1
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
by and
among
HADCO CORPORATION
HADCO ACQUISITION CORP.
and
ZYCON CORPORATION
dated December 4, 1996
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TABLE OF CONTENTS
Section Page
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ARTICLE I
THE OFFER ......................................................................1
1.1 The Offer.............................................................1
1.2 Offer Documents.......................................................2
1.3 Company Actions.......................................................3
1.4 Directors.............................................................4
ARTICLE II
THE MERGER .....................................................................5
2.1 The Merger............................................................5
2.2 Closing...............................................................5
2.3 Effective Time of the Merger..........................................5
2.4 Effects of the Merger.................................................5
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES..........................6
3.1 Effect on Capital Stock...............................................6
3.2 Conversion of Securities..............................................6
3.3 Payment for Shares....................................................7
3.4 Stock Transfer Books..................................................9
3.5 Stock Options.........................................................9
3.6 Dissenting Shares....................................................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................................................10
4.1 Representations and Warranties of the Company........................10
(a) Organization, Standing and Power.................................10
(b) Capital Structure................................................11
(c) Authority; No Violations; Consents and Approvals.................12
(d) SEC Documents....................................................13
(e) Information Supplied.............................................14
(f) Compliance with Applicable Laws..................................14
(g) Litigation.......................................................15
(h) Taxes............................................................15
(i) Pension and Benefit Plans; ERISA.................................16
(j) Absence of Certain Changes or Events.............................18
(k) No Undisclosed Material Liabilities..............................18
(l) Vote Required....................................................18
(m) Labor Matters....................................................18
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(n) Intangible Property..............................................19
(o) Environmental Matters............................................20
(p) Real Property....................................................22
(q) Insurance........................................................23
(r) Board Recommendation.............................................23
(s) Material Contracts...............................................23
(t) Related Party Transactions.......................................24
(u) Indebtedness.....................................................24
(v) Liens............................................................24
4.2 Representations, Warranties, and Covenants of Parent and Sub.........24
(a) Organization, Standing and Power.................................25
(b) Authority; No Violations; Consents and Approvals.................25
(c) Information Supplied.............................................26
(d) Board Recommendation.............................................26
(e) Financing........................................................26
(f) Changes in Financing.............................................26
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS......................................26
5.1 Covenants of the Company.............................................27
(a) Ordinary Course..................................................27
(b) Dividends; Changes in Stock......................................27
(c) Issuance of Securities...........................................27
(d) Governing Documents..............................................27
(e) No Solicitation..................................................27
(f) No Acquisitions..................................................29
(g) No Dispositions..................................................29
(h) SEC Filings......................................................29
(i) No Dissolution, Etc..............................................29
(j) Other Actions....................................................29
(k) Certain Employee Matters.........................................29
(l) Indebtedness; Agreements.........................................30
(m) Accounting.......................................................30
(n) Capital Expenditures.............................................30
ARTICLE VI
ADDITIONAL AGREEMENTS..........................................................30
6.1 Preparation of the Proxy Statement; Company
Stockholders Meeting; Merger without a Company
Stockholders Meeting.................................................30
6.2 Access to Information................................................31
6.3 Legal Conditions to Merger...........................................31
6.4 Fees and Expenses....................................................32
6.5 Brokers or Finders...................................................32
6.6 Indemnification; Directors' and Officers' Insurance..................33
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6.7 Best Efforts.........................................................34
6.8 Conduct of Business of Sub...........................................34
6.9 Publicity............................................................35
6.10 Opinion of Financial Advisor.........................................35
6.11 Limitation on the Company's Legal and Investment Banking Fees........35
ARTICLE VII
CONDITIONS PRECEDENT...........................................................35
7.1 Conditions to Each Party's Obligation to Effect the Merger...........35
(a) Stockholder Approval.............................................35
(b) HSR Act..........................................................35
(c) No Injunctions or Restraints.....................................36
7.2 Conditions of Obligations of Parent and Sub..........................36
(a) Payment for Shares...............................................36
(b) Representations and Warranties...................................36
(c) Performance of Obligations of the Company........................36
(d) Consents, etc....................................................36
ARTICLE VIII
TERMINATION AND AMENDMENT......................................................36
8.1 Termination..........................................................37
8.2 Effect of Termination................................................38
8.3 Amendment............................................................38
8.4 Extension; Waiver....................................................38
ARTICLE IX
GENERAL PROVISIONS.............................................................38
9.1 Nonsurvival of Representations, Warranties and Agreements............38
9.2 Notices..............................................................39
9.3 Interpretation.......................................................40
9.4 Counterparts.........................................................40
9.5 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership..40
9.6 Governing Law........................................................40
9.7 No Remedy in Certain Circumstances...................................40
9.8 Assignment...........................................................41
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Glossary of Defined Terms
-------------------------
Defined Terms Defined in Section
------------- ------------------
Acquisition Proposal...................................................5.1(e)
Agreement............................................................preamble
Benefit Plans....................................................4.1(i)(i)(A)
Board Percentage.......................................................1.4(a)
CERCLA...........................................................4.1(p)(i)(B)
Certificate of Merger.....................................................2.3
Certificates...........................................................3.3(b)
Closing...................................................................2.2
Closing Date..............................................................2.2
Code...................................................................3.3(e)
Company..............................................................preamble
Company Common Stock.................................................preamble
Company Intangible Property.........................................4.1(o)(i)
Company Intangible Property Licenses..............................4.1(o)(iii)
Company Litigation.....................................................4.1(g)
Company Order..........................................................4.1(g)
Company Permits........................................................4.1(f)
Company SEC Documents..................................................4.1(d)
Company Stockholder Approval......................................4.1(c)(iii)
Company Voting Debt....................................................4.1(b)
Confidentiality Agreement.................................................6.2
Constituent Corporations..................................................2.1
Continuing Director....................................................1.4(b)
Control................................................................3.2(a)
Designated Person......................................................6.4(c)
DGCL......................................................................1.3
Dissenting Shares.........................................................3.6
Effective Time............................................................2.3
Employee Arrangements............................................4.1(i)(i)(B)
Environmental Costs and Liabilities..............................4.1(p)(i)(A)
Environmental Law................................................4.1(p)(i)(B)
Exchange Act...........................................................1.1(a)
GAAP...................................................................4.1(d)
Governmental Entity...............................................4.1(c)(iii)
Hazardous Material...............................................4.1(p)(i)(C)
HSR Act...........................................................4.1(c)(iii)
Indebtedness...........................................................4.2(v)
Indemnified Parties.......................................................6.6
Indemnified Liabilities...................................................6.6
Injunction.............................................................7.1(c)
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ISRA.............................................................4.1(p)(i)(B)
Laws...............................................................4.1(c)(ii)
Material Adverse Effect................................................4.1(a)
Material Contracts.....................................................4.1(t)
Material Employment Contracts..........................................4.1(t)
Merger....................................................................2.1
Merger Consideration...................................................3.2(a)
OSHA.............................................................4.1(p)(i)(B)
Offer..................................................................1.1(a)
Offer Consideration....................................................1.1(a)
Offer Documents...........................................................1.2
Option Consideration......................................................3.5
Options...................................................................3.5
Parent...............................................................preamble
Paying Agent...........................................................3.3(a)
Payment Fund..............................................................3.3
Preferred Stock........................................................4.1(b)
Permitted Investments..................................................3.3(a)
Proxy Statement...................................................4.1(c)(iii)
Real Property Leases...............................................4.1(q)(ii)
Release..........................................................4.1(p)(i)(D)
Remedial Action..................................................4.1(p)(i)(E)
Representative.........................................................5.1(e)
SEC....................................................................1.1(b)
SEC Contracts..........................................................4.1(t)
Schedule 14D-1 (1.2)......................................................1.3
Schedule 14D-9............................................................1.3
Securities Act.........................................................4.1(d)
Shares...............................................................preamble
Stock Option Plans........................................................3.5
Stockholders Agreement...............................................preamble
Sub..................................................................preamble
Subsidiary.............................................................3.2(a)
Surviving Corporation.....................................................2.1
Trigger Event..........................................................6.4(b)
Violation..........................................................4.1(c)(ii)
WARN................................................................4.1(n)(v)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 4, 1996 (this
"Agreement"), is made and entered into by Hadco Corporation, a Massachusetts
corporation ("Parent"), Hadco Acquisition Corp., a Delaware corporation and a
direct wholly-owned subsidiary of Parent ("Sub"), and Zycon Corporation, a
Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have unanimously approved the acquisition of the Company by Parent, by means of
the merger of Sub with and into the Company, upon the terms and subject to the
conditions set forth in the Agreement;
WHEREAS, to effectuate the acquisition, Parent and the Company each desire
that Sub commence a cash tender offer to purchase all of the outstanding shares
of common stock, par value $.001 per share, of the Company ("Shares" or "Company
Common Stock"), upon the terms and subject to the conditions set forth in this
Agreement and the Offer Documents (as defined in Section 1.2), and the Board of
Directors of the Company has unanimously approved such tender offer and agreed
to recommend to its stockholders that they accept the tender offer and tender
their Company Common Stock pursuant thereto;
WHEREAS, as an inducement to Parent and Sub entering into this Agreement
(i) certain beneficial and record holders of the Company Common Stock are
entering into an agreement (the "Stockholders Agreement") providing for the
tender of their Shares pursuant to the Offer (as defined in Section 1.1) and
certain other matters with respect to their Shares and (ii) the Company has
approved the execution and delivery of the Stockholders Agreement by the parties
thereto; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger (as defined in Section 2.1) and also to prescribe various
conditions to consummation thereof.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
THE OFFER
1.1 THE OFFER. (a) Provided that none of the events set forth in EXHIBIT A
hereto shall have occurred and be continuing, as promptly as practicable (but in
any event not later than five business days after the public announcement of the
execution and delivery of this Agreement), Sub shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), an offer to purchase (the "Offer") all outstanding shares of
the Company Common Stock at a price of $18.00 per share, net to the seller in
cash (the
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"Offer Consideration"). The obligations of Parent and Sub to commence the Offer,
consummate the Offer, accept for payment and pay for shares of Company Common
Stock validly tendered in the Offer and not withdrawn shall be subject only to
those conditions set forth on EXHIBIT A hereto.
(b) Parent and Sub expressly reserve the right to amend or modify the
terms of the Offer, except that, without the prior written consent of the
Company, Sub shall not (and Parent shall not cause Sub to) (i) decrease the
Offer Consideration or change the form of consideration therefor or decrease the
number of Shares sought pursuant to the Offer, (ii) change, in any material
respect, the conditions to the Offer, (iii) impose additional material
conditions to the Offer, (iv) waive the condition that there shall be validly
tendered and not withdrawn prior to the time the Offer expires a number of
shares of Company Common Stock which constitutes a majority of the Shares
outstanding on a fully-diluted basis on the date of purchase ("on a
fully-diluted basis" having the following meaning, as of any date: the number of
shares of Company Common Stock outstanding, together with Shares which the
Company may be required to issue pursuant to obligations outstanding at that
date under employee stock option or similar benefit plans, or otherwise), (v)
extend the expiration date of the Offer (except that Sub may extend the
expiration date of the Offer (a) as required by law, (b) for up to ten (10)
business days after the initial expiration date or for longer periods (not to
exceed 90 calendar days from the date of commencement of the Offer) in the event
that any condition to the Offer is not satisfied), or (c) for one or more times
for an aggregate period of up to 15 days (not to exceed 90 calendar days from
the date of commencement for any reason other than those specified in the
immediately preceding clause (a) or clause (b)), or (vi) amend any term of the
Offer in any manner materially adverse to holders of shares of Company Common
Stock; PROVIDED, HOWEVER, that, except as set forth above, Sub may waive any
other condition to the Offer in its sole discretion and, PROVIDED FURTHER, that
the Offer may be extended in connection with an increase in the consideration to
be paid pursuant to the Offer so as to comply with applicable rules and
regulations of the United States Securities and Exchange Commission (the "SEC").
Assuming the prior satisfaction or waiver of the conditions to the Offer, Sub
shall accept for payment, and pay for, in accordance with the terms of the
Offer, all shares of Company Common Stock validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the expiration date thereof.
The initial expiration date of the Offer shall be twenty business days from the
commencement of the Offer.
1.2 OFFER DOCUMENTS. As soon as practicable on the date of commencement of
the Offer, Parent and Sub shall file or cause to be filed with the SEC a Tender
Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with respect to the
Offer which shall contain the offer to purchase and related letter of
transmittal and other ancillary Offer documents and instruments pursuant to
which the Offer will be made (collectively with any supplements or amendments
thereto, the "Offer Documents") and shall contain (or shall be amended in a
timely manner to contain) all information which is required to be included
therein in accordance with the Exchange Act and the rules and regulations
thereunder and any other applicable law, and shall conform in all material
respects with the requirements of the Exchange Act and any other applicable law;
PROVIDED, HOWEVER, that no agreement or representation hereby is made or shall
be made by Parent or Sub with respect to information supplied by the Company
expressly for
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inclusion in, or with respect to Company information derived from the Company's
public SEC filings that is included or incorporated by reference in, the Offer
Documents. Parent, Sub and the Company each agree promptly to correct any
information provided by them for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect and Sub
further agrees to take all lawful action necessary to cause the Offer Documents
as so corrected to be filed promptly with the SEC and to be disseminated to
holders of Company Common Stock, in each case as and to the extent required by
applicable law. In conducting the Offer, Parent and Sub shall comply in all
material respects with the provisions of the Exchange Act and any other
applicable law. The Company and its counsel shall be given the opportunity to
review and comment on the Offer Documents and any amendments thereto prior to
the filing thereof with the SEC.
1.3 COMPANY ACTIONS. The Company hereby consents to the Offer and
represents that (a) its Board of Directors (at a meeting duly called and held)
has unanimously (i) determined that each of this Agreement, the Offer and the
Merger are fair to and in the best interests of the stockholders of the Company,
(ii) approved the execution, delivery and performance of this Agreement and the
Stockholders Agreement and the consummation of the transactions contemplated
hereby and thereby, including the Offer and the Merger, and such approval
constitutes approval of the foregoing for purposes of Section 203 of the
Delaware General Corporation Law, as amended (the "DGCL"), and (iii) after
considering its fiduciary duties under applicable law upon the advice of
counsel, resolved to recommend acceptance of the Offer, approval and adoption of
this Agreement and the Stockholders Agreement and approval of the Merger by the
holders of Company Common Stock, and (b) Xxxxxxx & Company has delivered to the
Board of Directors of the Company its written opinion that the Offer
Consideration to be received by the holders of Company Common Stock in the Offer
is fair, from a financial point of view, to such holders. The Board of Directors
of the Company shall not withdraw, modify or amend its approval or
recommendation of the Offer, this Agreement, the Stockholders Agreement or the
Merger unless the Board of Directors of the Company shall conclude in good faith
upon the advice of counsel that such action is required under applicable law for
the discharge of such Board's fiduciary duties. The Company hereby consents to
the inclusion in the Offer Documents of the recommendation referred to in this
Section 1.3. The Company hereby agrees to file with the SEC simultaneously with
the filing by Parent and Sub of the Schedule 14D-1, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing such
recommendations of the Board of Directors of the Company in favor of the Offer
and the Merger and otherwise complying with Rule 14d-9 under the Exchange Act.
The Schedule 14D-9 shall comply in all material respects with the Exchange Act
and any other applicable law and shall contain (or shall be amended in a timely
manner to contain) all information which is required to be included therein in
accordance with the Exchange Act and the rules and regulations thereunder and
any other applicable law. The Company, Parent and Sub each agree promptly to
correct any information provided by them for use in the Schedule 14D-9 if and to
the extent that it shall have become false or misleading in any material respect
and the Company further agrees to take all lawful action necessary to cause the
Schedule 14D-9 as so corrected to be filed promptly with the SEC and
disseminated to the holders of Company Common Stock, in each case as and to the
extent required by applicable law. Parent, Sub and their counsel shall be given
an opportunity to
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review and comment on the Schedule 14D-9 and any amendments thereto prior to the
filing thereof with the SEC. In connection with the Offer, the Company shall
promptly furnish, or cause its transfer agent to furnish, Parent with mailing
labels, security position listings and all available listings or computer files
containing the names and addresses of the record holders of the Company Common
Stock as of the latest practicable date and shall furnish, or cause its transfer
agent to furnish, Parent with such information and assistance (including updated
lists of stockholders, mailing labels and lists of security positions) as Parent
or its agents may reasonably request in communicating the Offer to the record
and beneficial holders of Company Common Stock. Subject to the requirements of
applicable law, and except for such actions as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Offer and
the Merger, Parent and Sub and each of their affiliates, associates, partners,
employees, agents and advisors shall hold in confidence the information
contained in such labels and lists, shall use such information only in
connection with the Offer and the Merger, and, if this Agreement is terminated,
in accordance with its terms, shall deliver promptly to the Company all copies
of such information then in their possession or under their control.
1.4 DIRECTORS. (a) Promptly upon the purchase by Parent or any of its
subsidiaries of such number of shares of Company Common Stock which represents
at least 50.1% of the outstanding shares of Company Common Stock (on a fully-
diluted basis), and from time to time thereafter, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number as will
give Parent, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to the product of
(x) the number of directors on the Board of Directors of the Company (giving
effect to any increase in the number of directors pursuant to this Section 1.4)
and (y) the percentage that such number of Shares so purchased bears to the
aggregate number of Shares outstanding (such number being, the "Board
Percentage"), and the Company shall, upon request by Parent, promptly satisfy
the Board Percentage by (i) increasing the size of the Board of Directors of the
Company or (ii) using its best efforts to secure the resignations of such number
of directors as is necessary to enable Parent's designees to be elected to the
Board of Directors of the Company and shall cause Parent's designees promptly to
be so elected. At the request of Parent, the Company shall take, at the
Company's expense, all lawful action necessary to effect any such election,
including, without limitation, mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, unless such information has previously been provided to the
Company's stockholders in the Schedule 14D-9.
(b) Following the election or appointment of Parent's designees
pursuant to this Section 1.4 and prior to the Effective Time (as defined in
Section 2.3) of the Merger, any (i) amendment or termination of this Agreement,
(ii) extension for the performance or waiver of the obligations or other acts of
Parent or Sub, (iii) action which might affect the accuracy of the
representations and warranties under Article VI, or (iv) waiver of the Company's
rights thereunder shall require the concurrence of a majority of directors of
the Company then in office who are "Continuing Directors". The term "Continuing
Director" shall mean (i) each member of the Board of Directors of the Company on
the date hereof and (ii) any successor to any Continuing Director that was
recommended to succeed such Continuing Director by a majority of the Continuing
Directors then on the Board of Directors.
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ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, Sub shall be merged (the
"Merger") with and into the Company at the Effective Time. At the Effective
Time, the separate corporate existence of Sub shall cease, and the Company shall
continue as the surviving corporation and a direct wholly-owned subsidiary of
Parent (Sub and the Company are sometimes hereinafter referred to as
"Constituent Corporations" and, as the context requires, the Company is
sometimes hereinafter referred to as the "Surviving Corporation"), and shall
continue under the name Zycon Corporation.
2.2 CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.1, the closing of the Merger (the "Closing") shall take place at 10:00 a.m.,
New York time, as soon as practicable following satisfaction or waiver of the
conditions set forth in Article VII (the "Closing Date"), at the offices of
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000, unless
another date, time or place is agreed to in writing by the parties hereto.
2.3 EFFECTIVE TIME OF THE MERGE. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware, as provided in the DGCL, as soon as practicable
on or after the Closing Date. The Merger shall become effective upon such filing
or at such time thereafter as is provided in the Certificate of Merger (the
"Effective Time").
2.4 EFFECTS OF THE MERGER. (a) The Merger shall have the effects as set
forth in the applicable provisions of the DGCL.
(b) The directors of Sub and the officers of the Company immediately
prior to the Effective Time shall, from and after the Effective Time, be the
initial directors and officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified, or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and Bylaws.
(c) The Certificate of Incorporation of the Company shall be amended
and restated in its entirety as set forth on EXHIBIT B hereto and, from and
after the Effective Time, such amended and restated Certificate of Incorporation
shall be the Certificate of Incorporation of the Surviving Corporation, until
duly amended in accordance with the terms thereof and the DGCL.
(d) The Bylaws of the Company shall be amended and restated in their
entirety as set forth on EXHIBIT C hereto and, from and after the Effective
Time, such amended
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and restated Bylaws shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by applicable law, the Certificate of
Incorporation or the Bylaws.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any shares of Company Common
Stock or the holder of any capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each share of the capital stock of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share
of Company Common Stock and all other shares of capital stock of the Company
that are owned by the Company and all shares of Company Common Stock and other
shares of capital stock of the Company owned by Parent or Sub shall be canceled
and retired and shall cease to exist and no consideration shall be delivered or
deliverable in exchange therefor.
3.2 CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
Merger and without any action on the part of Sub, the Company or the holders of
any of the shares thereof:
(a) Subject to the other provisions of this Section 3.2, each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time (excluding shares owned, directly or indirectly, by the Company or any
Subsidiary (as defined below) of the Company or by Parent, Sub or any other
Subsidiary of Parent and Dissenting Shares (as defined in Section 3.6)) shall be
converted into the right to receive the Offer Consideration, payable to the
holder thereof, without any interest thereon, less any required withholding
taxes (the "Merger Consideration"), upon surrender and exchange of the
Certificates (as defined in Section 3.3). As used in this Agreement the word
"Subsidiary", with respect to any party, means any corporation, partnership,
joint venture or other organization, whether incorporated or unincorporated
which is, directly or indirectly, controlled by such party. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such corporation, partnership, joint
venture or other organization, whether through the ownership of voting
securities, by contract or otherwise.
(b) All such shares of Company Common Stock, when converted as
provided in Section 3.2(a), no longer shall be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
Certificate previously evidencing Shares shall thereafter represent only the
right to receive the Merger Consideration. The holders of Certificates
previously evidencing Shares outstanding immediately prior to the Effective Time
shall cease to
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have any rights with respect to the Company Common Stock except as otherwise
provided herein or by law and, upon the surrender of Certificates in accordance
with the provisions of Section 3.3, shall only represent the right to receive
for their Shares, the Merger Consideration, without any interest thereon.
3.3 PAYMENT FOR SHARES. (a) Paying Agent. Prior to the Effective Time, Sub
shall appoint a United States bank or trust company (reasonably acceptable to
the Company) to act as paying agent (the "Paying Agent") for the payment of the
Merger Consideration, and Sub shall deposit or shall cause to be deposited with
the Paying Agent in a separate fund established for the benefit of the holders
of shares of Company Common Stock, for payment in accordance with this Article
III, through the Paying Agent (the "Payment Fund"), immediately available funds
in amounts necessary to make the payments pursuant to Section 3.2(a) and this
Section 3.3 to holders (other than the Company or any Subsidiary of the Company
or Parent, Sub or any other Subsidiary of Parent, or holders of Dissenting
Shares). The Paying Agent shall, pursuant to irrevocable instructions, pay the
Merger Consideration out of the Payment Fund.
The Paying Agent shall invest portions of the Payment Fund as Parent
directs in obligations of or guaranteed by the United States of America, in
commercial paper obligations receiving the highest investment grade rating from
both Xxxxx'x Investors Services, Inc. and Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or banker's acceptances of
commercial banks with capital exceeding $1,000,000,000 (collectively, "Permitted
Investments"); PROVIDED, HOWEVER, that the maturities of Permitted Investments
shall be such as to permit the Paying Agent to make prompt payment to former
holders of Company Common Stock entitled thereto as contemplated by this
Section. Parent and the Surviving Corporation shall cause the Payment Fund to be
promptly replenished to the extent of any losses incurred as a result of
Permitted Investments. All earnings on Permitted Investments shall be paid to
the Surviving Corporation. If for any reason (including losses) the Payment Fund
is inadequate to pay the amounts to which holders of shares of Company Common
Stock shall be entitled under this Section 3.3, Parent and the Surviving
Corporation shall in any event be liable for payment thereof. The Payment Fund
shall not be used for any purpose except as expressly provided in this
Agreement.
(b) PAYMENT PROCEDURES. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall instruct the Paying Agent to
mail to each holder of record (other than the Company or any Subsidiary of the
Company or Parent, Sub or any other Subsidiary of Parent) of a Certificate or
Certificates which, immediately prior to the Effective Time, evidenced
outstanding shares of Company Common Stock (the "Certificates"), (i) a form of
letter of transmittal (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 shall be in such form and have such
other provisions as the Surviving Corporation reasonably may specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment therefor. Upon surrender of a Certificate for cancellation to the
Paying Agent together with such letter of transmittal, duly executed, and such
other customary documents as may be required pursuant to such instructions, the
holder of such Certificate shall be paid in cash in an amount equal to the
product of (x) the number of shares of Company
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Common Stock represented by such Certificate and (y) the Merger Consideration,
and the Certificate so surrendered shall forthwith be canceled. Absolutely no
interest shall be paid or accrued on the Merger Consideration payable upon the
surrender of any Certificate. If payment is to be made to a person other than
the person in whose name the surrendered Certificate is registered, it shall be
a condition of payment that the Certificate so surrendered shall be promptly
endorsed or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the surrendered
Certificate or established to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 3.3(b), each Certificate (other than
Certificates representing Shares owned by Parent or any subsidiary of Parent or
held in the treasury of the Company) shall represent for all purposes only the
right to receive the Merger Consideration.
(c) TERMINATION OF PAYMENT FUND; INTEREST. Any portion of the Payment
Fund which remains undistributed to the holders of Company Common Stock for 180
days after the Effective Time shall be delivered to the Surviving Corporation,
upon demand, and any holders of Company Common Stock who have not theretofore
complied with this Article III and the instructions set forth in the letter of
transmittal mailed to such holder after the Effective Time shall thereafter look
only to the Surviving Corporation for payment of the Merger Consideration to
which they are entitled. All interest accrued in respect of the Payment Fund
shall inure to the benefit of and be paid to the Surviving Corporation.
(d) NO LIABILITY. Neither Parent nor the Surviving Corporation shall
be liable to any holder of shares of Company Common Stock for any cash from the
Payment Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(e) WITHHOLDING RIGHTS. The Surviving Corporation shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such amounts as the
Surviving Corporation is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by the Surviving Corporation, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such deduction
and withholding was made by the Surviving Corporation.
3.4 STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer books
of the Company shall be closed and there shall be no further registration of
transfers of shares of Company Common Stock thereafter on the records of the
Company. On or after the Effective Time, any certificates presented to the
Paying Agent or Parent for any reason shall be converted into the Merger
Consideration.
3.5 STOCK OPTIONS. At the Effective Time, each holder of a then outstanding
option to purchase Shares under the Company's 1993 Long-Term Equity Incentive
Plan and the Stock
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Option Plan for Directors (collectively, the "Stock Option Plans"), whether or
not then exercisable (the "Options"), shall, in settlement thereof, receive for
each Share subject to such Option an amount (subject to any applicable
withholding tax) in cash equal to the difference between the Offer Consideration
and the per Share exercise price of such Option to the extent such difference is
a positive number (such amount being hereinafter referred to as, the "Option
Consideration"); provided, however, that with respect to any person subject to
Section 16(a) of the Exchange Act, any such amount shall be paid as soon as
practicable after the first date payment can be made without liability to such
person under Section 16(b) of the Exchange Act. Upon receipt of the Option
Consideration, the Option shall be canceled. The surrender of an Option to the
Company in exchange for the Option Consideration shall be deemed a release of
any and all rights the holder had or may have had in respect of such Option.
Prior to the Effective Time, the Company shall obtain all necessary consents or
releases from holders of Options under the Stock Option Plans and take all such
other lawful action as may be necessary to give effect to the transactions
contemplated by this Section 3.5. All Stock Option Plans shall terminate as of
the Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any Subsidiary thereof shall be canceled as of
the Effective Time, and the Company shall take all action necessary to ensure
that following the Effective Time no participant in any Stock Option Plan or
other plans, programs or arrangements shall have any right thereunder to acquire
equity securities of the Company, the Surviving Corporation or any Subsidiary
thereof and to terminate all such plans.
3.6 DISSENTING SHARES. Notwithstanding any other provisions of this
Agreement to the contrary, shares of Company Common Stock that are outstanding
immediately prior to the Effective Time and which are held by stockholders who
shall have not voted in favor of the Merger or consented thereto in writing and
who shall have demanded properly in writing appraisal for such shares in
accordance with Section 262 of the DGCL (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration. Such stockholders instead shall be entitled to receive payment of
the appraised value of such shares of Company Common Stock held by them in
accordance with the provisions of such Section 262, except that all Dissenting
Shares held by stockholders who shall have failed to perfect or who effectively
shall have withdrawn or lost their rights to appraisal of such shares of Company
Common Stock under such Section 262 shall thereupon be deemed to have been
converted into and to have become exchangeable, as of the Effective Time, for
the right to receive, without any interest thereon, the Merger Consideration
upon surrender in the manner provided in Section 3.3, of the Certificate or
Certificates that, immediately prior to the Effective Time, evidenced such
shares of Company Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Parent and Sub that, except as set forth in the schedule
corresponding to the sub paragraph number or letter below:
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(a) ORGANIZATION, STANDING AND POWER. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation, has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, and is duly qualified and in good
standing to conduct business in each jurisdiction in which the business it is
conducting, or the operation, ownership or leasing of its properties, makes such
qualification necessary, other than in such jurisdictions where the failure so
to qualify could not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect (as defined below) with respect to the
Company. The Company has heretofore made available to Parent complete and
correct copies of its and its Subsidiaries' respective Certificates of
Incorporation and Bylaws. All Subsidiaries of the Company and their respective
jurisdictions of incorporation or organization are identified on Schedule
4.1(a). As used in this Agreement: a "Material Adverse Effect" shall mean, with
respect to any party, the result of one or more events, changes or effects
which, individually or in the aggregate, would have a material adverse effect on
the business, operations, assets, condition (financial or otherwise) or
prospects of such party and its Subsidiaries, taken as a whole.
(b) CAPITAL STRUCTURE. As of the date hereof, the authorized capital
stock of the Company consists of 25,000,000 Shares and 25,000,000 shares of
Preferred Stock, $.001 par value ("Preferred Stock"). At the close of business
on the date of this Agreement: (i) 11,056,000 Shares were issued and
outstanding; (ii) no shares of Preferred Stock were issued and outstanding;
(iii) 1,000,000 Shares were reserved for issuance pursuant to the Stock Option
Plans of which 769,200 Shares are subject to outstanding Options; (iv) except
for the issuance of Shares pursuant to the exercise of the Options, there are no
employment, executive termination or similar agreements providing for the
issuance of Shares; (v) no Shares were held by the Company; and (vi) no bonds,
debentures, notes or other instruments or evidence of indebtedness having the
right to vote (or convertible into, or exercisable or exchangeable for,
securities having the right to vote) on any matters on which the Company
stockholders may vote ("Company Voting Debt") were issued or outstanding. All
outstanding Shares are validly issued, fully paid and nonassessable and are not
subject to preemptive or other similar rights. No Shares are owned by any
Subsidiary of the Company. Except as set forth on Schedule 4.1(b), all
outstanding shares of capital stock of the Subsidiaries of the Company are owned
by the Company or a direct or indirect Subsidiary (other than shares of
Subsidiaries held by nominees for which the Company maintains beneficial
ownership) of the Company, free and clear of all liens, charges, encumbrances,
claims and options of any nature. Except as set forth in this Section 4.1(b) and
except for changes resulting from the exercise of Options or as contemplated by
this Agreement, from and after the date hereof there will be outstanding: (i) no
shares of capital stock, Company Voting Debt or other voting securities of the
Company; (ii) no securities of the Company or any Subsidiary of the Company
convertible into, or exchangeable or exercisable for, shares of capital stock,
Company Voting Debt or other voting securities of the Company or any Subsidiary
of the Company; and (iii) no options, warrants, calls, rights (including
preemptive rights), commitments or agreements to which the Company or any
Subsidiary of the Company is a party or by which it is bound, in any case
obligating the Company or any Subsidiary of the Company to issue, deliver, sell,
purchase, redeem or acquire,
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or cause to be issued, delivered, sold, purchased, redeemed or acquired,
additional shares of capital stock or any Company Voting Debt or other voting
securities of the Company or of any Subsidiary of the Company, or obligating the
Company or any Subsidiary of the Company to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. The Company will not (i)
grant any options, warrants or rights to purchase shares of Company Common Stock
or (ii) amend or reprice any Option or Stock Option Plans, and set forth on
Schedule 4.1(b) is a list of all outstanding options, warrants and rights to
purchase shares of Company Common Stock and the exercise prices relating
thereto. Except for the Stockholders Agreement, there are not as of the date
hereof and there will not be at the Effective Time any stockholder agreements,
voting trusts or other agreements or understandings to which the Company is a
party or by which it is bound relating to the voting of any shares of the
capital stock of the Company which will limit in any way the solicitation of
proxies by or on behalf of the Company from, or the casting of votes by, the
stockholders of the Company with respect to the Merger. There are no
restrictions on the Company to vote the stock of any of its Subsidiaries.
(c) Authority; No Violations; Consents and Approvals
(i) The Company gave written notice of termination of the
Agreement and Plan of Merger (the "Prior Merger Agreement") dated as of November
30, 1996 among HMTF Acquisition Corp., PCB Acquisition Corp. and the Company
prior to 5:00 p.m. Pacific Time on December 4, 1996. Such termination was
validly given by the Company in accordance with the provisions of Section 8.1(g)
of the Prior Merger Agreement. The Company has given irrevocable instructions to
its bank to pay the termination fee required to be paid under such Section
8.1(g) and a representative of the Company's bank has given the Company oral
assurances that the amount will be paid to HMTF Acquisition Corp. prior to 9:00
a.m. Pacific Time on December 5, 1996. Subject only to HMTF Acquisition Corp.'s
receipt of such termination fee, the Prior Merger Agreement is void and of no
further effect.
(ii) The Company has all requisite corporate power and authority
to enter into this Agreement and, subject to the Company Stockholder Approval
(as defined in Section 4.1(c)(iv)), to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject, if required with respect
to consummation of the Merger, to the Company Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and, subject, if
required with respect to consummation of the Merger, to the Company Stockholder
Approval, and assuming that this Agreement constitutes the valid and binding
agreement of Parent and Sub, constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms except that the enforcement
hereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by the Company will not
conflict with, or
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result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration (including pursuant to any put right) of any obligation or the loss
of a material benefit under, or the creation of a lien, pledge, security
interest or other encumbrance on assets or property, or right of first refusal
with respect to any asset or property (any such conflict, violation, default,
right of termination, cancellation or acceleration, loss, creation or right of
first refusal, a "Violation"), pursuant to any provision of the Certificate of
Incorporation or Bylaws of the Company or any of its Subsidiaries or, except as
to which requisite waivers or consents have been obtained and, except as set
forth on Schedule 4.1(c)(iii) hereto and assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in paragraph
(iii) of this Section 4.1(c) are duly and timely obtained or made and, if
required, the Company Stockholder Approval has been obtained, result in any
Violation except for Violations that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on the Company of
(A) any loan or credit agreement, note, mortgage, deed of trust, indenture,
lease, Company Employee Benefit Plan (as defined in Section 4.1(ii)), Company
Permit (as defined in Section 4.1(f)), or any other material agreement,
obligation, instrument, concession, franchise, or license, or (B) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries or their respective properties or assets
(collectively, "Laws"). The Board of Directors of the Company has taken all
actions necessary under the DGCL, including approving the transactions
contemplated by this Agreement and the Stockholders Agreement, to ensure that
Section 203 of the DGCL does not, and will not, apply to the transactions
contemplated in this Agreement or the Stockholders Agreement.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, notice to, or permit from any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), is required by
or with respect to the Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, except for: (A) the filing
of a premerger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the expiration or termination of the applicable waiting period
thereunder; (B) the filing with the SEC of (x) a proxy statement (if required by
applicable law) in definitive form relating to a meeting of the holders of
Company Common Stock to approve the Merger (such proxy statement as amended or
supplemented from time to time being hereinafter referred to as the "Proxy
Statement"), (y) the Schedule 14D-9 in connection with the Offer, and (z) such
reports under and such other compliance with the Exchange Act and the rules and
regulations thereunder as may be required in connection with this Agreement and
the transactions contemplated hereby; (C) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware; (D) such filings
and approvals as may be required by any applicable state securities, "blue sky"
or takeover laws; and (E) the approval of this Agreement and the Merger by the
holders of a majority of the outstanding Shares ("Company Stockholder
Approval").
(d) SEC DOCUMENTS. The Company has made available to Parent a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement
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filed by the Company with the SEC prior to the date of this Agreement (the
"Company SEC Documents"), which are all the documents (other than preliminary
material) that the Company was required to file with the SEC since such date. As
of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Documents, and
none of the Company SEC Documents contained any untrue statement of a material
fact or omitted to state a 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. The financial statements of the Company
included in the Company SEC Documents complied as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC)
and fairly present in accordance with applicable requirements of GAAP (subject,
in the case of the unaudited statements, to normal, recurring adjustments, which
will not be material, either individually or in the aggregate) the consolidated
financial position of the Company and its consolidated Subsidiaries as of their
respective dates and the consolidated results of operations and the consolidated
cash flows of the Company and its consolidated Subsidiaries for the periods
presented therein.
(e) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in (i) any
of the Offer Documents will, at the time the Offer Documents are first
published, sent or given to holders of Company Common Stock, and at any time
they are amended or supplemented, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and (ii) the Proxy Statement will, on the
date it is first mailed to the holders of the Company Common Stock or at the
time of the Company's Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the expiration date of the Offer or the Effective Time any event with respect to
the Company or any of its Subsidiaries, or with respect to other information
supplied by the Company for inclusion in the Offer Documents or the Proxy
Statement, shall occur which is required to be described in an amendment of, or
a supplement to, the Offer Documents or the Proxy Statement, as the case may be,
such event shall be so described, and such amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated to the
stockholders of the Company. The Proxy Statement, insofar as it relates to the
Company or its Subsidiaries or other information supplied by the Company for
inclusion therein will comply as to form, in all material respects, with the
provisions of the Exchange Act or the rules and regulations thereunder.
(f) COMPLIANCE WITH APPLICABLE LAWS. The Company and its Subsidiaries
hold all material permits, licenses, variances, exemptions, orders, franchises
and approvals of all Governmental Entities necessary to enable them to conduct
their respective businesses (the
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"Company Permits"), and the Company and its Subsidiaries are in material
compliance with the terms of the Company Permits. Except as disclosed in the
Company SEC Documents, the businesses of the Company and its Subsidiaries are
not being conducted in material violation of any law, ordinance or regulation of
any Governmental Entity. As of the date of this Agreement, no investigation or
review by any Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the knowledge of the Company, threatened.
(g) LITIGATION. Except as disclosed in the Company SEC Documents (i)
there is no suit, action or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary of the
Company ("Company Litigation"), and (ii) the Company and its Subsidiaries have
no knowledge (after due inquiry) of any facts which are reasonably likely to
give rise to any Company Litigation which in the case of (i) or (ii) is
reasonably likely to have a Material Adverse Effect with respect to the Company,
nor is there any material judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any
Subsidiary of the Company ("Company Order").
(h) TAXES. Except as set forth on Schedule 4.1(h) hereto:
(i) All Tax Returns required to be filed by or with respect to
the Company and each of its Subsidiaries have been duly and timely filed, and
all such Tax Returns are true, correct and complete in all material respects.
The Company and each of its Subsidiaries has duly and timely paid (or there has
been paid on its behalf) all Taxes that are due, or claimed or asserted by any
taxing authority to be due, from or with respect to it. With respect to any
period for which Taxes are not yet due with respect to the Company or any
Subsidiary, the Company and each of its Subsidiaries has made due and sufficient
current accruals for such Taxes in accordance with GAAP in the most recent
financial statements contained in the Company SEC Documents. The Company and
each of its Subsidiaries has made (or there has been made on its behalf) all
required estimated Tax payments sufficient to avoid any underpayment penalties.
The Company and each of its Subsidiaries has withheld and paid all Taxes
required by all applicable laws to be withheld or paid in connection with any
amounts paid or owing to any employee, creditor, independent contractor or other
third party.
(ii) There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitation applicable to any
claim for, or the period for the collection or assessment of, Taxes due from or
with respect to the Company or any of its Subsidiaries for any taxable period.
No audit or other proceeding by any court, governmental or regulatory authority,
or similar person is pending or threatened in regard to any Taxes due from or
with respect to the Company or any of the Subsidiaries or any Tax Return filed
by or with respect to the Company or any Subsidiary. No assessment of Taxes is
proposed against the Company or any of its Subsidiaries or any of their assets.
(iii) No election under Section 338 of the Code has been made or
filed by or with respect to the Company or any of its Subsidiaries. No consent
to the application of Section 341(f)(2) of the Code (or any predecessor
provision) has been made or filed by or with respect to the Company or any of
its Subsidiaries or any of their assets. None of the Company or
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any of its Subsidiaries has agreed to make any adjustment pursuant to Section
481(a) of the Code (or any predecessor provision) by reason of any change in any
accounting method, and there is no application pending with any taxing authority
requesting permission for any changes in any accounting method of the Company or
any of its Subsidiaries. None of the assets of the Company or any of its
Subsidiaries is or will be required to be treated as being owned by any person
(other than the Company or its Subsidiaries) pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately before the enactment of the Tax Reform Act of 1986.
(iv) None of the Company or any of its Subsidiaries is a party
to, is bound by, or has any obligation under, any Tax sharing agreement, Tax
allocation agreement or similar contract.
(v) There is no contract, agreement, plan or arrangement covering
any person that, individually or collectively, could give rise to the payment of
any amount that would not be deductible by the Company or any of its
Subsidiaries by reason of Section 280G of the Code.
(vi) Schedule 4.1(h) accurately sets forth (i) the amount of all
deferred intercompany gains for purposes of Treasury Regulation section
1.1502-13 (including any predecessor regulation) with respect to the Company and
its Subsidiaries; and (ii) the amount of any excess loss account with respect to
the stock of each of the Subsidiaries for purposes of Treasury Regulation
section 1.1502-19 (including any predecessor regulation).
(vii) "Code" shall mean the Internal Revenue Code of 1986, as
amended. "Taxes" shall mean all taxes, charges, fees, levies, or other similar
assessments or liabilities, including without limitation (a) income, gross
receipts, ad valorem, premium, excise, real property, personal property, sales,
use, transfer, withholding, employment, payroll, and franchise taxes imposed by
the United States of America, or by any state, local, or foreign government, or
any subdivision, agency, or other similar person of the United States or any
such government; and (b) any interest, fines, penalties, assessments, or
additions to taxes resulting from, attributable to, or incurred in connection
with any Tax or any contest, dispute, or refund thereof. "Tax Returns" shall
mean any report, return, or statement required to be supplied to a taxing
authority in connection with Taxes.
(i) Pension and Benefit Plans; ERISA.
(i) Schedule 4.1(i)(i) sets forth a complete and correct list of:
(A) all "employee benefit plans", as defined in Section 3(3)
of ERISA, which Company or any of its Subsidiaries has any obligation or
liability, contingent or otherwise ("Benefit Plans"); and
(B) all employment or consulting agreements, bonus or other
incentive compensation, deferred compensation, salary continuation during any
absence from
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active employment for disability or other reasons, severance, sick days, stock
award, stock option, stock purchase, tuition assistance, club membership,
employee discount, employee loan, or vacation pay agreements, policies or
arrangements which Company or any of its Subsidiaries maintains or has any
obligation or liability (contingent or otherwise) with respect to any current or
former officer, director or employee of Company or any of its Subsidiaries (the
"Employee Arrangements").
(ii) With respect to each Benefit Plan and Employee Arrangement,
a complete and correct copy of each of the following documents (if applicable)
has been provided to Purchaser: (A) the most recent plan and related trust
documents, and all amendments thereto; (B) the most recent summary plan
description, and all related summaries of material modifications thereto; (C)
the most recent Form 5500 (including schedules and attachments); (D) the most
recent Internal Revenue Service determination letter; (E) the most recent
actuarial reports (including for purposes of Financial Accounting Standards
Board report no. 87, 106 and 112) and (F) each written employment, consulting or
individual severance or other compensation agreement, and all amendments
thereto.
(iii) Company and its Subsidiaries have not during the preceding
six years had any obligation or liability (contingent or otherwise) with respect
to a Benefit Plan which is described in Section 3(37), 4(b)(4), 4063 or 4064 of
ERISA.
(iv) The Benefit Plans and their related trusts intended to
qualify under Sections 401 and 501(a) of the Code, respectively, so qualify. Any
voluntary employee benefit association which provides benefits to current or
former employees of the Company and its Subsidiaries, or their beneficiaries, is
and has been qualified under Section 501(c)(9) of the Code.
(v) All contributions or other payments required to have been
made by Company and its Subsidiaries to or under any Benefit Plan or Employee
Arrangement by applicable law or the terms of such Benefit Plan or Employee
Arrangement (or any agreement relating thereto) have been timely and properly
made.
(vi) The Benefit Plans and Employee Arrangements have been
maintained and administered in all material respects in accordance with their
terms and applicable laws.
(vii) There are no pending or, to the knowledge of Company and
its Subsidiaries, threatened actions, claims or proceedings against or relating
to any Benefit Plan or Employee Arrangement other than routine benefit claims by
persons entitled to benefits thereunder.
(viii) Company and its Subsidiaries do not maintain or have an
obligation to contribute to retiree life or retiree health plans which provide
for continuing benefits or coverage for current or former officers, directors or
employees of the Company or any of its Subsidiaries except (A) as may be
required under Part 6 of Title I of ERISA and at the sole
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expense of the participant or the participant's beneficiary or (B) a medical
expense reimbursement account plan pursuant to Section 125 of the Code.
(ix) None of the assets of any Benefit Plan is stock of the
Company or any of its affiliates, or property leased to or jointly owned by the
Company or any of its affiliates.
(x) Except as disclosed in Schedule 4.1(i)(x) or in connection
with equity compensation, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (A) result in
any payment becoming due to any employee (current, former or retired) of Company
and its Subsidiaries, (B) increase any benefits under any Benefit Plan or
Employee Arrangement or (C) result in the acceleration of the time of payment
of, vesting of or other rights with respect to any such benefits.
(xi) Company and its Subsidiaries have no liability (contingent
or otherwise) under Section 4069 of ERISA by reason of a transfer of an
underfunded pension plan.
(j) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Company SEC Documents filed after September 30, 1996 or as contemplated by this
Agreement, since September 30, 1996, the business of the Company and its
Subsidiaries has been carried on only in the ordinary and usual course and there
has not been any material adverse changes (either individually or in the
aggregate) in the business, operations, assets, condition (financial or
otherwise) or prospects of the Company.
(k) NO UNDISCLOSED MATERIAL LIABILITIES. To the Company's knowledge,
except as specifically and individually set forth on Schedule 4.1(k) or the
other schedules hereto (specific reference to which has been made on Schedule
4.1(k)), there are no liabilities of the Company or any Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, that are material to the Company and its Subsidiaries considered as a
whole other than: (i) liabilities reflected on the Consolidated Condensed
Balance Sheet of the Company and its Subsidiaries contained in the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996 (the "September 30
Balance Sheet"); and (ii) liabilities under this Agreement.
(l) VOTE REQUIRED. In the event that Section 253 of the DGCL is
inapplicable and unavailable to effectuate the Merger, the affirmative vote of
the holders of a majority of the outstanding shares of Company Common Stock is
the only vote of the holders of any class or series of the Company's capital
stock necessary (under applicable law or otherwise) to approve the Merger and
this Agreement and the transactions contemplated hereby.
(m) Labor Matters.
(i) Neither the Company nor any of its Subsidiaries is a party to
any labor or collective bargaining agreement, and no employees of Company or any
of its Subsidiaries are represented by any labor organization. Within the
preceding three years, there have been no representation or certification
proceedings, or petitions seeking a representation
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proceeding, pending or, to the knowledge of the Company, threatened in writing
to be brought or filed with the National Labor Relations Board or any other
labor relations tribunal or authority. Within the preceding three years, to the
knowledge of Company, there have been no organizing activities involving Company
and its Subsidiaries with respect to any group of employees of Company or any of
its Subsidiaries.
(ii) There are no strikes, work stoppages, slowdowns, lockouts,
material arbitrations or material grievances or other material labor disputes
pending or threatened in writing against or involving Company or any of its
Subsidiaries. There are no unfair labor practice charges, grievances or
complaints pending or, to the knowledge of Company, threatened in writing by or
on behalf of any employee or group of employees of Company or any of its
Subsidiaries.
(iii) There are no material complaints, charges or claims against
Company or any of its Subsidiaries pending or, to the knowledge of Company,
threatened to be brought or filed with any governmental authority, arbitrator or
court based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment of any individual by Company or any of
its Subsidiaries.
(iv) Each of the Company and its Subsidiaries is in material
compliance with all laws, regulations and orders relating to the employment of
labor, including all such laws, regulations and orders relating to wages, hours,
WARN (as defined below), collective bargaining, discrimination, civil rights,
safety and health, workers' compensation and the collection and payment of
withholding and/or social security taxes and any similar tax except for
immaterial non-compliance.
(v) There has been no "mass layoff" or "plant closing" as defined
by the Worker Adjustment Retraining and Notification Act, as amended ("WARN"),
with respect to Company and its Subsidiaries within the six (6) months prior to
Closing.
(n) Intangible Property.
(i) Schedule 4.1(n) sets forth a list of each material trademark,
trade name, patent, service xxxx, brand xxxx, brand name, computer program,
database, industrial design and copyright owned, used or useful in connection
with the operation of the businesses of each of the Company and its Subsidiaries
as well as a list of all registrations thereof and pending applications
therefor, and each license or other contract relating thereto (collectively, the
"Company Intangible Property"). Except as set forth on Schedule 4.1(n), all of
the Company Intangible Property is in good standing and is owned by the Company
or its Subsidiaries free and clear of any and all liens, claims or encumbrances.
Except as set forth on Schedule 4.1(n), to the knowledge of the Company, the use
of the Company Intangible Property by the Company or its Subsidiaries does not,
in any material respect, conflict with, infringe upon, violate or interfere with
or constitute an appropriation of any right, title, interest or goodwill,
including, without limitation, any intellectual property right, trademark, trade
name, patent, service xxxx, brand xxxx, brand name, computer program, database,
industrial design, copyright or any pending
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application therefor of any other person and there have been no claims made and
neither the Company nor any of its Subsidiaries has received any notice of any
claim or otherwise knows that any of the Company Intangible Property is invalid
or conflicts with the asserted rights of any other person or has not been used
or enforced or has failed to be used or enforced in a manner that would result
in the abandonment, cancellation or unenforceability of any of the Company
Intangible Property.
(ii) Each of the Company and its Subsidiaries owns or has a right
to use all material Company Intangible Property necessary for the operation of
its respective business and has not forfeited or otherwise relinquished any
material Company Intangible Property.
(iii) Except as set forth on Schedule 4.1(n), each of the
material licenses or other contracts relating to the Company Intangible Property
(collectively, the "Company Intangible Property Licenses") is in full force and
effect and is valid and enforceable in accordance with its terms, and there is
no material default under any Company Intangible Property License either by the
Company or any of its Subsidiaries or, to the knowledge of the Company, by any
other party thereto.
(o) Environmental Matters.
(i) For purposes of this Agreement:
(A) "Environmental Costs and Liabilities" means any and all
losses, liabilities, obligations, damages, fines, penalties, judgments, actions,
claims, costs and expenses (including, without limitation, fees, disbursements
and expenses of legal counsel, experts, engineers and consultants and the costs
of investigation and feasibility studies and clean up, remove, treat, or in any
other way address any Hazardous Materials) arising from or under any
Environmental Law.
(B) "Environmental Law" means any applicable law regulating
or prohibiting Releases into any part of the natural environment, or pertaining
to the protection of natural resources, the environment and public and employee
health and safety including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C. [section] 9601
ET SEQ.), the Hazardous Materials Transportation Act (49 U.S.C. [section] 1801
ET SEQ.), the Resource Conservation and Recovery Act (42 U.S.C. [section] 6901
ET SEQ.), the Clean Water Act (33 U.S.C. [section] 1251 ET SEQ.), the Clean Air
Act (33 U.S.C. [section] 7401 ET SEQ.), the Toxic Substances Control Act (15
U.S.C. [section] 7401 ET SEQ.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. [section] 136 ET SEQ.), and the Occupational Safety
and Health Act (29 U.S.C. [section] 651 ET SEQ.) ("OSHA") and the regulations
promulgated pursuant thereto, and any such applicable state or local statutes,
including, without limitation, the Industrial Site Recovery Act ("ISRA"), and
the regulations promulgated pursuant thereto, as such laws have been and may be
amended or supplemented through the Closing Date;
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(C) "Hazardous Material" means any substance, material or
waste which is regulated by any public or governmental authority in the
jurisdictions in which the applicable party or its Subsidiaries conducts
business, or the United States, including, without limitation, any material or
substance which is defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste," "contaminant," "toxic waste" or "toxic substance" under any provision of
Environmental Law and shall also include, without limitation, petroleum,
petroleum products, asbestos, polychlorinated biphenyls and radioactive
materials;
(D) "Release" means any release, spill, effluent, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching,
or migration into the indoor or outdoor environment, or into or out of any
property; and
(E) "Remedial Action" means all actions, including, without
limitation, any capital expenditures, required by a governmental entity or
required under any Environmental Law, or voluntarily undertaken to (I) clean up,
remove, treat, or in any other way ameliorate or address any Hazardous Materials
or other substance in the indoor or outdoor environment; (II) prevent the
Release or threat of Release, or minimize the further Release of any Hazardous
Material so it does not endanger or threaten to endanger the public health or
welfare of the indoor or outdoor environment; (III) perform pre-remedial studies
and investigations or post-remedial monitoring and care pertaining or relating
to a Release; or (IV) bring the applicable party into compliance with any
Environmental Law.
Except as set forth in the SEC Documents or Schedule 4.1(o):
(ii) The operations of the Company and its Subsidiaries have been
and, as of the Closing Date, will be, in compliance in all material respects
with all Environmental Laws;
(iii) The Company and its Subsidiaries have obtained and will, as
of the Closing Date, maintain all permits required under applicable
Environmental Laws for the continued operations of their respective businesses,
except such permits the lack of which would not materially impair the ability of
the Company and its Subsidiaries to continue operations;
(iv) The Company and its Subsidiaries are not subject to any
outstanding written orders or material contracts with any Governmental Entity or
other person respecting (A) Environmental Laws, (B) Remedial Action or (C) any
Release or threatened Release of a Hazardous Material;
(v) The Company and its Subsidiaries have not received any
written communication alleging, with respect to any such party, the violation of
or liability under any Environmental Law, which violation or liability is
outstanding;
(vi) Neither the Company nor any of its Subsidiaries has any
contingent liability in connection with the Release of any Hazardous Material
into the indoor or
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outdoor environment (whether on-site or off-site) which would
be reasonably likely to result in the Company and its Subsidiaries incurring
Environmental Costs and Liabilities in excess of $250,000;
(vii) There is not now, nor to the knowledge of the Company has
there been in the past, on or in any property of the Company or its Subsidiaries
any of the following: (A) any underground storage tanks or surface impoundments,
(B) any asbestos-containing materials, or (C) any polychlorinated biphenyls;
(viii) No judicial or administrative proceedings are pending or,
to the knowledge of the Company, threatened against the Company and its
Subsidiaries alleging the violation of or seeking to impose liability pursuant
to any Environmental Law and there are no investigations pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries under Environmental Laws;
(ix) None of the exceptions set forth on Schedule 4.1(o) are
reasonably likely to result in the Company and its Subsidiaries incurring
Environmental Costs and Liabilities in excess of $250,000 individually or
$500,000 in the aggregate; and
(x) The Company and its Subsidiaries have provided Parent with
copies of all environmentally related audits, assessments, studies, reports,
analyses, and results of investigations prepared within the past 5 years of any
real property currently or formerly owned, operated or leased by the Company or
its Subsidiaries that are in the possession, custody or control of the Company
or any of its Subsidiaries.
(p) Real Property.
(i) Neither the Company nor any of its Subsidiaries owns any real
property, other than Company's Malaysian subsidiary's interest, if any, in the
improvements located on the real property leased by such subsidiary.
(ii) Schedule 4.1(p)(ii) sets forth all leases, subleases and
other agreements (the "Real Property Leases") under which the Company or any of
its Subsidiaries uses or occupies or has the right to use or occupy, now or in
the future, any real property. The Company has heretofore delivered to Parent
true, correct and complete copies of all Real Property Leases (including all
modifications, amendments and supplements hereto). Each Real Property Lease is
valid, binding and in full force and effect, all rent and other sums and charges
payable by the Company and its Subsidiaries as tenants thereunder are current,
no termination event or condition or uncured default of a material nature on the
part of the Company or any such Subsidiary or, to the Company's knowledge, the
landlord, exists under any Real Property Lease. Each of the Company and its
Subsidiaries has a good and valid leasehold interest in each parcel of real
property leased by it free and clear of all mortgages, pledges, liens,
encumbrances and security interests, except (i) those reflected or reserved
against in the September 30 Balance Sheet; (ii) taxes and general and special
assessments not in default and payable without penalty
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and interest; (iii) superior rights of lessors' lenders as permitted by such
leases; and (iv) as set forth on Schedule 4.1(p)(ii).
(q) INSURANCE. Set forth on Schedule 4.1(q) is a list and description
of insurance policies (including information on the premiums payable in
connection therewith and the scope and amount of the coverage and deductibles
provided thereunder) maintained by the Company or any of its Subsidiaries which
policies have been issued by reputable and financially sound insurers and
provide adequate coverage for the operations conducted by the Company and its
Subsidiaries in accordance with customary industry practice.
(r) BOARD RECOMMENDATION. The Board of Directors of the Company,
at a meeting duly called and held, has by the vote of those directors present
(who constituted 100% of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, and the execution and delivery of the Stockholders Agreement and the
transactions contemplated thereby, taken together, are fair to and in the best
interests of the stockholders of the Company and has approved the same, and (ii)
resolved to recommend that the holders of the shares of Company Common Stock
approve this Agreement and the transactions contemplated herein, including the
Merger, and accept the Offer and tender their shares of Company Common Stock
pursuant thereto.
(s) MATERIAL CONTRACTS. Each contract, agreement or other document or
instrument (collectively "SEC Contracts") to which the Company or any of its
Subsidiaries is a party that was required to be filed as an exhibit to the
Company's annual report on Form 10-K for the year ended December 31, 1995 was so
filed and, neither the Company nor any of its Subsidiaries (A) has entered into,
from and after December 31, 1995, any contract, agreement or other document or
instrument (other than this Agreement) that is required to be filed with the SEC
that has not been so filed on or before the date of this Agreement or any
amendment, modification or waiver under any contract, agreement or other
document or instrument that was previously so filed, which amendment,
modification or waiver is required to be so filed (collectively "Additional SEC
Contracts") or (B) except as listed on Schedule 4.1(s), is a party to any oral
or written agreement, plan or arrangement with any officer, director or employee
of the Company or any Subsidiary of the Company (collectively "Material
Employment Contracts" and together with the SEC Contracts and Additional SEC
Contracts, the "Material Contracts") (1) the benefits of which are contingent,
or the terms of which are materially altered, upon the occurrence of a
transaction involving the Company of the nature of any of the transactions
contemplated by this Agreement, (2) providing severance benefits or other
benefits after the termination of employment regardless of the reason for such
termination of employment, (3) under which any person may receive payments
subject to the tax imposed by Section 4999 of the Code, or (4) any of the
benefits of which will be increased, or by vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement. Except as set
forth on Schedule 4.1(s), each Material Contract is a valid and binding
obligation of the parties thereto and is in full force and effect without
amendment. Except as set forth on Schedule 4.1(s), each party has performed all
obligations required to be performed by it through the date hereof under the
Material Contracts
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and is not (with or without lapse of time or giving notice, or both) in breach
or default in any respect thereunder.
(t) RELATED PARTY TRANSACTIONS. Except as set forth on Schedule 4.1(t)
hereto, no director, officer, partner, employee, "affiliate" or "associate" (as
such terms are defined in Rule 12b-2 under the Exchange Act) of the Company or
any of its Subsidiaries (i) has outstanding any indebtedness or other similar
obligations to the Company or any of its Subsidiaries; (ii) to the knowledge of
the Company, owns any direct or indirect interest of any kind in, or is a
director, officer, employee, partner, affiliate or associate of, or consultant
or lender to, or borrower from, or has the right to participate in the
management, operations or profits of, any person or entity which is (1) a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of the Company or any of its Subsidiaries, (2) engaged in a business related to
the business of the Company or any of its Subsidiaries or (3) participating in
any transaction to which the Company or any of its Subsidiaries is a party or
(iii) is otherwise a party to any contract, arrangement or understanding with
the Company or any of its Subsidiaries.
(u) INDEBTEDNESS. Except as set forth on Schedule 4.1(u), or reflected
in the SEC Documents or the Company's financial statements provided to Parent,
neither the Company nor any of its Subsidiaries has any outstanding indebtedness
for borrowed money or representing the deferred purchase price of property or
services or similar liabilities or obligations, including any guarantee in
respect thereof ("Indebtedness"), or is a party to any agreement, arrangement or
understanding providing for the creation, incurrence or assumption thereof.
(v) LIENS. Except as set forth on Schedule 4.1(v) or reflected in the
SEC Documents or in the Company's financial statements provided to Parent,
neither the Company nor any of its Subsidiaries has granted, created or suffered
to exist with respect to any of its assets, any mortgage, pledge, charge,
hypothecation, collateral assignment, lien (statutory or otherwise), encumbrance
or security agreement of any kind or nature whatsoever.
4.2 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF PARENT AND SUB. Parent
and Sub represent and warrant and as provided in paragraphs (f), (g), or (h)
covenant to the Company as follows:
(a) ORGANIZATION, STANDING AND POWER. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation or organization, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to conduct
business in each jurisdiction in which the business it is conducting, or the
operation, ownership or leasing of its properties, makes such qualification
necessary, other than in such jurisdictions where the failure so to qualify
would not have a Material Adverse Effect with respect to Parent. Parent and Sub
have heretofore made available to the Company complete and correct copies of
their respective Certificates of Incorporation and Bylaws.
(b) AUTHORITY; NO VIOLATIONS; CONSENTS AND APPROVALS.
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(i) Each of Parent and Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Parent and Sub. This Agreement
has been duly executed and delivered by each of Parent and Sub and assuming this
Agreement constitutes the valid and binding agreement of the Company,
constitutes a valid and binding obligation of Parent and Sub enforceable in
accordance with its terms except that the enforcement hereof may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by each of Parent and Sub
will not result in any Violation (as defined in Section 4.1(c)(ii)) pursuant to
any provision of the respective Articles or Certificates of Incorporation or
Bylaws of Parent or Sub or, except as to which requisite waivers or consents
have been obtained and assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in paragraph (iii) of this
Section 4.2(b) are duly and timely obtained or made and, if required, the
Company Stockholder Approval has been obtained, result in any Violation of any
loan or credit agreement, note, mortgage, indenture, lease, or other agreement,
obligation, instrument, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or Sub or their
respective properties or assets, which would have a Material Adverse Effect with
respect to Parent.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, notice to, or permit from any
Governmental Entity, is required by or with respect to Parent or Sub in
connection with the execution and delivery of this Agreement by each of Parent
and Sub or the consummation by each of Parent or Sub of the transactions
contemplated hereby, except for: (A) filings under the HSR Act; (B) the filing
with the SEC of (x) the Schedule 14D-1 in connection with the commencement and
consummation of the Offer and (y) such reports under and such other compliance
with the Exchange Act and the rules and regulations thereunder, as may be
required in connection with this Agreement and the transactions contemplated
hereby; (C) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware; and (D) such filings and approvals as may be required
by any applicable state securities, "blue sky" or takeover laws.
(c) Information Supplied. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in (i)
the Schedule 14D-9 will, at the time the Schedule 14D-9 is filed with the SEC,
and at any time it is amended or supplemented, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and (ii) the Proxy Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be
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stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Parent or Sub, or with
respect to information supplied by Parent or Sub for inclusion in the Schedule
14D-9 or the Proxy Statement, shall occur which is required to be described in
an amendment of, or a supplement to, such documents, such event shall be so
described to the Company.
(d) BOARD RECOMMENDATION. The Boards of Directors of the Parent and
Sub at meetings duly called and held, has by the unanimous vote of their
directors determined that each of the Offer and the Merger is fair to and in the
best interests of Parent and Sub and has approved the same.
(e) FINANCING. Parent and Sub have delivered to the Company true and
complete copies of commitments obtained by Parent and Sub from third parties in
respect of the debt financing for the transactions contemplated hereby.
(f) CHANGES IN FINANCING. Parent and Sub will as promptly as
practicable notify the Company of any material fact, act or omission known to
either Parent or Sub which would reasonably be likely to affect the ability or
obligation of Bank of Boston or any other person providing debt financing
to provide the financing necessary to consummate the Offer or the Merger.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 COVENANTS OF THE COMPANY. During the period from the date of this
Agreement and continuing until the Effective Time, the Company agrees as to the
Company and its Subsidiaries that (except as expressly contemplated or permitted
by this Agreement, or to the extent that Parent shall otherwise consent in
writing):
(a) ORDINARY COURSE. Each of the Company and its Subsidiaries shall
carry on its businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and shall use all
reasonable efforts to preserve intact its present business organizations, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall not be impaired in
any material respect at the Effective Time.
(b) DIVIDENDS; CHANGES IN STOCK. The Company shall not, nor shall it
permit any of its Subsidiaries to: (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock; (ii) split, combine
or reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock; or (iii) repurchase or otherwise acquire, or
permit any Subsidiary to purchase or otherwise acquire, any shares of its
capital stock, except as required by
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the terms of its securities outstanding on the date hereof, as contemplated by
this Agreement or as contemplated by employee benefit and dividend reinvestment
plans as in effect on the date hereof.
(c) ISSUANCE OF SECURITIES. The Company shall not, nor shall it permit
any of its Subsidiaries to, (i) grant any options, warrants or rights, to
purchase shares of Company Common Stock, (ii) amend or reprice any Option or
Stock Option Plan, or (iii) issue, deliver or sell, or authorize or propose to
issue, deliver or sell, any shares of its capital stock of any class or series,
any Company Voting Debt or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, Company Voting Debt or
convertible securities, other than: (A) the issuance of Shares upon the exercise
of Options granted under Stock Option Plans which are outstanding on the date
hereof, or in satisfaction of stock grants or stock based awards made prior to
the date hereof pursuant to Stock Option Plans or based upon any individual
agreements such as employment agreements or executive termination agreements (in
each such case, as in effect on the date hereof); and (B) issuances by a
wholly-owned Subsidiary of its capital stock to its parent.
(d) GOVERNING DOCUMENTS. The Company shall not amend or propose to
amend its Certificate of Incorporation or Bylaws.
(e) NO SOLICITATION. From and after the date hereof until the
termination of this Agreement, neither the Company or any of its Subsidiaries,
nor any of their respective officers, directors, employees, representatives,
agents or affiliates (including, without limitation, any investment banker,
attorney or accountant retained by the Company or any of its Subsidiaries) (such
officers, directors, employees, representatives, agents, affiliates, investment
bankers, attorneys and accountants being referred to herein, collectively, as
"Representatives"), will, directly or indirectly, initiate, solicit or encourage
(including by way of furnishing information or assistance to any person making,
or as a result thereof may reasonably be expected to lead to, any Acquisition
Proposal), or take any other action to facilitate, any inquiries or the making
of any proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below), or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, and neither the Company nor any of its Subsidiaries will
authorize or permit any of its Representatives to take any such action, and the
Company shall notify Parent orally (within one business day) and in writing (as
promptly as practicable) of all of the relevant details relating to, and all
material aspects of, all inquiries and proposals which it or any of its
Subsidiaries or any of their respective Representatives may receive relating to
any of such matters and, if such inquiry or proposal is in writing, the Company
shall deliver to Parent a copy of such inquiry or proposal promptly; provided,
however, that nothing contained in this Section 5.1(e) shall prohibit the Board
of Directors of the Company from:
(i) furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited written, bona
fide Acquisition Proposal and in respect of which such person or entity has, or
in the reasonable and good faith
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opinion of the Board of Directors or its Representatives, will have the
necessary funds or commitments therefor if, and only to the extent that, (A) the
Board of Directors of the Company, after consultation with and based upon the
advice of independent legal counsel (who may be the Company's regularly engaged
independent legal counsel), determines in good faith that such action is
necessary for the Board of Directors of the Company to comply with its fiduciary
duties to stockholders under applicable law, (B) prior to taking such action,
the Company (x) provides reasonable prior notice to Parent to the effect that it
is taking such action and (y) receives from such person or entity an executed
confidentiality agreement in reasonably customary form, and (C) the Company
shall, unless prohibited by its fiduciary duty to its stockholders, promptly and
continuously advise Parent as to all of the relevant details relating to, and
all material aspects, of any such discussions or negotiations, or
(ii) failing to make or withdrawing or modifying its
recommendation referred to in Section 4.1 if there exists an Acquisition
Proposal and the Board of Directors of the Company, after consultation with and
based upon the advice of independent legal counsel (who may be the Company's
regularly engaged independent counsel), determines in good faith that such
action is necessary for the Board of Directors of the Company to comply with its
fiduciary duties to stockholders under applicable law.
For purposes of this Agreement, "Acquisition Proposal" shall mean any of the
following (other than the transactions between the Company, Parent and Sub
contemplated hereunder) involving the Company or any of its Subsidiaries: (i)
any merger, consolidation, share exchange, recapitalization, business
combination, or other similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 10% or more of the assets of
the Company and its Subsidiaries, taken as a whole, in a single transaction or
series of transactions; (iii) any tender offer or exchange offer for 10% or more
of the outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
(f) NO ACQUISITIONS. The Company shall not, nor shall it permit any of
its Subsidiaries to, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof.
(g) NO DISPOSITIONS. Other than dispositions in the ordinary course of
business consistent with past practice which are not material, individually or
in the aggregate, to such party and its Subsidiaries taken as a whole, the
Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease,
encumber or otherwise dispose of, or agree to sell, lease (whether such lease is
an operating or capital lease), encumber or otherwise dispose of, any of its
assets.
(h) SEC FILINGS. The Company shall promptly provide Parent (or its
counsel) with copies of all filings made by the Company with the SEC or any
other state or federal
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Governmental Entity in connection with this Agreement and the transactions
contemplated hereby.
(i) NO DISSOLUTION, ETC. Except as otherwise permitted or contemplated
by this Agreement, the Company shall not, nor shall it permit any of its
Subsidiaries to, authorize, recommend, propose or announce an intention to adopt
a plan of complete or partial liquidation or dissolution of the Company or any
of its Subsidiaries.
(j) OTHER ACTIONS. Except as contemplated by this Agreement, the
Company will not nor will it permit any of its Subsidiaries to take or agree or
commit to take any action that is reasonably likely to result in any of the
Company's representations or warranties hereunder being untrue in any material
respect or in any of the Company's covenants hereunder or any of the conditions
to the Merger not being satisfied in all material respects.
(k) CERTAIN EMPLOYEE MATTERS. The Company and its Subsidiaries shall
not (without the prior written consent of Parent): (i) grant any increases in
the compensation of any of its directors, officers or key employees; (ii) pay or
agree to pay any pension, retirement allowance or other employee benefit not
required or contemplated by any of the existing Company Benefit Plans or Company
Pension Plans as in effect on the date hereof to any such director, officer or
key employee, whether past or present; (iii) enter into any new, or materially
amend any existing, employment or severance or termination agreement with any
such director, officer or key employee; or (iv) except as may be required to
comply with applicable law, become obligated under any new Company Employee
Benefit Plan or Company Pension Plan, which was not in existence on the date
hereof, or amend any such plan or arrangement in existence on the date hereof if
such amendment would have the effect of materially enhancing any benefits
thereunder.
(l) INDEBTEDNESS; AGREEMENTS. (i) Except as set forth on Schedule
5.1(l)(i), the Company shall not, nor shall the Company permit any of its
Subsidiaries to, assume or incur (which shall not be deemed to include entering
into credit agreements, lines of credit or similar arrangements until borrowings
are made under such arrangements) any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or warrants
or rights to acquire any debt securities of such party or any of its
Subsidiaries or guarantee any debt securities of others or enter into any lease
(whether such lease is an operating or capital lease) or create any mortgages,
liens, security interests or other encumbrances on the property of the Company
or any of its Subsidiaries in connection with any indebtedness thereof, or enter
into any "keep well" or other agreement or arrangement to maintain the financial
condition of another person.
(ii) Except as set forth on Schedule 5.1(1)(ii) the Company shall
not, nor shall the Company permit any of its Subsidiaries to, enter into,
modify, rescind, terminate, waive, release or otherwise amend in any material
respect any of the terms or provisions of any Material Contract.
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(m) ACCOUNTING. The Company shall not take any action, other than in
the ordinary course of business, consistent with past practice or as required by
the SEC or by law, with respect to accounting policies, procedures and
practices.
(n) CAPITAL EXPENDITURES. Except for the capital expenditures set
forth on Schedule 5.1(n), the Company and its Subsidiaries shall not incur any
capital expenditures that, in the aggregate, are in excess of $1,000,000.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 PREPARATION OF THE PROXY STATEMENT; COMPANY STOCKHOLDERS MEETING;
MERGER WITHOUT A COMPANY STOCKHOLDERS MEETING. (a) As soon as practicable
following the acceptance for payment of and payment for shares of Company Common
Stock by Sub in the Offer, the Company and Parent shall prepare and file with
the SEC the Proxy Statement. The Company shall use its best efforts to respond
to all SEC comments with respect to the Proxy Statement and to cause the Proxy
Statement to be mailed to the Company's stockholders at the earliest practicable
date.
(b) The Company will, as soon as practicable following the acceptance
for payment of and payment for shares of Company Common Stock by Sub in the
Offer, duly call, give notice of, convene and hold the Company Stockholders
Meeting for the purpose of approving this Agreement and the transactions
contemplated hereby. At the Company Stockholders Meeting, Parent shall cause all
of the shares of Company Common Stock then owned by Parent and Sub and any of
their Subsidiaries or affiliates to be voted in favor of the Merger.
(c) Notwithstanding the foregoing clauses (a) and (b), in the event
that Parent or any other Subsidiary of Parent shall acquire at least 90% of the
outstanding shares of Company Common Stock in the Offer, the parties hereto
agree, at the request of Sub, to take all necessary and appropriate action to
cause the Merger to become effective, as soon as practicable after the
expiration of the Offer, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
(d) Parent shall (i) cause Sub promptly to submit this Agreement and
the transactions contemplated hereby for approval and adoption by its parent by
written consent of sole stockholder; (ii) cause the shares of capital stock of
Sub to be voted for adoption and approval of this Agreement and the transactions
contemplated hereby; and (iii) cause to be taken all additional actions
necessary for Sub to adopt and approve this Agreement and the transactions
contemplated hereby.
6.2 ACCESS TO INFORMATION. Upon reasonable notice, each of the Company or
Parent, as the case may be, shall (and shall cause each of its Subsidiaries to)
afford to the officers, employees, accountants, counsel and other
Representatives of the other party (including, in the
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case of Parent and Sub, potential financing sources and their employees,
accountants, counsel and other representatives), access, during normal business
hours during the period prior to the Effective Time, to all its properties,
books, contracts, commitments and records and, during such period, such party
shall (and shall cause each of its Subsidiaries to) furnish promptly to the
other party, (a) a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to SEC
requirements and (b) all other information concerning its business, properties
and personnel as such other party may reasonably request. The Confidentiality
Agreement between Parent and the Company (the "Confidentiality Agreement") shall
apply with respect to information furnished thereunder or hereunder and any
other activities contemplated thereby.
6.3 LEGAL CONDITIONS TO MERGER. Each of the Company, Parent and Sub will
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on such party with respect to the Offer, the
Merger and the transactions contemplated by the Stockholders Agreement
(including furnishing all information required under the HSR Act and in
connection with approvals of or filings with any other Governmental Entity) and
will promptly cooperate with and furnish information to each other in connection
with any such requirements imposed upon any of them or any of their Subsidiaries
in connection with the Offer, the Merger and the transactions contemplated by
the Stockholders Agreement; provided, however, that Parent need not so comply if
required by the Department of Justice or any other Governmental Entity to hold
separate, sell or otherwise dispose of any Subsidiary of Parent or the Company
or assets or properties of any of the foregoing. Each of the Company, Parent and
Sub will, and will cause its Subsidiaries to, take all reasonable actions
necessary to obtain (and will cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party, required to be
obtained or made by the Company, Parent or any of their Subsidiaries in
connection with the Offer, the Merger, the Stockholders Agreement or the taking
of any action contemplated hereby or thereby.
6.4 FEES AND EXPENSES. (a) Except as otherwise provided in this Section 6.4
and except with respect to claims for damages incurred as a result of the breach
of this Agreement, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expense.
(b) The Company agrees to pay Parent a fee in immediately available
funds equal to $3,000,000 (the "Termination Fee") as provided under Section
8.1(g).
(c) The Company agrees to pay Parent a fee in immediately available
funds equal to $3,000,000 upon the termination of this Agreement under Section
8.1(h), if any of the events set forth below occurs (each, a "Trigger Event"):
(i) the Board of Directors of the Company shall have withdrawn or
adversely modified, or taken a public position materially inconsistent with, its
approval or recommendation of the Offer, the Merger, this Agreement or the
Stockholders Agreement; or
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(ii) an Acquisition Proposal has been recommended or accepted by
the Company or the Company shall have entered into an agreement (other than a
confidentiality agreement as contemplated by Section 5.1(e)) with respect to an
Acquisition Proposal.
(d) Any amounts due under this Section 6.4 that are not paid when due
shall bear interest at the rate of 9% per annum from the date due through and
including the date paid.
6.5 BROKERS OR FINDERS. (a) The Company represents, as to itself, its
Subsidiaries and its affiliates, that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any broker's
or finders fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement, except Xxxxxxxxx, Xxxxxxxx &
Company, whose fees and expenses will be paid by the Company in accordance with
the Company's agreements with such firm (copies of which have been delivered by
the Company to Parent prior to the date of this Agreement).
(b) Parent represents, as to itself, its Subsidiaries and its
affiliates, that no agent, broker, investment banker, financial advisor or other
firm or person is or will be entitled to any broker's or finders fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except Xxxxxxxxx, Xxxxxxxx & Company, whose fees
and expenses will be paid by the Company in accordance with the Company's
agreements with such firm.
6.6 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) The Company
shall, and from and after the Effective Time, the Parent and Surviving
Corporation shall, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer or director of, or agent, attorney or advisor to, the
Company or any of its Subsidiaries (the "Indemnified Parties") against all
losses, claims, damages, costs, expenses (including reasonable attorneys' fees
and expenses), liabilities or judgments or amounts that are paid in settlement
with the approval of the indemnifying party of or in connection with any
threatened or actual claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of the fact that such
person is or was a director or officer of, or agent, attorney or advisor to, the
Company or any of its Subsidiaries whether pertaining to any matter existing or
occurring at or prior to the Effective Time and whether asserted or claimed
prior to, or at or after, the Effective Time ("Indemnified Liabilities"),
including all Indemnified Liabilities based in whole or in part on, or arising
in whole or in part out of, or pertaining to this Agreement or the transactions
contemplated hereby, in each case to the full extent a corporation is permitted
under the DGCL to indemnify its own directors or officers as the case may be
(and Parent and the Surviving Corporation, as the case may be, will pay expenses
in advance of the final disposition of any such action or proceeding to each
Indemnified Party to the full extent permitted by law). Without limiting the
foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Parties (whether arising before
or after the Effective Time), (i) the Indemnified Parties may retain counsel
satisfactory to them and the Company (or them and the Surviving Corporation
after the Effective Time) and the Company (or after the Effective Time, the
Surviving Corporation) shall pay all fees and expenses of such counsel for the
Indemnified
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Parties promptly as statements therefor are received; and (ii) the Company (or
after the Effective Time, the Surviving Corporation) will use all reasonable
efforts to assist in the vigorous defense of any such matter, provided that
neither the Company nor the Surviving Corporation shall be liable for any
settlement effected without its prior written consent. Any Indemnified Party
wishing to claim indemnification under this Section 6.6, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify the Company
(or after the Effective Time, the Surviving Corporation) (but the failure so to
notify shall not relieve a party from any liability which it may have under this
Section 6.6 except to the extent such failure prejudices such party), and shall
to the extent required by the DGCL deliver to the Company (or after the
Effective Time, the Surviving Corporation) the undertaking contemplated by
Section 145(e) of the DGCL. The Indemnified Parties as a group may retain only
one law firm to represent them with respect to each such matter unless there is,
under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more Indemnified Parties.
The Company, Parent and Sub agree that all rights to indemnification, including
provisions relating to advances of expenses incurred in defense of any action or
suit, existing in favor of the Indemnified Parties with respect to matters
occurring through the Effective Time, shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time; provided, however, that all rights to indemnification in
respect of any Indemnified Liabilities asserted or made within such period shall
continue until the disposition of such Indemnified Liabilities.
(b) For a period of two years after the Effective Time, the Surviving
Corporation shall cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by the Company and its
Subsidiaries (provided that Parent may substitute therefor policies issued by
Insurers of comparable financial strength and integrity or of at least the same
coverage and amounts containing terms and conditions which are no less
advantageous in any material respect to the Indemnified Parties) with respect to
matters arising before the Effective Time, provided that Parent shall not be
required to pay an annual premium for such insurance in excess of 150% of the
last annual premium paid by the Company prior to the date hereof, but in such
case shall purchase as much coverage as possible for such amount.
(c) The provisions of this Section 6.6 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his heirs and
his personal representatives and shall be binding on all successors and assigns
of Sub, the Company and the Surviving Corporation.
6.7 BEST EFFORTS. Subject to the terms and conditions of this Agreement,
each of the parties hereto agrees to use its best efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement and the Stockholders
Agreement, subject, as applicable, to the Company Stockholder Approval,
including cooperating fully with the other party, including by provision of
information and making of all necessary filings in connection with, among other
things, approvals under the HSR Act. In case at any time after the Effective
Time, any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
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properties, assets, rights, approvals, immunities and franchises of either of
the Constituent Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
6.8 CONDUCT OF BUSINESS OF SUB. During the period of time from the date of
this Agreement to the Effective Time, Sub shall not engage in any activities of
any nature except as provided in or contemplated by this Agreement.
6.9 PUBLICITY. The parties will consult with each other and will mutually
agree upon any press release or public announcement pertaining to the Offer and
the Merger and shall not issue any such press release or make any such public
announcement prior to such consultation and agreement, except as may be required
by applicable law or by obligations arising under the Company's listing
agreement with NASDAQ, in which case the party proposing to issue such press
release or make such public announcement shall use reasonable efforts to consult
in good faith with the other party before issuing any such press release or
making any such public announcement.
6.10 OPINION OF FINANCIAL ADVISOR. The Company has received the opinion
(the "Fairness Opinion") of Xxxxxxx & Co. to the effect that, as of the date
thereof, the Offer Consideration to be received by the holders of Company Common
Stock in the Offer and the Merger Consideration to be received by the holders of
Company Common Stock in the Merger is fair from a financial point of view to
such holders, a signed, true and complete copy of which opinion has been
delivered to Parent.
6.11 LIMITATION ON THE COMPANY'S LEGAL AND INVESTMENT BANKING FEES. The
Company agrees that the legal fees and investment banking and/or consulting fees
(including, without limitation, the fees of Gateway Advisors and Xxxxxxx & Co.)
incurred or to be incurred by the Company in connection with the transactions
contemplated hereby (excluding any fees arising as a result of any challenge to
this Agreement) shall in no event exceed $3,101,000 in the aggregate.
ARTICLE VII
CONDITIONS PRECEDENT
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
satisfaction prior to the Closing Date of the following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall have
been approved and adopted by the affirmative vote of the holders of a majority
of the Shares entitled to vote thereon if such vote is required by applicable
law; PROVIDED that the Parent and Sub shall vote all Shares purchased pursuant
to the Offer or the Stockholders Agreement in favor of the Merger.
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(b) HSR ACT. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger shall be in effect; provided, however,
that prior to invoking this condition, each party shall use all commercially
reasonable efforts to have any such decree, ruling, injunction or order vacated.
7.2 CONDITIONS OF OBLIGATIONS OF PARENT AND SUB. The obligations of Parent
and Sub to effect the Merger are subject to the satisfaction of the following
conditions, any or all of which may be waived in whole or in part by Parent and
Sub:
(a) PAYMENT FOR SHARES. Sub shall have accepted for payment and become
obligated to pay for the shares of Company Common Stock tendered in the Offer
such that, after such acceptance and payment, Parent and its affiliates shall
own, at consummation of the Offer, a majority of the outstanding shares of the
Company Common Stock.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and Parent shall have received a certificate
signed on behalf of the Company by the chief executive officer and by the chief
financial officer of the Company to such effect.
(c) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and by the chief financial officer of the Company to such effect.
(d) CONSENTS, ETC. All licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and all
material licenses, permits, consents, approvals, authorizations, qualifications
and orders of other third parties as are necessary in connection with the
transactions contemplated hereby shall have been obtained.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after
approval of the matters presented in connection with the Merger by the
stockholders of the Company or Parent:
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(a) by mutual written consent of the Company and Parent, or by mutual
action of their respective Boards of Directors;
(b) by either the Company or Parent prior to the consummation of the
Offer (i) if there has been a material breach (for purpose of this clause, a
material breach shall mean a breach or series of breaches the result of which
impairs the value of the Company or could reasonably be expected to impair the
value of the Company by more than $1.75 million in the aggregate) of any
representation, warranty, covenant or agreement on the part of the other set
forth in this Agreement which breach has not been cured within three business
days following receipt by the breaching party of notice of such breach, or (ii)
if any permanent injunction or other order of a court or other competent
authority preventing the consummation of the Merger shall have become final and
non-appealable;
(c) by either the Company or Parent if the Merger shall not have been
consummated on or before June 30, 1997; provided, that the right to terminate
this Agreement under this Section 8.1(c) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause
of or resulted in the failure of the Merger to occur on or before such date;
(d) by Parent in the event an Acquisition Proposal has been made to
the Company and the Company shall fail to reaffirm its approval or
recommendation of the Offer, the Merger, this Agreement and the Stockholders
Agreement on or before the fifth business day following the date on which such
Acquisition Proposal shall have been made;
(e) by Parent, if the Offer terminates, is withdrawn, abandoned or
expires by reason of the failure to satisfy any condition set forth in EXHIBIT A
hereto;
(f) by the Company, if the Offer shall have expired or have been
withdrawn, abandoned or terminated without any shares of Company Common Stock
being purchased by Sub thereunder on or prior to the 120th day after the date of
commencement of the Offer pursuant to Section 1.2 hereof;
(g) by the Company, if on or prior to 5:00 p.m. Pacific Standard Time
on December 4, 1996, the Company gives written notice to Parent of its intention
to terminate this Agreement pursuant to this Section and (A) at or prior to such
time either (1) the Company has not received the Fairness Opinion under Section
6.10 or (2) the Company has received a bona fide Acquisition Proposal as defined
in paragraph 5.1(e), and (B) in each case, the Company has paid the Termination
Fee by wire transfer to an account of Parent no later than Noon Pacific Standard
Time on December 5, 1996. The parties acknowledge that if the Company fails to
either provide the notice by the time set forth above or pay the Termination Fee
by the time set forth above, the Company's right pursuant to this Section to
terminate this Agreement shall become null and void; or
(h) by Parent or Company in the event that a Trigger Event has
occurred under Section 6.4(c)(i) or (ii).
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8.2 EFFECT OF TERMINATION. In the event of termination of this Agreement by
either the Company or Parent as provided in Section 8.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of Parent, Sub or the Company or their respective affiliates, officers,
directors or shareholders except (i) with respect to this Section 8.2, the
second sentence of Section 6.2, and Section 6.4, and (ii) for any breach by a
party hereto of any of its representations or warranties, or of any of its
covenants or agreements as set forth in this Agreement except as provided in
Section 9.7.
8.3 AMENDMENT. Subject to applicable law, this Agreement may be amended,
modified or supplemented only by written agreement of Parent, Sub and the
Company at any time prior to the Effective Date with respect to any of the terms
contained herein; provided, however, that, after this Agreement is approved by
the Company's stockholders, no such amendment or modification shall reduce the
amount or change the form of consideration to be delivered to the stockholders
of the Company.
8.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the parties
hereto, by action taken or authorized by their respective Boards of Directors,
may, to the extent legally allowed: (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto; and (iii) waive compliance with any of the
agreements or conditions 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 a
written instrument signed on behalf of such party. The failure of any party
hereto to assert any of its rights hereunder shall not constitute a waiver of
such rights.
ARTICLE IX
GENERAL PROVISIONS
9.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None of the
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for the agreements contained in Article III, and Section 6.6
hereof. The Confidentiality Agreement shall survive the execution and delivery
of this Agreement, and the provisions of the Confidentiality Agreement shall
apply to all information and material delivered by any party hereunder.
9.2 NOTICES. Any notice or communication required or permitted hereunder
shall be in writing and either delivered personally, telegraphed or telecopied
or sent by certified or registered mail, postage prepaid, and shall be deemed to
be given, dated and received when so delivered personally, telegraphed or
telecopied or, if mailed, five business days after the date of mailing to the
following address or telecopy number, or to such other address or addresses as
such person may subsequently designate by notice given hereunder:
(a) if to Parent or Sub, to:
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Hadco Corporation
00X Xxxxx Xxxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Company, to:
Zycon Corporation
000 Xx Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies to:
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxxxxxx Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxxxx L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
9.3 INTERPRETATION. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. The table of contents, glossary of defined terms and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the word
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available.
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9.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF OWNERSHIP.
This Agreement (together with the Confidentiality Agreement, the Stockholders
Agreement and any other documents and instruments referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereto and, except as provided in Section 6.6, is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
9.6 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
9.7 NO REMEDY IN CERTAIN CIRCUMSTANCES. Each party agrees that, should any
court or other competent authority hold any provision of this Agreement or part
hereof to be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby, unless the foregoing inconsistent action or the failure to
take an action constitutes a material breach of this Agreement or makes the
Agreement impossible to perform in which case this Agreement shall terminate
pursuant to Article VIII hereof. Except as otherwise contemplated by this
Agreement, to the extent that a party hereto took an action inconsistent
herewith or failed to take action consistent herewith or required hereby
pursuant to an order or judgment of a court or other competent authority, such
party shall incur no liability or obligation unless such party did not in good
faith seek to resist or object to the imposition or entering of such order or
judgment.
9.8 ASSIGNMENT. 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, except that Sub may assign, in its sole discretion, any or all of its
rights, interests and obligations hereunder to any newly-formed direct
wholly-owned Subsidiary of Parent. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
HADCO CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
HADCO ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
ZYCON CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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EXHIBIT A
---------
The capitalized terms used in this EXHIBIT A shall have the respective
meanings given to such terms in the Agreement and Plan of Merger, dated as of
December 4, 1996, among Hadco Corporation, Hadco Acquisition Corp. and Zycon
Corporation (the "Merger Agreement") to which this EXHIBIT A is attached.
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Sub shall not be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act (relating to Sub's
obligation to pay for or return tendered Shares promptly after expiration or
termination of the Offer), to pay for any Shares tendered, and may postpone the
acceptance for payment or, subject to the restriction referred to above, payment
for any Shares tendered, and may amend or terminate the Offer (whether or not
any Shares have theretofore been purchased or paid for) if, (i) there have not
been validly tendered and not withdrawn prior to the time the Offer shall
otherwise expire a number of Shares which constitutes a majority of the Shares
outstanding on a fully-diluted basis on the date of purchase ("on a
fully-diluted basis" having the following meaning, as of any date: the number of
Shares outstanding, together with Shares the Company may be then required to
issue pursuant to obligations outstanding at that date under employee stock
option or other benefit plans or otherwise); (ii) all material regulatory and
related approvals have not been obtained or made on terms reasonably
satisfactory to Sub; (iii) any applicable waiting periods under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer;
(iv) the debt financing sources for Sub shall not (other than as a result of
Parent's or Sub's failure to use its reasonable best efforts to obtain the same)
have provided the applicable debt financing to Sub pursuant to the financing
commitments with respect thereto previously delivered to the Company by Sub; or
(v) at any time on or after the date of the Merger Agreement and before
acceptance for payment of, or payment for, such Shares any of the following
events shall occur or shall be deemed by Sub to have occurred:
(A) Except for an action entitled XXXX X. XXXXXX, ET AL. filed in the Santa
Xxxxx County Superior Court on or about December 3, 1996, there shall have been
threatened, instituted or pending any action, proceeding, application or
counterclaim by or before any court or governmental, regulatory or
administrative agency, authority or tribunal, domestic, foreign or supranational
(other than actions, proceedings, applications or counterclaims filed or
initiated by Sub), which (i) seeks to challenge the acquisition by Sub of the
Shares, restrain, prohibit or delay the making or consummation of the Offer or
the Merger or any other merger or business combination involving Sub or any of
its affiliates and the Company or any of its subsidiaries, prohibit the
performance of any of the contracts or other agreements entered into by Sub or
any of its affiliates in connection with the acquisition of the Company or the
Shares, or obtain any damages in connection with any of the foregoing, (ii)
seeks to make the purchase of or payment for, some or all of the Shares pursuant
to the Offer, the Merger or otherwise, illegal, (iii) seeks to impose
limitations on the ability of Sub or the Company or any of their respective
affiliates or subsidiaries effectively to acquire or hold, or requiring Sub, the
Company or any of their respective affiliates or
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47
subsidiaries to dispose of or hold separate, any portion of the assets or the
business of Sub or its affiliates or the Company or its subsidiaries, or impose
limitations on the ability of Sub, the Company or any of their respective
affiliates or subsidiaries to continue to conduct, own or operate all or any
portion of their businesses and assets as heretofore conducted, owned or
operated, (iv) seeks to impose or may result in material limitations on the
ability of Sub or any of its affiliates to exercise full rights of ownership of
the Shares purchased by them, including, without limitation, the right to vote
the Shares purchased by them on all matters properly presented to the
stockholders of the Company, or the right to vote any shares of capital stock of
any subsidiary directly or indirectly owned by the Company, (v) is reasonably
likely to result in a material diminution in the benefits expected to be derived
by Sub as a result of the transactions contemplated by the Offer, including the
Merger, (vi) seeks to impose voting, procedural, price or other requirements in
addition to those under Delaware Law and federal securities laws (each as in
effect on the date of the Offer to Purchase) or any material condition to the
Offer that is unacceptable (in its reasonable judgment) to Sub or (vii)
challenges or adversely and materially affects the financing of the Offer;
(B) There shall have been proposed, sought, promulgated, enacted, entered,
enforced or deemed applicable to the Offer or the Merger by any domestic,
foreign or supranational government or any governmental, administrative or
regulatory authority or agency or by any court or tribunal, domestic, foreign or
supranational, any statute, rule, regulation, judgment, decree, order or
injunction that might, directly or indirectly, result in any of the consequences
referred to in clauses (i) through (vii) of paragraph (A) above;
(C) there shall have occurred (1) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market in the United States, (2) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (3) any material adverse change (or any existing or threatened
condition, event or development involving a prospective material adverse change)
in United States or any other currency exchange rates or a suspension of, or a
limitation on, the markets therefor, (4) the commencement of a war, armed
hostilities or other international or national calamity, directly or indirectly
involving the United States, (5) any limitations (whether or not mandatory)
imposed by any governmental authority on, or any event which might have material
adverse significance with respect to, the nature or extension of credit or
further extension of credit by banks or other lending institutions, (6) any
significant adverse change in securities or financial markets in the United
States or abroad, including, without limitation, a decline of at least 10
percent in either the Dow Xxxxx Average of Industrial Stocks or the Standard &
Poor's 500 Index from that existing at the close of business on November 27,
1996, or (7) in the case of any of the foregoing, a material acceleration or
worsening thereof;
(D) the representations and warranties of the Company contained in the
Merger Agreement (without giving effect to any "Material Adverse Effect",
"materiality" or similar qualifications contained therein) shall not be true and
correct in all material respects (for purpose of this clause, a failure of the
representations and warranties to be true and correct in all material respects
shall mean a failure or series of failures the result of which impairs the value
of the
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48
Company or could reasonably be expected to impair the value of the Company by
more than $1.75 million) as of the date of the consummation of the Offer as
though made on and as of such date except (1) for changes specifically permitted
by the Merger Agreement and (2) that those representations and warranties which
address matters only as of a particular date shall remain true and correct as of
such date;
(E) the obligations of the Company contained in the Merger Agreement
(without giving effect to any "Material Adverse Effect", "materiality" or
similar qualifications contained therein) shall not have been performed or
complied with in all material respects by the Company;
(F) the obligations of the Company under Section 6.11 of the Merger
Agreement shall not have been complied with in all respects;
(G) the Merger Agreement shall have been terminated in accordance with its
terms;
(H) prior to the purchase of Shares pursuant to the Offer, an Acquisition
Proposal for the Company exists and the Board shall have withdrawn or materially
modified or changed (including by amendment of the Schedule 14D-9) in a manner
adverse to Sub its recommendation of the Offer, the Merger Agreement or the
Merger; or
(I) any person or group shall have entered into a definitive agreement or
agreement in principle with the Company with respect to a merger, consolidation
or other business combination with the Company.
The foregoing conditions are for the sole benefit of Sub and its affiliates
and may be asserted by Sub regardless of the circumstances (other than any
action or inaction by Parent, Sub or any of their affiliates) giving rise to any
such condition or may be waived by Sub, in whole or in part, from time to time
in its sole discretion, except as otherwise provided in the Agreement. The
failure by Sub at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right and may be asserted at any time and from time to time. Any reasonable
determination by Sub concerning any of the events described herein shall be
final and binding.
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