1
EXHIBIT 2.3
AGREEMENT AND PLAN OF REORGANIZATION
dated as of
June 6, 1997
by and among
GIGA-TRONICS INCORPORATED,
GTV ACQUISITION CORP.
and
VIKING SEMICONDUCTOR EQUIPMENT, INC.
2
TABLE OF CONTENTS
PAGE
RECITALS ............................................................ 1
ARTICLE I THE MERGER.................................................. 2
1.01 The Merger.......................................... 2
1.02 Conversion of Shares................................ 2
1.03 Exchange of Certificates............................ 3
1.04 Dissenting Shares................................... 4
1.05 Fractional Shares................................... 4
1.06 Viking Options...................................... 5
1.07 No Registration of Giga-tronics Common Stock........ 5
ARTICLE II THE SURVIVING CORPORATION................................... 6
2.01 Articles of Incorporation........................... 6
2.02 Bylaws.............................................. 6
2.03 Directors and Officers.............................. 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VIKING............ 6
3.01 Corporate Existence and Power....................... 6
3.02 Corporate Authorization............................. 6
3.03 Governmental Authorization.......................... 7
3.04 Non-Contravention................................... 7
3.05 Capitalization...................................... 8
3.06 Subsidiaries and Investments........................ 8
3.07 Financial Statements................................ 8
3.08 Absence of Changes or Events........................ 8
3.09 No Undisclosed Liabilities.......................... 10
3.10 Litigation.......................................... 11
3.11 Taxes............................................... 11
3.12 Insurance........................................... 12
3.13 Employee Benefit Plans; ERISA....................... 12
3.14 Material Agreements................................. 12
3.15 Real Property; Leases............................... 13
3.16 Title to Assets..................................... 13
3.17 Environmental Matters............................... 14
3.18 Intellectual Property............................... 15
3.19 No Guaranties....................................... 15
i.
3
PAGE
3.20 Absence of Certain Business Practices.............. 15
3.21 Compliance with Laws and Other Instruments......... 15
3.22 Disclosure Documents............................... 16
3.23 Tax Matters........................................ 16
3.24 Accounting Matters................................. 16
3.25 Restrictions on Business Activities................ 16
3.26 Interested Party Transactions...................... 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
GIGA-TRONICS....................................... 17
4.01 Corporate Existence and Power...................... 17
4.02 Corporate Authorization............................ 17
4.03 Governmental Authorization......................... 17
4.04 Non-Contravention.................................. 18
4.05 Capitalization of Giga-tronics..................... 18
4.06 Capitalization of Merger Sub; Subsidiaries......... 19
4.07 SEC Filings........................................ 19
4.08 Financial Statements............................... 20
4.09 Disclosure Documents............................... 20
4.10 Absence of Certain Changes......................... 20
4.11 Litigation......................................... 21
4.12 Advisor's Fees..................................... 21
ARTICLE V COVENANTS OF VIKING........................................ 22
5.01 Conduct of Viking.................................. 22
5.02 Shareholders' Meeting; Proxy Material.............. 23
5.03 Access to Financial and Operation Information...... 23
5.04 Other Offers....................................... 23
5.05 Maintenance of Business............................ 24
5.06 Compliance with Obligations........................ 24
5.07 Notices of Certain Events.......................... 24
5.08 Confidentiality.................................... 25
5.09 Compliance with the Securities Act................. 25
ARTICLE VI COVENANTS OF GIGA-TRONICS AND MERGER SUB........... 25
6.01 Conduct of Giga-tronics............................ 25
6.02 Compliance with Securities Laws.................... 26
6.03 Maintenance of Business............................ 26
6.04 Compliance with Obligations........................ 26
ii.
4
PAGE
6.05 Notices of Certain Events................................ 27
6.06 Confidentiality.......................................... 27
6.07 Obligations of Merger Sub................................ 27
6.08 Compliance with the Securities Act....................... 27
ARTICLE VII OTHER COVENANTS OF THE PARTIES........................... 28
7.01 Advice of Changes........................................ 28
7.02 Regulatory Approvals..................................... 28
7.03 Actions Contrary to Stated Intent........................ 28
7.04 Certain Filings.......................................... 28
7.05 Communications........................................... 29
7.06 Satisfaction of Conditions Precedent..................... 29
ARTICLE VIII CONDITIONS TO THE MERGER................................. 29
8.01 Conditions to Obligations of Giga-tronics and Merger Sub. 29
8.02 Conditions to Obligations of Viking...................... 30
8.03 Conditions to Obligations of Each Party.................. 31
ARTICLE IX TERMINATION OF AGREEMENT................................. 32
9.01 Termination.............................................. 32
9.02 Effect of Termination.................................... 33
ARTICLE X MISCELLANEOUS.................................................... 33
10.01 Further Assurances....................................... 33
10.02 Fees and Expenses........................................ 33
10.03 Nonsurvival of Representations and Warranties............ 33
10.04 Notices.................................................. 33
10.05 Governing Laws........................................... 34
10.06 Binding upon Successors and Assigns; Assignment.......... 35
10.07 Severability............................................. 35
10.08 Entire Agreement......................................... 35
10.09 Other Remedies........................................... 35
10.10 Amendment and Waivers.................................... 35
10.11 No Waiver................................................ 35
10.12 Construction of Agreement; Knowledge..................... 35
10.13 Counterparts............................................. 36
iii.
5
GLOSSARY ...............................................................37
SCHEDULES
Viking Disclosure Schedule
Giga-tronics Disclosure Schedule
EXHIBITS
Exhibit 1.01 Form of Agreement of Merger
Exhibit 5.09 Form of Viking Affiliates Agreement
Exhibit 6.08 Form of Giga-tronics Affiliates Agreement
iv.
6
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is entered
into as of the 6th day of June, 1997, by and among Giga-tronics Incorporated, a
California corporation ("Giga-tronics"), GTV Acquisition Corp., a California
corporation and a wholly owned subsidiary of Giga-tronics ("Merger Sub"), and
Viking Semiconductor Equipment, Inc., a California corporation ("Viking").
RECITALS
A. The Boards of Directors of Giga-tronics, Merger Sub and Viking have
each determined to engage in the transactions contemplated hereby, pursuant to
which (i) Merger Sub will merge (the "Merger") with and into Viking, (ii) each
share of common stock, no par value, of Viking ("Viking Common Stock") and any
other shares of Viking stock which shall have previously been converted into
Viking Common Stock (except for shares of Viking stock as to which dissenters'
rights, if available, shall have been perfected) shall be converted into the
right to receive a fraction of a share of common stock, no par value, of
Giga-tronics ("Giga-tronics Common Stock"), in the manner and amount herein
described, and (iii) the capital stock of Merger Sub shall be converted into
shares of Viking Common Stock, all upon the terms and subject to the conditions
set forth herein.
B. The Board of Directors of Viking has approved, and has resolved to
recommend that the shareholders of Viking approve, the Merger and this
Agreement.
C. The respective Boards of Directors of Giga-tronics and Merger Sub
have approved the Merger and this Agreement. Giga-tronics, as the sole
shareholder of Merger Sub, has approved the Merger and this Agreement.
D. The parties intend for the transactions contemplated by this
Agreement to qualify as a tax-free reorganization in accordance with the
provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and to be accounted for as a pooling of interests transaction.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
1.
7
ARTICLE I
THE MERGER
SECTION 1.01 THE MERGER.
(a) Subject to the terms and conditions hereof, and in accordance with
the General Corporation Law of California, Merger Sub will be merged with and
into Viking (the "Merger"), as soon as practicable following the satisfaction or
waiver of the conditions set forth in Article VIII hereof. Following the Merger,
Viking shall continue as the surviving corporation (the "Surviving
Corporation"), and the separate corporate existence of Merger Sub shall cease.
(b) Concurrent with the Closing (as defined in subsection (d) below),
Giga-tronics, and Viking and Merger Sub shall file an agreement of merger in
the form attached hereto as Exhibit 1.01 (the "Agreement of Merger") in the
Office of the Secretary of State of the State of California in accordance with
California Law. The Merger shall become effective at such time as the Agreement
of Merger is duly filed in the Office of the Secretary of State of the State of
California (the date of such filing being hereinafter referred to as the
"Effective Date" and the time of such filing being hereinafter referred to as
the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of Viking and Merger Sub, all as
provided under California Law.
(d) The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place on June 27, 1997 at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, Xxx Xxxxxx Xxxxx, Xxx Xxxxxxxxx, XX 00000, or at such other date
and place as Giga-tronics and Viking may agree. The date of the Closing
determined pursuant to this Section 1.01(d) is referred to as the "Closing
Date."
SECTION 1.02 CONVERSION OF SHARES.
(a) At the Effective Time:
(i) Subject to Section 1.05 hereof, at the Effective
Time each issued and outstanding share of Viking Common Stock
issued and outstanding immediately prior to the Effective Time
(other than Dissenting Viking Shares (as defined in Section
1.04 hereof))(the "Viking Shares") shall automatically, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into a right to receive the
number of shares of Giga-tronics Common Stock as is determined
pursuant to this Section 1.02. A maximum total of 420,000
shares of Giga-tronics Common Stock (the "Merger
Consideration") will be issued in the Merger, including shares
that would have been issued to holders of Dissenting Viking
Shares and fractional shares that would have been issuable but
for Section 1.05 below.
2.
8
(ii) The Agreement of Merger to be filed shall
contain the final exchange ratio (the "Exchange Ratio") for
Viking Shares into Giga-tronics Common Stock and shall be
equal to 420,000 divided by the fully diluted number of Viking
Shares outstanding at the Effective Time (the "Viking
Outstanding Equivalent Number"). The Viking Outstanding
Equivalent Number shall be equal to the sum of (1) the number
of Viking Shares outstanding at the Effective time; plus (2)
the total number of Viking Shares which would be issuable on
the exercise of any Viking warrants or options or other
securities convertible into, or exercisable for, Viking Shares
(collectively "Viking Options"). All Viking Shares shall be
exchangeable into Giga-tronics Common Stock at the same
Exchange Ratio.
(b) If between the date of this Agreement and the Effective
Time, the number of outstanding Viking Shares or shares of Giga-tronics Common
Stock shall have been changed into a different number of shares or a different
class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination, exchange of shares or the like, the
Exchange Ratio shall be correspondingly adjusted.
SECTION 1.03 EXCHANGE OF CERTIFICATES.
(a) Giga-tronics (or such third party as Giga-tronics shall
appoint) shall act as Exchange Agent (the "Exchange Agent") for delivery of the
Merger Consideration to the Viking shareholders and, if applicable, the cash to
which holders of Viking shares shall be entitled pursuant to Section 1.05
hereof.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record (other than Giga-tronics or
Merger Sub or any other subsidiary of Giga-tronics) of a certificate or
certificates which immediately prior to the Effective Time represented issued
and outstanding Viking Shares (individually a "Certificate" and collectively the
"Certificates"), a letter of transmittal for return to the Exchange Agent which
shall specify that delivery shall be effected, and risk of loss and the title to
the Certificates shall pass, only upon receipt of the Certificates in exchange
for the Merger Consideration. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with and in accordance with such letter of
transmittal, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration that such holder is entitled to
receive pursuant to Section 1.02(a) hereof. Upon such surrender the Exchange
Agent shall promptly deliver such Merger Consideration.
(c) Until surrendered, each Certificate shall be deemed for
all purposes to evidence only the right to receive the Merger Consideration into
which Viking Shares formerly represented thereby shall have been converted
pursuant to Section 1.02(a) hereof. No dividends or other distribution declared
after the Effective Time with respect to Giga-tronics Common Stock shall be paid
to the holders of any unsurrendered Certificate until the holder thereof
surrenders such Certificate.
3.
9
(d) After the Effective Time there shall be no transfers on
the stock transfer books of either Viking (the stock transfer books of which
shall be closed) or the Surviving Corporation of Viking Shares which were
outstanding immediately prior to the Effective Time. If after the Effective Time
Certificates are presented for transfer to the Exchange Agent, together and in
accordance with the letter of transmittal from the Exchange Agent, they shall be
cancelled and exchanged for the Merger Consideration.
SECTION 1.04 DISSENTING SHARES. Viking Shares that have not been voted
for approval of this Agreement and with respect to which a demand for payment
and appraisal shall have been properly made in accordance with Chapter 13 of the
General Corporation Law of California ("Dissenting Viking Shares") shall not be
converted into the right to receive the Merger Consideration at or after the
Effective Time but shall be converted into the right to receive such
consideration as may be determined to be due with respect to such Dissenting
Viking Shares pursuant to the law of the State of California. If a holder of
Dissenting Viking Shares ("Dissenting Shareholder"), shall withdraw his or her
demand for such payment and appraisal or shall become ineligible for such
payment and appraisal, then, as of the Effective Time of the occurrence of such
event of withdrawal or ineligibility, whichever last occurs, such holder's
Dissenting Viking Shares shall cease to be Dissenting Viking Shares and shall be
converted into the right to receive, and shall be exchangeable for, the Merger
Consideration into which such Dissenting Viking Shares would have been converted
pursuant to Section 1.02(a) hereof. Viking shall give Giga-tronics prompt notice
of any demand received by Viking from a holder of Dissenting Viking Shares for
appraisal of Viking Shares, and Giga-tronics shall have the right to participate
in all negotiations and proceedings with respect to such demand. Viking agrees
that, except with the prior written consent of Giga-tronics, or as required
under the General Corporation Law of California, it will not voluntarily make
any payment with respect to, or settle or offer to settle, any such demand for
appraisal. Each Dissenting Shareholder who, pursuant to the provisions of
Chapter 13 of the General Corporation Law of California, becomes entitled to
payment of the value of shares of Viking stock shall receive payment therefor
(but only after the value therefor shall have been agreed upon or finally
determined pursuant to such provisions). Any Merger Consideration which would
have been issuable with respect to Dissenting Viking Shares shall be retained by
Giga-tronics.
SECTION 1.05 FRACTIONAL SHARES. Notwithstanding any other provision of
this Agreement to the contrary, no fractional shares of Giga-tronics Common
Stock shall be issued in connection with the Merger. All shares of Giga-tronics
Common Stock to which a holder of Viking Shares is entitled immediately prior to
the Effective Time shall be aggregated. If a fractional share results from such
aggregation, in lieu of any such fractional share, each holder of Viking Shares
who would otherwise have been entitled to receive a fraction of a share of
Giga-tronics Common Stock upon surrender of Certificates for exchange pursuant
to Section 1.03 shall be entitled to receive from the Exchange Agent a cash
payment equal to such fraction multiplied by the closing sale price per share of
Giga-tronics Common Stock on the last business day on which Giga-tronics Common
Stock is traded on the NASD, prior to the Effective Time.
4.
10
SECTION 1.06 VIKING OPTIONS. Giga-tronics will not assume any Viking
Options. At the Effective Time, any outstanding Viking Options shall be deemed
exercised for such number of shares of Giga-tronics Common Stock as would be
exchanged in the Merger for the Viking Shares which would have been issued had
such Viking Options been exercised in full and such Viking Shares been
outstanding immediately prior to the Effective Time, subject to the following
provisions of this Section 1.06. Such deemed exercise of Viking Options shall be
on a "net exercise" basis. The full number of shares issuable on exercise of
such Viking Option (including such number of shares as are deemed surrendered in
the net exercise) shall be added to the Viking Outstanding Equivalent Number as
described in Section 1.02 above. The value of the Viking Shares issuable on the
exercise of any Viking Option for purposes of determining the number of Viking
Shares to be surrendered in the deemed net exercise shall be equal to the number
of Viking Shares issuable on exercise of such Viking Option, multiplied by the
Exchange Ratio, multiplied by the average closing price of a share of
Giga-tronics Stock on such stock exchange as Giga-tronics Stock is then traded
for the five (5) business days immediately preceding the Closing Date. Shares of
Giga-tronics Common Stock which would otherwise be issuable in respect of the
Viking Shares deemed surrendered upon such net exercise shall be retained by
Giga-tronics.
SECTION 1.07 NO REGISTRATION OF GIGA-TRONICS COMMON STOCK. The parties
acknowledge and agree that the Giga-tronics Common Stock to be issued pursuant
to the Merger will be issued pursuant to a transaction not involving a public
offering and therefore will be characterized as "restricted securities" under
federal securities laws. The parties further acknowledge and agree that pursuant
to the Securities Act of 1933, as amended (the "Securities Act") the
Giga-tronics Common Stock so issued may be resold without registration under the
Securities Act only in certain limited circumstances. It is understood that the
Certificates issued pursuant to the Merger will bear the following legend:
"These securities have not been registered
under the Securities Act of 1993, as
amended. They may not be sold, offered for
sale, pledged or hypothecated in the
absence of a registration statement in
effect with respect to the securities under
such Act or an opinion of counsel
satisfactory to the Company that such
registration is not required or unless sold
pursuant to Rule 144 of such Act."
Giga-tronics shall be under no obligation to effect a
registration statement with respect to Giga-tronics Common Stock received in the
Merger.
5.
11
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.01 ARTICLES OF INCORPORATION. The Articles of Incorporation
of the Surviving Corporation shall be amended at the Effective Time to conform
to the Articles of Incorporation of Merger Sub, as in effect immediately prior
to the Effective Time.
SECTION 2.02 BYLAWS. The Bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving Corporation,
until thereafter amended in accordance with applicable law.
SECTION 2.03 DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, the directors of Merger Sub at the Effective Time shall become
the initial directors of the Surviving Corporation, and the officers of Viking
at the Effective Time shall become the initial officers of the Surviving
Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VIKING
Except as disclosed in a document referring specifically to this
Agreement (the "Viking Disclosure Schedule") which is delivered by Viking to
Giga-tronics no less than five days prior to the execution of this Agreement
(which shall contain appropriate and reasonably detailed references to each
representation and warranty to which any item there disclosed pertains), Viking
represents and warrants to Giga-tronics as set forth below:
SECTION 3.01 CORPORATE EXISTENCE AND POWER. Viking is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of California, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals (collectively, "Governmental
Authorizations") required to carry on its business as now conducted. Viking is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary. Viking has
delivered to Giga-tronics true and complete copies of Viking's Articles of
Incorporation and Bylaws as currently in effect.
SECTION 3.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Viking of this Agreement, the Viking and Giga-tronics Affiliates
Agreements (as defined in Sections 5.09 and 6.08 respectively, hereof) and the
consummation by Viking of the transactions contemplated hereby and thereby are
within Viking's corporate powers and have been duly authorized by all necessary
corporate action, except for the approval by Viking's shareholders in connection
with the consummation of the Merger. The Viking and Giga-tronics Affiliates
6.
12
Agreement are collectively referred to herein as the "Viking Ancillary
Agreements." This Agreement and the Viking Ancillary Agreements constitute, or
upon execution will constitute, valid and binding agreements of Viking,
enforceable against Viking in accordance with their respective terms.
SECTION 3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Viking of this Agreement, the Viking Ancillary Agreements and the
Agreement of Merger and the consummation of the Merger by Viking require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than:
(a) the filing of the Agreement of Merger in accordance with
California Law;
(b) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx");
(c) compliance with any applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder;
(d) compliance with any applicable foreign or state securities
or "blue sky" laws; and
(e) such other filings or registrations with, or
authorizations, consents or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or obtain would not
materially adversely affect the ability of Viking, Giga-tronics or Merger Sub to
consummate the transactions contemplated hereby and operate their businesses as
heretofore operated.
SECTION 3.04 NON-CONTRAVENTION. The execution, delivery and performance
by Viking of this Agreement, the Viking Ancillary Agreements and the Certificate
of Merger and the consummation by Viking of the transactions contemplated hereby
and thereby do not and will not:
(a) contravene or conflict with the Articles of Incorporation
or Bylaws of Viking;
(b) assuming compliance with the matters referred to in
Section 3.03 and assuming the requisite approval of Viking's shareholders of the
Merger, contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding upon or
applicable to Viking;
(c) conflict with or result in a breach or violation of, or
constitute a default under, or result in the termination or cancellation of, or
right to accelerate, any agreement,
7.
13
contract or other instrument binding upon Viking or any license, franchise,
permit or other similar authorization held by Viking; or
(d) result in the creation or imposition of any Lien (as defined
below) on any asset of Viking.
For purposes of this Agreement, the term "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset.
SECTION 3.05 CAPITALIZATION. The authorized capital stock of Viking
consists of 100,000 shares of Viking Common Stock. As of the date hereof, there
are 27,313 shares of Viking Common Stock outstanding. All outstanding Viking
Common Shares have been duly authorized and validly issued and are fully paid
and nonassessable and free from any preemptive rights. Except as set forth in
this Section and as otherwise contemplated by this Agreement, there are
outstanding (i) no shares of capital stock or other voting securities of Viking,
(ii) no securities of Viking convertible into or exchangeable for shares of
capital stock or voting securities of Viking and (iii) no options or other
rights to acquire from Viking, and no obligation of Viking to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or other voting securities of Viking (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Viking Securities"). There
are no outstanding obligations of Viking to repurchase, redeem or otherwise
acquire any Viking Securities.
SECTION 3.06 SUBSIDIARIES AND INVESTMENTS. Viking does not own,
directly or indirectly, any outstanding capital stock or equity interest in any
corporation, partnership, joint venture or other entity.
SECTION 3.07 FINANCIAL STATEMENTS. Viking has delivered to Purchaser
copies (initialled by Viking's Secretary and identified with a reference to this
Section of this Agreement) of financial statements (hereinafter collectively
called the "Financial Statements"), all of which are complete and correct, have
been prepared in accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods indicated and fairly
present the financial condition of Viking as at their respective dates and the
results of its operations for the periods covered thereby, as follows: balance
sheets of Viking as at March 31, 1997 and May 31, 1996 and May 31, 1995 and the
related statements of earnings for the years then ended. The balance sheet of
Viking as at March 31, 1997 (the "Viking Balance Sheet Date") is referred to
herein as the "Viking Balance Sheet."
Such statements of earnings do not contain any items of special or nonrecurring
income or any other income not earned in the ordinary course of business except
as expressly specified therein, and such interim financial statements include
all adjustments, which consist only of normal recurring accruals, necessary for
such fair presentation.
8.
14
SECTION 3.08 ABSENCE OF CHANGES OR EVENTS. Since the Viking Balance
Sheet Date Viking has conducted its business only in the ordinary course
consistent with its prior practices and has not:
(a) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, except current
liabilities for trade or business obligations incurred in connection with the
purchase of goods or services in the ordinary course of business and consistent
with its prior practice, none of which liabilities, in any case or in the
aggregate, materially and adversely affects the business, liabilities or
financial condition of Viking;
(b) discharged or satisfied any lien, charge or encumbrance
other than those then required to be discharged or satisfied, or paid any
obligation or liability, absolute, accrued, contingent or otherwise, whether due
or to become due, other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the Balance Sheet Date in the ordinary course
of business and consistent with its prior practice;
(c) declared or made any payment of dividends or other
distribution to its shareholders or upon or in respect of any shares of its
capital stock, or purchased, retired or redeemed, or obligated itself to
purchase, retire or redeem, any of its shares of capital stock or other
securities;
(d) mortgaged, pledged or subjected to lien, charge, security
interest or any other encumbrance or restriction any of its property, business
or assets, tangible or intangible;
(e) sold, transferred, leased to others or otherwise disposed
of any of its assets, except for inventory sold in the ordinary course of
business, or cancelled or compromised any debt or claim, or waived or released
any right of substantial value;
(f) received any notice of termination of any contract, lease
or other agreement or suffered any damage, destruction or loss (whether or not
covered by insurance) which in any case or in the aggregate, has had a
materially adverse effect on the assets, operations or prospects of Viking;
(g) encountered any labor union organizing activity, had any
actual or threatened employee strikes, work stoppages, slow-downs or lock-outs,
or had any material change in its relations with its employees, agents,
customers or suppliers or with any governmental authorities or self-regulatory
organizations;
(h) transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of, any United States or
foreign license, patent, copyright, trademark, trade name, invention or similar
rights, or modified any existing rights with respect thereto;
9.
15
(i) made any change in the rate of compensation, commission,
bonus or other direct or indirect remuneration payable, or paid or agreed or
orally promised to pay, conditionally or otherwise, any bonus, extra
compensation, pension or severance or vacation pay, to any shareholder,
director, officer, employee, salesman, distributor or agent of Viking;
(j) issued or sold any shares of its capital stock or other
securities, or issued, granted or sold any options, rights or warrants with
respect thereto, or acquired any capital stock or other securities of any
corporation or any interest in any business enterprise, or otherwise made any
loan or advance to or investment in any person, firm or corporation;
(k) made any capital expenditures or capital additions or
betterments in excess of an aggregate of $50,000;
(l) changed its banking or safe deposit arrangements;
(m) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body relating to Viking or
its property;
(n) failed to replenish its inventories and supplies in a
normal and customary manner consistent with its prior practice and prudent
business practices prevailing in the industry, or made any purchase commitment
in excess of the normal, ordinary and usual requirements of its business or at
any price in excess of the then current market price or upon terms and
conditions more onerous than those usual and customary in the industry, or made
any change in its selling, pricing, advertising or personnel practices
inconsistent with its prior practice and prudent business practices prevailing
in the industry;
(o) suffered any change, event or condition which, in any case
or in the aggregate, has had or may have a materially adverse effect on Viking's
condition (financial or otherwise), properties, assets, liabilities, operations
or prospects, including, without limitation, any change in Viking's revenues,
costs, backlog or relations with its employees, agents, customers, or suppliers;
(p) entered into any transaction, contract or commitment other
than in the ordinary course of business or paid or agreed to pay any legal,
accounting, brokerage, finder's fee, taxes or other expenses in connection with,
or incurred any severance pay obligations by reason of, this Agreement or the
transactions contemplated hereby; or
(q) entered into any agreement or made any commitment to take
any of the types of action described in subparagraphs (a) through (p) above.
SECTION 3.09 NO UNDISCLOSED LIABILITIES. There are no liabilities of
Viking or any of its Subsidiaries, including contingent liabilities, of the type
required to be reflected in financial statements (including the notes thereto)
under generally accepted accounting principles that are material to Viking,
other than:
10.
16
(a) liabilities disclosed or provided for in the Viking
Balance Sheet (including the notes thereto);
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Viking Balance Sheet Date and which do
not exceed $50,000 in the aggregate;
(c) liabilities incurred other than in the ordinary course of
business and which do not exceed $25,000 in the aggregate; and
(d) liabilities under this Agreement.
SECTION 3.10 LITIGATION. There is no action, suit, proceeding, claim or
investigation pending or, to the best of Viking's knowledge, overtly threatened,
against Viking or any of its assets or against or involving any of its officers,
directors or employees in connection with the business or affairs of Viking,
including, without limitation, any claims for indemnification arising under any
agreement to which Viking is a party, which could, individually or in the
aggregate, have a Material Adverse Effect on Viking or which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay any of the
transactions contemplated hereby. Viking is not subject to or in default with
respect to any writ, order, judgment, injunction or decree, which would have a
Material Adverse Effect on Viking.
SECTION 3.11 TAXES.
(a) For purposes of this Agreement, "Tax" or "Taxes" means any
and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any governmental or
taxing authority including, without limitation: taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer, value
added, or gains taxes; license, registration and documentation fees; and
customs' duties, tariffs, and similar charges.
(b) Except as described in Schedule 3.11 of the Viking
Disclosure Schedule, (i) Viking has filed all federal, state, local and foreign
tax returns and reports required to be filed by it and has paid and discharged
all Taxes shown as due thereon and has paid all of such other Taxes as are due,
other than (a) such filings, payments or other occurrences that would not have a
Material Adverse Effect; (ii) neither the IRS nor any other taxing authority or
agency, domestic or foreign, is now asserting or, to the best knowledge of
Viking after due inquiry, threatening to assert against Viking any deficiency or
claim for additional Taxes or interest thereon or penalties in connection
therewith; (iii) Viking has not granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any
federal, state, county, municipal or foreign income Tax; (iv) the accruals and
reserves for Taxes reflected in the Viking Balance Sheet and the most recent
quarterly financial statements are adequate to cover all Taxes
11.
17
accruable through the date thereof (including interest and penalties, if any,
thereon) in accordance with generally accepted accounting principals; (v) Viking
has not made an election under Section 341(f) of the Code; (vi) Viking has
withheld or collected and paid over to the appropriate governmental authorities
or is properly holding for such payment all Taxes required by law to be withheld
or collected, except for such failures to have so withheld or collected and paid
over or to be so holding for payment which would not have a Material Adverse
Effect and (vii) there are no material liens for Taxes upon the assets of
Viking, other than liens for Taxes that are being contested in good faith by
appropriate proceedings.
(c) Viking is not party to or bound by, nor has any obligation
under any Tax sharing, Tax indemnity or Tax allocation or similar agreement.
SECTION 3.12 INSURANCE. Viking maintains the policies of fire,
liability, use and occupancy and other forms of insurance covering its
properties and businesses set forth in the Viking Disclosure Schedule. Such
policies are in full force and effect.
SECTION 3.13 EMPLOYEE BENEFIT PLANS; ERISA. Schedule 3.13 of the Viking
Disclosure Schedule lists (i) all the employee benefit plans, programs and
arrangements maintained for the benefit of any current or former employee,
officer or director of Viking (the "Plans") and (ii) all contracts and
agreements relating to employment that provide for annual compensation in excess
of $75,000 and all severance agreements, with any of the directors, officers or
employees of Viking (other than, in each case, any such contract or agreement
that is terminable by Viking at will without penalty or other adverse
consequence) (the "Employment Contracts"). Giga-tronics has been furnished with
a copy of each Plan, any summary plan descriptions, annual reports, actuarial
reports, registration statements or other securities law filings and
determination letters produced or filed with respect thereto, and each
Employment Contract. Except as set forth in Section 3.13 of the Viking
Disclosure Schedule: (i) none of the Plans is a multiemployer plan within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); (ii) none of the Plans promises or provides retiree medical or life
insurance benefits to any person; (iii) each Plan intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service (the "IRS") that it is so qualified and nothing has
occurred since the date of such letter to affect the qualified status of such
Plan; (iv) none of the Plans promises or provides severance benefits or benefits
contingent upon a change in ownership or control, within the meaning of Section
280G of the Code; (v) each Plan has been operated in all material respects in
accordance with its terms and the requirements of applicable law; (vi) no Plan
is or has been covered by Title IV of ERISA or Section 412 of the Code; (vii)
Viking has not incurred any direct or indirect liability under, arising out of
or by operation of Title IV of ERISA in connection with the termination of, or
withdrawal from, any Plan or other retirement plan or arrangement, and no fact
or event exists that could give rise to any such liability; and (viii) Viking
has not incurred any liability under, and has complied in all respects with, the
Worker Adjustment Retraining Notification Act, and no fact or event exists that
could give rise to liability under such act.
SECTION 3.14 MATERIAL AGREEMENTS.
12.
18
(a) The Viking Disclosure Schedule includes a complete and
accurate list of all contracts, agreements, leases and instruments to which
Viking is a party or by which it or its properties or assets are bound which
individually involve payments or receipts in excess of $50,000, inclusive of
contracts entered into with customers and suppliers in the ordinary course of
business, or that pertain to employment or severance benefits for any officer,
director or employee of Viking, whether written or oral (each a "Material Viking
Agreement").
(b) Neither Viking nor, to the knowledge of Viking, any other
party is in default under any Material Viking Agreement and no event has
occurred which (after notice or lapse of time or both) would become a breach or
default under, or would permit modification, cancellation, acceleration or
termination of any Material Viking Agreement or result in the creation of any
security interest upon, or any person obtaining any right to acquire, any
properties, assets or rights of Viking.
(c) Each Material Viking Agreement is in full force and effect
and is valid and legally binding, there are, to the knowledge of Viking, no
unresolved disputes involving or with respect to any Material Viking Agreement,
and no party to a Material Viking Agreement has advised Viking that it intends
either to terminate a Material Viking Agreement or to refuse to renew a Material
Viking Agreement upon the expiration of the term thereof.
(d) Viking is not in violation of, or in default with respect
to, any term of its Certificate of Incorporation or any material term of its
Bylaws.
SECTION 3.15 REAL PROPERTY; LEASES.
(a) The Viking Disclosure Schedule includes a correct and
complete list of all items of real property, including leased property, and any
material buildings, structures and improvements located thereon or therein,
which are owned or leased by Viking.
(b) To Viking's knowledge, with respect to any real property
of Viking, including any leased property, and any material buildings, structures
and improvements located thereon or therein, such buildings, fixtures and
improvements, and the present use thereof, are not the subject of any official
complaint or notice of violation of any applicable zoning ordinance, building
code or environmental laws, and such premises are not affected or threatened by
any condemnation or eminent domain proceeding.
(c) All leases of real property and all material leases of
personal property by Viking are in full force and effect and, to Viking's
knowledge, there exists no default on the part of Viking which would interfere
with the use made and proposed to be made of such real and personal property,
and, except for leases of personal property terminated in the ordinary course of
business, upon consummation of the Merger, will continue to entitle Viking to
the use and possession of the real or personal property purported to be covered
thereby for the terms specified in such leases and for the purposes for which
such real or personal property is now used.
13.
19
SECTION 3.16 TITLE TO ASSETS. Viking has good, marketable and insurable
title to all the properties and assets it owns or uses in its business or
purports to own, including, without limitation, those reflected in its books and
records and in the Balance Sheet (except inventory sold after the Balance Sheet
Date in the ordinary course of business). None of such properties and assets are
subject to any mortgage, pledge, lien, charge, security interest, encumbrance,
restriction, lease, license, easement, liability or adverse claim of any nature
whatsoever, except (i) mortgages or security interests shown on the Balance
Sheet as securing specific liabilities or obligations or (ii) those
imperfections of title and encumbrances, if any, which, individually or in the
aggregate, (A) are not substantial in character, amount or extent and do not
materially detract from the value of the properties subject thereto, (B) do not
interfere with either the present and continued use of such property or the
conduct of Viking's normal operations and (C) have arisen only in the ordinary
course of business. All of the properties and assets owned, leased or used by
Viking are in good operating condition and repair, are suitable for the purposes
used, are adequate and sufficient for all current operations of Viking and are
directly related to the business of Viking.
SECTION 3.17 ENVIRONMENTAL MATTERS.
(a) For purposes of this Agreement, the following terms shall
have the following meanings: (i) "Hazardous Substances" means (A) those
substances defined in or regulated under the following United States federal
statutes and their state or foreign counterparts, as each may be amended from
time to time, and all regulations thereunder: the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum
and petroleum products including crude oil and any fractions thereof; (C)
natural gas, synthetic gas, and any mixtures thereof; (D) radon; (E) asbestos;
(F) any other pollutant or contaminant; and (G) any substance with respect to
which a federal, state or local agency requires environmental investigation,
monitoring, reporting or remediation; and (ii) "Environmental Laws" means any
United States or foreign, federal, state or local law relating to (A) releases
or threatened releases of Hazardous Substances or materials containing Hazardous
Substances; (B) the manufacture, handling, transport, use, treatment, storage or
disposal of Hazardous Substances or materials containing Hazardous Substances;
or (C) otherwise relating to pollution of the environment or the protection of
human health.
(b) Except as would not have a Material Adverse Effect: (i)
Viking has not violated and is not in violation of any Environmental law; (ii)
there has been no contamination, disposal, spilling, dumping, incineration,
discharge, storage, treatment or handling of any Hazardous Substance, on or from
any of the properties owned or leased by Viking (including, without limitation,
soils and surface and ground waters); (iii) Viking is not liable for any
off-site contamination; (iv) Viking is not liable under any Environmental Law;
(v) Viking has all permits, licenses and other authorizations required under any
Environmental Law ("Environmental Permits"); (vi) Viking has been and is in
compliance with its Environmental Permits; and
14.
20
(vii) there are no pending, or, to the best knowledge of Viking after due
inquiry, threatened claims against Viking relating to any Environmental Law or
Hazardous Substance.
SECTION 3.18 INTELLECTUAL PROPERTY. No claim is pending or, to the
knowledge of Viking, threatened to the effect that the present or past
operations of Viking infringes upon or conflicts with the rights of others with
respect to any intellectual property (including, without limitation, licenses,
patents, patent rights, patent applications, trademarks, trademark applications,
trade names, copyrights, drawings, trade secrets, know-how and computer
software) necessary to permit Viking to conduct its business as now operated
(the "Viking Intellectual Property"), except as disclosed in the Viking
Disclosure Schedule, no claim is pending or, to the best knowledge of Viking,
threatened to the effect that any of the Viking Intellectual Property is invalid
or unenforceable. Viking has provided Giga-tronics with a list of all licenses,
patents, patent rights, patent applications, trademarks, trademark applications,
trade names, copyrights and service marks of Viking and each of its
subsidiaries. Except as set forth in the Viking Disclosure Schedule, no
contract, agreement or understanding between Viking or any of its subsidiaries
and any other party exists which would impede or prevent the continued use by
Viking and its subsidiaries of the entire right, title and interest of Viking
and its subsidiaries in and to the Viking Intellectual Property.
SECTION 3.19 NO GUARANTIES. None of the obligations or liabilities of
Viking is guaranteed by, or subject to a similar contingent liability of, any
other person, firm or corporation, nor has Viking guaranteed, or otherwise
become contingently liable for, the obligations or liabilities of any other
person, firm or corporation.
SECTION 3.20 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Viking nor
any officer, employee or agent of Viking, nor any other person acting on its
behalf, has, directly or indirectly, within the past five years given or agreed
to give any gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder the
business of Viking (or assist Viking in connection with any actual or proposed
transaction) which (a) might subject Viking to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (b) if not given in
the past, might have had an adverse effect on the assets, business or operations
of Viking as reflected in the Financial Statements or (c) if not continued in
the future, might adversely affect Viking's assets, business, operations or
prospects or which might subject Viking to suit or penalty in any private or
governmental litigation or proceeding.
SECTION 3.21 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. Viking had
complied with all existing laws, rules, regulations, ordinances, orders,
judgments and decrees now applicable to its business, properties or operations
as presently conducted. Neither the ownership nor use of Viking's properties nor
the conduct of its business conflicts with the rights of any other person, firm
or corporation or violates, or with or without the giving of notice or the
passage of time, or both, will violate, conflict with or result in a default,
right to accelerate or loss of rights under, any terms or provisions of its
certificate of incorporation or by-laws as presently in effect, or any lien,
encumbrance, mortgage, deed of trust, lease, license, agreement, understanding,
law,
15.
21
ordinance, rule or regulation, or any order, judgment or decree to which Viking
is a party or by which it may be bound or affected. Neither Viking nor any
Shareholder is aware of any proposed laws, rules, regulations, ordinances,
orders, judgments, decrees, governmental takings, condemnations or other
proceedings which would be applicable to its business, operations or properties
and which might adversely affect its properties, assets, liabilities, operations
or prospects, either before or after the Closing.
SECTION 3.22 DISCLOSURE DOCUMENTS. None of the information supplied or
to be supplied by Viking for inclusion in the information materials relating to
the solicitation of the approval of Viking's shareholders of the Merger (the
"Information Materials") at the time of mailing of the Information Materials to
shareholders of Viking, and at the time of the meeting of Viking shareholders to
be held in connection with the Merger or action by written consent of
shareholders approving the Merger, contain any untrue statement of a material
fact or omits or will 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.
SECTION 3.23 TAX MATTERS. Neither Viking nor any of its affiliates has
taken or agreed to take any action that would prevent the Merger from being
effected as a pooling of interests or would prevent the Merger from constituting
a transaction qualifying under Section 368(a) of the Code. Neither Viking nor
any of its affiliates or agents is aware of any agreement, plan or other
circumstances that would prevent the Merger from qualifying under Section 368(a)
of the Code and to their best knowledge after due inquiry, the Merger will so
qualify.
SECTION 3.24 ACCOUNTING MATTERS. Schedule 3.24 of the Viking Disclosure
Schedule sets forth all persons who, as of the date of this Agreement, may be
deemed to be affiliates of Viking under Rule 145 of the Securities Act or
otherwise under applicable SEC accounting releases with respect to
pooling-of-interests accounting treatment. Prior to the date hereof, Viking has
advised such persons of the resale restrictions imposed by applicable securities
laws and required to cause the Merger to qualify for pooling-of-interests
accounting treatment.
SECTION 3.25 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement
(non-compete or otherwise), commitment, judgment, injunction order or decree to
which Viking is a party or otherwise binding upon Viking which has or could
reasonably be expected to have the effect of prohibiting or impairing any
business practice of Viking, any acquisition of property by Viking or the
conduct of business by Viking. Without limiting the foregoing, Viking has not
entered into any agreement under which Viking is restricted from selling,
licensing or otherwise distributing any of its products.
SECTION 3.26 INTERESTED PARTY TRANSACTIONS. No officer, director or
stockholder of Viking (nor any ancestor, sibling, descendant or spouse of any
such person, or any trust, partnership or corporation in which any of such
persons has or has had an interest) has or has had, directly or indirectly, (i)
an economic interest in any entity which furnished or sold, or furnishes or
sells, services or products that Viking furnishes or sells or proposes to
furnish or sell, or (ii) an economic interest in any entity that purchases from,
or sells or furnishes to, Viking any goods
16.
22
or services; provided that ownership of no more than one percent (1%) of the
outstanding voting stock of a publicly traded corporation shall not be deemed an
"economic interest in any entity" for purposes of this Section 3.26.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GIGA-TRONICS
Except as disclosed in a document referring specifically to this
Agreement (the "Giga-tronics Disclosure Schedule) which is delivered by
Giga-tronics to Viking concurrently with the execution of this Agreement or as
disclosed in public filings made by Giga-tronics with the SEC prior to the date
hereof, Giga-tronics represents and warrants to Viking as set forth below:
SECTION 4.01 CORPORATE EXISTENCE AND POWER. Giga-tronics and Merger Sub
are corporations duly incorporated, validly existing and in good standing under
the laws of the State of California. Each of Giga-tronics and Merger Sub has all
corporate powers and all material Governmental Authorizations required to carry
on its business as now conducted. Giga-tronics is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary. Giga-tronics has delivered to Viking true
and complete copies of Giga-tronics's Articles of Incorporation and Bylaws and
Merger Sub's Articles of Incorporation and Bylaws, each as currently in effect.
SECTION 4.02 CORPORATE AUTHORIZATION. The execution, delivery and
performance by Giga-tronics and Merger Sub of this Agreement, the Viking and the
Giga-tronics Affiliates Agreements and the consummation by Giga-tronics and
Merger Sub of the transactions contemplated hereby and thereby are within the
corporate powers of Giga-tronics and Merger Sub and have been duly authorized by
all necessary corporate action. The Viking and Giga-tronics Affiliates
Agreements are collectively referred to herein as the "Giga-tronics Ancillary
Agreements." This Agreement and the Giga-tronics Ancillary Agreements
constitute, or upon execution will constitute, valid and binding agreements of
Giga-tronics and Merger Sub, enforceable in each case against each in accordance
with their respective terms.
SECTION 4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Giga-tronics and Merger Sub of this Agreement and the
Giga-tronics Ancillary Agreements and the consummation of the Merger by
Giga-tronics and Merger Sub, require no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than:
(a) the filing of an agreement of merger in accordance with
California Law;
(b) compliance with any applicable requirements of the HSR
Act;
17.
23
(c) compliance with any applicable requirements of the
Exchange Act, and the rules and regulations promulgated thereunder;
(d) compliance with any applicable requirements of the
Securities Act and the rules and regulations promulgated thereunder;
(e) compliance with any applicable foreign or state securities
or "blue sky" laws; and
(f) such other filings or registrations with, or
authorizations, consents or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or obtain would not
materially adversely affect the ability of Viking, Giga-tronics or Merger Sub to
consummate the transactions contemplated hereby and operate their businesses as
heretofore operated.
SECTION 4.04 NON-CONTRAVENTION. The execution, delivery and performance
by Giga-tronics and Merger Sub of this Agreement and the Giga-tronics Ancillary
Agreements and the consummation by Giga-tronics and Merger Sub of the
transactions contemplated hereby and thereby do not and will not:
(a) contravene or conflict with the respective Articles of
Incorporation or Bylaws of Giga-tronics or Merger Sub;
(b) assuming compliance with the matters referred to in
Section 4.03, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to Giga-tronics, Merger Sub or any Subsidiary of
Giga-tronics;
(c) conflict with or result in a breach or violation of, or
constitute a default under, or result in the termination or cancellation of, or
right to accelerate, any agreement, contract or other instrument binding upon
Giga-tronics or Merger Sub or any such Subsidiary or any material license,
franchise, permit or other similar authorization held by Giga-tronics, Merger
Sub or any such Subsidiary; or
(d) result in the creation or imposition of any Lien on any
asset of Giga- tronics, Merger Sub or any Subsidiary of Giga-tronics.
SECTION 4.05 CAPITALIZATION OF GIGA-TRONICS.
(a) The authorized capital stock of Giga-tronics consists of
40,000,000 shares of Giga-tronics Common Stock and 1,000,000 shares of preferred
stock. As of the date hereof, there were outstanding:
(i) 3,379,199 shares of Giga-tronics Common Stock;
and
18.
24
(ii) employee and director stock options to purchase
an aggregate of 262,500 shares of Giga-tronics Common Stock.
Giga-tronics has authorized the issuance of employee rights to purchase 400,000
shares of Giga-tronics Common Stock under Giga-tronics' 1990 Restated Stock
Option Plan. In addition, Giga-tronics has authorized the issuance of up to
130,000 shares of Giga-tronics Common Stock under Giga-tronics' Employee Stock
Purchase Plan, which is subject to approval of the shareholders of Giga-tronics
at the next annual meeting of Giga-tronics, and pursuant to which no shares have
yet been issued. All outstanding shares of Giga-tronics Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable and free
from any preemptive rights. Except as set forth in this Section and as otherwise
contemplated by this Agreement, there are outstanding (i) no shares of capital
stock or other voting securities of Giga-tronics, (ii) no securities of
Giga-tronics convertible into or exchangeable for shares of capital stock or
voting securities of Giga-tronics and (iii) no options or other rights to
acquire from Giga-tronics, and no obligation of Giga-tronics to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or other voting securities of Giga-tronics (the items in
clauses (i), (ii) and (iii) being referred to collectively as the "Giga-tronics
Securities"). There are no outstanding obligations of Giga-tronics or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Giga-tronics
Securities. No holder of Giga-tronics Securities has, as of the date hereof, any
contractual right to include any such securities in any registration statement
proposed to be filed by Giga-tronics under the Securities Act.
(b) All shares of Giga-tronics Common Stock issued in the
Merger shall, upon issuance, be fully paid, validly issued and nonassessable.
Giga-tronics has reserved sufficient shares of Giga-tronics Common Stock for
issuance in the Merger based on the number of Viking Shares outstanding on the
date hereof.
SECTION 4.06 CAPITALIZATION OF MERGER SUB; SUBSIDIARIES. The authorized
capital stock of Merger Sub consists of 1,000 shares of common stock, no par
value, all of which are outstanding. All the issued and outstanding capital
stock of Merger Sub is owned by Giga-tronics. Merger Sub has not conducted any
business prior to the date hereof and has no assets, liabilities or obligations
of any nature other than those incident to its formation and pursuant to this
Agreement. Giga-tronics does not own, directly or indirectly, any outstanding
capital stock or equity interest in any corporation, partnership, joint venture
or other entity other than Merger Sub.
SECTION 4.07 SEC FILINGS.
(a) Giga-tronics has since March 27, 1993 filed all proxy
statements, schedules and reports required to be filed by it with the SEC
pursuant to the Exchange Act.
(b) Giga-tronics has delivered to Viking:
19.
25
(i) its annual reports on Form 10-K for its
fiscal years ended March 26, 1994, March 25, 1995, and March
30, 1996;
(ii) its quarterly report on Form 10-Q for its
fiscal quarter ending June 29, September 28 and December 28,
1996;
(iii) its proxy or information statements relating
to meetings of, or actions taken without a meeting by, the
shareholders of Giga-tronics held since March 26, 1994; and
(iv) all of its other reports, statements,
schedules and registration statements filed with the SEC since
March 26, 1994.
(c) As of its filing date, no such report or statement
filed pursuant to the Exchange Act contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(d) No such registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act, as of the
date such statement or amendment became effective, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
SECTION 4.08 FINANCIAL STATEMENTS. The audited financial statements
Giga-tronics included in its annual reports on Form 10-K and the unaudited
financial statements of Giga-tronics included in its quarterly reports on Form
10-Q referred to in Section 4.07 present fairly, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of
Giga-tronics as of the dates thereof and its results of operations,
shareholders' equity and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any interim financial statements).
For purposes of this Agreement, "Giga-tronics Balance Sheet" means the balance
sheet of Giga-tronics as of December 28, 1996, and the notes thereto, contained
in Giga-tronics's quarterly report on Form 10-Q filed for its fiscal quarter
then ended, and "Giga-tronics Balance Sheet Date" means December 28, 1996.
SECTION 4.09 DISCLOSURE DOCUMENTS. None of the information supplied or
to be supplied by Giga-tronics or Merger Sub for inclusion in the Information
Materials will, at the time of mailing of the Information Materials to
shareholders of Viking and at the time of any meeting of such shareholders to be
held in connection with the Merger or solicitation of written consent approving
the Merger, contain any untrue statement of a material fact or omits or will
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.
20.
26
SECTION 4.10 ABSENCE OF CERTAIN CHANGES. Since the Giga-tronics Balance
Sheet Date Giga-tronics and its Subsidiaries have in all material respects
conducted their business in the ordinary course and there has not been:
(a) any Material Adverse Change with respect to Giga-tronics;
(b) any declaration, setting aside or payment of any dividend
or other distribution in respect of any shares of capital stock of Giga-tronics;
(c) any repurchase, redemption or other acquisition by
Giga-tronics or any of its Subsidiaries of any outstanding shares of capital
stock or other securities of, or other ownership interests in, Giga-tronics or
any such Subsidiary;
(d) any amendment of any material term of any outstanding
Giga-tronics Securities or any Giga-tronics Subsidiary Securities;
(e) any damage, destruction or other casualty loss (whether or
not covered by insurance) materially and adversely affecting the business,
assets, liabilities, earnings or prospects of Giga-tronics or any of its
Subsidiaries;
(f) any new (or amendment to or alteration of any existing)
bonus, incentive compensation, severance, stock option, stock appreciation
right, pension, matching gift, profit-sharing, employee stock ownership,
retirement, pension group insurance, death benefit, or other fringe benefit
plan, arrangement or trust agreement adopted or implemented by Giga-tronics
which would result in a material increase in cost to Giga-tronics;
(g) the entering into of any agreement by Giga-tronics or any
person on behalf of Giga-tronics to take any of the foregoing actions.
SECTION 4.11 LITIGATION. There is no action, suit, proceeding, claim or
investigation pending or, to the best of Giga-tronics's knowledge, overtly
threatened, against Giga-tronics or any of its assets or against or involving
any of its officers, directors or employees in connection with the business or
affairs of Giga-tronics, including, without limitation, any claims for
indemnification arising under any agreement to which Giga-tronics is a party,
which could, individually or in the aggregate, have a Material Adverse Effect on
Giga-tronics or which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay any of the transactions contemplated hereby.
Giga-tronics is not subject to or in default with respect to any writ, order,
judgment, injunction or decree, which would have a Material Adverse Effect on
Giga-tronics.
21.
27
SECTION 4.12 ADVISOR'S FEES. Except for an investment banking firm
which may be selected by Giga-tronics (the "Giga-tronics Financial Advisor")
following the date hereof to render a fairness opinion in connection with the
transactions contemplated by the terms of this Agreement, whose fees will be
disclosed in writing to Viking and whose fees will be paid by Giga-tronics,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of Giga-tronics or any of its
Subsidiaries who is entitled to any fee or commission from Giga-tronics or any
of its affiliates upon consummation of the transactions contemplated by this
Agreement.
ARTICLE V
COVENANTS OF VIKING
Viking agrees that:
SECTION 5.01 CONDUCT OF VIKING. From the date hereof until the
Effective Time, Viking shall in all material respects conduct its business in
the ordinary course. Without limiting the generality of the foregoing, from the
date hereof until the Effective Time, except as contemplated hereby or
previously disclosed by Viking to Giga-tronics in writing, without the prior
written consent of Giga-tronics:
(a) Viking will not adopt or propose any change in its
Articles of Incorporation or Bylaws;
(b) Viking will not enter into or amend any employment
agreements, oral or written or increase the compensation payable or to become
payable by it to any of its officers, directors, or consultants over the amount
payable as of March 31, 1997, or increase the compensation payable to any other
employees (other than (A) increases in the ordinary course of business which are
not in the aggregate material to Viking, or (B) pursuant to plans disclosed in
Viking Disclosure Schedule), or adopt or amend any employee benefit plan or
arrangement (oral or written);
(c) Viking will not issue any Viking Securities;
(d) Viking will not pay any dividend or make any other
distribution to holders of its capital stock nor will Viking redeem or otherwise
acquire any Viking Securities;
(e) Viking will not, directly or indirectly, merge or
consolidate with another entity or dispose of or acquire any material properties
or assets except in the ordinary course of business;
22.
28
(f) Viking will not incur any additional indebtedness for
borrowed money in excess of $50,000 in the aggregate, except pursuant to
existing arrangements which have been disclosed to Giga-tronics prior to the
date hereof;
(g) Viking will not amend or change the period of
exercisability or accelerate the exercisability of any outstanding options or
warrants to acquire shares of capital stock, or accelerate, amend or change the
vesting period of any outstanding restricted stock;
(h) Viking will not, except in the ordinary course of business
consistent with past practices, sell, license or otherwise transfer to any
person any Viking intellectual property rights; and
(i) Viking will not agree or commit to do any of the
foregoing.
SECTION 5.02 SHAREHOLDERS' MEETING; PROXY MATERIAL. Viking shall cause
a meeting of its shareholders to be duly called and held as soon as reasonably
practicable or shall seek the written consent of its shareholders following the
approval by Giga-tronics of the Information Materials to be distributed to the
Viking shareholders for the purpose of voting on (or in the case of a written
consent, consenting to) the approval and adoption of this Agreement and the
Merger. The Board of Directors of Viking shall, subject to their fiduciary
duties, recommend approval and adoption of this Agreement and the Merger by
Viking's shareholders. In connection with such meeting or seeking of written
consent, Viking:
(a) will use all reasonable efforts to obtain the necessary
approvals by its shareholders of this Agreement and the transactions
contemplated hereby; and
(b) will otherwise comply with all legal requirements
applicable to such meeting.
SECTION 5.03 ACCESS TO FINANCIAL AND OPERATION INFORMATION. From the
date hereof until the Effective Time, Viking will give Giga-tronics, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access during normal business hours to the offices, properties, books
and records of Viking, will furnish to Giga-tronics, its counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data as such persons may reasonably request and will instruct Viking's
employees, counsel and financial advisors to cooperate with Giga-tronics in its
investigation of the business of Viking and in the planning for the combination
of the businesses of Viking and Giga-tronics following the consummation of the
Merger; provided that no investigation pursuant to this Section shall affect any
representation or warranty given by Viking to Giga-tronics hereunder. In
addition, Viking will cooperate in arranging joint meetings among
representatives of Viking and Giga-tronics and persons with whom Viking
maintains business relationships. All requests for information made pursuant to
this Section shall be directed to the Controller of Viking or such person as may
be designated by him. All information obtained pursuant to this Section 5.03
shall be governed by
23.
29
any confidentiality agreements currently in effect between Giga-tronics and
Viking as well as the terms of Section 5.08 of this Agreement.
SECTION 5.04 OTHER OFFERS. From the date hereof until the earlier of
the Effective Date or the termination of this Agreement in accordance with the
terms hereof, Viking and the officers, directors, employees or other agents of
Viking will not, directly or indirectly, (i) take any action to solicit,
initiate or encourage the making of any Acquisition Proposal (as hereinafter
defined); or (ii) engage in negotiations with, or disclose any nonpublic
information relating to Viking or afford access to the properties, books or
records of Viking to, any person or entity that informs the Board of Directors
that it is considering making, or has made, an Acquisition Proposal. Until this
Agreement shall be terminated in accordance with the terms hereof, Viking will
not enter into any agreement to merge or consolidate with, or sell a substantial
portion of its assets to, any person or entity. Viking will promptly notify
Giga-tronics after receipt of any Acquisition Proposal or any request for
nonpublic information relating to Viking in connection with an Acquisition
Proposal or for access to the properties, books or records of Viking by any
person or entity that informs the Board of Directors that it is considering
making, or has made, an Acquisition Proposal. The term "Acquisition Proposal"
shall mean (i) any merger, consolidation, tender offer or other similar
transaction or related transactions pursuant to which the holders of the voting
securities of Viking prior to the transaction hold following the consummation of
such transaction less than 80% of the voting securities of the surviving entity,
(ii) a sale of a material portion of the assets of Viking, or (iii) any equity
or convertible debt transaction or related transactions in which any person or
group of affiliated persons other than current security holders of Viking
acquire securities of Viking representing more than 20% of the aggregate voting
power of Viking's outstanding securities, other than in each case the
transactions contemplated by this Agreement. For purposes of the foregoing
definition, one person shall be deemed to be affiliated with a second person if
such first person controls, is controlled by or is under common control with the
second person, and control, for purposes hereof, shall be deemed to exist only
in the event there exists ownership of or the right to vote, in either case
directly or indirectly, securities representing more than 50% of the aggregate
voting power of an entity's outstanding securities.
SECTION 5.05 MAINTENANCE OF BUSINESS. Viking will use its best efforts
to carry on its business, keep available the services of its officers and
employees and preserve its relationships with those of its customers, suppliers,
licensors and others having business relationships with it that are material to
its business in substantially the same manner as it has prior to the date
hereof. If Viking becomes aware of a material deterioration or facts which are
likely to result in a material deterioration in the relationship with any
material customer, supplier, licensor or others having business relationships
with it, it will promptly bring such information to the attention of the
Giga-tronics in writing.
SECTION 5.06 COMPLIANCE WITH OBLIGATIONS. Prior to the Effective Date,
Viking shall comply with (i) all applicable federal, state, local and foreign
laws, rules and regulations, (ii) all material agreements and obligations,
including its Articles of Incorporation and Bylaws, by which
24.
30
it, its properties or its assets may be bound, and (iii) all decrees, orders,
writs, injunctions, judgments, statutes, rules and regulations applicable to
Viking and its properties or assets.
SECTION 5.07 NOTICES OF CERTAIN EVENTS. Viking shall, upon obtaining
knowledge of any of the following, promptly notify Giga-tronics of:
(a) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
Merger;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Merger; and
(c) any actions, suits, claims, investigations or other
judicial proceedings commenced or threatened against Viking which, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Sections 3.10 or 3.20 or which relate to the consummation of the
Merger.
SECTION 5.08 CONFIDENTIALITY. Viking agrees that for a period of three
years following any termination of this Agreement Viking shall not (a) disclose
to any person, association, firm, corporation or other entity in any manner,
directly or indirectly, any confidential information or data relevant to the
operations of Giga-tronics whether of a technical or commercial nature, nor (b)
use, or permit or assist, by acquiescence or otherwise, any person, association,
firm, corporation or other entity to use, directly or indirectly, any such
information or data in any manner which reasonably would be deemed to be
competitive with the operations of Giga-tronics excepting only use of (i)
information in the public domain at the time of disclosure to Viking (ii)
information subsequently coming into the public domain by means other than
disclosure by Viking or any of its agents (iii) information Viking can establish
and document was in its possession or was known to it prior to its disclosure to
Viking by Giga-tronics; (iv) information disclosed to Viking by a third party
not in violation of any obligation of confidentiality or nondisclosure known to
Viking or of which Viking should reasonably have known; or (v) information which
was independently developed by Viking or which is generally known in Viking's
industry.
SECTION 5.09 COMPLIANCE WITH THE SECURITIES ACT. Viking shall prior to
15 days after signing but in any event prior to mailing of the Information
Materials cause each person who is an "affiliate," as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act, of Viking to
deliver to Giga-tronics an Affiliates Agreement in substantially the form
attached hereto as Exhibit 5.09 (an "Viking Affiliates Agreement").
25.
31
ARTICLE VI
COVENANTS OF GIGA-TRONICS AND MERGER SUB
Giga-tronics and Merger Sub agree that:
SECTION 6.01 CONDUCT OF GIGA-TRONICS. From the date hereof until the
Effective Time, Giga-tronics and its Subsidiaries shall in all material respects
conduct their business in the ordinary course. Without limiting the generality
of the foregoing, from the date hereof until the Effective Time, except as
contemplated hereby or previously disclosed by Giga-tronics to Viking in
writing, without the prior written consent of Viking:
(a) Giga-tronics will not adopt or propose any changes in its
Certificate of Incorporation or Bylaws (other than those contemplated by the
Giga-tronics Reincorporation);
(b) Giga-tronics will not pay any dividend or make any other
distribution to holders of its capital stock nor will Giga-tronics or any of its
Subsidiaries redeem or otherwise acquire any Giga-tronics Securities;
(c) Giga-tronics shall take no extraordinary actions affecting
its capital structure (e.g., declaration of stock dividends or stock splits);
(d) Giga-tronics will not except, in the ordinary course of
business consistent with past practices, sell, license or otherwise transfer to
any person any Giga-tronics intellectual property rights or any intellectual
property rights of any of its Subsidiaries; and
(e) Giga-tronics will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.02 COMPLIANCE WITH SECURITIES LAWS. Giga-tronics shall take
any action required to be taken under foreign or state securities or "blue sky"
laws in connection with the issuance of Giga-tronics Common Stock in the Merger.
SECTION 6.03 MAINTENANCE OF BUSINESS. Giga-tronics will use its best
efforts to carry on its business, keep available the services of its officers
and employees and preserve its relationships with those of its customers,
suppliers, licensors and other persons having business relationships with it
that are material to its business in substantially the same manner as it has
prior to the date hereof. If Giga-tronics becomes aware of a material
deterioration or facts which are likely to result in a material deterioration in
the relationship with any customer, supplier, licensor or others having business
relationships with it, it will promptly bring such information to the attention
of Viking in writing.
26.
32
SECTION 6.04 COMPLIANCE WITH OBLIGATIONS. Prior to the Effective Date,
Giga-tronics and its Subsidiaries shall each comply with (i) all applicable
federal, state, local and foreign laws, rules and regulations, (ii) all material
agreements and obligations, including its respective certificate or articles of
incorporation and bylaws, by which it, its properties or its assets may be
bound, and (iii) all decrees, orders, writs, injunctions, judgments, statutes,
rules and regulations applicable to Giga-tronics and its Subsidiaries and their
respective properties or assets.
SECTION 6.05 NOTICES OF CERTAIN EVENTS. Giga-tronics shall, upon
obtaining knowledge of any of the following, promptly notify Viking of:
(a) any notice or other communication from any person alleging
that the consent of such person is or may be required in connection with the
Merger;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the Merger; and
(c) any actions, suits, claims, investigations or other
judicial proceedings commenced or threatened against Giga-tronics or any of its
Subsidiaries which, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.11 or which relate to the
consummation of the Merger.
SECTION 6.06 CONFIDENTIALITY. Giga-tronics agrees that for a period of
three years following any termination of this Agreement Giga-tronics shall not
(a) disclose to any person, association, firm, corporation or other entity in
any manner, directly or indirectly, any confidential information or data
relevant to the operations of Viking, whether of a technical or commercial
nature, nor (b) use, or permit or assist, by acquiescence or otherwise, any
person, association, firm, corporation or other entity to use, directly or
indirectly, any such information or data in any manner which reasonably would be
deemed to be competitive with the operations of Viking excepting only use of (i)
information in the public domain at the time of disclosure to Giga-tronics (ii)
information subsequently coming into the public domain by means other than
disclosure by Giga-tronics or any of its agents (iii) information Giga-tronics
can establish and document was in its possession or was known to it prior to its
disclosure to Giga-tronics by Viking; (iv) information disclosed to Giga-tronics
by a third party not in violation of any obligation of confidentiality or
nondisclosure known to Giga-tronics or of which Giga-tronics should reasonably
have known; or (v) information which was independently developed by Giga-tronics
or which is generally known in Viking's industry.
SECTION 6.07 OBLIGATIONS OF MERGER SUB. Giga-tronics will take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth in
this Agreement. Merger Sub will not issue any shares of its capital stock, any
securities convertible into or exchangeable for its capital stock, or any
option, warrant or other right to acquire its capital stock to any Person other
than Giga-tronics or a wholly owned Subsidiary of Giga-tronics. Merger Sub shall
not incur any indebtedness or liabilities of any kind except pursuant to this
Agreement.
27.
33
SECTION 6.08 COMPLIANCE WITH THE SECURITIES ACT. Giga-tronics shall use
its best efforts to cause each person who is an "affiliate," as that term is
used in paragraphs (c) and (d) of Rule 145 under the Securities Act, of
Giga-tronics to enter on or prior to the Effective Date an Affiliates Agreement
in substantially the form attached hereto as Exhibit 6.08 (a "Giga-tronics
Affiliates Agreement").
ARTICLE VII
OTHER COVENANTS OF THE PARTIES
The Parties agree that:
SECTION 7.01 ADVICE OF CHANGES. Each party will promptly advise each
other party in writing (i) of any event known to its executive officers
occurring subsequent to the date of this Agreement that would render any
representation or warranty of such party contained in this Agreement, if made on
or as of the date of such event or the Effective Date, untrue, inaccurate or
misleading in any material respect (other than an event so affecting a
representation or warranty which is expressly limited to a state of facts
existing at a time prior to the occurrence of such event) and (ii) of any
Material Adverse Change in the business condition of the party and its
Subsidiaries, taken as a whole.
SECTION 7.02 REGULATORY APPROVALS. Prior to the Effective Time, each
party shall execute and file, or join in the execution and filing of, any
application or other document that may be necessary in order to obtain the
authorization, approval or consent of any governmental body, federal, state,
local or foreign, which may be reasonably required, or that the other company
may reasonably request, in connection with the consummation of the Merger. Each
party shall use its reasonable best efforts to obtain all such authorizations,
approvals and consents.
SECTION 7.03 ACTIONS CONTRARY TO STATED INTENT. No party hereto shall,
from or after the date hereof and either before or after the Effective Time,
take any action that would prevent the Merger from qualifying as a
reorganization under Section 368 of the Code.
SECTION 7.04 CERTAIN FILINGS. The Parties shall cooperate with one
another:
(a) in connection with the preparation of the Information
Materials;
(b) in connection with the preparation of any filing required
by the HSR Act;
(c) in determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement; and
28.
34
(d) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 7.05 COMMUNICATIONS. Between the date hereof and the Effective
Time, no party will furnish any written communication to its shareholders or to
the public generally if the subject matter thereof relates to the transactions
contemplated by this Agreement without the prior approval of Viking and
Giga-tronics as to the content thereof, which approval shall not be unreasonably
withheld; provided that the foregoing shall not be deemed to prohibit any
disclosure required by any applicable law or by any competent governmental
authority.
SECTION 7.06 SATISFACTION OF CONDITIONS PRECEDENT. The parties will use
their reasonable best efforts to satisfy or cause to be satisfied all the
conditions precedent that are set forth in Article VIII, as applicable to each
of them, and to cause the transactions contemplated by this Agreement to be
consummated, and, without limiting the generality of the foregoing, to obtain
all consents and authorizations of third parties and to make all filings with,
and give all notices to, third parties that may be necessary or reasonably
required on its part in order to effect the transactions contemplated hereby.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 CONDITIONS TO OBLIGATIONS OF GIGA-TRONICS AND MERGER SUB.
The obligations of Giga-tronics and Merger Sub hereunder are subject to the
fulfillment or satisfaction, on and as of the Effective Date, of each of the
following conditions (any one or more of which may be waived by Giga-tronics,
but only in a writing signed by Giga-tronics):
(a) Accuracy of Representations and Warranties. The
representations and warranties of Viking contained in Article III shall be true
and accurate in all material respects on and as of the Effective Date with the
same force and effect as if they had been made on the Effective Date (except to
the extent a representation or warranty speaks only as of an earlier date) and
Viking shall have provided Giga-tronics with a certificate executed by the
President and the Chief Financial Officer of Viking, dated as of the Effective
Date, to such effect; provided, however, that any inaccuracy of a representation
or warranty, on the date hereof or on the Effective Date, shall not result in
the non-satisfaction of this Section 8.01(a) unless any such inaccuracy or
inaccuracies, either (i) individually or in the aggregate, represent a Material
Adverse Effect on Viking or (ii) are willful and intentional misrepresentations
of a material matter that constitute common law fraud. For purposes of this
Agreement, a "Material Adverse Effect," with respect to any person or entity,
means a material adverse effect on the financial condition, business,
liabilities (including contingent liabilities) or results of operations of such
person or entity and its subsidiaries, taken as a whole; and "Material Adverse
Change" shall
29.
35
mean a change or a development involving a prospective change which would have a
Material Adverse Effect.
(b) Covenants. Viking shall have performed and complied with
all of its covenants contained in Articles V and VII in all material respects on
or before the Effective Date, and Giga-tronics shall receive a certificate to
such effect signed by Viking's President and Chief Financial Officer.
(c) No Material Adverse Change. There shall have been no
Material Adverse Change in Viking since the Viking Balance Sheet Date.
(d) Affiliates Agreements. Giga-tronics shall have received
from each person or entity who may be deemed pursuant to Section 5.09 to be an
affiliate of Viking a duly executed Affiliates Agreement, and such Affiliates
Agreements shall remain in full force and effect.
(e) Satisfactory Completion of Due Diligence Review.
Giga-tronics shall have completed its due diligence review of the business,
operations and financial condition of Viking by May 25, 1997 and such review
shall not have revealed any facts or circumstances which in the reasonable
judgment of Giga-tronics could have a Material Adverse Effect on Viking. If such
due diligence review shall reveal facts or circumstances which in the reasonable
judgement of Giga-tronics could have a Material Adverse Effect on Viking,
Giga-tronics shall promptly notify Viking of its determination or shall be
deemed to have waived compliance with this condition.
(f) Pooling of Interests Matters. In the sole discretion of
Giga-tronics, the Merger shall qualify for accounting treatment as a pooling of
interests in accordance with Accounting Principles Board Release No. 16. In
determining whether the Merger so qualifies Giga-tronics may consider the impact
on such qualification of Viking Shares which are voted against the Merger or
which have abstained from voting with respect to the Merger.
SECTION 8.02 CONDITIONS TO OBLIGATIONS OF VIKING. Viking's obligations
hereunder are subject to the fulfillment or satisfaction, on and as of the
Effective Date, of each of the following conditions (any one or more of which
may be waived by Viking, but only in a writing signed by Viking):
(a) Accuracy of Representations and Warranties. The
representations and warranties of Giga-tronics set forth in Article IV shall be
true and accurate in all material respects on and as of the Effective Date with
the same force and effect as if they had been made on the Effective Date (except
to the extent a representation or warranty speaks only as of an earlier date and
except for changes contemplated by this Agreement) and Giga-tronics shall have
provided Viking with a certificate executed by the President and the Chief
Financial Officer of Giga-tronics, dated as of the Effective Date, to such
effect; provided, however, that any inaccuracy of a representation or warranty,
on the date hereof or on the Effective Date, shall not result in the
non-
30.
36
satisfaction of this Section 8.02(a) unless any such inaccuracy or
inaccuracies, either (i) individually or in the aggregate, represent a Material
Adverse Effect on Giga-tronics or (ii) are willful and intentional
misrepresentations that constitute common law fraud of a material matter.
(b) Covenants. Giga-tronics shall have performed and complied
with all of its covenants contained in Articles VI and VII in all material
respects on or before the Effective Date, and Viking shall receive a certificate
to such effect signed by Giga-tronics's President and Chief Financial Officer.
(c) No Material Adverse Change. There shall have been no
Material Adverse Change in Giga-tronics since the Giga-tronics Balance Sheet
Date.
SECTION 8.03 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of Viking and Giga-tronics hereunder are subject to the fulfillment,
on and as of the Effective Date, of each of the following conditions (any one or
more of which may be waived by such parties, but only in a writing signed by
such parties):
(a) Shareholder Approval. Viking's shareholders shall have
duly approved this Agreement, the Merger Agreement and the Merger, all in
accordance with applicable laws and regulatory requirements.
(b) Tax-Free Reorganization. Each of Viking and Giga-tronics
shall have received a written opinion from Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
("Xxxxxxx") to the effect that the Merger will constitute a reorganization
within the meaning of Section 368 of the Code, which opinions shall be
substantially identical in form and substance. In preparing Viking and the
Giga-tronics tax opinions, Xxxxxxx may rely on (and to the extent reasonably
required, the parties and Viking's shareholders shall make) reasonable
representations related thereto.
(c) Illegality or Legal Constraint. No statute, rule,
regulation, executive order, decree, injunction or restraining order shall have
been enacted, promulgated or enforced (and not repealed, superseded or otherwise
made inapplicable) by any court or governmental authority which prohibits the
consummation of the Merger (each party agreeing to use its reasonable best
efforts to have any such order, decree or injunction lifted).
(d) Consents. All written consents, assignments, waivers or
authorizations ("Consents"), other than Governmental Authorizations, that are
required as a result of the Merger for the continuation in full force and effect
of any material contracts or leases of Viking or Giga-tronics shall have been
obtained, other than those Consents the failure of which to obtain would not
have a Material Adverse Effect on Viking or Giga-tronics.
(e) Governmental Authorizations. There shall have been
obtained any and all Governmental Authorizations, permits, approvals and
consents of securities or "blue sky" commissions of any jurisdiction and of any
other governmental body or agency, that may
31.
37
reasonably be deemed necessary so that the consummation of the Merger will be in
compliance with applicable laws, the failure to comply with which would have a
Material Adverse Effect on Giga-tronics, Viking or the Surviving Corporation or
would be reasonably likely to subject any of Giga-tronics, Merger Sub, Viking or
any of their respective directors or officers to substantial penalties or
criminal liability.
(f) HSR Act. The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
ARTICLE IX
TERMINATION OF AGREEMENT
SECTION 9.01 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time whether before or after the approval by the
shareholders of Viking or Giga-tronics:
(a) by mutual consent of the Boards of Directors of
Giga-tronics, Merger Sub and Viking;
(b) by either Giga-tronics and Merger Sub or Viking, if the
requisite approval of the shareholders of Viking shall not be obtained
by August 1, 1997;
(c) by Giga-tronics, if it is not in material breach of its
obligations under this Agreement and if the Board of Directors of
Viking shall have:
(i) withdrawn its recommendation of the Merger, or
(ii) recommended or approved any acceptance by
shareholders of any Acquisition Proposal (other than an Acquisition
Proposal made by Giga-tronics or an affiliate of Giga-tronics); or
(d) by either Giga-tronics and Merger Sub or Viking,
respectively, (A) if there has been a breach of any representation and
warranty such that Section 8.01(a) or 8.02(a), respectively, cannot be
satisfied or (B) if there has been the willful breach on the part of
Viking or Giga-tronics and Merger Sub, respectively, of any covenant or
agreement contained in this Agreement such that Sections 8.01(b) or
8.02(b) cannot be satisfied, and in both case (A) and case (B) such
breach has not been promptly cured after notice to the breaching party;
or
(e) by Giga-tronics, if the conditions contained in Section
8.01(f) are not satisfied; or
32.
38
(f) by Giga-tronics, if Viking shall have issued any Viking
Securities between the date of this Agreement and the Closing Date
without the prior consent of Giga-tronics; or
(g) by either Giga-tronics and Merger Sub or Viking,
respectively, at any time after August 1, 1997, unless the delay is
caused by the failure of the terminating party to fulfill its
obligations hereunder.
SECTION 9.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become void, and
there shall be no liability on the part of either Giga-tronics, Merger Sub or
Viking, except that each of the agreements contained or referred to in Sections
5.08, 6.06 and 11.02 shall survive the termination hereof; provided, however,
that each party shall be entitled to any remedies at law or in equity in the
event of a breach of this Agreement by the other party.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
SECTION 10.02 FEES AND EXPENSES. Whether or not the Merger is
consummated, each party shall pay all fees and expenses incurred by such party,
including counsel fees and fees of accountants and investment bankers contracted
by such party, and any other expenses specifically identifiable to such party in
connection with the transactions contemplated hereby. Any other costs and
expenses not specifically identified as applicable to either Viking or
Giga-tronics shall be shared equally.
SECTION 10.03 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made herein, and in any instrument delivered
pursuant hereto, shall be deemed to be conditions to the Merger and shall not
survive the Merger.
SECTION 10.04 NOTICES. Any notice or communication required or
permitted by this Agreement shall be deemed sufficiently given if in writing
and, if delivered personally, when it is delivered or, if delivered in another
manner, the earlier of when it is actually received by the party to whom it is
directed or when the period set forth below expires (whether or not it is
actually received):
33.
39
(a) if deposited with the U.S. Postal Service, postage
prepaid, and addressed to the party to receive it as set forth below, 48 hours
after such deposit as registered or certified mail; or
(b) if accepted by Federal Express or a similar delivery
service in general usage for delivery to the address of the party to receive it
as set forth next below, 24 hours after the delivery time promised by the
delivery service.
Giga-tronics and Merger Sub:
Giga-tronics Incorporated
0000 Xxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Chief Executive Officer
Facsimile: (000) 000-0000
With copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Spear Street Tower
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Viking:
Viking Semiconductor Equipment, Inc.
00000 Xxx Xxxx Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
President
Facsimile: (000) 000-0000
With copy to:
Xxxxxx X. Xxxxx, Xx.
Attorney at Law
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Such communications shall be effective when they are received by the
addressee thereof. Any party may change its address for such communications by
giving notice thereof to the other parties in conformity with this Section.
34.
40
SECTION 10.05 GOVERNING LAWS. The laws of the State of California
(irrespective of its choice of law principles) shall govern all issues
concerning the Merger and all other issues concerning the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties.
SECTION 10.06 BINDING UPON SUCCESSORS AND ASSIGNS; ASSIGNMENT. This
Agreement and the provisions hereof shall be binding upon each of the parties,
their permitted successors and assigns. This Agreement may not be assigned by
any party without the prior consent of the other.
SECTION 10.07 SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall continue in full force and effect and in
no way be affected, impaired or invalidated.
SECTION 10.08 ENTIRE AGREEMENT. This Agreement and the other agreements
and instruments referenced herein constitute the entire understanding and
agreement of the parties with respect to the subject matter hereof and supersede
all prior and contemporaneous agreements or understandings, inducements or
conditions, express or implied, written or oral, between the parties with
respect hereto other than the Confidentiality Agreement.
SECTION 10.09 OTHER REMEDIES. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party shall be deemed
cumulative with and not exclusive of any other remedy conferred hereby or by law
on such party, and the exercise of any one remedy shall not preclude the
exercise of any other.
SECTION 10.10 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof or default in the performance hereof
shall not be deemed to constitute a waiver of any other default or any
succeeding breach or default. At any time before or after approval of this
Agreement and the Merger by the shareholders of Viking and prior to the
Effective Time, this Agreement may be amended or supplemented by Viking or
Giga-tronics with respect to any of the terms contained in this Agreement,
except that following approval by the shareholders of Viking there shall be no
amendment or change to the provisions hereof with respect to the Exchange Ratio
without further approval by the shareholders of Viking, and no other amendment
shall be made which by law requires further approval by such shareholders
without such further approval.
SECTION 10.11 NO WAIVER. The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
35.
41
SECTION 10.12 CONSTRUCTION OF AGREEMENT; KNOWLEDGE. A reference to an
Article, Section or an Exhibit shall mean an Article of, a Section in, or
Exhibit to, this Agreement unless otherwise explicitly set forth. The titles and
headings herein are for reference purposes only and shall not in any manner
limit the construction of this Agreement which shall be considered as a whole.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation." For purposes of
this Agreement, "knowledge" of any party shall mean the knowledge of the
executive officers of such party after such officers shall have made inquiry
that is customary and appropriate under the circumstances to which reference is
made.
SECTION 10.13 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against any party
whose signature appears thereon and all of which together shall constitute one
and the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the paries reflected hereon as signatories.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GIGA-TRONICS INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Chief Executive Officer
GTV ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President
VIKING SEMICONDUCTOR
EQUIPMENT, INC.
36.
42
GLOSSARY
--------
PAGE
Acquisition Proposal..............................................24
Agreement..........................................................1
Agreement of Merger................................................2
Xxxxxxx...........................................................31
Certificate........................................................3
Certificates.......................................................3
Closing............................................................2
Closing Date.......................................................2
Code...............................................................1
Consents..........................................................31
Dissenting Shareholder.............................................4
Dissenting Viking Shares...........................................4
Effective Date.....................................................2
Effective Time.....................................................2
Employment Contracts ............................................12
Environmental Laws ............................................14
Environmental Permits ............................................14
ERISA.............................................................12
Exchange Act...................................................7, 17
Exchange Agent.....................................................3
Exchange Ratio.....................................................3
Financial Statements...............................................8
Giga-tronics.......................................................1
Giga-tronics Affiliates Agreement.................................28
Giga-tronics Ancillary Agreements.................................17
Giga-tronics Balance Sheet........................................20
Giga-tronics Balance Sheet Date...................................20
Giga-tronics Common Stock..........................................1
Giga-tronics Disclosure Schedule..................................17
Giga-tronics Financial Advisor....................................21
Giga-tronics Securities...........................................19
Giga-tronics Stock Option Plan....................................19
Governmental Authorizations........................................6
Hazardous Substances..............................................14
HSR Act............................................................7
IRS...............................................................12
Lien...............................................................8
Material Adverse Change...........................................30
Material Adverse Effect...........................................29
Material Viking Agreement.........................................13
37.
43
PAGE
Merger..........................................................1, 2
Merger Consideration...............................................2
Merger Sub.........................................................1
Plans.............................................................12
Proxy Statement...................................................16
Securities Act.....................................................5
Surviving Corporation..............................................2
Tax...............................................................11
Taxes.............................................................11
Viking.............................................................1
Viking Affiliates Agreement.......................................25
Viking Ancillary Agreements........................................6
Viking Balance Sheet...............................................8
Viking Balance Sheet Date..........................................8
Viking Common Stock................................................1
Viking Disclosure Schedule.........................................6
Viking Intellectual Property......................................15
Viking Options.....................................................3
Viking Outstanding Equivalent Number...............................3
Viking Securities..................................................8
Viking Shares......................................................2
38.
44
EXHIBIT 1.01
AGREEMENT OF MERGER
This Agreement of Merger, dated as of _______________, 199__
("Merger Agreement"), is made and entered into by GTV Acquisition Corp., a
California corporation ("GTV"), Viking Semiconductor Equipment, Inc., a
California corporation ("Viking") (GTV and Viking being collectively referred
to as the "Constituent Corporations") and Giga-tronics Incorporated, a
California corporation ("Giga-tronics").
WITNESSETH:
WHEREAS, the Constituent Corporations and Giga-tronics
previously have entered into an Agreement and Plan of Reorganization (the
"Agreement and Plan of Reorganization") providing for certain representations,
warranties and agreements in connection with the transactions contemplated; and
WHEREAS, the Boards of Directors of the Constituent
Corporations deem it advisable and in the best interests of the Constituent
Corporations and in the best interests of the shareholders of the Constituent
Corporations that GTV merge (the "Merger") with and into Viking.
NOW, THEREFORE, the Constituent Corporations and Giga-tronics
hereby agree as follows:
ARTICLE I.
The Constituent Corporations
1.01 (a) Viking was incorporated under the laws of the
State of California on December 16, 1983.
(b) Viking is authorized to issue an aggregate of
100,000 Common Shares (the "Viking Common Stock").
(c) As of the date and time immediately prior to
the consummation of the Merger, there will be an aggregate of 27,313 shares of
Viking Common Stock outstanding.
1.02 (a) GTV was incorporated under the laws of the
State of California on April 7, 1997.
45
(b) GTV is authorized to issue an aggregate of
1,000 shares of common stock ("GTV Common Stock").
(c) As of the date and time immediately prior to
the consummation of the Merger, an aggregate of 1,000 shares of GTV Common
Stock were outstanding and owned by Giga-tronics.
ARTICLE II.
The Merger
2.01 (a) This Merger Agreement shall be submitted to
the shareholders of Viking and GTV. If adopted and approved by the
shareholders of Viking and GTV and if all of the conditions precedent to the
consummation of the Merger specified in the Agreement and Plan of
Reorganization shall have been satisfied or duly waived by the party entitled
to satisfaction thereof, then, unless terminated as provided in the Agreement
and Plan of Reorganization, this Merger Agreement, along with certificates
meeting the requirements of the California General Corporation Law, shall be
filed with the Secretary of State of California. Upon such filing, the Merger
shall become effective ("Effective Time of the Merger").
(b) At the Effective Time of the Merger, GTV
shall be merged into Viking and the separate corporate existence of GTV shall
thereupon cease. Viking shall be the surviving corporation in the Merger (the
"Surviving Corporation") and the separate corporate existence of Viking, with
all of its purposes, objects, rights, privileges, powers, immunities and
franchises, shall continue unaffected and unimpaired by the Merger.
2.02 (a) The Surviving Corporation shall succeed to
all of the rights, privileges, powers, immunities and franchises of GTV, all of
the properties and assets of GTV and all of the debts, choices in action and
other interests due or belonging to GTV and shall be subject to, and
responsible for, all of the debts, liabilities and obligations of GTV with the
effect set forth in the California General Corporation Law.
(b) If, at any time after the Effective Time of
the Merger, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things
are necessary or desirable to vest, perfect or confirm of record or otherwise
in the Surviving Corporation its right, title or interest in, to or under any
of the rights, properties or assets of GTV acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger or to
otherwise carry out this Merger Agreement, the officers and directors of the
Surviving Corporation shall and will be authorized to execute and deliver, in
the name and on behalf of the Constituent Corporations or otherwise, all such
deeds, bills of sale,
2.
46
assignments and assurances and to take and do, in the name and on behalf of the
Constituent Corporations or otherwise, all such other actions and things as may
be necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties or assets in the
Surviving Corporation or to otherwise carry out this Merger Agreement.
ARTICLE III.
Articles of Incorporation
3.01 The Articles of Incorporation of Viking in effect
immediately prior to the Effective Time of the Merger shall be amended and
restated to read as attached at Exhibit 1.
ARTICLE IV.
Manner And Basis Of Converting Shares
Of The Constituent Corporations
4.01 At the Effective Time of the Merger:
(a) Each share of GTV Stock which is outstanding
immediately prior to the Effective Time of the Merger shall be converted at the
Effective Time of the Merger into one share of Viking Common Stock.
(b) Each share of Viking Common Stock (except for
shares, if any, which shall then or thereafter constitute "dissenting shares"
within the meaning of Section 1300 of the California General Corporation Law
and those shares of GTV Common Stock converted to shares of Viking Common Stock
Pursuant to Section 4.01(a) above) which is outstanding immediately prior to
the Effective Time of the Merger shall be converted at the Effective Time of
the Merger into [______ FINAL NUMBER TO BE INSERTED AT CLOSING PURSUANT TO
CALCULATION CONTAINED IN REORGANIZATION AGREEMENT] shares (the "Exchange
Ratio") of Giga-tronics Common Stock.
4.02 Giga-tronics shall not be required to issue or
deliver any fractional shares of Giga-tronics Common Stock or any Giga- tronics
certificates representing fractional shares of Giga-tronics Common Stock in
connection with any exchange of Viking certificates for Giga-tronics
certificates; however, Giga-tronics shall pay to each person who would
otherwise be entitled to receive an Giga-tronics certificate representing a
fractional share of Giga-tronics Common Stock an amount in cash (rounded to the
nearest whole cent) equal to such fraction multiplied by the closing sale price
per share
3.
47
of Giga-tronics Common Stock on the last business day on which the Giga-tronics
Common Stock is traded on the NASDAQ National Market prior to the Effective
Time.
4.03 Immediately after the Effective Time of the Merger
and after surrender to Giga-tronics or such other party designated by
Giga-tronics (the "Exchange Agent") of any certificate which prior to the
Effective Time of the Merger shall have represented any shares of Viking Common
Stock, Giga-tronics shall cause to be distributed to the person in whose name
such certificate shall have been issued a certificate registered in the name of
such person representing the whole shares of Giga-tronics Common Stock into
which any shares previously represented by the surrendered certificate shall
have been converted at the Effective Time of the Merger, along with the check
representing the value of any fractional share as determined in Section 4.02
above. Until surrendered to the Exchange Agent, each certificate which
immediately prior to the Effective Time of the Merger shall have represented
any share of Viking Common Stock shall be deemed at and after the Effective
Time of the Merger to represent only the right to receive upon surrender the
certificate and payment contemplated above. Upon such surrender, there shall
be paid to the person in whose name the certificate representing such shares of
Giga-tronics Common Stock shall be issued and without interest any dividends
which shall have become payable with respect to such shares of Giga-tronics
Common Stock between the Effective Time of the Merger and the time of such
surrender.
ARTICLE V.
General
5.01 This Merger Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.02 Notwithstanding approval of this Merger Agreement by
the shareholders of either of the Constituent Corporations, this Merger
Agreement shall terminate forthwith in the event that the Agreement and Plan of
Reorganization shall be terminated as therein provided.
5.03 This Merger Agreement may be amended by the parties
hereto at any time before or after approval hereof by the shareholders of
either of the Constituent Corporations, but, after any such approval, no
amendment shall be made which would have a material adverse effect on the
shareholders of either of the Constituent Corporations, or change any of the
principal terms of the Merger Agreement, without the further approval of such
shareholders. This Merger Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
4.
48
Without limiting the foregoing, the parties hereto acknowledge and agree that
any modification of the manner or basis of converting Viking Common Stock into
Giga-tronics Common Stock shall require further approval of the Board of
Directors (or appropriate committee thereof empowered to so act) of
Giga-tronics and the shareholders of Viking.
IN WITNESS WHEREOF, the parties have duly executed this Merger
Agreement as of the date first written above.
GTV ACQUISITION CORP.
By ________________________________
Xxxxxx X. Xxxxx, Xx.
President
By ________________________________
Secretary
VIKING SEMICONDUCTOR EQUIPMENT, INC.
By ________________________________
Xxxx X. Xxxxxxxx
President
By ________________________________
Xxxx X. Xxxxxxxx
Secretary
GIGA-TRONICS INCORPORATED
By ________________________________
Xxxxxx X. Xxxxx, Xx.
Chief Executive Officer
By ________________________________
Secretary
5.
49
Exhibit 1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
VIKING SEMICONDUCTOR EQUIPMENT, INC.
ONE. The name of the corporation is Viking Semiconductor Equipment,
Inc.
TWO. The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated
by the California Corporations Code.
THREE. The Corporation is authorized to issue One Thousand (1,000)
shares of Common Stock of one class.
FOUR. The liability of the directors of the Corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
FIVE. The Corporation is authorized to indemnify the directors and
officers of the Corporation to the fullest extent permissible under California
law.
6.
50
EXHIBIT 5.09
FORM OF VIKING AFFILIATES AGREEMENT
THIS AFFILIATES AGREEMENT (the "Agreement") is entered
into as of this __ day of _____, 1997 among GIGA-TRONICS, INC., a California
corporation ("Giga-tronics"), the undersigned shareholder ("Shareholder")
of VIKING SEMICONDUCTOR EQUIPMENT, INC., a California corporation ("Viking"),
GTV ACQUISITION CORP., a California corporation and wholly owned subsidiary of
Giga-tronics ("MERGER SUB") and Viking.
This Agreement is entered into in connection with that
certain Agreement and Plan of Reorganization dated as of June 6, 1997 (the
"Reorganization Agreement") among Giga-tronics, Merger Sub, and Viking. The
Reorganization Agreement provides for the merger (the "Merger") of Merger Sub
with and into Viking in a transaction in which issued and outstanding shares of
common stock, no par value, of Viking (the "Viking Stock") will be exchanged
for shares of common stock, no par value of Giga-tronics (the "Giga-tronics
Stock") on the terms and conditions set forth in the Reorganization Agreement.
Capitalized terms used herein and not defined herein shall have their defined
meanings as set forth in the Reorganization Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties and covenants set forth herein, the parties
agree as follows:
1. TAX AND ACCOUNTING TREATMENT. Shareholder
understands and agrees that it is intended that the Merger will be treated as a
"reorganization" for federal income tax purposes and as a "pooling of
interests" in accordance with generally accepted accounting principals and the
applicable General Rules and Regulations published by the Securities and
Exchange Commission (the "SEC"). Shareholder further understands and agrees
that Shareholder may be deemed to be an "Affiliate" of Viking within the
meaning of Rule 145 ("Rule 145") promulgated under the Securities Act of
1933, as amended (the "Securities Act"), although nothing contained herein
should be construed as an admission of such fact.
2. RELIANCE UPON REPRESENTATIONS, WARRANTIES AND
COVENANTS. Shareholder has been informed that the treatment of the Merger as a
reorganization for federal income tax purposes requires that a sufficient
number of former stockholders of Viking maintain a meaningful continuing equity
ownership interest in Giga-tronics after the Merger. Shareholder understands
that the representations, warranties and covenants of the Shareholder set forth
herein will be relied upon by Giga-tronics, Viking, and agrees that
1.
51
their respective counsel and accounting firms and other stockholders of Viking
shall be entitled to rely thereon.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SHAREHOLDER. Shareholder represents, warrants and covenants as follows:
(a) Shareholder has full power and authority
to execute this Agreement, to make the representations, warranties and
covenants herein contained and to perform Shareholder's obligations
hereunder.
(b) Appendix A attached hereto sets forth all
shares of Viking Stock owned by Shareholder, including all Viking
Stock as to which Shareholder has sole or shared voting or investment
power and all rights and options to acquire Viking Stock.
(c) Shareholder will not sell, transfer,
exchange, pledge, or otherwise dispose of, or make any offer or
agreement relating to any of the foregoing with respect to, any shares
of Giga-tronics Stock that Shareholder may acquire in connection with
the Merger, or any securities that may be paid as a dividend or
otherwise distributed thereon or with respect thereto or issued or
delivered in exchange or substitution therefor (all such shares and
other securities of Giga-tronics being herein sometimes collectively
referred to as "Restricted Securities"), or any option, right or
other interest with respect to any Restricted Securities, unless (i)
such transaction is permitted pursuant to Rule 144 and 145(d) under
the Securities Act, (ii) counsel representing Shareholder shall have
advised Giga-tronics in a written opinion letter satisfactory to
Giga-tronics and Giga-tronics's legal counsel, and upon which
Giga-tronics and its legal counsel may rely, that no registration
under the Securities Act would be required in connection with the
proposed sale, transfer or other disposition, (iii) a registration
statement under the Securities Act covering the Giga-tronics Stock
proposed to be sold, transferred or otherwise disposed of, describing
the manner and terms of the proposed sale, transfer or other
disposition, and containing a current prospectus, shall have been
filed with the SEC and made effective under the Securities Act, or
(iv) an authorized representative of the SEC shall have rendered
written advice to Shareholder (sought by Shareholder or counsel to
Shareholder, with a copy thereof and all other related communications
delivered to Giga-tronics) to the effect that the SEC would take no
action, or that the staff of the SEC would not recommend that the SEC
take action, with respect to the proposed disposition if consummated.
(d) Notwithstanding any other provision of
this Agreement to the contrary, Shareholder will not sell, transfer,
exchange, pledge or otherwise dispose of, or in any other way reduce
Shareholder's risk of ownership or investment in, or make any offer or
agreement relating to any of the foregoing with respect to any Viking
Stock or any rights, options or warrants to purchase Viking Stock, or
any
2.
52
Restricted Securities or other securities of Giga-tronics (i) during
the 30-day period immediately preceding the Effective Time of the
Merger and (ii) until such time after the Effective Time of the Merger
as Giga-tronics has publicly released a report including the combined
financial results of Giga-tronics and Viking for a period of at least
30 days of combined operations of Giga-tronics and Viking within the
meaning of Accounting Series Release No. 130, as amended, of the SEC.
Giga-tronics agrees to publish such financial results expeditiously in
a manner consistent with its prior practices; provided that nothing
contained herein shall obligate Giga- tronics to publish its financial
results other than on a quarterly basis.
(e) Shareholder has, and as of the Effective
Time of the Merger will have, no plan or intention (a "Plan") to
sell, transfer, exchange, pledge (other than in a pre-existing bona
fide margin account) or otherwise dispose of (any of the foregoing, a
"Sale"), more than fifty percent (50%) of the shares of Giga-tronics
Stock that Shareholder may acquire in connection with the Merger, or
any securities that may be paid as a dividend or otherwise distributed
thereon or with respect thereto or issued or delivered in exchange or
substitution therefor. Sale shall also be deemed to include a
distribution by a partnership to its partners, or a corporation to its
stockholders, or any other transaction which results in a reduction in
the risk of ownership. Shareholder is not aware of, or participating
in, any Plan on the part of Viking stockholders to engage in Sales of
the shares of Giga-tronics Stock to be issued in the Merger such that
the aggregate fair market value, as of the Effective Time of the
Merger, of the shares subject to such Sales would exceed fifty percent
(50%) of the aggregate fair market value of all shares of outstanding
Viking Stock immediately prior to the Merger. For purposes of the
preceding sentence, shares of Viking Stock (i) with respect to which
dissenters' rights are exercised, (ii) which are exchanged for cash in
lieu of fractional shares of Giga-tronics Stock or (iii) with respect
to which a pre- Merger Sale occurs in a transaction that is in
contemplation of, or related or pursuant to, the Merger or the
Reorganization Agreement, shall be considered to be shares of Viking
Stock that are exchanged for Giga-tronics Stock in the Merger and then
disposed of pursuant to a Plan. If any of Shareholder's
representations in this Section 3(e) ceases to be true at any time
prior to the Effective Time of the Merger, Shareholder will deliver to
each of Viking and Giga-tronics, prior to the Effective Time of the
Merger, a written statement to that effect, signed by Shareholder.
4. RULE 144 AND 145. From and after the Effective Time
of the Merger and for so long as is necessary in order to permit Shareholder to
sell the Giga-tronics Stock held by and pursuant to Rule 144 under the
Securities Act, Giga-tronics will use its best efforts to file on a timely
basis all reports required to be filed by it pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, referred to in paragraph (c)(1) of
Rule 144 under the Securities Act, in order to permit Shareholder to sell the
Giga-tronics Stock held by it pursuant to the terms and conditions of Rule 144.
Shareholder understands that, Giga-tronics is under no obligation to register
the sale, transfer or other disposition of any
3.
53
Restricted Securities by or on behalf of Shareholder or to take any other
action necessary in order to make compliance with an exemption from
registration available.
5. NOTICES. Any notice or communication required or
permitted by this Agreement shall be deemed sufficiently given if in writing
and, if delivered personally, when it is delivered or, if delivered in another
manner, the earlier of when it is actually received by the party to whom it is
directed or when the period set forth below expires (whether or not it is
actually received):
A. if deposited with the U.S. Postal Service, postage
prepaid, and addressed to the party to receive it as set forth below, 48 hours
after such deposit as registered or certified mail; or
B. if accepted by Federal Express or a similar delivery
service in general usage for delivery to the address of the party to receive it
as set forth next below, 24 hours after the delivery time promised by the
delivery service.
Giga-tronics and Merger Sub:
Giga-tronics, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Chief Executive Officer
Facsimile: (000) 000-0000
With copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx
Xxxxx Street Tower
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Viking:
Viking Semiconductor Equipment, Inc.
00000 Xxx Xxxx Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
President
Facsimile: (000) 000-0000
4.
54
With copy to:
Xxxxx X. Xxxxx, Xx.
Attorney-at-Law
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to Shareholder:
At the address set forth beneath the Shareholder's signature
below.
or to such other address as any party may designate for itself by notice given
as provided in this Agreement.
6. TERMINATION. This Agreement shall be terminated and
shall be of no further force and effect upon the termination of the
Reorganization Agreement pursuant to Article IX thereof.
7. BINDING AGREEMENT. This Agreement will inure to the
benefit of and be binding upon and enforceable against the parties and their
successors and assigns, including administrators, executors, representatives,
heirs, legatees and devisees of Shareholder and any pledgee holding Restricted
Securities as collateral.
8. WAIVER. No waiver by any party hereto of any
condition or of any breach of any provision of this Agreement shall be
effective unless in writing and signed by each party hereto.
9. GOVERNING LAW. This Agreement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the
State of California (irrespective of its choice of law provisions).
10. ATTORNEYS' FEES. In the event of any legal action or
proceeding to enforce or interpret the provisions hereof, the prevailing party
shall be entitled to reasonable attorneys' fees, whether or not the proceeding
results in a final judgment.
11. EFFECT OF HEADINGS. The section headings herein are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
12. COUNTERPARTS. This Agreement shall be executed in
one or more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one instrument.
5.
55
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
GIGA-TRONICS, INC.
By ________________________________
Name:
Title: Chief Executive Officer
SHAREHOLDER:
___________________________________
Name:
Address:
___________________________________
___________________________________
GTV ACQUISITION CORP.
By ________________________________
Name:
Title: Chief Executive Officer
VIKING SEMICONDUCTOR EQUIPMENT, INC.
By ________________________________
Name:
Title: President
6.
56
APPENDIX A
RESTRICTED SECURITIES
Number of Shares
Viking Common Stock . . . . . . . . . . . . . . . . . _____________________
7.
57
EXHIBIT 6.08
FORM OF GIGA-TRONICS AFFILIATES AGREEMENT
THIS AFFILIATES AGREEMENT (the "Agreement") is entered into
as of this __ day of _____, 1997 among GIGA-TRONICS INCORPORATED, a California
corporation ("Giga-tronics"), the undersigned shareholder ("Shareholder")
of Giga-tronics, GTV ACQUISITION CORP., a California corporation and wholly
owned subsidiary of Giga-tronics ("Merger Sub") and VIKING SEMICONDUCTOR
EQUIPMENT, INC., a California corporation ("Viking").
This Agreement is entered into in connection with that certain
Agreement and Plan of Reorganization dated as of June 6, 1997 (the
"Reorganization Agreement") among Giga-tronics, Merger Sub, and Viking. The
Reorganization Agreement provides for the merger (the "Merger") of Merger Sub
with and into Viking in a transaction in which issued and outstanding shares of
common stock, no par value, of Viking (the "Viking Stock") will be exchanged
for shares of common stock, no par value, of Giga-tronics (the "Giga-tronics
Stock") on the terms and conditions set forth in the Reorganization Agreement.
Capitalized terms used herein and not defined herein shall have their defined
meanings as set forth in the Reorganization Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties and covenants set forth herein, the parties
agree as follows:
1. TAX AND ACCOUNTING TREATMENT. Shareholder
understands and agrees that it is intended that the Merger will be treated as a
"reorganization" for federal income tax purposes and as a "pooling of
interests" in accordance with generally accepted accounting principals and the
applicable General Rules and Regulations published by the Securities and
Exchange Commission (the "SEC"). Shareholder further understands and agrees
that Shareholder may be deemed to be an "Affiliate" of Giga-tronics within
the meaning of Rule 145 ("Rule 145") promulgated under the Securities Act of
1933, as amended (the "Securities Act"), although nothing contained herein
should be construed as an admission of such fact.
2. RELIANCE UPON REPRESENTATIONS, WARRANTIES AND
COVENANTS. Shareholder has been informed that the treatment of the Merger as a
reorganization for federal income tax purposes requires that a sufficient
number of shareholders of Giga-tronics maintain a meaningful continuing equity
ownership interest in Giga-tronics after the Merger. Shareholder understands
that the representations, warranties and covenants of the Shareholder set forth
herein will be relied upon by Giga-tronics, Viking, and agrees that their
respective counsel and accounting firms and other shareholders of Viking shall
be entitled to rely thereon.
1.
58
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDER.
Shareholder represents, warrants and covenants as follows:
(a) Shareholder has full power and authority to
execute this Agreement, to make the representations, warranties and
covenants herein contained and to perform Shareholder's obligations
hereunder.
(b) Appendix A attached hereto sets forth all
shares of Giga-tronics stock owned by Shareholder, including all
Giga-tronics stock as to which Shareholder has sole or shared voting
or investment power and all rights and options to acquire Giga-
tronics stock.
(c) Notwithstanding any other provision of this
Agreement to the contrary, Shareholder will not sell, transfer,
exchange, pledge or otherwise dispose of, or in any other way reduce
Shareholder's risk of ownership or investment in, or make any offer or
agreement relating to any of the foregoing with respect to any
Giga-tronics stock or any rights, options or warrants to purchase
Giga-tronics stock, or other securities of Giga-tronics (i) during the
30-day period immediately preceding the Effective Time of the Merger
and (ii) until such time after the Effective Time of the Merger as
Giga-tronics has publicly released a report including the combined
financial results of Giga-tronics and Viking for a period of at least
30 days of combined operations of Giga-tronics and Viking within the
meaning of Accounting Series Release No. 130, as amended, of the SEC.
Giga-tronics agrees to publish such financial results expeditiously in
a manner consistent with its prior practices; provided that nothing
contained herein shall obligate Giga- tronics to publish its financial
results other than on a quarterly basis.
(d) Shareholder has, and as of the Effective Time
of the Merger will have, no plan or intention (a "Plan") to sell,
transfer, exchange, pledge (other than in a pre-existing bona fide
margin account) or otherwise dispose of (any of the foregoing, a
"Sale"), more than fifty percent (50%) of the shares of Giga-tronics
Stock that Shareholder may acquire in connection with the Merger, or
any securities that may be paid as a dividend or otherwise distributed
thereon or with respect thereto or issued or delivered in exchange or
substitution therefor. Sale shall also be deemed to include a
distribution by a partnership to its partners, or a corporation to its
shareholders, or any other transaction which results in a reduction in
the risk of ownership. Shareholder is not aware of, or participating
in, any Plan on the part of Viking shareholders to engage in Sales of
the shares of Giga-tronics Stock to be issued in the Merger such that
the aggregate fair market value, as of the Effective Time of the
Merger, of the shares subject to such Sales would exceed fifty percent
(50%) of the aggregate fair market value of all shares of outstanding
Viking Stock immediately prior to the Merger. For purposes of the
preceding sentence, shares of Viking Stock (i) with respect to which
dissenters' rights are exercised, (ii) which are exchanged for cash in
lieu of fractional shares of Giga-tronics Stock or (iii) with
2.
59
respect to which a pre-Merger Sale occurs in a transaction that is in
contemplation of, or related or pursuant to, the Merger or the
Reorganization Agreement, shall be considered to be shares of Viking
Stock that are exchanged for Giga-tronics Stock in the Merger and then
disposed of pursuant to a Plan. If any of Shareholder's
representations in this Section 3(e) ceases to be true at any time
prior to the Effective Time of the Merger, Shareholder will deliver to
each of Viking and Giga-tronics, prior to the Effective Time of the
Merger, a written statement to that effect, signed by Shareholder.
4. NOTICES. Any notice or communication required or
permitted by this Agreement shall be deemed sufficiently given if in writing
and, if delivered personally, when it is delivered or, if delivered in another
manner, the earlier of when it is actually received by the party to whom it is
directed or when the period set forth below expires (whether or not it is
actually received):
A. if deposited with the U.S. Postal Service, postage
prepaid, and addressed to the party to receive it as set forth below, 48 hours
after such deposit as registered or certified mail; or
B. if accepted by Federal Express or a similar delivery
service in general usage for delivery to the address of the party to receive it
as set forth next below, 24 hours after the delivery time promised by the
delivery service.
Giga-tronics and Merger Sub:
Giga-tronics Incorporated
0000 Xxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Chief Executive Officer
Facsimile: (000) 000-0000
With copy to:
Xxxxxxx, Phleger & Xxxxxxxx
Xxxxx Street Tower
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
3.
60
Viking:
Viking Semiconductor Equipment, Inc.
00000 Xxx Xxxx Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
President
Facsimile: (000) 000-0000
With copy to:
Xxxxx X. Xxxxx, Xx.
Attorney-at-Law
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to Shareholder:
At the address set forth beneath the Shareholder's signature
below,
or to such other address as any party may designate for itself by notice given
as provided in this Agreement.
5. TERMINATION. This Agreement shall be terminated and
shall be of no further force and effect upon the termination of the
Reorganization Agreement pursuant to Article IX thereof.
6. BINDING AGREEMENT. This Agreement will inure to the
benefit of and be binding upon and enforceable against the parties and their
successors and assigns, including administrators, executors, representatives,
heirs, legatees and devisees of Shareholder and any pledgee holding Restricted
Securities as collateral.
7. WAIVER. No waiver by any party hereto of any
condition or of any breach of any provision of this Agreement shall be
effective unless in writing and signed by each party hereto.
8. GOVERNING LAW. This Agreement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the
State of California (irrespective of its choice of law provisions).
4.
61
9. ATTORNEYS' FEES. In the event of any legal action or
proceeding to enforce or interpret the provisions hereof, the prevailing party
shall be entitled to reasonable attorneys' fees, whether or not the proceeding
results in a final judgment.
10. EFFECT OF HEADINGS. The section headings herein are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
11. COUNTERPARTS. This Agreement shall be executed in
one or more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one instrument.
5.
62
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
GIGA-TRONICS INCORPORATED
By ________________________________
Name:
Title: Chief Executive Officer
SHAREHOLDER:
___________________________________
Name:
Address:
___________________________________
___________________________________
GTV ACQUISITION CORP.
By ________________________________
Name:
Title: Chief Executive Officer
VIKING SEMICONDUCTOR EQUIPMENT, INC.
By ________________________________
Name:
Title: President
6.
63
Appendix A
RESTRICTED SECURITIES
Number of Shares
Giga-tronics Common Stock . . . . . . . . . . . _______________
_____________________________________________________________________________
Options or Warrants to Purchase Giga-tronics Common Stock
__________________________________________ _______________
__________________________________________ _______________
__________________________________________ _______________
