all designated officers, attorneys,
accountants and other representatives of the other party reasonable access at
all reasonable times to its respective offices, records and files,
correspondence, audits and properties, as well as to all information relating to
its respective commitments, contracts, titles and financial position, or
otherwise pertaining to its respective business and affairs, (b) furnish to the
other party and the other party's counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as such persons may reasonably request and (c) instruct its
respective employees, counsel and financial advisors to cooperate with the other
party in the other party's investigation of its respective business.
6.6 PUBLICITY. The initial press release relating to this Agreement shall
be a joint press release and thereafter, until the Effective Time, the Company
and Parent shall, subject to their respective legal obligations (including
requirements of stock exchanges and similar self regulatory bodies), consult
with each other, and use reasonable efforts to agree upon the text of any press
release, before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any federal or state governmental or regulatory agency or with
any national securities exchange with respect thereto.
6.7 PROXY STATEMENT.
(a) Parent and the Company shall cooperate and promptly prepare the
proxy statement with respect to the Stockholders' Meeting (the "Proxy
Statement").
(b) The Company will cause the Proxy Statement to comply as to form in
all material respects with the applicable provisions of the Exchange Act and the
rules and regulations thereunder.
(c) The Company shall ensure that the information set forth in the
Proxy Statement does not (i) at the time the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to holders of Company Common
Stock, (ii) at the time of the Stockholders' Meeting, or (iii) at the Effective
Time, 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
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statements therein, in the light of the circumstances under which they are made,
not misleading, and shall comply as to form and substance with the requirements
of the Exchange Act.
(d) The information supplied by Parent for inclusion or incorporation
by reference in the Proxy Statement shall not (i) at the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
holders of Company Common Stock, (ii) at the time of the Stockholders' Meeting,
or (iii) at the Effective Time, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
are made, not misleading, and shall comply as to form and substance with the
requirements of the Exchange Act.
No amendment or supplement to the Proxy Statement will be made by the
Company without the approval of Parent.
6.8 AFFILIATE LETTERS. The letters previously delivered by Affiliates of
the Company in respect of certain securities and accounting matters are of no
further force and effect.
6.9 EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein and except that the filing fee in connection with the
filing of the Proxy Statement with the Commission and the expenses incurred in
connection with printing and mailing the Proxy Statement shall be shared equally
by the Company and Parent.
6.10 EMPLOYEE BENEFITS.
(a) From and after the Effective Time, Parent shall provide or cause
the Surviving Corporation to provide to persons who are employees of the Company
at the Effective Time and who will continue as employees of the Surviving
Corporation after the Effective Time (the "Company Personnel") the same employee
compensation and benefit plans, programs and arrangements as are provided to
other employees of Parent employed in similar capacities to such Company
Personnel; provided, however, that subject to the foregoing, Parent shall not be
precluded from amending or terminating any particular plan, program or
arrangement, or from substituting any such plans, programs or arrangements with
plans, programs or arrangements applicable and available to other employees of
Parent and its Subsidiaries.
(b) Following the Effective Time, Parent shall cause the benefit plans
covering the Company Personnel following the Effective Time (the "Future Benefit
Plans") to continue to recognize the service credit of the Company Personnel
accrued as of the Effective Time under the Company Benefit Plans for purposes of
participation, eligibility and vesting of benefits, to the extent permissible by
the terms of such Future Benefit Plans.
6.11 AGREEMENTS. Between the date hereof and the Closing Date, the Company
shall not enter into any agreement which the Company knows or has reason to know
is reasonably likely to cause any major customer of the Company to terminate any
material contracts, agreements or other obligations that exist between that
customer on the one hand, and the Company (or the Company following the Merger),
on the other hand and the Company shall take all reasonable action appropriate
to an effort to avoid such termination.
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6.12 TAKEOVER STATUTE. If any "fair price," "moratorium," "control share
acquisition" or other form of anti-takeover statute or regulation shall become
applicable to the transactions contemplated hereby, the Company and the Company
Board shall grant such approvals and take such actions as are reasonably
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby; provided, however, that the Company and the
Company Board shall not be required to grant such approvals or take such actions
if the Company Board, by majority vote, determines in its good faith judgment,
based as to legal matters on the written advice of legal counsel, that granting
such approvals or taking such actions would constitute a breach of the Company's
Board's fiduciary duties.
6.13 INTERIM OPERATIONS OF PARENT.
(a) Prior to the Effective Time, except as contemplated by any other
provision of this Agreement, unless the Company has consented in writing
thereto, Parent:
(i) shall promptly notify the Company of (A) any material adverse
change in its condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its business or of its properties, (B) any
material litigation or, to the extent known to Parent, any material governmental
complaints, investigations or hearings against or otherwise involving Parent (or
communications indicating that the same may be contemplated), or (C) the breach
of any representation or warranty of Parent contained herein;
(ii) shall promptly deliver to the Company true and correct copies
of any report, statement or schedule filed by Parent with the Commission
subsequent to the date of this Agreement; and
(b) shall not agree, in writing or otherwise, to take any action which
would make any representation or warranty in Article 5 hereof untrue or
incorrect in any material respect as of the Closing Date.
6.14 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The Articles of Incorporation and By-laws of the Surviving
Corporation shall contain the respective provisions that are set forth, as of
the date of this Agreement, in the Articles of Incorporation and the By-laws of
the Company dealing with indemnification of officers, directors and employees of
the Company and other persons specified therein, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would affect adversely the rights thereunder
with respect to actions or events occurring prior to the Effective Time of
individuals who were entitled to such indemnification prior to the Effective
Time.
(b) The Surviving Corporation shall maintain in effect for at least six
years from the Effective Time directors' and officers' liability insurance with
an insurance company rated at least "A" by A.M. Best Company, covering the
persons who, as of the date of this Agreement, are covered by the Company's
directors' and officers' liability insurance policy (the "Current Policy"). The
coverage provided by the directors' and officers' liability insurance maintained
by
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the Surviving Corporation shall be substantially similar to the coverage
provided by the Current Policy.
(c) Parent shall guarantee the obligations of the Surviving Corporation
provided by this Section 6.14.
This Section 6.14 shall survive the consummation of the Merger, is intended
to benefit the Company, the Surviving Corporation and each indemnified party,
and shall be enforceable by the indemnified parties.
6.15 VOTE TO ADJOURN. Parent shall vote all Common Stock as to which it has
voting power in favor of adjourning the meeting of holders of Company Common
Stock scheduled for October 23, 2000.
6.16 NON-EMPLOYEE DIRECTOR OPTION EXERCISES. The Company shall cause each
of its non-employee directors to provide to Parent, as soon as practicable but
in no event later than October 31, 2000, an agreement that such non-employee
director will exercise his Company Option prior to the Effective Time, if the
closing price of the Parent Common Stock on the trading day preceding the
Stockholders' Meeting is equal to or less than $15.75. Substituted Options will
not be granted to the non-employee directors of the Company as a result of such
exercises, if applicable.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the transactions contemplated hereby shall have
been approved by the requisite vote of the holders of the issued and outstanding
shares of capital stock of the Company.
(b) None of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction in the United States which
prohibits the consummation of the transactions contemplated by this Agreement.
In the event any such order or injunction shall have been issued, each party
agrees to use its best efforts to have any such injunction lifted.
(c) All consents, authorizations, orders and approvals of (or filings
or registrations with) any governmental commission, board or other regulatory
body required in connection with the execution, delivery and performance of this
Agreement shall have been obtained or made, except for the filing of the
Articles of Merger and any other documents required to be filed after the
Effective Time and except where the failure to have obtained or made any such
consent, authorization, order, approval, filing or registration would not have a
material adverse effect on the business of Parent (and its Subsidiaries) and the
Company, taken as a whole, following the Effective Time.
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(d) The Company Board shall have received the opinion of Xxxxx
Financial, Inc., substantially to the effect that, as of October 20, 2000, the
Cash Consideration is fair to the holders of Company Common Stock from a
financial point of view, and shall have provided a copy of the written opinion
to Parent.
7.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Parent shall have performed in all material respects its agreements
contained in this Agreement required to be performed on or prior to the Closing
Date, the representations and warranties of Parent and Merger Sub contained in
this Agreement and in any document delivered in connection herewith shall be
true and correct in all material respects as of the Closing Date, except that
those representations and warranties which address matters only as of a
particular date shall have been true and correct as of such date, and the
Company shall have received a certificate of an executive officer of Parent,
dated the Closing Date, certifying to such effect.
(b) From the date of this Agreement through the Effective Time, there
shall not have occurred a Parent Material Adverse Effect.
7.3 CONDITIONS TO OBLIGATION OF PARENT AND MERGER SUB TO EFFECT THE MERGER.
The obligations of Parent and Merger Sub to effect the Merger shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions:
(a) The Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Closing Date, the representations and warranties of the Company contained in
this Agreement and in any document delivered in connection herewith shall be
true and correct in all material respects as of the Closing Date, except that
those representations and warranties which address matters only as of a
particular date shall have been true and correct as of such date, and Parent
shall have received a certificate of an executive officer of the Company, dated
the Closing Date, certifying to such effect.
(b) Holders of not less than fifty-five percent (55%) of the Company
Common Stock outstanding as of the Record Date shall have entered into voting
agreements, in form and substance satisfactory to Parent, pursuant to which such
holders shall have agreed to vote, or cause their shares to be voted, in favor
of the Merger at the Stockholders' Meeting. Each such holder shall have complied
in all material respects with all agreements and covenants required to be
performed under such voting agreement.
(c) Holders of not more than five percent (5%) of the shares of Company
Common Stock outstanding immediately prior to the Effective Time shall have
exercised their rights as Dissenting Shareholders.
(d) The Stock Purchase Plan shall have been terminated and any stock
and/or cash distributed thereunder as set forth in Section 3.2(d)(iv).
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(e) From the date of this Agreement through the Effective Time, there
shall not have occurred a Company Material Adverse Effect.
ARTICLE 8
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, before or after
the approval of this Agreement by the stockholders of the Company, by the mutual
consent of Parent and the Company.
8.2 TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned by action of the Board of Directors
of either Parent or the Company if (a) the Merger shall not have been
consummated by January 31, 2001, or (b) the approval of the Company's
stockholders required by Section 7.1(a) shall not have been obtained at the
Stockholders' Meeting or any adjournment thereof, or (c) a United States federal
or state court of competent jurisdiction or United States federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and non-appealable; provided, that the party seeking to terminate this
Agreement pursuant to this paragraph (c) shall have used all reasonable efforts
to remove such injunction, order or decree; and provided, in the case of a
termination pursuant to paragraph (a) of this Section 8.2, that the terminating
party shall not have breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the failure
to consummate the Merger by January 31, 2001.
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, before or after
the adoption and approval by the stockholders of the Company referred to in
paragraph (a) of Section 7.1, by action of the Company Board, if (a) the Company
Board, by majority vote, determines in its good faith judgment, based as to
legal matters on the written advice of legal counsel, that terminating this
Agreement and abandoning the Merger is required by the Company Board's fiduciary
duties, or (b) there has been a breach by Parent or Merger Sub of any
representation or warranty contained in this Agreement that has had or is
reasonably likely to have a Parent Material Adverse Effect, which breach is not
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by the Company to Parent, or (c) there has been a material
breach of any of the covenants or agreements set forth in this Agreement on the
part of Parent, which breach is not curable or, if curable, is not cured within
30 days after written notice of such breach is given by the Company to Parent.
8.4 TERMINATION BY PARENT. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, by action of the Board
of Directors of Parent, if (a) the Company Board shall have (i) withdrawn or
modified in a manner materially adverse to Parent its approval or recommendation
of this Agreement or the Merger or (ii) recommended an Alternative Proposal to
the Company stockholders, or (b) there has been a breach by the Company of any
representation or warranty contained in this Agreement that has had or is
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reasonably likely to have a Company Material Adverse Effect, which breach is not
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by Parent to the Company, or (c) there has been a material
breach of any of the covenants or agreements set forth in this Agreement on the
part of the Company, which breach is not curable or, if curable, is not cured
within 30 days after written notice of such breach is given by Parent to the
Company.
8.5 EFFECT OF TERMINATION AND ABANDONMENT.
(a) If this Agreement is terminated by the Company or Parent pursuant
to Section 8.2(b), 8.3(a) or 8.4(a), and (x) prior to such termination, a
proposal with respect to a Transaction shall have been made, and (y) within two
(2) years after such termination, either the Company enters into any agreement
with respect to a Transaction whereby any third party shall acquire beneficial
ownership of more than 50% of the Company's (i) outstanding shares of voting
stock or (ii) assets (measured by fair market value), then the Company shall pay
Parent, by wire transfer of immediately available funds, a fee (the "Termination
Fee") of Five Million Dollars ($5,000,000) within fifteen (15) business days
after the execution of such agreement or the consummation of such acquisition
(whichever shall first occur).
(b) The Company acknowledges that the agreements contained in this
Section 8.5 are an integral part of the transactions contemplated in this
Agreement and that the Termination Fee constitutes liquidated damages and is not
a penalty. If the Company fails to promptly pay the Termination Fee when due
and, in order to obtain such payment, Parent or Merger Sub commences a suit
which results in a judgment against the Company, the Company shall reimburse
Parent for its costs and expenses (including attorneys' fees) incurred in
connection with such suit, together with interest on the amount of the
Termination Fee at the prime rate, as then quoted in The Wall Street Journal,
from the date the Termination Fee was required to be paid.
(c) In the event of termination of this Agreement and the abandonment
of the Merger pursuant to this Article 8, all obligations of the parties hereto
shall terminate, except (i) the obligations of the parties set forth in this
Section 8.5 and Section 6.9, (ii) the provisions of Sections 9.3, 9.6, 9.9, 9.12
and 9.13, and (iii) the Confidentiality Agreement previously executed between
the Company and Parent (the "Confidentiality Agreement"). Moreover, in the event
of termination of this Agreement pursuant to Section 8.3 or 8.4, nothing herein
shall prejudice the ability of the nonbreaching party from seeking damages,
after taking into account payment of the Termination Fee, if such fee has been
paid, from any other party for any willful breach of this Agreement, including
without limitation, attorneys' fees and the right to pursue any remedy at law or
in equity.
8.6 EXTENSION; WAIVER. At any time prior to the Effective Time, any party
hereto, by action taken by its Board of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
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ARTICLE 9
GENERAL PROVISIONS
9.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants in this Agreement or in any instrument
delivered pursuant to this Agreement shall not survive the Merger; provided,
however, that the covenants contained in Article 3, Section 6.9, Section 6.14
and this Article 9 shall survive the Merger, but not beyond the extent, if any,
specified therein.
9.2 NOTICES. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by facsimile transmission and by courier service (with
proof of service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to Parent or Merger Sub:
Advanced Energy Industries, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
with copies to:
Xxxxxx Xxxx & Priest LLP
000 Xxxx Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn.: Xxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Company:
Engineering Measurements Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with copies to:
Xxxxxxxx, Xxxxx & Xxxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: G. Xxxxx Xxxxxxxx, Jr.
Facsimile: (000) 000-0000
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or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
9.3 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary (except as provided in Section
6.13), nothing in this Agreement, expressed or implied, is intended to confer on
any person other than the parties hereto or their respective heirs, successors,
executors, administrators and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.4 ENTIRE AGREEMENT. This Agreement, the Exhibits, the Company Disclosure
Schedule, the Confidentiality Agreement and any documents delivered by the
parties in connection herewith constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any party
hereto unless made in writing and signed by all parties hereto.
9.5 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken by their respective Boards of Directors, at any time before or
after approval of the Merger by the stockholders of the Company, but after any
such stockholder approval, no amendment shall be made which by law requires the
further approval of stockholders without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado without regard to its rules of
conflict of laws.
9.7 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
9.8 HEADINGS. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
9.9 INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations, partnerships and other
business entities and vice versa.
9.10 WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be
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deemed to constitute a waiver by the party taking such action of compliance with
any representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision hereunder
shall not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provision hereunder.
9.11 INCORPORATION OF EXHIBITS. The Company Disclosure Schedule and all
Exhibits attached hereto and referred to herein are hereby incorporated herein
and made a part hereof for all purposes as if fully set forth herein.
9.12 SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.13 ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any Colorado court, this being in addition to
any other remedy to which they are entitled at law or in equity.
9.14 KNOWLEDGE. For purposes of this Agreement, (a) "to the knowledge of
the Company" or words of like import shall mean to the knowledge of Xxxxxxx
Xxxxxx or Xxxxxxx Xxxxxx, and (b) "to the knowledge of Parent" or words of like
import shall mean to the knowledge of Xxxxxxx Xxxxxx, Xxxxxxx Xxxx or Xxxxxx
Xxxxxxxxx.
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year set forth in the
Preamble hereto.
COMPANY: ENGINEERING MEASUREMENTS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: President
-----------------------------
MERGER SUB: FLOW ACQUISITION CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxxx
------------------------------
Title: President
-----------------------------
PARENT: ADVANCED ENERGY INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Chief Executive Officer
-----------------------------
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