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Exhibit 3
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AGREEMENT AND PLAN OF MERGER
Among
ERICSSON INC.,
ERICSSON MPD ACQUISITION CORP.,
and
MICROWAVE POWER DEVICES, INC.
Dated as of October 12, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions...................................................2
ARTICLE II
THE OFFER
SECTION 2.01. The Offer.....................................................6
SECTION 2.02. Company Action................................................8
ARTICLE III
THE MERGER
SECTION 3.01. The Merger....................................................9
SECTION 3.02. Effective Time; Closing.......................................9
SECTION 3.03. Effect of the Merger..........................................9
SECTION 3.04. Certificate of Incorporation; By-laws.........................9
SECTION 3.05. Directors and Officers.......................................10
SECTION 3.06. Conversion of Securities.....................................10
SECTION 3.07. Employee Stock Options.......................................10
SECTION 3.08. Dissenting Shares............................................11
SECTION 3.09. Surrender of Shares; Stock Transfer Books....................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Organization and Qualification; Subsidiaries.................13
SECTION 4.02. Certificate of Incorporation and By-laws.....................14
SECTION 4.03. Capitalization...............................................14
SECTION 4.04. Authority Relative to This Agreement.........................14
SECTION 4.05. No Conflict; Required Filings and Consents...................15
SECTION 4.06. Permits; Compliance..........................................16
SECTION 4.07. SEC Filings; Financial Statements............................16
SECTION 4.08. Absence of Certain Changes or Events.........................17
SECTION 4.09. Absence of Litigation........................................17
SECTION 4.10. Employee Benefit Plans.......................................18
SECTION 4.11. Labor and Employment Matters.................................20
SECTION 4.12. Offer Documents; Schedule 14D-9; Proxy Statement.............20
SECTION 4.13. Property and Leases..........................................21
SECTION 4.14. Intellectual Property........................................22
SECTION 4.15. Taxes........................................................23
SECTION 4.16. Environmental Matters........................................23
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SECTION 4.17. Material Contracts...........................................23
SECTION 4.18. Insurance....................................................25
SECTION 4.19. Brokers......................................................25
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01. Corporate Organization.......................................26
SECTION 5.02. Authority Relative to This Agreement.........................26
SECTION 5.03. No Conflict; Required Filings and Consents...................26
SECTION 5.04. Financing....................................................27
SECTION 5.05. Offer Documents; Proxy Statement.............................27
SECTION 5.06. Purchaser....................................................27
SECTION 5.07. Brokers......................................................28
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the Merger........28
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholders' Meeting........................................30
SECTION 7.02. Proxy Statement..............................................30
SECTION 7.03. Company Board Representation; Section 14(f)..................31
SECTION 7.04. Access to Information; Confidentiality.......................32
SECTION 7.05. No Solicitation of Transactions..............................32
SECTION 7.06. Employee Benefits Matters....................................33
SECTION 7.07. Directors' and Officers' Indemnification and Insurance.......33
SECTION 7.08. Notification of Certain Matters..............................35
SECTION 7.09. Further Action; Reasonable Best Efforts......................35
SECTION 7.10. Public Announcements.........................................36
SECTION 7.11. Confirmation of No Withholding...............................36
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Merger.....................................36
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination..................................................37
SECTION 9.02. Effect of Termination........................................38
SECTION 9.03. Fees and Expenses............................................38
SECTION 9.04. Amendment....................................................39
SECTION 9.05. Waiver.......................................................39
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Notices.....................................................39
SECTION 10.02. Severability................................................40
SECTION 10.03. Entire Agreement; Assignment................................41
SECTION 10.04. Parties in Interest.........................................41
SECTION 10.05. Specific Performance........................................41
SECTION 10.06. Governing Law...............................................41
SECTION 10.07. Waiver of Jury Trial........................................41
SECTION 10.08. Headings....................................................42
SECTION 10.09. Counterparts................................................42
SECTION 10.10. Obligations of Parent and the Company.......................42
SECTION 10.11. Limitations on Warranties...................................42
SECTION 10.12. Execution...................................................42
ANNEX A Conditions to the Offer
ANNEX B Material Agreements or Covenants
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AGREEMENT AND PLAN OF MERGER, dated as of October 12, 2000 (this
"Agreement"), among ERICSSON INC., a Delaware corporation ("Parent"), ERICSSON
MPD ACQUISITION CORP., a Delaware corporation and a wholly owned direct
subsidiary of Parent ("Purchaser"), and MICROWAVE POWER DEVICES, INC., a
Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the
Company have each determined that it is in the best interests of their
respective stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed that
Purchaser shall make a cash tender offer (the "Offer") to acquire all the shares
of common stock, par value $.01 per share, of the Company ("Shares") that are
issued and outstanding for $8.70 Share (such amount, or any greater amount per
Share paid pursuant to the Offer, being the "Per Share Amount"), net to the
seller in cash, upon the terms and subject to the conditions of this Agreement
and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board") has
unanimously approved the making of the Offer and resolved to recommend that
holders of Shares tender their Shares pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Parent, Purchaser and the Company have each approved this Agreement
and declared its advisability and approved the merger (the "Merger") of
Purchaser with and into the Company in accordance with the General Corporation
Law of the State of Delaware ("Delaware Law") following the consummation of the
Offer and upon the terms and subject to the conditions set forth herein; and
WHEREAS, Parent, Purchaser and certain stockholders of the Company
(the "Stockholders") have entered into the Stockholders' Agreement, dated as of
the date hereof (the "Stockholders' Agreement"), providing that, among other
things, the Stockholders will (i) tender their Shares into the Offer, (ii) vote
their Shares in favor of the Merger, if applicable, and (iii) grant an option to
Purchaser to purchase their Shares at the Per Share Amount, in each case subject
to the conditions set forth therein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) For purposes of this Agreement:
"Acquisition Proposal" means (i) any proposal or offer from any
person relating to any direct or indirect acquisition of (A) all or a
substantial part of the assets of the Company and its Subsidiaries, taken
as a whole, or (B) over 20% of the outstanding Company Shares on a Fully
Diluted Basis; (ii) any tender offer or exchange offer, as defined
pursuant to the Exchange Act, that, if consummated, would result in any
person beneficially owning 20% or more of the outstanding Company Shares
on a Fully Diluted Basis; (iii) any merger, consolidation, business
combination, sale of all or a substantial part of the assets,
recapitalization, liquidation, dissolution or similar transaction
involving the Company or any Material Subsidiary, other than the
Transactions; or (iv) any other transaction the consummation of which
would reasonably be expected to impede, interfere with, prevent or
materially delay the Transactions.
"affiliate" of a specified person means a person who, directly or
indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with, such specified person.
"beneficial owner", with respect to any Shares, has the meaning
ascribed to such term under Rule 13d-3(a) of the Exchange Act.
"business day" means any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in The City of New York.
"Company Systems" shall mean all computer, hardware, software,
systems, and equipment (including embedded microcontrollers in
non-computer equipment) embedded within or required to operate the current
products of the Company and the Subsidiaries, and/or material to or
necessary for the Company and the Subsidiaries to carry on their
businesses as currently conducted.
"control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise.
"Environmental Laws" means any United States federal, state, local
or non-United States laws relating to (i) releases or threatened releases
of Hazardous Substances or
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materials containing Hazardous Substances; (ii) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous Substances or
materials containing Hazardous Substances; or (iii) pollution or
protection of the environment, health, safety or natural resources.
"Excluded Matters" means any one or more of the following: (i)
changes that are generally applicable to (A) the industries in which the
Company and its Subsidiaries are engaged, (B) the United States or Swedish
economy or (C) the United States or Swedish securities markets and (ii)
any adverse effect resulting, directly or indirectly, in whole or in part,
from (A) the execution of this Agreement and the announcement of this
Agreement and the transactions contemplated hereby, including, but not
limited to, any stockholder litigation brought or threatened against the
Company or any member of the Board of Directors of the Company in respect
of this Agreement, the Offer or the Merger, (B) any change in the market
price of the Shares, or (C) any of the matters described in Section 1.01
of the Disclosure Schedule.
"Fully Diluted Basis" means after taking into account all Shares
issuable upon the conversion of shares of Company preferred stock or any
other convertible securities or upon the exercise of any vested options,
warrants or rights.
"Hazardous Substances" means (i) those substances defined in and
regulated under the following United States federal statutes and their
state 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; (ii) petroleum and
petroleum products, including crude oil and any fractions thereof; (iii)
natural gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated
biphenyls, asbestos and radon; and (v) any other contaminant substance,
material or waste regulated by any Governmental Authority pursuant to any
Environmental Law.
"Intellectual Property" means (i) United States, non-United States,
and international patents, patent applications and statutory invention
registrations, (ii) trademarks, service marks, trade dress, logos, trade
names, corporate names and other source identifiers, and registrations and
applications for registration thereof, (iii) copyrightable works,
copyrights, and registrations and applications for registration thereof,
and (iv) confidential and proprietary information, including trade secrets
and know-how.
"knowledge of the Company" means the actual knowledge of any
executive officer of the Company or the knowledge that any such individual
would obtain after the exercise of reasonable investigation.
"Material Adverse Effect" means, when used in connection with the
Company or any Subsidiary, any event, circumstance, change or effect that,
when taken together with
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all other events, circumstances, changes and effects occurring after the
date hereof that do not individually have a Material Adverse Effect, is or
is reasonably likely to be materially adverse to the consolidated
businesses, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole; provided, however, that the effect
of any Excluded Matter shall be disregarded for purposes of determining
whether a Material Adverse Effect has occurred
"person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including,
without limitation, a "person" as defined in Section 13(d)(3) of the
Exchange Act), trust, association or entity or government, political
subdivision, agency or instrumentality of a government.
"subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
"Taxes" shall mean 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 Authority or taxing authority,
including, without limitation: taxes or other charges on or with respect
to income, franchise, windfall or other profits, gross receipts, property,
sales, use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value-added or gains taxes; license, registration and documentation fees;
and customers' duties, tariffs and similar charges.
(b) The following terms have the meaning set forth in the Sections
set forth below:
Defined Term Location of Definition
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Action Section 4.09
Agreement Preamble
Arms Regulations Section 4.05(b)
Blue Sky Laws Section 4.05(b)
Board Recitals
Certificate of Merger Section 3.02
Certificates Section 3.09(b)
CFIUS Section 7.09(a)
CIBC World Markets Section 2.02(a)
Claim Section 7.07(d)
Code Section 4.10(a)
Company Preamble
Company Licensed Intellectual Property Section 4.14(b)
Company Owned Intellectual Property Section 4.14(c)
Company Preferred Stock Section 4.03
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Company Stock Option Section 3.07
Company Stock Option Plans Section 3.07
Confidentiality Agreement Section 7.04(b)
Delaware Law Recitals
Disclosure Schedule Section 4.01(b)
Dissenting Shares Section 3.08(a)
Effective Time Section 3.02
Environmental Permits Section 4.16
ERISA Section 4.10(a)
Exchange Act Section 2.01(a)
Exon-Xxxxxx Provision Section 4.05(b)
Expenses Section 9.03(b)
Fee Section 9.03(a)
GAAP Section 4.07(b)
Governmental Authority Section 4.05(b)
HSR Act Section 2.01(a)
Indemnified Party Section 7.07(d)
IRS Section 4.10(a)
Law Section 4.05(a)
Liens Section 4.13(b)
Material Contracts Section 4.19(a)
Material Subsidiary Section 4.01(c)
Maximum Premium Section 7.07(b)
Merger Recitals
Merger Consideration Section 2.01(a)
Minimum Condition Section 2.01(a)
Multiemployer Plan Section 4.10(b)
Multiple Employer Plan Section 4.10(b)
Offer Recitals
Offer Documents Section 2.01(b)
Offer to Purchase Section 2.01(b)
Parent Preamble
Paying Agent Section 3.09(a)
Permits Section 4.06
Permitted Liens Section 4.13(b)
Per Share Amount Recitals
Plans Section 4.10(a)
Proxy Statement Section 4.12
Purchaser Preamble
Schedule 14D-9 Section 2.02(b)
Schedule TO Section 2.01(b)
SEC Section 2.01(a)
SEC Reports Section 4.07(a)
Securities Act Section 4.07(a)
Shares Recitals
Stockholders' Agreement Recitals
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Stockholders Recitals
Stockholders' Meeting Section 7.01(a)
Subsidiary Section 4.01(a)
Surviving Corporation Section 3.03
Transactions Section 2.02(a)
1999 Balance Sheet Section 4.07(c)
ARTICLE II
THE OFFER
SECTION 2.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 9.01 below and none of the
events set forth in clauses (a) through (i) of Annex A hereto shall have
occurred and be continuing to exist, Purchaser shall commence (within the
meaning of Rule 14d-2(a) of the Exchange Act) the Offer as promptly as
reasonably practicable after the date hereof, but in no event later than 10
business days after the initial public announcement of the execution and
delivery of this Agreement. The initial expiration date of the Offer shall be 20
business days after the commencement of the Offer. The obligation of Purchaser
to accept for payment Shares tendered pursuant to the Offer shall be subject to
the condition (the "Minimum Condition") that at least the number of Shares that
shall constitute fifty and six-tenths percent (50.6%) of the then outstanding
Shares on a Fully Diluted Basis shall have been validly tendered and not
withdrawn prior to the expiration of the Offer and also shall be subject to the
satisfaction of each of the other conditions set forth in Annex A hereto.
Purchaser expressly reserves the right to waive any such condition other than
the Minimum Condition, to increase the cash price per Share payable in the
Offer, and to make any other changes in the terms and conditions of the Offer;
provided, however, that without the Company's prior written consent, no change
may be made which decreases the cash price per Share payable in the Offer or
which reduces the maximum number of Shares to be purchased in the Offer or which
imposes conditions to the Offer in addition to those set forth in Annex A hereto
or which otherwise adversely affects the holders of Shares. Notwithstanding the
foregoing, Purchaser may, without the consent of the Company, (i) extend the
Offer from time to time for the shortest time periods which the Purchaser
reasonably believes are necessary until the consummation of the Offer, (ii)
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC"), or the
staff thereof, applicable to the Offer, or (iii) extend the Offer for an
aggregate period of not more than 10 business days beyond the latest applicable
date that would otherwise be permitted under clause (i) or (ii) of this
sentence, if, as of such date, all of the conditions to Purchaser's obligations
to accept for payment Shares are satisfied or waived, but the number of Shares
validly tendered and not withdrawn pursuant to the Offer equals 80% or more, but
less than 90%, of outstanding Shares on a Fully Diluted Basis. In addition, if,
on the then applicable expiration date of the Offer, the sole condition(s)
remaining unsatisfied are (i) the failure of the waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
or under any applicable material non-United States statutes or regulations, (ii)
the process pursuant to the Exon-Xxxxxx Provision (as hereinafter defined) has
not been completed, and/or (iii) any waiting period applicable to the
consummation of the Offer under the Arms Regulations shall not have expired or
been terminated then, Purchaser shall extend the Offer from time to time until
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the earlier to occur of (i) January 31, 2001 and (ii) the fifth business day
after the latest to occur of (A) the expiration or termination of the applicable
waiting period under the HSR Act or any applicable material non-United States
statutes or regulations, (B) the satisfaction of any requirements under the
Exon-Xxxxxx Provision, as applicable, and (C) the expiration or termination of
the waiting period under the Arms Regulations. The Per Share Amount shall,
subject to applicable withholding of taxes, be net to the seller in cash, upon
the terms and subject to the conditions of the Offer. Purchaser shall pay for
all Shares validly tendered and not withdrawn promptly following the acceptance
of Shares for payment pursuant to the Offer. Notwithstanding the immediately
preceding sentence and subject to the applicable rules of the SEC and the terms
and conditions of the Offer, Purchaser expressly reserves the right to delay
payment for Shares in order to comply in whole or in part with applicable laws.
Any such delay shall be effected in compliance with Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the payment
equal to the Per Share Amount in cash (the "Merger Consideration") is to be made
to a person other than the person in whose name the surrendered certificate
formerly evidencing Shares is registered on the stock transfer books of the
Company, it shall be a condition of payment that the certificate so surrendered
shall be endorsed properly or otherwise be in proper form for transfer and that
the person requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the certificate surrendered, or shall have
established to the satisfaction of Purchaser that such taxes either have been
paid or are not applicable.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, Purchaser shall file with the SEC a Tender Offer
Statement on Schedule TO (together with all amendments and supplements thereto,
the "Schedule TO") with respect to the Offer. The Schedule TO shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule TO, the Offer to Purchase and such other documents,
together with all supplements and amendments thereto, being referred to herein
collectively as the "Offer Documents"). Parent, Purchaser and the Company agree
to correct promptly any information provided by any of them for use in the Offer
Documents that shall have become false or misleading, and Parent and Purchaser
further agree to take all steps necessary to cause the Schedule TO, as so
corrected, to be filed with the SEC, and the other Offer Documents, as so
corrected, to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment upon the Schedule TO
(and shall provide any comments thereon as soon as practicable) prior to the
filing thereof with the SEC. In addition, Parent and Purchaser shall provide the
Company and its counsel in writing with any comments that Parent, Purchaser or
their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after receipt of such comments and with copies of any written
responses by Parent, Purchaser or their counsel.
(c) Parent shall provide or cause to be provided to Purchaser all
the funds necessary to purchase any Shares that Purchaser becomes obligated to
purchase pursuant to the Offer.
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SECTION 2.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents that (i) the Board, at a meeting duly
called and held on October 12, 2000, has unanimously (A) determined that this
Agreement and the transactions contemplated hereby, including each of the Offer
and the Merger, and the transactions contemplated by the Stockholders' Agreement
(collectively, the "Transactions"), are fair to, and in the best interests of,
the holders of Shares, (B) approved, adopted and declared advisable this
Agreement and the Transactions (such approval and adoption having been made in
accordance with Delaware Law, including, without limitation, Section 203
thereof) and (C) resolved to recommend that the holders of Shares accept the
Offer and tender Shares pursuant to the Offer, and approve and adopt this
Agreement and the Transactions, and (ii) CIBC World Markets Corp. ("CIBC World
Markets") has delivered to the Board an oral opinion, which will be confirmed
promptly in writing, to the effect that, as of the date of this Agreement, the
Per Share Amount to be received by the holders of Shares (other than Parent and
its affiliates) pursuant to the Offer and the Merger, taken as a whole and not
separately, is fair, from a financial point of view, to such holders of Shares.
The Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding sentence, and
the Company shall not withdraw or modify such recommendation in any manner
adverse to Purchaser or Parent except as provided in Section 7.05(b).
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, except as
provided in Section 7.05(b), the recommendation of the Board described in
Section 2.02(a), and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Exchange Act, and any other applicable
federal securities laws. The Company, Parent and Purchaser agree to correct
promptly any information provided by any of them for use in the Schedule 14D-9
which shall have become false or misleading, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected, to be
filed with the SEC and disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Parent, Purchaser and
their counsel shall be given an opportunity to review and comment upon the
Schedule 14D-9 (and shall provide any comments thereon as soon as practicable)
prior to the filing thereof with the SEC. In addition, the Company shall provide
Parent, Purchaser and their counsel in writing with any comments the Company or
its counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after receipt of such comments and with copies of any written
responses by the Company or its counsel.
(c) The Company shall promptly instruct and use its best efforts to
cause its transfer agent to furnish Purchaser with mailing labels containing the
names and addresses of all record holders of Shares and with security position
listings of Shares held in stock depositories, each as of a recent date,
together with all other available listings and computer files containing names,
addresses and security position listings of record holders and beneficial owners
of Shares. The Company shall promptly instruct and use its best efforts to cause
its transfer agent to furnish Purchaser with such additional information,
including, without limitation, updated listings and computer files of
stockholders, mailing labels and security position listings, and such other
assistance in disseminating the Offer Documents to holders of Shares as Parent
or Purchaser may reasonably request. Subject to the requirements of applicable
law, and except for such steps as
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are necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Offer or the Merger, Parent and Purchaser shall hold
in confidence the information contained in such labels, listings and files,
shall use such information only in connection with the Transactions, and, if
this Agreement shall be terminated in accordance with Section 9.01, shall
deliver to the Company all copies of such information then in their possession.
ARTICLE III
THE MERGER
SECTION 3.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VIII, and in accordance with Delaware Law,
Purchaser shall be merged with and into the Company.
SECTION 3.02. Effective Time; Closing. As promptly as practicable
after the satisfaction or, if permissible, waiver of the conditions set forth in
Article VIII, the parties hereto shall cause the Merger to be consummated by
filing this Agreement or a certificate of merger or certificate of ownership and
merger (in either case, the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with, the relevant provisions of Delaware Law (the date and time of
such filing being the "Effective Time"). The closing of the Merger (the
"Closing") shall take place at 10:00 a.m., New York City time, on a date to be
specified by the parties, which shall be as soon as practicable, but in no event
later than the third business day after satisfaction or waiver of all the
conditions set forth in Article VIII hereof (the "Closing Date"), at the New
York offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, unless another date or place is agreed to in writing by the parties
hereto.
SECTION 3.03. Effect of the Merger. As a result of the Merger, the
separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of Delaware Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and Purchaser
shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of the Company and Purchaser
shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
SECTION 3.04. Certificate of Incorporation; By-laws. (a) At the
Effective Time, the Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation; provided, however, that, at the
Effective Time, the Certificate of Incorporation of the Surviving Corporation
shall be amended in its entirety to be identical to the Certificate of
Incorporation of Purchaser, as in effect
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immediately prior to the Effective Time, except that Article I shall read as
follows: "The name of the corporation is Microwave Power Devices, Inc."
(b) Unless otherwise determined by Parent prior to the Effective
Time, and subject to Section 7.07(a), the By-laws of Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such By-laws.
SECTION 3.05. Directors and Officers. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until their earlier death,
resignation or approval.
SECTION 3.06. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to Section
3.06(b) and any Dissenting Shares (as hereinafter defined)) shall be
canceled and shall be converted automatically into the right to receive an
amount equal to the Merger Consideration payable, without interest, to the
holder of such Share, upon surrender, in the manner provided in Section
3.09, of the certificate that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the Effective
Time shall be canceled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of common stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
SECTION 3.07. Employee Stock Options. Effective as of the Effective
Time, the Company shall take all necessary action, including obtaining the
consent of the individual option holders, if necessary, to (i) terminate the
Company's 1995 Stock Option Plan, the Company's 1996 Stock Option Plan and the
Company's 1999 Stock Option Plan, each as amended through the date of this
Agreement (the "Company Stock Option Plans"), and (ii) cancel, at the Effective
Time, each outstanding option to purchase Shares granted under the Company Stock
Option Plans (each, a "Company Stock Option") that is outstanding and
unexercised as of such date. Each holder of a Company Stock Option that is
outstanding and unexercised at the Effective Time, whether vested or unvested,
shall be entitled to receive from the Surviving Corporation immediately after
the Effective Time, in exchange for the cancellation
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of such Company Stock Option, an amount in cash equal to the excess, if any, of
(x) the Per Share Amount over (y) the per share exercise price of such Company
Stock Option, multiplied by the number of Shares subject to such Company Stock
Option as of the Effective Time. Any such payment shall be subject to all
applicable federal, state and local tax withholding requirements. The Company
shall take all necessary action to approve the disposition of the Company Stock
Options in connection with the transactions contemplated by this Agreement to
the extent necessary to exempt such dispositions and acquisitions under Rule
16b-3 of the Exchange Act. The Company agrees that the Board, or any committee
appointed by the Board, will not exercise its discretion under Section V.C of
the Company's 1995 Stock Option Plan and 1996 Stock Option Plan and under
Section 4.b of the Company's 1999 Stock Option Plan, each as amended through the
date of this Agreement, to accelerate the vesting of any unvested options
thereunder.
SECTION 3.08. Dissenting Shares. (a) Notwithstanding any provision
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and that are held by stockholders who shall have properly
exercised appraisal rights for such Shares in accordance with Section 262 of
Delaware Law (collectively, the "Dissenting Shares") shall not be converted
into, or represent the right to receive, the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
Shares held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Shares under such Section 262 shall thereupon be deemed to
have been converted into, and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner provided in Section 3.09, of the
certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to Delaware Law and received by the Company
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Delaware Law. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such demands.
SECTION 3.09. Surrender of Shares; Stock Transfer Books. (a) Prior
to the Effective Time, Purchaser shall designate a bank or trust company
reasonably acceptable to the Company to act as agent (the "Paying Agent") for
the holders of Shares to receive the funds to which holders of Shares shall
become entitled pursuant to Section 3.06(a), and such funds shall hereinafter be
referred to as the "Exchange Fund". The expenses of the Paying Agent shall not
be paid from the Exchange Fund but shall be paid directly by the Surviving
Corporation. Prior to the Effective Time, Parent shall take all steps necessary
to deposit or cause to be deposited with the Paying Agent, in trust for the
benefit of the Company's stockholders, the aggregate Merger Consideration, in
immediately available funds, for timely payment thereunder. If the amount of the
cash in the Exchange Fund is insufficient to pay all of the amounts required to
be paid pursuant to this Agreement, Parent, from time to time after the
Effective Time, shall deposit in trust additional cash with the Paying Agent
sufficient to make all such payment. The Exchange
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Fund shall not be used for any purpose that is not provided herein. The Paying
Agent may invest, if so directed by Parent or the Surviving Corporation, the
Exchange Fund in obligations of the United States government or any agency or
instrumentality thereof, or in obligations that are guaranteed or insured by the
United States government or an agency or instrumentality thereof. Any net profit
resulting from, or interest or income produced by, such investments shall be
payable to Parent on demand.
(b) Promptly after the Effective Time but in no event more than
three (3) business days thereafter, the Surviving Corporation shall cause to be
mailed to each person who was, at the Effective Time, a holder of record of
Shares entitled to receive the Merger Consideration pursuant to Section 3.06(a)
a form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates evidencing such Shares
(the "Certificates") shall pass, only upon proper delivery of the Certificates
to the Paying Agent) and instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal. Upon surrender to the
Paying Agent of a Certificate, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each Share formerly evidenced by such Certificate, and
such Certificate shall then be canceled. No interest shall accrue or be paid on
the Merger Consideration payable upon the surrender of any Certificate for the
benefit of the holder of such Certificate. If the payment equal to the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered certificate formerly evidencing Shares is registered on the stock
transfer books of the Company, it shall be a condition of payment that the
certificate so surrendered shall be endorsed properly or otherwise be in proper
form for transfer and that the person requesting such payment shall have paid
all transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered, or shall have established to the satisfaction of Purchaser that
such taxes either have been paid or are not applicable. Each of the Surviving
Corporation, Parent and the Paying Agent shall be entitled to deduct and
withhold from any amounts otherwise payable pursuant to this Agreement to any
holder of a Certificate such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code, or any provisions of
Law. To the extent that amounts are so withheld, such withheld amounts shall be
treated for purposes of this Agreement as having been paid to the holder of a
Certificate in respect of which such deduction and withholding was made by the
Surviving Corporation, Parent or the Paying Agent, as the case may be.
(c) At any time following the first anniversary of the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any
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Merger Consideration delivered in respect of such Share to a public official
pursuant to any abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and the Purchaser to enter into this
Agreement, the Company hereby represents and warrants to Parent and Purchaser
that:
SECTION 4.01. Organization and Qualification; Subsidiaries. (a) Each
of the Company and each subsidiary of the Company ("Subsidiary") is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted, except
where the failure to have such governmental approvals does not have a Material
Adverse Effect. The Company and each Subsidiary is duly qualified or licensed as
a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not prevent or materially delay consummation of the Offer or
the Merger or otherwise prevent or materially delay the Company from performing
its obligations under this Agreement and would not have a Material Adverse
Effect.
(b) A true and complete list of all the Subsidiaries, together with
the jurisdiction of incorporation of each Subsidiary and the percentage of the
outstanding capital stock of each Subsidiary owned by the Company and each other
Subsidiary, is set forth in Section 4.01(b) of the Disclosure Schedule (the
"Disclosure Schedule"), which has been prepared by the Company and delivered by
the Company to Parent and Purchaser prior to the execution and delivery of this
Agreement. Except as disclosed in Section 4.01(b) of the Disclosure Schedule,
the Company does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.
(c) Each Subsidiary that is material to the consolidated businesses,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole is so identified in Section 4.01(c) of the Disclosure Schedule
and is referred to herein as a "Material Subsidiary".
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SECTION 4.02. Certificate of Incorporation and By-laws. The Company
has heretofore furnished to Parent a complete and correct copy of the
Certificate of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Material Subsidiary.
Such Certificates of Incorporation, By-laws or equivalent organizational
documents are in full force and effect. Neither the Company nor any Subsidiary
is in violation of any of the provisions of its Certificate of Incorporation,
By-laws or equivalent organizational documents.
SECTION 4.03. Capitalization. The authorized capital stock of the
Company consists of 25,000,000 Shares and 5,000,000 shares of preferred stock,
par value $.01 per share ("Company Preferred Stock"). As of October 11, 2000,
(a) 10,709,064 Shares are issued and outstanding, all of which are validly
issued, fully paid and nonassessable, (b) no Shares are held in the treasury of
the Company, (c) no Shares are held by the Subsidiaries, and (d) 1,383,996
Shares are reserved for future issuance pursuant to outstanding employee stock
options or stock incentive rights granted pursuant to the Company Stock Option
Plans of which 613,457 options have vested as of October 11, 2000. As of the
date hereof, no shares of Company Preferred Stock are issued and outstanding.
Except as set forth in this Section 4.03, and except as contemplated under
Stockholders' Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any Subsidiary obligating the
Company or any Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Subsidiary. All Shares subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Shares or any capital stock of any Subsidiary or to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Subsidiary or any other person. Except as set
forth in Section 4.03 of the Disclosure Schedule, each outstanding share of
capital stock of each Subsidiary is duly authorized, validly issued, fully paid
and nonassessable, and each such share is owned by the Company or another
Subsidiary free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company's or
any Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever. Section 4.03 of the Disclosure Schedule sets forth a true and
correct list of all of the options of the Company which can vest over the ninety
day period beginning from the date of this Agreement.
SECTION 4.04. Authority Relative to This Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action on the part of the Company, and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the then-outstanding Shares, if and to the extent
required by applicable law, and the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly
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executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, constitutes legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. The Board has
approved this Agreement and the Transactions and such approvals are sufficient
so that the restrictions on business combinations set forth in Section 203(a) of
Delaware Law shall not apply to the Merger, provided that such transactions are
consummated in accordance with the terms hereof.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, except as set forth in
Section 4.05(a) of the Disclosure Schedule, (i) conflict with or violate the
Certificate of Incorporation or By-laws or equivalent organizational documents
of the Company or any Subsidiary, (ii) assuming all consents, approvals,
authorizations and actions contemplated by Section 4.05(b) have been obtained or
taken, as the case may be, conflict with or violate any United States or
non-United States statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or other order ("Law") applicable to the
Company or any Subsidiary or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) assuming all consents, approvals,
authorizations and actions contemplated by Section 4.05(b) have been obtained or
taken, as the case may be, result in any breach of or constitute a default (or
an event which, with notice or lapse of time or both, would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Company or any Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences
which would not prevent or materially delay consummation of the Offer or the
Merger or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company will not, except as
set forth in Section 4.05(b) of the Disclosure Schedule, require any consent,
approval, authorization or permit of, or filing with or notification to, any
United States federal, state, county or local or non-United States government,
governmental, regulatory or administrative authority, agency, instrumentality or
commission or any court, tribunal, or judicial or arbitral body (a "Governmental
Authority") on the part of the Company, except (i) for applicable requirements,
if any, of the Exchange Act, state securities or "blue sky" laws ("Blue Sky
Laws") and state takeover laws, the pre-merger notification requirements of the
HSR Act, the requirements of Section 271 of Title VII of the Defense Production
Act of 1950, as amended, and the regulations promulgated thereunder (the
"Exon-Xxxxxx Provision"), the notification requirements of the applicable
International Traffic in Arms Regulations of the U.S. Department
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of State (the "Arms Regulations") and filing and recordation of appropriate
merger documents as required by Delaware Law, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or materially delay consummation of
the Offer or the Merger, or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement, and would not, have a
Material Adverse Effect.
SECTION 4.06. Permits; Compliance. Except as set forth in Section
4.06 of the Disclosure Schedule, each of the Company and the Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Authority necessary for each of the Company or the
Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Permits"), except where the failure
to have, or the suspension or cancellation of, any of the Permits would not
prevent or materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement and would not, have a Material Adverse Effect. Except as set
forth in Section 4.06 of the Disclosure Schedule, as of the date hereof, no
suspension or cancellation of any of the Permits is pending or, to the knowledge
of the Company, threatened, except where the failure to have, or the suspension
or cancellation of, any of the Permits would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect. Except as set forth in Section 4.06 of the
Disclosure Schedule, neither the Company nor any Subsidiary is in conflict with,
or in default, breach or violation of, (a) any Law applicable to the Company or
any Subsidiary or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (b) any note, bond, mortgage, indenture,
contract, agreement, lease, license, Permit, franchise or other instrument or
obligation to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any property or asset of the Company or any
Subsidiary is bound, except for any such conflicts, defaults, breaches or
violations that would not prevent or materially delay consummation of the Offer
or the Merger or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and would not have a Material
Adverse Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) The Company has
filed all forms, reports and documents required to be filed by it with the SEC
since December 31,1997, including (i) its Annual Reports on Form 10-K for the
fiscal years ended December 31, 1997, 1998, and 1999, respectively, (ii) its
Quarterly Reports on Form 10-Q for the periods ended March 31, 2000 and June 30,
2000, (iii) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held since March 31, 1998 and (iv) all
other forms, reports and other registration statements (other than Quarterly
Reports on Form 10-Q not referred to in clause (ii) above) filed by the Company
with the SEC since January 1, 2000 (the forms, reports and other documents
referred to in clauses (i), (ii), (iii) and (iv) above being, collectively, the
"SEC Reports"). The SEC Reports (i) were prepared in accordance with either the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and regulations
promulgated thereunder, and (ii) did not, at the time they were filed, or, if
amended, as of the date of such amendment, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
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therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. No Subsidiary
is required to file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the SEC Reports was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or as set forth in Section 4.07 of the Disclosure
Schedule, and subject, in the case of unaudited interim financial statements, to
normal year-end adjustments and to the absence of complete notes) and each
fairly presents, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company and its consolidated
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein.
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Subsidiaries as at December
31, 1999, including the notes thereto (the "1999 Balance Sheet"), neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except (i) as disclosed in
the SEC Reports or in Section 4.07(c) of the Disclosure Schedule, (ii) for
liabilities and obligations incurred in connection with the consummation of the
transactions contemplated hereby, (iii) for liabilities and obligations incurred
in the ordinary course of business consistent with past practice since December
31, 1999, which would not prevent or materially delay consummation of the Offer
or the Merger or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement or (iv) liabilities and
obligations which would not have a Material Adverse Effect.
(d) The Company has heretofore furnished to Parent complete and
correct copies of all amendments and modifications that have not been filed by
the Company with the SEC to all agreements, documents and other instruments that
previously had been filed by the Company with the SEC and are currently in
effect.
SECTION 4.08. Absence of Certain Changes or Events. Since December
31, 1999, except as set forth in the SEC Reports or in Section 4.08 of the
Disclosure Schedule, or as expressly contemplated by this Agreement, (a) the
Company and the Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice, and (b) there has
not been any Material Adverse Effect.
SECTION 4.09. Absence of Litigation. Except as set forth in Section
4.09 of the Disclosure Schedule or the SEC Reports, there is no litigation,
suit, claim, action, proceeding or investigation (an "Action") pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary,
or any property or asset of the Company or any Subsidiary, before any
Governmental Authority that is reasonably likely to have a Material Adverse
Effect or seeks to materially delay or prevent the consummation of any
Transaction. Neither the Company nor any Subsidiary nor any property or asset of
the Company or any Subsidiary is subject to any continuing order of, consent
decree, settlement agreement or similar written agreement with, or, to the
knowledge of the Company, continuing investigation by, any Governmental
Authority, or
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any order, writ, judgment, injunction, decree, determination or award of any
Governmental Authority that would prevent or materially delay consummation of
the Offer or the Merger or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement or would have a Material
Adverse Effect.
SECTION 4.10. Employee Benefit Plans. (a) Section 4.10(a) of the
Disclosure Schedule lists (i) all employee benefit plans (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other material
contracts or agreements to which the Company or any Subsidiary is a party, with
respect to which the Company or any Subsidiary has any obligation or which are
maintained, contributed to or sponsored by the Company or any Subsidiary for the
benefit of any current or former employee, officer or director of the Company or
any Subsidiary, (ii) each employee benefit plan for which the Company or any
Subsidiary could reasonably be expected to incur liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated, (iii) any plan
in respect of which the Company or any Subsidiary could reasonably be expected
to incur liability under Section 4212(c) of ERISA, and (iv) any contracts,
arrangements or understandings between the Company or any Subsidiary and any
employee of the Company or any Subsidiary including, without limitation, any
contracts, arrangements or understandings relating in any way to a sale of the
Company or any Subsidiary (collectively, the "Plans"). The Company has furnished
to Purchaser a true and complete copy of each Plan and has delivered to
Purchaser a true and complete copy of each material document, if any, prepared
in connection with each such Plan, including, without limitation, (i) a copy of
each trust or other funding arrangement, (ii) each summary plan description and
summary of material modifications, (iii) the most recently filed Internal
Revenue Service ("IRS") Form 5500, (iv) the most recently received IRS
determination letter for each such Plan, and (v) the most recently prepared
actuarial report and financial statement in connection with each such Plan.
Except as would not have a Material Adverse Effect, neither the Company nor any
Subsidiary has any express or implied commitment, (i) to create or cause to
exist any other employee benefit plan, program or arrangement, (ii) to enter
into any contract or agreement to provide compensation or benefits to any
individual, or (iii) to modify, change or terminate any Plan, other than with
respect to a modification, change or termination required by ERISA or the
Internal Revenue Code of 1986, as amended (the "Code").
(b) None of the Plans is a multiemployer plan (within the meaning of
Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a single
employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for
which the Company or any Subsidiary could reasonably be expected to incur
liability under Section 4063 or 4064 of ERISA (a "Multiple Employer Plan").
Except as set forth in Section 410(b) of the Disclosure Schedule, none of the
Plans (i) provides for the payment of separation, severance, termination or
similar-type benefits to any person, (ii) obligates the Company or any
Subsidiary to pay separation, severance, termination or similar-type benefits
solely or partially as a result of any transaction contemplated by this
Agreement, or (iii) obligates the Company or any Subsidiary to make any payment
or provide any benefit as a result of a "change in control", within the meaning
of such term under Section 280G of the Code. None of the Plans provides for or
promises retiree
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medical, disability or life insurance benefits to any current or former
employee, officer or director of the Company or any Subsidiary other than under
Section 4980 of the Code or the Federal Social Security Act. Each of the Plans
is subject only to the Laws of the United States or a political subdivision
thereof.
(c) Except as would not have a Material Adverse Effect, each Plan is
now and always has been operated in all respects in accordance with its terms
and the requirements of all applicable Laws including, without limitation, ERISA
and the Code. Except as would not have a Material Adverse Effect, the Company
and the Subsidiaries have performed all obligations required to be performed by
them under, are not in any respect in default under or in violation of, and have
no knowledge of any default or violation by any party to, any Plan. Except as
would not have a Material Adverse Effect, no Action is pending or, to the
knowledge of the Company, threatened with respect to any Plan (other than claims
for benefits in the ordinary course).
(d) Each Plan that is intended to be qualified under Section 401(a)
of the Code or Section 401(k) of the Code has timely received a favorable
determination letter (which may be a favorable determination letter issued to a
prototype sponsor) from the IRS, or, has submitted, or is within the remedial
amendment period for submitting an application for a determination letter from
the IRS, covering all of the provisions applicable to the Plan for which
determination letters are currently available that the Plan is so qualified and
each trust established in connection with any Plan is exempt from federal income
taxation under Section 501(a) of the Code and, to the knowledge of the Company,
no fact or event has occurred which could reasonably be expected to adversely
affect the qualified status of any such Plan or the exempt status of any such
trust.
(e) To the knowledge of the Company, there has not been any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Plan. Neither the Company nor any
Subsidiary has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than liability for premiums to the Pension Benefit
Guaranty Corporation arising in the ordinary course), including, without
limitation, any liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA, or
(ii) the withdrawal from any Multiemployer Plan or Multiple Employer Plan.
(f) All contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. Except as set
forth in Section 4.10 (f) of the Disclosure Schedule, all such contributions
have been fully deducted for income tax purposes and no such deduction has been
challenged or disallowed by any Governmental Authority and no fact or event
exists which could reasonably be expected to give rise to any such challenge or
disallowance.
(g) Except as disclosed in Section 4.10(g) of the Disclosure
Schedule, all technical and professional employees of the Company and the
Subsidiaries are under written obligation to the Company and the Subsidiaries to
maintain in confidence all confidential or proprietary information acquired by
them in the course of their employment and to assign to the Company and the
Subsidiaries all inventions made by them within the scope of their employment
during such employment and for a reasonable period thereafter.
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SECTION 4.11. Labor and Employment Matters. Except as set
forth in Section 4.11 of the Disclosure Schedule or as would not have a Material
Adverse Effect: (a) there are no controversies pending or, to the knowledge of
the Company, threatened between the Company or any Subsidiary and any of their
respective employees; (b) neither the Company nor any Subsidiary is a party to
any collective bargaining agreement or other labor union contract applicable to
persons employed by the Company or any Subsidiary, nor, to the knowledge of the
Company, are there any activities or proceedings of any labor union to organize
any such employees; (c) neither the Company nor any Subsidiary has breached or
otherwise failed to comply with any provision of any such agreement or contract,
and there are no grievances outstanding against the Company or any Subsidiary
under any such agreement or contract; (d) there are no unfair labor practice
complaints pending against the Company or any Subsidiary before the National
Labor Relations Board or any current union representation questions involving
employees of the Company or any Subsidiary; and (e) there is no strike,
slowdown, work stoppage or lockout, or, to the knowledge of the Company, threat
thereof, by or with respect to any employees of the Company or any Subsidiary.
(b) Except as would not have a Material Adverse Effect, the
Company and the Subsidiaries are in compliance with all applicable laws relating
to the employment of labor, including those related to wages, hours, collective
bargaining and the payment and withholding of taxes and other sums as required
by the appropriate Governmental Authority and has withheld and paid to the
appropriate Governmental Authority or are holding for payment not yet due to
such Governmental Authority all amounts required to be withheld from employees
of the Company or any Subsidiary and are not liable for any arrears of wages,
taxes, penalties or other sums for failure to comply with any of the foregoing.
Except as would not have a Material Adverse Effect, the Company and the
Subsidiaries have paid in full to all employees or adequately accrued for in
accordance with GAAP consistently applied all wages, salaries, commissions,
bonuses, benefits and other compensation due to or on behalf of such employees
and there is no claim with respect to payment of wages, salary or overtime pay
that has been asserted or is now pending or threatened before any Governmental
Authority with respect to any persons currently or formerly employed by the
Company or any Subsidiary. Neither the Company nor any Subsidiary is a party to,
or otherwise bound by, any consent decree with, or citation by, any Governmental
Authority relating to employees or employment practices. There is no charge or
proceeding with respect to a violation of any occupational safety or health
standards that has been asserted or is now pending or, to the knowledge of the
Company, threatened with respect to the Company. There is no charge of
discrimination in employment or employment practices, for any reason, including,
without limitation, age, gender, race, religion or other legally protected
category, which has been asserted or is now pending or, to the knowledge of the
Company, threatened before the United States Equal Employment Opportunity
Commission or any other Governmental Authority in any jurisdiction in which the
Company or any Subsidiary have employed or employ any person.
SECTION 4.12. Offer Documents; Schedule 14D-9; Proxy
Statement. Neither the Schedule 14D-9 nor any information supplied by the
Company for inclusion in the Offer Documents shall, at the times the Schedule
14D-9, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders of
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the Company, as the case may be, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Neither the proxy statement to be sent to the
stockholders of the Company in connection with the Stockholders' Meeting (as
hereinafter defined) or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement, as
amended or supplemented, being referred to herein as the "Proxy Statement"),
shall, at the date the Proxy Statement (or any amendment or supplement thereto)
is first mailed to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective Time, contain any statement which, at the time and
in light of the circumstances under which it was made, is false or misleading
with respect to any material fact, or which omits to state any material fact
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent or
Purchaser or any of its representatives for inclusion in any of the foregoing
documents or the Offer Documents. The Schedule 14D-9 and the Proxy Statement
shall comply in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
SECTION 4.13. Property and Leases. (a) The Company and the
Subsidiaries have sufficient title to all their properties and assets to conduct
their respective businesses as currently conducted or as contemplated to be
conducted, with only such exceptions as would not have a Material Adverse
Effect.
(b) Each parcel of real property owned or leased by the
Company or any Subsidiary that is material to the Company and its Subsidiaries
taken as a whole (i) is owned or leased free and clear of all mortgages,
pledges, liens, security interests, conditional and installment sale agreements,
encumbrances, charges or other claims of third parties of any kind, including,
without limitation, any easement, right of way or other encumbrance to title, or
any option, right of first refusal, or right of first offer (collectively,
"Liens"), other than (A) Liens for current taxes and assessments not yet past
due, (B) inchoate mechanics' and materialmen's Liens for construction in
progress, (C) workmen's, repairmen's, warehousemen's and carriers' Liens arising
in the ordinary course of business of the Company or such Subsidiary consistent
with past practice, and (D) all matters of record, (E) Liens reflected in the
SEC Reports, including, without limitation, the financial statements contained
therein, (F) zoning laws and other land use restrictions that do not materially
impair the present use of the property, (G) as set forth in Section 4.13(b) of
the Disclosure Schedule, or (H) other Liens and other imperfections of title and
encumbrances that would not have a Material Adverse Effect (collectively,
"Permitted Liens"), and (ii) is neither subject to any governmental decree or
order to be sold nor is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor, to the
knowledge of the Company, has any such condemnation, expropriation or taking
been proposed.
(c) All material leases of real property leased for the use or
benefit of the Company or any Subsidiary to which the Company or any Subsidiary
is a party, and all amendments and modifications thereto, are in full force and
effect and have not been modified or
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amended, and there exists no default under any such lease by the Company or any
Subsidiary, nor any event which, with notice or lapse of time or both, would
constitute a default thereunder by the Company or any Subsidiary, except as
would not prevent or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Material Adverse Effect.
(d) There are no contractual or legal restrictions that
preclude or restrict the ability to use any real property owned or leased by the
Company or any Subsidiary that is material to the Company and its Subsidiaries
taken as a whole for the purposes for which it is currently being used. There
are no material latent defects or material adverse physical conditions affecting
the real property, and improvements thereon, owned or leased by the Company or
any Subsidiary that is material to the Company and its Subsidiaries taken as a
whole other than those that would not prevent or materially delay consummation
of the Offer or the Merger or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement and would not have a
Material Adverse Effect.
SECTION 4.14. Intellectual Property. Except as would not have
a Material Adverse Effect or as set forth in Section 4.14 of the Disclosure
Schedule: (a) the conduct of the business of the Company and the Subsidiaries as
currently conducted does not infringe upon or misappropriate the Intellectual
Property rights of any third party, and no claim has been asserted within the
twelve month period preceding the date of this Agreement to the Company that the
conduct of the business of the Company and the Subsidiaries as currently
conducted infringes upon or may infringe upon or misappropriates the
Intellectual Property Rights of any third party; (b) with respect to each item
of Intellectual Property owned by the Company or a Subsidiary and material to
the business, financial condition or results of operations of the Company and
the Subsidiaries taken as a whole ("Company Owned Intellectual Property"), the
Company or a Subsidiary is the owner of the entire right, title and interest in
and to such Company Owned Intellectual Property and is entitled to use such
Company Owned Intellectual Property in the continued operation of its respective
business; (c) with respect to each item of Intellectual Property licensed to the
Company or a Subsidiary that is material to the business of the Company and the
Subsidiaries as currently conducted ("Company Licensed Intellectual Property"),
the Company or a Subsidiary has the right to use such Company Licensed
Intellectual Property in the continued operation of its respective business in
accordance with the terms of the license agreement governing such Company
Licensed Intellectual Property; (d) to the knowledge of the Company, the Company
Owned Intellectual Property is valid and enforceable, and has not been adjudged
invalid or unenforceable in whole or in part; (e) to the knowledge of the
Company, no person is engaging in any activity that infringes upon the Company
Owned Intellectual Property; (f) to the knowledge of the Company, each license
of the Company Licensed Intellectual Property is valid and enforceable, is
binding on all parties to such license, and is in full force and effect; (g) to
the knowledge of the Company, no party to any license of the Company Licensed
Intellectual Property is in breach thereof or default thereunder; and (h)
neither the execution of this Agreement nor the consummation of any Transaction
shall adversely affect any of the Company's rights with respect to the Company
Owned Intellectual Property or the Company Licensed Intellectual Property.
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SECTION 4.15. Taxes. The Company and the Subsidiaries have
filed all United States federal, state, local and non-United States Tax returns
and reports required to be filed by them and have paid and discharged all Taxes
required to be paid or discharged, other than (a) such payments as are being
contested in good faith by appropriate proceedings, (b) such filings, payments
or other occurrences that would not have a Material Adverse Effect, and (c) as
set forth in Section 4.15 of the Disclosure Schedule. Neither the IRS nor any
other United States or non-United States taxing authority or agency is now
asserting or, to the knowledge of the Company, threatening to assert against the
Company or any Subsidiary any deficiency or claim for any Taxes or interest
thereon or penalties in connection therewith. No waiver of any statute of
limitations with respect to, and no extension of a period for the assessment of
any Tax, with respect to the Company or any Subsidiary is outstanding as of the
date of this Agreement. The accruals and reserves for Taxes reflected in the
1999 Balance Sheet are adequate to cover all Taxes accruable through such date
(including interest and penalties, if any, thereon) in accordance with GAAP.
Neither the Company nor any Subsidiary has made an election under Section 341(f)
of the Code. There are no Tax liens upon any property or assets of the Company
or any of the Subsidiaries except liens for current Taxes not yet due. Neither
the Company nor any of the Subsidiaries for present or future Tax years is
presently required to include in income any adjustment pursuant to Section 481
of the Code by reason of a voluntary change in accounting method initiated by
the Company or any of the Subsidiaries, and the IRS has not initiated or
proposed any such adjustment or change in accounting method, in either case
which adjustment or change would have a Material Adverse Effect. Except as set
forth in the financial statements described in Section 4.07, neither the Company
nor any of the Subsidiaries has entered into a transaction which is being
accounted for under the installment method of Section 453 of the Code, which
would prevent or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement or would have a Material Adverse Effect.
SECTION 4.16. Environmental Matters. Except as described in
Section 4.16 of the Disclosure Schedule or as would not prevent or materially
delay consummation of the Offer or the Merger or otherwise prevent or materially
delay the Company from performing its obligations under this Agreement and would
not have a Material Adverse Effect, (a) the Company has not violated and is not
in violation of any applicable Environmental Law; (b) none of the properties
currently or formerly owned, leased or, to the knowledge of the Company,
operated by the Company (including, without limitation, soils and surface and
ground waters) are contaminated with any Hazardous Substance in violation of
applicable Environmental Laws; (c) the Company has not received written notice
that it is actually, potentially or allegedly liable for any off-site
contamination by Hazardous Substances; (d) the Company has not received written
notice that it is actually, potentially or allegedly liable under any applicable
Environmental Law (including, without limitation, pending or threatened liens);
(e) the Company has all permits, licenses and other authorizations required for
the Company's operations under any Environmental Law ("Environmental Permits");
and (f) the Company has always been and is in compliance with its Environmental
Permits. This Section 4.16 is the exclusive section containing representations
and warranties covering environmental matters.
SECTION 4.17. Material Contracts. (a) Subsections (i) through
(xii) of Section 4.17 of the Disclosure Schedule contain a list of the following
types of contracts and
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agreements to which the Company or any Subsidiary is a party (such contracts,
agreements and arrangements as are required to be set forth in Section 4.17(a)
of the Disclosure Schedule being the "Material Contracts"):
(i) each contract and agreement which (A) is likely to involve
consideration of more than $500,000, in the aggregate, during the
calendar year ending December 31, 2000, (B) is likely to involve
consideration of more than $1,000,000, in the aggregate, over the
remaining term of such contract, and which, in either case, cannot be
canceled by the Company or any Subsidiary without penalty or further
payment and without more than 90 days' notice;
(ii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements to which
the Company or any Subsidiary is a party;
(iii) all management contracts (excluding contracts for
employment) and contracts with other consultants, including any
contracts involving the payment of royalties or other amounts
calculated based upon the revenues or income of the Company or any
Subsidiary or income or revenues related to any product of the Company
or any Subsidiary to which the Company or any Subsidiary is a party;
(iv) all contracts and agreements evidencing indebtedness for
borrowed money of the Company or any Subsidiary, and indebtedness of
the Company or any Subsidiary arising from the deferment of the
purchase price of goods and services for more than 60 days from the
delivery or purchase thereof;
(v) all contracts and agreements with any Governmental
Authority to which the Company or any Subsidiary is a party;
(vi) all contracts and agreements that limit, or purport to
limit, the ability of the Company or any Subsidiary to compete in any
line of business or with any person or entity or in any geographic area
or during any period of time;
(vii) all contracts and agreements providing for benefits under
any Plan;
(viii) all material contracts or arrangements that result in
any person or entity holding a power of attorney from the Company or
any Subsidiary that relates to the Company, any Subsidiary or their
respective businesses;
(ix) all contracts pursuant to which the Company or any
Subsidiary obtains from any third party any rights to use Company
Licensed Intellectual Property or the right to manufacture, distribute
or sell any product of the Company or such third party that, in either
case, is material to the Company and its Subsidiaries, taken as a
whole;
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(x) all contracts pursuant to which the Company or any
Subsidiary grants to any third party any rights to use Company Owned
Intellectual Property or the right to manufacture, distribute or sell
any product of the Company or such third party;
(xi) all contracts for employment required to be listed in
Section 3.10 of the Disclosure Schedule; and
(xii) all other contracts and agreements, whether or not made
in the ordinary course of business, which are material to the Company
and the Subsidiaries, taken as a whole, or the conduct of their
respective businesses, or the absence of which would have a Material
Adverse Effect.
(b) Except as (i) set forth in Section 4.17(b) of the
Disclosure Schedule or (ii) as would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect, (A) each Material Contract is a legal, valid and
binding agreement, and none of the Material Contracts is in default by its terms
or has been canceled by the other party; (B) to the Company's knowledge, no
other party is in material breach or material violation of, or material default
under, any Material Contract; and (C) the Company and the Subsidiaries are not
in receipt of any claim of material default under any such Contract. The Company
has furnished or made available to Parent true and complete copies of all
Material Contracts, including any amendments thereto.
(c) Except as set forth in Section 4.17(c) of the Disclosure
Schedule, the Company and its Subsidiaries have no outstanding proposals for
future business or production of products.
SECTION 4.18. Insurance. (a) The Company and its Subsidiaries
maintain policies of insurance on terms, and in amounts, that are adequate for
the conduct of their respective businesses, in each case as such business is
currently conducted and consistent with customary practices and standards of
companies engaged in businesses similar to that of the Company and the
Subsidiaries, and with insurers reasonably believed by the Company to be
responsible.
(b) With respect to each material insurance policy, except as
would not have a Material Adverse Effect: (i) the policy is legal, valid,
binding and enforceable in accordance with its terms and, except for policies
that have expired under their terms in the ordinary course, is in full force and
effect; (ii) neither the Company nor any Subsidiary is in material breach or
default (including any such breach or default with respect to the payment of
premiums or the giving of notice), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination or modification, under the policy; and (iii) to the knowledge of the
Company, no insurer on the policy has been declared insolvent or placed in
receivership, conservatorship or liquidation.
SECTION 4.19. Brokers. No broker, finder or investment banker
(other than CIBC World Markets) is entitled to any brokerage, finder's or other
fee or commission in
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connection with the Transactions based upon arrangements made by or on behalf of
the Company. The Company has heretofore furnished to Parent a complete and
correct copy of all agreements between the Company and CIBC World Markets
pursuant to which such firm would be entitled to any payment relating to the
Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement,
Parent and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 5.01. Corporate Organization. Each of Parent and
Purchaser is a company duly organized and validly existing under the laws of the
State of Delaware, and has the requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not prevent or materially delay consummation of
the Transactions, or otherwise prevent Parent or Purchaser from performing its
material obligations under this Agreement.
SECTION 5.02. Authority Relative to This Agreement. Each of
Parent and Purchaser has all necessary power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and validly
executed and delivered by Parent and Purchaser and, assuming due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of each of Parent and Purchaser enforceable against each of Parent
and Purchaser in accordance with its terms.
SECTION 5.03. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by Parent and Purchaser do not, and
the performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the organizational documents of either Parent or Purchaser, (ii)
assuming that all consents, approvals, authorizations and other actions
described in Section 5.03(b) have been obtained and all filings and obligations
described in Section 5.03(b) have been made, conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Parent or Purchaser or
by which any property or asset of either of them is bound or affected, or (iii)
result in any breach of, or constitute a default (or an event which, with notice
or lapse of time or both, would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Parent
or Purchaser pursuant to, any note, bond, mortgage, indenture, contract,
agreement,
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lease, license, permit, franchise or other instrument or obligation to which
Parent or Purchaser is a party or by which Parent or Purchaser or any property
or asset of either of them is bound or affected, except, with respect to clauses
(ii) and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or materially delay consummation of the
Transactions or otherwise prevent Parent and Purchaser from performing their
material obligations under this Agreement.
(b) Except as set forth in Section 5.03(b) of the Disclosure
Schedule (the "Purchaser Disclosure Schedule"), which has been prepared by
Parent and Purchaser and delivered by Parent and Purchaser to the Company prior
to the execution and delivery of this Agreement, the execution and delivery of
this Agreement by Parent and Purchaser do not, and the performance of this
Agreement by Parent and Purchaser will not, require any consent, approval,
authorization or permit of, or filing with, or notification to, any Governmental
Authority, except (i) for applicable requirements, if any, of the Exchange Act,
Blue Sky Laws and state takeover laws, the HSR Act, the Exon-Xxxxxx Provision,
the notification requirements of the Arms Regulations and filing and recordation
of appropriate merger documents as required by Delaware Law, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or materially delay
consummation of the Transactions, or otherwise prevent Parent or Purchaser from
performing their material obligations under this Agreement.
SECTION 5.04. Financing. Parent will have sufficient funds on
hand at the Effective Time to, and will provide or cause to be provided to
Purchaser all funds necessary to, permit Purchaser to consummate all the
Transactions, including, without limitation, acquiring all the outstanding
Shares in the Offer and the Merger.
SECTION 5.05. Offer Documents; Proxy Statement. The Offer
Documents shall not, at the time the Offer Documents are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The information supplied by Parent for inclusion in the
Proxy Statement shall not, at the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of the Company, at the time
of the Stockholders' Meeting or at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading, or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, Parent and Purchaser
make no representation or warranty with respect to any information supplied by
the Company or any of its representatives for inclusion in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 5.06. Purchaser. Purchaser was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not engaged
in any business activities
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or conducted any operations other than in connection with the transactions
contemplated hereby. All the issued and outstanding shares of capital stock of
Purchaser are owned of record and beneficially by Parent free and clear of any
Liens.
SECTION 5.07. Brokers. No broker, finder or investment banker
(other than Xxxxxxx Sachs & Co., Inc. whose fees and expenses shall be paid or
caused to be paid by Parent) is entitled to any brokerage, finder's or other fee
or commission in connection with the Transactions based upon arrangements made
by or on behalf of Parent or Purchaser.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the
Merger. The Company agrees that, between the date of this Agreement and the
Effective Time, unless Parent shall otherwise agree in writing, the businesses
of the Company and the Subsidiaries shall be conducted only in, and the Company
and the Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company shall
use its reasonable best efforts to preserve substantially intact the business
organization of the Company and the Subsidiaries, to keep available the services
of the current officers, employees and consultants of the Company and the
Subsidiaries and to preserve the current relationships of the Company and the
Subsidiaries with customers, suppliers and other persons with which the Company
or any Subsidiary has significant business relations. By way of amplification
and not limitation, except as expressly contemplated by this Agreement and
Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary
shall, between the date of this Agreement and the Effective Time, directly or
indirectly, do or initiate any significant steps to do any of the following
without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation
or By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of, (i) any shares of any class of capital stock of the Company or any
Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for the issuance of
a maximum of 1,394,166 Shares issuable pursuant to employee stock
options outstanding on the date hereof) or (ii) any assets of the
Company or any Subsidiary, except in the ordinary course of business
and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
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(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization
or any division thereof or any significant amount of assets; (ii)
except in the ordinary course of business and consistent with past
practice incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise become
responsible for, the obligations of any person or make any loans or
advances or grant any security interest in any of its assets; (iii)
enter into any customer contract related to the Company's military and
medical businesses, (iv) enter into any other contract or agreement
other than in the ordinary course of business and consistent with past
practice; (v) authorize, or make any commitment with respect to, any
single capital expenditure which is in excess of $500,000 or capital
expenditures which are, in the aggregate, in excess of $1,000,000 for
the Company and the Subsidiaries taken as a whole; or (vi) enter into
or amend any contract, agreement, commitment or arrangement with
respect to any matter set forth in this Section 6.01(e);
(f) increase the compensation payable or to become payable or
the benefits provided to its directors, officers or employees, except
for increases in the ordinary course of business and consistent with
past practice in salaries, wages, bonuses, incentives or pension
benefits of employees of the Company or any Subsidiary who are not
directors or officers of the Company, or grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any director, officer or other employee of the Company or of any
Subsidiary, or establish, adopt, enter into or amend (other than as may
be required by applicable Law) any collective bargaining, bonus,
profit-sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any director, officer or employee;
(g) change any of the accounting methods used by it unless
required by GAAP or applicable law;
(h) make any tax election or settle or compromise any material
United States federal, state, local or non-United States income tax
liability;
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the 1999 Balance Sheet or
subsequently incurred in the ordinary course of business and consistent
with past practice;
(j) amend, modify or consent to the termination of any
Material Contract, or amend, waive, modify or consent to the
termination of the Company's or any Subsidiary's material rights
thereunder;
(k) commence or settle any Action; or
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(l) publicly announce an intention, enter into any formal or
informal agreement or otherwise make a commitment, to do any of the
foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholders' Meeting. (a) If required by
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law and the Company's
Certificate of Incorporation and By-laws, (i) duly call, give notice of, convene
and hold an annual or special meeting of its stockholders as promptly as
practicable following consummation of the Offer for the purpose of considering
and taking action on this Agreement and the Merger (the "Stockholders' Meeting")
and (ii) (A) subject to Section 7.05(b), include in the Proxy Statement, and not
subsequently withdraw or modify in any manner adverse to Purchaser or Parent,
the unanimous recommendation of the Board that the stockholders of the Company
approve and adopt this Agreement and the Merger and (B) use its best efforts to
obtain such approval and adoption. At the Stockholders' Meeting, Parent and
Purchaser shall cause all Shares then owned by them and their subsidiaries to be
voted in favor of the approval and adoption of this Agreement and the
Transactions.
(b) Notwithstanding the foregoing, in the event that Purchaser
shall acquire at least 90% of the then outstanding Shares, the parties shall
take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 253 of Delaware Law, as promptly as
reasonably practicable after such acquisition, without a meeting of the
stockholders of the Company.
SECTION 7.02. Proxy Statement. If approval of the Company's
shareholders is required by applicable law to consummate the Merger, promptly
following consummation of the Offer, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, and shall use its reasonable best efforts
to have the Proxy Statement cleared by the SEC promptly. Parent, Purchaser and
the Company shall cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent of the receipt of any comments of
the SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
provide to Parent promptly copies of all correspondence between the Company or
any representative of the Company and the SEC. The Company shall give Parent and
its counsel the opportunity to review the Proxy Statement, including all
amendments and supplements thereto, prior to its being filed with the SEC and
shall give Parent and its counsel the opportunity to review all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, the SEC. Each of the Company, Parent and Purchaser
agrees to use its reasonable best efforts, after consultation with the other
parties hereto, to respond promptly to all such comments of and requests by the
SEC and to cause the Proxy Statement and all required amendments and supplements
thereto to be mailed to the holders of Shares entitled to vote at the
Stockholders' Meeting at the earliest practicable time.
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SECTION 7.03. Company Board Representation; Section 14(f). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
time to time thereafter, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board as shall
give Purchaser representation on the Board equal to the product of the total
number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors, or both. At such times, the Company shall use its reasonable best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) the board of directors of each Subsidiary,
and (iii) each committee of each such board, in each case only to the extent
permitted by applicable law. Notwithstanding the foregoing, until the Effective
Time, the Company shall use its reasonable best efforts to ensure that at least
two members of the Board and each committee of the Board and such boards and
committees of the Subsidiaries, as of the date hereof, who are not employees of
the Company shall remain members of the Board and of such boards and committees.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder to fulfill its obligations under this Section 7.03, and shall include
in the Schedule 14D-9 such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 to
fulfill such obligations. Parent or Purchaser shall supply to the Company, and
be solely responsible for, any information with respect to either of them and
their nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant
to this Section 7.03, prior to the Effective Time, any amendment of this
Agreement or the Certificate of Incorporation or By-laws of the Company, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or Purchaser, or waiver of any of the Company's rights hereunder, shall require
the concurrence of a majority of the directors of the Company then in office who
neither were designated by Purchaser nor are employees of the Company or any
Subsidiary.
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SECTION 7.04. Access to Information; Confidentiality. (a) From
the date hereof until the Effective Time, upon reasonable notice and at
reasonable times, the Company shall, and shall cause the Subsidiaries and the
officers, directors, employees, auditors and agents of the Company and the
Subsidiaries to, afford the officers, employees and agents of Parent and
Purchaser complete access to the officers, employees, agents, properties,
offices, plants and other facilities, books and records of the Company and each
Subsidiary, shall furnish Parent and Purchaser with such financial, operating
and other data and information as Parent or Purchaser, through its officers,
employees or agents, may reasonably request. The Company shall permit Parent
and/or Purchaser to have one or more observers on the premises of the Company
daily until the earlier of the Effective Time or the termination of this
Agreement.
(b) All information obtained by Parent or Purchaser pursuant
to this Section 7.04 shall be kept confidential in accordance with the
non-disclosure agreement, dated July 6, 2000 (the "Confidentiality Agreement"),
between Parent and the Company.
(c) No investigation pursuant to this Section 7.04 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto or any condition to the
Offer.
SECTION 7.05. No Solicitation of Transactions. (a) Neither the
Company nor any Subsidiary shall, directly or indirectly, through any officer,
director, agent or otherwise, (i) solicit, initiate or encourage the submission
of, any Acquisition Proposal (as defined below) or (ii) subject to Section
7.05(b), participate in any discussions or negotiations regarding, or furnish to
any person, any information with respect to, or otherwise cooperate in any way
with respect to, or assist or participate in, facilitate or encourage, any
unsolicited proposal that constitutes, or may reasonably be expected to lead to,
a Acquisition Proposal.
(b) Except as set forth in this Section 7.05(b), neither the
Board nor any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Purchaser, the approval or
recommendation by the Board or any such committee of this Agreement, the Offer,
the Merger or any other Transaction, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal. Notwithstanding the foregoing, in the
event that, prior to the time of acceptance for payment of Shares pursuant to
the Offer, the Board determines in good faith that it is required to do so by
its fiduciary duties under applicable law after having received advice from
outside legal counsel, the Board may withdraw or modify its approval or
recommendation of the Offer and the Merger.
(c) The Company shall, and shall direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal.
(d) The Company shall advise Parent orally (within one
business day) and in writing (as promptly as possible thereafter) of (i) any
Acquisition Proposal or any request for
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information with respect to any Acquisition Proposal, the material terms and
conditions of such Acquisition Proposal or request and the identity of the
person making such Acquisition Proposal or request and (ii) any changes in any
such Acquisition Proposal or request.
(e) The Company agrees, except as required by the Board's
fiduciary duties under applicable law after having received advice from outside
legal counsel, not to release any third party from, or waive any provision of,
any confidentiality or standstill agreement to which the Company is a party.
SECTION 7.06. Employee Benefits Matters. Except as provided in
the last sentence of this Section 7.06, Parent and Surviving Corporation shall
have no obligation to continue after the Effective Time any plan or arrangement
in effect immediately before the Effective Time (except as otherwise required by
applicable Law, including without limitation ERISA and the Code) for current or
former employees, officers or directors of the Company or any Subsidiary, and
shall have the discretion to continue or terminate any of such programs, or to
merge any of them into plans or arrangements in effect for other employees of
Parent or Surviving Corporation; provided, however, that Parent and Surviving
Corporation shall provide substantially comparable plans or arrangements in
effect immediately before the Effective Time for current or former employees,
officers or directors of the Company or any Subsidiary, after the Effective
Time, in a manner determined in the sole discretion of the Parent. Employees of
the Company or any Subsidiary shall receive credit for purposes of eligibility
to participate and vesting (but not for benefit accruals) under any employee
pension benefit plan, program or arrangement established or maintained by the
Surviving Corporation or any of its subsidiaries or for the purpose of
eligibility and determining the amount of any benefit with respect to any
employee welfare benefit plan, program or arrangement established or maintained
by Surviving Corporation for service accrued or deemed accrued prior to the
Effective Time with the Company or any Subsidiary; provided, however, that such
crediting of service shall not operate to duplicate any benefit or the funding
of any such benefit. Parent shall also cause the Surviving Corporation to
perform the Company's obligations under the change in control and other
agreements set forth in Section 4.10(a) of the Disclosure Schedule between the
Company and certain of its officers and employees unless any such officer or
employee agrees otherwise.
SECTION 7.07. Directors' and Officers' Indemnification and
Insurance. (a) The By-laws of the Surviving Corporation shall contain provisions
granting the same rights to indemnification that are set forth in Article 7 of
the By-laws of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who, at
or prior to the Effective Time, were directors, officers, employees, fiduciaries
or agents of the Company, unless such modification shall be required by law.
(b) Each of Parent and the Surviving Corporation shall use its
reasonable best efforts to maintain in effect for six years from the Effective
Time, if available, the current directors' and officers' liability insurance
policies maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions that are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event shall
the Surviving Corporation
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be required to expend pursuant to this Section 7.07(b) more than an amount per
year equal to 200% of current annual premiums paid by the Company for such
insurance (which premiums the Company represents and warrants to be $85,500 in
the aggregate, which premium has been calculated by dividing the aggregate two
year premium by two), (such 200% amount, the "Maximum Premium"). If such
insurance coverage cannot be obtained, or can only be obtained at an annual
premium in excess of the Maximum Premium, Parent shall cause the Surviving
Corporation (which, for purposes of this Section 7.07(b), shall include the
provision of necessary funds to the Surviving Corporation, if necessary) to
maintain the most advantageous policies of directors' and officers' insurance
obtainable for an annual premium equal to the Maximum Premium; provided further,
that if such insurance coverage cannot be obtained at all, Parent shall purchase
all available run-off insurance policies with respect to pre-existing insurance
in an amount that, together with all other insurance purchased pursuant to this
Section 7.07(b), does not exceed the Maximum Premium.
(c) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 7.07.
(d) From and after the consummation of the Offer, Parent shall cause
the Surviving Corporation (which, for purposes of this Section 7.07, shall
include the provision of necessary funds to the Surviving Corporation, if
necessary) to indemnify, defend and hold harmless any person who is now, or has
been at any time prior to the date hereof, or who becomes prior to the Effective
Time, an officer, director, employee or agent (the "Indemnified Party") of the
Company or any of its Subsidiaries against all losses, claims, damages,
liabilities, costs and expenses (including attorneys' fees and expenses),
judgments, fines, losses, and amounts paid in settlement in connection with any
actual or threatened action, suit, claim, proceeding or investigation (each, a
"Claim") to the extent that any such Claim is based on, or arises out of, (i)
the fact that such person is or was a director, officer, employee or agent of
the Company or any of its Subsidiaries or is or was serving at the request of
the Company or any of its Subsidiaries as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
or (ii) this Agreement, or any of the transactions contemplated hereby, in each
case to the extent that any such Claim pertains to any matter or fact arising,
existing, or occurring prior to or at the Effective Time, regardless of whether
such Claim is asserted or claimed prior to, at or after the Effective Time, to
the full extent permitted under Delaware law or the Company's Certificate of
Incorporation, By-laws or indemnification agreements in effect at the date
hereof, including provisions relating to advancement of expenses incurred in the
defense of any action or suit. Without limiting the foregoing, in the event any
Indemnified Party becomes involved in any capacity in any Claim of the type
described above, then from and after consummation of the Offer, Parent shall
cause the Company (or the Surviving Corporation if after the Effective Time)
(which, for purposes of this Section 7.07, shall include the provision of
necessary funds to the Surviving Corporation, if necessary) to periodically
advance to such Indemnified Party its legal and other expenses (including the
cost of any investigation and
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preparation incurred in connection therewith), subject to the provision by such
Indemnified Party of an undertaking to reimburse the amounts so advanced in the
event of a final non-appealable determination by a court of competent
jurisdiction that such Indemnified Party is not entitled thereto.
SECTION 7.08. Notification of Certain Matters. The Company
shall give prompt notice to Parent, and Parent shall give prompt notice to the
Company, in each case, upon its discovery of (a) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which
reasonably could be expected to cause any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect and (b) any
failure of the Company, Parent or Purchaser, as the case may be, to comply with
or satisfy any covenant or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 7.08 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 7.09. Further Action; Reasonable Best Efforts. (a)
Upon the terms and subject to the conditions hereof, each of the parties hereto
shall (i) make promptly its respective filings, and thereafter make any other
reasonable submissions, under the HSR Act with respect to the Transactions and
(ii) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the Transactions, including, without limitation, using its reasonable
best efforts to obtain all Permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and the Merger;
provided that neither Purchaser nor Parent will be required by this Section 7.09
to take any action, including entering into any consent decree, hold separate
orders or other arrangements, that (A) requires the divestiture of any assets of
any of the Purchaser, Parent, Company or any of their respective subsidiaries or
(B) limits Parent's freedom of action with respect to, or its ability to retain,
the Company and the Subsidiaries or any portion thereof or any of Parent's or
its affiliates' other assets or businesses; provided, further, that the Company
shall be required to use its reasonable best efforts to obtain Permits,
consents, approvals, authorizations, qualifications and orders only of such
Governmental Authorities and parties to contracts with the Company and the
Subsidiaries that are requested by Parent and/or Purchaser. Without limiting the
foregoing, the Company, Parent and Purchaser shall file as soon as practicable
notifications under the HSR Act and respond as promptly as practicable to any
inquiries received from the Federal Trade Commission and the Antitrust Division
of the United States Department of Justice for additional information or
documentation and respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other Governmental
Authority in connection with antitrust matters. Concurrently with the filing of
notifications under the HSR Act or as soon thereafter as practicable, the
Company and Parent shall each request early termination of the HSR Act
waiting-period. The Purchaser and the Company shall as soon as reasonably
practicable after the date of this Agreement jointly give notice of the
Transactions promptly to the Chairman of the Committee on Foreign Investment in
the United States ("CFIUS") pursuant to the Exon-Xxxxxx Provision, and each of
the parties hereto shall make such additional filings and submissions and take
such other actions as may be reasonably necessary
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under the Exon-Xxxxxx Provision in respect of the Transactions. The Company
agrees that Parent shall have the sole discretion with respect to a decision as
to whether or not to withdraw the filings or notifications made by the parties
under the Exon-Xxxxxx Provision. In addition, the Company, Parent and Purchaser
agree to make as soon as practicable such other filings as may be necessary or
required by any non-United States Governmental Authority. In case, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall use their reasonable best efforts to take all such
action.
(b) Each of the parties hereto agrees to cooperate and use its
reasonable best efforts to vigorously contest and resist any Action, including
administrative or judicial Action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and that restricts, prevents or
prohibits consummation of the Transactions, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal.
SECTION 7.10. Public Announcements. Parent and Purchaser, on
the one hand, and the Company, on the other hand, agree that no public release
or announcement concerning the Transactions, the Offer or the Merger shall be
issued by either party without the prior consent of the other party (which
consent shall not be unreasonably withheld), except as such release or
announcement may be required by Law or the rules or regulations of any United
States or non-United States securities exchange, in which case the party
required to make the release or announcement shall use its best efforts to allow
the other party reasonable time to comment on such release or announcement in
advance of such issuance.
SECTION 7.11. Confirmation of No Withholding. The Company
shall provide the Purchaser with copies of (i) a statement issued by the Company
pursuant to Section 1.897-2(h)(1) of the Treasury Regulations, dated no more
than thirty days prior to the Effective Time, certifying, to the effect that the
Shares are not a United States real property interest and (ii) the notice to the
IRS provided for in Section 1.897-2(h)(2) of the Treasury Regulations with
regard to the statement referred to in clause (i) of this section.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Merger. The obligations of
each party to effect the Merger shall be subject to the satisfaction, at or
prior to the Effective Time, of the following conditions:
(a) Stockholder Approval. If and to the extent required by
Delaware Law, this Agreement and the Merger shall have been approved
and adopted by the affirmative vote of the stockholders of the Company;
provided, however, that Parent and Purchaser may not assert this
condition unless all Shares purchased in the Offer by them and all
other shares owned by them or their affiliates are voted in favor of
this Agreement and the Merger;
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(b) No Injunctions. No Governmental Authority or court of
competent jurisdiction shall have issued an order, decree, injunction
or ruling or taken any other action (which order, decree, injunction,
ruling or other action the parties hereto shall use their respective
reasonable best efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the Merger and such order, decree,
injunction, ruling or other action shall have become final and
non-appealable; provided, however, that the party seeking to terminate
this Agreement as a result of the non-satisfaction of this condition
shall have used all reasonable best efforts to challenge such order,
decree, injunction or ruling;
(c) No Order. No Governmental Authority in the United States
or in the Kingdom of Sweden or the European Union shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise materially
restricting, preventing or prohibiting consummation of the
Transactions; and
(d) Offer. Purchaser or its permitted assignee shall have
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer; provided, however, that this condition shall not be applicable
to the obligations of Parent or Purchaser if, in breach of this
Agreement or the terms of the Offer, Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated
and the Merger and the other Transactions may be abandoned at any time prior to
the Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the Transactions by the stockholders of the Company:
(a) By mutual written consent of each of Parent, Purchaser and
the Company duly authorized by the Boards of Directors of Parent,
Purchaser and the Company; or
(b) By either Parent or Purchaser, on the one hand, or the
Company, on the other:
(i) if the Effective Time shall not have occurred on
or before January 31, 2001; provided, however, that the right
to terminate this Agreement under this Section 9.01(b) shall
not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or
before such date and provided further that this Agreement may
not be terminated pursuant to this clause (b)(i) after
Purchaser accepts Shares for payment pursuant to the Offer;
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(ii) if any Governmental Authority in the United
States, the Kingdom of Sweden or the European Union shall have
enacted, issued, promulgated, enforced or entered any
injunction, order, decree or ruling (whether temporary,
preliminary or permanent) which has become final and
nonappealable and has the effect of making consummation of the
Offer or the Merger illegal or otherwise materially preventing
or prohibiting consummation of the Offer or the Merger;
(iii) if Parent or Purchaser shall have terminated
the Offer because of a failure of a condition set forth on
Annex A to this Agreement and any option granted in the
Stockholders' Agreement has not been exercised and is not
exercisable, provided, however, that the right to terminate
this Agreement under this Section 9.01(b)(iii) shall not be
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in,
the failure of Purchaser to purchase Shares in the Offer; or
(c) By the Company, if (i) Parent, Purchaser or any of their
affiliates shall have failed to commence the Offer on or prior to ten
business days following the date of the initial public announcement of
the Offer; or (ii) prior to the purchase of Shares pursuant to the
Offer, there shall be a material breach by Parent or Purchaser of any
of the material covenants or agreements applicable to it contained in
this Agreement that is not cured within 15 business days after it
receives written notice from the Company of the occurrence of such
breach.
(d) By Purchaser or Parent if, due to an occurrence that if
occurring after the commencement of the Offer, would result in a
failure to satisfy the conditions set forth in clauses (a) through (h)
of Annex A hereto, Parent, Purchaser, or any of their affiliates shall
have failed to commence the Offer on or prior to ten business days
following the date of the initial public announcement of the Offer and
any option granted in the Stockholders' Agreement has not been
exercised and is not exercisable; provided, however, that Parent may
not terminate this Agreement pursuant to this Section 9.01(d) if Parent
or Purchaser is in material breach of this Agreement.
SECTION 9.02. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 9.01, this Agreement shall
forthwith become void, and there shall be no liability on the part of any party
hereto, except (a) as set forth in Section 9.03 and (b) nothing herein shall
relieve any party from liability for any breach hereof prior to the date of such
termination; provided, however, that the Confidentiality Agreement shall survive
any termination of this Agreement.
SECTION 9.03. Fees and Expenses. (a) In the event that (i)
this Agreement is terminated because the Board of Directors of the Company has
withdrawn or modified, in a manner adverse to Parent or Purchaser, the approval
or recommendation of the Offer, the Merger, the Agreement or the Stockholders'
Agreement , or approved or recommended any Acquisition Proposal and (ii) any
option granted in the Stockholders' Agreement has not been exercised and is not
exercisable, then, in any such event, the Company shall pay Parent promptly (but
in no event later than one business day after termination) a fee of $3 million
(the "Fee") and
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the Company shall reimburse Parent and Purchaser (not later than
one business day after submission of statements therefor) for all Reimbursable
Expenses of Parent and Purchaser, which amount shall be payable in immediately
available funds.
(b) Except as set forth in this Section 9.03, all costs and
expenses incurred in connection with this Agreement, the Stockholder Agreement
and the Transactions shall be paid by the party incurring such expenses, whether
or not any Transaction is consummated.
(c) In the event that the Company shall fail to pay the Fee or
any Reimbursable Expenses when due, the term "Reimbursable Expenses" shall also
include the out-of-pocket costs and expenses actually incurred or accrued by
Parent and Purchaser (including, without limitation, fees and expenses of
counsel) in connection with the collection under and enforcement of this Section
9.03, together with interest on such unpaid amounts, commencing on the date that
the respective amounts became due, at a rate equal to the rate of interest
publicly announced by Citibank, N.A., from time to time, in the City of New
York, at such bank's Base Rate plus 3.0%.
SECTION 9.04. Amendment. Subject to Section 7.03, this
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
the Transactions by the stockholders of the Company, no amendment may be made
that would reduce the amount or change the type of consideration into which each
Share shall be converted upon consummation of the Merger. This Agreement may not
be amended except by an instrument in writing signed by each of the parties
hereto.
SECTION 9.05. Waiver. Subject to Section 7.03, at any time
prior to the Effective Time, any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties of any other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement of any other party or any condition to its own
obligations contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 10.01):
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if to Parent or Purchaser:
Ericsson Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
Telecopier No: 972/583-1839
Attention: Xxxxxxxx X. Xxxxx, Esq.
Vice President and General Counsel
with a copy to:
Xxxxxxxxxxxxxxxxxxx XX Xxxxxxxx (xxxx)
Xxxxxxxxxxx, XX 00000
Xxxxxx
Telecopier No.: + 46 8 719 21 44
Attention: Xxxx Xxxxxxxx
Corporate Mergers and Acquisitions
and
Shearman & Sterling
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Telecopier No.: + 44 207 655 5500
Attention: Xxxxxxx Xxxxxxxxx, Esq.
if to the Company:
Microwave Power Devices, Inc.
00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier No.: 631/231-0712
Attention: Chief Executive Officer
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: 212/969-2900
Attention: Xxxxxxx X. Xxxxx, Esq.
SECTION 10.02. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is
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invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 10.03. Entire Agreement; Assignment. This Agreement
and the Stockholders' Agreement constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede, except as set
forth in Section 7.04(b), all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned (whether pursuant to a merger, by
operation of law or otherwise), except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any affiliate of Parent,
provided that no such assignment shall relieve the assigning party of its
obligations hereunder if such assignee does not perform such obligations.
SECTION 10.04. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Sections 3.06, 3.07, 3.08, 3.09 and 7.07
(which is intended to be for the benefit of the persons covered thereby and may
be enforced by such persons).
SECTION 10.05. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 10.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any Delaware Chancery Court. The parties
hereto hereby (a) submit to the exclusive jurisdiction of the Delaware Chancery
Court for the purpose of any Action arising out of or relating to this Agreement
brought by any party hereto, and (b) irrevocably waive, and agree not to assert
by way of motion, defense, or otherwise, in any such Action, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the Action
is brought in an inconvenient forum, that the venue of the Action is improper,
or that this Agreement or the Transactions may not be enforced in or by any of
the above-named courts.
SECTION 10.07. Waiver of Jury Trial. Each of the parties
hereto hereby waives to the fullest extent permitted by applicable law any right
it may have to a trial by jury with respect to any litigation directly or
indirectly arising out of, under or in connection with this Agreement or the
Transactions. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
that foregoing waiver and (b) acknowledges
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that it and the other hereto have been induced to enter into this Agreement and
the Transactions, as applicable, by, among other things, the mutual waivers and
certifications in this Section 10.07.
SECTION 10.08. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 10.09. Counterparts. This Agreement may be executed
and delivered (including by facsimile transmission) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 10.10. Obligations of Parent and the Company. Whenever
this Agreement requires a Subsidiary of Parent to take any action, such
requirement shall be deemed to include an undertaking on the part of Parent to
cause such Subsidiary to take such action. Whenever this Agreement requires a
Subsidiary of the Company to take any action, such requirement shall be deemed
to include an undertaking on the part of the Company to cause such Subsidiary to
take such action.
SECTION 10.11. Limitations on Warranties. (a) Except for the
representations and warranties contained in Article IV of this Agreement, the
Company makes no other express or implied representation or warranty to Parent
or Purchaser. Parent and Purchaser acknowledge that, in entering into this
Agreement, it has not relied on any representations or warranties of the Company
other than the representations and warranties of the Company set forth in
Article IV of this Agreement.
(b) Except for the representations and warranties contained in
Article V of this Agreement, Parent and Purchaser make no other express or
implied representation or warranty to the Company. The Company acknowledges
that, in entering into this Agreement, it has not relied on any representations
or warranties of Parent and Purchaser other than the representations and
warranties of Parent and Purchaser set forth in Article V of this Agreement.
SECTION 10.12. Execution. This Agreement may be executed by
facsimile signatures and such signature shall be deemed binding for all purposes
hereof, without delivery of an original signature being thereafter required.
[The Remainder of This Page is Intentionally Left Blank]
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
ERICSSON INC.
By /s/ Xxxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President & General Counsel
ERICSSON MPD ACQUISITION CORP.
By /s/ Xxxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chairman and President
MICROWAVE POWER DEVICES, INC.
By /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Chairman, President & CEO
48
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer,
Purchaser shall not be required to accept for payment any Shares
tendered pursuant to the Offer, and may, subject to and to the extent
permitted in the Agreement, extend, terminate or amend the Offer, if
(i) immediately prior to the expiration of the Offer, the Minimum
Condition shall not have been satisfied, (ii) any applicable waiting
period under the HSR Act or under any applicable material non-United
States statutes or regulations shall not have expired or been
terminated immediately prior to the expiration of the Offer, (iii)
CFIUS shall have conducted a full investigation of the notification
pursuant to the Exon-Xxxxxx Provision and shall not have recommended
that the President of the United States permit the Transactions, unless
Parent has withdrawn the filing of notification made by the parties
with CFIUS, (iv) any waiting period applicable to the consummation of
the Offer under the Arms Regulations shall not have expired or been
terminated immediately prior to the expiration of the offer (it being
agreed that Purchaser shall not be entitled to terminate the Offer on
account of the failure of a conditions set forth in clauses (ii), (iii)
or (iv) of this paragraph before February 1, 2001), or (v) at any time
on or after the date of this Agreement and immediately prior to the
expiration of the Offer, any of the following conditions shall exist
and continue to exist:
(a) there shall have been instituted and be pending any Action
instituted by any Governmental Authority (other than (w) any
such Action in which a motion for a temporary restraining
order, a preliminary injunction or a permanent injunction
shall have been denied or shall have expired, or a judicial
order granting any such temporary restraining order,
preliminary injunction or permanent injunction shall have been
reversed on appeal and not reinstated, (x) any such Action or
proceeding in the United States in which the United States
Department of Justice, or the Federal Trade Commission or any
applicable state or authority does not file within 10 business
days after commencement of such Action a motion seeking
injunctive relief of the type referred to in clauses (1)
through (5) of this paragraph (a), (y) an Action filed with
consent of Parent or Purchaser, or (z) any Action that Parent
and Purchaser shall not have used reasonable efforts to have
dismissed) (1) seeking to make illegal or otherwise, directly
or indirectly, restrain or prohibit, the making of the Offer,
the acceptance for payment of any Shares by Parent, Purchaser
or any other affiliate of Parent, or the purchase of Shares
pursuant to the Stockholders' Agreement, or the consummation
of any other Transaction, or seeking to obtain material
damages in connection with any Transaction; (2) seeking to
prohibit or materially limit (for reasons other than United
States Department of Defense Facility Security Clearance) the
ownership or operation, as a result of the Transactions, by
the Company, Parent or any of their subsidiaries of all or any
of the business or assets of the Company, Parent or any of
their subsidiaries that is material to either Parent and its
subsidiaries or the Company
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and the Subsidiaries, in either case, taken as a whole, or to
compel the Company, Parent or any of their affiliates, as a
result of the Transactions, to dispose of or to hold separate
all or any portion of the business or assets of the Company,
Parent or any of their subsidiaries that is material to either
Parent and its subsidiaries or the Company and the
Subsidiaries, in each case, taken as a whole; (3) seeking to
impose any material limitation on the ability of Parent,
Purchaser or any other affiliate of Parent to exercise
effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer or the Stockholders' Agreement
or otherwise on all matters properly presented to the
Company's stockholders, including, without limitation, the
approval and adoption of this Agreement and the Transactions;
(4) seeking to require divestiture, as a result of the
Transactions, by Parent, Purchaser or any other affiliate of
Parent of any Shares; or (5) which otherwise would prevent or
materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from
performing its obligations under this Agreement or would have
a Material Adverse Effect;
(b) if any Governmental Authority or court of competent
jurisdiction shall have issued an order, decree, injunction or
ruling or taken any other action (which order, decree,
injunction, ruling or other action Purchaser and Parent shall
have used their respective best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting or
materially delaying or preventing the Transactions and such
order, decree, injunction, ruling or other action shall have
become final and non-appealable;
(c) there shall have been any statute, rule, regulation,
legislation or interpretation enacted, promulgated, amended,
issued or deemed applicable to (i) Parent, the Company or any
subsidiary or affiliate of Parent or the Company or (ii) any
Transaction, in each case, by any United States or non-United
States legislative body or Governmental Authority with
appropriate jurisdiction, other than the routine application
of the waiting period provisions of the HSR Act to the Offer,
the waiting period under the Arms Regulations to the Offer,
the Stockholders' Agreement or the Merger, that results,
directly or indirectly, in any of the consequences referred to
in clauses 1 through 5 of paragraph (a) above;
(d) there shall have occurred (i) a declaration of a banking
moratorium or any suspension of payments in respect of banks
in the United States or Sweden that materially and adversely
affects the ability of Parent to pay for the Shares for more
than five business days after the expiration of the Offer or
(ii) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly
involving the United States or Sweden that materially and
adversely affects the ability of Purchaser and Parent to
consummate the Offer or, in the case of any such calamity
existing on the date hereof, a material acceleration or
worsening thereof;
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(e) the Board, or any committee thereof, shall have withdrawn or
modified, in a manner adverse to Parent or Purchaser, the
approval or recommendation of the Offer, the Merger, this
Agreement or the Stockholders' Agreement, or approved or
recommended any Acquisition Proposal or any other acquisition
of Shares other than the Offer, the Merger and the
Stockholders' Agreement or the Board, or any committee
thereof, shall have resolved to do any of the foregoing;
(f) any representation or warranty of the Company in this
Agreement, or of any Stockholder in the Stockholders'
Agreement shall not have been true and correct at the time of
the execution of this Agreement (provided, however, that if
any representation or warranty is qualified by "materiality",
"Material Adverse Effect", or similar qualifier, for purposes
of determining whether such representation is true and correct
for this sub section (f) such portion of such representation
or warranty shall be read as if not so qualified), if any such
failure to be true and correct, individually or in the
aggregate, would be reasonably likely to result in a loss or
diminution in value in an amount equal to or greater than
$10,000,000; provided, however, that in determining whether
any representation or warranty is not true or correct or the
loss of diminution that is reasonably likely to result from
such inaccuracy, the effect of any of the matters described in
(ii)(B) and (ii)(C) of the definition of Excluded Matters
shall be disregarded; provided, further, that in determining
whether the representation and warranty contained in Section
4.08(b) is not true or correct or the loss of diminution that
is reasonably likely to result from such inaccuracy, the
effect of any Excluded Matters shall be disregarded;
(g) the Company shall have failed to perform, in any material
respect, any obligation or to comply, in any material respect,
with any material agreement or covenant of the Company that is
then required to be performed or complied with by it under
this Agreement, such material agreements or covenants
consisting only of those agreements or covenants listed in
Annex B to this Agreement, or the Stockholders shall have
failed to perform in any material respect, any obligation or
to comply, in any material respect, with any agreement or
covenant of the Stockholders that is them required to be
performed or complied with by them under the Stockholders'
Agreement;
(h) this Agreement shall have been terminated in accordance with
its terms; or
(i) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for
payment of Shares thereunder;
which, in the sole judgment of Purchaser in any such case, and regardless of the
circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser
and Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such
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condition or may be waived by Purchaser or Parent in whole or
in part at any time and from time to time in their sole
discretion, provided that the Minimum Condition may not be
waived to be less than 50.6% of the total issued and
outstanding Shares on a Fully Diluted Basis. The failure by
Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular
facts and other circumstances shall not be deemed a waiver
with respect to any other facts and circumstances; and each
such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
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ANNEX B
Material Agreements or Covenants
The material agreements or covenants of the Company contained in the
Agreement shall consist of the agreements and covenants of the Company contained
in:
Section 2.02
Section 6.01
Section 7.04(a)
Section 7.05
Section 7.08
Section 7.09
Section 7.11
Section 10.10
