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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
FILTRONIC PLC,
FIL ACQUISITION CORP.
AND
SAGE LABORATORIES, INC.
DATED AS OF MAY 13, 1998
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Table OF CONTENTS
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ARTICLE I
THE OFFER
SECTION 1.1. Offer.......................................................... 2
SECTION 1.2. Company Actions................................................ 3
ARTICLE II
THE MERGER
SECTION 2.1. The Merger..................................................... 4
SECTION 2.2. Closing........................................................ 5
SECTION 2.3. Effective Time of the Merger................................... 5
SECTION 2.4. Effects of the Merger.......................................... 5
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS
SECTION 3.1. Conversion of Shares........................................... 5
SECTION 3.2. Surrender and Payment.......................................... 6
SECTION 3.3. Dissenting Shares.............................................. 7
SECTION 3.4. Stock Options and Stock Plans.................................. 7
SECTION 3.5. No Further Rights in Shares.................................... 9
SECTION 3.6. No Liability................................................... 9
SECTION 3.7. Withholding Rights............................................. 9
SECTION 3.8. Lost Certificates.............................................. 9
ARTICLE IV
THE SURVIVING CORPORATION
SECTION 4.1. Articles of Organization....................................... 9
SECTION 4.2. By-laws........................................................ 9
SECTION 4.3. Directors and Officers......................................... 10
SECTION 4.4. Subsequent Actions............................................. 10
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 5.1. Organization, Standing and Corporate Power..................... 10
SECTION 5.2. Subsidiaries and Minority Affiliates........................... 11
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SECTION 5.3. Capital Structure.............................................. 11
SECTION 5.4. Authority; Noncontravention.................................... 12
SECTION 5.5. SEC Documents; Financial Statements; No Undisclosed
Liabilities.................................................... 13
SECTION 5.6. Disclosure Documents........................................... 14
SECTION 5.7. Property....................................................... 15
SECTION 5.8. Absence of Certain Changes or Events........................... 15
SECTION 5.9. Litigation..................................................... 17
SECTION 5.10. Compliance with Laws, Etc..................................... 17
SECTION 5.11. Benefit....................................................... 17
SECTION 5.12. Tax Matters................................................... 20
SECTION 5.13. Debt Instruments.............................................. 21
SECTION 5.14. Insurance..................................................... 22
SECTION 5.15. Labor Matters................................................. 22
SECTION 5.16. Business Relationships; No Restrictive Agreements............. 23
SECTION 5.17. Interests of Officers and Directors........................... 23
SECTION 5.18. Intellectual Property......................................... 23
SECTION 5.19. Environmental Matters......................................... 24
SECTION 5.20. Brokers....................................................... 25
SECTION 5.21. Absence of Certain Commercial Practices....................... 25
SECTION 5.22. Warranty Claims............................................... 25
SECTION 5.23. Product Liability............................................. 25
SECTION 5.24. Backlog....................................................... 26
SECTION 5.25. Inventories................................................... 26
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
SECTION 6.1. Organization, Standing and Corporate Power..................... 26
SECTION 6.2. Authority; Noncontravention.................................... 26
SECTION 6.3. Disclosure Documents........................................... 27
SECTION 6.4. Brokers........................................................ 28
SECTION 6.5. Financial Resources............................................ 28
SECTION 6.6. Merger Sub..................................................... 28
SECTION 6.7. Litigation..................................................... 28
ARTICLE VII
COVENANTS OF THE COMPANY
SECTION 7.1. Conduct of Business............................................ 28
SECTION 7.2. No Solicitation................................................ 30
SECTION 7.3. Access to Information.......................................... 32
SECTION 7.4. Company SEC Documents.......................................... 32
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SECTION 7.5. Notification of Certain Matters................................ 33
SECTION 7.6. Accountants.................................................... 33
ARTICLE VIII
COVENANTS OF PARENT AND MERGER SUB
SECTION 8.1. Confidentiality................................................ 33
SECTION 8.2. Obligations of Merger Sub...................................... 34
SECTION 8.3. Voting of Shares............................................... 34
SECTION 8.4. Director and Officer Liability................................. 34
SECTION 8.5. Notice to Company of Certain Events............................ 35
ARTICLE IX
COVENANTS AND FURTHER AGREEMENTS OF PARENT AND THE COMPANY
SECTION 9.1. Reasonable Efforts; Notification; Further Actions.............. 35
SECTION 9.2. Public Announcements........................................... 36
SECTION 9.3. Directors...................................................... 37
SECTION 9.4. Employees...................................................... 38
SECTION 9.5. Company Stockholder Meeting.................................... 38
ARTICLE X
CONDITIONS TO THE MERGER
SECTION 10.1. Conditions to the Obligations of Each Party................... 39
SECTION 10.2. Conditions to the Obligations of Parent and Merger Sub........ 40
ARTICLE XI
TERMINATION
SECTION 11.1. Termination................................................... 40
SECTION 11.2. Effect of Termination......................................... 42
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. Notices....................................................... 42
SECTION 12.2. Survival of Representations and Warranties.................... 43
SECTION 12.3. Entire Agreement; Amendments; No Waivers...................... 43
SECTION 12.4. Expenses...................................................... 44
SECTION 12.5. Successors and Assigns; Parties in Interest................... 45
SECTION 12.6. Governing Law; Jurisdiction................................... 46
SECTION 12.7. Counterparts; Effectiveness; Interpretation................... 46
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INDEX OF DEFINED TERMS
POSITION OF
DEFINED TERM DEFINITION
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Accountant's Letter............................................. Section 7.6
Acquisition Proposal............................................ Section 7.2(f)
Action.......................................................... Section 5.9
Agreement....................................................... Preamble
Articles of Merger.............................................. Section 2.2
Articles of Organization........................................ Section 5.1
BCL............................................................. Recitals
Benefit Plans................................................... Section 5.8
Certificates.................................................... Section 3.2(b)
Closing......................................................... Section 2.2
Code............................................................ Section 5.11(a)
Company......................................................... Preamble
Company Disclosure Schedule..................................... Article V
Company Intellectual Property Rights............................ Section 5.18(a)
Company Material Adverse Effect................................. Section 5.1
Company Options................................................. Section 3.4
Company Proxy Statement......................................... Section 5.6(a)
Company Stockholder Approval.................................... Section 5.4(a)
Company Stockholder Meeting..................................... Section 5.4(a)
Consents........................................................ Section 5.4(d)
Constituent Corporations........................................ Section 2.1
Controlled Group Liability...................................... Section 5.11(a)
Dissenting Shares............................................... Section 3.3(a)
Effective Time.................................................. Section 2.3
Environmental Laws.............................................. Section 5.19(a)
Environmental Permits........................................... Section 5.19(b)
ERISA........................................................... Section 5.11(a)
ERISA Affiliate................................................. Section 5.11(a)
Exchange Act.................................................... Section 1.1(b)
Exchange Agent.................................................. Section 3.2(a)
Exchange Fund................................................... Section 3.2(a)
Expenses........................................................ Section 12.4(a)
Exon-Xxxxxx Provision........................................... Section 5.4(d)
GAAP............................................................ Section 5.5(b)
Governmental Entity............................................. Section 5.4(d)
Hazardous Substances............................................ Section 5.19(a)
HSR Act......................................................... Section 5.4(d)
Indebtedness.................................................... Section 5.13
Indemnified Parties............................................. Section 8.4
Independent Directors........................................... Section 9.3(a)
Inside Stockholders............................................. Recitals
IRS............................................................. Section 5.11(c)
Leases.......................................................... Section 5.7(b)
Liens........................................................... Section 5.2
Merger.......................................................... Recitals
Merger Consideration............................................ Section 3.1(c)
Merger Sub...................................................... Preamble
Minimum Condition............................................... Exhibit 1.1(j)
Multiemployer Plan.............................................. Section 5.11(h)
Multiple Employer Plan.......................................... Section 5.11(h)
Offer........................................................... Recitals
Offer Documents................................................. Section 1.1(b)
Offer Price..................................................... Recitals
Options......................................................... Section 5.3
Option Plans.................................................... Section 3.4(a)
Parent.......................................................... Preamble
Parent Material Adverse Effect.................................. Section 6.2(c)
Person.......................................................... Section 3.2(c)
Plans........................................................... Section 5.11(b)
Qualified Plans................................................. Section 5.11(d)
Schedule 14D-1.................................................. Section 1.1(b)
Schedule 14D-9.................................................. Section 1.2(a)
SEC............................................................. Section 1.1(a)
SEC Documents................................................... Section 5.5(a)
Securities Act.................................................. Section 5.5(a)
Shares.......................................................... Recitals
Stockholder Agreements.......................................... Recitals
Subsidiary...................................................... Section 5.1
Superior Proposal............................................... Section 9.5(b)
Surviving Corporation........................................... Section 2.1
Taxes........................................................... Section 5.12(h)
Terminating Company Event....................................... Section 11.1(g)
Terminating Parent Event........................................ Section 11.1(h)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of May
13, 1998, by and among Sage Laboratories, Inc., a Massachusetts corporation (the
"Company"), Filtronic plc, a public limited company incorporated under the laws
of England and Wales ("Parent"), and FIL Acquisition Corp., a Massachusetts
corporation and a wholly owned subsidiary of Parent ("Merger Sub").
RECITALS
WHEREAS, in furtherance of the acquisition of the Company by
Parent on the terms and subject to the condition set forth in this Agreement,
Parent proposes that Parent or Merger Sub commence a tender offer (as it may be
amended from time to time as permitted under this Agreement, the "Offer") to
purchase all of the outstanding shares of the common stock, par value $.10 per
share, of the Company (the "Shares"), at a purchase price of $17.50 per Share,
net to the seller in cash (the "Offer Price");
WHEREAS, the respective Boards of Directors of Parent, Merger Sub
and the Company have approved the Offer and the merger of Merger Sub and the
Company (the "Merger"), upon the terms and subject to the conditions set forth
in this Agreement and the Massachusetts Business Corporation Law (the "BCL"),
whereby each issued and outstanding Share, other than Shares owned directly or
indirectly by Parent or the Company and Dissenting Shares (as hereinafter
defined), will be converted into the right to receive the price paid in the
Offer;
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe the various conditions to the
consummation of the Offer and the Merger; and
WHEREAS, as a condition to the willingness of, and inducement to,
Parent and Merger Sub to enter into this Agreement and consummate the
transactions contemplated hereby, Parent has required that Xxxx X. Xxxxxxxxx and
certain other officers and directors of the Company who own Shares (the "Inside
Stockholders") execute and deliver on the date hereof certain Stockholder
Agreements among each of the Inside Stockholders, Parent and Merger Sub (the
"Stockholder Agreements"), pursuant to which among other things, each of the
Inside Stockholders has agreed to vote the Shares beneficially owned by such
Inside Stockholder in accordance with the Stockholder Agreement, to grant to
Parent an irrevocable proxy to vote the Shares and to sell all Shares then
owned by such Stockholder to Parent or Merger Sub, as applicable, in accordance
with the Offer and to make certain payments to Parent under certain
circumstances;
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NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements herein
contained, the parties hereto, in tending to be legally bound, hereby agree as
follows:
ARTICLE I
THE OFFER
Section 1.1. Offer.
(a) Subject to the terms and conditions of this Agreement, as
promptly as reasonably practicable after the date hereof, but in no event later
than five business days after the public announcement of the execution of this
Agreement, Parent or Merger Sub will commence the Offer. Parent or Merger Sub
will conduct the Offer in compliance in all material respects with applicable
laws, accept and pay for Shares validly tendered and not withdrawn and
consummate the Offer, all on the terms and subject to the conditions thereof, as
soon as legally permissible. The initial expiration date of the Offer will be
the 20th business day following the Offer. Subject to the conditions set forth
in Exhibit 1.1, Parent or Merger Sub, as the case may be, will pay, as promptly
as reasonably practicable after the expiration of the Offer for all Shares duly
tendered and not withdrawn. Parent expressly reserves the right to waive any
such condition, to increase the price per Share payable in the Offer, and to
make any other changes in the terms and conditions of the Offer; provided,
however, that no change may be made, without the consent of the Company, which
decreases the price per Share or form of consideration payable in the Offer,
reduces the maximum number of Shares to be purchased in the Offer, waives or
reduces below a majority of the outstanding Shares on a fully diluted basis (as
set forth in Exhibit 1.1) the Minimum Condition, imposes conditions to the Offer
other than those set forth in Exhibit 1.1 or extends the Offer. Notwithstanding
the foregoing, Parent may, without the consent of the Company, (i) extend the
Offer beyond the scheduled expiration date if, at the scheduled expiration date
of the Offer, any of the conditions to Parent's obligation to accept for
payment, and to pay for, the Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation, or
interpretation of the Securities and Exchange Commission (the "SEC") or the
staff thereof, applicable to the Offer or (iii) extend the Offer for an
aggregate period of not more than 10 business days beyond the latest applicable
date that would otherwise be permitted under clause (i) or (ii) of this
sentence, if as of such date all of the conditions to Parent's obligations to
accept for payment, and to pay for, the Shares are satisfied or waived, but the
number of Shares validly tendered and not withdrawn, or purchased pursuant to
the Stockholder Agreements, pursuant to the Offer, is less than 90% of the
outstanding Shares on a fully diluted basis (as set forth in Exhibit 1.1).
(b) On the date of commencement of the Offer, Parent and Merger
Sub will file with the SEC, a Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") with respect to the Offer, which shall contain an offer to
purchase, a related letter of transmittal and the other documents used in the
Offer (the "Offer Documents"). Parent and Merger Sub agree that the Schedule
14D-1, including the Offer Documents, shall comply in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended, and the
rules and
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regulations promulgated thereunder (the "Exchange Act") and shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by Parent or
Merger Sub with respect to information supplied by the Company or any of its
stockholders specifically for inclusion or incorporation by reference in the
Offer Documents. Each of Parent, Merger Sub and the Company agree promptly to
correct any information provided by it for use in the Schedule 14D-1 or Offer
Documents, if and to the extent that such information shall have become false or
misleading in any material respect, and Parent and Merger Sub further agree to
take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed
with the SEC and the Offer Documents as so corrected to be disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given the
opportunity to review the Schedule 14D-1, including the Offer Documents, prior
to their being filed with the SEC. Neither the Parent nor Merger Sub shall file
any such documents with the SEC without the approval of the Company (which shall
not be unreasonably withheld.) Parent and Merger Sub agree to provide the
Company and its counsel any comments Parent, Merger Sub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
Section 1.2. Company Actions.
(a) The Company hereby approves of, and consents to, the Offer and
represents that the Board of Directors of the Company, at a meeting duly called
and held, has unanimously (i) determined that the terms of the Offer and the
Merger are fair to the holders of the Shares and the Merger is in the best
interests of the Company and the stockholders of the Company, (ii) approved this
Agreement, the Offer and the Merger, and recommended acceptance of the Offer by
the holders of the Shares and the tender of their Shares pursuant to the Offer
and approval of the Agreement (including the Merger) by the Company's
stockholders, if required, and approving the acquisition of the Shares pursuant
to the Offer and the other transactions contemplated by this Agreement. The
Company has been advised by each of its directors and executive officers that
each such person currently intends to tender all Shares owned by such persons
pursuant to the Offer. On the date the Schedule 14D-1 is filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement with
respect to the Offer (the "Schedule 14D-9") containing, subject to the terms of
this Agreement, the recommendation described in this Section 1.2(a) and shall
mail the Schedule 14D-9 to the stockholders of the Company. The Schedule 14D-9
shall comply, in all material respects, with the requirements of the Exchange
Act and other applicable laws, and on the date filed with the SEC and on the
date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Company
with respect to information supplied by Parent or Merger Sub specifically for
inclusion in the Schedule 14D-9. Each of the Company, Parent and Merger Sub
agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that
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such information shall have become false or misleading in any material respect,
and the Company further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented, to be filed with the SEC and disseminated to the Company's
stockholders, in each case, as and to the extent required by applicable federal
securities laws. Parent and its counsel shall be given an opportunity to review
the Schedule 14D-9 prior to its being filed with the SEC. The Company shall not
file the Schedule 14D-9 with the SEC without the approval of the Parent (which
shall not be unreasonably withheld). The Company agrees to provide Parent and
its counsel any comments the Company or its counsel, may receive from the SEC or
its staff with respect to the Schedule 14D-9, promptly after the receipt of such
comments.
(b) In connection with the Offer and the Merger, the Company will
cause the transfer agent for the Shares to furnish promptly to Parent and Merger
Sub a list, as of a recent date, of the record holders of Shares and their
addresses, as well as mailing labels containing the names and addresses of all
record holders of Shares as of a recent date and of those Persons (as
hereinafter defined) becoming record holders subsequent to such date, together
with copies of all lists of stockholders, security position listings and
computer files, and all other information in the Company's possession or control
regarding the beneficial owners of Shares, and shall furnish to Parent and
Merger Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except as such steps are
necessary to disseminate the Offer Documents or (if required) the Proxy
Statement (as hereinafter defined) (i) Parent and Merger Sub will hold in
confidence the information contained in such labels and listings, (ii) use such
information only in connection with the Offer and the Merger and (iii) if this
Agreement shall be terminated in accordance with Article XI, deliver to the
Company all copies of such information in the possession of Parent or Merger Sub
or the possession of their respective agents or representatives.
ARTICLE II
THE MERGER
Section 2.1. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the BCL, at the
Effective Time (as hereinafter defined), Merger Sub shall be merged with and
into the Company. At the Effective Time, the separate corporate existence of
Merger Sub shall cease, and the Company (i) shall continue as the surviving
corporation as a direct or indirect wholly owned Subsidiary (as hereinafter
defined) of Parent (Merger Sub and the Company are sometimes hereinafter
referred to as "Constituent Corporations" and, the surviving corporation in the
Merger is sometimes hereinafter referred to as the "Surviving Corporation") and
(ii) shall succeed to and assume all the rights and obligations of Merger Sub in
accordance with the BCL. At the election of Parent, the Company may be merged
into Merger Sub, in which event, the reference to "Surviving Corporation"
shall mean Merger Sub.
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Section 2.2. Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 11.1, and subject to the satisfaction or waiver of the
conditions set forth in Article X, the closing of the Merger (the "Closing")
shall take place at 10:00 a.m. on the second business day after satisfaction or
waiver of the conditions set forth in Article X, at the offices Xxxx, Scholer,
Fierman, Xxxx & Handler, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless
another date, time or place is agreed to in writing by the parties hereto. At
the time of the Closing, the Company and Merger Sub will cause the Merger to be
consummated by filing articles of merger (the "Articles of Merger") with the
Secretary of State of the Commonwealth of Massachusetts as soon as practicable
on such date, in such form as required by, and executed in accordance with the
relevant provisions of the BCL and shall make all other filings or recordings
required by the BCL in connection with the Merger.
Section 2.3. Effective Time of the Merger. The Merger shall,
subject to the BCL, become effective as of such date and time as the Articles of
Merger is duly filed with the Secretary of State of the Commonwealth of
Massachusetts or at such later date and time as is specified in the Articles of
Merger (the "Effective Time").
Section 2.4. Effects of the Merger. From and after the Effective
Time, the Surviving Corporation shall possess all the property, rights,
privileges, immunities, powers and franchises and be subject to all of the
debts, restrictions, liabilities and duties of the Company and Merger Sub, all
as provided under the BCL.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS
Section 3.1. Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of Merger Sub, the
Company or the holder of any Shares or any shares of capital stock of Merger
Sub:
(a) each Share owned by (i) the Company, (ii) Parent or Merger Sub
or (iii) any Subsidiary of the Company, Parent or Merger Sub
immediately prior to the Effective Time shall be canceled and no
payment shall be made with respect thereto;
(b) each share of common stock of Merger Sub outstanding
immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock, par
value $.01 per share, of the Surviving Corporation and shall constitute
the only outstanding shares of capital stock of the Surviving
Corporation; and
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(c) except as otherwise provided in Section 3.1(a) or as provided
in Section 3.3 with respect to Dissenting Shares (as hereinafter
defined), each Share issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive in cash the
price paid in the Offer (the "Merger Consideration").
Section 3.2. Surrender and Payment. (a) Prior to the Effective
Time, Parent shall appoint a bank or trust company reasonably satisfactory to
the Company (the "Exchange Agent") for the purpose of exchanging certificates
representing Shares for the Merger Consideration. Parent will, or will cause
Merger Sub to, make available to the Exchange Agent, as needed, the Merger
Consideration to be paid in respect of the Shares (the "Exchange Fund").
Promptly after the Effective Time, Parent will send, or will cause the Exchange
Agent to send, to each holder of Shares at the Effective Time a letter of
transmittal for use in such exchange (which shall specify that the delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the certificates representing Shares to the Exchange Agent). The
Exchange Agent shall, pursuant to irrevocable instructions, make the payments
provided in this Section 3.2. The Exchange Fund shall not be used for any other
purpose, except as provided in this Agreement.
(b) Each holder of the Shares that have been converted into a
right to receive the Merger Consideration, upon surrender to the Exchange Agent
of a certificate or certificates representing such Shares (the "Certificates"),
together with a properly completed letter of transmittal covering such Shares
and other customary documentation, will be entitled to receive the Merger
Consideration, payable in respect of such Shares. As of the Effective Time, all
such Shares shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
previously representing any such Shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration, without
interest, upon surrender of the certificates representing such Shares, as
contemplated hereby.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time, certificates
representing Shares are presented to the
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Surviving Corporation, they shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set forth in
this Article III.
(e) Any portion of the Exchange Fund made available to the
Exchange Agent pursuant to this Agreement that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Parent, upon
Parent's demand, and any such holder who has not exchanged his Shares for the
Merger Consideration in accordance with this Section 3.2 prior to that time
shall thereafter look only to Parent for payment of the Merger Consideration in
respect of his Shares.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 3.2(a) to pay for Shares for which the right
to a determination of fair market value, as contemplated by Section 3.3, has
been perfected shall be returned to Parent upon Parent's demand.
Section 3.3. Dissenting Shares. (a) Notwithstanding anything in
this Agreement to the contrary, Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by holders who have
not voted in favor of, or consented to, the Merger and who shall have delivered
a written notice of objection and demand for appraisal of such Shares in the
time and manner provided in Sections 86 to 98, inclusive, of the BCL and shall
not have failed to perfect or shall not have effectively withdrawn or lost their
rights to appraisal and payment under the BCL (the "Dissenting Shares") shall
not be converted into the right to receive the Merger Consideration, but such
holders shall no longer retain any rights of a stockholder of the Company and
the Surviving Corporation, except those provided in the BCL, and such holders
shall be entitled to receive the consideration as shall be determined pursuant
to Section 89 of the BCL: provided, however, that, if any such holder shall have
failed to perfect or shall have effectively withdrawn or lost his, her or its
right to appraisal and payment under the BCL, such holder's Shares shall
thereupon be deemed to have been converted, at the Effective Time, into the
right to receive the Merger Consideration set forth in Section 3.l(c) of this
Agreement, without any interest thereon.
(b) The Company shall give Parent and Merger Sub (i) prompt notice
of any notices of objection and demands for appraisal pursuant to Section 86 of
the BCL received by the Company, withdrawals of such demands and any other
instruments served pursuant to the BCL and received by the Company, and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the BCL. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to any such demands for
appraisal or offer to settle any such demands.
Section 3.4. Stock Options and Stock Plans.
(a) Each option to purchase Shares granted pursuant to the Option
Plans and outstanding immediately prior to the Effective Time shall in
accordance with their terms, at the
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Effective Time, become the right to receive, upon exercise thereof as provided
in the option, the Merger Consideration for each Share subject to such option.
(b) Parent and the Company shall take all actions necessary to
provide that, at the Effective Time, each Company Option (as hereinafter
defined) surrendered for cash by the holder thereof shall be canceled. In
consideration of such cancellation, and except to the extent that Parent or
Merger Sub and the holder of any such Company Option otherwise agree, Parent
shall pay to each such holder of Company Options an amount in cash in respect
thereof equal to the product of (1) the excess, if any, of the Merger
Consideration over the per share exercise price thereof and (2) the number of
Shares subject thereto, immediately prior to the Effective Time, less applicable
withholding taxes (the "Option Consideration"). "Company Option" means any
option to purchase Shares granted pursuant to the 1997 Incentive Stock Option
Plan and Director Stock Option Plan (collectively, the "Option Plans") to the
extent that it is outstanding, fully vested and exercisable immediately prior to
the Effective Time (and has not expired or been previously exercised).
(c) Upon receipt of the Option Consideration, each Company Option
shall be canceled. The surrender of a Company Option to the Surviving
Corporation in exchange for the Option Consideration shall be deemed a release
of any and all rights the holder had or may have had in respect of such Company
Option.
(d) Each exercisable or non-exercisable option with an exercise
price greater than the Merger Consideration that is not surrendered for
cancellation shall, at the Effective Time, be deemed canceled, and in
consideration of the cancellation of such options, holders of such options shall
be granted options to purchase the number of ordinary shares of Parent,
determined by multiplying the number of such canceled options by the exercise
price per Share of each such canceled option and dividing the result by the then
market value of an ordinary share of Parent at the Effective Time. The exercise
price of each such new option shall be the then market value of an ordinary
share of Parent at the Effective Time. Each holder of an exercisable or
non-exercisable option with an exercise price equal to or less than the Merger
Consideration that is not surrendered for cancellation shall, at the Effective
Time, be given the opportunity to convert such options into options to purchase
ordinary shares of Parent, determined by multiplying the number of such options
by the Merger Consideration and dividing the result by the then market value of
an ordinary share of Parent as of the Effective Time. The exercise price of each
such new option shall be determined by multiplying the exercise price of each
such non-surrendered option at the Effective Time, by a fraction, the numerator
of which is the then fair market value of the ordinary shares of Parent at the
Effective Time and the denominator of which is the Merger Consideration.
Notwithstanding the foregoing. Parent shall not be required to take any action
that would require registration under the Securities Act or cause it to violate
such Securities Act or any applicable state securities law, but Parent shall
take such action as may be reasonable to provide such conversion opportunity on
or following the Effective Time without having to register under or violate the
Securities Act or such other law.
(e) Except as otherwise agreed to by the parties: (i) the Option
Plans shall terminate as of the Effective Time and the provisions in any other
plan, program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company shall be canceled as of
the Effective Time and (ii) the Company shall take all commercially reasonable
action in an effort to provide that following the Effective Time no participant
in any stock option plans or other plans, programs or arrangements shall have
any right thereunder to acquire equity securities of the Company or the
Surviving Corporation and to terminate all such plans.
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Section 3.5. No Further Rights in Shares. All Merger Consideration
paid upon the acceptance of tendered and not withdrawn Shares, in accordance
with the terms of the Offer, shall be deemed to have been paid in full
satisfaction of all rights pertaining to such Shares.
Section 3.6. No Liability. Neither Parent nor the Surviving
Corporation shall be liable to any holder of Shares for any cash delivered to a
public official pursuant to any abandoned property, escheat or similar law.
Section 3.7. Withholding Rights. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration,
otherwise payable pursuant to this Agreement to any Person, such amounts as is
required to deduct and withhold with respect to the making of such payment under
the Code (as hereinafter defined), or any provision of state, local or foreign
tax law. To the extent that amounts are so withheld by the Surviving Corporation
or Parent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to a Person in respect of which
such deduction and withholding was made by the Surviving Corporation or Parent.
Section 3.8. 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 will pay the Merger Consideration to the registered owner of
such Shares.
ARTICLE IV
THE SURVIVING CORPORATION
Section 4.1. Articles of Organization. (a) The articles of
organization of the corporation that will be the Surviving Corporation as in
effect immediately prior to the Effective Time shall be amended as of the
Effective Time in such manner as the Parent shall determine. As so amended, such
Articles of Organization shall be the Articles of Organization of the Surviving
Corporation, until thereafter changed or amended, as provided therein or by
applicable law.
Section 4.2. By-laws. The by-laws of Merger Sub in effect at the
Effective Time shall be the by-laws of the Surviving Corporation until amended
or repealed as provided therein and in accordance with the Surviving
Corporation's articles of organization and applicable law.
Section 4.3. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law or until their earlier death, resignation or removal, the
directors of Merger Sub and the officers of the
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Company at the Effective Time shall be the initial directors and officers,
respectively, of the Surviving Corporation.
Section 4.4. Subsequent Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect, confirm or record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Constituent Corporations acquired
or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized to execute and
deliver, in the name and on behalf of each of the Constituent Corporations or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do, in the name and on behalf of each of the Constituent Corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub,
subject to the exceptions specifically disclosed in the disclosure schedule
supplied by the Company to Parent (the "Company Disclosure Schedule"), as
follows:
Section 5.1. Organization, Standing and Corporate Power. Each of
the Company and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of the Company
and each of its Subsidiaries is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) could not reasonably be expected
to (i) have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and its Subsidiaries taken as a
whole, (ii) impair the ability of any party hereto to perform its obligations
under this Agreement or (iii) prevent or materially delay consummation of any of
the transactions contemplated by this Agreement (a "Company Material Adverse
Effect") (provided that a Company Material Adverse Effect shall not be deemed to
have occurred as a result of (i) any events or conditions affecting the economy
or the Company's industry in general or (ii) any events or conditions resulting
from the execution and/or announcement of this Agreement). The Company has
delivered to Parent complete and correct copies of its articles of organization
(the "Articles of Organization") and by-laws and equivalent organizational
documents of its Subsidiaries, in each case as amended to the date of this
Agreement. For purposes of this Agreement, a "Subsidiary" of any Person means
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another Person in which such first Person, directly or indirectly, owns 50% or
more of the equity interests, or has the right, through ownership of equity,
contractually or otherwise, to elect at least a majority of its Board of
Directors or any other governing body.
Section 5.2. Subsidiaries and Minority Affiliates. All the
outstanding shares of capital stock or other ownership interests of each
Subsidiary of the Company have been validly issued and are fully paid and
nonassessable and all such shares or ownership interests are owned by the
Company, by another Subsidiary of the Company or by the Company and another such
Subsidiary, free and clear of any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership (collectively, "Liens"). Neither the Company nor any of its
Subsidiaries (i) owns equity securities (as defined in Rule 3a-11 promulgated
under the Exchange Act) or (ii) has entered into any commitment, contract or
agreement to provide equity financing to any other Person or entity.
Section 5.3. Capital Structure. The authorized capital stock of
the Company consists of 10,000,000 shares of common stock, $.10 par value per
share. As of March 28, 1998 (i) 1,085,265 Shares were issued and outstanding,
(ii) 1,600,215 Shares were held by the Company or by any of the Company's
Subsidiaries and (iii) 550,000 Shares were reserved for issuance pursuant to the
Option Plans. Except as set forth above, no shares of capital stock or other
equity or voting securities of the Company are issued, reserved for issuance or
outstanding except for shares reserved for issuance under Option Plans. As of
the date hereof, 177,300 options (the "Options) have been granted and are
outstanding under the Option Plans and no further Options will be granted. All
outstanding shares of capital stock of the Company are, and all Shares which may
be issued pursuant to the Option Plans will, when issued, be duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. There are not any bonds, debentures, notes or other indebtedness or
securities 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. Other than the Shares and Options under
the Option Plans, there are not any securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity or voting securities of the Company or of any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
rights, commitments, agreements, arrangements or undertakings of any kind
obligating the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire or dispose of any shares of capital stock or other equity or
voting securities of the Company or any of its Subsidiaries or any securities of
the type described in the two immediately preceding sentences. No Company
Options will be accelerated or in any way altered or changed, whether in
connection with the acceleration of any vesting period or otherwise, by the
execution, delivery or performance of this Agreement by the Company or the
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consummation of the transactions contemplated by this Agreement, except pursuant
to and in accordance with Section 3.4 hereof. Except as specifically
contemplated by this Agreement, there are no stockholder agreements, voting
trusts or other agreements or understandings to which the Company is a party, or
of which the Company is aware, relating to voting, registration or disposition
of any Shares or granting to any Person or group of Persons the right to elect,
or to designate or nominate for election, a director to the Board of Directors
of the Company.
Section 5.4. Authority; Noncontravention. (a) The Company has the
requisite corporate power and authority to enter into this Agreement (and,
subject to the Company Stockholder Approval (as hereinafter defined) if required
by the BCL in connection with the consummation of the Merger) to consummate the
transactions contemplated by this Agreement. If the BCL requires that the Merger
be approved by the Stockholders of the Company, the approval by the affirmative
vote of the holders of two-thirds of the outstanding Shares (the "Company
Stockholder Approval") will be required and such approval will be the only vote
of the holders of any class or series of the capital stock of the Company
necessary to approve the Merger and this Agreement and the transactions
contemplated hereby.
(b) The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, except for the Company Stockholder Approval in connection
with the consummation of the Merger. This Agreement has been duly executed and
delivered by the Company and, assuming this Agreement constitutes a valid and
binding agreement of Parent and Merger Sub, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(c) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice, or lapse of time, or both)
under, or give rise to a right of termination, cancellation, modification or
acceleration of any obligation or to a loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries under, (i) the Articles of Organization or by-laws of the
Company or the comparable charter or organizational documents of any of its
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lien, lease or any other contract, agreement, instrument, permit,
commitment, concession, franchise or license applicable to the Company or any of
its Subsidiaries or their respective properties or assets, or (iii) subject to
the governmental filings and other matters referred to in the following
subsection 5.4(d), any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any of its Subsidiaries or their
respective properties or assets.
(d) No consent, approval, franchise, order, license, permit,
waiver or authorization of, or registration, declaration or filing with or
exemption, notice, application, or certification by or to (collectively,
"Consents") any federal, state or local government or any
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arbitration panel or any court, tribunal, administrative or regulatory agency or
commission or other governmental authority, department, bureau, commission or
agency, domestic or foreign (a "Governmental Entity"), is required by or with
respect to the Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated by this Agreement, except for (i)
the filing of a Schedule 14D-1, Schedule 14D-9 and the information required
under Rule 14f-1 of the Exchange Act with the SEC, (ii) the filing of the
Articles of Merger with the Secretary of State of the Commonwealth of
Massachusetts, (iii) the filing of the Proxy Statement with the SEC (if
necessary), (iv) the filing of a Current Report on Form 8-K with the SEC, (v)
the filing with the United States Department of Justice and the Federal Trade
Commission of such forms as may be required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), (xx) any filing pursuant to the
requirements of Section 721 (the "Exon-Xxxxxx Provision") of the Defense
Production Act or U.S. Government approval of necessary securities agreements to
mitigate foreign ownership, control or influence pursuant to the National
Industrial Securities Program Operating Manual, (vii) any requirements imposed
by the United States Department of Defense, (viii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws and the laws of any
foreign country and (ix) such other consents, authorizations, filings, approvals
and registrations which, if not obtained or made, would not have a Company
Material Adverse Effect or a material adverse effect on the ability of the
parties to consummate the Offer, the Merger or the other transactions
contemplated by this Agreement.
(e) The Board of Directors of the Company has, on May 13, 1998,
unanimously (i) approved and adopted this Agreement and transactions
contemplated hereby, (ii) determined that this Agreement and the transactions,
including each of the Offer and the Merger, are in the best interests of the
Company and its stockholders and that the terms of this Agreement are fair to
the Company and its stockholders and (iii) determined to recommend that the
stockholders of the Company approve and adopt this Agreement. The Company has
been advised by each of its directors and officers that they intend to tender
all Shares beneficially owned by them pursuant to the Offer.
(f) The Board of Directors of the Company has approved the
transactions contemplated by this Agreement and the Stockholder Agreements for
purposes of excluding Parent from the restrictions contained in Chapters 110D
and 110F of the BCL. To the Company's knowledge, except for Chapter 110C of the
BCL no other state takeover statute or similar statute or regulation applies to
or purports to apply to the Offer, the Merger, this Agreement, the Stockholder
Agreements or the transactions contemplated by this Agreement or the Stockholder
Agreements.
Section 5.5. SEC Documents; Financial Statements; No Undisclosed
Liabilities. (a) The Company has filed, and delivered to Parent true and
complete copies of, all required reports, schedules, forms, statements, exhibits
and other documents filed with the SEC since January 1, 1996, including the
Company's Form 10-Q filed on or before the date hereof (the "SEC Documents"). As
of their respective dates, the SEC Documents complied in all
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material respects with the requirements of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act"), or the
Exchange Act, as the case may be, applicable to such SEC Documents and none of
the SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with United States generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis throughout the periods
involved ("GAAP") (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
(c) Except as set forth in the SEC Documents, neither the Company
nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required to be reflected in
the financial statements of the Company in accordance with GAAP, except for
liabilities and obligations incurred in the ordinary course of business which,
individually or in the aggregate, have not had or could not reasonably be
expected to have a Company Material Adverse Effect.
Section 5.6. Disclosure Documents. (a) Any proxy statement or the
information statement of the Company to be filed with the SEC in connection with
the Merger (the "Company Proxy Statement"), and any amendments or supplements
thereto will, when filed, comply in all material respects with the applicable
requirements of the Exchange Act.
(b) At the time of filing a Company Proxy Statement with the SEC,
at the time the Company Proxy Statement or any amendment or supplement thereto
is first mailed to stockholders of the Company, at the time (if any) such
stockholders vote on adoption of this Agreement, and at the Effective Time, the
Company Proxy Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this paragraph (b) will not apply to statements or
omissions included in the Company Proxy Statement based upon information
furnished to the Company in writing by Parent or Merger Sub specifically for use
therein.
Section 5.7. Property. (a) The Company and its Subsidiaries have
good and valid title to all property material to the business of the Company and
reflected in the latest audited financial statements included in the SEC
Documents as being owned by the Company and its Subsidiaries or acquired after
the date thereof (except properties sold or otherwise
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disposed of in the ordinary course of business since the date thereof), free and
clear of all Liens except (i) Liens described in the SEC Documents, (ii)
statutory Liens securing payments not yet due and (iii) such imperfections or
irregularities of title or Liens as do not affect the use of the properties or
assets subject thereto or affected thereby or otherwise materially impair
business operations at such properties.
(b) The Company has delivered and made available to Parent prior
to the date hereof, correct and complete copies of each lease under which the
Company or any of its Subsidiaries is a lessee or lessor which is (i) a lease of
real property, or (ii) a lease of Personal property having a term of more than
one year or calling for annual rental payments in excess of $20,000
(collectively, the "Leases"). Each Lease is in full force and effect and
constitutes a binding obligation of the Company or its Subsidiaries and, to the
best knowledge of the Company, the other party thereto. The Company and its
Subsidiaries enjoy peaceful and undisturbed, exclusive possession under each
Lease to which it is a party, and there is not, with respect to any Lease, any
existing material breach or event of default, or event which with notice or
lapse of time or both would constitute a material breach or event of default, on
the part of the Company or, to the best knowledge of the Company, on the part of
any other party thereto.
(c) To the knowledge of the Company and its Subsidiaries, all
buildings, structures, and equipment owned or leased by the Company and its
Subsidiaries are structurally sound, free from material defects, in reasonable
operating condition and repair, subject to ordinary wear and tear given their
age and use, and are adequate and sufficient in all material respects for the
operation of their businesses as currently operated.
Section 5.8. Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents, since June 30, 1997, the Company and its
Subsidiaries have conducted their business only in the ordinary course
consistent with past practice, and there has not been:
(a) any event, occurrence or development of a state of
circumstances which has had or could reasonably be expected to have a
Company Material Adverse Effect,
(b) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect
to any of the Company's capital stock or any repurchase, redemption or
other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of the Company
or any of its Subsidiaries,
(c) any adjustment split, combination or reclassification of any
of its capital stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock,
(d) (i) any granting by the Company or any of its Subsidiaries to
any current or former director, officer or employee of the Company or
any of its Subsidiaries of any increase in compensation or benefits,
except for grants to employees who are not officers
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or directors in the ordinary course of business consistent with past
practice, (ii) any granting by the Company or any of its Subsidiaries
to any such director, officer or employee of any increase in severance
or termination pay (including the acceleration in the vesting of Shares
(or other property) or the provision of any tax gross-up), or (iii) any
entry by the Company or any of its Subsidiaries into any employment,
deferred compensation, severance or termination agreement or
arrangement with or for the benefit of any such current or former
director, officer or employee,
(e) (i) any acceleration, amendment or change of the period of
exercisability or vesting of any Company Options under the Option Plans
(including any discretionary acceleration of the exercise periods or
vesting by the Company's Board of Directors or any committee thereof or
any other Persons administering an Option Plan) or authorization of
cash payments in exchange for any Company Options under any of such
Option Plans, (ii) any adoption or material amendment by the Company or
any of its Subsidiaries of any collective bargaining agreement or any
bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, stock appreciation right, retirement, vacation, severance,
disability, death benefit, hospitalization, medical, worker's
compensation, supplementary unemployment benefits, or other plan,
arrangement or understanding (whether or not legally binding) or any
employment agreement providing compensation or benefits to any current
or former employee, officer, director or independent contractor of the
Company or any of its Subsidiaries or any beneficiary thereof or
entered into, maintained or contributed to, as the case may be, by the
Company or any of its Subsidiaries (collectively, "Benefit Plans"), or
(iii) any adoption of, or amendment to, or change in employee
participation or coverage under, any Benefit Plans which would increase
materially the expense of maintaining such Benefit Plans above the
level of the expense incurred in respect thereof for the fiscal year
ended on June 30, 1997.
(f) any change in accounting methods, principles or practices by
the Company or any of its Subsidiaries (except as required by law),
(g) any amendment, waiver or modification of any material term of
any out standing security of the Company or any of its Subsidiaries,
(h) any incurrence, assumption or guarantee by the Company or any
of its Subsidiaries of any material indebtedness for borrowed money or
other material obligations, or any creation or assumption by the
Company or any of its Subsidiaries of any Lien on any asset other than
in the ordinary course of business consistent with past practice, but
in no event with respect to assets with a value of, or obligations in
an amount of, more than $25,000 in the aggregate,
(i) any making of any loan, advance or capital contributions to or
investment in any Person other than in the ordinary course of business
consistent with past practice, but in no event in the amount of more
than $25,000 in the aggregate, and other than
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investments in cash equivalents made in the ordinary course of business
consistent with past practice,
(j) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any of its Subsidiaries
relating to its assets or business on behalf of the Company or any of
its Subsidiaries, other than the purchase of products and services and
sales of products and services in the ordinary course of business,
(k) any acquisition or disposition of any assets, other than in
the ordinary course of business, or any merger or consolidation with
any Person on behalf of the Company or any of its Subsidiaries,
(l) any entry by the Company or any Subsidiary into any other
commitment or transaction material to the Company and its Subsidiaries
taken as a whole, except in the ordinary course of business and
consistent with past practice,
(m) any relinquishment by the Company or any of its Subsidiaries
of any contract or other right, in either case, material to the
Company and its Subsidiaries taken as a whole, other than transactions
and commitments in the ordinary course of business consistent with
past practice and those contemplated by the Agreement, or
(n) any agreement, commitment, arrangement or undertaking by the
Company or any of its Subsidiaries to perform any action described in
clauses (a) through (m).
Section 5.9. Litigation. There is no action, arbitration, audit,
hearing, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Entity or arbitrator ("Action") or, to the Company's
knowledge, investigation pending against or affecting the Company or any of its
Subsidiaries or any of their respective properties and, to the Company's
knowledge, there is no Action or investigation threatened against or affecting
the Company or any of its Subsidiaries or any of their respective properties
before any Governmental Entity. Neither the Company nor any of its Subsidiaries
is subject to any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator.
Section 5.10. Compliance with Laws, Etc. The conduct by the
Company and its Subsidiaries of their business is and has been in compliance in
all material respects with all statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees, applicable thereto and material to the conduct of
their business.
Section 5.11. Benefit. (a) For purposes of this Agreement, the
following definitions apply: "Code" means the Internal Revenue Code of 1986, as
amended, and the Treasury regulations thereunder; "Controlled Group Liability"
means any and all liabilities under (i) Title IV of ERISA, (ii) Section 302 of
ERISA (as hereinafter defined), (iii) Sections 412 and 4971 of the Code, (iv)
the continuation coverage requirements of Section 601 et seq. of ERISA and
Section 4980B of the
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Code, and (v) corresponding or similar provisions of foreign laws or
regulations, other than such liabilities that arise solely out of, or relate
solely to, the Plans (as hereinafter defined); "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
thereunder; "ERISA Affiliate" means, with respect to any entity, trade or
business, any other entity, trade or business that is a member of a group
described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1)
of ERISA that includes the first entity, trade or business, or that is a member
of the same "controlled group" as the first entity, trade or business pursuant
to Section 4001(a)(14) of ERISA.
(b) Exhibit 5.11 includes a complete list of all employee benefit
plans, programs, policies, practices, and other arrangements in effect at any
time during the past three years providing benefits to any current or former
employee, officer or director of the Company or any of its Subsidiaries or
beneficiary or dependent thereof, whether or not written, and whether covering
one Person or more than one Person, sponsored or maintained by the Company or to
which the Company contributes or is obligated to contribute ("Plans"). Without
limiting the generality of the foregoing, the term "Plans" includes all employee
welfare benefit plans within the meaning of Section 3(1) of ERISA, all employee
pension benefit plans within the meaning of Section 3(2) of ERISA, and all other
employee benefit, bonus, incentive, deferred compensation, stock purchase, stock
option, severance, change of control and fringe benefit plans, programs or
agreements.
(c) With respect to each Plan, the Company has delivered to Parent
and Merger Sub a true, correct and complete copy of: (i) each writing
constituting a part of such Plan, including without limitation all plan
documents, benefit schedules, trust agreements, and insurance contracts and
other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series)
and accompanying schedules, if any; (iii) the current summary plan description
and any material modifications thereto, if any; (iv) the most recent annual
financial report, if any; (v) the most recent actuarial report, if any; and (vi)
the most recent determination letter from the Internal Revenue Service (the
"IRS"). Except as specifically provided in the foregoing documents delivered to
Parent and Merger Sub or as otherwise required by law, there are no amendments
to any Plan or any new Plan that have been adopted or approved nor has the
Company undertaken to make any such amendments or adopt or approve any new Plan.
(d) Exhibit 5.11 identifies each Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code ("Qualified
Plans"). The IRS has issued a favorable determination letter with respect to
each Qualified Plan that has not been revoked, and, to the knowledge of the
Company, there are no existing circumstances nor any events that have occurred
that could reasonably be expected to adversely affect the qualified status of
any Qualified Plan or the related trust. No Plan is intended to meet the
requirements of Code Section 501(c)(9) of the Code.
(e) All contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Plan, for any period through the date
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hereof have been timely made or paid in full or, to the extent not required to
be made or paid on or before the date hereof, have been fully reflected in all
material respects on the financial statements contained in the SEC Documents.
(f) The Company has complied, and is now in compliance, in all
material respects with all provisions of ERISA, with the Code and all laws and
regulations applicable to the Plans. There is not now, nor do any circumstances
exist that could give rise to, any requirement for the posting of security with
respect to a Plan or the imposition of any lien on the assets of the Company
under ERISA or the Code. No non-exempt prohibited transaction has occurred with
respect to any Plan that could reasonably be expected to result in a material
liability to the Company or any of its Subsidiaries.
(g) With respect to each Plan that is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not
exist any accumulated funding deficiency within the meaning of Section 412 of
the Code or Section 302 of ERISA, whether or not waived; (ii) the fair market
value of the assets of such Plan equals or exceeds the actuarial present value
of all accrued benefits under Plan (whether or not vested) on a termination
basis; (iii) no reportable event within the meaning of Section 4043(c) of ERISA
has occurred, and the consummation of the transactions contemplated by this
Agreement will not result in the occurrence of any such reportable event; and
(iv) all premiums to the Pension Benefit Guaranty Corporation have been timely
paid in full. All liabilities in connection with the termination of any employee
pension benefit plan that was sponsored, maintained or contributed to by the
Company at any time within the past three years have been fully satisfied.
(h) No Plan is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or
more contributing sponsors at least two of whom are not under common control,
within the meaning of Section 4063 of ERISA (a "Multiple Employer Plan").
(i) There does not now exist, nor do any circumstances exist that
could reasonably be expected to result in any Controlled Group Liability that
would be a material liability of the Company following the Closing. Without
limiting the generality of the foregoing, neither the Company nor any ERISA
Affiliate of the Company has engaged in any transaction described in Section
4069 or Section 4204 of ERISA.
(j) The Company has no liability for life, health, medical or
other welfare benefits to former employees or beneficiaries or dependents
thereof, except for health continuation coverage as required by Section 4980B of
the Code or Part 6 of Title I of ERISA and at no expense to the Company.
(k) All Plans covering foreign employees of the Company comply
with applicable local law and are fully funded and/or book reserved to the
extent applicable.
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(l) There are no pending or, to the Company's knowledge,
threatened claims (other than claims for benefits in the ordinary course),
lawsuits or arbitrations which have been asserted or instituted against the
Plans, any fiduciaries thereof with respect to their duties to the Plans or the
assets of any of the trusts under any of the Plans which could reasonably be
expected to result in any material liability of the Company to the Pension
Benefit Guaranty Corporation, the Department of Treasury or the Department of
Labor.
(m) Except as expressly contemplated hereby, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in conjunction with any
other event) result in, cause the accelerated vesting or delivery of, or
increase the amount or value of, any payment or benefit to any employee of the
Company.
SECTION 5.12. Tax Matters. Except as set forth in the SEC
Documents:
(a) Each of the Company and each of its Subsidiaries has filed
or caused to be filed on a timely basis since January 1, 1993 all tax
returns and reports required to be filed by them pursuant to applicable
legal requirements. All tax returns filed by the Company and/or any
Subsidiary are true, complete and correct in all material respects.
Each of the Company and each of its Subsidiaries has paid (or the
Company has paid on its Subsidiaries' behalf), or has made provision
for the payment of, all Taxes (as hereinafter defined) that have been
or may become due pursuant to those tax returns or otherwise.
(b) No tax return of the Company or any of its Subsidiaries is
under audit or examination by any taxing authority, and no written or
unwritten notice of such an audit or examination has been received by
the Company or any of its Subsidiaries. Each deficiency resulting from
any audit or examination relating to Taxes by any taxing authority has
been paid, except for deficiencies being contested in good faith by
appropriate proceedings and which have been reserved against in
accordance with GAAP. No issues relating to taxes were raised in
writing by the relevant taxing authority during any presently pending
audit or examination, and no material issues relating to Taxes were
raised in writing by the relevant taxing authority in any completed
audit or examination that can reasonably be expected to recur in a
later taxable period. Neither the Company nor any of its Subsidiaries
has given or is there a pending request to give waivers or extensions
(or is or would be subject to a waiver or extension given by any other
Person) of any statute of limitations relating to Taxes for which the
Company or any of its Subsidiaries would be liable. The federal income
tax returns of the Company and each of its Subsidiaries consolidated in
such returns have been examined by and settled with the IRS for all
years, or all years are otherwise closed, through the taxable year
ended June 30, 1995.
(c) The charges, accruals and reserves with respect to Taxes on
the respective books of each of the Company or any Subsidiary are
adequate (determined in accordance
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with GAAP). There exists no proposed Tax assessment against the Company
or any Subsidiary. No consent for the application of Section 341(f)(2)
of the Code has been filed with respect to any property or assets held,
acquired or to be acquired by the Company or any Subsidiary thereof.
All Taxes required by legal requirements to be withheld or collected
have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Entity or Person.
(d) No Liens for Taxes exist with respect to any assets or
properties of the Company or any of its Subsidiaries, except for
statutory Liens for Taxes not yet due.
(e) None of the Company or any of its Subsidiaries is a party
to, is bound by or required to make any payment under any tax sharing
agreement, tax allocation agreement, tax indemnity obligation or
similar written or unwritten agreement, arrangement, understanding or
practice with respect to Taxes (including any advance pricing
agreement, closing agreement or other agreement relating to Taxes with
any taxing authority).
(f) The disallowance of a deduction under Section 162(m) of
the Code for employee remuneration will not apply to any material
amount paid or payable by the Company or any of its Subsidiaries under
any contract, Option Plan, Benefit Plan, program, arrangement or
understanding currently in effect.
(g) No material amount or other entitlement that could be
received (whether in cash or property or the vesting of property) in
connection with the transactions contemplated hereby (either alone or
in conjunction with any other event) will be an "excess parachute
payment" (as such term is defined in Section 280G(b)(1) of the Code).
(h) As used in this Agreement, "Taxes" shall include all
federal, state, local and foreign income, property, sales, excise,
withholding and other taxes, tariffs or governmental charges of any
nature whatsoever, and all interest, penalties and additions to tax
with respect to any of the foregoing.
SECTION 5.13. Debt Instruments. Exhibit 5.13 hereto is a list
of (i) all loan or credit agreements, notes, bonds, mortgages, indentures and
other agreements and instruments pursuant to which any Indebtedness (as
hereinafter defined) of the Company or any of its Subsidiaries is outstanding or
may be incurred and (ii) the respective principal amounts currently outstanding
thereunder. All such Indebtedness is prepayable at any time without penalty,
subject to the notice provisions of the agreements governing such Indebtedness
(which shall not require a notice period of more than 30 days). For purposes of
this Section 5.13, "Indebtedness" shall mean, with respect to any Person,
without duplication, (i) all obligations of such Person for borrowed money, or
with respect to deposits or advances of any kind to such Person, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations of such Person upon which interest charges
are customarily paid, (iv) all obligations of such Person under conditional sale
or other title retention agreements relating to property
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purchased by such Person, (v) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (excluding obligations of
such Person to creditors for raw materials, inventory, services and supplies
incurred in the ordinary course of such Person's business), (vi) all capitalized
lease obligations of such Person, (vii) 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, (viii) all obligations of such
Person under interest rate or currency swap transactions (valued at the
termination value thereof), (ix) all letters of credit issued for the account of
such Person (excluding letters of credit issued for the benefit of suppliers to
support accounts payable to suppliers incurred in the ordinary course of
business), (x) all obligations of such Person to purchase securities (or other
property) which arises out of or in connection with the sale of the same or
substantially similar securities or property, and (xi) all guarantees and
arrangements having the economic effect of a guarantee of such Person of any
indebtedness of any other Person.
SECTION 5.14. Insurance. The Company and its Subsidiaries are
covered by valid and currently effective insurance policies issued in favor of
the Company that are customary for companies of similar size and financial
condition. All such policies are in full force and effect, all premiums due
thereon have been paid and the Company has complied with the provisions of such
policies. The Company has not been advised of any defense to coverage in
connection with any claim to coverage asserted or noticed by the Company under
or in connection with any of its extant insurance policies. The Company has not
received any written notice from or on behalf of any insurance carrier issuing
policies or binders relating to or covering the Company and its Subsidiaries
that there will be a cancellation or non-renewal of existing policies or
binders, or that alteration of any equipment or any improvements to real estate
occupied by or leased to or by the Company or its Subsidiaries, purchase of
additional equipment, or material modification of any of the methods of doing
business, will be required.
SECTION 5.15. Labor Matters. The Company and its Subsidiaries
are in material compliance with all federal, state and local laws, rules,
regulations and orders respecting employment and employment practices,
including, without limitation, immigration and terms and conditions of
employment, wages and hours. To the Company's knowledge, there are no pending
investigations involving the Company or any of its Subsidiaries by any
Governmental Entity for the enforcement of such federal, state or local laws,
rules, regulations and orders. There is no unfair labor practice charge or
complaint pending, or, to the Company's knowledge, threatened or contemplated,
against the Company or any of its Subsidiaries before any Governmental Entity or
any strike, picketing, boycott, dispute, slowdown or stoppage pending, or, to
the Company's knowledge, threatened or contemplated, against or involving the
Company or any of its Subsidiaries. There are no existing collective bargaining
agreements with the Company or any of its Subsidiaries. No representation
question exists respecting the employees of the Company or any of its
Subsidiaries and no collective bargaining agreement or modification thereof is
currently being negotiated by or on behalf of the Company or any of its
Subsidiaries. No grievance or arbitration proceeding is pending, or, to the
Company's knowledge, threatened or contemplated, under any expired collective
bargaining agreements of the Company or its Subsidiaries. No labor dispute with
the employees of the Company or any of
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its Subsidiaries which could reasonably be expected to have a Company Material
Adverse Effect. is pending or, to the Company's knowledge, threatened or
contemplated.
SECTION 5.16. Business Relationships; No Restrictive
Agreements. (a) The relationships of the Company and its Subsidiaries with its
customers, distributors, licensors, designers and suppliers are satisfactory in
all material respects.
(b) The Company and its Subsidiaries are not parties to or
bound by any agreement, contract, policy, license, document, instrument,
arrangement or commitment that limits the freedom of the Company or any of its
Subsidiaries to compete in any line of business or with any Person or in any
geographic area or which would so limit the freedom of the Company or any of its
Subsidiaries or affiliates after the Effective Time.
(c) To the Company's knowledge, based on most recent costs
estimates to complete, there are no sales agreements or commitments involving
the Company or any of its Subsidiaries, the fulfillment of which will likely
result in a loss to the Company or its Subsidiaries in excess of $100,000.
SECTION 5.17. Interests of Officers and Directors. None of the
Company's or any of its Subsidiaries' officers or directors or any of their
respective affiliates (other than the Company or any of its Subsidiaries) has
any interest in any property, real or personal, tangible or intangible, used in
or pertaining to the business of the Company or its Subsidiaries, or any
supplier, distributor or customer of the Company or its Subsidiaries, or any
other relationship, contract, agreement, arrangement or understanding with the
Company or any of its Subsidiaries, except as disclosed in the SEC Documents and
except for the normal rights of a stockholder and rights under the Benefit Plans
and the Option Plans. Except as disclosed in the SEC Documents, neither the
Company nor any of its Subsidiaries is indebted to any director, officer,
employee or agent of the Company or any of its Subsidiaries (except for amounts
due as normal salaries and bonuses and in reimbursement of ordinary expenses)
and no such Person is indebted to the Company or any of its Subsidiaries, and
there have been no transactions of the type required to be disclosed pursuant to
Items 402 and 404 of Regulation S-K under the Exchange Act.
SECTION 5.18. Intellectual Property.
(a) "Company Intellectual Property Rights" means all
trademarks, trademark rights, trade names, trade name rights, patents, patent
rights, industrial models, copyrights, servicemarks, trade secrets, computer
software programs or applications (in both source code and object code form),
maskworks, net lists, schematics, technology, ideas, algorithms, processes,
know-how, inventions and applications for patents, trademarks, copyrights and
servicemarks and all other tangible and intangible proprietary rights and
information owned by or licensed to the Company or any Subsidiary or which the
Company or any Subsidiary otherwise possesses legally enforceable rights to use.
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(b) The Company Intellectual Property Rights are all those
used or proposed to be used by the Company for the operation of the businesses
of the Company and its Subsidiaries as they are currently conducted or currently
proposed to be conducted, respectively. Either the Company or one of its
Subsidiaries is the owner of all right, title and interest in and to each of the
Company Intellectual Property Rights, free and clear of all Liens and has the
right to use without payment to a third party such Company Intellectual Property
Rights and the Company or one of its Subsidiaries will continue to own or
license such Company Intellectual Property Rights immediately after the
Effective Time. No claim of infringement of any intellectual property rights of
any third party has been brought or, to the Company's knowledge, asserted
against the Company or any of its Subsidiaries in respect of the operation of
the Company or any of its Subsidiaries. To the Company's knowledge, no Person is
infringing in any material respect the rights of the Company or any of its
Subsidiaries with respect to any Company Intellectual Property Rights. Neither
the Company nor any of its Subsidiaries has licensed, or otherwise granted, to
any third party, any material rights in or to any Company Intellectual Property
Rights.
(c) All former and current employees of each of the Company
and each of its Subsidiaries who are or were employees at any time during the
past three years have executed written agreements with one or more of the
Company and its Subsidiaries that assign to one or more of such entities all
rights to any inventions, improvements, discoveries or information relating to
and material to the business of the Company or one of its Subsidiaries. To the
Company's knowledge, no employee of the Company or one of its Subsidiaries has
entered into any contract, agreement, understanding or arrangement that restrict
or limits in any way the scope or type of work in which the employee may be
engaged or requires the employees to transfer, assign, or disclose information
concerning his work to anyone other than one or more of the Company and its
Subsidiaries.
SECTION 5.19. Environmental Matters.
(a) For purposes of this Agreement, the following terms shall
have the following meanings: (i) "Hazardous Substances" means (A) those
substances defined in or regulated under the following federal statutes and
their state counterparts and all regulations thereunder: the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum
and petroleum products including crude oil and any fractions thereof; (C)
natural gas, synthetic gas, and mixtures thereof; (D) radon; (E) asbestos; (F)
any other contaminant; and (G) any substance with respect to which a federal,
state or local agency requires environmental investigation, monitoring,
reporting or remediation; and (ii) "Environmental Laws" means any federal, state
or local law relating to (A) releases or threatened releases of Hazardous
Substances or materials containing Hazardous Substances; (B) the manufacture,
handling, transport, use, treatment, storage or disposal of Hazardous Substances
or material containing Hazardous Substances; or (C) otherwise relating to
pollution of the environment.
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(b) Except as could not reasonably be expected to have a
Company Material Adverse Effect, (i) the Company is not in violation of any
Environmental Law; (ii) to the Company's knowledge, none of the properties owned
or leased by the Company are contaminated with any Hazardous Substances; (iii)
to the Company's knowledge, the Company is not liable for any off-site
contamination; (iv) to the Company's knowledge, the Company is not liable under
any Environmental Law; (v) the Company has all permits, licenses and other
authorizations required under any Environmental Law ("Environmental Permits");
(vi) the Company is in compliance with its Environmental Permits; and (vii)
there are no pending, or, to the knowledge of the Company, threatened claims
against the Company or any of its Subsidiaries relating to any Environmental Law
or Hazardous Substance.
SECTION 5.20. Brokers. KPMG Inc. has orally delivered to the
Company's Board of Directors its opinion that the consideration to be paid in
the Merger is fair to the holders of Shares from a financial point of view, and
shall deliver such opinion in writing to the Company's Board of Directors prior
to the date the Company files the Company Proxy Statement with the SEC. In
addition, no broker, investment banker, financial advisor or other Person, other
than KPMG Inc. and Katahdin Investment Partnership LLP, the fees and expenses of
which will be paid by the Company (and copies of whose engagement letters and a
calculation of the fees that would be due thereunder has been provided to
Parent), is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company or
any of its Subsidiaries. No such engagement letters obligate the Company to
continue to use their services or pay fees or expenses in connection with any
future transaction.
SECTION 5.21. Absence of Certain Commercial Practices. Neither
the Company nor any of its Subsidiaries, nor any director, officer, agent,
employee or other Person acting on behalf of the Company nor any of its
Subsidiaries, has given or agreed to give any gift or similar benefit of more
than nominal value to any customer, supplier or governmental employee or
official or any other Person who is in a position to help or hinder the Company
or any of its Subsidiaries in connection with any proposed transaction, which
gift or similar benefit, if not given in the past, has had or was likely to have
had an adverse effect on the prospects of the Company or its Subsidiary
transacting business with such customer or supplier, or which, if not continued
in the future, is likely to have such an effect after the Closing.
SECTION 5.22. Warranty Claims. To the Company's knowledge, no
defects exist in any products which would result in warranty or rebate claims
which the Company or any of its Subsidiaries would be liable in amounts
exceeding those reserved against (as determined in accordance with GAAP).
SECTION 5.23. Product Liability. There are no pending or, to
the Company's knowledge, threatened claims against the Company and, to the
Company's knowledge, there are no product defects or occurrences of events
forming the basis for specific material product liability claims against the
Company that are not adequately reserved against (as determined in accordance
with GAAP) or adequately covered by insurance.
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SECTION 5.24. Backlog. Exhibit 5.24 contains a true and
complete copy of the Company's and its Subsidiaries' open "firm" order reports
as of May 2, 1998, all of which represent bona fide orders received by the
Company in the ordinary course of business, and any options open as of May 2,
1998.
SECTION 5.25. Inventories. All inventories, whether or not
reflected in the financial statements in the SEC Documents, are of good, usable
and saleable quality in the ordinary course of business of the Company and its
Subsidiaries, except for obsolete items and items of below-standard quality as
to which adequate reserves (determined in accordance with GAAP) have been
provided. Except as set forth in the Company Disclosure Schedule, (i) all
inventories are of such quality as to meet the quality control standards of the
Company and its Subsidiaries, (ii) all inventories that are finished goods are
saleable as current inventory in the ordinary course of business, (iii) all
inventories are recorded on the books of the Company at the lower of actual cost
or market and (iv) all inventories disposed of by the Company since June 30,
1997 have been disposed of under terms consistent with past practices, except in
each case for exceptions that would not have a Company Material Adverse Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as
follows:
SECTION 6.1. Organization, Standing and Corporate Power.
Parent is a public limited company incorporated under the laws of England and
Wales and has been in continuous existence since its incorporation. Merger Sub
is a corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts. Each of Parent and Merger Sub has the
requisite corporate power and authority to carry on its business as now being
conducted.
SECTION 6.2. Authority; Noncontravention. (a) Parent and
Merger Sub have all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Parent and Merger
Sub (except for any approval required of such Person's shareholders). This
Agreement has been duly executed and delivered by Parent and Merger Sub and,
assuming this Agreement constitutes a valid and binding agreement of the
Company, constitutes a valid and binding obligation of such party, enforceable
against such party in accordance with its terms.
(c) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of
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this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation, modification or acceleration of any
obligation or to a loss of a material benefit under, or result in the creation
of any Lien upon any of the properties or assets of Parent or any of its
Subsidiaries under, (i) the memorandum and articles of association of Parent or
the articles of organization or by-laws of Merger Sub, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or any other contract,
agreement, instrument, permit, concession, franchise or license applicable to
Parent or Merger Sub or their respective properties or assets, or (iii) subject
to the governmental filings and other matters referred to in paragraph (d) of
this Section 6.2, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent, Merger Sub or any other Subsidiary of Parent or
their respective properties or assets, other than, in the case of clause (ii) or
(iii), any such conflicts, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not impair the ability of Parent and
Merger Sub to perform their respective obligations under this Agreement or
prevent or materially delay the consummation of any of the transactions
contemplated by this Agreement (a "Parent Material Adverse Effect").
(d) No Consent of any Governmental Entity is required by or
with respect to Parent, Merger Sub or any other Subsidiary of Parent in
connection with the execution and delivery of this Agreement or the
consummation by Parent or Merger Sub, as the case may be, of any of the
transactions contemplated by this Agreement, except for (i) compliance with the
applicable requirements of the Exchange Act, (ii) the filing of the Articles of
Merger with the Secretary of State of the Commonwealth of Massachusetts, (iv)
the filing with the United States Department of Justice and the Federal Trade
Commission of such forms as may be required by the HSR Act, (vi) any filing
pursuant to the requirements of the Exon-Xxxxxx Provision of the Defense
Production Act or U.S. Government approval of necessary securities agreements to
mitigate foreign ownership, control or influence pursuant to the National
Investment Securities Program Operating Manual, (vii) any requirements imposed
by the United States Department of Defense, (viii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws and the laws of any
foreign country and (ix) such other consents, authorizations, filings, approvals
and registrations which, if not obtained or made, would not have a Parent
Material Adverse Effect or have a material adverse effect on the ability of the
parties to consummate the Offer, the Merger or the other transactions
contemplated by this Agreement.
SECTION 6.3. Disclosure Documents. Any information with
respect to Parent and its Subsidiaries that Parent furnishes to the Company in
writing, specifically for use in the Company Proxy Statement will not contain,
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading at the time of filing
the Company Proxy Statement with the SEC, at the time the Company Proxy
Statement or any amendment or supplement thereto is first mailed to stockholders
of the Company, at the time if any such stockholders vote on adoption of this
Agreement and at the Effective Time.
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SECTION 6.4. Brokers. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission from the Company in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent or Merger Sub.
SECTION 6.5. Financial Resources. The Parent will have, and
will cause the Merger Sub to have, the financial resources necessary to perform
each of their respective obligations and to consummate the transactions
contemplated under this Agreement.
SECTION 6.6. Merger Sub. The Merger Sub 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.
SECTION 6.7. Litigation. There is no action, suit, proceeding,
claim, arbitration or investigation pending, or as to which the Parent or any of
its Subsidiaries has received any notice or assertion nor, to Parent's
knowledge, is there a threatened action, suit, proceeding, claim, arbitration or
investigation against Parent or any of its Subsidiaries which would have a
Parent Material Adverse Effect, or which in any manner challenges or seeks to
prevent, enjoin, alter or delay any of the transactions contemplated by this
Agreement.
ARTICLE VII
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 7.1. Conduct of Business. During the period from the
date of this Agreement to the Effective Time, the Company shall, and shall cause
its Subsidiaries to, carry on their business in the ordinary course of business
in substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them. Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time, the Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
except as expressly permitted by this Agreement or with the prior written
approval of Parent:
(a) (i) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in respect of, any
of its capital stock, other than (A) dividends and distributions by any direct
or indirect wholly owned Subsidiary of the Company to its parent or (B) if the
Offer has not been consummated, any annual dividend payable in October 1998 in
an amount consistent with that paid in October 1997, (ii) adjust, 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 (iii) purchase,
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redeem or otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(b) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options, including Company
Options, to acquire, any such shares, voting securities or convertible
securities (other than the issuance of Shares upon the exercise of Company
Options outstanding as of the date hereof);
(c) amend its Articles of Organization, by-laws or other
comparable charter or organizational documents;
(d) acquire or agree to acquire, including, without
limitation, by merging or consolidating with, or purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any other manner,
any business or any Person or division thereof;
(e) mortgage or otherwise encumber or subject to any Lien or,
except in the ordinary course of business consistent with past practice and
pursuant to existing contracts or commitments, sell, lease, license, transfer,
grant an option in respect of or otherwise dispose of any material properties or
assets;
(f) amend, modify or waive any material term of any
outstanding security of the Company and its Subsidiaries;
(g) incur, assume, guarantee or become obligated with respect
to any Indebtedness, or incur, assume, guarantee or become obligated with
respect to any other material obligations, other than in the ordinary course of
business and consistent with past practice;
(h) make or agree to make any new capital expenditures or
acquisitions of assets or property or other acquisitions or commitments in
excess of $100,000 in the aggregate or otherwise acquire or agree to acquire any
material assets or property;
(i) make any material tax election or take any material tax
position (unless required by law) or change its fiscal year or accounting
methods, policies or practices (except as required by changes in GAAP) or settle
or compromise any material income tax liability;
(j) make any loan, advance or capital contributions to or
investment in any Person other than in the ordinary course of business
consistent with past practice, but in no event in the amount of more than $7,500
to any one Person or $25,000 in the aggregate, and other than investments in
cash equivalents made in the ordinary course of business consistent with past
practice;
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(k) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction thereof, in the
ordinary course of business consistent with past practice and in accordance
with their terms, modify, amend or terminate any material contract or agreement
to which it is a party, or release or waive any material rights or claims, or
agree to modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any of its Subsidiaries is a party;
(l) (i) provide to any current or former director, officer or
employee of the Company or any of its Subsidiaries any material increase in
compensation or benefits or any severance payment or other benefit not required
under the terms of an existing Plan, except for employees who are not officers
or directors in the ordinary course of business consistent with past practice,
(ii) grant to any such director, officer, or employee any increase in severance
or termination pay (including the acceleration in the exercisability of Company
Options or in the vesting of Shares (or other property) except for automatic
acceleration in accordance with the terms of the Option Plans or the provision
of any tax gross-up), or (iii) enter into any employment, deferred compensation,
severance or termination agreement or arrangement with or for the benefit of any
such current or former director, officer, or employee; provided, however, that
notwithstanding any provision to the contrary, the Company shall be permitted to
hire new employees, at salary levels and with benefits packages consistent with
past practices, in the ordinary course of business;
(m) (i) take or agree or commit to take any action that would
make any representation or warranty of the Company hereunder inaccurate in any
material respect at, or as of any time prior to, the Effective Time, or (ii)
omit or agree or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect at any
such time; or
(n) authorize any of, or commit or agree to take any of, the
foregoing actions.
SECTION 7.2. No Solicitation.
(a) The Company shall not, directly or indirectly, through any
officer, director or employee, representative or agent of the Company or any of
its Subsidiaries, (i) solicit, initiate or encourage or take any other action to
facilitate the institution of any inquiries or proposals regarding any
Acquisition Proposal (as hereinafter defined), (ii) engage in negotiations or
discussions concerning, or provide any nonpublic information or assistance to
any Person in connection with any Acquisition Proposal or (iii) agree to,
approve or recommend any Acquisition Proposal. Nothing contained in this Section
7.2(a) shall prevent the Company or the Board of Directors of the Company from
considering, negotiating, discussing, approving, entering into agreements with
respect to and recommending to the stockholders of the Company a bona fide
Acquisition Proposal not solicited in violation of this Agreement that
constitutes a Superior Proposal (as hereinafter defined), provided that the
Board of Directors of the Company determines in good faith (after consultation
with and based upon the advise of outside counsel)
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that it is required to do so in order to discharge properly its fiduciary duties
to the Company's stockholders; and provided, further, that the Company shall
keep Parent informed, on a current basis, as to the status and details of any
such consideration, negotiations or discussions and shall, upon receipt, provide
Parent with copies of all correspondence, offers and written communications
received by it with respect thereto. Nothing contained in this Section 7.2(a)
shall prohibit the Board of Directors of the Company from complying with Rules
14d-9 and 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer.
(b) The Company shall immediately notify Parent after receipt
of any Acquisition Proposal or any modification of, or amendment to, any
Acquisition Proposal, or any request for nonpublic information relating to the
Company or any of its Subsidiaries in connection with an Acquisition Proposal or
for access to the properties, books or records of the Company or any Subsidiary
by any Person or entity that informs the Board of Directors of the Company or
such Subsidiary that it is considering making, or has made, an Acquisition
Proposal. Such notice to Parent shall be made orally and in writing, shall
indicate whether the Company is providing or intends to provide the Person
making the Acquisition Proposal with access to information concerning the
Company as provided in Section 7.2(c) and, if reasonably practicable, shall be
made prior to furnishing any such information to, or entering into negotiations
or discussions with, such Person.
(c) If the Board of Directors of the Company receives a
request for material nonpublic information by a Person who makes, or indicates
that it is considering making, a bona fide Acquisition Proposal, and the Board
of Directors determines in good faith and upon the advice of outside counsel
that it is required to cause the Company to act as provided in this Section
7.2(c) in order to discharge properly the directors' fiduciary duties to the
Company's stockholders, then, provided that such Person has executed a
confidentiality agreement substantially similar to the one then in effect among
the Company and Parent, the Company may provide such Person with access to
information regarding the Company.
(d) The Company shall immediately cease and cause to be
terminated any existing discussions or negotiations with any Persons (other than
Parent and Merger Sub) conducted heretofore with respect to any of the
foregoing. The Company agrees not to release any third party from the
confidentiality provision of any confidentiality agreement to which the Company
is a party.
(e) The Company shall ensure that the officers, directors and
employees of the Company and its Subsidiaries and any investment banker or other
advisor or representative retained by the Company are aware of the restrictions
described in this Section 7.2.
(f) For purposes of this Agreement, an "Acquisition Proposal"
shall mean any of the following involving the Company or any of its Subsidiaries
(other than the entering into or consummation of the Merger and the other
transactions contemplated hereby): (a) any merger, consolidation, share
exchange, business combination, or other similar transaction; (b) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of substantial
assets (other than
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assets held in inventory for resale in the ordinary course of business) of the
Company and its Subsidiaries, taken as a whole, in a single transaction or
series of transactions; (c) any tender offer or exchange offer that if
consummated would result in any Person beneficially owning 20% or more of the
outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; (d) any
solicitation of proxies in opposition to approval by the Company's stockholders
of the Merger; (e) the acquisition by any Person, after the date hereof, of
beneficial ownership or the right to acquire beneficial ownership of, or the
formation of any "group" (as such term is defined under Section 13(d) of the
Exchange Act), that beneficially owns or has the right to acquire beneficial
ownership of 20% or more of the then outstanding shares of capital stock of the
Company, or the acquisition by any Person or "group" that, as of the date
hereof, beneficially owns 20% or more of the outstanding shares of capital stock
of the Company of beneficial ownership or the right to acquire beneficial
ownership of any additional shares of capital stock of the Company; (f) the
adoption by the Company of a plan of liquidation, the declaration or payment by
the Company of an extraordinary dividend on any of its shares of capital stock
or the effectuation by the Company of stock dividend or a distribution of assets
of any kind to the holders of such capital stock (except as permitted herein);
(g) the repurchase by the Company or any of its Subsidiaries of Shares; or (h)
any agreement to, or public announcement by the Company or any other Person,
entity or group of a proposal, plan or intention to, do any of the foregoing.
SECTION 7.3. Access to Information. From the date hereof until
the Effective Time, the Company will give Parent, its counsel, financial
advisors, auditors and other authorized representatives full and complete
access (during normal business hours and upon reasonable notice) to the offices,
properties, officers, employees, accountants, auditors, counsel and other
representatives, books and records of the Company and its Subsidiaries
(including to perform any environmental studies), will furnish to Parent, its
counsel, financial advisors, auditors and other authorized representatives,
subject to the provisions of the Confidentiality Agreement, such financial,
operating and property related data and other information as such Persons may
request, and will instruct the Company's and its Subsidiaries' employees,
counsel and financial advisors to cooperate with Parent in its investigation of
the business of the Company and its Subsidiaries.
SECTION 7.4. Company SEC Documents.
(a) The Company shall timely file all required SEC Documents,
each of which (i) shall be prepared in all material respects in accordance with
the requirement of the Securities Act and Exchange Act applicable to such SEC
Documents and (ii) shall not at the time they are filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Documents filed after the
date of this Agreement and prior to the Effective Time shall be prepared in
accordance with the published rules and regulations of the SEC and generally
accepted accounting principles applied on a consistent basis throughout
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the periods indicated and each shall present fairly, the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which are not expected,
individually or in the aggregate, to be material).
SECTION 7.5. Notification of Certain Matters. The Company
shall give prompt notice to Parent of (a) any notice of, or other communication
relating to, a default or event which, with notice or lapse of time or both,
would become a default, received by the Company or any of its Subsidiaries
subsequent to the date of this Agreement and prior to the Effective Time, under
any contract material to the business, operations, properties, financial
condition or results of operations of the Company and its Subsidiaries, taken as
a whole, to which the Company or any of its Subsidiaries is a party or is
subject, (b) any Company Material Adverse Change involving the Company or the
occurrence of any event which, so far as reasonably can be foreseen at the time
of its occurrence, is reasonably likely to result in any such change or (c)(i)
any representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any respect, or (ii) the failure by it to comply with or
satisfy in any respect any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 7.6. Accountants. The Company shall cause Xxxxxx
Xxxxxxxx LLP, the Company's independent auditors, to deliver to Parent and
Merger Sub on or prior to the expiration of the Offer a letter (the
"Accountant's Letter"), dated such date, in form and substance reasonably
satisfactory to Parent to the effect that they have performed their usual
procedures and that based upon such procedures, nothing has come to their
attention which would cause them to believe that any financial statements
contained in any SEC Documents filed by the Company with respect to the periods
ending on or after the fiscal year ended June 30, 1997 do not comply in all
material respects with all applicable accounting requirements of the Exchange
Act or that such financial statements are not fairly presented in all material
respects in conformity with generally accepted accounting principles.
ARTICLE VIII
COVENANTS OF PARENT AND MERGER SUB
Parent and Merger Sub agree that:
SECTION 8.1. Confidentiality. Prior to the Effective Time and
after any termination of this Agreement, Parent will hold, and will use its
reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
Company and its Subsidiaries furnished to Parent in connection with the
transactions contemplated by this Agree-
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ment, except to the extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by Parent, (ii) in the public domain
through no fault of Parent or (iii) later lawfully acquired by Parent from
sources other than the Company; provided that Parent may disclose such
information to its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement. Parent's obligation to hold any such information
in confidence shall be satisfied if it exercises the same care with respect to
such information as it would take to preserve the confidentiality of its own
similar information. If this Agreement is terminated, Parent will, and will use
its best efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, deliver to the Company, upon
request, or, at the election of Parent, destroy, all documents and other
materials and all copies thereof, obtained by Parent or on its behalf from the
Company in connection with this Agreement that are subject to such
confidentiality.
SECTION 8.2. Obligations of Merger Sub. Parent will take all
action, and provide all financing, necessary to cause Merger Sub to consummate
the Offer and the Merger on the terms and conditions set forth in this
Agreement.
SECTION 8.3. Voting of Shares. Each of Parent and Merger Sub
agrees to vote all Shares beneficially owned by it, if any, in favor of adoption
of this Agreement at the Company Stockholder Meeting.
SECTION 8.4. Director and Officer Liability. For six years
after the Effective Time, Parent will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers, directors,
employees and agents of the Company (the "Indemnified Parties") in respect of
acts or omissions occurring on or prior to the Effective Time or arising out of
or pertaining to the transactions contemplated by this Agreement to the extent
provided under the Company's Articles of Organization and By-laws in effect on
the date hereof; provided that such indemnification shall be subject to any
limitation imposed from time to time under applicable law. Parent and Surviving
Corporation shall not amend the Articles of Organization or by-laws of the
Surviving Corporation to amend the indemnification provisions therein in a
manner inconsistent with this Section 8.4 for the six-year period referred to
above. For three years after the Effective Time, Parent will cause the Surviving
Corporation to use its best efforts to provide officers' and directors'
liability insurance in respect of acts or omissions occurring on or prior to the
Effective Time covering each such Person currently covered by the Company's
officers' and directors' liability insurance policy on terms substantially
similar to those of such policy in effect on the date hereof; provided that in
satisfying its obligation under this Section 8.4, Parent shall not be obligated
to cause the Surviving Corporation to pay premiums in excess of 125% of the
amount per annum the Company paid in its last full fiscal year, which amount has
been disclosed to Parent, and if the Surviving Corporation is unable to obtain
the insurance required by this Section , it shall obtain as much comparable
insurance as possible for an annual premium equal to such maximum amount.
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SECTION 8.5. Notice to Company of Certain Events. Each of the
Parent and Merger Sub shall give prompt notice to the Company of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
ARTICLE IX
COVENANTS AND FURTHER AGREEMENTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 9.1. Reasonable Efforts; Notification; Further
Actions.
(a) Each of the parties agrees to use all reasonable efforts
to take, or cause to be taken, all actions, and to 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, in the most expeditious
manner practicable the Offer, the Merger and the other transactions contemplated
by this Agreement, including (i) the obtaining of all other necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all other necessary registrations and filings (including other filings
with Governmental Entities, if any), (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the preparation of the
Company Proxy Statement, if required, and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement.
(b) Notwithstanding anything to the contrary in Section 9.1
(a), (i) neither Parent nor any of its Subsidiaries or affiliates shall be
required to divest, or cause or permit the Company or its Subsidiaries or
affiliates to divest or agree to hold separate, any of their respective
businesses, product lines or assets, or to take or agree to take any other
action or agree to any limitation that could reasonably be expected to have a
material adverse effect on the value, condition (financial or otherwise),
prospects, business or results of operations or prospects of Parent and its
Subsidiaries taken as a whole or of the Company and its Subsidiaries taken as a
whole, or all such entities taken together, and (ii) neither Parent nor Merger
Sub shall be required to waive any of the conditions to the Merger set forth in
Article X.
(c) The Company shall give prompt notice to Parent, and Parent
or Merger Sub shall give prompt notice to the Company, of:
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(i) any notice or other communication from any Person alleging
that the con sent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this
Agreement; and
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against,
relating to or involving or otherwise affecting it or any of its
Subsidiaries which, if pending on the date of this Agreement would
have been required to have been disclosed pursuant to Article IV or
which relate to the consummation of the transactions contemplated by
this Agreement.
(d) Each of Parent, Merger Sub and the Company shall not
permit any of its respective Subsidiaries to take any action that would, or that
would reasonably be expected to, result in (i) any of its respective
representations and warranties set forth in this Agreement that are qualified as
to materiality becoming untrue, (ii) any of such respective representations and
warranties that are not so qualified becoming untrue in any material respect or
(iii) any of the conditions to the Merger set forth in Article X not being
satisfied except to the extent permitted under Sections 7.2 and 9.5 in the
exercise of the fiduciary duties referred to therein.
(e) Each of the Parent and Merger Sub shall give prompt notice
to the Company of (i) any representation or warranty made by it contained in
this Agreement that is qualified as to materiality becoming untrue or inaccurate
in any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect or (ii) the failure by it
to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
SECTION 9.2. Public Announcements. Parent and Merger Sub, on
the one hand, and the Company, on the other hand, will consult with each other
before issuing, and provide each other the opportunity to review and comment
upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange or with the Nasdaq National Market. The parties agree that the initial
press release to be issued with respect to the transactions contemplated by this
Agreement will be in the form previously agreed to by the parties.
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SECTION 9.3. Directors.
(a) Promptly upon the acceptance for payment of, and payment
for, Shares constituting a majority of the then outstanding Shares by Parent or
Merger Sub, as applicable, pursuant to the Offer, Parent from time to time shall
be entitled to designate such number of directors (rounded up to the next whole
number) on the Board of Directors of the Company as will give Parent or Merger
Sub, as applicable, subject to compliance with Section 14(f) of the Exchange
Act, up to that percentage of the total number of directors on the Board of
Directors of the Company (giving effect to the election of any additional
directors pursuant to this Section 9.3) equal to the percentage of then
outstanding Shares owned by Parent or Merger Sub, and the Company shall, at such
time, cause Parent's or Merger Sub's designees, as applicable, to be so elected
by its existing Board of Directors; provided, however, that in the event that
such designees are elected to the Board of Directors of the Company, until the
Effective Time such Board of Directors shall have at least two directors who are
directors on the date of this Agreement [and who are neither officers of the
Company nor affiliates of Parent or Merger Sub (the "Independent Directors");
and provided further that if the number of Independent Directors shall be
reduced below two for any reasons whatsoever, the remaining Independent Director
shall designate a Person to fill such vacancy who shall be deemed to be an
Independent Director for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate two Persons to fill
such vacancies who shall not be officers or affiliates of the Company or
officers or affiliates of Parent of any of its Subsidiaries, and such Persons
shall be deemed to be Independent Directors for purposes of this Agreement.
(b) Subject to applicable law, the Company shall take all
actions requested by Parent necessary to effect any such election, including
mailing to its stockholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder by the SEC, and the Company agrees to make such mailing with the
mailing of the Schedule 14D-9 (or if requested by Parent promptly after a later
request for such mailing). In connection with the foregoing, the Company will
promptly, at the option of Parent, either increase the size of the Company's
Board of Directors and/or obtain the resignation of such number of its current
directors as is necessary to enable Parent's or Merger Sub's designees, as
applicable, to be elected or appointed to, and to constitute (rounded up to the
next whole number that percentage of the total number of directors on the Board
of Directors of the Company (giving effect to the election of any additional
directors pursuant to this Section 9.3) equal to the percentage of then
outstanding Shares owned by Parent or Merger Sub (provided that such percentage
of the total number of directors shall not be less than a majority of the Board
of Directors of the Company).
(c) Following the election of Parent's or Merger Sub's
designees, as applicable, pursuant to this Section 9.3, prior to the Effective
Time, any amendment or termination of this Agreement or waiver of any of the
Company's rights hereunder shall require the concurrence of a majority of the
Independent Directors.
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SECTION 9.4. Employees. Parent agrees to provide, after the
Effective Time, or cause the Surviving Corporation to provide employees of the
Company and its Subsidiaries retained and who continue to be employed by Parent
with employee benefits in the aggregate substantially no less favorable
than those benefits provided by the Company to its employees prior to the
Effective Time that are set forth in Schedule 9.4 for a period ending on the
first anniversary of the Effective Time. The benefits provided shall include
those listed in paragraphs 2 and 3 of Section 9.4 to the Company Disclosure
Schedule.
SECTION 9.5. Company Stockholder Meeting.
(a) The Company will take all action necessary in accordance with
applicable law and its Articles of Organization and by-laws to duly call and
convene a meeting of its shareholders (a "Company Stockholder Meeting") to
consider and vote upon the approval of this Agreement and the Merger and such
other matters as may be necessary to effectuate the transactions contemplated
hereby, if necessary to comply with applicable law, as promptly as practicable
after the expiration of the Offer.
(b) The Board of Directors of the Company shall recommend such
approval and take all lawful action to solicit such approval; provided, however,
that the Board of Directors of the Company at any time prior to the time of
acceptance for payment of at least two-thirds of the Shares pursuant to the
Offer may withdraw, modify or change any such recommendations to the extent that
the Board of Directors of the Company (i) determines in good faith after
consultation with and based upon the advice of outside legal counsel that it is
required to so withdraw, modify or change its recommendation in order to
discharge properly its fiduciary duties to the Company's stockholders under
applicable law and (ii) the Company has received in writing a Superior Proposal
(as hereinafter defined), which is then pending, which the Board of Directors of
the Company has determined to recommend to the stockholders of the Company. For
purposes of this Agreement, a "Superior Proposal" means any bona fide proposal
relating to an Acquisition Proposal made by a third party on terms which the
Board of Directors of the Company determines in its good faith judgment (based
upon the advice of a financial advisor of nationally recognized reputation,
including KPMG Inc.) to be more financially favorable to the Company's
stockholders than the Offer and the Merger and for which financing, to the
extent required, is then committed or which, in the good faith judgment (based
upon the advice of a financial advisor nationally recognized reputation,
including KPMG, Inc.) of the Board of Directors of the Company, is reasonably
capable of being financed by such third party. The Company agrees that it shall
notify Parent at least 48 hours prior to taking any action with respect to such
Superior Proposal or taking any action with respect to the withdrawal,
modification or change of its recommendation for approval of this Agreement, the
Offer, the Merger or the transactions contemplated hereby. Notwithstanding
anything to the contrary contained in this Agreement, any such withdrawal,
modification or change of recommendation in accordance with the provisions of
this Section 9.5(b) shall not constitute a breach of this Agreement by the
Company.
(c) Notwithstanding the foregoing, in the event that Parent
shall acquire at
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least 90 percent of the then outstanding Shares, the parties hereto agree,
subject to Article X, to take all necessary and appropriate action to cause the
Merger to become effective, in accordance with Section 82 of the BCL, as soon as
reasonably practicable after the Merger, without a meeting of the stockholders
of the Company.
(d) If paragraph (c) is inapplicable, as soon as practicable
after the expiration of the Offer, the Company shall file with the SEC the
Company Proxy Statement, which shall comply as to form with all applicable laws.
The Company shall obtain and furnish the information required to be included in
the Company Proxy Statement and shall respond promptly to any comments made by
the SEC with respect to the Company Proxy Statement and cause the Company Proxy
Statement to be mailed to the Company's stockholders at the earliest practicable
date. Parent and Merger Sub shall cooperate in the preparation of the Company
Proxy Statement and shall furnish the Company with all information with respect
to itself, and its directors, officers, stockholders and Subsidiaries, as may be
required for inclusion in the Company Proxy Statement. The Company agrees, as to
information with respect to the Company, its officers, directors, stockholders
and Subsidiaries contained in the Company Proxy Statement, and Parent agrees, as
to information with respect to Parent, its officers, directors, stockholders and
Subsidiaries contained in the Company Proxy Statement, that such information, at
the date the Company Proxy Statement is mailed and (as then amended or
supplemented) at the time of the Meeting, will not be false or misleading with
respect to any material fact, or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
Parent and its counsel shall be given an opportunity to review the Company Proxy
Statement, and all amendments or supplements thereof, prior to their being filed
with the SEC and the Company shall not make any such filing without the approval
of Parent (which shall not be unreasonably withheld). The Company will advise
Parent, promptly after it receives notice thereof, of the time when the Company
Proxy Statement has been cleared by the SEC or any request by the SEC for
amendment of the Company Proxy Statement or comments thereon and proposed
responses thereto or requests by the SEC for additional information.
ARTICLE X
CONDITIONS TO THE MERGER
SECTION 10.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) if required by applicable law, this Agreement shall have been
approved and adopted by the stockholders of the Company within the meaning
of, and in accordance with, applicable law and the Company's Articles of
Organization and by-laws;
(b) no provision of any applicable law or regulation and no judgment,
injunction, order, decree or other legal restraint shall prohibit the
consummation of the Merger; and
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(c) the Merger Sub shall have made the Offer on the terms and
conditions set forth herein and shall have purchased, or caused to be
purchased, all Shares validly tendered and not withdrawn pursuant to
the Offer; provided, however, this condition shall not be applicable to
the obligations of Parent or Merger Sub if, in breach of this Agreement
or the terms of the Offer, Merger Sub fails to purchase any Shares
validly tendered and not withdrawn pursuant to the Offer.
SECTION 10.2. Conditions to the Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to consummate the Merger
are further subject to the satisfaction of the condition that the Offer shall
not have been terminated in accordance with its terms prior to the purchase of
any Shares.
ARTICLE XI
TERMINATION
SECTION 11.1. Termination. This Agreement may be terminated
and the Merger and the other transactions contemplated hereby may be abandoned
at any time prior to the Effective Time (notwithstanding any requisite approval
and adoption of this Agreement and the transactions contemplated hereby):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent if the Merger shall not
have been consummated by October 31, 1998; provided, however, that the
right to terminate this Agreement under this Section 11.1(b) shall not
be available to any party whose action or failure to act has been a
principal cause of, or resulted in, the failure of the Merger to occur
on or before such date if such action or failure to act constitutes a
breach of this Agreement;
(c) by Parent, if at the Company Stockholder Meeting or any
adjournment thereof at which the Company Stockholder Approval is voted
upon, the Company Stockholder Approval shall not have been obtained
(provided that the right to terminate under this Section 11.1(c) shall
not be available to Parent where the failure to obtain the Company
Stockholder Approval shall have been caused by (i) the failure of the
Parent or Merger Sub to vote its Shares in favor of the Merger or (ii)
if it is legally able to do so because of its control of the Company's
Board of Directors, failure to call or convene a meeting of the
stockholders of the Company to vote on the Merger as provided in
Section 9.5(a) and (d));
(d) by either the Company or Parent, if Parent or Merger Sub
shall have terminated the Offer in accordance with its terms and
conditions without purchasing any Shares pursuant thereto;
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(e) by either the Company or Parent, if there shall be any law or
regulation that makes payment of, or payment for Shares pursuant to
the Offer or consummation of the Merger illegal or otherwise
prohibited or any judgment, injunction, order or decree is entered
enjoining Parent, the Merger Sub, or the Company from paying for the
Shares pursuant to the Offer or consummating the Merger and, in the
case of any action brought other than by a Governmental Entity, such
judgment, injunction, order or decree shall become final and
non-appealable; or
(f) by Parent, if the Board of Directors of the Company (i)
withdraws, modifies or changes its recommendation of this Agreement,
the Offer or the Merger in a manner adverse to Parent or Merger Sub,
(ii) shall have initiated, entered into, or recommended to the
stockholders of the Company any Acquisition Proposal (including a
Superior Proposal) or (iii) shall have resolved to do any of the
foregoing;
(g) by Parent, prior to the purchase of the Shares pursuant to
the Offer if there has been a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall
have become untrue (except, in all cases, where the failure to be so
true and correct would not have a Company Material Adverse Effect) (a
"Terminating Company Event"); provided, however, that, if such
Terminating Company Event is curable by the Company through the
exercise of its reasonable best efforts and for so long as the Company
continues to exercise such reasonable best efforts (but in no event
longer than 30 days after Parent's notification of the Company of the
occurrence of such Terminating Company Event), Parent may not
terminate this Agreement under this Section 11.1(g);
(h) by the Company, if there has been a breach of any
representation, warranty, covenant or agreement on the part of Parent
and Merger Sub set forth in this Agreement, or if any representation
or warranty of Parent and Merger Sub shall have become untrue (except,
in all cases, where the failure to be so true and correct would not
have a Parent Material Adverse Effect) ("Terminating Parent Event");
provided, however, that, if such Terminating Parent Event is curable
by Parent and Merger Sub through the exercise of its reasonable best
efforts and for so long as Parent and Merger Sub continue to exercise
such reasonable best efforts (but in no event longer than 30 days
after the Company's notification of Parent of the occurrence of such
Terminating Purchaser Event), the Company may not terminate this
Agreement under this Section 11.1(h);
(i) by the Company, if Merger Sub has not commenced the Offer
within five business days of the date on which Merger Sub's intention
to make the Offer is publicly announced;
(j) by the Company or the Parent, if the Company shall have
accepted a Superior Proposal; or
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(k) by the Company, if at a meeting of the shareholders of the
Parent or any adjournment thereof at which the approval of the
shareholders of the Parent to the acquisition by the Parent of the
Company is voted upon, such approval shall not have been obtained by
the requisite vote required.
SECTION 11.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 11.1, this Agreement shall become void and of no
effect with no liability on the part of any party hereto or their respective
officers and directors, except that the agreements contained in Sections 8.1,
12.4 and 12.6 shall survive the termination hereof. Specifically, and without
limiting the generality of the foregoing, Parent and Merger Sub agree that
termination of this Agreement and remedies in Section 12.4 shall be their sole
and exclusive remedy for any nonwillful breach by the Company of its
representations, warranties and covenants under this Agreement and the Company
agrees that termination of this Agreement and remedies in Section 12.4 shall be
its sole and exclusive remedy for any nonwillful breach by Parent or Merger Sub
of their representations, warranties and covenants under this Agreement.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy or
similar writing) and shall be given,
if to Parent or Merger Sub, to:
Filtronic plc
Xxxxx Xxxx Xxxx, Xxxxxxxx
Xxxxxxx, XX 00 0XX
Xxxxxxx
Telecopy: 011-44-1274-530622
Attention: Xxxxxxxxxxx Xxxxxxxxx, Solicitor
with a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxx X. Xxxxx, Esq.
if to the Company, to:
Sage Laboratories, Inc.
00 Xxxxx Xxxxx
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00
Xxxx Xxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Chief Executive Officer
with a copy to:
Xxxxxx & Dodge, LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: 617-227-4420
Attention: Xxxxxxx Xxxxxx, Esq.
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered at the address specified
in this Section 12.1.
SECTION 12.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the
representations, warranties and agreements set forth in Sections 8.1, 12.4 and
12.6 which shall survive termination of this Agreement.
SECTION 12.3. Entire Agreement; Amendments; No Waivers. (a)
This Agreement and the Confidentiality Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and superede all prior
agreements and understandings of the parties with respect thereto.
(b) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, by the party to be charged therewith; provided that if and
after the adoption of this Agreement by the stockholders of the Company, no such
amendment or waiver shall, without the further approval of such stockholders,
alter or change (i) the amount or kind of consideration to be received in
exchange for any shares of capital stock of the Company or (ii) any of the
principal terms of the Merger.
(c) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
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SECTION 12.4. Expenses.
(a) Except as otherwise set forth in this Section 12.4, all
Expenses (as herein defined) incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not any transaction contemplated hereby is consummated.
"Expenses" as used in this Agreement shall include all reasonable out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the preparation, printing, filing and mailing of
the Company Proxy Statement if required and the Offer documents, the
solicitation of stockholder approvals and all other matters relating to the
closing of the transactions contemplated hereby.
(b) The Company agrees that, if
(i) Parent shall terminate this Agreement pursuant to Section
11.1(f), (g) or (j) or the Company shall terminate this
Agreement pursuant to Section 11.1(j); or
(ii) Parent shall terminate this Agreement pursuant to Section
11.1(c) or shall terminate the Offer because the Minimum
Condition (as defined in Exhibit 1.1 hereof) is not
satisfied and at the time the Company Stockholder Approval
in the case of a termination pursuant to 11(c) was voted
upon or the Offer was so terminated, as the case may be (A)
there was announced or commenced an Acquisition Proposal and
the Company shall have either (x) executed an agreement to
engage in the same or (y) the Board of Directors of the
Company shall not have recommended against such Acquisition
Proposal and maintained such recommendation in effect or (B)
there was announced an Acquisition Proposal with a third
party and the Company shall have initiated, recommended or
entered into an agreement to engage in, an Acquisition
Proposal with such third party or an affiliate thereof
within 12 months after the date of the Company Stockholder
Meeting or the termination of the Offer, as the case may be;
or
(iii) Parent shall terminate the Offer because the condition
under clause (iv)(f) of Exhibit 1.1 hereof shall exist;
then promptly after such termination (or, with respect to
clause (ii)(B) above, upon engaging in such Acquisition
Proposal or agreement) the Company shall pay to Parent an
amount equal to (i) in the case of a termination by Parent
pursuant to Section 11.1(g) or the termination event
referred to in Section 12.4(b)(iii), 3% of the amount of the
consideration to
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be paid to the stockholders of the Company hereunder and (ii) in the
case of a termination pursuant to Section 11(f) or (j) or the
termination events referred to in Section 12.4(b)(ii), that amount
which is equal to the greater of (x) 3% of the amount of the
consideration to be paid to the stockholders of the Company hereunder
and (y) the excess of the amount which the stockholders of the Company
who are parties to a Stockholder Agreement would receive in any
Superior Proposal over the amount to be paid to such stockholders
hereunder, but in no event shall such amount exceed 5% of such
consideration to be paid to the stockholders of the Company hereunder.
(c) Parent agrees that, if
(i) Company shall terminate this Agreement pursuant to Section
11.1(h), (i) or (k); or
(ii) Parent shall terminate the Offer because clause (iii) of
Exhibit 1.1 hereof is not satisfied;
then promptly after such termination, Parent shall pay to the
Company an amount equal to $250,000.
(d) Any payment required to be made pursuant to Section 12.4(b) or
12.4(c) shall be made to Parent or the Company, as the case may be, not later
than three business days after delivery to the Company or Parent of notice of
demand for payment and shall be made by wire transfer of immediately available
funds to an account designated by Parent or the Company in the notice of demand
for payment delivered pursuant to this Section 12.4.
(e) The payouts, if any, made pursuant to Section 12.4 shall not be
deemed to be liquidated damages, and the right to the payment of such amount
shall be in addition to (and not a maximum payment in respect of) any other
damages or remedies at law or in equity (i) to which Parent or Merger Sub may be
entitled as a result of the Company's willful violation or breach of any term or
provision of this Agreement or (ii) to which the Company may be entitled as a
result of Parent's or Merger Sub's willful violation or breach of any term or
provision of this Agreement.
SECTION 12.5. Successors and Assigns; Parties in Interest. The
provisions of this Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and assigns, provided that
no party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties hereto
except that Merger Sub may transfer or assign, in whole or from time to time in
part, to one or more of Parent or any of its wholly owned Subsidiaries, any or
all of its rights or obligations, but any such transfer or assignment will not
relieve Merger Sub of its obligations under this Agreement. Except as expressly
set forth herein nothing in this Agreement, express or implied, is intended to
or shall confer upon any Person not a party hereto any right, benefit or rem-
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edy of any nature whatsoever under or by reason of this Agreement, including to
confer third party beneficiary rights.
SECTION 12.6. Governing Law; Jurisdiction. (a) This Agreement shall
be construed in accordance with and governed by the law of the Commonwealth of
Massachusetts, without giving effect to principles of conflicts of laws.
(b) Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought against any of
the parties in the courts of the Commonwealth of Massachusetts, or, if it has or
can acquire jurisdiction, in the United States District Court for the District
of Massachusetts, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
SECTION 12.7. Counterparts; Effectiveness; Interpretation. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto. When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation."
The parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above
written.
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SAGE LABORATORIES, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------
Xxxx X. Xxxxxxxxxx
Treasurer
FILTRONIC PLC
By: /s/ Xxxxxxxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxxxxxxx Xxxxxxxxx
Title: Company Secretary
FIL ACQUISITION CORP.
By: /s/ Xxxxxxxxx Xxxx Xxxxxx
--------------------------
Name: Xxxxxxxxx Xxxx Xxxxxx
Title: President
By: /s/ Xxxxxxxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxxxxxxx Xxxxxxxxx
Title: Clerk
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EXHIBIT 1.1
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement,
Parent or the Merger Sub, as applicable, shall not be required to accept for
payment or pay for any Shares tendered pursuant to the Offer, and may terminate
or amend the Offer (subject to the provisions of the Agreement) and may postpone
the acceptance of, and payment for, subject to Rule 14e-1(c) of the Exchange
Act, any Shares tendered if:
(i) the Minimum Condition (as hereinafter defined) shall not
have been satisfied,
(ii) the period of time for any review process by the
Committee on Foreign Investment in the United States ("CFIUS") pursuant to
Section 721 of Title VII of the Defense Production Act of 1950 as amended by
Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 (the "Exon
Xxxxxx Act") in relation to the determination of any threat to national security
shall not have expired, and CFIUS shall have taken any action or made any
recommendation to the President of the United States to block or prevent the
consummation of the transaction;
(iii) the shareholders of Parent shall not have approved the
acquisition of the Company by Parent;
(iv) at any time on or after the date of this Agreement, and
prior to the acceptance for payment of Shares, any of the following conditions
shall exist:
(a) there shall have been instituted by any
government or Governmental Entity, any action or proceeding before any
Governmental Entity (including such Governmental Entity instituting or
initiating such action or proceeding): (i) challenging or seeking to make
illegal, materially delay or otherwise directly or indirectly restrain or
prohibit the making of the Offer, the acceptance for payment of, or payment for,
any Shares by Parent, Merger Sub or any other affiliate of Parent, or the
consummation of any other transaction contemplated by this Agreement, or seeking
to obtain material damages in connection with any transaction contemplated by
the Agreement; (ii) seeking to prohibit or limit materially the ownership or
operation by the Company, Parent or any of their respective Subsidiaries of all
or any material portion of the business or assets of the Company, Parent or any
of their respective Subsidiaries, or to compel the Company, Parent or any of
their respective Subsidiaries to dispose of or to hold separate all or any
material portion of the business or assets of the Company, Parent or any of
their respective Subsidiaries, as a result of the transactions contemplated by
this Agreement; (iii) seeking to impose or confirm limitations on the ability of
Parent, Merger Sub or any other affiliate of Parent to exercise effectively full
rights of ownership of any Shares, including, without limitation, the right to
vote any Shares acquired by Merger Sub or Parent pursuant to the Offer or
54
otherwise on all matters properly presented to the Company's stockholders,
including, without limitation, the approval and adoption of this Agreement and
the transactions contemplated by this Agreement; (iv) seeking to require
divestiture by Parent, Merger Sub or any other affiliate of Parent of any Share;
or (v) which otherwise has a Company Material Adverse Effect or which relates to
the transactions contemplated by this Agreement and has a Parent Material
Adverse Effect;
(b) there shall have been any action taken, or any
law enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Parent, the Company or any Subsidiary or affiliate of Parent
or the Company or (ii) any transaction contemplated by the Agreement, by any
government or Governmental Entity, which is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) there shall have occurred any change, condition,
event or development that has a Company Material Adverse Effect;
(d) there shall have occurred (i) any general
suspension of, or limitation on prices for, trading in securities on the New
York Stock Exchange or the Nasdaq National Market (excluding any coordinated
trading halt triggered solely as a result of a specified decrease in a market
index), (ii) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States, (iii) any limitation (whether or not
mandatory) by any government or Governmental Entity of the United States on the
extension of credit by banks or other lending institutions or (iv) a
commencement of a war or material armed hostilities or other national or
international calamity involving the United States;
(e) the Company or any of its Subsidiaries shall have
sustained a loss or interference with its business by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act which
will, in the reasonable opinion of Parent, make it inadvisable or impractical to
proceed with the Offer;
(f) (i) it shall have been publicly disclosed or
Parent or Merger Sub shall have otherwise learned that beneficial ownership of
20% of more of the then outstanding Shares has been acquired by any Person,
other than Parent or any of its affiliates or any other Person not required to
file a Schedule 13D under the rules promulgated under the Exchange Act or (ii)
(A) the Board of Directors of the Company or any committee thereof shall have
withdrawn, modified or changed in a manner adverse to Parent or Merger Sub the
approval or recommendation of the Offer, the Merger or the Agreement, or
approved or recommended any Acquisition Proposal or any other acquisition of
Shares other than the Offer or the Merger or (B) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the foregoing;
(g) the representations and warranties of the Company
contained in this Agreement shall not be true and correct in all respects
(except, in all cases, where the failure to be so true and correct would not
have a Company Material Adverse Effect) as of the expiration of the
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Offer, except for (i) changes specifically contemplated by this Agreement and
(ii) those representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such date);
(h) the Company shall not have performed or complied
in all material respects with all obligations, agreements and covenants of the
Company to be performed or complied with by it under this Agreement;
(i) the Agreement shall have been terminated in
accordance with its terms; or
(j) Parent and the Company shall have agreed that
Parent or Merger Sub, as applicable, shall terminate the Offer or postpone the
acceptance for payment of or payment for Shares thereunder.
For purposes hereof the term "Minimum Condition" shall mean at
least two-thirds of the Shares outstanding on a fully diluted basis (including
for purposes of such calculation all Shares issuable upon exercise of all stock
options that are or will be fully vested, currently exercisable and outstanding
immediately prior to the Effective Time and conversion of convertible securities
or other rights to purchase or acquire Shares that can be converted or purchased
prior to the Effective Time) being validly tendered and not withdrawn prior to
the expiration of the Offer.
The foregoing conditions are for the sole benefit of Parent
and Merger Sub and may be asserted by Parent or Merger Sub regardless of the
circumstances giving rise to any such condition or may be waived by Parent or
Merger Sub in whole or in part at any time and from time to time in their sole
discretion, subject in each case to the terms of this Agreement. The failure by
Parent or Merger Sub at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right; the waiver of any such right with
respect to particular facts and other circumstances shall not be deemed a waiver
with respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
3
