AGREEMENT AND PLAN OF MERGER (Cash Merger) (hereinafter called this
"Agreement"), dated as of December 16, 1996, among TYLAN GENERAL, INC., a
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Delaware corporation (the "Company"), MILLIPORE CORPORATION, a Massachusetts
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corporation ("Purchaser"), and MCTG ACQUISITION CORP., a Delaware corporation
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and a wholly-owned subsidiary of Purchaser ("Purchaser Sub"), the Company and
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Purchaser Sub sometimes being hereinafter collectively referred to as the
"Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Purchaser and the Company each have
determined that it is in the best interests of their respective stockholders for
Purchaser to acquire the Company upon the terms and subject to the conditions
set forth herein; and
WHEREAS, the Company, Purchaser and Purchaser Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE TENDER OFFER
1.1. Tender Offer.
------------
(a) Provided that this Agreement shall not have been terminated in
accordance with Article IX hereof and none of the events set forth in Annex A
hereto shall have occurred or be existing, within five business days after the
public announcement of the execution of this Agreement, Purchaser Sub will
commence a tender offer (the "Offer") for all of the outstanding shares of
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common stock, par value $0.001 per share (the "Shares"), of the Company at a
------
price of $16.00 per Share in cash, net to the seller, which Offer shall have an
initial expiration date not later than twenty (20) business days after the
commencement of the Offer. The obligation of Purchaser Sub to accept
for payment and pay for Shares tendered pursuant to the Offer shall be subject
only to the satisfaction or waiver of the conditions to the Offer set forth in
Annex A hereto. It is agreed that the Minimum Condition (as defined in Annex A)
and the other conditions set forth in Annex A hereto are for the sole benefit of
Purchaser Sub and may be asserted by Purchaser Sub regardless of the
circumstances giving rise to any such condition unless the Purchaser, Purchaser
Sub or their Affiliates shall have caused the circumstances giving rise to such
condition. Purchaser Sub expressly reserves the right in its sole discretion to
waive, in whole or in part, at any time or from time to time, any such condition
(other than the Minimum Condition, which may not be waived without the prior
written consent of the Company), to increase the price per Share payable in the
Offer or to make any other changes in the terms and conditions of the Offer,
provided that, unless previously approved by the Company in writing, no change
--------
may be made that decreases the price per Share payable in the Offer, reduces the
Minimum Condition, changes the form of consideration payable in the Offer,
reduces the maximum number of Shares to be purchased in the Offer, imposes
conditions to the Offer in addition to those set forth in Annex A hereto or
amends or modifies such conditions in any manner adverse to the holders of
Shares. Purchaser Sub covenants and agrees that, subject to the conditions of
the Offer set forth in Annex A hereto, Purchaser Sub shall accept for payment
and pay for Shares that have been validly tendered and not withdrawn pursuant to
the Offer as soon as it is permitted to do so under applicable law; provided
that, if the number of Shares that have been validly tendered and not withdrawn
represent less than 90% of the Shares outstanding on a fully diluted basis,
Purchaser Sub may extend the Offer up to the fifth business day following the
date on which all conditions to the Offer shall first have been satisfied or
waived.
(b) Purchaser agrees, as to the offer to purchase and related letter
of transmittal (which together constitute the "Offer Documents") and the Company
---------------
agrees, as to the Schedule 14D-9, that such documents shall, in all material
respects, comply with the requirements of the Securities Exchange Act of 1934
(the "Exchange Act") and the rules and regulations thereunder and other
------------
applicable laws. The Company and its counsel, as to the Offer Documents, and
Purchaser Sub and its counsel, as to the Schedule 14D-9, shall be given an
opportunity to review such documents prior to their being filed with the SEC.
(c) In connection with the Offer, the Company will cause its transfer
agent to furnish promptly to Purchaser Sub a list, as of a recent date, of the
record holders of Shares and their addresses, as well as mailing labels
containing the names and addresses of all record holders of Shares and lists of
security positions of Shares held in stock depositories. The Company will
furnish Purchaser Sub with such additional information (including, but not
limited to, updated lists of holders of Shares and their addresses, mailing
labels and lists of security positions) and such other assistance as Purchaser
or Purchaser Sub or their agents may reasonably request in communicating the
Offer to the record and beneficial holders of Shares. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, Purchaser Sub and its Affiliates and Associates shall hold in
confidence the information contained in any such labels, listings and files,
will use such
2
information only in connection with the Offer and the Merger, and, if this
Agreement shall be terminated, will deliver to the Company all copies of such
information then in their possession.
1.2. Company Action.
--------------
(a) The Company hereby approves of and consents to the Offer and
represents and warrants that its Board of Directors, at a meeting called and
held on December 16, 1996, by a unanimous vote of the directors present, (i)
determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are fair to and in the best interests of the
stockholders of the Company, (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and (iii) resolved to
recommend that the stockholders of the Company accept the Offer, tender their
Shares thereunder to Purchaser Sub and, if required by applicable law, approve
and adopt this Agreement and the Merger. Subject to the fiduciary duties of the
Board under applicable law (as determined in good faith after consultation with
independent counsel), the Company hereby consents to the inclusion in the Offer
Documents of the recommendations of the Board described in this Section 1.2(a).
(b) As soon as practicable on or prior to the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "Schedule 14D-9") and shall mail the Schedule 14D-9 to the
stockholders of the Company promptly after the commencement of the Offer. The
Schedule 14D-9 shall, subject to the fiduciary duties of the Board under
applicable law (as determined in good faith after consultation with independent
counsel), at all times contain the determinations, approvals and recommendations
described in Section 1.2(a). Purchaser, Purchaser Sub and the Company each
agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that any such information shall have become
false or misleading in any material respect and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Purchaser, Purchaser
Sub and their counsel shall be given a reasonable opportunity to review and
comment on the Schedule 14D-9 prior to its filing with the SEC and shall be
provided with any comments the Company and its counsel may receive from the SEC
or its staff with respect to the Schedule 14D-9 promptly after receipt of such
comments.
3
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger. Subject to the terms and conditions of this Agreement,
----------
at the Effective Time (as defined in Section 2.3), Purchaser Sub shall be merged
with and into the Company and the separate corporate existence of Purchaser Sub
shall thereupon cease (the "Merger"). The Company shall be the surviving
------
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
---------
Corporation") and shall continue to be governed by the laws of the State of
-----------
Delaware, and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except as set forth in Section 3.1. The Merger shall have the
effects specified in the Delaware General Corporation Law (the "DGCL").
----
2.2. Closing. The closing of the Merger (the "Closing") shall take place
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(i) at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 10:00 A.M. on the first
business day on which the last to be fulfilled or waived of the conditions set
forth in Article VIII hereof shall be fulfilled or waived in accordance with
this Agreement or (ii) at such other place and time and/or on such other date as
the Company and Purchaser may agree.
2.3. Effective Time. As soon as practicable following the Closing, and
--------------
provided that this Agreement has not been terminated or abandoned pursuant to
Article IX hereof, the Company and the Purchaser will cause a Certificate of
Merger (the "Delaware Certificate of Merger") to be executed and filed with the
------------------------------
Secretary of State of Delaware as provided in Section 251 of the DGCL. The
Merger shall become effective on the date on which the Delaware Certificate of
Merger has been duly filed with the Secretary of State of Delaware, and such
time is hereinafter referred to as the "Effective Time."
--------------
2.4. Subsequent Actions. If at any time after the Effective Time, the
------------------
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of the Company or Purchaser Sub acquired or to be acquired
by the Surviving Corporation as a result of or in connection with the Merger, or
otherwise to carry out this Agreement, the officers and directors of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of the Company or Purchaser Sub, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm of record or otherwise any
and all right, title and interest in, to and under such rights, properties or
assets of the Surviving Corporation or otherwise to carry out this Agreement.
4
ARTICLE III
CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
3.1. The Certificate of Incorporation. The Certificate of Incorporation
--------------------------------
of the Purchaser Sub (the "Certificate") in effect at the Effective Time shall
-----------
be the Certificate of Incorporation of the Surviving Corporation, until duly
amended in accordance with the terms thereof, and the DGCL; provided, however,
that at the Effective Time the Certificate shall be amended to change the name
of the Surviving Corporation to Tylan General, Inc.
3.2. The By-Laws. The By-Laws of Purchaser Sub in effect at the
-----------
Effective Time shall be the By-Laws of the Surviving Corporation, until duly
amended in accordance with the terms thereof and the DGCL.
ARTICLE IV
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
4.1. Officers and Directors. The directors of Purchaser Sub and the
----------------------
officers of the Company, together with any additional individuals designated by
Purchaser, at the Effective Time shall, from and after the Effective Time, be
the directors and officers, respectively, of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-Laws.
4.2. Actions by Directors. Following the election or appointment of
--------------------
Purchaser's designees pursuant to Section 4.3 hereof, and prior to the Effective
Time, the approval of a majority of the Continuing Directors shall be required
to authorize (and such authorization shall constitute the authorization of the
Board of Directors of the Company and no other action on the part of the
Company, including any action by any other director of the Company, shall be
required to authorize) any termination of this Agreement by the Company, any
amendment of this Agreement requiring action by the Board of Directors of the
Company, any extension of time for the performance of any of the obligations or
other acts of Purchaser or Purchaser Sub, any waiver of compliance with any
5
of the agreements or conditions contained herein for the benefit of the Company
or any other rights of the Company hereunder, and any amendment or withdrawal by
the Board of Directors of its recommendation of the Merger pursuant to Section
7.3 hereof.
4.3. Boards of Directors; Committees. If requested by Purchaser, the
-------------------------------
Company will, subject to compliance with applicable law and immediately
following the purchase by Purchaser Sub of more than 50 percent of the
outstanding Shares pursuant to the Offer, take all actions necessary to cause
persons designated by Purchaser to become directors of the Company so that the
total number of such persons equals that number of directors, rounded up to the
next whole number, which represents the product of (x) the total number of
directors on the Board of Directors multiplied by (y) the percentage that the
number of Shares so purchased plus any Shares beneficially owned by Purchaser or
its Affiliates on the date hereof bears to the number of Shares outstanding at
the time of such purchase; provided, however, that in no event shall Purchaser
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be entitled to designate a majority of the Board of Directors unless it is the
beneficial owner of Shares entitling it to exercise at least a majority of the
voting power of the Company's outstanding shares entitled to vote generally in
the election of directors. In furtherance thereof, the Company will use its
reasonable best efforts to secure the resignation of all but three directors, or
will increase the size of the Board, or both, as is necessary to permit
Purchaser's designees to be elected to the Company's Board of Directors;
provided, however, that prior to the Effective Time, the Company's Board of
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Directors shall always have at least three Continuing Directors. Immediately
following the purchase by Purchaser Sub of more than 50% of the outstanding
Shares pursuant to the Offer, the Company, if so requested, will use its
reasonable efforts to cause persons designated by Purchaser to constitute the
same percentage of each committee of such board, each board of directors of each
subsidiary of the Company and each committee of each such board (in each case to
the extent of the Company's ability to elect such persons). The Company's
obligations to appoint designees to the Board of Directors shall be subject to
Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The Company shall
promptly take all actions required in order to fulfill its obligations under
this Section 4.3 and shall include in the Schedule 14D-9 such information as is
required under such Section 14(f), Rule 14(f)-1 and Schedule 14D-9. The
Purchaser will supply to the Company in writing and be solely responsible for
any information with respect to the Purchaser and its subsidiaries
(collectively, the "Purchaser Companies") and the nominees, directors and
-------------------
Affiliates thereof required by Section 14(f) and Rule 14f-1 to be included in
the Schedule 14D-9.
ARTICLE V
CONVERSION OR CANCELLATION OF SHARES IN THE MERGER
5.1. Conversion or Cancellation of Shares. The manner of converting or
------------------------------------
canceling shares of the Company and Purchaser Sub in the Merger shall be as
follows:
6
(a) At the Effective Time, each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by Purchaser,
Purchaser Sub or any other subsidiary of Purchaser) or Shares which are held by
stockholders ("Dissenting Stockholders") exercising appraisal rights pursuant to
-----------------------
Section 262 of the DGCL) shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to receive,
without interest, an amount in cash equal to $16.00 or such greater amount which
may be paid pursuant to the Offer (the "Merger Consideration"). All such
--------------------
Shares, by virtue of the Merger and without any action on the part of the
holders thereof, shall no longer be outstanding and shall be canceled and
retired and shall cease to exist, and each holder of a certificate representing
any such Shares shall thereafter cease to have any rights with respect to such
Shares, except the right to receive the Merger Consideration for such Shares
upon the surrender of such certificate in accordance with Section 5.2 or the
right, if any, to receive payment from the Surviving Corporation of the "fair
value" of such Shares as determined in accordance with Section 262 of the DGCL.
(b) At the Effective Time, each Share issued and outstanding at the
Effective Time and owned by any of the Purchaser Companies, and each Share
issued and held in the Company's treasury at the Effective Time, shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(c) At the Effective Time, each share of Common Stock, par value
$0.01 per share, of Purchaser Sub issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of Purchaser Sub or the holders of such shares, be converted into one
Share.
5.2. Payment for Shares. Purchaser shall make available or cause to be
------------------
made available to the paying agent appointed by Purchaser with the Company's
prior approval (the "Paying Agent") amounts sufficient in the aggregate to
------------
provide all funds necessary for the Paying Agent to make payments pursuant to
Section 5.1(a) hereof to holders of Shares issued and outstanding immediately
prior to the Effective Time. Promptly after the Effective Time, the Purchaser
shall instruct the Paying Agent to mail to each person who was, at the Effective
Time, a holder of record (other than any of the Purchaser Companies) of issued
and outstanding Shares a form (mutually agreed to by Purchaser and the Company)
of letter of transmittal and instructions for use in effecting the surrender of
the certificates which, immediately prior to the Effective Time, represented any
of such Shares in exchange for payment therefor. Upon surrender to the Paying
Agent of such certificates, together with such letter of transmittal, duly
executed and completed in accordance with the instructions
7
thereto, the Surviving Corporation shall promptly cause to be paid to the
persons entitled thereto a check in the amount to which such persons are
entitled, after giving effect to any required tax withholdings. No interest will
be paid or will accrue on the amount payable upon the surrender of any such
certificate. If payment is to be made to a person other than the registered
holder of the certificate surrendered, it shall be a condition of such payment
that the certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the payment to a person other
than the registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent that such tax has
been paid or is not applicable. One hundred eighty days following the Effective
Time, the Surviving Corporation shall be entitled to cause the Paying Agent to
deliver to it any funds (including any interest received with respect thereto)
made available to the Paying Agent which have not been disbursed to holders of
certificates formerly representing Shares outstanding on the Effective Time, and
thereafter such holders shall be entitled to look to the Surviving Corporation
only as general creditors thereof with respect to the cash payable upon due
surrender of their certificates. Notwithstanding the foregoing, neither the
Paying Agent nor any party hereto shall be liable to any holder of certificates
formerly representing Shares for any amount paid to a public official pursuant
to any applicable abandoned property, escheat or similar law. The Surviving
Corporation shall pay all charges and expenses, including those of the Paying
Agent, in connection with the exchange of cash for Shares and Purchaser shall
reimburse the Surviving Corporation for such charges and expenses.
5.3. Dissenters' Rights. If any Dissenting Stockholder shall be entitled
------------------
to be paid the "fair value" of his or her Shares, as provided in Section 262 of
the DGCL, the Company shall give Purchaser notice thereof and Purchaser shall
have the right to participate, at its own expense, in all negotiations and
proceedings with respect to any such demands. Neither the Company nor the
Surviving Corporation shall, except with the prior written consent of Purchaser,
which consent shall not be unreasonably withheld, voluntarily make any payment
with respect to, or settle or offer to settle, any such demand for payment. If
any Dissenting Stockholder shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent, the Shares held by such Dissenting
Stockholder shall thereupon be treated as though such Shares had been converted
into the Merger Consideration pursuant to Section 5.1.
5.4. Transfer of Shares After the Effective Time. No transfers of Shares
-------------------------------------------
shall be made on the stock transfer books of the Surviving Corporation at or
after the Effective Time.
5.5. Stockholders' Meeting. If approval by the Company's stockholders is
---------------------
required by applicable law to consummate the Merger, the Company, acting through
its Board of Directors, shall in accordance with applicable law, as soon as
practicable following the consummation of the Offer:
8
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Stockholders' Meeting") for the purpose of considering
and taking action upon this Agreement and the Merger;
(ii) subject to the fiduciary duties of the Board under applicable
law (as determined in good faith after consultation with independent counsel),
include in the Proxy Statement the recommendation of its Board of Directors that
the stockholders of the Company vote in favor of the approval and adoption of
this Agreement and the transactions contemplated hereby (including the Merger);
and
(iii) use its reasonable best efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Purchaser, respond promptly to any comments made by the SEC
with respect to the Proxy Statement and any preliminary version thereof and
cause the Proxy Statement to be mailed to its stockholders at the earliest
practicable time following the consummation of the Offer and (B) subject to the
fiduciary duties of the Board under applicable law (as determined in good faith
after consultation with independent counsel), to obtain the necessary approvals
by its stockholders of this Agreement and the transactions contemplated hereby
(including the Merger).
At such meeting, Purchaser and Purchaser Sub will vote all Shares owned
by them in favor of this Agreement and the transactions contemplated hereby
(including the Merger).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of the Company. Except as set forth
---------------------------------------------
in the Disclosure Schedule delivered by the Company to Purchaser concurrently
with the execution of this Agreement (the "Company Disclosure Schedule"), the
---------------------------
Company hereby represents and warrants to Purchaser that:
9
(a) Organization and Qualification; Subsidiaries.
--------------------------------------------
Each of the Company and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of each of their
respective jurisdictions of incorporation or organization, as the case may be,
has all requisite corporate power and authority to own, lease and operate its
respective properties and to carry on its respective business as is now being
conducted. Each of the Company and each of its subsidiaries is duly qualified
as a foreign corporation and in good standing to do business in each
jurisdiction in which the character of its properties owned or leased or the
nature of the business conducted by it makes such qualification necessary, other
than where the failure to be so qualified would not have a Company Material
Adverse Effect. Company Disclosure Schedule 6.1(a) sets forth (i) a true and
complete list of all of the Company's directly or indirectly owned subsidiaries,
together with the jurisdiction of incorporation or organization of each
subsidiary and the percentage of each subsidiary's outstanding capital stock or
other equity interests owned by the Company, another subsidiary of the Company
or any Affiliate of the Company, and (ii) a true and complete list of all
partnerships and joint venture arrangements or other business entities in which
the Company or any subsidiary of the Company owns, either directly or
indirectly, an equity interest, together with the jurisdiction of organization
thereof and the percentage of equity of such partnership or joint venture as is
represented by such equity interest owned by the Company, such subsidiary and
any Affiliate of the Company.
(b) Certificates of Incorporation and By-Laws.
-----------------------------------------
The Company has heretofore furnished to Purchaser complete and correct
copies of the Certificate of Incorporation and the By-Laws of the Company, which
are in full force and effect on the date hereof. The Company will provide
complete and correct copies of the comparable charter documents of each of its
subsidiaries promptly following the date hereof. The Company and its
subsidiaries are not in violation of any of the provisions of their respective
Certificates of Incorporation, By-Laws or other charter documents.
(c) Capitalization.
--------------
(A) The authorized capital stock of the Company consists of (i) 50,000,000
shares of Common Stock, $0.001 par value per share ("Company Common Stock") of
--------------------
which, as of the date hereof: (w) 7,873,491 shares of Company Common Stock were
issued and outstanding, all of which are duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
the Company's Certificate of Incorporation or By-Laws or any agreement to which
the Company is a party or is bound; (x) no shares of Company Common Stock were
held in the treasury of the Company; and (y) (1) 1,094,449 shares of Company
Common Stock were reserved for future issuance pursuant to outstanding stock
options (collectively, the "Stock Options") granted to certain employees,
-------------
directors and consultants of the Company pursuant to the Company's 1989 Non-
Qualified Stock Option Plan, 1994 Stock Option Plan, the 1996 Nonstatutory Stock
Option
10
Plan, the Employee Stock Purchase Plan, and the 1994 Non-Employee Directors'
Stock Option Plan (collectively, the "Company Option Plans"), and (2)
--------------------
10,624 shares of Company Common Stock were reserved for future issuance pursuant
to outstanding stock options granted to the parties listed on Company Disclosure
Schedule 6.1(c)(A) (the "Miscellaneous Stock Options", and collectively with the
---------------------------
Stock Options, the "Company Stock Options") and (ii) 10,000,000 shares of
---------------------
preferred stock, par value $0.001 per share, of the Company (the "Company
-------
Preferred Stock" and, together with the Company Common Stock and the Company
---------------
Stock Options, the "Company Securities") of which, as of the date hereof,
------------------
100,000 shares of Series A Junior Participating Preferred Stock, $0.001 par
value per share, were reserved for issuance with respect to certain Rights (as
defined in the Rights Agreement, dated as of July 2, 1996, between the Company
and The First National Bank of Boston, as Rights Agent, as amended (the "Rights
Agreement")). The Company Option Plans are the only plans or agreements
pursuant to which the Company has granted Company Stock Options. Except as
described in this Section 6.1(c), no shares of Company Common Stock are reserved
for any other purpose. Except as set forth in Company Disclosure Schedule
6.1(c)(A), since October 31, 1996, no shares of Company Common Stock have been
issued by the Company, except pursuant to the exercise of Company Stock Options
outstanding on the date of this Agreement, in each case in accordance with each
of their respective terms. Each of the outstanding shares of capital stock of,
or other equity interests in, each of the Company and its subsidiaries is duly
authorized and validly issued, and, in the case of shares of capital stock,
fully paid and nonassessable, and, except as set forth in Company Disclosure
Schedule 6.1(c)(A), all such outstanding shares or other equity interests are
owned by the Company or another subsidiary of the Company free and clear of all
security interests, liens, claims, pledges, agreements, limitations on the
Company's or such subsidiaries' voting rights, charges or other encumbrances of
any nature whatsoever.
(B) Except as set forth in Company Disclosure Schedule 6.1(c)(B) and except
as set forth in Section 6.1(c)(A) above or otherwise contemplated hereby, there
are no options, warrants or other rights (including registration rights),
agreements, arrangements or commitments of any character to which the Company or
any of its subsidiaries is a party relating to the issued or unissued capital
stock of, or other equity interests in, the Company or any of its subsidiaries,
or obligating the Company or any of its subsidiaries to grant, issue or sell any
shares of the capital stock of, or other equity interests in, the Company or any
of its subsidiaries, by sale, lease, license or otherwise. There are no
obligations, contingent or otherwise, of the Company or any of its subsidiaries
to (x) repurchase, redeem or otherwise acquire any shares of Company Common
Stock or Company Preferred Stock, or the capital stock of, or other equity
interests in, any subsidiary of the Company; or (y) except as set forth in
Company Disclosure Schedule 6.1(c)(B), provide funds to, or make any investment
in (in the form of a loan, capital contribution or otherwise), or provide any
guarantee with
11
respect to the obligations of, any subsidiary of the Company or any other
person. Neither the Company nor any of its subsidiaries directly or indirectly
owns, or has agreed to purchase or otherwise acquire, any of the capital stock
of, or other equity interest in, or any interest convertible into or
exchangeable or exercisable for, any of the capital stock of, or other equity
interest in, any corporation, partnership, joint venture or other business
association or entity. Except for the Company's Annual Incentive Bonus Program
and as set forth in Company Disclosure Schedule 6.1(c)(B), there are no
agreements, arrangements or commitments of any character (contingent or
otherwise) pursuant to which any person is or may be entitled to receive any
payment based on the revenues or earnings, or calculated in accordance
therewith, of the Company or any of its subsidiaries. Except as set forth in
Company Disclosure Schedule 6.1(c)(B), there are no voting trusts, proxies or
other agreements or understandings to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound with respect to the voting of any shares of capital stock of the Company
or any of its subsidiaries.
(C) The Company has previously delivered to Purchaser true and complete
copies of each of the Company Option Plans and the forms of Company Stock
Options issued pursuant to the respective Company Option Plan, including all
amendments thereto. Except as contemplated by this Agreement, there have been
no changes in the terms of outstanding Company Stock Options not reflected in
such documents so delivered. Except for the Company Option Plans, and all such
amendments, agreements and documentation to them, there are no agreements,
instruments or other documents binding on the Company or any of its subsidiaries
with respect to the Company Stock Options, or any other options or warrants to
purchase shares of Company Common Stock. The Company has previously delivered
to Purchaser a true and complete written list setting forth (i) the number of
shares subject to each Company Stock Option currently outstanding, (ii) the
exercise price for each such Company Stock Option, (iii) the grant date for each
such Company Stock Option, and (iv) the expiration date for each such Company
Stock Option. Except for the Amendment to Employment Agreement dated as of July
22, 1996 between the Company and Xxxxx X. Xxxxxx, except as permitted by this
Agreement and except as set forth in Company Disclosure Schedule 6.1(c)(C),
since July 28, 1996, the Company has not taken any action that has resulted in
or which will result in the acceleration of vesting of any of the Company Stock
Options.
(d) Authority; Approval.
-------------------
The Company has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby to be consummated by the Company (other
than when required by law with respect to the Merger, the approval and adoption
of this Agreement by the holders of a majority of the outstanding shares of
Company Common Stock in accordance with Delaware Law). The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action, and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to
12
consummate the transactions contemplated hereby (other than, with respect to the
approval and adoption of this Agreement, by the holders of a majority of the
outstanding shares of Company Common Stock in accordance with Delaware Law).
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery thereof by Purchaser
and Purchaser Sub, constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to: (i) applicable bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or similar laws from time to time in effect affecting creditors'
rights generally and (ii) general principles of equity including, without
limitation, standards of materiality, good faith, fair dealing and
reasonableness, whether such principles are considered in a proceeding of law or
in equity. The Company hereby represents that the Special Committee of the Board
of Directors has recommended that the Board of Directors of the Company approve
the Merger and that the Board of Directors of the Company has unanimously
adopted a resolution approving the Merger and has resolved to recommend approval
of the Merger to the Company's stockholders.
(e) No Conflict; Required Filings and Consents.
------------------------------------------
(A) To the knowledge of the Company, except as set forth on Company
Disclosure Schedule 6.1(e), the execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company,
(including, without limitation, consummation of the Merger) will not, (i)
conflict with or violate the Certificate of Incorporation or By-Laws, or the
equivalent organizational documents, in each case as amended or restated, of the
Company or any of its subsidiaries, (ii) conflict with or violate any foreign,
federal, state or local law, statute, treaty, ordinance, rule, regulation,
order, writ, injunction, decree, judgment or decree (collectively, "Laws")
----
applicable to the Company or any of its subsidiaries or by which any of their
respective properties is bound or affected or (iii) result in any breach of or
constitute a default (or an event that 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 any
lien, security interest, charge or other encumbrance ("Encumbrance") on any of
the properties or assets of the Company or any of its subsidiaries pursuant to
any note, bond, mortgage, indenture, lease or other instrument or obligation to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound or
affected, other than, in the case of (ii) and (iii), any such conflicts,
violations, defaults, rights, or Encumbrances that, individually or in the
aggregate, would not have a Company Material Adverse Effect.
13
(B) To the knowledge of the Company, except as set forth on Company
Disclosure Schedule 6.1(e)(A), the execution and delivery of this Agreement by
the Company does not, and the performance of this Agreement by the Company
(including, without limitation, consummation of the Merger) will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, either domestic or
foreign ("Governmental Entities"), except (i) for applicable requirements, if
---------------------
any, of the Securities Act of 1933, as amended (the "Securities Act"), the
--------------
Exchange Act, state securities or blue sky laws ("Blue Sky Laws"), the NASDAQ,
-------------
and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the 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, either individually or in the aggregate, have a Company Material
Adverse Effect.
(f) Reports; Financial Statements.
-----------------------------
(A) Since January 28, 1995, the Company has filed all forms, reports,
statements and other documents required to be filed with the SEC including,
without limitation, (A) all Annual Reports on Form 10-K, (B) all Quarterly
Reports on Form 10-Q, (C) all proxy statements relating to meetings of
stockholders (whether annual or special) of the Company, (D) all Reports on Form
8-K, (E) all other reports or registration statements (including the Form S-4
filed in connection with its acquisition of Span Instruments, Inc.) and (F) all
amendments and supplements to all such reports and registration statements
(collectively referred to as the "SEC Reports"). The SEC Reports, including all
-----------
SEC Reports filed after the date of this Agreement and prior to the Effective
Time (i) were or will be prepared in all material respects in accordance with
the requirements of applicable Law (including, the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such SEC Reports) and (ii) did not at the time they
were filed, or will not at the time they are filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(B) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the SEC Reports filed prior to or after
the date of this Agreement, and the consolidated financial statements as of and
for the fiscal year ended October 31, 1996 (the "Fiscal 1996 Financial
---------------------
Statements"), a copy of which has previously been provided to Purchaser
----------
(collectively, the "Company Financial Statements") (i) have been or will be
----------------------------
prepared in accordance with the published rules and regulations of the SEC and
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except (1) to the extent required by changes in
generally accepted accounting principles, (2) with respect to SEC Reports filed
prior to the date of this Agreement, as may be indicated in the notes thereto
and (3) the Fiscal 1996 Financial Statements do not include any notes) and (ii)
fairly present or will fairly present the consolidated financial position of the
Company and its subsidiaries, as of the respective dates thereof, and the
14
consolidated results of operations and cash flows and changes in financial
position for the respective periods then ended, except that (x) any unaudited
interim financial statements were or will be subject to normal year-end
adjustments and (y) any pro forma financial statements contained in such
consolidated financial statements are not necessarily indicative of the
consolidated financial position of the Company and its subsidiaries, as of the
respective dates thereof, and the consolidated results of operations and cash
flows and changes in financial position for the respective periods then ended.
Upon completion of the audit of the Fiscal 1996 Financial Statements, the
Company will provide a copy thereof to the Purchaser, which will be the same in
all material respects as the Fiscal 1996 Financial Statements previously
provided to the Purchaser, will be accompanied by an unqualified audit opinion
by Ernst & Young, LLP, the Company's independent public accountants, and will
contain notes that do not include any information that is different from that
provided to the Purchaser under or pursuant to this Agreement or any document
referenced herein or in the Schedules hereto to the extent that such difference
constitutes a Company Material Adverse Effect (the "Audited Fiscal 1996
Financial Statements").
(C) Except as disclosed on Company Disclosure Schedule 6.1(f), neither the
Company nor any of its subsidiaries is liable as an indemnitor, guarantor,
surety or endorser, and no person has the power to confess judgment against the
Company or any of its subsidiaries, assets, properties or business except as
would not, individually or in the aggregate, result in or reasonably be likely
to result in a Company Material Adverse Effect.
(g) Absence of Certain Changes or Events.
------------------------------------
Except as disclosed in the SEC Reports filed prior to the date of this
Agreement or as contemplated in this Agreement, since October 31, 1996, there
has not been:
(A) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of the
Company's capital stock;
(B) any material change by the Company or its subsidiaries in their
accounting methods, principles or practices (except for changes made after the
date of this Agreement as required by changes in generally accepted accounting
principles);
(C) any amendment of any material term of any outstanding equity security
of the Company or any subsidiary;
15
(D) any repurchase, redemption or other acquisition by the Company or any
subsidiary of any outstanding shares of capital stock or other equity securities
of, or other ownership interests in, the Company or any subsidiary; or
(E) any change, event or series of changes or events which would have a
Company Material Adverse Effect, except for general economic changes and changes
that may affect the industries of the Company or any of its subsidiaries
generally.
(h) Absence of Litigation.
---------------------
Except as set forth in Company Disclosure Schedule 6.1(h), there is no
action, suit, investigation or proceeding, (collectively, "Litigation"), pending
----------
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries which if adversely determined, individually or in the
aggregate, would have a Company Material Adverse Effect, and neither the Company
nor any of its subsidiaries is subject to any judgments, decrees, injunctions,
rules or orders of any Governmental Entity or arbitrator (collectively, "Orders"
------
and Orders together with Litigation being referred to as "Claims"), except for
------
matters which, individually or in the aggregate, would not have a Company
Material Adverse Effect.
(i) Employee Benefit Plans.
----------------------
(a) For purposes of this Section, the term "Company Benefit Plans" shall
---------------------
mean all material pension, retirement, profit-sharing, deferred compensation,
stock option, employee stock ownership, severance pay, vacation, bonus or other
incentive plans, and all other employee programs, arrangements or agreements,
whether arrived at through collective bargaining or otherwise, all medical,
vision, dental and other health plans, all life insurance plans, and all other
employee benefit plans or fringe benefit plans, including, without limitation,
any "employee benefit plan," as that term is defined in Section 3(3) of ERISA,
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by the Company or its Affiliates for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate. Any of the Company Benefit Plans which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to
herein as a "Company ERISA Plan."
------------------
(b) Except as set forth on Company Disclosure Schedule 6.1(i), no Company
Benefit Plan is or has been a multiemployer plan within the meaning of Section
3(37) of ERISA. As to any multiemployer plan set forth on Company Disclosure
Schedule 6.1(i), prior to the date hereof the Company has provided to Purchaser
a true and correct copy of any estimate of the "withdrawal liability" that would
arise if the Company were to withdraw or cause a withdrawal from such plan that
is within the knowledge of the Company. To the knowledge of the Company, all
Company
16
Benefit Plans are in compliance with the applicable provisions (including,
without limitation, any funding requirements or limitations) of ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), except for any breach or
violation that would not have a Company Material Adverse Effect. No Company
Benefit Plan provides for post-retirement medical benefit obligations (without
regard to COBRA obligations). Except as set forth on Company Disclosure Schedule
6.1(i), no Company ERISA Plan which is a defined benefit pension plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the present fair market value of the assets of any such plan exceeds
the plan's "benefit liabilities," as that term is defined in Section 4001(a)(16)
of ERISA, when determined under actuarial factors that would apply if the plan
terminated in accordance with all applicable legal requirements.
(c) Company Disclosure Schedule 6.1(i) sets forth a true and correct list
of all Company Benefit Plans. The Company has provided Purchaser with access to
true and correct copies of each governing document for each Company Benefit
Plan, together with the most recent summary plan description and annual report
for each such plan and the actuarial report for any Company Benefit Plan that is
a defined benefit pension plan or funded welfare benefit plan.
(j) Taxes.
-----
(a) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, the Company and each of its subsidiaries has filed all
federal, state, local and foreign income and other tax returns required to be
filed by it, has paid all taxes, assessments, fees and other governmental
charges of any nature whatsoever, with any related penalties, interest and
liabilities (any of the foregoing being referred to herein as a "Tax"), that are
due and payable on or before the date hereof, other than such Taxes as are being
contested in good faith. There are no material claims or assessments pending
against the Company or any of its subsidiaries for any alleged deficiency in
Tax, and the Company does not know of any threatened Tax claims, assessments or
investigations against the Company or any of its subsidiaries which if upheld
could have a Company Material Adverse Effect.
(b) The Company and all of its subsidiaries have paid or are withholding
and will pay when due to the proper taxing authorities all withholding amounts
required to be withheld with respect to all Taxes, including without limitation
sales and use Taxes and Taxes on income or benefits and Taxes for unemployment,
social security or other similar programs with respect to salary and other
compensation of directors, officers and employees of the Company and its
subsidiaries, except when the failure to pay or withhold would not have a
Company Material Adverse Effect.
17
(c) Neither the Company nor any of its subsidiaries has any liability for
any federal, state, local, foreign or other Taxes of any corporation or entity
other than the Company and its subsidiaries, including without limitation any
liability arising from the application of U.S. Treasury Regulations (S) 1.1502-6
or any analogous provision of state, local or foreign law, except any liability
that would not have a Company Material Adverse Effect.
(d) Neither the Company nor any of its subsidiaries is or has been a party
to any Tax sharing agreement with any corporation other than the Company and its
subsidiaries.
(e) To the best of the Company's knowledge and as of the date hereof, no
person who holds 5 percent or more of the stock of the Company is a "foreign
person" as defined in Section 1445(f)(3) of the Code.
(k) Proprietary Rights.
------------------
The Company and its subsidiaries possess or have adequate rights to use all
material trademarks, trade names, patents, service marks, marks, brand names,
computer programs, databases, industrial designs and copyrights necessary for
the operation of the businesses of each of Company and its subsidiaries
(collectively, the "Proprietary Rights"). Except as set forth on Company
------------------
Disclosure Schedule 6.1(k), all of the Proprietary Rights that are material to
the conduct of the Company's business taken as a whole are owned by the Company
or its subsidiaries free and clear of any and all Encumbrances that would have a
material adverse effect on the value of, or ability of Purchaser to utilize, the
item of the Proprietary Rights to which such Encumbrances relates, and neither
the Company nor any such subsidiary has forfeited or otherwise relinquished any
Proprietary Rights which forfeiture would have a Company Material Adverse
Effect. The use of the Proprietary Rights by the Company or its subsidiaries
does not conflict with, infringe upon, violate or interfere with or constitute
an appropriation of any right, title, interest or goodwill, including, without
limitation, any intellectual property right, trademark, trade name, patent,
service xxxx, brand xxxx, brand name, computer program, database, industrial
design, copyright or any pending application therefor of any other person,
except where such conflict, infringement, violation, interference or
appropriation would not result in a Company Material Adverse Effect. Except as
set forth on Company Disclosure Schedule 6.1(k), the Company has received no
written notice that the use of any Proprietary Rights or trade dress by the
Company or its subsidiaries conflicts with, infringes upon, violates or
interferes with any rights of any other person. There are no pending claims
that any of the Proprietary Rights is invalid or conflicts with the asserted
rights of any other person or has not been used or enforced or has been failed
to be used or enforced in a manner that would result in the abandonment,
cancellation or unenforceability of any of the Proprietary Rights that is
material to the conduct of the Company's business. Except as set forth on
Company Disclosure Schedule 6.1(k), neither the Company nor any of its
subsidiaries has (i) granted any third party any license or other right to use
any of the Proprietary Rights or (ii) a license or other right to use any
intellectual property of a third party.
18
(l) Opinion of Financial Advisor.
----------------------------
The Company has received the written opinion (the "Fairness Opinion") of
----------------
Xxxxxxx, Xxxxx & Co. ("Xxxxxxx Sachs") dated the date of this Agreement to the
-------------
effect that the $16.00 in cash to be received by the holders of Shares in the
Offer and Merger, taken as a unitary transaction, is fair to such holders; it
being understood and acknowledged that such Fairness Opinion has been rendered
to the Board of Directors of the Company and may not be relied by Purchaser,
Purchaser Sub, their affiliates or their respective stockholders.
(m) Brokers.
-------
No broker, finder or investment banker (other than Xxxxxxx Xxxxx) is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
(n) Environmental Matters; Compliance with Laws.
-------------------------------------------
19
(A) For purposes of this Agreement:
"Environmental Law" means any applicable federal, state or local law
-----------------
regulating or prohibiting Releases into any part of the environment, or
pertaining to the protection of natural resources, the environment and public
and employee health and safety including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601
et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 7401 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 136 et seq.), and the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) and the regulations promulgated pursuant thereto, as
such laws have been and may be amended or supplemented through the Closing Date;
"Hazardous Material" means any substance, material or waste which is
------------------
regulated pursuant to any Environmental Law by any public or governmental
authority in the jurisdictions in which the applicable party or its subsidiaries
conducts business, including, without limitation, any material or substance
which is defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or "restricted hazardous waste,"
"contaminant," "toxic waste" or "toxic substance" under any provision of
Environmental Law; and
"Release" means any release, spill, effluent, emission, leaking, pumping
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, or into or out of any property owned,
operated or leased by the applicable party or its subsidiaries.
(B) Except as set forth on Company Disclosure Schedule
6.1(n) or as would not, individually or in the aggregate, have a Company
Material Adverse Effect:
(i) The operations of the Company and its subsidiaries, including
without limitation any generation, transportation, treatment, storage or
disposal of hazardous waste, as defined and regulated under 40 C.F.R. Parts 260-
270 (in effect as of the date of this Agreement) or any state equivalent, to the
Company's knowledge have been for the last three years, and currently are, in
compliance with all Environmental Laws;
(ii) The Company and its subsidiaries currently maintain in full force
and effect all permits, licenses, variances, exceptions and approvals required
under applicable Environmental Laws for their respective businesses as of the
date hereof;
(iii) As of the date hereof and with the exception of the permits,
licenses, variances, exceptions and approvals referenced in Section
6.1(n)(B)(ii), the Company and
20
its subsidiaries are not subject to any outstanding written orders from any
Governmental Entity respecting the remediation of any Hazardous Materials or any
Release or threatened Release of a Hazardous Material;
(iv) The Company and its subsidiaries have not received within the
last three years any written notice alleging any, and as of the date hereof, to
the Company's knowledge, there is no investigation of any such party with
respect to, the violation of any Environmental Law arising from the owned or
leased properties and the operations of the Company and its subsidiaries;
(v) There is no suit, action or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries arising under Environmental Laws;
(vi) To the knowledge of the Company, there has been no Release of any
Hazardous Material into the indoor or outdoor environment at, on or from the
owned or leased properties of the Company or its subsidiaries in violation of
any Environmental Laws;
(vii) To the knowledge of the Company, there is not now on or in any
owned or leased property of the Company or its subsidiaries any of the
following: (1) any underground storage tanks or surface impoundments, (2) any
friable asbestos-containing materials or (3) any polychlorinated biphenyls, in
each case in violation of Environmental Laws;
(viii) To the knowledge of the Company, the Company does not have
liability for violations of any Environmental Law by any other person or
entities that it has assumed contractually or by operation of law which would
reasonably be likely to have a Company Material Adverse Effect; and
(ix) Purchaser and Purchaser Sub acknowledge that the representations
and warranties contained in this Section 6.1(n) are the only representations and
warranties being made with respect to the environmental matters or Environmental
Laws, no other representation contained in this Agreement shall apply to any
environmental matter or Environmental Laws and no other representation or
warranty, express or implied, is being made with respect thereto.
(o) Rights Agreement.
----------------
21
The Company has taken all necessary action so that none of the execution of
this Agreement, the acquisition of Shares pursuant to the Offer or the
consummation of the Merger will (i) cause any person to become an Acquiring
Person (as such term is defined in the Rights Agreement) or (ii) give rise to a
Distribution Date or a Triggering Event (as defined in the Rights Agreement).
6.2. Representations and Warranties of Purchaser and Purchaser Sub. Except
-------------------------------------------------------------
as set forth in the Disclosure Schedule delivered by the Purchaser and Purchaser
Sub to the Company concurrently with the execution of this Agreement (the
"Purchaser Disclosure Schedule"), Purchaser and Purchaser Sub hereby jointly
------------------------------
represent and warrant to Purchaser that:
(a) Organization and Qualification; subsidiaries.
--------------------------------------------
Each of Purchaser and Purchaser Sub and each of Purchaser's subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of each of their respective jurisdictions of incorporation or organization,
as the case may be, has all requisite corporate power and authority to own,
lease and operate its respective properties and to carry on its respective
business as is now being conducted. Each of Purchaser and Purchaser Sub and
each of Purchaser's subsidiaries is duly qualified as a foreign corporation and
in good standing to do business in each jurisdiction in which the character of
its properties owned or leased or the nature of the business conducted by it
makes such qualification necessary, other than where the failure to be so
qualified would not have a Purchaser Material Adverse Effect.
(b) Authority; Approval.
-------------------
Purchaser has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby to be consummated by Purchaser. The
execution and delivery of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized by
all necessary corporate action and no other corporate proceedings on the part of
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and, assuming the due authorization,
execution and delivery thereof by the Company, constitutes the legal, valid and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with its terms: (i) subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws from time to
time in effect affecting creditors' rights generally and (ii) general principles
of equity including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness, whether such principles are considered in a
proceeding of law or in equity.
Purchaser Sub has all requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated
22
hereby to be consummated by Purchaser Sub. The execution and delivery of this
Agreement by Purchaser Sub and the consummation by Purchaser Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of Purchaser Sub
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Purchaser Sub and, assuming the due authorization, execution and
delivery thereof by the Company, constitutes the legal, valid and binding
obligations of Purchaser Sub, enforceable against Purchaser Sub in accordance
with its terms: (i) subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws from time to
time in effect affecting creditors' rights generally and (ii) general principles
of equity including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness, whether such principles are considered in a
proceeding of law or in equity.
(c) No Conflict; Required Filings and Consents.
------------------------------------------
(A) To the knowledge of Purchaser and Purchaser Sub, except as set forth on
Purchaser Disclosure Schedule 6.2(c)(A), the execution and delivery of this
Agreement by Purchaser and Purchaser Sub does not, and the performance of this
Agreement by Purchaser and Purchaser Sub will not, (i) conflict with or violate
the Certificate of Incorporation or By-Laws, or the equivalent organizational
documents, in each case as amended or restated, of the Purchaser, Purchaser Sub
or any of Purchaser's subsidiaries, (ii) conflict with or violate any laws
applicable to Purchaser or Purchaser Sub, respectively, or any of Purchaser's
subsidiaries or by which any of their respective properties is bound or affected
or (iii) result in any breach of or constitute a default (or an event that 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 any Encumbrance on any of the properties or assets of
Purchaser or Purchaser Sub, respectively, or any of Purchaser's subsidiaries
pursuant to any note, bond, mortgage, indenture, lease or other instrument or
obligation to which Purchaser or Purchaser Sub, respectively, or any of
Purchaser's subsidiaries is a party or by which Purchaser or Purchaser Sub,
respectively, or any of Purchaser's subsidiaries or any of their respective
properties is bound or affected, other than, in the case of (ii) and (iii), any
such conflicts, violations, defaults, rights, liens, security interests, charges
or Encumbrances that, individually or in the aggregate, would not have a
Purchaser Material Adverse Effect. Neither Purchaser nor any of its Affiliates
or Associates (as such terms are defined in Section 203 of Delaware Law) is an
"interested stockholder" (as such term is defined in Section 203 of Delaware
Law) of the Company.
23
(B) To the knowledge of the Purchaser and Purchaser Sub, except as set
forth on Purchaser Disclosure Schedule 6.2(c)(A), the execution and delivery of
this Agreement by the Purchaser and Purchaser Sub does not, and the performance
of this Agreement by the Purchaser and Purchaser Sub will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entities, except (i) for applicable requirements, if any,
of the Securities Act, the Exchange Act, Blue Sky Laws, the NASDAQ, and the HSR
Act, and the 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,
either individually or in the aggregate, have a Purchaser Material Adverse
Effect.
(d) Brokers.
-------
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Purchaser (other than CS First Boston, any entitlement to fees of which will
not be the liability of the Company prior to the closing of the Merger).
(e) Financing.
---------
Parent and Purchaser have available financing in an amount sufficient to
consummate the Offer and the Merger, evidence of which has been delivered to the
Company.
(f) No Prior Activities
-------------------
Except for obligations incurred in connection with its incorporation or
organization or the negotiation and consummation of this Agreement and the
transactions contemplated hereby, Purchaser Sub has neither incurred any
obligation or liability nor engaged in any business or activity of any type or
kind whatsoever or entered into any agreement or arrangement with any person or
entity.
ARTICLE VII
COVENANTS
7.1. Interim Operations of the Company. The Company covenants and agrees
---------------------------------
that, prior to the Effective Time (unless Purchaser shall otherwise agree in
writing and except as otherwise contemplated by this Agreement):
(a) the business of the Company and its subsidiaries shall be
conducted only in the ordinary and usual course and, to the extent consistent
therewith, each of the Company and its subsidiaries shall use its reasonable
best efforts to preserve its business organization intact and
24
maintain satisfactory relations with customers, suppliers, employees and
business associates, in each case in all material respects.
(b) the Company shall not (i) sell, pledge, dispose of or encumber or
agree to sell or pledge any stock owned by it in any of its subsidiaries; (ii)
amend its Certificate or By-Laws or increase or propose to increase the number
of directors of the Company; (iii) split, combine or reclassify the outstanding
Shares; or (iv) declare, set aside or pay any dividend payable in cash, stock or
property with respect to the Shares.
(c) neither the Company nor any of its subsidiaries shall (i) issue,
sell, pledge, dispose of or encumber any additional shares of, or securities
convertible or exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its capital stock other than, in
the case of the Company, Shares issuable pursuant to options outstanding on the
date hereof under any Company Option Plan; (ii) transfer, lease, license,
guarantee, sell, mortgage, pledge, dispose of or encumber any assets or incur or
modify any indebtedness or other liability involving an amount in excess of
$100,000 in the aggregate other than in the ordinary and usual course of
business; (iii) acquire directly or indirectly by redemption or otherwise any
shares of the capital stock of the Company (iv) incur any indebtedness for
borrowed money (except for working capital under the Company's existing credit
facilities and refinancings of existing debt that permit prepayment of such debt
without penalty) involving an amount in excess of $100,000 in the aggregate or
assume or endorse the obligations of any other person or entity; (v) make any
acquisition of, or investment in, assets or stock of any other person or entity
involving an amount in excess of $100,000 in the aggregate other than in the
ordinary and usual course of business or (vi) make or authorize any capital
expenditure in excess of $500,000 in the aggregate.
(d) except for normal increases in the ordinary course of business
that are consistent with past practices and that, in the aggregate, do not
result in a material increase in benefits or compensation expense, adopt or
amend (except as may be required by law or as provided in this Agreement) any
bonus, profit sharing, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreements,
trusts, plans, funds or other arrangements for the benefit or welfare of any
director, officer or employee, or increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any existing plan or arrangement (including, without limitation, the
granting of stock options, stock appreciation rights, shares of restricted stock
or performance units) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
25
(e) neither the Company nor any of its subsidiaries shall, except in
the ordinary and usual course of business, enter into any material agreement or
modify, amend or terminate any of its material agreements or waive, release or
assign any material rights or claims thereunder.
(f) neither the Company nor any of its subsidiaries will authorize or
enter into an agreement to do any of the foregoing.
7.2. Acquisition Proposals. The Company agrees that neither the Company
---------------------
nor any of its subsidiaries nor any of the respective officers and directors of
the Company or its subsidiaries shall, and the Company shall direct and use its
best efforts to cause its employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by
the Company or any of its subsidiaries) not to, initiate, continue, solicit or
encourage, directly or indirectly, any inquiries or the making of any proposal
or offer (including, without limitation, any proposal or offer to stockholders
of the Company) or furnish any non-public information to any third party, with
respect to a merger, consolidation, business combination or similar transaction
involving, or any tender offer, exchange offer or other purchase of all or any
significant portion of the assets or any equity securities of, the Company or
any of its subsidiaries (any such proposal or offer being hereinafter referred
to as an "Acquisition Proposal") or, unless the Board of Directors of the
--------------------
Company receives an unsolicited written offer with respect to a merger,
consolidation or sale of all or substantially all of the Company's assets or an
unsolicited tender or exchange offer for the Shares is commenced, which the
Board of Directors of the Company determines in good faith (after receiving
advice of independent legal counsel that such action is required for the
discharge of their fiduciary duties) is more favorable to the stockholders of
the Company than the Offer (an "Alternative Transaction"), engage in any
-----------------------
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal. The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The Company will as promptly
as reasonably practicable (and in any event within 24 hours) notify Purchaser
(i) if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated with the Company, (ii) of its receipt of an acquisition proposal and
(iii) of the existence of an Alternative Transaction. Prior to furnishing
nonpublic information to, or entering into discussions or negotiations with, any
other persons or entities, the Company shall obtain from such person or entity
an executed confidentiality agreement with terms no less favorable, taken as a
whole, to the Company than those contained in the Confidentiality Agreement, but
which confidentiality agreement shall not include any provision calling for an
exclusive right to negotiate with the Company, and the Company shall advise
Purchaser of all such nonpublic information delivered to such person
concurrently with its delivery to the requesting party.
26
7.3. Meetings of the Company's Stockholders. Except as set forth in this
--------------------------------------
Section 7.3, the Board of Directors of the Company shall recommend approval of
the Agreement and the Merger and the Company shall take all lawful action to
solicit such approval. If the Board of Directors of the Company receives an
unsolicited written offer embodying an Alternative Transaction, the Board of
Directors may so amend or withdraw its recommendation and such withdrawal or
recommendation shall not constitute a breach of this Agreement. The Company's
proxy or information statement with respect to such meeting of stockholders (the
"Proxy Statement"), at the date thereof and at the date of such meeting, will
---------------
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the foregoing shall not apply to the extent that any
such untrue statement of a material fact or omission to state a material fact
was made by the Company in reliance upon and in conformity with written
information concerning the Purchaser Companies and nominees, directors and
Affiliates of such Purchaser Companies furnished to the Company by Purchaser
specifically for use in the Proxy Statement. The Proxy Statement shall not be
filed, and no amendment or supplement to the Proxy Statement will be made by the
Company, without consultation with Purchaser and its counsel. None of the
written information concerning the Purchaser Companies and the nominees,
directors and Affiliates thereof furnished to the Company by Purchaser
specifically for use in the Proxy Statement, at the date thereof and at the date
of the stockholders' meeting, will include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
7.4. Filings; Other Action. Subject to the terms and conditions herein
---------------------
provided, the Company and Purchaser shall: (a) promptly make their respective
filings and thereafter make any other required submissions under the HSR Act,
the Securities Act, the Exchange Act, Blue Sky Laws and the NASDAQ with respect
to the Offer and the Merger; and (b) use their reasonable best efforts to
promptly take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement.
7.5. Access. Upon reasonable notice, the Company shall (and shall cause
------
each of its subsidiaries to) afford Purchaser's officers, employees, counsel,
accountants and other authorized representatives ("Representatives") access,
---------------
during normal business hours throughout the period prior to the Effective Time,
to its and its subsidiaries' properties, books, contracts and records and,
during such period, the Company shall (and shall cause each of its subsidiaries
to) furnish promptly to Purchaser all information concerning its business,
properties and personnel as Purchaser or its
27
Representatives may reasonably request, provided, that the foregoing shall not
--------
require the Company to permit any inspection, or to disclose any information,
which in the reasonable judgment of the Company would result in the disclosure
of any trade secrets of third parties or violate any obligation of the Company
with respect to confidentiality All information obtained by Purchaser and its
Representatives pursuant to this Section 7.5 shall be treated as "Evaluation
Material" for all purposes of the Confidentiality Agreement.
7.6. Notification of Certain Matters. Each party shall give prompt notice
-------------------------------
to the other parties of (i) the occurrence or failure to occur of any event,
which occurrence or failure would be likely to cause any representation or
warranty or on its part contained in this Agreement to be untrue or inaccurate
at any time from the date hereof to the Effective Time, and (ii) any material
failure of the party, or any officer, director, employee or agent thereof, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder.
7.7. Publicity. The initial press release shall be a joint press release
---------
and thereafter, except as required by law, the Company and Purchaser shall
consult with each other prior to issuing any press releases or otherwise making
public statements with respect to the transactions contemplated hereby and prior
to making any filings with any Governmental Entity or with any national
securities exchange with respect thereto.
7.8. Benefits.
--------
(a) Stock Options; Stock Purchase Plan. Not later than the Effective
----------------------------------
Time and continuing for a period of at least one hundred twenty (120) days after
the Effective Time, Purchaser shall offer in writing to each holder of a vested
Company Stock Option (whether or not such Company Stock Option terminated
effective as of the Effective Time by virtue of the Merger or would have
terminated thereafter) the opportunity to have such Company Stock Option
canceled and to receive an amount in cash equal to the excess of the Merger
Consideration over the exercise price per Share of such Company Stock Option
multiplied by the number of Shares previously subject to such Company Stock
Option, less all applicable withholding taxes. Whether or not vested, any
Company Stock Options not tendered for cancellation pursuant to such offer shall
continue to be governed by the terms of such Company Stock Option and the
applicable Company Option Plan. The Company shall have the right to amend the
terms of any Company Stock Option outstanding on the date hereof so that it
would become vested immediately prior to the Effective Time. The Company shall
have the right to cause all funds held in the Company's Employee Stock Purchase
Plan to be used to purchase Shares so that such Shares will be converted into
the right to receive cash in the Merger; provided that the Employee Stock
Purchase Plan is thereupon terminated.
(b) Employee Benefits. (i) Purchaser shall cause the Surviving
-----------------
Corporation to provide to employees of the Company and its subsidiaries, who are
employed by the Surviving Corporation or its subsidiaries following the
Effective Time ("Company Employees"), employee benefits which
-----------------
28
in the aggregate are substantially comparable to or greater than those currently
provided by the Company to such employees.
(ii) In the event that Company Employees are or become eligible to
participate in any plans maintained by the Purchaser or its Subsidiaries
("Purchaser Benefit Plans"), Purchaser or its subsidiaries shall grant such
-------------------------
employees credit for purposes of eligibility, vesting and benefit accrual, for
all service credited for such purposes under comparable Company Benefit Plans,
provided, however, that, with respect to Purchaser's Retirement Plan and such
service with the Company shall be credited with respect to eligibility and
vesting only, but shall not be recognized for purposes of determining the amount
of retirement benefits, if any, under Purchaser's Retirement Plan.
(iii) Any pre-existing condition exclusion under any Purchaser
Benefit Plan providing medical or dental benefits shall be no more restrictive
for any Company Employee who, immediately prior to commencing participation in
such Purchaser Benefit Plan, was participating in a Company Benefit Plan
providing medical or dental benefits and had satisfied any pre-existing
condition provision under such Company Benefit Plan. Any expenses that were
taken into account under a Company Benefit Plan providing medical or dental
benefits in which the Company Employee participated immediately prior to
commencing participation in a Purchaser Benefit Plan providing medical or dental
benefits shall be taken into account to the same extent under such Purchaser
Benefit Plan, in accordance with the terms of such Purchaser Benefit Plan, for
purposes of satisfying applicable deductible, coinsurance and maximum out-of-
pocket provisions and life-time benefit limits.
(c) Survivability. This Section 7.8 shall survive the Effective
-------------
Time, and is intended to be for the benefit of, and shall be enforceable by, the
Company Employees and the holders of Company Stock Options and shall be binding
on Purchaser and Purchaser Sub and the Surviving Corporation and their
respective successors and assigns.
Section 7.9. Indemnification; Directors' and Officers' Insurance.
---------------------------------------------------
(a) The Certificate of Incorporation of the Surviving Corporation
shall contain the provisions with respect to indemnification not less favorable
to the directors and officers than those set forth in the Certificate of
Incorporation of the Company on the date of this Agreement, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
after the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who
29
at the Effective Time were directors or officers of the Company in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by Law. Purchaser shall guarantee the obligations
of the Surviving Corporation under this Section 7.9(a).
(b) Purchaser shall cause the Surviving Corporation to use its
reasonable best efforts to maintain in effect for six years from the Effective
Time, if available, the coverage provided by 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 which are not materially less
favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that nothing contained herein shall require the Surviving
-------- -------
Corporation to incur any annual premium in excess of 200% of the last annual
aggregate premium paid prior to the date of this Agreement for all current
directors' and officers' liability insurance policies maintained by the Company
which the Company represents and warrants to be $150,000 (the "Current
Premium"). If such premiums for such insurance would at any time exceed 200% of
the Current Premium, then the Surviving Corporation shall cause to be maintained
policies of insurance which, in the Surviving Corporation's good faith
determination, provide the maximum coverage available at an annual premium equal
to 200% of the Current Premium.
(c) This Section 7.9 shall survive the Effective Time, and is
intended to be for the benefit of, and shall be enforceable by, the Indemnified
Parties and shall be binding on Purchaser and Purchaser Sub and the Surviving
Corporation and their respective successors and assigns.
7.10. Takeover Statute. If any "fair price", "moratorium", "control share
----------------
acquisition" or other form of anti-takeover statute or regulation is or shall
become applicable to the transactions contemplated hereby, the Company and the
members of the Board of Directors of the Company shall grant such approvals and
take such actions as are necessary so that the transactions contemplated hereby
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise act to eliminate or minimize the effects of such statute or
regulation on the transactions contemplated hereby.
30
ARTICLE VIII
CONDITIONS TO THE MERGER
8.1. Conditions to Each Party's Obligation to Effect the Merger. The
----------------------------------------------------------
respective obligation of each party to effect the Merger shall be subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of the
following conditions:
(a) Stockholder Approval. If approval of the Merger by the holders
--------------------
of Shares is required by applicable law, the Merger shall have been approved by
the requisite vote of such holders;
(b) No Injunctions; Laws. No injunction or other order shall have
--------------------
been issued or any law enacted which prohibits the consummation of the Merger or
makes such consummation illegal; provided, however, that prior to either party
invoking this provision, such party shall have used its reasonable best efforts
to have any such injunction lifted; and
(c) Governmental and Regulatory Consents. The waiting period
------------------------------------
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated and all consents, approvals and authorizations
required to be obtained prior to the Effective Time by the Company from any
Governmental Entity in connection with the execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby by the Company, Purchaser and Purchaser Sub shall have been made or
obtained (as the case may be) except where the failure to obtain the same would
not have a Company Material Adverse Effect.
ARTICLE IX
TERMINATION
9.1. Termination by Mutual Consent. This Agreement may be terminated and
-----------------------------
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval by holders of Shares, by the mutual consent of Purchaser and
the Company, by action of their respective Boards of Directors.
9.2. Termination by either Purchaser or the Company. This Agreement may be
----------------------------------------------
terminated and the Merger may be abandoned by action of the Board of Directors
of either Purchaser or the Company if, (a) without fault of the terminating
party, the Merger shall not have been consummated
31
by June 30, 1997 whether or not such date is before or after the approval by
holders of Shares; and (b) by Purchaser or the Company if any court of competent
jurisdiction or other governmental body located or having jurisdiction within
the United States or any country or economic region in which the Company or any
of its subsidiaries or Purchaser or any of its affiliates, directly or
indirectly, has material assets or operations, shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Offer or the Merger and such order, decree, ruling or other
action shall have become final and non-appealable.
9.3. Termination by Purchaser. Until any Shares have been purchased
------------------------
pursuant to the Offer, this Agreement may be terminated and the Merger may be
abandoned prior to the Effective Time, before or after the approval by holders
of Shares, by action of the Board of Directors of Purchaser, if (x) the Company
shall have failed to comply in any material respect with the covenants or
agreements contained in this Agreement to be complied with or performed by the
Company at or prior to such date of termination and, with respect to any such
failure that can be remedied, the failure is not remedied within fifteen days
after Purchaser has furnished the Company with written notice of such failure,
or (y) the Board of Directors of the Company shall have withdrawn or modified in
a manner materially adverse to Purchaser or Purchaser Sub its approval or
recommendation of the Offer, this Agreement or the Merger or shall have resolved
to do any of the foregoing.
9.4. Termination by the Company. This Agreement may be terminated and the
--------------------------
Merger may be abandoned prior to the Effective Time, before or after the
approval by holders of Shares by action of the Board of Directors of the
Company, if Purchaser or Purchaser Sub (or another Purchaser Company) (i) shall
have failed to comply in any material respect with the covenants or agreements
contained in this Agreement to be complied with or performed by Purchaser or
Purchaser Sub at or prior to such date of termination and, with respect to any
such failure that can be remedied, the failure is not remedied within fifteen
days after the Company has furnished Purchaser with written notice of such
failure, (ii) shall have failed to commence the Offer within the time required
in Section 1.1 or (iii) shall have terminated or withdrawn the Offer or amended
the Offer in any manner not expressly permitted by this Agreement.
9.5. Termination in the Event of an Alternative Transaction. This
------------------------------------------------------
Agreement may be terminated and the Merger abandoned prior to the Effective
Time:
(a) By either Purchaser or the Company, if that entity is not
material breach of any of the terms of this Agreement, not sooner than the third
business day after the Company's notice to the Purchaser (or Purchaser's
becoming aware) that the Company has entered into an agreement providing for an
Alternative Transaction; or
32
(b) By Parent, if the Board of Directors of the Company shall have
withdrawn or modified in any manner adverse to Purchaser or Purchaser Sub its
approval of the Offer, this Agreement and the Merger or its recommendation that
the Company's stockholders accept the Offer.
9.6. Effect of Termination and Abandonment.
-------------------------------------
(a) In the event of termination and abandonment of this Agreement
pursuant to Section 9.1, 9.2, 9.3 or 9.4, this Agreement shall forthwith become
void and have no further effect, other than the provisions of Section 1.1(c),
this Section 9.6 and Section 10.1. No such termination and abandonment and
nothing contained in this Section 9.6, shall relieve any party from liability
for any breach of this Agreement.
(b) If this Agreement is terminated pursuant to Section 9.5, the
Company shall pay Purchaser a non-refundable fee of $5,000,000, which amount
shall be paid by wire transfer of immediately available funds within two
business days after the date this Agreement is so terminated.
(c) If this Agreement is terminated after the commencement of the
Offer as a result of the Company's failure to provide Audited Fiscal 1996
Financial Statements meeting the standards set forth in the final sentence of
Section 6.1(f)(B) prior to the termination of the Offer (except where such
failure to meet such standards results solely from facts or circumstances
arising after October 31, 1996 reflected in the Audited Fiscal 1996 Financial
Statements in a manner that results in a difference from the information
referred to in said Section 6.1(f)(B) that constitutes a Company Material
Adverse Effect), the Company shall pay Purchaser a non-refundable fee of
$75,000, which amount shall be paid by wire transfer of immediately available
funds within two business days after the date this Agreement is so terminated.
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1. Payment of Expenses. Subject to Section 9.6, whether or not the
-------------------
Merger shall be consummated, each party hereto shall pay its own expenses
incident to preparing for, entering into and carrying out this Agreement and the
consummation of the Merger.
33
10.2. Survival. Except for Sections 7.8, 7.9, 9.6 and 10.1 and the
--------
confidentiality obligations pursuant to Section 1.1(c), the representations,
warranties, agreements and covenants in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
10.3. Modification or Amendment. Subject to the applicable provisions of
-------------------------
the DGCL, at any time prior to the Effective Time, the parties hereto may modify
or amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
10.4. Waiver of Conditions. The conditions to each of the parties'
--------------------
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
10.5. Counterparts. For the convenience of the parties hereto, this
------------
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
10.6. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
rules of such state respecting conflicts of laws.
10.7. Notices. All notices and other communications given or made
-------
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission (provided that a
confirmation copy is sent by another approved means) to the telecopier number
specified below:
(a) If to Purchaser or to Purchaser Sub:
Millipore Corporation
00 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
34
with a copy to:
Xxxxx X. Xxxxx
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) If to the Company:
Tylan General, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: D. Xxxxxxx Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
35
and
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Xx.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
and
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
10.8. Entire Agreement, etc. This Agreement together with the Disclosure
---------------------
Schedules and any exhibits or Annexes hereto and the Confidentiality Agreement
(a) constitutes the entire agreement, and supersedes all other prior agreements,
understandings, representations and warranties both written and oral, among the
parties, with respect to the subject matter hereof, and (b) shall not be
assignable by operation of law or otherwise and is not intended to create any
obligations to, or rights in respect of, any persons other than the parties
hereto; provided, however, that Purchaser may designate, by written notice to
the Company, another wholly-owned direct or indirect subsidiary to be a
Constituent Corporation in lieu of Purchaser Sub, in the event of which, all
references herein to Purchaser Sub shall be deemed references to such other
subsidiary except that all representations and warranties made herein with
respect to Purchaser Sub as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other subsidiary as of
the date of such designation.
10.9 Definition of "Affiliate" and "Associate". For purposes of this
-----------------------------------------
Agreement, "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in effect on the
date of this Agreement (the term "registrant" in said Rule 12b-2 meaning in this
case the Company).
10.10. Definition of "Company Material Adverse Effect". For purposes of
-----------------------------------------------
this Agreement, "Company Material Adverse Effect" shall mean any material
adverse effect on the financial condition, properties, businesses or results of
operations of the Company and its subsidiaries taken as a whole.
36
10.11. Definition of "Continuing Director". For purposes of this
-----------------------------------
Agreement "Continuing Director" means any member of the Board of Directors of
the Company, while such person is a member of the Board of Directors of the
Company, who is not an Affiliate or Associate or representative of the Purchaser
or Purchaser Sub and was a member of the Board of Directors of the Company prior
to the date of this Agreement, and any successor of a Continuing Director while
such successor is a member of the Board of Directors of the Company, who is not
an Affiliate or Associate or representative of the Purchaser or Purchaser Sub
and is recommended or elected to succeed the Continuing Director by a majority
of Continuing Directors.
10.12. Definition of "Purchaser Material Adverse Effect". For purposes of
-------------------------------------------------
this Agreement, "Purchaser Material Adverse Effect" shall mean any material
adverse effect on the financial conditions properties, businesses or results of
operations of the Purchaser and its subsidiaries taken as a whole.
10.13. Definition of "subsidiary". When a reference is made in this
--------------------------
Agreement to a subsidiary of a party, the word "subsidiary" means any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its subsidiaries, or by such party and
one or more of its subsidiaries.
10.14. Obligation of Purchaser. Whenever this Agreement requires
-----------------------
Purchaser Sub to take any action, such requirement shall be deemed also to
include an undertaking on the part of Purchaser to cause Purchaser Sub to take
such action.
10.15. Captions. The Article, Section and paragraph captions herein are
--------
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
37
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first hereinabove
written.
MILLIPORE CORPORATION
By: /s/ XXXXXXXX XXXXX
-----------------------------------
Name: XXXXXXXX XXXXX
Title: SENIOR VICE PRESIDENT
MCTG ACQUISITION CORP.
By: /s/ XXXXXXXX XXXXX
-----------------------------------
Name: XXXXXXXX XXXXX
Title: PRESIDENT
TYLAN GENERAL, INC.
By: /s/ XXXXX X. XXXXXX
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Name: XXXXX X. XXXXXX
Title: CHAIRMAN, CHIEF EXECUTIVE
OFFICER AND PRESIDENT
38
Annex A
Certain Conditions of the Offer. Notwithstanding any other provision of
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the Offer and provided that Purchaser Sub shall not be obligated to accept for
payment any Shares until expiration of all applicable waiting periods under the
HSR Act, Purchaser Sub shall not be required to accept for payment or, subject
to any applicable rules and regulations of the Commission, including Rule 14e-
1(c) promulgated under the Exchange Act (relating to the Purchaser's obligation
to pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), pay for, or may delay the acceptance for payment of or payment for,
any tendered Shares, or may, in its sole discretion, terminate or amend the
Offer as to any Shares not then paid for if a majority of the total Shares
outstanding on a fully diluted basis and as will permit Purchaser Sub to effect
the Merger without the vote of any person other than Purchaser Sub shall not
have been properly and validly tendered pursuant to the Offer and not withdrawn
prior to the expiration of the Offer (the "Minimum Condition"), or, if on or
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after the date of the Agreement, and at or before the time of payment for any of
such Shares (whether or not any of such Shares have theretofore been accepted
for payment), any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of, or
limitation on trading in securities on the NYSE or in the over-the-counter
market (other than a shortening of trading hours or any coordinated trading halt
triggered solely as a result of a specified increase or decrease in a market
index), (ii) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or (iii) a commencement of a war or
armed hostilities involving the United States and continuing for at least three
business days and which has a Company Material Adverse Effect;
(b) the Company shall have breached or failed to perform in any
material respect its obligations, covenants or agreements under the Agreement
and, with respect to any such failure that can be remedied, the failure is not
remedied on or before the Closing Date, or any representation or warranty of the
Company set forth in the Agreement shall have been inaccurate or incomplete in
any respect except as would not have a Company Material Adverse Effect;
(c) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action")
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before any court of competent jurisdiction or other
A-1
governmental entity by any governmental entity that is reasonably likely to: (i)
result in a restriction or prohibition on the consummation of the transactions
contemplated by the Offer or the Merger; (ii) prohibit, or impose any material
limitations on Purchaser's or Purchaser Sub's ownership or operation of all or a
material portion of their or the Company's business or assets, or to compel
Purchaser or Purchaser Sub to dispose of or hold separate all or a material
portion of Purchaser's or Purchaser Sub's or the Company's business or assets;
(iii) make the acceptance for payment of, purchase of, or payment for, some or
all of the Shares illegal or rendering Purchaser or Purchaser Sub unable to, or
restricting or prohibiting, the ability of Purchaser or Purchaser Sub to accept
for payment, purchase or pay for some or all of the Shares; or (iv) impose
material limitations on the ability of Purchaser or Purchaser Sub effectively to
acquire or hold or to exercise full rights of ownership of the Shares including,
without limitation, the right to vote the Shares purchased by them on an equal
basis with all other Shares on all matters properly presented to the
stockholders of the Company;
(d) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or deemed to or become applicable to the
Offer or the Merger that results in any of the consequences referred to in
clauses (i) through (iv) of paragraph (c) above;
(e) any person, entity or group shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to a tender
offer or exchange offer for some portion or all of the Shares or a merger,
consolidation or other business combination with or involving the Company;
(f) the Board of Directors of the Company shall have withdrawn or
amended, or modified in a manner materially adverse to the Purchaser or
Purchaser Sub, its recommendation of the Offer or the Merger, or shall have
approved or recommended any other Acquisition Proposal; or
(g) the Merger Agreement shall have been terminated by the Company or
Purchaser or Purchaser Sub in accordance with its terms or Purchaser or
Purchaser Sub shall have reached an agreement or understanding in writing with
the Company providing for termination or amendment of the Offer or delay in
payment for the Shares;
A-2
