EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
Bookham Technology plc,
Budapest Acquisition Corp.
and
New Focus, Inc.
Dated as of September 21, 2003
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER...................................................................2
1.1 Effective Time of the Merger.................................................2
1.2 Closing......................................................................2
1.3 Effects of the Merger........................................................2
ARTICLE II CONVERSION OF SECURITIES AND DISTRIBUTION OF THE CASH AMOUNT.................3
2.1 Conversion of Capital Stock..................................................3
2.2 Exchange of Certificates and Distribution of Cash Amount.....................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................7
3.1 Organization, Standing and Power; Subsidiaries...............................8
3.2 Capitalization...............................................................9
3.3 Authority; No Conflict; Required Filings and Consents.......................11
3.4 SEC Filings; Financial Statements; Information Provided. ...................13
3.5 No Undisclosed Liabilities; Indebtedness....................................14
3.6 Absence of Certain Changes or Events........................................15
3.7 Taxes.......................................................................15
3.8 Owned and Leased Real Properties. ..........................................18
3.9 Intellectual Property.......................................................19
3.10 Agreements, Contracts and Commitments; Government Contracts.................20
3.11 Litigation; Product Liability...............................................22
3.12 Environmental Matters.......................................................22
3.13 Employee Benefit Plans......................................................23
3.14 Compliance With Laws........................................................26
3.15 Permits.....................................................................26
3.16 Labor Matters...............................................................26
3.17 Insurance...................................................................27
3.18 [Intentionally Omitted].....................................................27
3.19 Assets......................................................................27
3.20 Warranty....................................................................27
3.21 Customers and Suppliers.....................................................27
3.22 Opinion of Financial Advisor................................................28
3.23 Section 203 of the DGCL Not Applicable......................................28
3.24 Rights Agreement............................................................28
3.25 Brokers; Schedule of Fees and Expenses......................................28
3.26 No Existing Discussions.....................................................29
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE TRANSITORY SUBSIDIARY..29
4.1 Organization, Standing and Power............................................29
4.2 Capitalization..............................................................30
4.3 Authority; No Conflict; Required Filings and Consents.......................31
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4.4 SEC Filings; Financial Statements; Information Provided; LSE................32
4.5 No Undisclosed Liabilities..................................................34
4.6 Agreements, Contracts and Commitments; Government Contracts.................34
4.7 Absence of Certain Changes or Events........................................35
4.8 Litigation; Product Liability...............................................35
4.9 Intellectual Property.......................................................35
4.10 Taxes.......................................................................36
4.11 Environmental Matters.......................................................38
4.12 Compliance With Laws........................................................39
4.13 Assets......................................................................39
4.14 Broker......................................................................39
4.15 Operations of the Transitory Subsidiary.....................................39
ARTICLE V CONDUCT OF BUSINESS.........................................................39
5.1 Covenants of the Company....................................................39
5.2 Covenants of the Parent.....................................................43
5.3 Confidentiality.............................................................44
ARTICLE VI ADDITIONAL AGREEMENTS.......................................................45
6.1 Company No Solicitation.....................................................45
6.2 Parent Notices; Additional Negotiations.....................................48
6.3 Joint Proxy Statement/Prospectus; Registration Statement; Shareholder
Circular; Listing Particulars...............................................48
6.4 NASDAQ and LSE Quotation....................................................49
6.5 Access to Information.......................................................49
6.6 Stockholders Meetings.......................................................50
6.7 [Intentionally Omitted].....................................................51
6.8 Legal Conditions to the Merger..............................................51
6.9 Public Disclosure...........................................................52
6.10 Section 368(a) Reorganization...............................................52
6.11 Affiliate Legends...........................................................52
6.12 Listing Applications........................................................53
6.13 Company Stock Plans.........................................................53
6.14 Stockholder Litigation......................................................54
6.15 Indemnification.............................................................54
6.16 Notification of Certain Matters.............................................55
6.17 Exemption from Liability Under Section 16(b)................................55
6.18 Board of Directors of Parent................................................56
6.19 Service Credit..............................................................56
6.20 Employee Communications.....................................................56
6.21 401(k) Plan.................................................................57
6.22 Distribution................................................................57
6.23 Transfer Taxes..............................................................57
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ARTICLE VII CONDITIONS TO MERGER........................................................57
7.1 Conditions to Each Party's Obligation To Effect the Merger..................57
7.2 Additional Conditions to Obligations of the Parent and the Transitory
Subsidiary..................................................................59
7.3 Additional Conditions to Obligations of the Company.........................60
ARTICLE VIII TERMINATION AND AMENDMENT...................................................61
8.1 Termination.................................................................61
8.2 Effect of Termination.......................................................62
8.3 Fees and Expenses...........................................................63
8.4 Amendment...................................................................64
8.5 Extension; Waiver...........................................................64
ARTICLE IX MISCELLANEOUS...............................................................64
9.1 Nonsurvival of Representations and Warranties...............................64
9.2 Notices.....................................................................64
9.3 Entire Agreement............................................................65
9.4 No Third Party Beneficiaries................................................66
9.5 Assignment..................................................................66
9.6 Severability................................................................66
9.7 Counterparts and Signature..................................................66
9.8 Interpretation..............................................................66
9.9 Governing Law...............................................................67
9.10 Remedies....................................................................67
9.11 Submission to Jurisdiction..................................................67
9.12 Waiver of Jury Trial........................................................68
Schedule A Parties to Company Stockholder Agreements
Schedule B Parties to Parent Shareholder Agreements
Schedule 6.18 Board of Directors of Parent
Exhibit A Form of Company Stockholder Agreement
Exhibit B Form of Parent Shareholder Agreement
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TABLE OF DEFINED TERMS
Reference in
Terms Agreement
----- ------------
Affiliate Section 3.2(d)
Agreement Preamble
Alternative Acquisition Agreement Section 6.1(b)
Antitrust Laws Section 6.8(b)
Antitrust Order Section 6.8(b)
Bankruptcy and Equity Exception Section 3.3(a)
Cash Amount Section 2.2(j)
Cash Amount Per Share Section 2.2(j)
CERCLA Section 3.12(g)
Certificate of Merger Section 1.1
Certificates Section 2.2(a)
Closing Section 1.2
Closing Date Section 1.2
Code Preamble
Company Preamble
Company Acquisition Proposal Section 6.1(f)
Company Balance Sheet Section 3.4(b)
Company Board Section 3.3(a)
Company Common Stock Section 2.1(b)
Company Disclosure Schedule Article III
Company Designees Section 6.18
Company Employee Plan Section 3.13(a)
Company ESPP Section 5.1(q)
Company Insiders Section 6.17(c)
Company Intellectual Property Section 3.9(b)
Company Leases Section 3.8(d)
Company Material Adverse Effect Section 3.1(a)
Company Material Contracts Section 3.10(a)
Company Permits Section 3.15
Company Preferred Stock Section 3.2(a)
Company Products Section 3.9(e)
Company Rights Section 3.2(d)
Company Rights Plan Section 3.2(d)
Company SEC Reports Section 3.4(a)
Company Stock Options Section 3.2(c)
Company Stock Plans Section 3.2(c)
Company Stockholder Agreements Preamble
Company Stockholder Approval Section 3.3(a)
Company Stockholders Meeting Section 3.4(c)
Company Third Party Intellectual Property Section 3.9(b)
Company Voting Proposal Section 3.3(a)
Confidentiality Agreement Section 5.3
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Reference in
Terms Agreement
----- ------------
Continuing Employees Section 6.19
Deposit Agreement Section 2.1(c)
Depository Section 2.1(c)
DGCL Preamble
Distribution Preamble
Distribution Record Date Section 2.2(j)
Effective Time Section 1.1
Employee Benefit Plan Section 3.13(a)
Environmental Law Section 3.12(g)
ERISA Section 3.13(a)
ERISA Affiliate Section 3.13(a)
Exchange Agent Section 2.2(a)
Exchange Fund Section 2.2(a)
Exchange Act Section 3.3(c)
Exchange Ratio Section 2.1(c)
FSMA Section 4.4(d)
GAAP Section 3.4(b)
Governmental Entity Section 3.3(c)
Governmental Regulations Section 3.8(b)
HSR Act Section 3.3(c)
Indemnified Parties Section 6.15(a)
Insurance Policies Section 3.17
Intellectual Property Section 3.9(a)
Joint Proxy Statement/Prospectus Section 3.4(c)
Liens Section 3.2(f)
Listing Rules Section 4.4(d)
LSE Section 4.3(a)
Materials of Environmental Concern Section 3.12(h)
Merger Preamble
Non-U.S. Plan Section 3.13(j)
Ordinary Course of Business Section 3.2(d)
Outside Date Section 8.1(b)
Parent Preamble
Parent Acquisition Proposal Section 6.2
Parent ADRs Section 2.1(c)
Parent ADSs Section 2.1(c)
Parent Balance Sheet Section 4.4(b)
Parent Board Section 4.3(a)
Parent Circular Section 6.3(b)
Parent Disclosure Schedule Article IV
Parent Employee Benefit Plan Section 6.19
Parent Intellectual Property Section 3.10(d)
Parent Listing Document Section 6.3(b)
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Reference in
Terms Agreement
----- ------------
Parent Material Adverse Effect Section 4.1(a)
Parent Material Contracts Section 4.6(a)
Parent Ordinary Shares Section 2.1(c)
Parent Products Section 4.9(e)
Parent SEC Reports Section 4.4(a)
Parent Share Plans Section 4.2(b)
Parent Shareholder Agreements Preamble
Parent Shareholder Approval Section 4.3(a)
Parent Shareholders Meeting Section 3.4(c)
Parent Third Party Intellectual Property Section 4.9(b)
Parent UK Documents Section 6.3(b)
Parent Voting Proposal Section 3.4(c)
Patents Section 3.9(a)
PRC Section 3.1(c)
Qualifying Proposal Section 6.1(f)
Real Estate Section 3.8(a)
Registration Statement Section 3.4(c)
Regulation M-A Filing Section 3.4(c)
Representatives Section 6.1(a)
Rights Agreement Amendment Section 3.24
Rule 145 Affiliates Section 6.11
SEC Section 3.3(c)
Section 16 Information Section 6.17(b)
Securities Act Section 3.2(d)
Specified Time Section 6.1(a)
Subsidiary Section 3.1(b)
Superior Proposal Section 6.1(f)
Surviving Corporation Section 1.3
Tax Returns Section 3.7(a)
Taxes Section 3.7(a)
Transitory Subsidiary Preamble
UK GAAP Section 4.4(b)
UKLA Section 4.4(d)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
September 21, 2003, is entered into by and among
Bookham Technology plc, a
public limited company incorporated under the laws of England and Wales (the
"Parent"), Budapest Acquisition Corp., a
Delaware corporation and a wholly owned
subsidiary of the Parent (the "Transitory Subsidiary"), and New Focus, Inc., a
Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of the Parent and the Company deem it
advisable and in the best interests of each corporation and their respective
stockholders that the Parent combine with the Company in order to advance the
long-term business interests of the Parent and the Company;
WHEREAS, the business combination of the Company shall be effected
through a merger (the "Merger") of the Transitory Subsidiary into the Company in
accordance with the terms of this Agreement and the General Corporation Law of
the State of
Delaware (the "DGCL"), as a result of which the Company shall
become a wholly owned subsidiary of the Parent;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the Parent's willingness to enter into this
Agreement, the stockholders of the Company listed on SCHEDULE A have entered
into Stockholder Agreements, dated as of the date of this Agreement, in the form
attached hereto as EXHIBIT A (the "Company Stockholder Agreements"), pursuant to
which such stockholders have, among other things, agreed to give the Parent a
proxy to vote all of the shares of capital stock of the Company that such
stockholders own;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the Company's willingness to enter into
this Agreement, the shareholders of the Parent listed on SCHEDULE B have entered
into Shareholder Agreements, dated as of the date of this Agreement, in the form
attached hereto as EXHIBIT B (the "Parent Shareholder Agreements"), pursuant to
which such shareholders have, among other things, agreed to give the Company a
proxy to vote all of the shares of capital stock of the Parent that such
shareholders own;
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, immediately prior to the Effective Time, the Company intends to
distribute the Cash Amount (as defined herein) to the holders of Company Common
Stock outstanding on the Distribution Record Date, as defined below (the
"Distribution").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parent, the Transitory Subsidiary and the Company agree
as follows:
ARTICLE I
THE MERGER
1.1 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, prior to the Closing, the Parent shall prepare, and on the Closing
Date or as soon as practicable thereafter the Parent shall cause to be filed
with the Secretary of State of the State of
Delaware, a certificate of merger
(the "Certificate of Merger") in such form as is required by, and executed by
the Surviving Corporation in accordance with, the relevant provisions of the
DGCL and shall make all other filings or recordings required under the DGCL. The
Merger shall become effective upon the filing of the Certificate of Merger with
the Secretary of State of the State of
Delaware or at such later time as is
established by the Parent and the Company and set forth in the Certificate of
Merger (the "Effective Time").
1.2 CLOSING. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m., Eastern time, on a date to be specified by the Parent and
the Company (the "Closing Date"), which shall be no later than the second
business day after satisfaction or waiver of the conditions set forth in Article
VII (other than delivery of items to be delivered at the Closing and other than
satisfaction of those conditions that by their nature are to be satisfied at the
Closing, it being understood that the occurrence of the Closing shall remain
subject to the delivery of such items and the satisfaction or waiver of such
conditions at the Closing), at the offices of Wilson, Sonsini, Xxxxxxxx &
Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx,
unless another date, place or time is agreed to in writing by the Parent and the
Company.
1.3 EFFECTS OF THE MERGER. At the Effective Time (i) the separate
existence of the Transitory Subsidiary shall cease and the Transitory Subsidiary
shall be merged with and into the Company (the Company following the Merger is
sometimes referred to herein as the "Surviving Corporation"), (ii) the
Certificate of Incorporation of the Company as in effect on the date of this
Agreement shall be amended so that Article FOURTH of such Certificate of
Incorporation reads in its entirety as follows: "The total number of shares of
all classes of stock which the Corporation shall have authority to issue is
1,000, all of which shall consist of common stock, $.01 par value per share,"
and, as so amended, such Certificate of Incorporation shall be the Certificate
of Incorporation of the Surviving Corporation, until further amended in
accordance with the DGCL, and (iii) the directors and officers of the Transitory
Subsidiary immediately prior to the Effective Time shall be the initial
directors and officers of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation. In addition, the Parent shall cause the By-laws of the Company to
be amended and restated in their entirety immediately following the Effective
Time so that they are identical to the By-laws of the Transitory Subsidiary as
in effect immediately prior to the Effective Time, except that all references to
the name of the Transitory Subsidiary therein shall be changed to refer to the
name of the Company, and, as so amended and restated, such By-laws shall be the
By-laws of the Surviving Corporation, until further amended in accordance with
the DGCL and such By-laws. The Merger shall have the effects set forth in
Section 259 of the DGCL.
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ARTICLE II
CONVERSION OF SECURITIES AND
DISTRIBUTION OF THE CASH AMOUNT
2.1 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
the capital stock of the Company or capital stock of the Transitory Subsidiary:
(a) CAPITAL STOCK OF THE TRANSITORY SUBSIDIARY. Each share of
the common stock of the Transitory Subsidiary issued and outstanding immediately
prior to the Effective Time shall be converted into and become one fully paid
and nonassessable share of common stock, US $.01 par value per share, of the
Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. All
shares of common stock, US $0.001 par value per share, of the Company ("Company
Common Stock") that are owned by the Company as treasury stock or by any wholly
owned Subsidiary of the Company and any shares of Company Common Stock owned by
the Parent, the Transitory Subsidiary or any other wholly owned Subsidiary of
the Parent immediately prior to the Effective Time shall be cancelled and shall
cease to exist and no stock of the Parent or other consideration shall be
delivered in exchange therefor.
(c) EXCHANGE RATIO FOR COMPANY COMMON STOCK. Subject to
Section 2.2, each share of Company Common Stock (other than shares to be
cancelled in accordance with Section 2.1(b)) issued and outstanding immediately
prior to the Effective Time shall be automatically converted into and represent
the right to receive 1.2015 shares (the "Exchange Ratio") of Parent American
Depositary Shares ("Parent ADSs"), each Parent ADS representing one ordinary
share, par value 1/3 p per share, of the Parent ("Parent Ordinary Shares") or,
at the election of the holder of Company Common Stock, the equivalent number of
Parent Ordinary Shares in registered certificated or uncertificated form, upon
surrender of the certificate representing such share of Company Common Stock in
the manner provided in Section 2.2; PROVIDED that if a holder of Company Common
Stock does not make such election on the letter of transmittal forwarded to such
holder pursuant to Section 2.2(b), such holder shall be deemed to have elected
to receive Parent ADSs. The Parent ADSs shall be evidenced by one or more
American Depository Receipts ("Parent ADRs") issued in accordance with the
Deposit Agreement dated as of April 11, 2000 by and among the Parent, The Bank
of New York (the "Depository") and the holders from time to time of Parent ADRs
(the "Deposit Agreement"). As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be cancelled
and shall cease to exist, and each holder of a certificate representing any such
shares of Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the Parent ADSs pursuant to this Section
2.1(c), any cash in lieu of fractional Parent ADSs to be issued or paid in
consideration therefor and any dividends or distributions payable pursuant to
Section 2.2(c) upon the surrender of such certificate in accordance with Section
2.2, without interest. For purposes of this Agreement, references to Parent ADSs
shall also mean Parent Ordinary Shares that holders of Company Common Stock may
elect to receive in lieu of Parent ADSs pursuant to the Merger.
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(d) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted to reflect fully the effect of any reclassification, stock split,
consolidation, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Parent Ordinary Shares, Parent ADSs
or Company Common Stock), reorganization, capital redemption or repayment, bonus
issue, recapitalization or other like change with respect to Parent Ordinary
Shares, Parent ADSs or Company Common Stock occurring (or for which a record
date is established) after the date hereof and prior to the Effective Time,
other than the Distribution.
(e) UNVESTED STOCK. At the Effective Time, any Parent ADSs
issued in accordance with Section 2.1(c) with respect to any unvested shares of
Company Common Stock awarded to employees, directors or consultants pursuant to
any of the Company's plans or arrangements and outstanding immediately prior to
the Effective Time shall remain subject to the same terms, restrictions and
vesting schedule as in effect immediately prior to the Effective Time, except to
the extent by their terms as in effect as of the date hereof such unvested
shares of Company Common Stock vest at the Effective Time. The Company shall not
take or permit any action, which would accelerate vesting of any unvested
shares, except to the extent required by their terms as in effect on the date
hereof. Copies of the relevant agreements governing such shares and the vesting
thereof have been provided to the Parent. All outstanding rights which the
Company may hold immediately prior to the Effective Time to repurchase unvested
shares of Company Common Stock shall be assigned to the Parent in the Merger and
shall thereafter be exercisable by the Surviving Corporation upon the same terms
and conditions in effect immediately prior to the Effective Time, except that
the shares purchasable and the purchase price payable per share pursuant to such
rights shall be appropriately adjusted to reflect the Exchange Ratio. The
Company shall take all steps necessary to cause the foregoing provisions of this
Section 2.1(e) to occur.
(f) TREATMENT OF COMPANY STOCK OPTIONS. Following the
Effective Time, Company Stock Options shall be treated in the manner set forth
in Section 6.13.
2.2 EXCHANGE OF CERTIFICATES AND DISTRIBUTION OF CASH AMOUNT. The
procedures for exchanging outstanding shares of Company Common Stock for Parent
ADSs pursuant to the Merger and the Distribution of the Cash Amount are as
follows:
(a) EXCHANGE AGENT. As of the Effective Time, the Parent shall
deposit with the Depository, for the benefit of the holders of shares of Company
Common Stock, the number of Parent Ordinary Shares as are represented by the
Parent ADSs to be issued in connection with Section 2.1. In addition, as of the
Effective Time, the Depository shall deposit with Capita plc or another bank or
trust company designated by the Parent and reasonably acceptable to the Company
(the "Exchange Agent"), for the benefit of the holders of shares of Company
Common Stock, for exchange in accordance with this Section 2.2, through the
Exchange Agent, Parent ADSs (such Parent ADSs, together with any dividends or
distributions with respect to the Parent Ordinary Shares underlying such Parent
ADSs with a record date after the Effective Time, being hereinafter referred to
as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange for
certificates evidencing shares of Company Common Stock outstanding as of the
Effective Time ("Certificates"). At the Effective Time, the Parent shall also
deposit with the Exchange Agent for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance
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with this Section 2.2, through the Exchange Agent cash in an amount sufficient
to make payments for fractional shares required pursuant to Section 2.2(e).
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable and
in any event within ten (10) business days after the Effective Time, the Parent
shall cause the Exchange Agent to mail to each holder of record of a Certificate
(i) a letter of transmittal (which shall (A) include a form of election by which
each such holder may elect to receive the merger consideration to which such
holder is entitled in the form of Parent ADSs or Parent Ordinary Shares in
registered form and (B) specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as the Parent may reasonably specify) and (ii) instructions for
effecting the surrender of the Certificates in exchange for Parent ADRs (plus
cash in lieu of fractional shares, if any, of Parent ADSs and any dividends or
distributions as provided below) or certificates representing Parent Ordinary
Shares. Upon surrender of a Certificate for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by the Parent, together
with such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor a Parent ADR representing that
number of whole Parent ADSs or a certificate representing that number of Parent
Ordinary Shares which such holder has the right to receive pursuant to the
provisions of this Article II plus cash in lieu of fractional shares pursuant to
Section 2.2(e) and any dividends or distributions then payable pursuant to
Section 2.2(c), and the Certificate so surrendered shall immediately be
cancelled. In the event of a transfer of ownership of Company Common Stock which
is not registered in the transfer records of the Company, a Parent ADR
representing the proper number of Parent ADSs or a certificate representing the
proper number of Parent Ordinary Shares issuable in exchange therefor pursuant
to this Article II plus cash in lieu of fractional shares pursuant to Section
2.2(e) and any dividends or distributions then payable pursuant to Section
2.2(c) may be issued or paid to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate is presented to
the Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.2, each Certificate
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the Parent ADR representing Parent ADSs or
certificates representing Parent Ordinary Shares plus cash in lieu of fractional
shares pursuant to Section 2.2(e) and any dividends or distributions then
payable pursuant to Section 2.2(c) as contemplated by this Section 2.2.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions declared or made after the Effective Time with
respect to Parent ADSs with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate until the holder of record of
such Certificate shall surrender such Certificate. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
issued and paid to the record holder of the Certificate, at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time previously paid with respect to such whole Parent ADSs,
without interest, and, at the appropriate payment date, the amount of dividends
or other distributions having a record date after the Effective Time but prior
to surrender and a payment date subsequent to surrender that are payable with
respect to such whole Parent ADSs.
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(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK.
All Parent ADSs issued upon the surrender for exchange of Certificates in
accordance with the terms hereof (including any cash or dividends or other
distributions paid pursuant to Sections 2.2(c) or 2.2(e)) shall be deemed to
have been issued (and paid) in full satisfaction of all rights pertaining to
such shares of Company Common Stock, and from and after the Effective Time there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Exchange
Agent for any reason, they shall be cancelled and exchanged as provided in this
Article II.
(e) NO FRACTIONAL SHARES. No Parent ADRs or scrip representing
fractional shares of Parent ADSs, or if applicable certificates representing
Parent Ordinary Shares, shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests shall not entitle the owner
thereof to vote or to any other rights of a shareholder of the Parent.
Notwithstanding any other provision of this Agreement, each holder of shares of
Company Common Stock converted pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a Parent ADS (after taking into account
all Certificates delivered by such holder and the aggregate number of shares of
Company Common Stock represented thereby) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a Parent ADS
multiplied by the average of the last reported sales prices of Parent ADSs at
the 4:00 p.m., Eastern time, end of regular trading hours on The NASDAQ Stock
Market during the ten consecutive trading days ending on the last trading day
prior to the Effective Time.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the holders of Company Common Stock for 12
months after the Effective Time shall be delivered to the Parent, upon demand,
and any holder of Company Common Stock who has not previously complied with this
Section 2.2 shall thereafter look only to the Parent, as a general unsecured
creditor, for payment of its claim for Parent ADSs, any cash in lieu of
fractional shares of Parent ADSs and any dividends or distributions with respect
to Parent ADSs.
(g) NO LIABILITY. To the extent permitted by applicable law,
none of the Parent, the Transitory Subsidiary, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any holder of shares of
Company Common Stock, Parent Ordinary Shares or Parent ADSs, as the case may be,
for such shares (or dividends or distributions with respect thereto) delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificate shall not have been surrendered prior to the
date that is 18 months after the Effective Time (or immediately prior to such
earlier date on which any Parent ADSs and any cash payable to the holder of such
Certificate or any dividends or distributions payable to the holder of such
Certificate pursuant to this Article II would otherwise escheat to or become the
property of any Governmental Entity), any such Parent ADSs and the underlying
Parent Ordinary Shares, or cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Parent, free and clear of all claims or interest of any person
previously entitled thereto.
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(h) WITHHOLDING RIGHTS. Notwithstanding any other provision
in this Agreement, each of the Parent, the Surviving Corporation and the Company
shall be entitled to deduct and withhold from the payments to be made pursuant
to this Agreement such amounts as it reasonably determines that it is required
to deduct and withhold with respect to the making of such payments under the
Code or any other applicable provision of law and to collect Forms W-8 or W-9,
as applicable, or similar information from the holders of Company Common Stock
and any other recipients of payments hereunder. To the extent that amounts are
so withheld by the Company, the Surviving Corporation or the Parent, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Company Common
Stock in respect of which such deduction and withholding was made by the
Company, the Surviving Corporation or the Parent, as the case may be.
(i) LOST CERTIFICATES. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Parent ADSs and any cash in lieu of fractional shares, and
unpaid dividends and distributions on Parent Ordinary Shares deliverable in
respect thereof pursuant to this Agreement.
(j) DISTRIBUTION OF THE CASH AMOUNT. Subject to the provisions
of Section 6.22, (A) prior to the Effective Time, the Company shall deliver the
Cash Amount to EquiServe and (B) immediately prior to the Effective Time, the
Company shall effect the Distribution and EquiServe shall deliver to each holder
of Company Common Stock on the Distribution Record Date, a check in the amount
of the Cash Amount Per Share. For the purposes of this Agreement, the following
terms shall have the following meanings:
(i) "Cash Amount" shall equal the product of (A) the Cash
Amount Per Share and (B) the number of shares of Company Common Stock issued and
outstanding as of the Distribution Record Date.
(ii) "Cash Amount Per Share" shall equal US $2.19.
(iii) "Distribution Record Date" means the close of
business on the date to be determined by the Board of Directors of the Company
as the record date for determining stockholders of the Company entitled to
receive a share of the Distribution.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Transitory
Subsidiary that the statements contained in this Article III are true and
correct, except as expressly set forth herein or in the disclosure schedule
delivered by the Company to the Parent and the Transitory Subsidiary on or
before the date of this Agreement (the "Company Disclosure Schedule"). The
Company Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered
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and lettered paragraphs contained in this Article III and the disclosure in any
paragraph shall qualify (1) the corresponding paragraph in this Article III and
(2) the other paragraphs in this Article III only to the extent such disclosure
reasonably appears on its face to be applicable to such other paragraphs.
3.1 ORGANIZATION, STANDING AND POWER; SUBSIDIARIES.
(a) Each of the Company and its Subsidiaries is a corporation
duly organized, validly existing and, where applicable as a legal concept, in
good standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as now being conducted and as proposed
to be conducted, and is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction listed in Section 3.1 of the Company
Disclosure Schedule, which jurisdictions constitute the only jurisdictions in
which the character of the properties it owns, operates or leases or the nature
of its activities makes such qualification necessary, except for such failures
to be so organized, qualified or in good standing, individually or in the
aggregate, that have not had a Company Material Adverse Effect. For purposes of
this Agreement, the term "Company Material Adverse Effect" means any material
adverse change, event, circumstance or development with respect to, or material
adverse effect on (i) the business, assets, liabilities, capitalization,
financial condition, or results of operations of the Company and its
Subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate
the transactions contemplated by this Agreement; PROVIDED, HOWEVER, that in the
case of clause (i), in no event shall any of the following, alone or in
combination, be deemed to constitute, nor shall any of the following be taken
into account in determining whether there has occurred, a Company Material
Adverse Effect: any adverse change, event, circumstance or development with
respect to, or effect resulting from (A) general economic conditions or
conditions generally affecting the semiconductor capital equipment and the test
and measurement industries, except to the extent the Company is materially
disproportionately affected thereby, (B) the announcement or pendency of the
Merger or any other transactions expressly contemplated hereby, (C) compliance
with the express terms and conditions of this Agreement, (D) a change in the
stock price or trading volume of the Company (or any failure of the Company to
meet published revenue or earnings projections), PROVIDED that clause (D) shall
not exclude any underlying effect which may have caused such change in stock
price or trading volume or failure to meet published revenue or earnings
projections, (E) any change in accounting requirements or principles or any
change in applicable laws, rules or regulations or the interpretation thereof or
(F) the continued incurrence of losses by the Company. For the avoidance of
doubt, the parties agree that the terms "material", "materially" or
"materiality" as used in this Agreement with an initial lower case "m" shall
have their respective customary and ordinary meanings, without regard to the
meanings ascribed to Company Material Adverse Effect in the prior sentence of
this paragraph or Parent Material Adverse Effect in Section 4.1.
(b) Section 3.1(b) of the Company Disclosure Schedule sets
forth a complete and accurate list of all of the Company's Subsidiaries and the
Company's direct or indirect equity interest therein. Except as set forth in
Section 3.1(b) of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries directly or indirectly owns any equity, membership,
partnership or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity, membership, partnership or similar
interest in, any corporation,
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partnership, joint venture, limited liability company or other business
association or entity, whether incorporated or unincorporated, and neither the
Company, nor any of its Subsidiaries, has, at any time, been a general partner
or managing member of any general partnership, limited partnership, limited
liability company or other entity. As used in this Agreement, the term
"Subsidiary" means, with respect to a party, any corporation, partnership, joint
venture, limited liability company or other business association or entity,
whether incorporated or unincorporated, of which (i) such party or any other
Subsidiary of such party is a general partner or a managing member (excluding
partnerships, the general partnership interests of which held by such party
and/or one or more of its Subsidiaries do not have a majority of the voting
interest in such partnership), (ii) such party and/or one or more of its
Subsidiaries holds voting power to elect a majority of the board of directors or
other governing body performing similar functions, or (iii) such party and/or
one or more of its Subsidiaries, directly or indirectly, owns or controls more
than 50% of the equity, membership, partnership or similar interests.
(c) The Company has timely paid in its capital contribution to
the registered capital of the Company's subsidiaries in The People's Republic of
China (the "PRC") as such capital contributions have become due.
(d) The Company has delivered to the Parent complete and
accurate copies of the Certificate of Incorporation and By-laws of the Company
and of the charter, by-laws or other organizational documents of each Subsidiary
of the Company.
3.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
250,000,000 shares of Company Common Stock and 10,000,000 shares of preferred
stock, $.001 par value per share (the "Company Preferred Stock"), of which
250,000 shares are designated Series A Participating Preferred Stock. The rights
and privileges of each class of the Company's capital stock are as set forth in
the Company's Certificate of Incorporation. As of the close of business on
September 18, 2003: (i) 64,140,847 shares of Company Common Stock were issued
and outstanding, (ii) no shares of Company Common Stock were held in the
treasury of the Company or by Subsidiaries of the Company, and (iii) no shares
of Company Preferred Stock were issued or outstanding. No material change in
such capitalization has occurred between September 18, 2003 and the date of this
Agreement.
(b) Section 3.2(b) of the Company Disclosure Schedule lists
all issued and outstanding shares of Company Common Stock that constitute
restricted stock or that are otherwise subject to a repurchase or redemption
right or right of first refusal in favor of the Company, indicating the name of
the applicable stockholder, the lapsing schedule for any such shares, including
the extent to which any such repurchase or redemption right or right of first
refusal has lapsed as of the date of this Agreement, whether (and to what
extent) the lapsing will be accelerated in any way by the transactions
contemplated by this Agreement or by termination of employment or change in
position following consummation of the Merger, and whether such holder has the
sole power to vote and dispose of such shares.
(c) Section 3.2(c) of the Company Disclosure Schedule lists the
number of shares of Company Common Stock reserved for future issuance pursuant
to stock options
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granted and outstanding as of the date of this Agreement and the plans or other
arrangements under which such options were granted (collectively, the "Company
Stock Plans") and sets forth a complete and accurate list, as of the date
hereof, of all holders of outstanding options to purchase shares of Company
Common Stock (such outstanding options, the "Company Stock Options"), indicating
with respect to each Company Stock Option, the number of shares of Company
Common Stock subject to such Company Stock Option, the relationship of the
holder to the Company, and the exercise price, the date of grant, vesting
schedule and the expiration date thereof, including the extent to which any
vesting has occurred as of the date of this Agreement, and whether (and to what
extent) the vesting of such Company Stock Options will be accelerated in any way
by the transactions contemplated by this Agreement or by the termination of
employment or engagement or change in position of any holder thereof following
consummation of the Merger. There are no warrants or other outstanding rights
(other than Company Stock Options) to purchase shares of Company Common Stock
outstanding as of the date of this Agreement. The Company has provided to the
Parent accurate and complete copies of all Company Stock Plans and the forms of
all stock option agreements evidencing Company Stock Options.
(d) Except (x) as set forth in this Section 3.2, (y) as
reserved for future grants under Company Stock Plans, and (z) the rights (the
"Company Rights") issued and issuable under the Rights Agreement dated as of
July 26, 2001 between the Company and Equiserve Trust Company, N.A. (the
"Company Rights Plan"), (i) there are no equity securities of any class of the
Company or any of its Subsidiaries (other than equity securities of any such
Subsidiary that are directly or indirectly owned by the Company), or any
security exchangeable into or exercisable for such equity securities, issued,
reserved for issuance or outstanding and (ii) there are no options, warrants,
equity securities, calls, rights, commitments or agreements of any character to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound obligating the Company or any of its
Subsidiaries to issue, exchange, transfer, deliver or sell, or cause to be
issued, exchanged, transferred, delivered or sold, additional shares of capital
stock or other equity interests of the Company or any of its Subsidiaries or any
security or rights convertible into or exchangeable or exercisable for any such
shares or other equity interests, or obligating the Company or any of its
Subsidiaries to grant, extend, accelerate the vesting of, otherwise modify or
amend or enter into any such option, warrant, equity security, call, right,
commitment or agreement. Neither the Company nor any of its Subsidiaries has
outstanding any stock appreciation rights, phantom stock, performance based
rights or similar rights or obligations. There are no obligations, contingent or
otherwise, of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or the capital stock of the
Company or any of its Subsidiaries or to provide funds to or make any material
investment (in the form of a loan, capital contribution or otherwise) in the
Company or any Subsidiary of the Company or any other entity, other than
guarantees of bank obligations of Subsidiaries of the Company entered into in
the ordinary course of business consistent with past practice (the "Ordinary
Course of Business") and listed in Section 3.2(d) of the Company Disclosure
Schedule. Other than the Company Stockholder Agreements, neither the Company nor
any of its Affiliates is a party to or is bound by any, and to the knowledge of
the Company, there are no, agreements or understandings with respect to the
voting (including voting trusts and proxies) or sale or transfer (including
agreements imposing transfer restrictions) of any shares of capital stock or
other equity interests of the Company or any of its Subsidiaries. For purposes
of this Agreement, the term "Affiliate" when used with
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respect to any party shall mean any person who is an "affiliate" of that party
within the meaning of Rule 405 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). Except as contemplated by this Agreement, there
are no registration rights, and there is no rights agreement, "poison pill"
anti-takeover plan or other agreement or understanding to which the Company or
any of its Subsidiaries is a party or by which it or they are bound with respect
to any equity security of any class of the Company or any of its Subsidiaries or
with respect to any equity security, partnership interest or similar ownership
interest of any class of any of its Subsidiaries.
(e) All outstanding shares of Company Common Stock are, and all
shares of Company Common Stock subject to issuance as specified in Section
3.2(c) above, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be, duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the DGCL, the Company's Certificate of Incorporation or By-laws or any agreement
to which the Company is a party or is otherwise bound.
(f) All of the outstanding shares of capital stock and other
equity securities or interests of each of the Company's Subsidiaries are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights and all such shares (other than directors' qualifying shares in the case
of non-U.S. Subsidiaries, all of which the Company has the power to cause to be
transferred for no or nominal consideration to the Parent or the Parent's
designee) are owned, of record and beneficially, by the Company or another
Subsidiary of the Company free and clear of all mortgages, security interests,
claims, pledges, liens, charges or encumbrances of any nature ("Liens") and
agreements in respect of, or limitations on, the Company's voting rights.
(g) No consent of the holders of Company Stock Options is
required in connection with the actions contemplated by Section 6.13.
3.3 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The Company has all requisite corporate power and authority
to enter into this Agreement and, subject only to the adoption of this Agreement
and the approval of the Merger (the "Company Voting Proposal") by the Company's
stockholders under the DGCL (the "Company Stockholder Approval"), to consummate
the transactions contemplated by this Agreement. Without limiting the generality
of the foregoing, the Board of Directors of the Company (the "Company Board"),
at a meeting duly called and held on or prior to the date hereof, by the
unanimous vote of all directors (i) determined that the Merger is fair to and in
the best interests of the Company and its stockholders, (ii) approved this
Agreement and declared its advisability in accordance with the provisions of the
DGCL, (iii) directed that this Agreement and the Merger be submitted to the
stockholders of the Company for their adoption and approval and resolved to
recommend that the stockholders of the Company vote in favor of the adoption of
this Agreement and the approval of the Merger, and (iv) to the extent necessary,
adopted a resolution having the effect of causing the Company not to be subject
to any state takeover law or similar law that might otherwise apply to the
Merger and any other transactions contemplated by this Agreement. The execution
and delivery of this Agreement and the consummation of the
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transactions contemplated by this Agreement by the Company have been duly
authorized by all necessary corporate action on the part of the Company, subject
only to the required receipt of the Company Stockholder Approval. This Agreement
has been duly executed and delivered by the Company and constitutes the valid
and binding obligation of the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "Bankruptcy and Equity
Exception").
(b) The execution and delivery of this Agreement by the Company
do not, and the consummation by the Company of the transactions contemplated by
this Agreement, including, subject to Section 6.22 of this Agreement, the
Distribution, shall not, (i) conflict with, or result in any violation or breach
of, any provision of the Certificate of Incorporation or By-laws of the Company
or of the charter, by-laws, or other organizational document of any Subsidiary
of the Company, (ii) conflict with, or result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of any material benefit) under, require a consent or waiver under,
constitute a change in control under, require the payment of a penalty under or
result in the imposition of any Lien on the Company's or any of its Subsidiary's
assets under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, contract or other agreement, instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound, or (iii)
subject to obtaining the Company Stockholder Approval and compliance with the
requirements specified in clauses (i) through (vi) of Section 3.3(c), conflict
with or violate any permit, concession, franchise, license, judgment,
injunction, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or any of its or their
properties or assets, except in the case of clauses (ii) and (iii) of this
Section 3.3(b) for any such conflicts, violations, breaches, defaults,
terminations, cancellations, accelerations or losses that, individually or in
the aggregate, would not have a Company Material Adverse Effect. Section 3.3(b)
of the Company Disclosure Schedule lists all material consents, waivers and
approvals under any of the Company's or any of its Subsidiaries' agreements,
licenses or leases required to be obtained in connection with the consummation
of the transactions contemplated hereby.
(c) No consent, approval, license, permit, order or
authorization of, or registration, declaration, notice or filing with, any
court, arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority, agency or instrumentality (a "Governmental
Entity") or any stock market or stock exchange on which shares of Company Common
Stock are listed for trading is required by or with respect to the Company or
any of its Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated by this Agreement, except for (i) the pre-merger notification
requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of
Delaware and appropriate corresponding
documents with the appropriate authorities of other states in which the Company
is qualified as a foreign corporation to transact business, (iii) the filing of
the Joint Proxy Statement/Prospectus with the Securities and Exchange Commission
(the "SEC") in accordance with the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (iv) the filing of such reports,
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schedules or materials under Section 13 of or Rule 14a-12 under the Exchange Act
and materials under Rule 165 and Rule 425 under the Securities Act as may be
required in connection with this Agreement and the transactions contemplated
hereby, (v) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities
laws and the securities laws of any foreign country and (vi) in connection with
any applicable Antitrust Law.
(d) The affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock on the record date for the Company
Stockholders Meeting is the only vote of the holders of any class or series of
the Company's capital stock or other securities necessary for the adoption and
approval of this Agreement and for the consummation by the Company of the other
transactions contemplated by this Agreement. There are no bonds, debentures,
notes or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of the Company may vote.
3.4 SEC FILINGS; FINANCIAL STATEMENTS; INFORMATION PROVIDED.
(a) The Company has filed all registration statements, forms,
reports and other documents required to be filed by the Company with the SEC
since January 1, 2000, and has made available to the Parent copies of all
registration statements, forms, reports and other documents filed by the Company
with the SEC since such date, all of which are publicly available on the SEC's
XXXXX system. All such registration statements, forms, reports and other
documents (including those that the Company may file after the date hereof until
the Closing) are referred to herein as the "Company SEC Reports." The Company
SEC Reports (i) were or will be filed on a timely basis, (ii) at the time filed,
were or will be prepared in compliance in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Company SEC Reports, including the provision of all statements and
certifications required by (x) the SEC's order dated June 27, 2002 pursuant to
Section 21(a)(1) of the Exchange Act, (y) Rule 13a-14 or 15d-14 under the
Exchange Act or (z) 18 U.S.C. Section 1350 (Section 906 of the Xxxxxxxx-Xxxxx
Act of 2002), and (iii) did not or will not at the time they were or are filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Company SEC Reports or necessary in order to make
the statements in such Company SEC Reports, in the light of the circumstances
under which they were made, not misleading. No Subsidiary of the Company is
subject to the reporting requirements of Section 13(a) or Section 15(d) of the
Exchange Act.
(b) Each of the consolidated financial statements (including,
in each case, any related notes and schedules) contained or to be contained in
the Company SEC Reports at the time filed (i) complied or will comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, (ii) were or
will be prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim financial statements, as permitted by the
SEC on Form 10-Q under the Exchange Act) and (iii) fairly presented or will
fairly present in all material respects the consolidated financial position
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of the Company and its Subsidiaries as of the dates indicated and the
consolidated results of its operations and cash flows for the periods indicated,
consistent with the books and records of the Company and its Subsidiaries,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount. The consolidated, unaudited balance sheet of the Company
as of June 30, 2003 is referred to herein as the "Company Balance Sheet."
(c) The information to be supplied by or on behalf of the
Company for inclusion or incorporation by reference in the registration
statement on Form F-4 to be filed by the Parent pursuant to which the Parent
Ordinary Shares issued in connection with the Merger shall be registered under
the Securities Act (the "Registration Statement"), or to be included or supplied
by or on behalf of the Company for inclusion in any filing pursuant to Rule 165
and Rule 425 under the Securities Act or Rule 14a-12 under the Exchange Act
(each a "Regulation M-A Filing"), shall not at the time the Registration
Statement or any such Regulation M-A Filing is filed with the SEC, at any time
it is amended or supplemented, or at the time the Registration Statement is
declared effective by the SEC, as applicable, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. The
information to be supplied by or on behalf of the Company for inclusion in (i)
the joint proxy statement/prospectus to be sent to the stockholders of the
Company (the "Joint Proxy Statement/Prospectus") in connection with the meeting
of the Company's stockholders to consider the Company Voting Proposal (the
"Company Stockholders Meeting") (which shall be deemed to include all
information about or relating to the Company, the Company Voting Proposal and
the Company Stockholders Meeting), and (ii) the Parent UK Documents, to be sent
to shareholders of the Parent in connection with the extraordinary general
meeting of the Parent's shareholders (the "Parent Shareholders Meeting") to
consider the issue of shares of Parent Ordinary Shares pursuant to the Merger
(the "Parent Voting Proposal") shall not, on the date the Joint Proxy
Statement/Prospectus is first mailed to stockholders of the Company or the
Parent UK Documents are first mailed to the shareholders of the Parent, or at
the time of the Company Stockholders Meeting or the Parent Shareholders Meeting
or at the Effective Time, contain any statement which, at such time and in light
of the circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements made in the Joint Proxy Statement/Prospectus or the
Parent UK Documents, as the case may be, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholders Meeting or the Parent Shareholders Meeting which has become false
or misleading. If at any time prior to the Effective Time any fact or event
relating to the Company or any of its Affiliates which should be set forth in an
amendment to the Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus or the Parent UK Documents should be discovered by the
Company or should occur, the Company shall promptly inform the Parent of such
fact or event.
3.5 NO UNDISCLOSED LIABILITIES; INDEBTEDNESS.
(a) Except as disclosed in the Company SEC Reports filed prior
to the date of this Agreement, and except for normal and recurring liabilities
incurred since the date of the Company Balance Sheet in the Ordinary Course of
Business, the Company and its Subsidiaries
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do not have any material liabilities, either accrued, contingent or otherwise
(whether or not required to be reflected in financial statements in accordance
with GAAP), and whether due or to become due.
(b) Section 3.5(b) of the Company Disclosure Schedule sets
forth a complete and accurate list, as of the date of this Agreement, of all
loan or credit agreements, notes, bonds, mortgages, indentures and other
agreements and instruments (i) pursuant to which any indebtedness of the Company
or any of its Subsidiaries in an aggregate principal amount in excess of US
$250,000 is outstanding or may be incurred and the respective principal amounts
outstanding thereunder as of the date of this Agreement or (ii) which creates or
governs all securitization and "off-balance sheet arrangements" (as defined in
Item 303(c) of Regulation S-K of the Securities Act). For purposes of this
Section, "indebtedness" means, with respect to any person, without duplication,
(A) all obligations of such person for borrowed money, or with respect to
deposits or advances of any kind to such person, (B) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (C) all
obligations of such person upon which interest charges are customarily paid, (D)
all obligations of such person under conditional sale or other title retention
agreements relating to property purchased by such person, (E) all obligations of
such person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such person or creditors for raw materials,
inventory, services and supplies incurred in the Ordinary Course of Business),
(F) all capitalized lease obligations of such person, (G) all obligations of
others secured by any lien on property or assets owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (H)
all obligations of such person under interest rate or currency hedging
transactions (valued at the termination value thereof), (I) all letters of
credit issued for the account of such person, and (J) all guarantees and
arrangements having the economic effect of a guarantee by such person of any
indebtedness of any other person. Except as set forth in Section 5.1, all of the
outstanding indebtedness of the type described in this Section 3.5(b) of the
Company and each of its Subsidiaries may be prepaid by the Company or its
Subsidiary at any time without the consent or approval of, or prior notice to,
any other person, and without payment of any premium or penalty.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, since the date of
the Company Balance Sheet, the Company and its Subsidiaries have conducted their
respective businesses only in the Ordinary Course of Business and, since such
date, there has not been (i) any change, event, circumstance, development or
effect that, individually or in the aggregate, has had, or is reasonably likely
to have, a Company Material Adverse Effect; or (ii) any other action or event
that would have required the consent of the Parent pursuant to Section 5.1 of
this Agreement had such action or event occurred after the date of this
Agreement.
3.7 TAXES.
(a) The Company and each of its Subsidiaries has filed all
material Tax Returns that it was required to file, and all such Tax Returns were
correct and complete except for any errors or omissions that, individually or in
the aggregate, would not have a Company Material Adverse Effect. Except as would
not have a Company Material Adverse Effect, the Company and each of its
Subsidiaries have paid on a timely basis all Taxes that are shown to be
-15-
due on any such Tax Returns. The unpaid Taxes of the Company and its
Subsidiaries for Tax periods through the date of the Company Balance Sheet do
not exceed the accruals and reserves for Taxes set forth on the Company Balance
Sheet exclusive of any accruals and reserves for "deferred taxes" or similar
items that reflect timing differences between Tax and financial accounting
principles. All Taxes attributable to the period from and after the date of the
Company Balance Sheet and continuing through the Closing Date are attributable
to the conduct by the Company of its operations in the Ordinary Course of
Business and are consistent both as to type and amount with Taxes attributable
to such comparable period in the immediately preceding year. All Taxes that the
Company or any of its Subsidiaries is or was required by law to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Entity. For purposes of this Agreement, (i)
"Taxes" means all taxes, charges, fees, imposts, levies or other similar
assessments or liabilities, including income, gross receipts, ad valorem,
premium, value-added, excise, real property, personal property, sales, use,
services, transfer, withholding, employment, payroll and franchise taxes imposed
by the United States or the United Kingdom, as the case may be, or any state,
local or other foreign government, or any agency thereof, or other political
subdivision of the United States or any such government, and any interest,
fines, penalties, assessments or additions to tax resulting from, attributable
to or incurred in connection with any tax or any contest or dispute thereof and
(ii) "Tax Returns" means all reports, returns, declarations, statements or other
information required to be supplied to a taxing authority in connection with
Taxes.
(b) The income Tax Returns of the Company and each of its
Subsidiaries have been audited by the applicable Governmental Entity or are
closed by the applicable statute of limitations for all taxable years through
the taxable year specified in Section 3.7(b) of the Company Disclosure Schedule.
No examination, audit or other dispute with respect to any material Tax Return
of the Company or any of its Subsidiaries by any Governmental Entity is
currently in progress or, to the knowledge of the Company, threatened or
contemplated. Neither the Company nor any of its Subsidiaries has been informed
by any Governmental Entity that the Governmental Entity believes that the
Company or any of its Subsidiaries was required to file any material Tax Return
that was not filed. Neither the Company nor any of its Subsidiaries has waived
any statute of limitations with respect to Taxes or agreed to an extension of
time with respect to a Tax assessment or deficiency.
(c) Neither the Company nor any of its Subsidiaries: (i) has
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section
897(c)(l)(A)(ii) of the Code; (ii) has made any payments, is obligated to make
any payments, or is a party to any agreement that could obligate it to make any
payments that may be treated as an "excess parachute payment" under Section 280G
of the Code (without regard to Section 280G(b)(4)); (iii) has any actual or
potential liability for any Taxes of any person (other than the Company and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of law in any jurisdiction), or as a transferee or successor, by
contract, or otherwise; or (iv) is or has been required to make a basis
reduction pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury
Regulation Section 1.337(d)-2(b). The Company has provided to the Parent the
information necessary to accurately calculate any excise tax due under Section
4999 of the Code as a result of the transactions contemplated by this Agreement
for which the Company or the Parent may directly or indirectly
-16-
become liable and the amount of deductions that may be disallowed under Section
280G of the Code as a result of the transactions contemplated by this Agreement.
(d) None of the assets of the Company or any of its
Subsidiaries: (i) is property that is required to be treated as being owned by
any other person pursuant to the provisions of former Section 168(f)(8) of the
Code; (ii) is "tax-exempt use property" within the meaning of Section 168(h) of
the Code; (iii) directly or indirectly secures any debt the interest on which is
tax exempt under Section 103(a) of the Code; or (iv) is subject to a lease under
Section 7701(h) of the Code or any predecessor section.
(e) Neither the Company nor any of its Subsidiaries (i) is or
has ever been a member of a group of corporations with which it has filed (or
been required to file) group, consolidated, combined or unitary Tax Returns,
other than a group of which only the Company and its Subsidiaries are or were
members or (ii) is a party to or bound by any Tax indemnity, Tax sharing or Tax
allocation agreement.
(f) There are no material adjustments under Section 481 of the
Code (or any similar adjustments under any provision of the Code or any
corresponding foreign, state or local Tax laws) that are required (or will be
required as a result of the transactions contemplated by this Agreement) to be
taken into account by the Company or any Subsidiary in any period ending after
the Closing Date by reason of a change in method of accounting in any taxable
period ending on or before the Closing Date.
(g) Neither the Company nor any Subsidiary has distributed to
its stockholders or security holders stock or securities of a controlled
corporation, nor has stock or securities of the Company or any Subsidiary been
distributed, in a transaction to which Section 355 of the Code applies (i) in
the two years prior to the date of this Agreement or (ii) in a distribution that
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) that includes the
transactions contemplated by this Agreement.
(h) Neither the Company nor any Subsidiary owns any interest in
an entity that is characterized as a partnership for United States federal
income Tax purposes.
(i) Neither the Company nor any Subsidiary has incurred (or
been allocated) an "overall foreign loss" as defined in Section 904(f)(2) of the
Code which has not been previously recaptured in full as provided in Sections
904(f)(1) and/or 904(f)(3) of the Code.
(j) Neither the Company nor any Subsidiary is a party to a gain
recognition agreement under Section 367 of the Code.
(k) Section 3.7(k) of the Company Disclosure Schedule sets
forth a complete and accurate list, as of the date hereof, of any Subsidiaries
for which a "check-the-box" election under Section 7701 of the Code has been
made.
(l) Section 3.7(l) of the Company Disclosure Schedule sets
forth a complete and accurate list, as of the date hereof, of all material
agreements, rulings, settlements or other
-17-
Tax documents relating to Tax incentives between the Company or any Subsidiary
and a Governmental Entity.
3.8 OWNED AND LEASED REAL PROPERTIES.
(a) Section 3.8(a) of the Company Disclosure Schedule sets
forth a complete and accurate list of (i) the addresses and legal descriptions
of all real property owned by the Company or any of its Subsidiaries (the "Real
Estate") and (ii) all material liabilities, Liens, easements, restrictions,
reservations, tenancies, agreements or other obligations affecting the Real
Estate. There is no pending or, to the Company's knowledge, threatened
condemnation or eminent domain proceeding with respect to the Real Estate. There
are no material Taxes or material betterment assessments other than ordinary
real estate taxes pending or payable against the Real Estate and there are no
contingencies existing under which any assessment for real estate taxes may be
retroactively filed against the Real Estate.
(b) The Real Estate complies in all material respects with the
requirements of all applicable building, zoning, subdivision, health, safety,
environmental, pollution control, waste products, sewage control and all other
applicable statutes, laws, codes, ordinances, rules, orders and regulations
(collectively, "Governmental Regulations"). There is no material action pending
or threatened by any Governmental Entity claiming that the Real Estate violates
any Governmental Regulations or threatening to shut down the business of the
Company or any of its Subsidiaries. There are no suits, petitions, notices or
proceedings pending, given or, to the Company's knowledge, threatened against
the Company by any persons or Governmental Entities before any court,
Governmental Entity or instrumentalities, administrative or otherwise, which if
given, commenced or concluded would have a material adverse effect on the
Company's title to the Real Estate or the operation of the business of the
Company or any of its Subsidiaries, as a whole, as presently operated.
(c) All of the buildings, fixtures and other improvements
located on the Real Estate are in good operating condition and repair, and, to
the Company's knowledge, the operation thereof as presently conducted is not in
material violation of any applicable building code, zoning ordinance or other
law or regulation.
(d) Section 3.8(d) of the Company Disclosure Schedule sets
forth a complete and accurate list of all real property leased, subleased or
licensed by the Company or any of its Subsidiaries (collectively, "Company
Leases") and the location of the premises. Neither the Company nor any of its
Subsidiaries nor, to the Company's knowledge, any other party to any Company
Lease, is in default under any of the Company Leases, except where the existence
of such defaults, individually or in the aggregate, has not had a Company
Material Adverse Effect. Each of the Company Leases is in full force and effect
and is enforceable in accordance with its terms and shall not cease to be in
full force and effect as a result of the transactions contemplated by this
Agreement. Neither the Company nor any of its Subsidiaries leases, subleases or
licenses any real property to any person other than the Company and its
Subsidiaries. The Company has provided the Parent with complete and accurate
copies of all Company Leases. All of the plants, structures, facilities,
properties, leased premises and equipment of the Company and its Subsidiaries,
are in good operating condition and repair, in all material respects, and
suitable for their intended uses.
-18-
3.9 INTELLECTUAL PROPERTY.
(a) The Company and its Subsidiaries exclusively own, or
license or otherwise possess legally enforceable rights to use, without any
obligation to make any fixed or contingent payments, including any royalty
payments, all Intellectual Property used or necessary to conduct the business of
the Company and its Subsidiaries as currently conducted, or that would be used
or necessary as such business is planned to be conducted (in each case excluding
generally commercially available, off-the-shelf software programs licensed
pursuant to shrinkwrap or "click-and-accept" licenses), the absence of which,
individually or in the aggregate, would have a Company Material Adverse Effect.
For purposes of this Agreement, the term "Intellectual Property" shall mean any
or all of the following and all rights in, arising out of, or associated
therewith: (A) all United States and foreign patents and utility models and
applications therefor and all reissues, divisions, re-examinations, renewals,
extensions, provisionals, continuations and continuations-in-part thereof, and
equivalent or similar rights anywhere in the world in inventions and discoveries
including without limitation invention disclosures ("Patents"); (B) all trade
secrets and other rights in know-how and confidential or proprietary
information; (C) all copyrights, copyrights registrations and applications
therefor and all other rights corresponding thereto throughout the world; (D)
all industrial designs and any registrations and applications therefor
throughout the world; (E) mask works, mask work registrations and applications
therefor, and all other rights corresponding thereto throughout the world; (F)
all rights in World Wide Web addresses and domain names and applications and
registrations therefor, all trade names, logos, trademarks and service marks,
trademark and service xxxx registrations and applications therefor and all
goodwill associated therewith throughout the world; and (G) any similar,
corresponding or equivalent rights to any of the foregoing anywhere in the
world.
(b) The execution and delivery of this Agreement and
consummation of the Merger will not result in the breach of, or create on behalf
of any third party the right to terminate or modify, (i) any license, sublicense
or other agreement relating to any Intellectual Property owned by the Company
that is material to the business of the Company and its Subsidiaries, taken as a
whole, including software that is used in the manufacture of, incorporated in,
or forms a part of any product or service sold by or expected to be sold by the
Company or any of its Subsidiaries (the "Company Intellectual Property") or (ii)
any license, sublicense and other agreement as to which the Company or any of
its Subsidiaries is a party and pursuant to which the Company or any of its
Subsidiaries is authorized to use any third party Intellectual Property that is
material to the business of the Company and its Subsidiaries, taken as a whole,
including software that is used in the manufacture of, incorporated in, or forms
a part of any product or service sold by or expected to be sold by the Company
or any of its Subsidiaries (the "Company Third Party Intellectual Property").
Section 3.9(b)(i) of the Company Disclosure Schedule sets forth a complete and
accurate list, as of the date hereof, of the Company Intellectual Property
(other than unregistered copyrights, trade secrets and confidential information)
and Section 3.9(b)(ii) sets forth a complete and accurate list, as of the date
hereof, of all Company Third Party Intellectual Property. Neither the Company
nor any of its Subsidiaries has transferred ownership of, or granted any
exclusive license of or right to use any Intellectual Property that is or was
Company Intellectual Property, to any other person.
-19-
(c) All patents and registrations and applications for
trademarks, service marks and copyrights which are held by the Company or any of
its Subsidiaries and which are material to the business of the Company and its
Subsidiaries, taken as a whole, are, to the Company's knowledge, valid and
subsisting. The Company and its Subsidiaries have taken reasonable measures to
protect the proprietary nature of the Company Intellectual Property. To the
knowledge of the Company, no other person or entity is infringing, violating or
misappropriating any of the Company Intellectual Property, except for
infringements, violations or misappropriations that, individually or in the
aggregate, would not have a Company Material Adverse Effect.
(d) None of the (i) Company Products or (ii) business as
currently conducted by the Company or any of its Subsidiaries infringes,
violates or constitutes a misappropriation of, any Intellectual Property (other
than Patents) of any third party, except for such infringements, violations and
misappropriation that, individually or in the aggregate, would not have a
Company Material Adverse Effect. With respect to Patents, to its knowledge none
of the (i) Company Products or (ii) business as currently conducted by the
Company or any of its Subsidiaries infringes, violates or constitutes a
misappropriation of, any Patents of any third party, except for such
infringements, violations and misappropriation that, individually or in the
aggregate, would not have a Company Material Adverse Effect. Neither the Company
nor any of its Subsidiaries has received any complaint, claim or notice alleging
any such infringement, violation or misappropriation of Intellectual Property of
a third party.
(e) For purposes of this Section, "Company Products" means the
products and or services sold, leased, licensed or provided by the Company or
its Subsidiaries currently or at any time during the immediately preceding seven
years.
3.10 AGREEMENTS, CONTRACTS AND COMMITMENTS; GOVERNMENT CONTRACTS.
(a) Section 3.10(a) of the Company Disclosure Schedules sets
forth a complete and accurate list, as of the date hereof, of all contracts and
agreements (collectively, the "Company Material Contracts"), that are material
to the business, assets, liabilities, capitalization, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries, taken
as a whole, including without limitation (i) any agreement, contract or
commitment in connection with which or pursuant to which the Company and its
Subsidiaries will spend or receive (or are expected to spend or receive pursuant
to the terms of such contract or agreement), in the aggregate, more than US
$250,000 during the current fiscal year or during the next fiscal year and (ii)
any non-competition or other agreement, contract or commitment that prohibits or
otherwise restricts, in any material respect, the Company or any of its
Subsidiaries from freely engaging in business anywhere in the world. The Company
has provided the Parent with a complete and accurate copy of each Company
Material Contract. Each Company Material Contract is in full force and effect
and is enforceable in accordance with its terms against the Company or the
applicable Subsidiary, as the case may be, subject to the Bankruptcy and Equity
Exception. To the Company's knowledge, each Company Material Contract is
enforceable against each other party thereto, subject to the Bankruptcy and
Equity Exception. Neither the Company nor any of its Subsidiaries nor, to the
Company's knowledge, any other party to any Company Material Contract is in
violation of or in default under (nor does there exist any condition which, upon
the passage of time or the giving of notice or both, would cause
-20-
such a violation of or default under) (x) any loan or credit agreement, note,
bond, mortgage, indenture, lease, permit, concession, franchise, license or
other contract, arrangement or understanding to which it is a party or by which
it or any of its properties or assets is bound, except for violations or
defaults that, individually or in the aggregate, have not had, and are not
reasonably likely to have, a Company Material Adverse Effect or (y) any Company
Material Contract.
(b) Section 3.10(b) of the Company Disclosure Schedule sets
forth a complete and accurate list of each contract or agreement to which the
Company or any of its Subsidiaries is a party or bound with any Affiliate of the
Company (other than any Subsidiary which is a direct or indirect wholly owned
Subsidiary of the Company). Complete and accurate copies of all the agreements,
contracts and arrangements set forth in Section 3.10(b) of the Company
Disclosure Schedule have heretofore been furnished to the Parent. Except as
disclosed in the Company SEC Reports filed prior to the date of this Agreement,
neither the Company nor any of its Subsidiaries has entered into any transaction
with any Affiliate of the Company or any of its Subsidiaries or any transaction
that would be subject to proxy statement disclosure pursuant to Item 404 of
Regulation S-K.
(c) There is no non-competition or other similar agreement,
commitment, judgment, injunction or order to which the Company or any of its
Subsidiaries is a party or is subject that has or could reasonably be expected
to have the effect of prohibiting or impairing in any material respect the
conduct of the business of the Company or any of its Subsidiaries as currently
conducted and as proposed to be conducted. Neither the Company nor any of its
Subsidiaries has entered into (or is otherwise bound by) any agreement under
which it is restricted in any material respect from selling, licensing or
otherwise distributing any of its technology or products, or providing services
to, customers or potential customers or any class of customers, in any
geographic area, during any period of time or any segment of the market or line
of business.
(d) Neither the Company nor any of its Subsidiaries is a party
to any agreement under which a third party would be entitled to receive, as a
result of this Agreement or the transactions provided for hereunder, any
license, sublicense or other agreement relating to any Intellectual Property
owned by the Parent that is material to the business of the Parent and its
Subsidiaries, taken as a whole, including software that is used in the
manufacture of, incorporated in, or forms a part of any product or service sold
by or expected to be sold by the Parent or any of its Subsidiaries (the "Parent
Intellectual Property") following the Closing, other than any Company
Intellectual Property that such third party was entitled to use prior to
Closing.
(e) Neither the Company nor any of its Subsidiaries is or has
been suspended or debarred from bidding on contracts or subcontracts with any
Governmental Entity; no such suspension or debarment has been initiated or, to
the Company's knowledge, threatened; and the consummation of the transactions
contemplated by this Agreement will not result in any such suspension or
debarment that, individually or in the aggregate, would have a Company Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has any
agreements, contracts or commitments, which require it to obtain or maintain a
security clearance with any Governmental Entity.
-21-
3.11 LITIGATION; PRODUCT LIABILITY. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, there is no
action, suit, proceeding, claim, arbitration or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries that, individually or in the aggregate, has had, or is
reasonably likely to have, a Company Material Adverse Effect. There are no
material judgments, orders or decrees outstanding against the Company or any of
its Subsidiaries. No material product liability claims have been asserted or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries with respect to any Company Products.
3.12 ENVIRONMENTAL MATTERS.
(a) Except as disclosed in the Company SEC Reports filed prior
to the date of this Agreement, each of the Company and its Subsidiaries has
complied with all applicable Environmental Laws, except for violations of
Environmental Laws that, individually or in the aggregate, would not have a
Company Material Adverse Effect. There is no pending or, to the knowledge of the
Company, threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information
request by any Governmental Entity, relating to any Environmental Law involving
the Company or any of its Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries has
released, emitted, injected, spilled or discharged any amount of Materials of
Environmental Concern into the environment in a manner that has resulted in or
is reasonably likely to result in a material liability to or corrective action
or remedial obligation of the Company or its Subsidiaries.
(c) Neither the Company nor any of its Subsidiaries is a party
to or bound by any court order, administrative order, consent order or other
agreement between the Company and any Governmental Entity entered into in
connection with any legal obligation or liability arising under any
Environmental Law.
(d) Set forth in Section 3.12(d) of the Company Disclosure
Schedule is a list of all documents within the Company's possession or control
(whether in hard copy or electronic form) that contain any environmental
reports, investigations and audits relating to premises currently or previously
owned or operated by the Company or any of its Subsidiaries (whether conducted
by or on behalf of the Company or any of its Subsidiaries or a third party, and
whether done at the initiative of the Company or any of its Subsidiaries or
directed by a Governmental Entity or other third party) which were issued or
conducted during the past five years and which the Company has possession of or
access to. A complete and accurate copy of each such document has been provided
to the Parent.
(e) The Company is not aware of any material environmental
liability of any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by the Company or any of its Subsidiaries.
(f) For purposes of this Agreement, "Environmental Law" means
any national, federal, state or local law, statute, rule or regulation or the
common law or applicable
-22-
laws of PRC relating to the environment or occupational health and safety,
including any statute, regulation, administrative decision or order pertaining
to (i) treatment, storage, disposal, generation and transportation of
industrial, toxic or hazardous materials or substances or solid or hazardous
waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of
industrial, toxic or hazardous materials or substances, or solid or hazardous
waste, including emissions, discharges, injections, spills, escapes or dumping
of pollutants, contaminants or chemicals; (v) the protection of wild life,
marine life and wetlands, including all endangered and threatened species; (vi)
storage tanks, vessels, containers, abandoned or discarded barrels and other
closed receptacles; (vii) health and safety of employees and other persons; and
(viii) manufacturing, processing, using, distributing, treating, storing,
disposing, transporting or handling of materials regulated under any law as
pollutants, contaminants, toxic or hazardous materials or substances or oil or
petroleum products or solid or hazardous waste. As used above, the terms
"release" and "environment" shall have the meaning set forth in the federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA").
(g) For purposes of this Agreement, "Materials of Environmental
Concern" means any chemicals, pollutants or contaminants, hazardous substances
(as such term is defined under CERCLA), solid wastes and hazardous wastes (as
such terms are defined under the Resource Conservation and Recovery Act), toxic
materials, oil or petroleum and petroleum products or any other material subject
to regulation under any Environmental Law.
3.13 EMPLOYEE BENEFIT PLANS.
(a) Section 3.13(a) of the Company Disclosure Schedule sets
forth a complete and accurate list of all Company Employee Plans currently
maintained, or contributed to, by the Company, any of the Company's Subsidiaries
or any of their ERISA Affiliates. For purposes of this Agreement, the following
terms shall have the following meanings: (i) "Company Employee Plan" means any
Employee Benefit Plan maintained, or contributed to, by the Company, any of the
Company's Subsidiaries or any of their ERISA Affiliates; (ii) "Employee Benefit
Plan" means any "employee pension benefit plan" (as defined in Section 3(2) of
ERISA), any "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), and any other written or oral plan, agreement or arrangement involving
direct or indirect compensation, including insurance coverage, severance
benefits, disability benefits, deferred compensation, bonuses, stock options,
stock purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement compensation and all unexpired severance
agreements, written or otherwise, for the benefit of, or relating to, any
current or former employee of the Company or any of its Subsidiaries or an ERISA
Affiliate; (iii) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended; and (iv) "ERISA Affiliate" means any entity which is, or at
any applicable time was, a member of (1) a controlled group of corporations (as
defined in Section 414(b) of the Code), (2) a group of trades or businesses
under common control (as defined in Section 414(c) of the Code), or (3) an
affiliated service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes or included
the Company or a Subsidiary.
(b) With respect to each Company Employee Plan, the Company has
furnished to the Parent a complete and accurate copy of (i) such Company
Employee Plan (or a
-23-
written summary of any unwritten plan), (ii) the three (3) most recent annual
reports, if any, (Form 5500 and all required schedules and financial statements)
filed with the United States Internal Revenue Service, (iii) each trust
agreement, group annuity contract and summary plan description, if any, relating
to such Company Employee Plan, (iv) the most recent financial statements for
each Company Employee Plan that is funded, (v) all personnel, payroll and
employment manuals and policies, (vi) all employee handbooks, (vii) all reports
regarding the satisfaction of the nondiscrimination requirements of Sections
410(b), 401(k) and 401(m) of the Code, if applicable, (viii) all Internal
Revenue Service determination, opinion, notification and advisory letters with
respect to any Company Employee Plan and (ix) all material correspondence to or
from any governmental agency relating to any Company Employee Plan.
(c) Each Company Employee Plan has been administered in all
material respects in accordance with ERISA, the Code and all other applicable
laws and the regulations thereunder and in accordance with its terms and each of
the Company, the Company's Subsidiaries and their ERISA Affiliates has in all
material respects met its obligations with respect to such Company Employee Plan
and has made all required contributions thereto (or reserved such contributions
on the Company Balance Sheet) on time. The Company, each Subsidiary of the
Company, each ERISA Affiliate and each Company Employee Plan are in compliance
in all material respects with the currently applicable provisions of ERISA and
the Code and the regulations thereunder (including Section 4980B of the Code,
Subtitle K; Chapter 100 of the Code and Sections 601 through 608 and Section 701
ET SEQ. of ERISA). All filings and reports as to each Company Employee Plan
required to have been submitted to the Internal Revenue Service or to the United
States Department of Labor have been timely submitted. With respect to the
Company Employee Plans, no event has occurred, and there exists no condition or
set of circumstances in connection with which the Company, any of its
Subsidiaries or any ERISA Affiliate could be subject to any material liability
under ERISA, the Code or any other applicable law. There are no audits,
inquiries or proceedings pending or, to the knowledge of the Company, threatened
by the Internal Revenue Service, the Department of Labor or any other person.
(d) With respect to the Company Employee Plans, there are no
benefit obligations for which contributions have not been made or properly
accrued and there are no benefit obligations, which have not been accounted for
by reserves, or otherwise properly footnoted in accordance with GAAP, on the
financial statements of the Company. The assets of each Company Employee Plan,
which is funded, are reported at their fair market value on the books and
records of such Company Employee Plan.
(e) All the Company Employee Plans that are intended to be
qualified under Section 401(a) of the Code have received determination letters
from the Internal Revenue Service to the effect that such Company Employee Plans
are qualified and the plans and trusts related thereto are exempt from federal
income taxes under Sections 401(a) and 501(a), respectively, of the Code, no
such determination letter has been revoked and, to the Company's knowledge,
revocation has not been threatened, and no such Employee Benefit Plan has been
amended or operated since the date of its most recent determination letter or
application therefor in any respect, and no act or omission has occurred, that
would adversely affect its qualification or materially increase its cost. Each
Company Employee Plan which is required to satisfy Section 401(k)(3) or Section
401(m)(2) of the Code has been tested (if required to be tested) for
-24-
compliance with, and satisfies the requirements of Section 401(k)(3) and Section
401(m)(2) of the Code, as the case may be, for each plan year ending prior to
the Closing Date.
(f) Neither the Company, any of the Company's Subsidiaries nor
any of their ERISA Affiliates has (i) ever maintained a Company Employee Plan
which was ever subject to Section 412 of the Code or Title IV of ERISA or (ii)
ever been obligated to contribute to a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA). No Company Employee Plan is funded by, associated
with or related to a "voluntary employee's beneficiary association" within the
meaning of Section 501(c)(9) of the Code. Any Company Employee Plan that holds
securities issued by the Company, any of the Company's Subsidiaries or any of
their ERISA Affiliates is identified as such on Schedule 3.13(f). No Company
Employee Plan provides health benefits that are not fully insured through an
insurance contract.
(g) Each Company Employee Plan is amendable and terminable
unilaterally by the Company and any of the Company's Subsidiaries which are a
party thereto or covered thereby at any time without liability to the Company or
any of its Subsidiaries as a result thereof (other than for benefits accrued
through the date of termination or amendment and reasonable administrative
expenses related thereto) and no Company Employee Plan, plan documentation or
agreement, summary plan description or other written communication distributed
generally to employees by its terms prohibits the Company or any of its
Subsidiaries from amending or terminating any such Company Employee Plan. The
investment vehicles used to fund the Company Employee Plans may be changed at
any time without incurring a material sales charge, surrender fee or other
similar expense.
(h) Except as disclosed in the Company SEC Reports filed prior
to the date of this Agreement, neither the Company nor any of its Subsidiaries
is a party to any oral or written (i) agreement with any stockholders, director,
executive officer or other key employee of the Company or any of its
Subsidiaries (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
or any of its Subsidiaries of the nature of any of the transactions contemplated
by this Agreement, (B) providing any term of employment or compensation
guarantee or (C) providing severance benefits or other benefits after the
termination of employment of such director, executive officer or key employee or
(ii) agreement or plan binding the Company or any of its Subsidiaries, including
any stock option plan, stock appreciation right plan, restricted stock plan,
stock purchase plan or severance benefit plan, any of the benefits of which
shall be increased, or the vesting of the benefits of which shall be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which shall be calculated on
the basis of any of the transactions contemplated by this Agreement.
(i) None of the Company Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person, except as
required by applicable law.
(j) Schedule 3.13(j) sets forth a complete and accurate list of
all Company Employee Plans maintained outside the United States (each, a
"Non-U.S. Plan"). Each Non-U.S. Plan is in material compliance and the books and
records thereof are maintained in material compliance with all applicable laws,
rules and regulations of each jurisdiction in which such Non-U.S. Plan is
maintained. The Company, each of its Subsidiaries and each ERISA Affiliate
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have satisfied in all material respects their respective obligations with
respect to each Non-U.S. Plan.
3.14 COMPLIANCE WITH LAWS. The Company and each of its Subsidiaries
has complied with, is not in violation of, and has not received any written
notice alleging any violation with respect to, any applicable provisions of any
statute, law or regulation with respect to the conduct of its business, or the
ownership or operation of its properties or assets, except for failures to
comply or violations that, individually or in the aggregate, have not had a
Company Material Adverse Effect.
3.15 PERMITS. The Company and each of its Subsidiaries have all
permits, licenses and franchises from Governmental Entities required to conduct
their businesses as now being conducted or as presently contemplated to be
conducted (the "Company Permits"), except for such permits, licenses and
franchises the absence of which, individually or in the aggregate, have not had
a Company Material Adverse Effect. The Company and each of its Subsidiaries are
in compliance with the terms of the Company Permits, except for such failures to
comply that, individually or in the aggregate, have not had a Company Material
Adverse Effect. No material Company Permit shall cease to be effective as a
result of the consummation of the transactions contemplated by this Agreement.
3.16 LABOR MATTERS.
(a) Section 3.16(a) of the Company Disclosure Schedule contains
a list, as of the date hereof, of all employees of the Company and each of its
Subsidiaries whose annual rate of compensation exceeds U.S. $150,000 per year,
along with the position and the annual rate of cash compensation of each such
person. Each current or past employee of the Company or any of its Subsidiaries
has entered into a confidentiality and assignment of inventions agreement with
the Company, a copy or form of which has previously been delivered to the
Parent. Neither the Company nor any of its Subsidiaries is a party to or
otherwise bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization. Neither the
Company nor any of its Subsidiaries is the subject of any proceeding asserting
that the Company or any of its Subsidiaries has committed an unfair labor
practice or is seeking to compel it to bargain with any labor union or labor
organization that, individually or in the aggregate, have had a Company Material
Adverse Effect, nor is there pending or, to the knowledge of the Company,
threatened, any labor strike, dispute, walkout, work stoppage, slow-down or
lockout involving the Company or any of its Subsidiaries. The Company is in
compliance in all material respects with all applicable foreign, federal, state
and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours, in each case,
with respect to its current or former employees.
(b) Except as disclosed in the Company SEC Reports filed prior
to the date of this Agreement, no employee of the Company or any of its
Subsidiaries (i) has an employment agreement, (ii) to the Company's knowledge is
in violation of any term of any patent disclosure agreement, non-competition
agreement, or any restrictive covenant to a former employer relating to the
right of any such employee to be employed by the Company or any of its
Subsidiaries because of the nature of the business conducted or presently
proposed to be conducted by the Company or any of its Subsidiaries or to the use
of trade secrets or proprietary information of
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others, or (iii) in the case of any key employee or group of key employees, has
given notice to the Company or any of its Subsidiaries that such employee or any
employee in a group of key employees intends to terminate his or her employment
with the Company.
3.17 INSURANCE. Section 3.17 of the Company Disclosure Schedule sets
forth the insurance coverage maintained by the Company and its Subsidiaries and
a history of any claims made and claims paid since January 1, 2000. Each of the
insurance policies that the Company and its Subsidiaries maintain (the
"Insurance Policies") is in full force and effect and is valid, outstanding and
enforceable, and all premiums due thereon have been paid in full. None of the
Insurance Policies shall terminate or lapse (or be affected in any other
materially adverse manner) by reason of the transactions contemplated by this
Agreement. The Company and each of its Subsidiaries have complied in all
material respects with the provisions of each Insurance Policy under which it is
the insured party. No insurer under any Insurance Policy has canceled or
generally disclaimed liability under any such policy or indicated any intent to
do so or not to renew any such policy.
3.18 [Intentionally Omitted]
3.19 ASSETS. The Company or one of its Subsidiaries owns or leases
all tangible assets necessary for the conduct of their businesses as presently
conducted. All of such tangible assets which are owned, are owned free and clear
of all Liens except for (i) Liens which are disclosed in the Financial
Statements contained in the Company SEC Reports filed prior to the date of this
Agreement, (ii) Liens for Taxes not yet due and payable and (iii) other Liens
that, individually and in the aggregate, do not materially interfere with the
ability of the Company or its Subsidiaries to conduct their business as
currently conducted, and have not had a Company Material Adverse Effect. The
tangible assets of the Company and its Subsidiaries, taken as a whole, are free
from material defects, have been maintained in accordance with normal industry
practice, are in good operating condition and repair (subject to normal wear and
tear) and are suitable for the purpose for which they are presently used.
3.20 WARRANTY. Except as set forth in Section 3.20 of the Company
Disclosure Schedule, no product or service manufactured, sold, leased, licensed,
delivered or otherwise provided by the Company or any of its Subsidiaries is
subject to any guaranty, warranty, right of return or other indemnity.
3.21 CUSTOMERS AND SUPPLIERS. Section 3.21 of the Company Disclosure
Schedule accurately identifies, and provides an accurate and complete breakdown
of the revenues received from, each customer of the Company or any of its
Subsidiaries that represented 5% or more of the Company's consolidated revenues
in the fiscal year ended December 29, 2002 or in the six-month period ended June
29, 2003. No such customer has affirmatively indicated in writing to the Company
or any of its Subsidiaries that it will stop, or materially decrease the rate
of, buying materials, products or services from the Company or any of its
Subsidiaries. No material supplier or exclusive supplier of the Company or any
of its Subsidiaries has affirmatively indicated in writing to the Company or any
of its Subsidiaries that it will stop, or materially decrease the rate of,
supplying materials, products or services to them.
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3.22 OPINION OF FINANCIAL ADVISOR. The financial advisor of the
Company, Xxxxxx Xxxxxx Partners LLC, has delivered to the Company an opinion
dated the date of this Agreement to the effect that, as of such date, the Parent
ADSs or Parent Ordinary Shares, as the case may be, and the cash to be received
by the holders of Company Common Stock pursuant to the Merger and the
Distribution are fair to such holders from a financial point of view, a signed
copy of which opinion has been, or will be within three days following the date
of this Agreement, delivered to the Parent.
3.23 SECTION 203 OF THE DGCL NOT APPLICABLE. The Company Board has
taken all actions necessary so that the restrictions contained in Section 203 of
the DGCL applicable to a "business combination" (as defined in Section 203)
shall not apply to the execution, delivery or performance of this Agreement, the
Company Stockholder Agreements or the consummation of the Merger or the other
transactions contemplated by this Agreement or the Company Stockholder
Agreements. No other "fair practice," "moratorium," "control share acquisition,"
"business combination," or other state takeover statute or similar statute or
regulation applies to the Company, the Parent, the Transitory Subsidiary, the
Merger, this Agreement or the Company Stockholder Agreements.
3.24 RIGHTS AGREEMENT. The Company has duly entered into an amendment
to the Company Rights Plan, a signed copy of which has been delivered to the
Parent (the "Rights Agreement Amendment"), and taken all other action necessary
or appropriate so that: (a) the entering into of this Agreement or the Company
Stockholder Agreements and the consummation of the transactions contemplated
hereby and thereby do not and will not result in the ability of any person to
exercise any of the Company Rights under the Company Rights Plan or enable or
require the Company Rights issued thereunder to separate from the shares of
Company Common Stock to which they are attached or to be triggered or become
exercisable or cease to be redeemable and (b) the Company Rights will expire
immediately prior to the Effective Time.
3.25 BROKERS; SCHEDULE OF FEES AND EXPENSES.
(a) No agent, broker, investment banker, financial advisor or
other firm or person is or shall be entitled, as a result of any action,
agreement or commitment of the Company or any of its Affiliates, to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with any of the transactions contemplated by this Agreement, except
Xxxxxx Xxxxxx Partners, whose fees and expense shall be paid by the Company. The
Company has delivered to the Parent a complete and accurate copy of all
agreements pursuant to which Xxxxxx Xxxxxx Partners is entitled to any fees and
expenses in connection with any of the transactions contemplated by this
Agreement.
(b) Section 3.25(b) of the Company Disclosure Schedule sets
forth, as of the date hereof, a good faith estimate by the Company of the
estimated fees and expenses incurred and to be incurred by the Company and any
of its Subsidiaries in connection with this Agreement and the transactions
contemplated by this Agreement (including the fees and expenses of Xxxxxx Xxxxxx
Partners and of the Company's legal counsel and accountants).
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3.26 NO EXISTING DISCUSSIONS. As of the time of execution of this
Agreement, neither the Company nor any of its Subsidiaries is engaged, directly
or indirectly, in any discussions or negotiations with any other party with
respect to a Company Acquisition Proposal.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE
TRANSITORY SUBSIDIARY
The Parent and the Transitory Subsidiary represent and warrant to the
Company that the statements contained in this Article IV are true and correct,
except as expressly set forth herein or in the disclosure schedule delivered by
the Parent and the Transitory Subsidiary to the Company on or before the date of
this Agreement (the "Parent Disclosure Schedule"). The Parent Disclosure
Schedule shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Article IV and the disclosure in any
paragraph shall qualify (1) the corresponding paragraph in this Article IV and
(2) the other paragraphs in this Article IV only to the extent such disclosure
reasonably appears on its face to be applicable to such other paragraphs.
4.1 ORGANIZATION, STANDING AND POWER.
(a) Each of the Parent and the Transitory Subsidiary is a
corporation duly organized, validly existing and, where applicable as a legal
concept, in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the character of the properties it owns, operates or leases or the nature of its
activities makes such qualification necessary, except for such failures to be so
organized, qualified or in good standing, individually or in the aggregate, that
have not had a Parent Material Adverse Effect. For purposes of this Agreement,
the term "Parent Material Adverse Effect" means any material adverse change,
event, circumstance or development with respect to, or material adverse effect
on (i) the business, assets, liabilities, capitalization, financial condition,
or results of operations of the Parent and its Subsidiaries, taken as a whole or
(ii) the ability of the Parent or the Transitory Subsidiary to consummate the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that in the case
of clause (i), in no event shall any of the following, alone or in combination,
be deemed to constitute, nor shall any of the following be taken into account in
determining whether there has occurred, a Parent Material Adverse Effect: any
adverse change, event, circumstance or development with respect to, or effect
resulting from (A) general economic conditions or conditions generally affecting
the optical networking industry, except in either case to the extent the Parent
is materially disproportionately affected thereby, (B) the announcement or
pendency of the Merger or any other transactions expressly contemplated hereby,
(C) compliance with the terms and conditions of this Agreement, (D) a change in
the stock price or trading volume of the Parent Ordinary Shares or Parent ADSs
(or any failure of the Parent to meet published revenue or earnings
projections), PROVIDED that clause (D) shall not exclude any underlying effect
which may have caused such change in stock price or trading volume or failure to
meet published revenue or earnings projections, (E) any change in accounting
requirements or principles or any
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change in applicable laws, rules or regulations or the interpretation thereof or
(F) the continued incurrence of losses by the Parent. For the avoidance of
doubt, the parties agree that the terms "material", "materially" or
"materiality" as used in this Agreement with an initial lower case "m" shall
have their respective customary and ordinary meanings, without regard to the
meanings ascribed to Parent Material Adverse Effect in the prior sentence of
this paragraph or Company Material Adverse Effect in Section 3.1(a). The Parent
has delivered to the Company complete and accurate copies of the Memorandum and
Articles of Association of the Parent together with copies of all shareholder
resolutions required by law to be embodied in or annexed thereto.
(b) Section 4.1(b) of the Parent Disclosure Schedule sets forth
a complete and accurate list of all of the Parent's Subsidiaries and the
Parent's direct or indirect equity interest therein. Except as set forth in
Section 4.1(b) of the Parent Disclosure Schedule, neither the Parent nor any of
its Subsidiaries directly or indirectly owns any equity, membership, partnership
or similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity, membership, partnership or similar interest in, any
corporation, partnership, joint venture, limited liability company or other
business association or entity, whether incorporated or unincorporated, and
neither the Parent, nor any of its Subsidiaries, has, at any time, been a
general partner or managing member of any general partnership, limited
partnership, limited liability company or other entity.
4.2 CAPITALIZATION.
(a) The authorized share capital of the Parent consists of an
aggregate nominal value of L1,000,000 divided into 300,000,000 Parent Ordinary
Shares. The rights and privileges of the Parent Ordinary Shares are set forth in
the Parent's Memorandum and Articles of Association. As of the close of business
on September 19, 2003, 208,032,813 Parent Ordinary Shares were issued and
outstanding. No material change in such capitalization has occurred between
September 19, 2003 and the date of this Agreement.
(b) Section 4.2(b) of the Parent Disclosure Schedule sets forth
a complete and accurate list, as of the date of this Agreement, of: (i) all
share option plans or other share or equity-related plans of the Parent (the
"Parent Share Plans"), indicating for each Parent Share Plan the number of
Parent Ordinary Shares and/or Parent ADSs issued to date under such Plan, the
number of Parent Ordinary Shares and/or Parent ADSs subject to outstanding
options under such Plan and the number of Parent Ordinary Shares and/or Parent
ADSs reserved for future issuance under such Plan; and (ii) the number of Parent
Ordinary Shares and/or Parent ADSs, and the class or series of such shares,
subject to any outstanding warrants or other contractual rights to purchase or
acquire share capital of the Parent. The Parent has provided to the Company
complete and accurate copies of all Parent Share Plans and standard forms of
option agreements used thereunder. Except as set forth in this Section 4.2, (i)
no subscription, warrant, option, convertible security or other right
(contingent or otherwise) to subscribe, purchase or acquire or require the
allotment or issue of any share capital of the Parent is authorized or
outstanding, (ii) the Parent has no obligation (contingent or otherwise) to
issue any subscription, warrant, option, convertible security or other such
right, or to issue or distribute to holders of any share capital any evidences
of indebtedness or assets of the Parent, (iii) the Parent has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any share
capital or any interest therein or to pay any dividend or to make any other
distribution in respect thereof,
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and (iv) there are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the Parent.
(c) All outstanding Parent Ordinary Shares are, and all Parent
Ordinary Shares issuable pursuant to Section 2.1(c) in connection with the
Merger, when issued on the terms and conditions of this Agreement, will be, duly
authorized, validly issued and fully paid, and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under the Parent's
Memorandum and Articles of Association or any agreement to which the Parent is a
party or is otherwise bound.
4.3 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Each of the Parent and the Transitory Subsidiary has all
requisite corporate power and authority to enter into this Agreement and,
subject to obtaining the necessary approval of the shareholders of the Parent as
referred to in Section 6.3(b) (the "Parent Shareholder Approval"), the UKLA
agreeing to admit all of the Parent Ordinary Shares (including those underlying
the Parent ADSs) to the Official List of the UKLA and the London Stock Exchange
plc (the "LSE") agreeing to admit such Parent Ordinary Shares to trading on the
LSE's market for listed securities, to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement by the Parent
and the Transitory Subsidiary have been duly authorized by all necessary
corporate action on the part of each of the Parent and the Transitory Subsidiary
and the approval of the Board of Directors of the Parent (the "Parent Board")),
subject only to the required receipt of the Parent Shareholder Approval and
adoption of this Agreement by the Parent in its capacity as the sole stockholder
of the Transitory Subsidiary. This Agreement has been duly executed and
delivered by each of the Parent and the Transitory Subsidiary and constitutes
the valid and binding obligation of each of the Parent and the Transitory
Subsidiary, enforceable in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
(b) The execution and delivery of this Agreement by each of the
Parent and the Transitory Subsidiary do not, and the consummation by the Parent
and the Transitory Subsidiary of the transactions contemplated by this Agreement
shall not, (i) conflict with, or result in any violation or breach of, any
provision of the Memorandum and Articles of Association of the Parent or
Certificate of Incorporation or By-laws of the Transitory Subsidiary, (ii)
conflict with, or result in any violation or breach of, or constitute (with or
without notice or lapse of time, or both) a default (or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
material benefit) under, require a consent or waiver under, constitute a change
in control under, require the payment of a penalty under or result in the
imposition of any Lien on the Parent's or the Transitory Subsidiary's assets
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract or other agreement, instrument or obligation
to which the Parent or the Transitory Subsidiary is a party or by which any of
them or any of their properties or assets may be bound, or (iii) subject to
obtaining the Parent Shareholder Approval and compliance with the requirements
specified in clauses (i) through (viii) of Section 4.3(c), conflict with or
violate any permit, concession, franchise, license, judgment, injunction, order,
decree, statute, law, ordinance, rule or regulation applicable to the Parent or
the Transitory Subsidiary or any of its or their properties or assets,
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except in the case of clauses (ii) and (iii) of this Section 4.3(b) for any such
conflicts, violations, breaches, defaults, terminations, cancellations,
accelerations or losses that, individually or in the aggregate, would not have a
Parent Material Adverse Effect.
(c) No consent, approval, license, permit, order or
authorization of, or registration, declaration, notice or filing with, any
Governmental Entity, including the UKLA, the UK Panel on Takeovers and Mergers,
or any stock market or stock exchange on which the Parent Ordinary Shares or
Parent ADSs are listed for trading is required by or with respect to the Parent
or the Transitory Subsidiary in connection with the execution and delivery of
this Agreement by the Parent or the Transitory Subsidiary or the consummation by
the Parent or the Transitory Subsidiary of the transactions contemplated by this
Agreement, except for (i) the pre-merger notification requirements under the HSR
Act, (ii) the filing of the Certificate of Merger with the Secretary of State of
the State of
Delaware and appropriate corresponding documents with the
appropriate authorities of other states in which the Company is qualified as a
foreign corporation to transact business, (iii) the filing of the Registration
Statement with the SEC in accordance with the Securities Act, (iv) the filing of
the Joint Proxy Statement/Prospectus with the SEC in accordance with the
Exchange Act, (v) the filing of such reports, schedules or materials under
Section 13 of or Rule 14a-12 under the Exchange Act and materials under Rule 165
and Rule 425 under the Securities Act as may be required in connection with this
Agreement and the transactions contemplated hereby, (vi) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws and the securities laws
of any foreign country, (vii) the filing with The NASDAQ Stock Market of a
Notification Form for Listing of Additional Shares with respect to the Parent
ADSs issuable in connection with the Merger and a listing application with the
LSE with respect to the Parent Ordinary Shares issuable in connection with the
Merger, the UKLA agreeing to admit all of the Parent Ordinary Shares underlying
the Parent ADSs to the Official List of the UKLA and the LSE agreeing to admit
such Parent Ordinary Shares to trading on the LSE's market for listed
securities, and (viii) in connection with any applicable Antitrust Law.
(d) The affirmative vote of the holders of a majority of the
Parent Ordinary Shares present or represented by proxy and voting at the Parent
Shareholders Meeting is the only vote of the holders of any class or series of
the Parent's share capital necessary for approval of the Parent Voting Proposal
and for the consummation by the Parent of the other transactions contemplated by
this Agreement. There are no bonds, debentures, notes or other indebtedness of
the Parent having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which stockholders of the
Parent may vote.
4.4 SEC FILINGS; FINANCIAL STATEMENTS; INFORMATION PROVIDED; LSE.
(a) The Parent has filed all registration statements, forms,
reports and other documents required to be filed by the Parent with the SEC
since January 1, 2000 and has made available to the Company copies of all
registration statements, forms, reports and other documents filed by the Parent
with the SEC since such date. All such registration statements, forms, reports
and other documents (including those that the Parent may file after the date
hereof until the Closing) are referred to herein as the "Parent SEC Reports."
The Parent SEC Reports (i) were or will be filed on a timely basis, (ii) at the
time filed, were or will be prepared in
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compliance in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Parent SEC Reports,
including the provision of all statements and certifications required by (x) the
SEC's order dated June 27, 2002 pursuant to Section 21(a)(1) of the Exchange
Act, (y) Rule 13a-14 or 15d-14 under the Exchange Act or (z) 18 U.S.C.
Section 1350 (Section 906 of the Xxxxxxxx-Xxxxx Act of 2002), and (iii) did not
or will not at the time they were or are filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Parent SEC Reports or necessary in order to make the statements in such Parent
SEC Reports, in the light of the circumstances under which they were made, not
misleading. No Subsidiary of the Parent is subject to the reporting requirements
of Section 13(a) or Section 15(d) of the Exchange Act.
(b) Each of the consolidated financial statements (including,
in each case, any related notes and schedules) contained or to be contained in
the Parent SEC Reports at the time filed (i) complied or will comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, (ii) were or
will be prepared in accordance with generally accepted accounting principles in
the United Kingdom ("UK GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by the SEC)
and, to the extent applicable and required by the Securities Act or Exchange
Act, reconciled to GAAP and (iii) fairly presented or will fairly present in all
material respects the consolidated financial position of the Parent and its
Subsidiaries as of the dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, consistent with the books
and records of the Parent and its Subsidiaries, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in
amount. The consolidated, unaudited balance sheet of the Parent as of June 30,
2003 is referred to herein as the "Parent Balance Sheet."
(c) The information in the Registration Statement to be
supplied by or on behalf of the Parent for inclusion or incorporation by
reference in the Registration Statement or to be included or supplied by or on
behalf of the Parent for inclusion in any Regulation M-A Filing shall not at the
time the Registration Statement or any such Regulation M-A Filing is filed with
the SEC, at any time it is amended or supplemented, or at the time the
Registration Statement is declared effective by the SEC, as applicable, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. The information to be supplied by or on behalf of the
Parent for inclusion in (i) the Joint Proxy Statement/Prospectus (which shall be
deemed to include all information about or relating to the Parent, the Parent
Voting Proposal and the Parent Shareholders Meeting) and (ii) the Parent UK
Documents, to be sent to the shareholders of the Parent in connection with the
Parent Shareholders Meeting to consider the Parent Voting Proposal, shall not,
on the date the Joint Proxy Statement/Prospectus is first mailed to stockholders
of the Company or the Parent UK Documents are first mailed to the shareholders
of the Parent, or at the time of the Company Stockholders Meeting or the Parent
Shareholders Meeting or at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it shall be made, is
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements made in the
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Joint Proxy Statement/Prospectus or the Parent UK Documents, as the case may be,
not false or misleading; or omit to state any material fact necessary to correct
any statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders Meeting or the Parent Shareholders Meeting
which has become false or misleading. If at any time prior to the Effective Time
any fact or event relating to the Parent or any of its Affiliates which should
be set forth in an amendment to the Registration Statement or a supplement to
the Joint Proxy Statement/Prospectus or the Parent UK Documents, should be
discovered by the Parent or should occur, the Parent shall promptly inform the
Company of such fact or event.
(d) The Parent has in all material respects complied with its
obligations to notify a Regulatory Information Service of information pursuant
to the Listing Rules (the "Listing Rules") of the Financial Services Authority
acting in its capacity as the competent authority for listing in the United
Kingdom (the "UKLA") under Part VI of the Financial Services and Markets Xxx
0000 ("FSMA") since January 1, 2000, and such notifications are publicly
available. The Parent has not received notice from the UKLA that there are any
circumstances and, as of the date of this Agreement, the Parent is not aware of
any circumstances that would justify or warrant the UKLA commencing proceedings
to withdraw or cancel of the listing of the Parent Ordinary Shares by the UKLA.
4.5 NO UNDISCLOSED LIABILITIES. Except as disclosed in the Parent
SEC Reports filed prior to the date of this Agreement, and except for normal and
recurring liabilities incurred since the date of the Parent Balance Sheet in the
Ordinary Course of Business, the Parent and its Subsidiaries do not have any
material liabilities, either accrued, contingent or otherwise (whether or not
required to be reflected in financial statements in accordance with UK GAAP),
and whether due or to become due.
4.6 AGREEMENTS, CONTRACTS AND COMMITMENTS; GOVERNMENT CONTRACTS.
(a) The Parent has made available to the Company a complete and
accurate copy of each contract and agreement that is material to the business,
assets, liabilities, capitalization, condition (financial or otherwise) or
results of operations of the Parent and its Subsidiaries, taken as a whole (the
"Parent Material Contracts"). Each Parent Material Contract is in full force and
effect and is enforceable in accordance with its terms against the Company or
the applicable Subsidiary, as the case may be, subject to the Bankruptcy and
Equity Exception. To the Parent's knowledge, each Parent Material Contract is
enforceable against each other party thereto, subject to the Bankruptcy and
Equity Exception. Neither the Parent nor any of its Subsidiaries nor, to the
Parent's knowledge, any other party to any Parent Material Contract is in
violation of or in default under (nor does there exist any condition which, upon
the passage of time or the giving of notice or both, would cause such a
violation of or default under) (x) any loan or credit agreement, note, bond,
mortgage, indenture, lease, permit, concession, franchise, license or other
contract, arrangement or understanding to which it is a party or by which it or
any of its properties or assets is bound, except for violations or defaults
that, individually or in the aggregate, have not had, and are not reasonably
likely to have, a Parent Material Adverse Effect or (y) any Parent Material
Contract.
(b) Neither the Parent nor any of its Subsidiaries is or has
been suspended or debarred from bidding on contracts or subcontracts with any
Governmental Entity; no such
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suspension or debarment has been initiated or, to the Parent's knowledge,
threatened; and the consummation of the transactions contemplated by this
Agreement will not result in any such suspension or debarment that, individually
or in the aggregate, would have a Parent Material Adverse Effect. Neither the
Parent nor any of its Subsidiaries has any agreements, contracts or commitments,
which require it to obtain or maintain a security clearance with any
Governmental Entity.
4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Parent SEC Reports filed prior to the date of this Agreement, since the date of
the Parent Balance Sheet, there has not been (i) any event, change,
circumstance, development or effect that, individually or in the aggregate, has
had, or is reasonably likely to have, a Parent Material Adverse Effect or (ii)
any other action or event that would have required the consent of the Company
pursuant to Section 5.2 of this Agreement had such action or event occurred
after the date of this Agreement.
4.8 LITIGATION; PRODUCT LIABILITY. Except as disclosed in the Parent
SEC Reports filed prior to the date of this Agreement, there is no action, suit,
proceeding, claim, arbitration or investigation pending or, to the knowledge of
the Parent, threatened against or affecting the Parent or any of its
Subsidiaries that, individually or in the aggregate, has had, or is reasonably
likely to have, a Parent Material Adverse Effect. There are no material
judgments, orders or decrees outstanding against the Parent or any of its
Subsidiaries. No material product liability claims have been asserted or, to the
knowledge of the Parent, threatened against the Parent or any of its
Subsidiaries with respect to any Parent Products.
4.9 INTELLECTUAL PROPERTY.
(a) The Parent and its Subsidiaries exclusively own, or license
or otherwise possess legally enforceable rights to use, without any obligation
to make any fixed or contingent payments, including any royalty payments, all
Intellectual Property used or necessary to conduct the business of the Parent
and its Subsidiaries as currently conducted, or that would be used or necessary
as such business is planned to be conducted (in each case excluding generally
commercially available, off-the-shelf software programs licensed pursuant to
shrinkwrap or "click-and-accept" licenses), the absence of which, individually
or in the aggregate would have a Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement and
consummation of the Merger will not result in the breach of, or create on behalf
of any third party the right to terminate or modify, (i) Parent Intellectual
Property or (ii) any license, sublicense and other agreement as to which the
Parent or any of its Subsidiaries is a party and pursuant to which the Parent or
any of its Subsidiaries is authorized to use any third party Intellectual
Property that is material to the business of the Parent and its Subsidiaries,
taken as a whole, including software that is used in the manufacture of,
incorporated in, or forms a part of any product or service sold by or expected
to be sold by the Parent or any of its Subsidiaries (the "Parent Third Party
Intellectual Property"). Section 4.9(b)(i) of the Parent Disclosure Schedule
sets forth a complete and accurate list, as of the date hereof, of the Parent
Intellectual Property (other than unregistered copyrights, trade secrets and
confidential information) and Section 4.9(b)(ii) sets forth a complete and
accurate list of all Third Party Intellectual Property. Neither the Parent nor
any of its Subsidiaries has transferred ownership of, or granted any exclusive
license of or right to use,
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or authorized the retention of any exclusive rights to use or joint ownership
of, any Intellectual Property this is or was Parent Intellectual Property, to
any other person.
(c) All patents and registrations and applications for
trademarks, service marks and copyrights which are held by the Parent or any of
its Subsidiaries and which are material to the business of the Parent and its
Subsidiaries, taken as a whole, are, to Parent's knowledge, valid and
subsisting. The Parent and its Subsidiaries have taken reasonable measures to
protect the proprietary nature of the Parent Intellectual Property. To the
knowledge of the Parent, no other person or entity is infringing, violating or
misappropriating any of the Parent Intellectual Property or Third Party
Intellectual Property, except for infringements, violations or misappropriations
that, individually or in the aggregate, would not have a Parent Material Adverse
Effect.
(d) None of the (i) Parent Products or (ii) business or
activities previously or currently conducted by the Parent or any of its
Subsidiaries infringes, violates or constitutes a misappropriation of, any
Intellectual Property (other than Patents) of any third party, except for such
infringements, violations and misappropriation that, individually or in the
aggregate, would not have a Parent Material Adverse Effect. With respect to
Patents, to the knowledge of Parent and its Subsidiaries, none of the (i) Parent
Products or (ii) business as currently conducted by the Parent or any of its
Subsidiaries infringes, violates or constitutes a misappropriation of, any
Patents of any third party, except for such infringements, violations and
misappropriation that, individually or in the aggregate, would not have a Parent
Material Adverse Effect. Neither the Parent nor any of its Subsidiaries has
received any complaint, claim or notice alleging any such infringement,
violation or misappropriation of Intellectual Property of a third party.
(e) For purposes of this Section, "Parent Products" means the
product and or services sold, leased, licensed or provided by Parent or its
Subsidiaries currently or at any time during the immediately preceding seven
years.
4.10 TAXES.
(a) The Parent and each of its Subsidiaries has filed all
material Tax Returns that it was required to file, and all such Tax Returns were
correct and complete except for any errors or omissions that, individually or in
the aggregate, would not have a Parent Material Adverse Effect. Except as would
not have a Parent Material Adverse Effect, the Parent and each of its
Subsidiaries have paid on a timely basis all Taxes that are due. The unpaid
Taxes of the Parent and its Subsidiaries for Tax periods through the date of the
Parent Balance Sheet do not exceed the accruals and reserves for Taxes set forth
on the Parent Balance Sheet exclusive of any accruals and reserves for "deferred
taxes" or similar items that reflect timing differences between Tax and
financial accounting principles. All Taxes attributable to the period from and
after the date of the Parent Balance Sheet and continuing through the Closing
Date are attributable to the conduct by the Parent and its Subsidiaries of
operations in the Ordinary Course of Business and are consistent both as to type
and amount with Taxes attributable to such comparable periods in the immediately
preceding year. All Taxes that the Parent or any of its Subsidiaries is or was
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been paid to the proper Governmental Entity.
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(b) The income Tax Returns of the Parent and each of its
Subsidiaries have been audited by the applicable Governmental Entity or are
closed by the applicable statute of limitations for all taxable years through
the taxable year specified in Section 4.10(b) of the Parent Disclosure Schedule.
No examination, audit or other dispute with respect to any material Tax Return
of the Parent or any of its Subsidiaries by any Governmental Entity is currently
in progress or, to the knowledge of the Parent, threatened or contemplated.
Neither the Parent nor any of its Subsidiaries has been informed by any
Governmental Entity that the Governmental Entity believes that the Parent or any
of its Subsidiaries was required to file any Tax Return that was not filed.
Neither the Parent nor any of its Subsidiaries has waived any statute of
limitations with respect to Taxes or agreed to an extension of time with respect
to a Tax assessment or deficiency.
(c) Neither the Parent nor any of its Subsidiaries: (i) has
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section
897(c)(l)(A)(ii) of the Code; (ii) has made any payments, is obligated to make
any payments, or is a party to any agreement that could obligate it to make any
payments that may be treated as an "excess parachute payment" under Section 280G
of the Code (without regard to Section 280G(b)(4)); (iii) has any actual or
potential liability for any Taxes of any person (other than the Parent and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of law in any jurisdiction), or as a transferee or successor, by
contract, or otherwise; or (iv) is or has been required to make a basis
reduction pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury
Regulation Section 1.337(d)-2(b).
(d) None of the assets of the Parent or any of its
Subsidiaries: (i) is property that is required to be treated as being owned by
any other person pursuant to the provisions of former Section 168(f)(8) of the
Code; (ii) is "tax-exempt use property" within the meaning of Section 168(h) of
the Code; (iii) directly or indirectly secures any debt the interest on which is
tax exempt under Section 103(a) of the Code; or (iv) is subject to a lease under
Section 7701(h) of the Code or any predecessor section.
(e) Neither the Parent nor any of its Subsidiaries (i) is or
has ever been a member of a group of corporations with which it has filed (or
been required to file) group, consolidated, combined or unitary Tax Returns,
other than a group of which only the Parent and its Subsidiaries are or were
members or (ii) is a party to or bound by any Tax indemnity, Tax sharing or Tax
allocation agreement.
(f) There are no material adjustments under Section 481 of the
Code (or any similar adjustments under any provision of the Code or any
corresponding foreign, state or local Tax laws) that are required (or will be
required as a result of the transactions contemplated by this Agreement) to be
taken into account by the Parent or any Subsidiary in any period ending after
the Closing Date by reason of a change in method of accounting in any taxable
period ending on or before the Closing Date.
(g) Neither the Parent nor any Subsidiary has distributed to
its stockholders or security holders stock or securities of a controlled
corporation, nor has stock or securities of the Parent or any Subsidiary been
distributed, in a transaction to which Section 355 of the Code
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applies (i) in the two years prior to the date of this Agreement or (ii) in a
distribution that could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) that
includes the transactions contemplated by this Agreement.
(h) Neither the Parent nor any Subsidiary owns any interest in
an entity that is characterized as a partnership for United States federal
income Tax purposes.
(i) Neither the Parent nor any Subsidiary has incurred (or been
allocated) an "overall foreign loss" as defined in Section 904(f)(2) of the Code
which has not been previously recaptured in full as provided in Sections
904(f)(1) and/or 904(f)(3) of the Code.
(j) Neither the Parent nor any Subsidiary is a party to a gain
recognition agreement under Section 367 of the Code.
(k) Section 4.10(k) of the Parent Disclosure Schedule sets
forth a complete and accurate list, as of the date hereof, of any Subsidiaries
for which a "check-the-box" election under Section 7701 of the Code has been
made.
(l) Section 4.10(l) of the Parent Disclosure Schedule sets
forth a complete and accurate list, as of the date hereof, of all material
agreements, rulings, settlements or other Tax documents relating to Tax
incentives between the Parent or any Subsidiary and a Governmental Entity.
4.11 ENVIRONMENTAL MATTERS.
(a) Except as disclosed in the Parent SEC Reports filed prior
to the date of this Agreement, each of the Parent and its Subsidiaries has
complied with all applicable Environmental Laws, except for violations of
Environmental Laws that, individually or in the aggregate, would not have a
Parent Material Adverse Effect. There is no pending or, to the knowledge of the
Parent, threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information
request by any Governmental Entity, relating to any Environmental Law involving
the Parent or any of its Subsidiaries.
(b) Neither the Parent nor any of its Subsidiaries has
released, emitted, injected, spilled or discharged any amount of Materials of
Environmental Concern into the environment in a manner that has resulted in or
is reasonably likely to result in a material liability to or corrective action
or remedial obligation of the Parent or its Subsidiaries.
(c) Neither the Parent nor any of its Subsidiaries is a party
to or bound by any court order, administrative order, consent order or other
agreement between the Parent and any Governmental Entity entered into in
connection with any legal obligation or liability arising under any
Environmental Law.
(d) The Parent is not aware of any material environmental
liability of any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by the Parent or any of its Subsidiaries.
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4.12 COMPLIANCE WITH LAWS. The Parent and each of its Subsidiaries
has complied with, is not in violation of, and, has not received any written
notice alleging any violation with respect to, any applicable provisions of any
statute, law or regulation with respect to the conduct of its business, or the
ownership or operation of its properties or assets, except for failures to
comply or violations that, individually or in the aggregate, have not had a
Parent Material Adverse Effect.
4.13 ASSETS. The Parent or one of its Subsidiaries owns or leases all
tangible assets necessary for the conduct of their businesses as presently
conducted. The tangible assets of the Parent and its Subsidiaries, taken as a
whole, are free from material defects, have been maintained in accordance with
normal industry practice, are in good operating condition and repair (subject to
normal wear and tear) and are suitable for the purpose for which they are
presently used.
4.14 BROKER. No agent, broker, investment banker, financial advisor
or other firm or person is or shall be entitled, as a result of any action,
agreement or commitment of the Parent or any of its Affiliates, to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with any of the transactions contemplated by this Agreement, except Perseus
Group, LLC, whose fees and expense shall be paid by the Parent.
4.15 OPERATIONS OF THE TRANSITORY SUBSIDIARY. The Transitory
Subsidiary was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and
has conducted its operations only as contemplated by this Agreement.
ARTICLE V
CONDUCT OF BUSINESS
5.1 COVENANTS OF THE COMPANY. Except as expressly provided herein or
set forth in Section 5.1 of the Company Disclosure Schedule or as consented to
in writing by the Parent, from and after the date of this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or the
Effective Time, the Company shall, and shall cause each of its Subsidiaries to,
act and carry on its business in the ordinary course in substantially the same
manner as previously conducted, pay its debts and Taxes and perform its other
obligations when due (subject to good faith disputes over such debts, Taxes or
obligations), comply with all applicable laws, rules and regulations, and use
commercially reasonable efforts, consistent with past practices, to maintain and
preserve its and each Subsidiary's present business organization, assets and
properties, maintain inventory levels in the Ordinary Course of Business, keep
available the services of its present officers and employees and preserve its
advantageous business relationships with customers, strategic partners,
suppliers, distributors and others having business dealings with it. Without
limiting the generality of the foregoing, and except as set forth in Section 5.1
of the Company Disclosure Schedule, from and after the date of this Agreement
until the earlier of the termination of this Agreement in accordance with its
terms or the Effective Time, the Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, do any of the following without the
prior written consent of the Parent:
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(a) (A) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, securities or other property) in respect
of, any of its capital stock (other than (i) the Distribution and (ii) dividends
and distributions by a direct or indirect wholly owned Subsidiary of the Company
to its parent); (B) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or any of its other
securities; or (C) purchase, redeem or otherwise acquire any shares of its
capital stock or any other of its securities or any rights, warrants or options
to acquire any such shares or other securities; provided, however, that nothing
in this Section 5.1(a) shall prohibit the Company from exercising contractual
rights of repurchase of any shares of Company Common Stock under any employee,
consultant or director plan or agreement as in effect on the date hereof and
disclosed on Section 3.2(b) of the Company Disclosure Schedule, copies of which
have been provided to the Parent;
(b) except as permitted by Section 5.1(o), issue, deliver,
sell, grant, pledge or otherwise dispose of or encumber any shares of its
capital stock, any other voting securities or any securities convertible into or
exchangeable for, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible or exchangeable securities (other than
(i) the issuance of shares of Company Common Stock (and corresponding Company
Rights) upon the exercise of Company Stock Options outstanding on the date of
this Agreement in accordance with their present terms and (ii) the grant of
options to purchase Company Common Stock, which grants (A) shall not exceed
100,000 shares of Company Common Stock in the aggregate, net of any shares of
Company Common Stock returned, after the date hereof, to the Company Stock Plans
in accordance with the terms of such Company Stock Plans, (B) shall have an
exercise price equal to the fair market value of Company Common Stock on the
date of grant (determined in a manner consistent with the Company's existing
practice for establishing fair market value for option grants) and (C) shall
otherwise be upon the Company's customary terms));
(c) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents, except as expressly provided by
this Agreement;
(d) acquire (A) by merging or consolidating with, or by
purchasing all or a substantial portion of the assets or any stock of, or by any
other manner, any business or any corporation, partnership, joint venture,
limited liability company, association or other business organization or
division thereof or (B) any assets that are material, in the aggregate, to the
Company and its Subsidiaries, taken as a whole, except purchases of inventory
and components in the Ordinary Course of Business;
(e) except for sales of inventory in the Ordinary Course of
Business, sell, lease, license, pledge, or otherwise dispose of or encumber any
properties or assets of the Company or of any of its Subsidiaries;
(f) whether or not in the Ordinary Course of Business, sell,
dispose of or otherwise transfer any assets material to the Company and its
Subsidiaries, taken as a whole (including any accounts, leases, contracts or
intellectual property or any assets or the stock of any of its Subsidiaries, but
excluding the sale or non-exclusive license of products in the Ordinary Course
of Business);
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(g) adopt or implement any stockholder rights plan or, except
as provided in Section 3.24, alter or further amend the Company Rights Plan or
the Company Rights; provided, however, that, subject to the provisions of
Section 6.1 of this Agreement, but notwithstanding anything else to the contrary
set forth herein, the Company Board may (i) in the event of an unsolicited
exchange or tender offer by a third party not resulting from a breach of the
provisions of Section 6.1, amend the Company Rights Plan solely for the purpose
of extending the Distribution Date thereunder to that time immediately prior to
the consummation of such exchange or tender offer and (ii) take any action in
connection with the Company Rights Plan that is required by order of a court of
competent jurisdiction;
(h) except for a confidentiality agreement as permitted by
Section 6.1, enter into an agreement with respect to any merger, consolidation,
liquidation or business combination, or any acquisition or disposition of all or
substantially all of the assets or securities of the Company or any of its
Subsidiaries;
(i) (A) incur or suffer to exist any indebtedness (as such term
is defined in Section 3.5(b) of this Agreement) other than such indebtedness
which existed as of June 29, 2003, as reflected on the Company Balance Sheet or
guarantee any such indebtedness of another person, including entering into any
agreements, notes, bonds, mortgages, indentures or other agreements or
instruments which create or govern securitization or "off-balance sheet"
arrangements (as defined in Item 303(a) of Regulation S-K, (B) issue, sell or
amend any debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its Subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, (C) make any
loans, advances (other than routine advances to employees of the Company and its
Subsidiaries in the Ordinary Course of Business) or capital contributions to, or
investment in, any other person, other than the Company or any of its direct or
indirect wholly owned Subsidiaries or (D) enter into any hedging agreement or
other financial agreement or arrangement designed to protect the Company or its
Subsidiaries against fluctuations in commodities prices or exchange rates;
(j) make any capital expenditures or other expenditures with
respect to property, plant or equipment in excess of US $300,000 in the
aggregate for the Company and its Subsidiaries, taken as a whole, other than the
specific capital expenditures disclosed and set forth in Section 3.6 of the
Company Disclosure Schedule;
(k) make any changes in accounting methods, principles or
practices, except insofar as may have been required by a change in GAAP or,
except as so required, change any assumption underlying, or method of
calculating, any bad debt, contingency or other reserve;
(l) (A) pay, discharge, settle or satisfy any claims,
liabilities or obligations (whether absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction, in
the Ordinary Course of Business or in accordance with their terms as in effect
on the date of this Agreement, of claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the most recent consolidated
financial statements (or the notes thereto) of the Company included in the
Company SEC Reports filed prior to the date of this Agreement (to the extent so
reflected or reserved against) or incurred since the date of
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such financial statements in the Ordinary Course of Business, or (B) waive any
material benefits of, modify in any adverse respect, fail to enforce, or consent
to any matter with respect to which its consent is required under, any
confidentiality, standstill or similar agreements to which the Company or any of
its Subsidiaries is a party;
(m) except in the Ordinary Course of Business, modify, amend or
terminate any material contract or agreement to which the Company or any of its
Subsidiaries is party, or knowingly waive, release or assign any material rights
or claims (including any write-off or other compromise of any accounts
receivable of the Company or any of its Subsidiaries);
(n) (A) except in the Ordinary Course of Business enter into
any material contract or agreement, including, without limitation, any contract
for the sale or supply of goods or products with a term exceeding six months or
value exceeding, in any single instance, US $1,000,000 or (B) except for
non-exclusive licenses entered into in the Ordinary Course of Business, license
any material intellectual property rights to or from any third party;
(o) except as required to comply with applicable law or
agreements, plans or arrangements existing on the date hereof, (A) enter into or
adopt any employment or similar agreement with any person whose annual rate of
cash compensation exceeds U.S. $150,000 per year pursuant to such employment
agreement, (B) take any action with respect to, adopt, enter into, terminate or
amend any employment, severance or similar agreement or benefit plan for the
benefit or welfare of any current or former director, officer, employee or
consultant or any collective bargaining agreement, (C) increase in any material
respect the compensation or fringe benefits of, or pay any bonus to, any
director, officer, employee or consultant (except for annual increases of the
salaries of non-officer employees in the Ordinary Course of Business), (D) amend
or accelerate the payment, right to payment or vesting of any compensation or
benefits, including any outstanding options or restricted stock awards, (E) pay
any material benefit not provided for as of the date of this Agreement under any
benefit plan, (F) grant any awards under any bonus, incentive, performance or
other compensation plan or arrangement or benefit plan, including the grant of
stock options, stock appreciation rights, stock based or stock related awards,
performance units or restricted stock, or the removal of existing restrictions
in any benefit plans or agreements or awards made thereunder, except for the
grant of options to purchase Company Common Stock to new hires, which grants
shall not exceed 100,000 shares in the aggregate net of any shares of Company
Common Stock returned, after the date hereof, to the Company Stock Plans in
accordance with the terms of such Company Stock Plans, and which options shall
have an exercise price equal to the fair market value of the Company Common
Stock on the date of grant (determined in a manner consistent with the Company's
existing practice for establishing fair market value for option grants) and
which options shall otherwise be upon the Company's customary terms, or (G) take
any action other than in the Ordinary Course of Business to fund or in any other
way secure the payment of compensation or benefits under any employee plan,
agreement, contract or arrangement or benefit plan;
(p) make or rescind any material Tax election, make any
material settlement or material compromise to any Tax liability or make any
material amendments to any Tax return;
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(q) commence any Offering (as defined in the Company's Employee
Stock Purchase Plan (the "Company ESPP") of shares of Company Common Stock
pursuant to the Company ESPP that will not terminate prior to the Effective
Time;
(r) initiate, compromise or settle any material litigation or
arbitration proceeding (other than in connection with the enforcement of the
Company's rights against Parent under this Agreement);
(s) open or close any facility or office greater than 10,000
square feet;
(t) fail to maintain insurance at levels substantially
comparable to levels existing as of the date of this Agreement;
(u) fail to pay accounts payable and other obligations in the
Ordinary Course of Business or accelerate the payment of any accounts receivable
other than in the Ordinary Course of Business; or
(v) authorize any of, or commit or agree, in writing or
otherwise, to take any of, the foregoing actions or any action which would
prevent or materially impair the satisfaction of any conditions in Article VII
hereof.
The Parent shall not unreasonably delay its consideration of any consent to a
waiver requested by the Company pursuant to this Section 5.1 (it being
understood, however, that the Parent shall be entitled to act in its sole
discretion in granting or withholding such consent).
5.2 COVENANTS OF THE PARENT. Except as expressly provided herein or
set forth in Section 5.2 of the Parent Disclosure Schedule or as consented to in
writing by the Company, from and after the date of this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or the
Effective Time, the Parent shall, and shall cause each of its Subsidiaries to,
act and carry on its business in the ordinary course in substantially the same
manner as previously conducted, pay its debts and Taxes and perform its other
obligations when due (subject to good faith disputes over such debts, Taxes or
obligations), comply with all applicable laws, rules and regulations, and use
commercially reasonable efforts, consistent with past practices, to maintain and
preserve its and each Subsidiary's present business organization, assets and
properties, keep available the services of its present officers and employees
and preserve its advantageous business relationships with customers, strategic
partners, suppliers, distributors and others having business dealings with it.
Without limiting the generality of the foregoing, and except as set forth in
Section 5.2 of the Parent Disclosure Schedule, from and after the date of this
Agreement until the earlier of the termination of this Agreement in accordance
with its terms or the Effective Time, the Parent shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, do any of the following
without the prior written consent of the Company:
(a) (A) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, securities or other property) in respect
of, any of its share capital (other than (i) dividends and distributions by a
direct or indirect wholly owned Subsidiary of the Parent to its parent); (B)
split, combine or reclassify any of its share capital or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its
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share capital or any of its other securities; or (C) purchase, redeem or
otherwise acquire any shares of its share capital or any other of its securities
or any rights, warrants or options to acquire any such shares or other
securities; provided, however, that nothing in this Section 5.2(a) shall
prohibit the Parent from exercising contractual rights of repurchase of any
Parent Ordinary Shares or Parent ADSs under any employee, consultant or director
plan or agreement as in effect on the date hereof);
(b) except as contemplated by this Agreement, amend its
Memorandum, Articles of Association or other comparable charter or
organizational documents;
(c) enter into an agreement with respect to any merger,
consolidation, liquidation or business combination involving the disposition of
a material amount of the assets or securities of the Parent and its
Subsidiaries, taken as a whole;
(d) make any changes in accounting methods, principles or
practices, except insofar as may have been required by a change in UK GAAP
and/or GAAP, or, except as so required, change any assumption underlying, or
method of calculating, any bad debt, contingency or other reserve;
(e) take any action, following the filing of the Registration
Statement that would require the Parent to include pro forma financial
statements in the Registration Statement pursuant to Article 11 of Regulation
S-X under the Securities Act (other than the pro forma financial statements
required to be filed in connection with the transactions contemplated by this
Agreement); or
(f) authorize any of, or commit or agree, in writing or
otherwise, to take any of, the foregoing actions or any action which would or
prevent or materially impair the satisfaction of any conditions in Article VII
hereof.
The Company shall not unreasonably delay its consideration of any consent to a
waiver requested by the Parent pursuant to this Section 5.2 (it being
understood, however, that the Company shall be entitled to act in its sole
discretion in granting or withholding such consent).
5.3 CONFIDENTIALITY. The parties acknowledge that the Parent and the
Company have previously executed a confidentiality agreement, dated as of August
19, 2003 (the "Confidentiality Agreement"), which Confidentiality Agreement
shall continue in full force and effect in accordance with its terms, except as
expressly modified herein, PROVIDED that Section 7, "Stand Still Provisions," of
the Confidentiality Agreement shall be of no further force and effect as of the
date hereof; PROVIDED FURTHER, HOWEVER, that in the event this Agreement is
terminated: (i) pursuant to Section 8.1(a) or (ii) pursuant to any other
provision of Section 8.1 at a time at which a Company Acquisition Proposal is
not pending, and, in either such case, so long as at the time of such
termination the Company is not in breach of a representation, warranty or
covenant set forth in this Agreement (which breach would cause the conditions
set forth in Sections 7.2(a) or 7.2(b) to not be satisfied), the "Stand Still
Provisions" of Section 7 of the Confidentiality Agreement shall be reinstated
and in full force and effect as of the time of such termination. Notwithstanding
anything herein to the contrary, any party to this Agreement (and any employee,
representative, shareholder, stockholder or other agent of any party to this
Agreement)
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may disclose to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of the proposed transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure; PROVIDED, HOWEVER, that such disclosure may not be made to the extent
such disclosure would reasonably be expected to violate any applicable federal
or state securities laws. For the purposes of the foregoing sentence: (a) the
"tax treatment" of a transaction means the purported or claimed federal income
tax treatment of the transaction; and (b) the "tax structure" of a transaction
means any fact that may be relevant to understanding the purported or claimed
federal income tax treatment of the transaction.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 COMPANY NO SOLICITATION.
(a) NO SOLICITATION OR NEGOTIATION. Except as set forth in this
Section 6.1, the Company shall not, nor shall it (i) authorize or permit any of
its Subsidiaries or (ii) authorize or knowingly permit any of its or its
Subsidiaries' respective directors, officers, employees, investment bankers,
attorneys, accountants or other advisors, agents or representatives (such
directors, officers, employees, investment bankers, attorneys, accountants,
other advisors and representatives, collectively, "Representatives") to,
directly or indirectly:
(i) solicit, initiate, encourage or take any other action
to facilitate any inquiries or the making of any proposal or offer that
constitutes, or could reasonably be expected to lead to, any Company Acquisition
Proposal, including without limitation (A) approving any transaction under
Section 203 of the DGCL, (B) approving any person becoming an "interested
stockholder" under Section 203 of the DGCL, or (C) amending or granting any
waiver or release under any standstill or similar agreement with respect to any
Company Common Stock, Parent ADSs or Parent Ordinary Shares, respectively; or
(ii) enter into, continue or otherwise participate in any
discussions or negotiations regarding, furnish to any person or permit any
person access to any information with respect to, assist or participate in any
effort or attempt by any person with respect to, or otherwise cooperate in any
way with, any Company Acquisition Proposal.
Notwithstanding the foregoing, prior to the adoption of this Agreement at the
Company Stockholders Meeting (the "Specified Time"), the Company may, to the
extent required by the fiduciary obligations of the Company Board, as determined
in good faith by the Company Board, after consultation with outside counsel, in
response to a Qualifying Proposal that did not result from a breach by the
Company of this Section 6.1, and subject to compliance with Section 6.1(c), (x)
furnish information with respect to the Company to the person making such
Qualifying Proposal and its Representatives pursuant to a confidentiality
agreement not less restrictive of the other party than the Confidentiality
Agreement and (y) participate in discussions or negotiations with such person
and its Representatives regarding such Qualifying Proposal.
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(b) NO CHANGE IN RECOMMENDATION; SUPERIOR PROPOSAL. Neither the
Company Board, nor any committee thereof, shall:
(i) except as set forth in this Section 6.1, withdraw or
modify, or publicly propose to withdraw or modify, in a manner adverse to the
Parent or the Transitory Subsidiary, the approval or recommendation by the
Company Board or any such committee of this Agreement or the Merger;
(ii) cause or permit the Company to enter into any letter
of intent, memorandum of understanding, agreement in principle, acquisition
agreement,
merger agreement or similar agreement (an "Alternative Acquisition
Agreement") constituting or relating to any Company Acquisition Proposal (other
than a confidentiality agreement referred to in Section 6.1(a) entered into in
the circumstances referred to in Section 6.1(a)); or
(iii) adopt, approve or recommend, or propose to adopt,
approve or recommend, any Company Acquisition Proposal.
Notwithstanding the foregoing, the Company Board may, in response to a Superior
Proposal that did not result from a breach by the Company of this Section 6.1,
withdraw or modify the recommendation by the Company Board or any committee
thereof of this Agreement and the Merger, if the Company Board determines in
good faith (after consultation with outside counsel) that such actions are
required by its fiduciary obligations, but only at a time that is prior to the
Specified Time and is after the third business day following receipt by the
Parent of written notice advising it that the Company Board desires to withdraw
or modify the recommendation due to the existence of a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal and
identifying the person making such Superior Proposal. Nothing in this Section
6.1 (other than Section 6.1(d)) shall be deemed to limit the Company's
obligation to call, give notice of, convene and hold the Company Stockholders
Meeting, regardless of whether the Company Board has withdrawn or modified its
recommendation of this Agreement and the Merger.
(c) NOTICES; ADDITIONAL NEGOTIATIONS. The Company shall
promptly advise the Parent orally, with written confirmation to follow promptly
(and in any event within 24 hours), of the Company or any of its officers,
directors, investment bankers, financial advisors or attorneys attaining
knowledge of any Company Acquisition Proposal or any request for nonpublic
information in connection with any Company Acquisition Proposal, or of any
inquiry with respect to, or that could reasonably be expected to lead to, any
Company Acquisition Proposal, the material terms and conditions of any such
Company Acquisition Proposal or inquiry and the identity of the person making
any such Company Acquisition Proposal or inquiry. The Company shall not provide
any information to or participate in discussions or negotiations with the person
or entity making any Qualifying Proposal until three business days after the
Company has first notified the Parent of such Qualifying Proposal as required by
the preceding sentence. The Company shall (i) keep the Parent fully informed, on
a prompt basis (and in any event within 24 hours), of the status and any
material change to the terms of any such Company Acquisition Proposal or
inquiry, (ii) provide to the Parent as promptly as practicable after receipt or
delivery thereof copies of all correspondence and other written material sent or
provided to the Company from any third party describing the terms of any Company
Acquisition
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Proposal, and (iii) if the Parent shall make a counterproposal, consider and
cause its financial and legal advisors to negotiate on its behalf in good faith
with respect to the terms of such counterproposal. Contemporaneously with
providing any information to a third party in connection with any such
Qualifying Proposal, the Company shall furnish a copy of such information to the
Parent.
(d) CERTAIN PERMITTED DISCLOSURE. Nothing contained in this
Section 6.1 or in Section 6.6 shall be deemed to prohibit the Company from
taking and disclosing to its stockholders a position with respect to a tender
offer contemplated by Rule 14e-2(a) promulgated under the Exchange Act if, in
the good faith judgment of the Company Board, after consultation with outside
counsel, failure to so disclose would be inconsistent with its obligations under
applicable law; PROVIDED, HOWEVER, that, except as set forth in Section 6.1(b),
in no event shall the Company Board or any committee thereof withdraw or modify
or propose to withdraw or modify, in a manner adverse to the Parent or the
Transitory Subsidiary, the approval or recommendation by the Company Board or
such committee of the Merger or this Agreement.
(e) CESSATION OF ONGOING DISCUSSIONS. Except as expressly
provided for in Section 6.1(a), the Company shall, and shall cause its
Subsidiaries and its and their Representatives to, cease immediately all
discussions and negotiations regarding any proposal that constitutes, or could
reasonably be expected to lead to, a Company Acquisition Proposal and, except
for any confidentiality agreements entered into in accordance with Section
6.1(a), shall not enter into an agreement based upon a Company Acquisition
Proposal. The Company shall use commercially reasonable efforts through written
communication to have all copies of all nonpublic information it or its
Subsidiaries or its and their Representatives have distributed on or prior to
the date of this Agreement to other potential purchasers returned to the Company
or destroyed as soon as possible.
(f) DEFINITIONS. For purposes of this Agreement:
"Company Acquisition Proposal" means (i) any inquiry, proposal
or offer for (A) the dissolution or liquidation of the Company or any of its
Subsidiaries or (B) a merger, consolidation, tender offer, recapitalization,
share exchange or other business combination involving 15% or more of the
Company's equity securities, (ii) any proposal for the issuance by the Company
of over 15% of its equity securities or (iii) any proposal or offer to acquire
in any manner, directly or indirectly, over 15% of the equity securities or
consolidated total assets of such party, in each case other than the
Distribution and the Merger contemplated by this Agreement.
"Qualifying Proposal" means a Superior Proposal or a Company
Acquisition Proposal that constitutes or, in the good faith judgment of the
Company Board, after consultation with outside counsel and its independent
financial adviser, would reasonably be expected to result in a Superior
Proposal.
"Superior Proposal" means any unsolicited, bona fide written
proposal made by a third party to acquire all or substantially all of the equity
securities or assets of the Company, pursuant to a tender or exchange offer, a
merger, a consolidation or a sale of its assets, (i) on terms which the Company
Board determines in its good faith judgment to be more favorable
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from a financial point of view to the stockholders of the Company than the
transactions contemplated by this Agreement (after consultation with respect
thereto with its independent financial advisor), taking into account all the
terms and conditions of such proposal and this Agreement (including any proposal
by either party to amend the terms of this Agreement) and (ii) that is
reasonably capable of being completed on the terms proposed, taking into account
all financial, regulatory, legal and other aspects of such proposal; PROVIDED,
HOWEVER, that no Company Acquisition Proposal shall be deemed to be a Superior
Proposal if any financing required to consummate the Company Acquisition
Proposal is not committed.
6.2 PARENT NOTICES; ADDITIONAL NEGOTIATIONS. The Parent shall
promptly advise the Company orally, with written confirmation to follow promptly
(and in any event within 24 hours), of Parent attaining knowledge of any Parent
Acquisition Proposal or any request for nonpublic information in connection with
any Parent Acquisition Proposal, or of any inquiry with respect to, or that
could reasonably be expected to lead to, any Parent Acquisition Proposal, the
material terms and conditions of any such Parent Acquisition Proposal or inquiry
and the identity of the person making any such Parent Acquisition Proposal or
inquiry. The Parent shall (i) keep the Company fully informed, on a prompt
basis, of the status and details (including any change to the terms) of any such
Parent Acquisition Proposal or inquiry, and (ii) provide to the Company as soon
as practicable after receipt or delivery thereof copies of all correspondence
and other written material sent or provided to the Parent from any third party
in connection with any Parent Acquisition Proposal. "Parent Acquisition
Proposal" means (i) any inquiry, proposal or offer for (A) the dissolution of
the Parent or any of its Subsidiaries, (B) a merger, consolidation, tender
offer, recapitalization, share exchange or other business combination involving
15% or more of the Parent's share capital or (C) a sale of substantial assets of
the Parent or any of its Subsidiaries, (ii) any proposal for the issuance by the
Parent or any of its Subsidiaries of over 15% of its share capital or equity
securities, as applicable, or (iii) any proposal or offer to acquire in any
manner, directly or indirectly, over 15% of the equity securities or
consolidated total assets of such party, in each case other than the Merger
contemplated by this Agreement.
6.3 JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT;
SHAREHOLDER CIRCULAR; LISTING PARTICULARS.
(a) JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT.
(i) As promptly as practicable after the execution of
this Agreement, the Parent, in cooperation with the Company, shall prepare and
file with the SEC the Registration Statement, in which the Joint Proxy
Statement/Prospectus shall be included as a prospectus. Each of the Parent and
the Company shall respond to any comments of the SEC and shall use its
respective commercially reasonable efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filings, and the Company shall cause the Joint Proxy Statement/Prospectus
to be mailed to its stockholders at the earliest practicable time after the
Registration Statement is declared effective under the Securities Act. Each of
the Parent and the Company shall notify the other promptly upon the receipt of
any comments from the SEC or its staff or any other government officials and of
any request by the SEC or its staff or any other government officials for
amendments or supplements to the Registration Statement, the Joint Proxy
Statement/Prospectus or any filing pursuant to Section 6.3(b) or for additional
information and shall supply the other with copies of all
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correspondence between such party or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Registration Statement, the Joint Proxy
Statement/Prospectus, the Merger or any filing pursuant to Section 6.3(b). Each
of the Parent and the Company shall use its commercially reasonable efforts to
cause all documents that it is responsible for filing with the SEC or other
regulatory authorities under this Section 6.3 to comply in all material respects
with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Joint Proxy Statement/Prospectus, the
Registration Statement or any filing pursuant to Section 6.3(b), the Parent or
the Company, as the case may be, shall promptly inform the other of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of the Company, such
amendment or supplement.
(ii) The Parent and the Company shall promptly make all
necessary filings with respect to the Merger under the Securities Act, the
Exchange Act, applicable state blue sky laws and the rules and regulations
thereunder.
(b) SHAREHOLDER CIRCULAR; LISTING PARTICULARS. As promptly as
practicable after the execution of this Agreement, the Parent, in cooperation
with the Company, shall prepare and seek the approval of the UKLA for (i) a
circular to be sent to the Parent shareholders in connection with the Parent
Shareholders Meeting (the "Parent Circular") containing (A) a notice convening
the Parent Shareholders Meeting, (B) such other information as may be required
by the UKLA and (C) such other information as the Parent and the Company shall
agree to include therein and (ii) listing particulars relating to the Parent and
its Subsidiaries and the Parent Ordinary Shares (together with any supplement
thereto, the "Parent Listing Document" and the Parent Circular and the Parent
Listing Document, together, the "Parent UK Documents"). The Parent and the
Company each agrees, as to itself and its Subsidiaries, that the Parent UK
Documents and any supplements thereto and any circulars or documents issued to
shareholders or employees of the Parent will contain all particulars relating to
the Parent and the Company required to comply in all material respects with all
United Kingdom statutory and other legal provisions (including, without
limitation, the Companies Act, FSMA and the rules and regulations made
thereunder and the rules and requirements of the UKLA and the LSE) and all such
information contained in the Parent UK Documents will be substantially in
accordance with the facts and will not omit anything material likely to affect
the import of such information.
6.4 NASDAQ AND LSE QUOTATION. The Parent and the Company each agree
to continue the quotation of Parent ADSs and Company Common Stock, respectively,
on The NASDAQ Stock Market and the Parent Ordinary Shares on the LSE during the
term of this Agreement. The Parent, if required by the rules of The NASDAQ Stock
Market, will file with The NASDAQ Stock Market a Notification Form for Listing
Additional Shares with respect to the Parent ADSs and Parent Ordinary Shares
issuable in connection with the Merger.
6.5 ACCESS TO INFORMATION. Each of the Parent and the Company shall
(and shall cause each of its Subsidiaries to) afford to the other party's
officers, employees, accountants, counsel and other representatives, reasonable
access, during normal business hours during the period prior to the Effective
Time, to all its properties, books, contracts, commitments, personnel and
records and, during such period, each of the Parent and the Company shall (and
shall cause
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their respective Subsidiaries to) furnish promptly to the other party (a) a copy
of each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal or
state securities laws and (b) all other information concerning its business,
properties, assets and personnel as the other party may reasonably request. Each
of the Parent and the Company will hold any such information which is nonpublic
in confidence in accordance with the Confidentiality Agreement. No information
or knowledge obtained in any investigation pursuant to this Section or otherwise
shall affect or be deemed to modify any representation or warranty contained in
this Agreement or the conditions to the obligations of the parties to consummate
the Merger.
6.6 STOCKHOLDERS MEETINGS.
(a) The Company, acting through the Company Board, shall take
all actions in accordance with the DGCL, its Certificate of Incorporation and
By-laws and the rules of The NASDAQ Stock Market to promptly and duly call, give
notice of, convene and hold as promptly as practicable, and within 45 days after
the declaration of the effectiveness of the Registration Statement if
practicable, the Company Stockholders Meeting for the purpose of considering and
voting upon the Company Voting Proposal. Subject to Section 6.1(b), (i) the
Company Board shall recommend approval and adoption of the Company Voting
Proposal by the stockholders of the Company and include such recommendation in
the Joint Proxy Statement/Prospectus, and (ii) neither the Company Board nor any
committee thereof shall withdraw or modify, or propose or resolve to withdraw or
modify in a manner adverse to the Parent or the Transitory Subsidiary, the
approval or recommendation of the Company Board or such committee that the
Company's stockholders vote in favor of the Company Voting Proposal. Subject to
Section 6.1(b), the Company shall take all action that is both reasonable and
lawful to solicit from its stockholders proxies in favor of the Company Voting
Proposal and shall take all other action necessary or advisable to secure the
vote or consent of the stockholders of the Company required by the rules of The
NASDAQ Stock Market or the DGCL to obtain such approvals. Notwithstanding
anything to the contrary contained in this Agreement, the Company, after
consultation with the Parent, may adjourn or postpone the Company Stockholders
Meeting to the extent necessary to ensure that any required supplement or
amendment to the Joint Proxy Statement/Prospectus is provided to the Company's
stockholders or, if as of the time for which the Company Stockholders Meeting is
originally scheduled (as set forth in the Joint Proxy Statement/Prospectus)
there are insufficient shares of Company Common Stock represented (either in
person or by proxy) to constitute a quorum necessary to conduct the business of
the Company Stockholders Meeting.
(b) The Parent, acting through the Parent Board, shall take all
actions in accordance with applicable law, its Memorandum and Articles of
Association and the rules of The NASDAQ Stock Market, the UKLA and the LSE to
promptly and duly call, give notice of, convene and hold as promptly as
practicable after the declaration of effectiveness of the Registration
Statement, the Parent Shareholders Meeting for the purpose of considering and
voting upon the Parent Voting Proposal. The Parent Board shall recommend
approval and adoption of the Parent Voting Proposal by the shareholders of the
Parent and include such recommendation in the Joint Proxy Statement/Prospectus
and the Parent UK Documents, and (ii) neither the Parent Board nor any committee
thereof shall withdraw or modify, or propose or resolve to withdraw or modify in
a manner adverse to the Company, the recommendation of the
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Parent Board or such committee that the Parent's shareholders vote in favor of
the Parent Voting Proposal. Notwithstanding anything to the contrary contained
in this Agreement, the Parent, after consultation with the Company, may adjourn
or postpone the Parent Shareholders Meeting to the extent necessary to ensure
that any required supplement or amendment to the Parent UK Documents is provided
to the Parent's shareholders or, if as of the time for which the Parent
Shareholders Meeting is originally scheduled (as set forth in the Parent UK
Documents) there are insufficient Parent Ordinary Shares represented (either in
person or by proxy) to constitute a quorum necessary to conduct the business of
the Parent Shareholders Meeting.
(c) The Company shall call, give notice of, convene and hold
the Company Stockholders Meeting in accordance with this Section 6.6 and shall
submit the Company Voting Proposal to its stockholders for the purpose of acting
upon such proposal whether or not (i) the Company Board at any time subsequent
to the date hereof determines, in the manner permitted by Section 6.1(b) that
the Company Voting Proposal is no longer advisable or recommends that the
stockholders of the Company reject such proposal, or (ii) any actual, potential
or purported Company Acquisition Proposal or Superior Proposal has been
commenced, disclosed, announced or submitted to the Company.
(d) The Parent shall call, give notice of, convene and hold the
Parent Shareholders Meeting in accordance with this Section 6.6 and shall submit
the Parent Voting Proposal to its shareholders for the purpose of acting upon
such proposal.
6.7 [Intentionally Omitted]
6.8 LEGAL CONDITIONS TO THE MERGER.
(a) Subject to the terms hereof, including Section 6.8(b), the
Company and the Parent shall each use its commercially reasonable efforts to (i)
take, or cause to be taken, all actions, and do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective the transactions
contemplated hereby as promptly as practicable, (ii) as promptly as practicable,
obtain from any Governmental Entity or any other third party any consents,
licenses, permits, waivers, approvals, authorizations, or orders required to be
obtained or made by the Company or the Parent or any of their Subsidiaries in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, (iii) as promptly as
practicable, make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (A)
the Securities Act and the Exchange Act, and any other applicable federal or
state securities laws, (B) the HSR Act and any related governmental request
thereunder, (C) any other applicable law and (D) the UKLA and (iv) execute or
deliver any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. The
Company and the Parent shall cooperate with each other in connection with the
making of all such filings, including providing copies of all such documents to
the non-filing party and its advisors prior to filing and, if requested,
accepting all reasonable additions, deletions or changes suggested in connection
therewith. The Company and the Parent shall use their respective commercially
reasonable efforts to furnish to each other all information required for any
application or other filing to be made pursuant to the rules and regulations of
any applicable law (including all
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information required to be included in the Joint Proxy Statement/Prospectus, the
Parent UK Documents and the Registration Statement) in connection with the
transactions contemplated by this Agreement. The Parent and the Company agree
that nothing contained in this Section 6.8(a) shall modify or affect their
respective rights and responsibilities under Section 6.8(b).
(b) Subject to the terms hereof, the Parent and the Company
agree, and shall cause each of their respective Subsidiaries, to cooperate and
to use their respective commercially reasonable efforts to obtain any government
clearances or approvals required for Closing under the HSR Act, the Xxxxxxx Act,
as amended, the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as
amended, and any other federal, state or foreign law or, regulation or decree
designed to prohibit, restrict or regulate actions for the purpose or effect of
monopolization or restraint of trade (collectively "Antitrust Laws"), to respond
to any government requests for information under any Antitrust Law, and to
contest and resist any action, including any legislative, administrative or
judicial action, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) (an "Antitrust Order") that restricts, prevents or prohibits the
consummation of the Merger or any other transactions contemplated by this
Agreement under any Antitrust Law. The parties hereto will consult and cooperate
with one another, and consider in good faith the views of one another, in
connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to any Antitrust Law.
The Parent shall be entitled to direct any proceedings or negotiations with any
Governmental Entity relating to any of the foregoing, provided that it shall
afford the Company a reasonable opportunity to participate therein.
(c) Each of the Company and the Parent shall give (or shall
cause their respective Subsidiaries to give) any notices to third parties, and
use, and cause their respective Subsidiaries to use, their commercially
reasonable efforts to obtain any third party consents related to or required in
connection with the Merger that are (A) necessary to consummate the transactions
contemplated hereby, (B) disclosed or required to be disclosed in the Company
Disclosure Schedule or the Parent Disclosure Schedule, as the case may be, or
(C) required to prevent the occurrence of an event that may have a Company
Material Adverse Effect or a Parent Material Adverse Effect prior to or after
the Effective Time.
6.9 PUBLIC DISCLOSURE. Except as may be required by law or stock
market regulations, (i) the press release announcing the execution of this
Agreement shall be issued only in such form as shall be mutually agreed upon by
the Company and the Parent and (ii) the Parent and the Company shall each use
its commercially reasonable efforts to consult with the other party before
issuing any other press release or otherwise making any public statement with
respect to the Merger or this Agreement.
6.10 SECTION 368(a) REORGANIZATION. The Parent and the Company shall
not take any action that would, or fail to take any action the omission of which
would be reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code. The parties
hereto hereby adopt this Agreement as a plan of reorganization.
6.11 AFFILIATE LEGENDS. Section 6.11 of the Company Disclosure
Schedule sets forth a list of those persons who are, in the Company's reasonable
judgment, "affiliates" of the
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Company within the meaning of Rule 145 promulgated under the Securities Act
("Rule 145 Affiliates"). The Company shall notify the Parent in writing
regarding any change in the identity of its Rule 145 Affiliates prior to the
Closing Date. The Parent shall be entitled to place appropriate legends on the
certificates representing the Parent Ordinary Shares or Parent ADRs to be
received by Rule 145 Affiliates of the Company pursuant to the Merger reflecting
the restrictions set forth in Rule 145 promulgated under the Securities Act and
to issue appropriate stop transfer instructions to the transfer agent for Parent
Ordinary Shares and Parent ADSs (provided that such legends or stop transfer
instructions shall be removed one year after the Effective Time, upon the
request of any holder of Parent Ordinary Shares or Parent ADSs issued pursuant
to the Merger if such holder is not then a Rule 145 Affiliate of the Parent).
6.12 LISTING APPLICATIONS. The Parent shall (i) if required by the
rules of The NASDAQ Stock Market, file with The NASDAQ Stock Market a
Notification Form for Listing Additional Shares with respect to the Parent ADSs
issuable in connection with the Merger, and (ii) use its commercially reasonable
efforts to obtain, prior to the Effective Time, approval for admission of the
Parent Ordinary Shares to the Official List of the UKLA and to trading on the
LSE market for listed securities, in the case of the UKLA and the LSE, subject
to allotment and the Parent ADSs, and in the case of The NASDAQ Stock Market,
subject to official notice of issuance.
6.13 COMPANY STOCK PLANS.
(a) At the Effective Time, each outstanding Company Stock
Option under the Company Stock Plans, whether vested or unvested, shall, as part
of the Merger, be assumed by the Parent and each Company Stock Option shall be
deemed to constitute an option to acquire, on the same terms and conditions as
were applicable under such Company Stock Option immediately prior to the
Effective Time, a number of units equal to the number of shares of Company
Common Stock underlying each such option. The exercise price for each such unit
shall equal the per share exercise price of the applicable Company Stock Option.
A unit shall be comprised of (i) 1.2015 Parent Ordinary Shares and (ii) the Cash
Amount Per Share. The number of Parent Ordinary Shares issuable upon each
exercise of any Company Stock Option assumed pursuant to this Section 6.13(a)
shall be rounded to the nearest whole number of Parent Ordinary Shares (with .5
being rounded up to the nearest whole share).
(b) As soon as practicable after the Effective Time, the Parent
shall deliver to the holders of Company Stock Options an appropriate notice
setting forth such participants' rights pursuant to the Company Stock Options,
as provided in this Section 6.13.
(c) The Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of Parent Ordinary Shares for delivery
upon exercise of the Company Stock Options assumed in accordance with this
Section. Within ten (10) days after the Effective Time, the Parent shall file a
registration statement on Form S-8 (or any successor form) or another
appropriate form with respect to the Parent Ordinary Shares subject to such
options and shall use its commercially reasonable efforts to maintain the
effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses contained therein)
for so long as such options remain outstanding.
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(d) The Company and the Parent acknowledge that the Company
ESPP shall continue to operate in accordance with its terms following the
execution of this Agreement, except as provided below. The Company shall not
commence any Offering (as defined in the Company ESPP) pursuant to the Company
ESPP that will not terminate prior to the Effective Time. Effective as of or
prior to the Effective Time, the Company shall cause the Company ESPP to
terminate in accordance with Section 20 of the Company ESPP, and no purchase
rights shall be subsequently granted or exercised under the Company ESPP. The
Company shall take all actions necessary to ensure that the Company ESPP will
not be amended or modified in any respect after the date hereof, except to
effect the terms of this Section 6.13(d).
(e) Prior to the Effective Time, the Company shall take all
action necessary to amend all outstanding Company Stock Options to include the
Company Stock Plan under which such Company Stock Option was issued as an
exhibit to and as part of such Company Stock Option.
(f) The Company shall take all such action, including the
adoption of any necessary resolutions by the Company Board or any appropriate
committee thereof, necessary or appropriate to effect the transactions
contemplated by this Section 6.13.
6.14 STOCKHOLDER LITIGATION. Until the earlier of the termination of
this Agreement in accordance with its terms or the Effective Time, the Company
shall give the Parent the opportunity to participate in the defense or
settlement of any stockholder litigation against the Company or the Company
Board relating to this Agreement or any of the transactions contemplated by this
Agreement, and shall not settle any such litigation without the Parent's prior
written consent, which will not be unreasonably withheld, conditioned or
delayed.
6.15 INDEMNIFICATION.
(a) From and after the Effective Time, the Parent shall, and
shall cause the Surviving Corporation, to the fullest extent permitted by law,
for a period of six years from the Effective Time, to honor all of the Company's
obligations to indemnify and hold harmless each present and former director and
officer of the Company (the "Indemnified Parties"), against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities or amounts paid in settlement incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, to the extent that such
obligations to indemnify and hold harmless exist on the date of this Agreement.
(b) Without limiting any obligation under 6.15(a), for a period
of six years after the Effective Time, the Parent shall cause the Surviving
Corporation to maintain (to the extent available in the market) in effect a
directors' and officers' liability insurance policy covering those persons who
are currently covered by the Company's directors' and officers' liability
insurance policy (a complete and accurate copy of which has been delivered to
the Parent prior to the date of this Agreement) with coverage in amount and
scope at least as favorable to such persons as the Company's existing coverage;
provided, however, that in no event shall the Parent or the Surviving
Corporation be required to expend in excess of one
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hundred seventy five percent (175%) of the annual premium currently paid by the
Company for such coverage, and to the extent the annual premium would exceed one
hundred seventy five percent (175%) of such current annual premium, the Parent
or Surviving Corporation shall use all reasonable efforts to be maintained the
maximum amount of coverage available for such one hundred seventy five percent
(175%) of such current annual premium. The Company hereby represents that the
annual premium currently paid by the Company for such coverage is US $1,411,618.
The Parent and the Surviving Corporation may meet their obligations under this
Section 6.15 by purchasing a "tail" policy under the Company's existing
directors' and officers' insurance policy which (i) has an effective term of six
years from the Effective Time, (ii) covers only those persons who are currently
covered by the Company's directors' and officers' insurance policy in effect as
of the date hereof and only for actions and omissions occurring on or prior to
the Effective Time, and (iii) contains coverage in amount and scope at least as
favorable to the Indemnified Parties as the Company's existing directors' and
officers' insurance policy.
(c) The provisions of this Section 6.15 are intended to be in
addition to the rights otherwise available to the current officers and directors
of the Company by law, charter, statute, by-law or agreement, and shall operate
for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives. The obligations of the Company
and Surviving Corporation under this Section 6.15 shall be binding upon their
respective successors and assigns.
6.16 NOTIFICATION OF CERTAIN MATTERS. The Parent shall give notice to
the Company, and the Company shall give notice to the Parent, promptly upon any
director or officer of the Parent or Company (as applicable) becoming aware of
the occurrence, or failure to occur, of any event, which occurrence or failure
to occur would be reasonably likely to cause (a) (i) any representation or
warranty of such party contained in this Agreement that is qualified as to
materiality to be untrue or inaccurate in any respect or (ii) any other
representation or warranty of such party contained in this Agreement to be
untrue or inaccurate in any material respect, in each case at any time from and
after the date of this Agreement until the Effective Time, or (b) any material
failure of the Parent and the Transitory Subsidiary or the Company, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement. Notwithstanding the
above, (i) the delivery of any notice pursuant to this Section will not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice or the conditions to such party's obligation to consummate the Merger and
(ii) any breach of a representation or warranty by the Parent or the Company, as
applicable, that does not itself give rise to a failure to satisfy the
conditions set forth in Section 7.2(a) or 7.3(a) of this Agreement, as
applicable, shall not give the non-breaching party the right to terminate this
Agreement pursuant to Section 8(h) or Section 8(i) of this Agreement, as
applicable.
6.17 EXEMPTION FROM LIABILITY UNDER SECTION 16(b).
(a) The Parent Board, or a committee thereof consisting of
non-employee directors (as such term is defined for purposes of Rule 16b-3(d)
under the Exchange Act), shall adopt a resolution in advance of the Effective
Time providing that the receipt by the Company Insiders of Parent Ordinary
Shares represented by Parent ADSs in exchange for shares of
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Company Common Stock, and of options to purchase Parent Ordinary Shares upon
assumption and conversion of Company Stock Options, in each case pursuant to the
transactions contemplated hereby and to the extent such securities are listed in
the Section 16 Information, is intended to be exempt pursuant to Rule 16b-3
under the Exchange Act.
(b) For purposes of this Agreement, "Section 16 Information"
means information regarding the Company Insiders and the number of shares of
Company Common Stock or other Company equity securities deemed to be
beneficially owned by each such Company Insider and expected to be exchanged for
Parent Ordinary Shares represented by Parent ADSs, or options to purchase Parent
Ordinary Shares, in each case, in connection with the Merger, which shall be
provided by the Company to the Parent within 10 business days after the date of
this Agreement.
(c) For purposes of this Agreement, "Company Insiders" means
those officers and directors of the Company who are subject to the reporting
requirements of Section 16(a) of the Exchange Act as listed in the Section 16
Information.
6.18 BOARD OF DIRECTORS OF PARENT. The Parent shall take all action
to cause the individuals listed in Schedule 6.18 attached hereto (or, to the
extent any such individual is unable or unwilling to serve, such other designee
as the Company and the Parent shall jointly select) (the "Company Designees") to
be elected as directors of the Parent.
6.19 SERVICE CREDIT. Following the Effective Time, the Parent will
give each Continuing Employee full credit for prior service with the Company or
its Subsidiaries for purposes of (i) eligibility and vesting under any Parent
Employee Benefit Plans and (ii) determination of benefits levels under any
Parent Employee Benefit Plan or policy relating to vacation or severance, in
each case for which the Continuing Employee is otherwise eligible and in which
the Continuing Employee is offered participation, but except where such
crediting would (A) result in a duplication of benefits or (B) otherwise cause
the Parent or its Subsidiaries or any Parent Employee Benefit Plan or trust
relating thereto to accrue or pay for benefits that relate to any time period
prior to the Continuing Employee's participation in the Parent Employee Benefit
Plan. For purposes of this Agreement, (i) "Parent Employee Benefit Plan" means
any "employee pension benefit plan" (as defined in Section 3(2) of ERISA), any
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA), and any
other written or oral plan, agreement or arrangement involving direct or
indirect compensation, including insurance coverage, severance benefits,
disability benefits, deferred compensation, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement compensation and all unexpired severance
agreements, written or otherwise, for the benefit of, or relating to, any
current or former employee of the Company or any of its Subsidiaries or an ERISA
Affiliate and (ii) Continuing Employee means those employees of Parent and
employees of the Transitory Subsidiary as of the Effective Time who shall have
been employees of the Company immediately prior to the Effective Time.
6.20 EMPLOYEE COMMUNICATIONS. The Parent and the Company will use
reasonable efforts to consult with each other, and will consider in good faith
each other's advice, prior to sending any notices or other communication
materials to its employees regarding this
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Agreement, the Merger or the effects thereof on the employment, compensation or
benefits of its employees.
6.21 401(k) PLAN. If requested by the Parent by written notice no
less than five (5) days prior to the Effective Time, the Company shall terminate
each Company Employee Plan that is intended to comply with Section 401(k) of the
Code, effective as of the day immediately preceding the Closing Date. If the
Parent provides such notice to the Company, the Company shall provide the Parent
with evidence that all such 401(k) plans have been so terminated pursuant to
resolutions of the Company Board. The form and substance of such resolutions
shall be subject to review and reasonable approval of the Parent. The Company
shall take such other actions in furtherance of terminating such 401(k) plan as
the Parent may reasonably require.
6.22 DISTRIBUTION. Notwithstanding any other provisions of this
Agreement, in the event that the Parent or the Company determines, in its
reasonable judgment after consultation with outside counsel, the Distribution
would constitute a violation of applicable statutory law, then the Parent or the
Company, as the case may be, shall promptly provide notice thereof to the other
party. The Company and the Parent covenant that they shall thereafter negotiate
in good faith to restructure the transactions contemplated by this Agreement,
such that the Company stockholders shall receive consideration composed of cash
and shares corresponding to the consideration contemplated by the provisions of
this Agreement, in conformity with applicable law and, provided that the
conditions set forth in Article VII, other than the conditions set forth in
Sections 7.1(h) and 7.2(d), which shall be deemed to have been satisfied or
waived, shall continue to be the obligations of the parties hereunder pursuant
to such restructuring.
6.23 TRANSFER TAXES. The Company shall pay any transfer Taxes
(including, but not limited to, stamp duties, stamp duty reserve taxes, and
other similar taxes) payable in connection with the Merger and shall be
responsible for the preparation and filing of any required Tax Returns with
respect to such Taxes. At and following the Effective Time, the Company and
Parent shall be jointly and severally liable for all Transfer Taxes (including,
but not limited to, stamp duties, stamp duty reserve tax and other similar
taxes) imposed on the Company and/or Parent in connection with the issuance of
Parent ADRs and the Parent Ordinary Shares to be issued in the Merger and upon
the exercise of Company Stock Options assumed by Parent pursuant to this
Agreement. Notwithstanding the foregoing, Parent shall not be liable for the
payment of any amounts which would cause the Merger to not qualify as a
reorganization under Section 368(a) of the Code.
ARTICLE VII
CONDITIONS TO MERGER
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction on or prior to the Closing Date of the
following conditions:
(a) STOCKHOLDER APPROVALS. The Company Voting Proposal shall
have been approved and adopted at the Company Stockholders Meeting, at which a
quorum is present, by the requisite vote of the stockholders of the Company
under applicable law and the Company's
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Certificate of Incorporation and By-laws. The Parent Voting Proposal shall have
been approved at the Parent Shareholders Meeting, at which a quorum is present,
by the requisite vote of the shareholders of the Parent under applicable law,
the rules of The NASDAQ Stock Market and the UKLA and the Parent's Memorandum
and Articles of Association.
(b) HSR ACT. The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated.
(c) GOVERNMENTAL APPROVALS. Other than the filing of the
Certificate of Merger, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity in connection with the Merger and the consummation of the
other transactions contemplated by this Agreement shall have been filed, been
obtained or occurred on terms and conditions which would not reasonably be
likely to have a Parent Material Adverse Effect or a Company Material Adverse
Effect.
(d) REGISTRATION STATEMENT; JOINT PROXY STATEMENT/PROSPECTUS.
The Registration Statement shall have become effective under the Securities Act
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose, and no similar
proceeding with respect to the Joint Proxy Statement/Prospectus, shall have been
initiated or threatened in writing by the SEC or its staff.
(e) NO INJUNCTIONS. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
order, executive order, stay, decree, judgment or injunction (preliminary or
permanent) or statute, rule or regulation which is in effect and which has the
effect of making the Distribution or the Merger illegal or otherwise prohibiting
consummation of the Distribution or the Merger or the other transactions
contemplated by this Agreement.
(f) NASDAQ, UKLA AND LSE. The Parent, if required by the rules
of The NASDAQ Stock Market, shall have filed with The NASDAQ Stock Market a
Notification Form for Listing of Additional Shares with respect to the Parent
ADSs issuable in connection with the Merger, the UKLA shall have granted
permission for the admission to the LSE's market for listed securities and such
listing shall have become effective in accordance with Section 7 of the Listing
Rules, and LSE shall have granted permission for the admission to the Official
List and the LSE, subject only to allotment of the Parent Ordinary Shares to be
issued pursuant to the Merger, and such permission shall not have been withdrawn
prior to the Effective Time.
(g) NO RESTRAINTS. There shall not be instituted or pending any
action or proceeding by any Governmental Entity (i) seeking to restrain,
prohibit or otherwise interfere with the ownership or operation by the Parent or
any of its Subsidiaries, of all or any material portion of the business of the
Company and its Subsidiaries, taken as a whole, or of the Parent and
Subsidiaries, take as a whole, or to compel the Parent or any of its
Subsidiaries to dispose of or hold separate all or any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole, or of
the Parent and its Subsidiaries, taken as a whole, (ii) seeking to impose or
confirm limitations on the ability of the Parent or any of its Subsidiaries
effectively to exercise full rights of ownership of the shares of Company Common
Stock (or shares of stock of the Surviving Corporation) including the right to
vote any such shares on any matters properly
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presented to stockholders, or (iii) seeking to require divestiture by the Parent
or any of its Subsidiaries of any such shares.
(h) DISTRIBUTION. Subject to the provisions of Section 6.22,
the payment of the Cash Amount pursuant to the Distribution shall not constitute
a violation of any applicable statutory law.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE PARENT AND THE
TRANSITORY SUBSIDIARY. The obligations of the Parent and the Transitory
Subsidiary to effect the Merger shall be subject to the satisfaction on or prior
to the Closing Date of each of the following additional conditions, any of which
may be waived, in writing, exclusively by the Parent and the Transitory
Subsidiary:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
(i) as of the date of this Agreement and (ii) as of the Closing Date as though
made on and as of the Closing Date (except in each case (x) to the extent such
representations and warranties are specifically made as of a particular date, in
which case such representations and warranties shall be true and correct as of
such date, (y) for changes contemplated by this Agreement and (z) where the
failure to be true and correct (without regard to any materiality, Company
Material Adverse Effect or, in the case of clause (ii) of this Section 7.2(a),
the knowledge qualifications contained therein), individually or in the
aggregate, has not had a Company Material Adverse Effect); and the Parent shall
have received a certificate signed on behalf of the Company by the chief
executive officer and the chief financial officer of the Company to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all obligations and covenants
required to be performed by it under this Agreement on or prior to the Closing
Date; and the Parent shall have received a certificate signed on behalf of the
Company by the chief executive officer and the chief financial officer of the
Company to such effect.
(c) TAX OPINION. The Parent shall have received a written
opinion from Xxxx and Xxxx LLP, counsel to the Parent, to the effect that the
Merger will be treated for United States federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code; provided that
if Xxxx and Xxxx LLP does not render such opinion, this condition shall
nonetheless be deemed satisfied if Wilson, Sonsini, Goodrich& Xxxxxx,
Professional Corporation, renders such opinion to the Parent (it being agreed
that the Parent and the Company shall each provide reasonable cooperation,
including making customary representations for a transaction of this type, to
Xxxx and Xxxx LLP or Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional
Corporation, as the case may be, to enable them to render such opinion).
(d) DISTRIBUTION. Subject to the provisions of Section 6.22, on
or prior to the Closing Date, (i) the Company Board shall have adopted all
appropriate resolutions to effect the Distribution (including the declaration of
the Distribution Record Date), (ii) the Company shall have provided all notices
and made all filings required to be provided or made prior to the Closing in
connection with the Distribution, (iii) the Company shall have deposited the
Cash Amount with EquiServe, and (iv) the Company shall have complied with its
obligations under Section 2.2(j).
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(e) RESIGNATIONS. The Parent shall have received copies of the
resignations, effective as of the Effective Time, of each director of the
Company.
(f) NO COMPANY MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, and except as described in Section 7.2(f) of the Company Disclosure
Schedule, there shall not have been any change, event, circumstance, development
or effect that individually or in the aggregate has had a Company Material
Adverse Effect.
7.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligations of the Company to effect the Merger shall be subject to the
satisfaction on or prior to the Closing Date of each of the following additional
conditions, any of which may be waived, in writing, exclusively by the Company:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Parent and the Transitory Subsidiary set forth in this
Agreement shall be true and correct (i) as of the date of this Agreement and
(ii) as of the Closing Date as though made on and as of the Closing Date (except
in each case (x) to the extent such representations and warranties are
specifically made as of a particular date, in which case such representations
and warranties shall be true and correct as of such date, (y) for changes
contemplated by this Agreement and (z) where the failure to be true and correct
(without regard to any materiality, Parent Material Adverse Effect or, in the
case of clause (ii) of this Section 7.3(a), knowledge qualifications contained
therein), individually or in the aggregate, has not had, a Parent Material
Adverse Effect); and the Company shall have received a certificate signed on
behalf of the Parent by the chief executive officer and the chief financial
officer of the Parent to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE PARENT AND THE TRANSITORY
SUBSIDIARY. The Parent and the Transitory Subsidiary shall have performed in all
material respects all obligations and covenants required to be performed by them
under this Agreement on or prior to the Closing Date; and the Company shall have
received a certificate signed on behalf of the Parent by the chief executive
officer or the chief financial officer of the Parent to such effect.
(c) TAX OPINION. The Company shall have received the opinion of
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation, counsel to the
Company, to the effect that the Merger will be treated for United States federal
income tax purposes as a reorganization within the meaning of Section 368(a) of
the Code; provided that if Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, does not render such opinion, this condition shall nonetheless be
deemed satisfied if Xxxx and Xxxx LLP renders such opinion to the Company (it
being agreed that the Parent and the Company shall each provide reasonable
cooperation, including making customary representations for a transaction of
this type, to Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation, or
Xxxx and Xxxx LLP, as the case may be, to enable them to render such opinion).
(d) NO PARENT MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, and except as described in Section 7.3(d) of the Parent Disclosure
Schedule, there shall not have been any change, event, circumstance, development
or effect that individually or in the aggregate has had a Parent Material
Adverse Effect.
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(e) COMPANY DESIGNEES. All corporate action necessary to effect
the appointment of the Company Designees as directors of the Parent from and
after the Effective Time in accordance with Section 6.17 shall have been taken.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time (with respect to Sections 8.1(b) through 8.1(i), by
written notice by the terminating party to the other party), whether before or,
subject to the terms hereof, after adoption of this Agreement by the
stockholders of the Company, the shareholders of the Parent or the sole
stockholder of the Transitory Subsidiary:
(a) by mutual written consent of the Parent, the Transitory
Subsidiary and the Company; or
(b) by either the Parent or the Company if the Merger shall not
have been consummated by April 21, 2004, (the "Outside Date") (provided that the
right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been a principal cause of or resulted in the failure of the Merger
to occur on or before the Outside Date); or
(c) by either the Parent or the Company if a Governmental
Entity of competent jurisdiction shall have issued a nonappealable final order,
decree or ruling or taken any other nonappealable final action, in each case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger; or
(d) by either the Parent or the Company if at the Company
Stockholders Meeting (including any adjournment or postponement thereof
permitted by this Agreement) at which a vote on the Company Voting Proposal is
taken, the requisite vote of the stockholders of the Company in favor of the
Company Voting Proposal shall not have been obtained (provided that the right to
terminate this Agreement under this Section 8.1(d) shall not be available to any
party seeking termination if, at such time, such party is in material breach of
or has failed to fulfill any of its material obligations under this Agreement
and such breach or failure has been a principal cause of the inability to obtain
the requisite vote of such stockholders; or
(e) by either the Parent or the Company if at the Parent
Shareholders Meeting (including any adjournment or postponement thereof
permitted by this Agreement) at which a vote on the Parent Voting Proposal is
taken, the requisite vote of the shareholders of the Parent in favor of the
Parent Voting Proposal shall not have been obtained (provided the right to
terminate this Agreement under this Section 8.1(e) shall not be available to any
party seeking termination if, at such time, such party is in material breach of
or has failed to fulfill any of its material obligations under this Agreement
and such breach or failure has been a principal cause of the inability to obtain
the requisite vote of such shareholders; or
(f) by the Parent, if: (i) the Company Board (or any committee
thereof) shall have failed to recommend approval of the Company Voting Proposal
in the Joint Proxy
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Statement/Prospectus or shall have withdrawn or modified its recommendation of
the Company Voting Proposal; (ii) the Company Board (or any committee thereof)
shall have failed to reconfirm its recommendation of the Company Voting Proposal
within ten business days after the Parent requests in writing that the Company
Board (or any committee thereof) do so after of the public announcement of a
Company Acquisition Proposal (or a material amendment thereto); (iii) the
Company Board (or any committee thereof) shall have approved or recommended to
the stockholders of the Company a Company Acquisition Proposal (other than the
Merger); (iv) a tender offer or exchange offer for outstanding shares of Company
Common Stock shall have been commenced (other than by the Parent or an Affiliate
of the Parent) and the Company Board (or any committee thereof) recommends that
the stockholders of the Company tender their shares in such tender or exchange
offer or, within 10 business days after the commencement of such tender or
exchange offer, the Company Board fails to recommend against acceptance of such
offer; or (v) the Company shall have materially breached its obligations under
Sections 6.1 or 6.6; provided, that if the Company sends a notice of its
intention to terminate this Agreement pursuant to Section 8.1(i), the sending of
such notice in and of itself shall not be deemed to be a breach or default by
the Company that would permit Parent to terminate this Agreement pursuant to
clause (i) of this Section 8.1(f); or
(g) by the Company, if: (i) the Parent shall have materially
breached its obligations under Sections 6.2 or 6.6; or (ii) for any reason the
Parent shall have failed to hold the Parent Shareholders Meeting and submit the
Parent Voting Proposal to the Parent's shareholders by the date which is five
business days prior to the Outside Date; or
(h) by the Parent, if there has been a breach of or failure to
perform any representation, warranty, covenant or agreement on the part of the
Company set forth in this Agreement, which breach or failure to perform (i)
would cause the conditions set forth in Sections 7.2(a) or 7.2(b) not to be
satisfied, and (ii) if curable, shall not have been cured within 20 days
following receipt by the Company of written notice of such breach or failure to
perform from the Parent; or
(i) by the Company, if there has been a breach of or failure to
perform any representation, warranty, covenant or agreement on the part of the
Parent or the Transitory Subsidiary set forth in this Agreement, which breach or
failure to perform (i) would cause the conditions set forth in Sections 7.3(a)
or 7.3(b) not to be satisfied, and (ii) if curable, shall not have been cured
within 20 days following receipt by the Parent of written notice of such breach
or failure to perform from the Company.
8.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall immediately become
void and there shall be no liability or obligation on the part of the Parent,
the Company, the Transitory Subsidiary or their respective officers, directors,
stockholders or Affiliates; provided that (i) any such termination shall not
relieve any party from liability for any willful breach of this Agreement (which
includes, without limitation, the making of any representation or warranty by a
party in this Agreement that the party knew was not true and accurate when made)
and (ii) the provisions of Sections 3.25, 5.3 and 8.3 and Article IX of this
Agreement and the Confidentiality Agreement, as amended hereby, shall remain in
full force and effect and survive any termination of this Agreement.
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8.3 FEES AND EXPENSES.
(a) Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees and expenses,
whether or not the Merger is consummated; provided however, that the Company and
the Parent shall share equally (i) the filing fee of the Parent's pre-merger
notification report under the HSR Act and (ii) all fees and expenses, other than
accountants' and attorneys' fees, incurred with respect to the printing, filing
and mailing of the Joint Proxy Statement/Prospectus (including any related
preliminary materials), the Parent UK Documents and the Registration Statement
and any amendments or supplements thereto.
(b) The Company shall pay the Parent a termination fee of US
$7,000,000 in the event of the termination of this Agreement:
(i) by the Parent pursuant to Section 8.1(b) or Section
8.1(d), in each case, if, at the time of such termination, the Company is in
willful breach of any of its obligations under Article V or Article VI of this
Agreement and such breach has been the principal cause of the inability to
consummate the Merger or the failure to obtain the requisite vote of the
stockholders of the Company in favor of the Company Voting Proposal;
(ii) by the Parent pursuant to Section 8.1(f); or
(iii) by the Parent or the Company pursuant to Section
8.1(d) if (A) at or prior to the time of such failure, there shall have been
publicly announced a Company Acquisition Proposal which shall not have been
absolutely and unconditionally withdrawn and abandoned and (B) on or before the
date 12 months following the date of such termination of this Agreement, the
Company enters into an Alternative Acquisition Agreement or consummates an
Alternative Acquisition Proposal; provided, however, that if, at the time of
termination, there is pending a Company Acquisition Proposal that does not
involve a liquidation or dissolution of the Company, the Company shall be
permitted to be undertake a complete liquidation or dissolution in lieu of such
Company Acquisition Proposal and, under such circumstances, the Company shall
not be obligated to make any payment of a termination fee to the Parent under
this Section 8.3(b); provided, however, that if a Company Acquisition Proposal
and any liquidation or dissolution are a part of a series of related
transactions, the Company shall be obligated to pay the termination fee provided
for hereunder to the Parent. For the purposes of this Section 8.3(b) only, all
references in the definition of "Company Acquisition Proposal" to "15%" shall be
deemed to be references to "30%."
Any fee due under this Section 8.3(b) shall be paid by wire transfer of
same-day funds within one business day after (I) the date of termination of this
Agreement, in the case of a payment pursuant to clause (i) or (ii) above, or
(II) the earlier of execution of an Alternative Acquisition Agreement or
consummation of an Alternative Acquisition Proposal in the case of a payment
pursuant to clause (iii) above.
(c) The Company acknowledges that the agreements contained in
this Section 8.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Parent would not enter into
this Agreement. If the Company fails to
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promptly pay any expense reimbursement or fee due hereunder, the Company shall
pay the costs and expenses (including legal fees and expenses) in connection
with any action, including the filing of any lawsuit or other legal action,
taken to collect payment, together with interest on the amount of any unpaid fee
at the publicly announced prime rate of Fleet Bank, N.A. plus five percent per
annum, compounded quarterly, from the date such expense reimbursement or fee was
required to be paid. Payment of the fees and expenses described in this Section
8.3 shall not be in lieu of damages incurred in the event of a breach of this
Agreement described in clause (i) of Section 8.2.
8.4 AMENDMENT. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of any party, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
8.5 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party. Such extension
or waiver shall not be deemed to apply to any time for performance, inaccuracy
in any representation or warranty, or noncompliance with any agreement or
condition, as the case may be, other than that which is specified in the
extension or waiver. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
ARTICLE IX
MISCELLANEOUS
9.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the Company, the Parent and the Transitory
Subsidiary contained in this Agreement or in any instrument delivered pursuant
to this Agreement shall expire with, and be terminated and extinguished upon,
the Effective Time. This Section 9.1 shall have no effect upon any other
obligations of the parties hereto, whether to be performed before or after the
consummation of the Merger.
9.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed duly delivered (i) four business days after being
sent by registered or certified mail, return receipt requested, postage prepaid,
(ii) one business day after being sent for next business day delivery, fees
prepaid, via a reputable nationwide overnight courier service, or (iii) on the
date of confirmation of receipt (or, the first business day following such
receipt if the date of such receipt is not a business day) of transmission by
facsimile in each case to the intended recipient as set forth below:
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(a) if to the Parent or the Transitory Subsidiary, to
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx
XX00 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxx Xxxxx, Esq., General Counsel
Facsimile: 011 44-1235-827201
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Attention: Xxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
(b) if to the Company, to
New Focus, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Chairman and Chief Executive
Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Any party to this Agreement may give any notice or other communication
hereunder using any other means (including personal delivery, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice or other
communication shall be deemed to have been duly given unless and until it
actually is received by the party for whom it is intended. Any party to this
Agreement may change the address to which notices and other communications
hereunder are to be delivered by giving the other parties to this Agreement
notice in the manner herein set forth.
9.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits hereto and the documents and instruments referred to herein that are to
be delivered at the Closing as well as the Company Stockholder Agreements and
the Parent Shareholder Agreements)
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constitutes the entire agreement among the parties to this Agreement and
supersedes any prior understandings, agreements or representations by or among
the parties hereto, or any of them, written or oral, with respect to the subject
matter hereof; provided that the Confidentiality Agreement shall remain in
effect in accordance with its terms.
9.4 NO THIRD PARTY BENEFICIARIES. Except as provided in Section
6.15, this Agreement is not intended, and shall not be deemed, to confer any
rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns, to create any agreement of
employment with any person or to otherwise create any third-party beneficiary
hereto.
9.5 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties hereto
without the prior written consent of the other parties, and any such assignment
without such prior written consent shall be null and void, except that the
Parent and/or the Transitory Subsidiary may assign this Agreement to any direct
or indirect wholly owned Subsidiary of the Parent without consent of the Company
(and the parties hereto shall execute and deliver any amendment to this
Agreement necessary to effect such assignment), provided that the Parent and/or
the Transitory Subsidiary, as the case may be, shall remain liable for all of
its obligations under this Agreement. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and permitted assigns.
9.6 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior sentence, the parties hereto
agree to replace such invalid or unenforceable term or provision with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.
9.7 COUNTERPARTS AND SIGNATURE. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties hereto and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart. This Agreement may be executed and delivered by
facsimile transmission.
9.8 INTERPRETATION. When reference is made in this Agreement to an
Article or a Section, such reference shall be to an Article or Section of this
Agreement, unless otherwise indicated. The table of contents, table of defined
terms and headings contained in this
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Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa. Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". No summary of this Agreement
prepared by any party shall affect the meaning or interpretation of this
Agreement.
9.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of
Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of
Delaware or any other jurisdiction) that would cause the application of laws
of any jurisdictions other than those of the State of
Delaware.
9.10 REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity.
9.11 SUBMISSION TO JURISDICTION. Each of the parties to this
Agreement (a) consents to submit itself to the personal jurisdiction of any
state or federal court sitting in the State of Delaware in any action or
proceeding arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that all claims in
respect of such action or proceeding may be heard and determined in any such
court, (c) agrees that it shall not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (d)
agrees not to bring any action or proceeding arising out of or relating to this
Agreement or any of the transaction contemplated by this Agreement in any other
court. Each of the parties hereto waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought and waives any bond,
surety or other security that might be required of any other party with respect
thereto. Any party hereto may make service on another party by sending or
delivering a copy of the process to the party to be served at the address and in
the manner provided for the giving of notices in Section 9.2. Nothing in this
Section 9.11, however, shall affect the right of any party to serve legal
process in any other manner permitted by law.
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9.12 WAIVER OF JURY TRIAL. Each of the Parent, the Transitory
Subsidiary and the Company hereby irrevocably waives all right to trial by jury
in any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the transactions
contemplated hereby or the actions of the Parent, the Transitory Subsidiary or
the Company in the negotiation, administration, performance and enforcement of
this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parent, the Transitory Subsidiary and the
Company have caused this Agreement to be signed by their respective officers
thereunto duly authorized as of the date first written above.
BOOKHAM TECHNOLOGY PLC
By: /s Xxxxxx Xxxxxxx
------------------------------------
Title: Chairman
---------------------------------
BUDAPEST ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Title: Incorporator
NEW FOCUS, INC.
By: /s/ X. Xxxxxxx
------------------------------------
Title: Pres. & CEO
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SCHEDULE A
COMPANY STOCKHOLDER AGREEMENTS
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxxxxx
Xxxxxxx Xx
Xxx X. Xxxxxxx
Xxxxxxx Xxx
Xxxxxxx X. Xxxxx, Xx.
SCHEDULE B
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
SCHEDULE 6.18
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
February 2, 2004
This Amendment No. 1 (the "Amendment") dated February 2, 2004 to the
Agreement and Plan of Merger, dated September 21, 2003 (the "Agreement"), is
entered into by and among
Bookham Technology plc, a public limited company
incorporated under the laws of England and Wales (the "Parent"), Budapest
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the
Parent (the "Transitory Subsidiary"), and New Focus, Inc., a Delaware
corporation (the "Company"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Agreement.
WHEREAS, the parties to the Agreement desire to amend the Agreement to
reduce the potential tax arising in connection with the deposit of Parent
Ordinary Shares with the Depository.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the undersigned hereby agree as follows:
1. Section 2.2(a) of the Agreement is hereby amended by deleting such Section
in its entirety and inserting in place thereof the following new Section
2.2(a):
(a) (a) EXCHANGE AGENT. As of the Effective Time, the Parent shall deposit
with the Bank of New York, in its capacity as Exchange Agent for the
Parent (the "Exchange Agent"), for the benefit of the holders of shares
of Company Common Stock, the number of Parent Ordinary Shares as are
represented by the Parent ADSs to be issued in connection with Section
2.1. In addition, promptly upon receipt of a properly executed
transmittal letter from a holder of Company Common Stock electing to
receive Parent ADSs (or the failure to return a properly executed
transmittal letter within the time provided for in such transmittal
letter), the Exchange Agent shall deposit with the Depository, for the
benefit of the holders of shares of Company Common Stock, for exchange
in accordance with this Section 2.2, through the Exchange Agent, Parent
ADSs (such Parent ADSs, together with any dividends or distributions
with respect to the Parent Ordinary Shares underlying such Parent ADSs
with a record date after the Effective Time, being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange
for certificates evidencing shares of Company Common Stock outstanding
as of the Effective Time ("Certificates"). At the Effective Time, the
Parent shall also deposit with the Exchange Agent for the benefit of the
holders of shares of Company Common Stock, for exchange in accordance
with this Section 2.2, through the Exchange Agent cash in an amount
sufficient to make payments for fractional shares required pursuant to
Section 2.2(e).
2. For the purpose of clarification, the Bank of New York will serve as (i) the
Depository, in accordance with the Deposit Agreement and (ii) the Exchange
Agent, in accordance with an Exchange Agency Agreement by and between the
Parent and the Bank of New York to be executed prior to the Closing.
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3. The Agreement, as supplemented and modified by this Amendment, together with
the other writings referred to in the Agreement or delivered pursuant
thereto which form a part thereof, contains the entire agreement among the
parties with respect to the subject matter thereof and amends, restates and
supersedes all prior and contemporaneous arrangements or understandings with
respect thereto.
4. Upon the effectiveness of this Amendment, on and after the date hereof, each
reference in the Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference in the other documents
entered into in connection with the Agreement, shall mean and be a reference
to the Agreement, as amended hereby.
5. This Amendment shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of Delaware without regard
to its principles of conflicts of law.
6. This Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parent, the Transitory Subsidiary and the
Company have caused this Amendment No. 1 to the Agreement and Plan of Merger to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
BOOKHAM TECHNOLOGY PLC
By: /s/ Xxxxxx Xxxxx
------------------------------------
Title: General Counsel and Company Secretary
BUDAPEST ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Title: Treasurer
NEW FOCUS, INC.
By: /s/ X. Xxxxxxx
------------------------------------
Title: President & CEO
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