EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of June
1, 1998, is made by and among Advanced Energy Industries, Inc., a Delaware
corporation ("Parent"), Warpspeed, Inc., a New Jersey corporation and a wholly
owned subsidiary of Parent ("Merger Sub"), and RF Power Products, Inc., a New
Jersey corporation (the "Company").
RECITALS
A. The Boards of Directors of Parent and the Company each have determined
that a business combination between Parent and the Company would enable the
companies to achieve long-term strategic and financial benefits and,
accordingly, is in the best interests of their respective stockholders. Each of
such Boards of Directors desires to effect the Merger (as defined herein), on
the terms and subject to the conditions set forth herein.
B. It is intended that the Merger qualify as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"), for federal income tax purposes.
C. It is intended that the Merger be accounted for as a pooling of
interests for financial accounting purposes.
D. Parent has incorporated and organized Merger Sub solely to facilitate
the Merger.
NOW, THEREFORE, in consideration of the mutual covenants and subject to the
terms and conditions set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1. The Basic Transaction. On the terms and subject to the conditions of
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this Agreement, at the Effective Time (as defined in Section 1.3), Merger Sub
shall be merged with and into the Company in accordance with this Agreement, and
the separate corporate existence of Merger Sub shall thereupon cease (the
"Merger"). The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"), and shall
become a wholly owned subsidiary of Parent. The Merger shall have the effects
specified in the New Jersey Business Corporation Act (the "NJBCA").
1.2. The Closing. Subject to the terms and conditions of this Agreement,
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the closing of the Merger (the "Closing") shall take place (a) at the offices of
▇▇▇▇▇▇, ▇▇▇▇ & Priest LLP, New York, New York at 10:00 a.m., local time, on the
first business day immediately following the day on which the last to be
fulfilled or waived of the conditions set forth in Article 6 shall be completely
fulfilled or waived in accordance herewith, or (b) at such other time, date or
place as
Parent and the Company may agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
1.3. Effective Time. On the Closing Date, a Certificate of Merger
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meeting the requirements of Section 14A:10-4.1 of the NJBCA shall be executed
and filed in the office of the New Jersey Secretary of State, in accordance with
the NJBCA. The Merger shall become effective at (a) the time of filing of the
Certificate of Merger with the New Jersey Secretary of State or (b) such later
time as agreed by the parties hereto and designated in the Certificate of Merger
as the effective time of the Merger (the "Effective Time").
1.4. Certificate of Incorporation and By-laws. The Certificate of
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Incorporation and By-laws of Merger Sub in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation and By-laws of the
Surviving Corporation, until duly amended in accordance with applicable law.
1.5. Directors and Officers of the Surviving Corporation. The directors
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and officers of Merger Sub immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation until their successors are
duly appointed or elected in accordance with applicable law; and ▇▇▇▇▇▇ ▇▇▇▇▇,
president and chief executive officer of the Company, also shall become an
officer of the Surviving Corporation.
ARTICLE 2
CONVERSION AND EXCHANGE OF SECURITIES
2.1. Merger Sub Stock. At the Effective Time, each share of common stock,
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par value $0.01 per share, of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and non-assessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
2.2. Company Stock; Options.
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(a) Exchange Ratio. At the Effective Time, each share of common stock, par
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value $0.01 per share, of the Company ("Company Common Stock") that is issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into the right to receive the number of shares of common stock, par value $0.001
per share, of Parent (the "Parent Common Stock") that is equal to 3,750,000
divided by the number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (the "Exchange Ratio"); provided,
however, that (A) if the Closing Price (as defined in this Section 2.2) is less
than or equal to $12.11, then the Exchange Ratio shall be the result obtained by
dividing $3.74 by the Closing Price, but in no event shall the Exchange Ratio
computed pursuant to this clause (A) be greater than 4,000,000 divided by the
number of shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time (the "Effective Time Share Number") and (B) if the
Closing Price is greater than or equal to $16.39, the Exchange Ratio shall be
the result obtained by dividing, $5.06 by the Closing Price, but in no event
shall the Exchange Ratio computed
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pursuant to this clause (B) be less than 3,500,000 divided by the Effective Time
Share Number. "Closing Price" means the average closing price of the Parent
Common Stock, as reported in The Wall Street Journal, Eastern Edition, for each
of the 10 consecutive Trading Days immediately preceding the third Trading Day
prior to the Stockholders Meeting (as defined in Section 5.4). "Trading Day"
means a day on which trading is conducted on the Nasdaq National Market.
(b) Cancellation of Company Common Stock. At the Effective Time, as a
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result of the Merger and without any action on the part of the holders thereof,
all shares of Company Common Stock shall cease to be outstanding, shall be
canceled and retired and shall cease to exist, and each holder of shares of
Company Common Stock shall thereafter cease to have any rights with respect to
such shares of Company Common Stock, except the right to receive upon the
surrender of a certificate (a "Certificate") representing such shares of Company
Common Stock (i) the number of shares of Parent Common Stock determined in
accordance with this Section 2.2, and (ii) cash, without interest, payable (A)
in lieu of any fractional shares of Parent Common Stock, in accordance with
Section 2.3(b), and (B) as Specified Post-Closing Dividends (as defined in
Section 2.3), in accordance with Section 2.3(f).
(c) Treasury Shares and Shares Held by Subsidiaries. At the Effective
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Time, as a result of the Merger and without any action on the part of Parent,
Merger Sub or the Company, any and all shares of Company Common Stock issued and
held in the Company's treasury or held by a Subsidiary of the Company shall
cease to be outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(d) Options.
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(i) At the Effective Time, as a result of the Merger and without any action
on the part of holder thereof, each option to purchase Company Common Stock
granted by the Company (collectively, "Company Options") under one of its stock
option plans (collectively, "Company Option Plans") that remains outstanding and
unexercised as of the Effective Time, whether or not vested or exercisable,
shall be assumed by Parent and shall be converted into an option to purchase
Parent Common Stock (collectively, "Substituted Options").
(ii) Subject to subsection 2.2(d)(iii) below, (A) the number of shares of
Parent Common Stock underlying a Substituted Option shall be equal to the number
of shares of Company Common Stock underlying the subject Company Option
multiplied by the Exchange Ratio and rounded to the nearest whole number, (B)
the exercise price per share of a Substituted Option shall be equal to the
exercise price of the subject Company Option divided by the Exchange Ratio and
rounded to the nearest cent, and (C) each Substituted Option shall be
exercisable on the same terms and subject to the same conditions as had been
applicable to the related Company Option, except to the extent the number of
shares and exercise price per share have been adjusted pursuant to (A) and (B),
respectively, of this subsection 2.2(d)(ii).
(iii) It is the intention of the parties that Company Options that
qualified as incentive stock options, within the meaning of Section 422 of the
Code ("ISOs"), immediately prior to the Effective Time, be converted, when
assumed by Parent, into Substituted
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Options that qualify as ISOs immediately following the Effective Time, to the
extent permitted by Section 422 of the Code and applicable terms of the Company
Option Plans. In furtherance of such intention, the formulae, terms and
conditions set forth in subsection 2.2(d)(ii) above may be applied to, or
modified for, such Substituted Options as deemed reasonably necessary by Parent,
so long as any such application or modification does not reduce the benefit of
the Substituted Option to the holder thereof.
(iv) On or prior to the Effective Time, Parent shall file with the
Securities and Exchange Commission (the "Commission") a Registration Statement
on Form S-3 or Form S-8, as determined by Parent in its sole discretion,
relating to the issuance of the Parent Common Stock underlying the Substituted
Options or shall cause such Parent Common Stock to be included in an effective
Registration Statement on Form S-8 relating to one or more of Parent's stock
option plans (collectively, "Parent Option Plans"). So long as any Substituted
Options remain outstanding, Parent shall use its best efforts to maintain the
effectiveness of any Registration Statement or Statements relating to the
Substituted Options (and to maintain the current status of the prospectus or
prospectuses related thereto). At or prior to the Effective Time, Parent shall
take all corporate action necessary to reserve for issuance a sufficient number
of shares of Parent Common Stock for delivery upon exercise of the Substituted
Options.
2.3. Exchange of Certificates Representing Company Common Stock.
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(a) As of the Effective Time, Parent shall deposit, or shall cause to be
deposited, with an exchange agent reasonably acceptable to the Company (the
"Exchange Agent"), for the benefit of the holders of Company Common Stock, for
exchange in accordance with this Article 2, (i) certificates representing the
shares of Parent Common Stock to be issued in connection with the Merger
("Merger Certificates"), and (ii) Parent's good faith estimate of the cash in
lieu of fractional shares expected to be payable in connection with the Merger.
Such cash and Merger Certificates are referred to herein as the "Exchange Fund."
(b) No fractional shares of Parent Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional share of Parent Common Stock,
cash will be paid in respect of any fractional share of Parent Common Stock that
would otherwise be issuable, and the amount of such cash shall be equal to such
fractional proportion of the Closing Price. No interest will be paid or accrued
on the cash payable to holders of shares of Company Common Stock.
(c) Promptly after the Effective Time, Parent shall cause the Exchange
Agent to mail to each holder of record of Company Common Stock (i) a letter of
transmittal, in a form and having such provisions as Parent may reasonably
specify ("Letter of Transmittal"), which shall advise the holder that delivery
of Merger Certificates shall be effected, and risk of loss and title to such
holder's shares of Company Common Stock shall pass, only upon delivery of the
Certificates representing such shares to the Exchange Agent, and (ii)
instructions for use in effecting the surrender of such Certificates in exchange
for Merger Certificates and cash in lieu of fractional shares from the Exchange
Fund.
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(d) Upon surrender of a Certificate to the Exchange Agent for cancellation,
together with a duly executed and properly completed Letter of Transmittal, (i)
the holder of the shares of Company Common Stock represented by such Certificate
shall be entitled to receive in exchange therefor from the Exchange Fund (A) a
Merger Certificate representing that number of whole shares of Parent Common
Stock determined by multiplying the number of shares of Company Common Stock
represented by the Certificate by the Exchange Ratio, and (B) a check
representing (1) the amount of cash in lieu of fractional shares of Parent
Common Stock, if any, determined pursuant to paragraph (b) of this Section 2.3,
and (2) any Specified Post-Closing Dividends, in each case less any applicable
tax withholding, and (ii) the Company Common Stock represented by the
surrendered Certificate shall thereupon be canceled.
(e) In the event of a transfer of ownership of Company Common Stock which
is not registered in the transfer records of the Company, a Merger Certificate
representing the proper number of shares of Parent Common Stock, together with a
check for the cash to be paid in lieu of fractional shares, if any, may be
issued to such transferee of such Company Common Stock, if the Certificate
representing such Company Common Stock is presented to the Exchange Agent,
accompanied by all documents, in form and substance reasonably satisfactory to
Parent and the Exchange Agent, required to evidence and effect such transfer of
Company Common Stock and to evidence that any applicable stock transfer taxes
have been paid. There shall be no transfers on the transfer records of the
Company, at or after the Effective Time, of shares of Company Common Stock which
were outstanding immediately prior to the Effective Time.
(f) Notwithstanding any other provisions of this Agreement, no dividends
or other distributions declared after the Effective Time on Parent Common Stock
("Post-Closing Dividends") shall be paid with respect to any shares of Company
Common Stock represented by a Certificate until such Certificate is surrendered
for exchange as provided herein. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the holder
of the certificates representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of Post-Closing Dividends with a record date after the Effective Time
theretofore payable with respect to such whole shares of Parent Common Stock and
not paid, less the amount of any withholding taxes which may be required thereon
("Specified Post-Closing Dividends"), and (ii) at the appropriate payment date,
the amount of Post-Closing Dividends with a record date after the Effective Time
but prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of Parent Common Stock, less the amount of any
withholding taxes which may be required thereon.
(g) Certificates surrendered for exchange by any person that is an
"affiliate" of the Company for purposes of Rule 145(c) under the Securities Act
of 1933, as amended (the "Securities Act"), shall not be exchanged until Parent
has received a written agreement from such person as provided in Section 5.11.
(h) One year after the Effective Time, the Exchange Agent shall deliver to
the Surviving Corporation any portion of the Exchange Fund (including the
proceeds of any investments thereof and any shares of Parent Common Stock) that
remains unclaimed by the
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former stockholders of the Company. Thereafter, former stockholders of the
Company that have not surrendered their Certificates for exchange shall look to
the Surviving Corporation for delivery of Merger Certificates, cash in lieu of
fractional shares and unpaid Post-Closing Dividends which such former
stockholder is entitled to receive in respect of the Company Common Stock
represented by the theretofore unsurrendered Certificates, in each case, without
any interest thereon.
(i) None of Parent, the Company, the Surviving Corporation, the Exchange
Agent or any other person shall be liable to any former stockholder of the
Company for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
2.4. Lost Certificates. In the event any Certificate shall have been
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lost, stolen or destroyed, upon the making and delivery 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 issue in exchange for such lost, stolen or
destroyed Certificate the shares of Parent Common Stock and cash deliverable in
respect thereof pursuant to this Agreement.
2.5. Adjustment of Exchange Ratio. In the event that, subsequent to the
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date of this Agreement but prior to the Effective Time, the outstanding shares
of Parent Common Stock shall have been changed into a different number of shares
or a different class as a result of a stock split, reverse stock split, stock
dividend, subdivision, reclassification, combination, exchange, recapitalization
or other similar transaction, the Exchange Ratio shall be appropriately
adjusted.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered at or prior to the
execution hereof to Parent (the "Company Disclosure Schedule") or the Company
Reports (as defined in Section 3.6) filed by the Company prior to the date of
this Agreement, the Company makes the following representations and warranties
to Parent and Merger Sub, as of the date of this Agreement. The term "Company
Material Adverse Effect" has the meaning given to it in Section 8.14.
3.1. Organization and Standing.
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(a) The Company (i) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, (ii) has
all requisite corporate power and authority to own, operate and lease its
properties and carry on its business as now conducted, and (iii) is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the failure to so qualify, or be in good standing,
would have a Company Material Adverse Effect.
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(b) The Company does not have any Subsidiaries (as defined in Section 8.14)
other than RFPP Foreign Sales Corporation, a corporation organized under the
United States Virgin Islands ("Company Subsidiary"). Company Subsidiary (i) is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (ii) has all requisite corporate
power and authority to carry on its business as now conducted, and (iii) is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the failure to so qualify, or be in good standing,
would have a Company Material Adverse Effect. Company Subsidiary does not (x)
own, operate or lease any real or personal property, or (y) have any operations
or engage in any activities other than those related to coordination of export
sales by the Company.
(c) Neither the Company nor Company Subsidiary has (i) filed or had filed
against it a petition in bankruptcy or a petition to take advantage of any other
insolvency act, (ii) admitted in writing its inability to pay its debts
generally, (iii) made an assignment for the benefit of creditors, (iv) consented
to the appointment of a receiver for itself or any substantial part of its
property, or (v) generally committed any act of insolvency (including the
failure to pay obligations as they become due) or bankruptcy.
3.2. Capitalization.
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(a) The authorized capital stock of the Company consists of 19,000,000
shares of Company Common Stock. As of May 27, 1998, there were 12,149,220
shares of Company Common Stock issued and outstanding. From such date to the
date of this Agreement, no additional shares of capital stock of the Company
have been issued, except pursuant to the exercise of Company Options. As of May
27, 1998, Company Options to acquire 712,123 shares of Company Common Stock were
outstanding. From such date to the date of this Agreement, no additional
Company Options have been granted.
(b) All of the issued and outstanding shares of Company Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive or similar rights. Other than Company Options, there are no
existing and outstanding warrants, rights, options, subscriptions, convertible
securities or other agreements or commitments which obligate the Company to
issue, transfer or sell any shares of capital stock of the Company or of the
Company Subsidiary.
(c) Neither the Company nor Company Subsidiary has any outstanding bonds,
debentures, notes or other obligations pursuant to which the holders thereof
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of the Company on any
matter.
3.3. Authorization; Enforceability; No Violation.
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(a) The Company has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
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(b) Subject only to the approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company in accordance with the
NJBCA, all corporate action necessary on the part of the Company for the
execution, delivery and performance of this Agreement has been duly taken.
(c) This Agreement constitutes (assuming this Agreement is a valid and
legally binding obligation of Parent and Merger Sub) a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity and public policy
considerations (the "Enforceability Exceptions") and compliance with the
Industrial Site Recovery Act, N.J.S.A. Section 13:1K-6 et seq. and its
implementing regulations ("ISRA").
(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the Certificate
of Incorporation or the Bylaws of the Company, (ii) any statute, rule,
regulation, judicial, governmental, regulatory or administrative decree, order
or judgment applicable to the Company or Company Subsidiary, or (iii) any
agreement, lease, license, permit or other instrument to which the Company is a
party or to which any of its assets are subject, except where any such breach,
violation, default, termination or forfeiture would not have or result in a
Company Material Adverse Effect.
(e) There is no action, suit, proceeding or investigation pending or, to
the knowledge of the Company, threatened against the Company that questions the
validity of this Agreement or the right of the Company to enter into this
Agreement or to consummate the transactions contemplated hereby.
3.4. No Consents. No consent, approval, authorization, order,
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registration, qualification or filing of or with any court or any regulatory
authority or any other governmental or administrative body is required on the
Company's part for the consummation by it of the transactions contemplated by
this Agreement, except (i) filings required in order to comply with the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(ii) notices and filings required in order to comply with the Securities Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and state
securities or "blue sky" laws, (iii) the filing of the Certificate of Merger
with the New Jersey Secretary of State, and (iv) as may be required by ISRA.
3.5. Compliance With Laws. Except where the failure to so comply would not
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have a Company Material Adverse Effect, the Company and Company Subsidiary (i)
have all valid and current permits, licenses, orders, authorizations,
registrations, approvals and other analogous instruments (collectively,
"Permits"), and each Permit is in full force and effect, and (ii) have made all
filings and registrations and the like, necessary or required by law to conduct
their respective businesses as currently conducted. Neither the Company nor
Company Subsidiary has received any governmental notice of any violation by such
company of any laws, rules,
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regulation or orders applicable to their respective businesses. Except where the
failure to comply would not have a Company Material Adverse Effect, (a) neither
the Company nor Company Subsidiary is in default or is not in compliance under
any Permits, and (b) the business and operations of each of the Company and
Company Subsidiary are in compliance with all applicable foreign, federal,
state, local and county laws, ordinances, regulations, judgments, orders,
decrees or rules of any court, arbitrator or governmental, regulatory or
administrative agency or entity.
3.6. Company Reports.
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(a) The Company has filed all reports, forms, registrations, schedules,
statements and other documents required to be filed by it with the Commission
since January 1, 1995 (the "Company Reports"). As of their respective dates, the
Company Reports complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the applicable rules and regulations promulgated thereunder. Except to the
extent that information contained in any Company Report has been amended,
revised or superseded by a Company Report subsequently filed and publicly
available prior to the date of this Agreement, none of the Company Reports, when
filed, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) Each of the consolidated balance sheets of the Company included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) fairly presents in all material respects the consolidated
financial position of the Company and Company Subsidiary as of its date, and
each of the consolidated statements of income, retained earnings and cash flows
of the Company included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents in all material
respects the results of operations and cash flows of the Company and Company
Subsidiary for the periods set forth therein (subject, in the case of unaudited
statements, to normal year-end audit adjustments which would not be material in
amount or effect), in each case in accordance with U.S. generally accepted
accounting principles consistently applied during the periods involved ("GAAP"),
except as may be noted therein and subject to the fact that unaudited financial
statements do not contain full notes thereto. Neither the Company nor Company
Subsidiary has any liabilities or obligations required to be disclosed in a
consolidated balance sheet or the notes thereto prepared in accordance with
GAAP, except (i) liabilities or obligations reflected on, or reserved against
in, a consolidated balance sheet of the Company or in the notes thereto, and
included in the Company Reports, (ii) liabilities or obligations incurred since
February 28, 1998, in the ordinary course of business, consistent with past
practices, or (iii) liabilities disclosed in a Company Report.
3.7. Absence of Litigation, Orders, Judgments.
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(a) There are no actions, suits or proceedings pending or, to the knowledge
of the Company, threatened which involve transactions of or otherwise relate to
the Company,
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Company Subsidiary or either of their businesses or properties, at law or in
equity, or before any arbitrator of any kind, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or other instrumentality, domestic or foreign, that are reasonably likely
to have a Company Material Adverse Effect.
(b) There are no outstanding orders, writs, injunctions, decrees,
judgments, awards, determinations or directions, which involve transactions of
or otherwise relate to the Company, Company Subsidiary or either of their
businesses or properties, of any court or arbitrator or under any outstanding
order, regulation or demand of any federal, state, municipal or other
governmental instrumentality, domestic or foreign, that are reasonably likely to
have a Company Material Adverse Effect.
3.8. Absence of Certain Changes. Since February 28, 1998, the Company
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has conducted its business only in the ordinary course of such business, and
there has not been (i) any Company Material Adverse Effect or any event which is
reasonably likely to result in a Company Material Adverse Effect; (ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock; or (iii) any material change in its accounting
principles, practices or methods.
3.9. Taxes. The Company (i) has timely filed all material federal, state
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and foreign tax returns required to be filed by it for tax years ended prior to
the date of this Agreement or requests for extensions have been timely filed and
any such request shall have been granted and not expired, and all such returns
are complete in all material respects, (ii) has paid or accrued all taxes shown
to be due and payable on such returns and (iii) has properly accrued all such
taxes for such periods subsequent to the periods covered by such returns.
3.10. Contracts. Each (a) agreement, contract and commitment, whether
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written or oral, to which the Company is a party or by which it is bound and
which is filed as an exhibit to or described in a Company Report and (b)
material agreement, contract and commitment entered into by the Company, or by
which it became bound, after the date of the Quarterly Report on Form 10-Q most
recently filed by the Company (collectively, "Company Contracts"), is a valid
and legally binding obligation of the Company and, to the knowledge of the
Company, the other parties thereto, enforceable against the Company and, to the
knowledge of the Company, the other parties thereto, in accordance with its
terms, subject to the Enforceability Exceptions. The Company is not, and to the
knowledge of the Company no other party to any Company Contract is, in material
default thereof. The Company has not, and to the knowledge of the Company no
other party to any Company Contract has, performed any act or omitted to perform
any act which act or omission, with the giving of notice or passage of time or
otherwise, will become a material default thereunder.
3.11 Intellectual Property.
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(a) "Intellectual Property" means:
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(i) any and all issued patents, reissue or reexamination patents, revivals
of patents, utility models, certificates of invention, registrations of patents,
or extensions thereof, regardless of country or formal name (collectively,
"Issued Patents");
(ii) patent rights, including, without limitation, all United States and
foreign utility and design patents, and all published or unpublished
nonprovisional and provisional patent applications, including, without
limitation, any and all applications of additions, divisionals, continuations,
continuations-in-part, reexaminations, substitutions, extensions, renewals,
utility models, certificates of invention or reissues thereof or therefor,
invention disclosures and records of invention abandoned patent applications
(collectively "Patent Applications" and with the Issued Patents, the "Patents");
(iii) all copyrights, copyrightable works, semiconductor topography and
mask work interests, including, without limitation, all rights of authorship,
use, publication, reproduction, distribution, performance, transformation, moral
rights and ownership of copyrightable works, semiconductor topography works and
mask works, and all rights to register and obtain renewals and extensions of
registrations, together with all other interests accruing by reason of
international copyright, semiconductor topography and mask work conventions
(collectively, "Copyrights");
(iv) trademarks, registered trademarks, applications for registration of
trademark, service marks, registered service marks, applications for
registration of service marks, trade names, registered trade names, and
applications for registrations of trade names (collectively, "Trademarks");
(v) any and all technology, ideas, inventions, designs, proprietary
information, unpublished research and development information, manufacturing and
operating information, know-how, formulae, trade secrets and technical data,
computer programs, and all hardware, software and processes; and
(vi) all other intangible assets, properties and rights (whether or not
appropriate steps have been taken to protect, under applicable law, such other
intangible assets, properties or rights).
(b) The Company owns or has the right to use all Intellectual Property used
in the operation of its business as presently conducted, without any
interference or conflict with or misappropriation or infringement of the
Intellectual Property rights of others, other than any interference, conflict,
misappropriation or infringement which is not reasonably likely to result in (i)
a material adverse effect on the Company's ability to manufacture or sell any of
its material products or any material line of products or otherwise to operate
its business, (ii) a material liability of the Company, or (iii) material
redesign or other corrective costs to the Company. The Company has taken
reasonably necessary action to maintain and protect its rights in the material
Intellectual Property that it owns or uses. Each material item of Intellectual
Property owned or used by the Company immediately prior to the Effective Time
hereunder will be owned or
11
available for use by the Surviving Corporation on substantially identical terms
and conditions immediately subsequent to the Effective Time.
(c) Section 3.11 of the Company Disclosure Schedule sets forth all Patents,
registered Copyrights, registered Trademarks, joint development agreements,
licenses and agreements relating to Intellectual Property owned or used by the
Company that require a consent or waiver to consummate the transactions
contemplated by this Agreement.
(d) The Company has not, within the past four years, interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of others other than any interference,
infringement, misappropriation or conflict which did not and is not reasonably
likely to result in (i) a material adverse effect on the Company's ability to
manufacture or sell any of its material products or any material line of
products or otherwise to operate its business, (ii) a material liability of the
Company, or (iii) material redesign or other corrective costs to the Company.
The Company has not received, and has no knowledge of, any charge, complaint,
claim, demand or notice alleging any such interference, infringement,
misappropriation, or conflict (including, without limitation, any claim that the
Company must license or refrain from using any Intellectual Property rights of
any other person), or that the Company's use of the Intellectual Property
constitutes unfair competition.
(e) To the knowledge of the Company, no fraud or misrepresentation has been
made by the Company or any of its officers, directors or employees or the
relevant inventors during the prosecution of any of the Patents of the Company,
nor has any fraud or misrepresentation been included in any documentation for or
other disclosure of the Intellectual Property of the Company.
3.12. Employee Benefit Plans.
----------------------
(a) For purpose of this Agreement, (i) "Company Benefit Plans" means all
employee benefit plans and other benefit arrangements covering employees or
former employees of the Company and all employee agreements providing
compensation, severance or other benefits to any employee or former employee of
the Company; and (ii) "ERISA Affiliate" means any business or entity which is a
member of the same "controlled group of corporations," under "common control" or
an "affiliated service group" with an entity within the meanings of Sections
414(b), (c) or (m) of the Code, or required to be aggregated with the entity
under Section 414(o) of the Code, or is under "common control" with the entity,
within the meaning of Section 4001(a)(14) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any regulations promulgated or
proposed under any of the foregoing Sections.
(b) With respect to each Company Benefit Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code, either (i)
the Internal Revenue Service (the "IRS") has issued a favorable determination
letter that has not been revoked, or (ii) an application for a favorable
determination letter was timely submitted to the IRS for which no final action
has been taken by the IRS. To the knowledge of the Company, there is no reason
12
that is not susceptible to cure why the qualified status under Section 401(a) of
the Code of any Company Benefit Plan would be denied or revoked, whether
retroactively or prospectively.
(c) Except as would not have a Company Material Adverse Effect, no Company
Benefit Plan, any fiduciary thereof, nor the Company has incurred any liability
or penalty under Section 4975 of the Code or Section 502(i) of ERISA. Except as
would not have a Company Material Adverse Effect, each Company Benefit Plan has
been maintained and administered in all material respects in compliance with its
terms and with ERISA and the Code, to the extent applicable thereto.
(d) Except as would not have a Company Material Adverse Effect, neither the
Company nor any ERISA Affiliate (during the period of its affiliated status) has
any existing liability currently due and payable that has not been satisfied in
full under Title IV of ERISA or Section 412 of the Code. To the knowledge of the
Company, there are no current plans to terminate, whether voluntarily or
involuntarily, any materially underfunded pension plan of the Company or any
ERISA Affiliate that is subject to Title IV of ERISA.
(e) Except as would not have a Company Material Adverse Effect, to the
knowledge of the Company, there are no pending or anticipated claims against or
otherwise involving any of the Company Benefit Plans and no suit, action or
other litigation (excluding claims for benefits incurred in the ordinary course
of the Company Benefit Plan activities) has been brought against or with respect
to any such Company Benefit Plan, except for any of the foregoing which would
not have a Company Material Adverse Effect.
(f) All material contributions required to be made as of the date hereof to
the Company Benefit Plans have been made or provided for.
(g) The execution of, and performance of the transactions contemplated by,
this Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any benefit plan, policy,
arrangement or agreement or any trust or loan that will or is reasonably likely
to result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee of the Company.
(h) The Company has not entered into any severance agreements or adopted
any severance policies applicable to the Company or its employees.
3.13. No Brokers. The Company has not entered into any contract,
----------
arrangement or understanding with any person or firm which will or is reasonably
likely to result in the obligation of the Company, Parent or Merger Sub to pay
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that the Company has retained
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC as its financial advisor, the arrangements
with which have been disclosed in writing to Parent prior to the date hereof.
Other than the foregoing arrangements, the Company is not aware of any claim for
payment of any
13
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
3.14. Opinion of Financial Advisor. The Company has received the opinion
----------------------------
of NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC substantially to the effect that, as of
the date hereof, the Exchange Ratio is fair to the holders of Company Common
Stock from a financial point of view.
3.15. Parent Stock Ownership. Neither the Company nor any of its
----------------------
Subsidiaries owns any shares of Parent Common Stock or other securities
convertible into Parent Common Stock.
3.16. Pooling of Interests; Tax Reorganization. To the knowledge of the
----------------------------------------
Company, having sought and obtained the advice of its accounting advisors, the
Company has not taken (or as of the date hereof failed to take) any action which
would prevent the accounting for the Merger as a pooling of interests in
accordance with Accounting Principles Board Opinion ▇▇. ▇▇ ("▇▇▇ ▇▇. ▇▇"), the
interpretative releases issued pursuant thereto, and the pronouncements of the
Commission. To the knowledge of the Company, the Company has not taken or
failed to take any action which would prevent the Merger from constituting a
reorganization within the meaning of section 368 of the Code.
3.17. Environmental Matters.
---------------------
(a) For purposes of this Agreement, (i) "Environmental Requirements" means
any applicable laws, regulations, ordinances or other provisions having the
force or effect of law, or any judicial, governmental, or administrative orders,
requests, or determinations, or any common law requirements relating to the
protection of human health or the environment (both natural and workplace),
including without limitation any Environmental Requirements concerning (A) the
use, generation, treatment, storage, transportation, handling or disposal of
toxic, injurious or hazardous materials, substances or wastes, toxic pollutants
or contaminants, including petroleum products, crude oil or any by-products or
derivatives thereof (as any of the foregoing terms are defined in federal,
state and local laws applicable to the Company or Parent, as the case may be)
(collectively, "Hazardous Materials"), (B) the control of soil, surface or
groundwater pollution products, (C) air quality and emission standards, or (D)
health, safety and hazard communication matters; and (ii) "Company Real
Properties" means all real property ever owned, leased or occupied by the
Company or any Company Predecessor. For purposes of this Section 3.17, "Company
Predecessor" shall include the former operating entities of RF Power Products,
RF Plasma Products and any division or subsidiary of Plasmatherm which operated
a business at the current Company location, or at either of the two previously
disclosed locations: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇.
(b) There has not been any violation of any Environmental Requirements by
the Company or, to the knowledge of the Company, any Company Predecessor, nor to
the knowledge of the Company has there been any third party claim or demand
based upon any Environmental Requirements against the Company or any Company
Predecessor, other than
14
violations, claims or demands that have not resulted, and are not reasonably
likely to result, in a Company Material Adverse Effect.
(c) The Company has not disposed of, stored or used any Hazardous Materials
on, nor has it transported any Hazardous Materials from, any of the Company Real
Properties owned, leased or occupied by the Company, in violation of applicable
Environmental Requirements other than a disposal, storage, use or transport
which has not resulted in and is not reasonably likely to result in a Company
Material Adverse Effect. To the knowledge of the Company, no Company Predecessor
has disposed of, stored or used any Hazardous Materials on, nor has any such
Company Predecessor transported any Hazardous Materials from, any of the Company
Real Properties owned, leased or occupied by such Company Predecessor, in
violation of applicable Environmental Requirements.
(d) To the knowledge of the Company, none of the following exists at any of
the real property currently owned, leased or occupied by the Company or existed
at any of the Company Real Properties at the time the Company or the Company
Predecessor operated there: (i) underground storage tanks, (ii) asbestos-
containing material in any friable or damaged form or condition, (iii) materials
or equipment containing polychlorinated biphenyls (PCBs), or (iv) landfills or
surface impoundments.
(e) To the knowledge of the Company, none of the Company Real Properties is
or has been contaminated by any Hazardous Materials, in a manner that has given
or is reasonably likely to give rise to any material liability on the part of
the Company to any person, including without limitation any governmental
authority, for response costs, corrective action costs, personal injury,
property damage, natural resources damages or attorney fees, pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or the Solid Waste Disposal Act, as amended ("SWDA"), or any
other Environmental Requirements, whether federal, state or locally imposed.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule delivered at or prior to the
execution hereof to the Company (the "Parent Disclosure Schedule") or in the
Parent Reports (as defined in Section 4.6) filed with the Commission prior to
the date hereof, Parent and Merger Sub make the following representations and
warranties to the Company as of the date of this Agreement. The term "Parent
Material Adverse Effect" has the meaning given to it in Section 8.14.
4.1. Organization and Standing.
-------------------------
(a) Parent and each of its Significant Subsidiaries (i) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (ii) has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business as
now conducted, and (iii) is duly qualified to do business
15
and is in good standing as a foreign corporation in each jurisdiction in which
the failure to so qualify, or be in good standing, would have a Parent Material
Adverse Effect.
(b) Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. Merger Sub
was organized for purposes of consummating the transactions contemplated by this
Agreement. Merger Sub has not engaged in any activity other than as provided
in, or contemplated by, this Agreement and, as of the date hereof, has no
liabilities of any nature, contingent or otherwise, other than liabilities or
obligations that may arise from this Agreement or the transactions contemplated
hereby. The authorized capital stock of Merger Sub consists of 1,000 shares of
Merger Sub Common Stock, all of which are validly issued, fully paid and
nonassessable and are owned by Parent.
(c) Neither Parent nor any of its Subsidiaries (including without
limitation Merger Sub) has (i) filed or had filed against it a petition in
bankruptcy or a petition to take advantage of any other insolvency act, (ii)
admitted in writing its inability to pay its debts generally, (iii) made an
assignment for the benefit of creditors, (iv) consented to the appointment of a
receiver for itself or any substantial part of its property or (v) generally
committed any act of insolvency (including the failure to pay obligations as
they become due) or bankruptcy.
4.2. Capitalization.
--------------
(a) The authorized capital stock of Parent consists of 30,000,000 shares of
Parent Common Stock and 1,000,000 shares of preferred stock, par value $0.001
per share ("Parent Preferred Stock"). As of May 31, 1998, there were 22,542,346
shares of Parent Common Stock, and no shares of Parent Preferred Stock, issued
and outstanding. From such date to the date of this Agreement, no additional
shares of capital stock of Parent have been issued, except pursuant to the
exercise of options to acquire Parent Common Stock granted by Parent ("Parent
Options"). As of May 31, 1998, Parent Options to acquire 1,550,683 shares of
Parent Common Stock were outstanding. From such date to the date of this
Agreement, no additional Parent Options have been granted.
(b) All of the issued and outstanding shares of Parent Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights. Other than Parent Options, there are no existing and
outstanding warrants, rights, options, subscriptions, convertible securities or
other agreements or commitments which obligate Parent to issue, transfer or sell
any shares of capital stock of Parent or Merger Sub.
(c) All of the shares of Parent Common Stock issuable as consideration in
the Merger at the Effective Time, when issued in accordance with the terms and
conditions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable and free of preemptive rights.
(d) Neither Parent nor any of its Subsidiaries (including without
limitation Merger Sub) has any outstanding bonds, debentures, notes or other
obligations pursuant to which
16
the holders thereof have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
Parent on any matter.
4.3. Authorization; Enforceability; No Violation.
-------------------------------------------
(a) Each of Parent and Merger Sub has full corporate power and authority to
execute and deliver this Agreement, and to perform its respective obligations
hereunder.
(b) All corporate action necessary on the part of Parent and Merger Sub for
the execution, delivery and performance of this Agreement has been duly taken.
No approval of the stockholders of Parent is required by applicable law or the
rules of the Nasdaq National Market in connection with the consummation by
Parent or Merger Sub of the transactions contemplated hereby.
(c) This Agreement constitutes (assuming this Agreement is a valid and
binding obligation of the Company), a valid and legally binding obligation of
each of Parent and Merger Sub, enforceable against Parent and Merger Sub, as
applicable, in accordance with its terms, subject to the Enforceability
Exceptions and compliance with ISRA.
(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the Certificate
of Incorporation or the By-laws of Parent or any of its Subsidiaries (including
without limitation Merger Sub), (ii) any statute, rule, regulation, judicial,
governmental, regulatory or administrative decree, order or judgment applicable
to Parent or any of its Subsidiaries (including without limitation Merger Sub),
or (iii) any agreement, lease, license, permit or other instrument to which
Parent or any of its Subsidiaries (including without limitation Merger Sub) is a
party or to which any of its assets are subject, except where such any such
breach, violation, default, termination or forfeiture would not have or result
in a Parent Material Adverse Effect.
(e) There is no action, suit, proceeding or investigation pending or
threatened against Parent or any of its Subsidiaries that questions the validity
of this Agreement or the right of Parent or Merger Sub to enter into this
Agreement or to consummate the transactions contemplated hereby.
4.4. No Consents. No consent, approval, authorization, order,
-----------
registration, qualification or filing of or with any court or any regulatory
authority or any other governmental or administrative body is required on the
part of Parent or any of its Subsidiaries for the consummation by Parent and
Merger Sub of the transactions contemplated by this Agreement, except (i)
filings required in order to comply with the HSR Act, (ii) notices and filings
required in order to comply with the Securities Act, the Exchange Act and state
securities or "blue sky" laws, (iii) the filing of the Certificate of Merger
with the New Jersey Secretary of State, and (iv) as may be required by ISRA.
17
4.5. Compliance With Laws. Except where the failure to so comply would
--------------------
not have a Parent Material Adverse Effect, Parent and each of its Subsidiaries
(i) have all valid and current Permits, and each Permit is in full force and
effect, and (ii) have made all filings and registrations and the like, necessary
or required by law to conduct their respective businesses as currently
conducted. Neither Parent nor any of its Subsidiaries has received any
governmental notice of any violation by such company of any laws, rules,
regulation or orders applicable to their respective businesses, which violation
in the case of any Subsidiary is reasonably likely to have a Parent Material
Adverse Effect. Except where the failure to comply would not have a Parent
Material Adverse Effect, (a) neither Parent nor any of its Subsidiaries is in
default or is not in compliance under any Permits, and (b) the business and
operations of each of Parent and its Subsidiaries are in compliance with all
applicable foreign, federal, state, local and county laws, ordinances,
regulations, judgments, orders, decrees or rules of any court, arbitrator or
governmental, regulatory or administrative agency or entity.
4.6. Parent Reports.
--------------
(a) Parent has filed all reports, forms, registrations, schedules,
statements and other documents required to be filed by it with the Commission
since November 17, 1995 (the "Parent Reports"). As of their respective dates,
the Parent Reports complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the applicable rules and regulations promulgated thereunder. Except to the
extent that information contained in any Parent Report has been amended, revised
or superseded by a Parent Report subsequently filed and publicly available prior
to the date of this Agreement, none of the Parent Reports, when filed, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated balance sheets of Parent included in or
incorporated by reference into the Parent Reports (including the related notes
and schedules) fairly presents in all material respects the consolidated
financial position of Parent and its Subsidiaries as of its date, and each of
the consolidated statements of income, stockholders' equity and cash flows of
Parent included in or incorporated by reference into the Parent Reports
(including any related notes and schedules) fairly presents in all material
respects the income, stockholders' equity and cash flows, as the case may be, of
Parent and its Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments which would
not be material in amount or effect), in each case in accordance with GAAP,
except as may be noted therein and subject to the fact that unaudited financial
statements do not contain full notes thereto. Parent and its Subsidiaries do
not have any liabilities or obligations required to be disclosed in a
consolidated balance sheet or the notes thereto prepared in accordance with
GAAP, except (i) liabilities or obligations reflected on, or reserved against
in, a consolidated balance sheet of Parent or in the notes thereto, and included
in the Parent Reports, (ii) liabilities or obligations incurred since March 31,
1998 in the ordinary course of business, consistent with past practices, or
(iii) liabilities disclosed in a Parent Report.
4.7. Absence of Litigation, Orders, Judgments.
----------------------------------------
18
(a) There are no actions, suits or proceedings pending or, to the knowledge
of Parent, threatened which involve transactions of or otherwise relate to
Parent or any of its Subsidiaries or any of such companies' businesses or
properties, at law or in equity, or before any arbitrator of any kind, or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or other instrumentality, domestic or foreign,
that are reasonably likely to have a Parent Material Adverse Effect.
(b) There are no outstanding orders, writs, injunctions, decrees,
judgments, awards, determinations or directions, which involve transactions of
or otherwise relate to Parent or any of its Subsidiaries or any of such
companies' businesses or properties, of any court or arbitrator or under any
outstanding order, regulation or demand of any federal, state, municipal or
other governmental instrumentality, domestic or foreign, that are reasonably
likely to have a Parent Material Adverse Effect.
4.8. Absence of Certain Changes. Since March 31, 1998, Parent and its
--------------------------
Subsidiaries have conducted their businesses only in the ordinary course of such
businesses, except for any action conducted outside the ordinary course of
business which is not reasonably likely to result in a Parent Material Adverse
Effect, and there has not been (i) any Parent Material Adverse Effect or any
event which is reasonably likely to result in a Parent Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or other
distribution with respect to its capital stock; or (iii) any material change in
its accounting principles, practices or methods.
4.9. Taxes. Parent (a) has timely filed all material federal, state and
-----
foreign tax returns required to be filed by it for tax years ended prior to the
date of this Agreement or requests for extensions have been timely filed and any
such request shall have been granted and not expired, and all such returns are
complete in all material respects, (b) has paid or accrued all taxes shown to be
due and payable on such returns and (c) has properly accrued all such taxes for
such periods subsequent to the periods covered by such returns.
4.10. Contracts. Each (a) agreement, contract and commitment, whether
---------
written or oral, to which Parent or any of its Subsidiaries is a party or by
which any of such companies is bound and which is filed as an exhibit to or
described in a Parent Report, and (b) agreement, contract and commitment that is
material to Parent and its Subsidiaries taken as a whole and that was entered
into by Parent or any of its Subsidiaries, or by which such company became
bound, after the date of the Quarterly Report on Form 10-Q most recently filed
by Parent (collectively, "Parent Contracts"), is a valid and legally binding
obligation of Parent or the Subsidiary party thereto and, to the knowledge of
Parent, the other parties thereto, enforceable against Parent or the Subsidiary
party thereto and, to the knowledge of Parent, the other parties thereto, in
accordance with its terms, subject to the Enforceability Exceptions. Neither
Parent nor any Subsidiary party to a Parent Contract is in material default of
such Parent Contract, and, to the knowledge of Parent, no other party
19
to a Parent Contract is in material default of such Parent Contract. Neither
Parent nor any Subsidiary party to a Parent Contract has performed any act or
omitted to perform any act which act or omission, with the giving of notice or
passage of time or otherwise, will become a material default thereunder. To the
knowledge of Parent, no other party to a Parent Contract has performed any act
or omitted to perform any act which act or omission, with the giving of notice
or passage of time or otherwise, will become a material default thereunder.
4.11. Intellectual Property.
---------------------
(a) Parent and its Subsidiaries own or have the right to use all
Intellectual Property used by them in the operation of their respective
businesses, except to the extent that the failure to have such rights has not
and is not reasonably likely to result in (i) a material adverse effect on
Parent's or its Subsidiaries' ability to manufacture or sell any product or line
of products that is material to Parent and its Subsidiaries, taken as a whole,
(ii) a material adverse effect on Parent's or any of its Subsidiaries' ability
to operate its businesses, which inability to so operate would have a Parent
Material Adverse Effect, (iii) a liability of Parent or any of its Subsidiaries,
which liability would have a Parent Material Adverse Effect, or (iv) material
redesign or other corrective costs to Parent or any of its Subsidiaries, which
costs would be material to Parent and its Subsidiaries, taken as a whole.
Parent and its Subsidiaries have taken reasonably necessary action to maintain
and protect their rights in the material Intellectual Property that they own or
use.
(b) Parent has not, within the past four years, interfered with, infringed
upon, misappropriated or otherwise come into conflict with any Intellectual
Property rights of others, other than any interference, infringement,
misappropriation or conflict with did not and is not reasonably likely to result
in (i) a material adverse effect on Parent's or its Subsidiaries' ability to
manufacture or sell any product or line of products that is material to Parent
and its Subsidiaries, taken as a whole, (ii) a material adverse effect on
Parent's or any of its Subsidiaries' ability to operate its businesses, which
inability to so operate would have a Parent Material Adverse Effect, (iii) a
liability of Parent or any of its Subsidiaries, which liability would have a
Parent Material Adverse Effect, or (iv) material redesign or other corrective
costs to Parent or any of its Subsidiaries, which costs would be material to
Parent and its Subsidiaries, taken as a whole. Parent has not received, and
has no knowledge of, any charge, complaint, claim, demand or notice alleging any
such interference, infringement, misappropriation or conflict by Parent or any
of its Subsidiaries.
(c) To the knowledge of Parent, no fraud or misrepresentation has been made
by (i) Parent or any of its Subsidiaries, (ii) any of their respective officers,
directors or employees or (iii) the relevant inventors during the prosecution of
any of the Patents of Parent or any of its Subsidiaries, nor has any fraud or
misrepresentation been included in any documentation for or other disclosure of
the Intellectual Property of Parent or any of its Subsidiaries.
4.12 Employee Benefit Plans.
----------------------
(a) For purpose of this Agreement, (i) "Parent Benefit Plans" means all
employee benefit plans and other benefit arrangements covering employees or
former employees of Parent and its Subsidiaries and all employee agreements
providing compensation, severance or other benefits to any employee or former
employee of Parent or one of its Subsidiaries.
20
(b) With respect to each Parent Benefit Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code, either (i)
the IRS has issued a favorable determination letter that has not been revoked,
or (ii) an application for a favorable determination letter was timely submitted
to the IRS for which no final action has been taken by the IRS. To the
knowledge of Parent, there is no reason that is not susceptible to cure why the
qualified status under Section 401(a) of the Code of any Parent Benefit Plan
would be denied or revoked, whether retroactively or prospectively.
(c) Except as would not have a Parent Material Adverse Effect, no Parent
Benefit Plan, any fiduciary thereof, nor Parent has incurred any liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA. Except as
would not have a Parent Material Adverse Effect, each Parent Benefit Plan has
been maintained and administered in all material respects in compliance with its
terms and with ERISA and the Code, to the extent applicable thereto.
(d) Except as would not have a Parent Material Adverse Effect, neither
Parent nor any ERISA Affiliate (during the period of its affiliated status) has
any existing liability currently due and payable that has not been satisfied in
full under Title IV of ERISA or Section 412 of the Code. To the knowledge of
Parent, there are no current plans to terminate, whether voluntarily or
involuntarily any materially underfunded pension plans of Parent or any ERISA
Affiliate that are subject to Title IV of ERISA.
(e) Except as would not have a Parent Material Adverse Effect, to the
knowledge of Parent, there are no pending or anticipated claims against or
otherwise involving any of the Parent Benefit Plans and no suit, action or other
litigation (excluding claims for benefits incurred in the ordinary course of the
Parent Benefit Plan activities) has been brought against or with respect to any
such Parent Benefit Plan, except for any of the foregoing which would not have a
Parent Material Adverse Effect.
(f) All material contributions required to be made as of the date hereof to
the Parent Benefit Plans have been made or provided for.
(g) The execution of, and performance of the transactions contemplated by,
this Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any benefit plan, policy,
arrangement or agreement or any trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee of Parent or any of its Subsidiaries.
4.13. No Brokers. Neither Parent nor any of its Subsidiaries has entered
----------
into any contract, arrangement or understanding with any person or firm which
will or is reasonably likely to result in the obligation of the Company, Parent
or Merger Sub to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, except
21
that Parent has retained PaineWebber Incorporated as its financial advisor, the
arrangements with which have been disclosed in writing to the Company prior to
the date hereof. Other than the foregoing arrangements, Parent is not aware of
any claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
4.14. Company Stock Ownership. Neither Parent nor any of its
-----------------------
Subsidiaries owns any shares of Company Common Stock or other securities
convertible into Company Common Stock.
4.15. Pooling of Interests; Tax Reorganization. To the knowledge of
----------------------------------------
Parent, having sought and obtained the advice of its accounting advisors,
neither Parent nor any of its Subsidiaries has taken (or as of the date hereof
failed to take) any action which would prevent the accounting for the Merger as
a pooling of interests in accordance with APB No. 16, the interpretative
releases issued pursuant thereto, and the pronouncements of the Commission. To
the knowledge of Parent, neither Parent nor any of its Subsidiaries has taken or
failed to take any action which would prevent the Merger from constituting a
reorganization within the meaning of section 368 of the Code.
4.16. Environmental Matters.
---------------------
(a) For purposes of this Agreement, "Parent Real Properties" means all real
property ever owned, leased or occupied by Parent or any of its Subsidiaries or
any predecessor to their businesses (each, a "Predecessor").
(b) There has not been any violation of any Environmental Requirements by
Parent or any of its Subsidiaries or, to the knowledge of Parent, any
Predecessor, nor to the knowledge of Parent has there been any third party claim
or demand based upon any Environmental Requirements against Parent or any or its
Subsidiaries or any Predecessor, other than violations, claims or demands that
have not resulted, and are not reasonably likely to result in, a Parent Material
Adverse Effect.
(c) Neither Parent nor any of its Subsidiaries has disposed of, stored or
used any Hazardous Materials on, nor has any of such companies transported any
Hazardous Materials from, any of the Parent Real Properties owned, leased or
occupied by Parent or any of its Subsidiaries, in violation of applicable
Environmental Requirements, other than a disposal, storage, use or transport
which has not resulted in and is not reasonably likely to result in a Parent
Material Adverse Effect. To the knowledge of Parent, no Predecessor has
disposed of, stored or used any Hazardous Materials on, nor has any Predecessor
transported any Hazardous Materials from, any of the Parent Real Properties
owned, leased or occupied by such Predecessor, in violation of applicable
Environmental Requirements.
(d) To the knowledge of Parent, none of the following exists at any of the
Parent Real Properties: (i) underground storage tanks, (ii) asbestos-containing
material in any
22
friable or damaged form or condition, (iii) materials or equipment containing
polychlorinated biphenyls (PCBs), or (iv) landfills or surface impoundments.
(e) To the knowledge of Parent, none of the Parent Real Properties is or
has been contaminated by any Hazardous Materials, in a manner that has given or
is reasonably likely to give rise to any material liability on the part of
Parent or any of its Subsidiaries to any person, including without limitation
any governmental authority, for response costs, corrective action costs,
personal injury, property damage, natural resources damages or attorney fees,
pursuant to CERCLA or SWDA or any other Environmental Requirements, whether
federal, state or locally imposed.
ARTICLE 5
COVENANTS
5.1. Alternative Proposals.
---------------------
(a) Upon execution and delivery of this Agreement, the Company, its
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, conducted with any parties heretofore with respect to any acquisition of
all or any material portion of the assets of, or any equity interest in, the
Company or any business combination with the Company.
(b) Prior to the Closing Date, the Company may, solely in response to
unsolicited requests therefor, furnish non-public information regarding itself
to any corporation, partnership, person or other entity or group in respect of,
and may participate in discussions and negotiate with such entity or group
concerning, a business combination, merger, sale of material assets, sale of
shares of capital stock or similar transaction involving the Company (a
"Transaction"), provided that (i) such entity or group has submitted a written
proposal to the Board of Directors of the Company relating to any such
Transaction (an "Alternative Proposal"), (ii) the entity or group enters into
confidentiality agreements with the Company with respect to such non-public
information, and (iii) the Board of Directors of the Company ("Company Board"),
by a majority vote, determines in its good faith judgment, based as to legal
matters on the advice of legal counsel, that failing to take such action would
constitute a breach of the Company Board's fiduciary duty. The Company Board
shall provide a copy of any such written proposal to Parent and Merger Sub
immediately after receipt thereof, unless prohibited by the terms of such
proposal.
(c) Neither the Company nor any of its affiliates, nor any of such persons'
respective officers, directors, employees, representatives or agents, shall,
directly or indirectly (i) encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent and
Merger Sub, any affiliate or associate of Parent and Merger Sub or any designees
of Parent and Merger Sub) concerning any Transaction, or (ii) authorize, propose
or announce an intention to authorize or propose any Transaction (other than the
Merger), unless and until the Company has received an Alternative Proposal in
writing and the Company Board, by majority vote, has
23
determined in its good faith judgment, based as to legal matters on the advice
of legal counsel, that failing to take such action would constitute a breach of
the Company Board's fiduciary duty; provided, however, that nothing herein shall
prevent the Company Board from taking, and disclosing to the Company's
stockholders, a position contemplated by Rules 14d-9 and 14e-2 promulgated under
the Exchange Act with regard to any tender offers; provided, further, that the
Company Board shall not recommend that the stockholders of the Company tender
their shares in connection with any such tender offer unless the Company Board
by a majority vote determines in its good faith judgment, based as to legal
matters on the advice of legal counsel, that failing to take such action would
constitute a breach of the Company Board's fiduciary duty.
(d) Nothing in this Section 5.1 shall (i) permit the Company to terminate
this Agreement (except as specifically provided in Article 7 hereof), (ii)
permit the Company to enter into any agreement with respect to a Transaction
during the term of this Agreement (it being agreed that during the term of this
Agreement, the Company shall not enter into any agreement with any person that
provides for, or in any way facilitates, a Transaction, other than a
confidentiality agreement in customary form), or (iii) affect any other
obligation of the Company under this Agreement.
5.2. Interim Operations of the Company.
---------------------------------
(a) Prior to the Effective Time, except as set forth in Section 5.2 of the
Company Disclosure Schedule or as contemplated by any other provision of this
Agreement, unless Parent has consented in writing thereto, the Company:
(i) shall, and shall cause Company Subsidiary to, conduct its
operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(ii) shall use its reasonable efforts to preserve intact its
business organizations and goodwill, keep available the services of its officers
and employees and maintain satisfactory relationships with those persons having
business relationships with them;
(iii) shall not amend its Certificate of Incorporation or Bylaws or
the charter documents of Company Subsidiary;
(iv) shall promptly notify Parent of (A) any material adverse
change in its condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its business or of its properties, (B) any
material litigation or, to the extent known to the Company, any material
governmental complaints, investigations or hearings against or otherwise
involving the Company or Company Subsidiary (or communications indicating that
the same may be contemplated), or (C) the breach of any Company representation
or warranty contained herein;
24
(v) shall promptly deliver to Parent true and correct copies of any
report, statement or schedule filed by the Company with the Commission
subsequent to the date of this Agreement;
(vi) shall not enter into or amend any employment, severance or
similar agreements or arrangements with any of its or Company Subsidiary's
directors or executive officers, except (A) in the ordinary course of business
consistent with past practice, or (B) as otherwise provided in this Agreement;
(vii) shall not, and shall not permit Company Subsidiary to,
authorize, propose or announce an intention to authorize or propose, or enter
into negotiations or an agreement with respect to any acquisition of assets or
securities, any disposition of assets or securities or any release or
relinquishment of any contract rights, which acquisitions, dispositions,
releases or relinquishments would be outside the ordinary course of business and
would involve aggregate consideration in excess of $500,000;
(viii) shall not issue any shares of capital stock or securities,
except upon exercise of Company Options outstanding as of the date hereof, or
effect any stock split or otherwise change its capitalization;
(ix) shall not grant, confer or award any options, appreciation
rights, warrants, conversion rights, restricted stock, stock units, performance
shares or other rights, not existing on the date hereof, with respect to any
shares of its capital stock or other securities of the Company;
(x) shall not take any actions which would, or would be reasonably
likely to, prevent the Merger from qualifying as a reorganization within the
meaning of Section 368 of the Code;
(xi) shall not take any actions which would, or would be reasonably
likely to, prevent the Merger from qualifying as a transaction to be accounted
for as a pooling of interests in accordance with ▇▇▇ ▇▇. ▇▇;
(xii) except as required by applicable law (in which case prompt
notice shall be given by the Company to Parent), shall not amend in any material
respect the terms of the Company Benefit Plans, including without limitation any
employment, severance or similar agreements or arrangements in existence on the
date hereof, or adopt any new employee benefit plans, programs or arrangements
or any employment, severance or similar agreements or arrangements;
(xiii) shall not incur, create, assume or otherwise become liable
for borrowed money or assume, guarantee, endorse or otherwise become responsible
or liable for the obligations of any other individual, corporation or other
entity, except in the ordinary course of business;
25
(xiv) shall not make any loans or advances to any other person,
except in the ordinary course of business;
(xv) shall not make any material tax election other than in the
ordinary course, or without the consent of Parent, which shall not unreasonably
be withheld, settle or compromise any material tax liability;
(xvi) shall not declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital stock or
other ownership interests;
(xvii) shall not directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock, or make any commitment for
any such action; and
(xviii) shall not agree, in writing or otherwise, to take any of
the foregoing actions or take any action which would make any representation or
warranty in Article 3 hereof untrue or incorrect in any material respect as of
the Closing Date.
5.3. Interim Operations of Parent.
----------------------------
(a) Prior to the Effective Time, except as contemplated by another
provision of this Agreement, unless the Company has consented in writing
thereto, Parent:
(i) shall, and shall cause its Subsidiaries to, conduct their
operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted; provided, however, that
any Subsidiary of Parent shall be permitted, and Parent shall be permitted to
cause such Subsidiary, without the written consent of the Company, to take
actions outside the usual, regular and ordinary course of such Subsidiary's
business if such actions do not have a material effect on the operations of
Parent and its Subsidiaries, taken as a whole;
(ii) shall use its reasonable efforts (A) to preserve intact the
business organizations and goodwill of Parent and its Subsidiaries, (B) to keep
available the services of Parent's officers and employees and each of its
Subsidiaries' officers and key employees and (C) to maintain satisfactory
relationships with those persons having business relationships with them;
(iii) shall not, and shall not permit any of its Subsidiaries to,
amend their respective Certificates of Incorporation or Bylaws or comparable
charter documents (other than amendments to the charter documents of any
Subsidiary, which amendments are not material to Parent or to the consummation
of the transactions contemplated by this Agreement);
(iv) shall promptly notify the Company of (A) any material change
in its condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its business or of its properties, (B) any
material litigation or, to the extent known to Parent,
26
material governmental complaints, investigations or hearings against or
otherwise involving Parent or any of its Subsidiaries (or communications
indicating that the same may be contemplated), or (C) the breach by Parent or
Merger Sub of any of its representations or warranties contained herein;
(v) shall promptly deliver to the Company true and correct copies
of any report, statement or schedule filed by Parent with the Commission
subsequent to the date of this Agreement;
(vi) shall not, and shall not permit any of its Subsidiaries to,
authorize, propose or announce an intention to authorize or propose, or enter
into negotiations or an agreement with respect to any acquisition of assets or
securities, any disposition of assets or securities or any release or
relinquishment of any contract rights, which acquisitions, dispositions,
releases or relinquishments would be outside the ordinary course of business and
would involve aggregate consideration in excess of $2,500,000;
(vii) shall not issue any shares of capital stock or securities,
except upon exercise of Parent Options outstanding as of the date hereof;
(viii) except in the ordinary course or business, shall not grant,
confer or award any options, appreciation rights, warrants, conversion rights,
restricted stock, stock units, performance shares or other rights, not existing
on the date hereof, with respect to any shares of its capital stock or other
securities of Parent;
(ix) shall not, and shall not permit any of its Subsidiaries
(including without limitation Merger Sub) to, take any actions which would, or
would be reasonably likely to, prevent the Merger from qualifying as a
reorganization within the meaning of section 368 of the Code;
(x) shall not, and shall not permit any of its Subsidiaries
(including without limitation Merger Sub) to, take any actions which would, or
would be reasonably likely to, prevent the Merger from qualifying as a
transaction to be accounted for as a pooling of interests in accordance with ▇▇▇
▇▇. ▇▇;
(xi) shall not incur, create, assume or otherwise become liable for
borrowed money or assume, guarantee, endorse or otherwise become responsible or
liable for the obligations of any other individual, corporation or other entity,
except in the ordinary course of business;
(xii) shall not declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital stock;
(xiii) shall not directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock or make any commitment for any
such action; and
27
(xiv) shall not, and shall not permit any of its Subsidiaries to,
agree, in writing or otherwise, to take any of the foregoing actions or take any
action which would make any representation or warranty in Article 4 hereof
untrue or incorrect in any material respect as of the Closing Date.
5.4. Meeting of Stockholders. The Company will take all action necessary
-----------------------
in accordance with applicable law and its Certificate of Incorporation and
Bylaws to convene a meeting of its stockholders (the "Stockholders' Meeting") as
promptly as practicable to consider and vote upon the approval of this Agreement
and the transactions contemplated hereby. The Board of Directors of the Company
shall recommend such approval, and the Company shall take all lawful action to
solicit such approval, including, without limitation, timely mailing the Proxy
Statement/Prospectus (as defined in Section 5.9); provided, however, that such
recommendation or solicitation shall not be required if and to the extent that
the Company Board determines, after the date hereof, and upon the advice of
outside counsel, that the making of such recommendation or solicitation would
involve a breach of its fiduciary duties to its stockholders imposed by law.
5.5. Filings; Other Actions. Subject to the terms and conditions herein
----------------------
provided, the Company and Parent shall: (a) promptly make their respective
filings and thereafter make any other required submissions under the HSR Act
with respect to the Merger; (b) use all reasonable efforts to cooperate with one
another in (i) determining which other filings are required to be made prior to
the Effective Time with, and which other consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
governmental or regulatory authorities of the United States, the several states
and foreign jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (c) use all reasonable efforts to take, or cause
to be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement.
5.6. HSR Act.
-------
(a) The parties shall take all actions reasonably necessary or appropriate
to cause the prompt expiration or termination of any applicable waiting period
under the HSR Act in respect of the Merger, including without limitation
complying as promptly as practicable with any requests by the Federal Trade
Commission or Department of Justice for additional information.
(b) In furtherance and not in limitation of the covenants in Sections 5.5
and 5.6(a), the parties shall use their reasonable best efforts to resolve any
objections that may be asserted under any Antitrust Law (as defined in paragraph
(d) of this Section 5.6) with respect to the Merger or any other transactions
contemplated by this Agreement, except that neither Parent nor the Company nor
any of its respective Subsidiaries shall be required, by this paragraph (b) or
otherwise, to sell, hold separate or divest any of its (or any its Subsidiaries'
or affiliates) businesses, product lines, assets or properties (or to agree or
commit to take any such action) in
28
order to resolve any such objections. If any administrative, judicial or
legislative action or proceeding is instituted (or threatened to be instituted)
challenging the Merger or any other transactions contemplated hereby as
violative of any Antitrust Law, the parties shall cooperate and use their best
efforts vigorously to contest and resist any such action or proceeding, and to
have vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) that is in effect and
that restricts, prevents or prohibits consummation of the Merger or any other
transaction contemplated by this Agreement, including without limitation by
vigorously pursuing all available avenues of administrative and judicial appeal
and legislative action.
(c) Each of the Company, Parent and Merger Sub shall promptly inform the
other parties of any material communication received by such party from the
Federal Trade Commission, the Antitrust Division of the Deportment of Justice or
any other governmental or regulatory authority regarding any of the transactions
contemplated hereby. Parent and Merger Sub will advise the Company promptly in
respect of any understandings, undertakings or agreements which Parent or Merger
Sub propose to make or enter into with the Federal Trade Commission, the
Antitrust Division of the Deportment of Justice or any other governmental or
regulatory authority regarding any of the transactions contemplated hereby.
(d) "Antitrust Law" means the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
5.7. Inspection of Records. From the date hereof to the Effective Time,
---------------------
each of the Company and Parent shall (a) allow all designated officers,
attorneys, accountants and other representatives of the other party reasonable
access at all reasonable times to its respective offices, records and files,
correspondence, audits and properties, as well as to all information relating to
its respective commitments, contracts, titles and financial position, or
otherwise pertaining to its respective business and affairs, (b) furnish to the
other party and the other party's counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as such persons may reasonably request and (c) instruct its
respective employees, counsel and financial advisors to cooperate with the other
party in the other party's investigation of its respective business.
5.8. Publicity. The initial press release relating to this Agreement
---------
shall be a joint press release and thereafter the Company and Parent shall,
subject to their respective legal obligations (including requirements of stock
exchanges and similar self regulatory bodies), consult with each other, and use
reasonable efforts to agree upon the text of any press release, before issuing
any such press release or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any federal or
state governmental or regulatory agency or with any national securities exchange
with respect thereto.
5.9. Proxy Statement/Prospectus.
--------------------------
29
(a) Parent and the Company shall cooperate and promptly prepare and Parent
shall file with the Commission as soon as practicable a Registration Statement
on Form S-4 under the Securities Act (the "Registration Statement"), with
respect to the Parent Common Stock issuable in the Merger, which Registration
Statement shall contain the proxy statement with respect to the meeting of the
stockholders of the Company in connection with the Merger (the "Proxy
Statement/Prospectus"). Notwithstanding the foregoing, the Company and Parent
may elect to file the Proxy Statement/Prospectus pursuant to Section 14 of the
Exchange Act on a confidential basis and to receive, respond to and clear all
Commission comments thereon, prior to filing the Registration Statement.
(b) The parties will cause the Proxy Statement/Prospectus, and Parent will
cause the Registration Statement, to comply as to form in all material respects
with the applicable provisions of the Securities Act, the Exchange Act and the
rules and regulations thereunder. Parent shall use all reasonable efforts, and
the Company shall cooperate with Parent, (i) to have the Registration Statement
declared effective by the Commission as promptly as practicable, and (ii) to
obtain timely any and all necessary state securities or "blue sky" permits or
approvals required to carry out the transactions contemplated by this Agreement.
(c) The information supplied by the Company for inclusion or incorporation
by reference in the Proxy Statement/Prospectus and the Registration Statement
shall not (i) at the time the Registration Statement is declared effective, (ii)
at the time the Proxy Statement/Prospectus (or any amendment thereof or
supplement thereto) is first mailed to holders of Company Common Stock, (iii) at
the time of the Stockholders' Meeting, and (iv) at the Effective Time, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
(d) The information supplied by Parent for inclusion or incorporation by
reference in the Proxy Statement/Prospectus and the Registration Statement shall
not (i) at the time the Registration Statement is declared effective, (ii) at
the time the Proxy Statement/Prospectus (or any amendment thereof or supplement
thereto) is first mailed to holders of Company Common Stock, (iii) at the time
of the Stockholders' Meeting, and (iv) at the Effective Time, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(e) No amendment or supplement to the Proxy Statement/Prospectus will be
made by the Company or Parent without the approval of the other. Parent will
advise the Company, promptly after it receives notice thereof, of the time when
the Registration Statement has become effective or any supplement or amendment
has been filed, the issuance of any stop order, the suspension of the
qualification of the Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or any request by the Commission for
amendment of the Proxy Statement/Prospectus or the Registration Statement or
comments thereon and responses thereto or requests by the Commission for
additional information.
30
5.10. Listing Application. Parent shall promptly prepare and submit to
-------------------
the Nasdaq National Market a listing application covering the shares of Parent
Common Stock issuable in the Merger, and shall use its best efforts to obtain,
prior to the Effective Time, approval for the listing of such Parent Common
Stock, subject to official notice of issuance.
5.11. Affiliate Letters. At least 30 days prior to the Closing Date, the
-----------------
Company shall deliver to Parent a list of names and addresses of those persons
who were, in the Company's reasonable judgment, as of the record date for the
Stockholders' Meeting, "affiliates" of the Company within the meaning of Rule
145 of the rules and regulations promulgated under the Securities Act (each such
person, an "Affiliate"). The Company shall provide Parent such information and
documents as Parent shall reasonably request for purposes of reviewing such
list. The Company shall use all reasonable efforts to deliver or cause to be
delivered to Parent, prior to the Closing Date, from each of the Affiliates of
the Company identified in the foregoing list, an affiliate letter in form and
substance reasonably acceptable tot he Company and Parent (collectively,
"Affiliate Letters"). Parent shall be entitled to place legends as specified in
such Affiliate Letters on the certificates evidencing any Parent Common Stock to
be received by such Affiliates pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for the
Parent Common Stock, consistent with the terms of such Affiliate Letters.
5.12. Expenses. Whether or not the Merger is consummated, all costs and
--------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein and except that the filing fee in connection with the
filing of the Registration Statement or Proxy Statement/Prospectus with the
Commission and the expenses incurred in connection with printing and mailing the
Registration Statement and the Proxy Statement/Prospectus shall be shared
equally by the Company and Parent.
5.13. Employee Benefits.
-----------------
(a) For a period of two years following the Effective Time, Parent shall
provide to persons who are employees of the Company at the Effective Time (the
"Company Personnel") employee compensation and benefit plans, programs and
arrangements which collectively for the Company Personnel, as a whole, are in
the aggregate substantially comparable to the employee compensation and benefit
plans, programs and arrangements generally provided to the employees of the
Company immediately prior to the Effective Time; provided, however, that subject
to the foregoing, Parent shall not be precluded from amending or terminating any
particular plan, program or arrangement, or from substituting any such plans,
programs or arrangements with plans, programs or arrangements applicable and
available to other employees of Parent and its Subsidiaries.
(b) Following the Effective Time, Parent shall cause the benefit plans
covering the Company Personnel following the Effective Time (the "Benefit
Plans") to continue to recognize the service credit of the Company Personnel
accrued as of the Effective Time under
31
the Company Benefit Plans for purposes of participation, eligibility and vesting
of benefits, to the extent permissible by the terms of such Benefit Plans.
(c) In the event of any change in coverage that applies generally to the
Company Personnel during the two-year period following the Effective Time under
any Benefit Plan that provides medical or health benefits, Parent shall (i)
cause such Benefit Plan to recognize credit toward satisfying deductible expense
requirements, out-of-pocket expense limits and maximum lifetime benefit limits
of such Company Personnel or their eligible dependents, (ii) waive any pre-
existing condition, exclusion or limitation, as and to the extent any such
matter would previously have been recognized or waived (as the case may be)
under the applicable Company Benefit Plan, and (iii) to waive any waiting period
or minimum service requirements.
5.14. Agreements. Between the date hereof and the Closing Date, neither
----------
Parent nor the Company shall enter into any agreement which Parent or the
Company, as the case may be, knows or has reason to know is reasonably likely to
cause any major customer of Parent or the Company (or their respective
subsidiaries) to terminate any material contracts, agreements or other
obligations that exist between that customer on the one hand, and Parent, the
Company (or Parent and the Company following the Merger) or any subsidiary of
either, on the other hand and Parent and the Company shall take all reasonable
action appropriate to an effort to avoid such termination.
5.15. Takeover Statute. If any "fair price," "moratorium," "control share
----------------
acquisition" or other form of anti-takeover statute or regulation shall become
applicable to the transactions contemplated hereby, the Company and the Company
Board shall grant such approvals and take such actions as are reasonably
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby; provided, however, that the Company and the
Company Board shall not be required to grant such approvals or take such actions
if the Company Board, by majority vote, determines in its good faith judgment,
based as to legal matters on the advice of legal counsel, that granting such
approvals or taking such actions would constitute a breach of the Company's
Board's fiduciary duties.
5.16. Directors' and Officers' Indemnification and Insurance.
------------------------------------------------------
(a) The Certificate of Incorporation and By-laws of the Surviving
Corporation shall contain the respective provisions that are set forth, as of
the date of this Agreement, in the Certificate of Incorporation and the By-laws
of the Company dealing with indemnification of officers and directors of the
Company, Company Personnel and other persons specified therein, including
without limitation Article VII of the Bylaws of the Company (collectively, the
"Indemnification Provisions"), which provisions shall not be amended, repealed
or otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder with respect to actions
or events occurring prior to the Effective Time of individuals who were entitled
to such indemnification prior to the Effective Time.
32
(b) The Surviving Corporation shall maintain in effect for at least six
years from the Effective Time directors' and officers' liability insurance with
an insurance company rated at least "A" by A.M. Best Company, covering the
persons who, as of the date of this Agreement, are covered by the Company's
directors' and officers' liability insurance policy (the "Current Policy"). The
coverage provided by the directors' and officers' liability insurance maintained
by the Surviving Corporation shall be substantially similar to the coverage
provided by the Current Policy.
(c) Parent shall guarantee the obligations of the Surviving Corporation
provided by this Section 5.16.
(d) This Section 5.16 shall survive the consummation of the Merger, is
intended to benefit the Company, the Surviving Corporation and each indemnified
party, and shall be enforceable by the indemnified parties.
5.17 Board of Directors of Parent. Parent shall cause each of ▇▇▇▇▇▇ ▇.
----------------------------
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ to be appointed to the Board of Directors of
Parent as of the Effective Time, provided such person agrees to so serve, until
the next meeting of the stockholders of Parent at which directors are to be
elected, and until such person's successor has been elected and qualified.
ARTICLE 6
CONDITIONS TO CLOSING
6.1. Conditions to Each Party's Obligation to Effect the Merger. The
----------------------------------------------------------
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the transactions contemplated hereby shall
have been approved by the requisite vote of the holders of the issued and
outstanding shares of capital stock of the Company.
(b) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(c) Neither of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction in the United States which
prohibits the consummation of the transactions contemplated by this Agreement.
In the event any such order or injunction shall have been issued, each party
agrees to use its best efforts to have any such injunction lifted.
(d) The Registration Statement shall have become effective and shall
be effective at the Effective Time, and no stop order suspending effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding or investigation by the Commission to suspend the effectiveness
thereof shall have been initiated and be continuing, and all material approvals
under state securities laws relating to the issuance or trading of the Parent
Common
33
Stock to be issued to the Company stockholders in connection with the Merger
shall have been received.
(e) The Parent Common Stock to be issued to the Company stockholders
in connection with the Merger shall have been approved for listing on the Nasdaq
National Market, subject only to official notice of issuance.
(f) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement (including without limitation ISRA) shall have
been obtained or made, except for filings in connection with the Merger and any
other documents required to be filed after the Effective Time and except where
the failure to have obtained or made any such consent, authorization, order,
approval, filing or registration would not have a material adverse effect on the
business of Parent (and its Subsidiaries) and the Company, taken as a whole,
following the Effective Time.
6.2. Conditions to Obligation of the Company to Effect the Merger. The
------------------------------------------------------------
obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Parent shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Closing Date, the representations and warranties of Parent and Merger Sub
contained in this Agreement and in any document delivered in connection herewith
shall be true and correct in all material respects as of the Closing Date,
except that those representations and warranties which address matters only as
of a particular date shall have been true and correct as of such date, and the
Company shall have received a certificate of the President or a Senior Vice
President of Parent, dated the Closing Date, certifying to such effect.
(b) The Company shall have received, prior to the effective date of
the Registration Statement, the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the
Company, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of section 368(a) of the Code,
and that the Company, Parent and Merger Sub each will be a party to that
reorganization within the meaning of section 368(b) of the Code, and such firm
shall have reconfirmed such opinion as of the Closing Date. In rendering such
opinion, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP may require and rely upon such certificates of the
Company, Parent and Merger Sub and/or their respective officers or principal
stockholders as are customary for such opinions.
(c) The Company shall have received a letter of KPMG Peat Marwick
LLP, its independent public accountants, dated as of the Closing Date, in form
and substance reasonably satisfactory to the Company, stating that such
accountants concur with management's conclusion that the Merger will qualify as
a transaction to be accounted for in accordance with the pooling of interests
method of accounting under the requirements of APB No. 16.
34
(c) From the date of this Agreement through the Effective Time, there
shall not have occurred a Parent Material Adverse Effect.
6.3. Conditions to Obligation of Parent and Merger Sub to Effect the
---------------------------------------------------------------
Merger. The obligations of Parent and Merger Sub to effect the Merger shall be
------
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) The Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Closing Date, the representations and warranties of the Company contained in
this Agreement and in any document delivered in connection herewith shall be
true and correct in all material respects as of the Closing Date, except that
those representations and warranties which address matters only as of a
particular date shall have been true and correct as of such date, and Parent
shall have received a certificate of the President or a Senior Vice President of
the Company, dated the Closing Date, certifying to such effect.
(b) Parent shall have received, prior to the effective date of the
Registration Statement, the opinion of Thelen, Marrin, ▇▇▇▇▇▇▇ & Bridges LLP (or
its successor), counsel to Parent, to the effect that the Merger will be treated
for Federal income tax purposes as a reorganization within the meaning of
section 368(a) of the Code, and that the Company, Parent and Merger Sub each
will be a party to that reorganization within the meaning of section 368(b) of
the Code, and such firm shall have reconfirmed such opinion as of the Closing
Date. In rendering such opinion, Thelen, Marrin, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP (or its
successor) may require and rely upon such certificates of the Company, Parent
and Merger Sub and/or their officers or principal stockholders as are customary
for such opinions.
(c) Parent shall have received a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLC, its
independent public accountants, dated as of the Closing Date, in form and
substance reasonably satisfactory to Parent, stating that such accountants
concur with management's conclusion that the Merger will qualify as a
transaction to be accounted for in accordance with the pooling of interests
method of accounting under the requirements of ▇▇▇ ▇▇. ▇▇.
(d) The employment agreement, dated as of even date herewith,
between the Surviving Corporation and ▇▇▇▇▇▇ ▇▇▇▇▇, shall not have been
terminated prior to the Effective Time.
(e) From the date of this Agreement through the Effective Time,
there shall not have occurred a Company Material Adverse Effect.
ARTICLE 7
TERMINATION
7.1. Termination by Mutual Consent. This Agreement may be terminated and
-----------------------------
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval of
35
this Agreement by the stockholders of the Company, by the mutual consent of
Parent and the Company.
7.2. Termination by Either Parent or the Company. This Agreement may be
-------------------------------------------
terminated and the Merger may be abandoned by action of the Board of Directors
of either Parent or the Company if (a) the Merger shall not have been
consummated by December 31, 1998, or (b) the approval of the Company's
stockholders required by Section 6.1(a) shall not have been obtained at the
Stockholders' Meeting or any adjournment thereof, or (c) a United States federal
or state court of competent jurisdiction or United States federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; provided, that the party seeking to terminate this
Agreement pursuant to this paragraph (c) shall have used all reasonable efforts
to remove such injunction, order or decree; and provided, in the case of a
termination pursuant to paragraph (a) of this Section 7.3, that the terminating
party shall not have breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the failure
to consummate the Merger by December 31, 1998.
7.3. Termination by the Company. This Agreement may be terminated and the
--------------------------
Merger may be abandoned at any time prior to the Effective Time, before or after
the adoption and approval by the stockholders of the Company referred to in
paragraph (a) of Section 6.1, by action of the Company Board, if (a) the Company
Board, by majority vote, determines in its good faith judgment, based as to
legal matters on the advice of legal counsel, that terminating this Agreement
and abandoning the Merger is required by the Company Board's fiduciary duties,
or (b) there has been a breach by Parent or Merger Sub of any representation or
warranty contained in this Agreement that has had or is reasonably likely to
have a Parent Material Adverse Effect, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by the Company to Parent, or (c) there has been a material breach of any
of the covenants or agreements set forth in this Agreement on the part of
Parent, which breach is not curable or, if curable, is not cured within 30 days
after written notice of such breach is given by the Company to Parent.
Notwithstanding the foregoing, the Company's ability to terminate this Agreement
pursuant to Section 7.2 or this Section 7.3 is conditioned upon the prior
payment by the Company of the Termination Fee (defined in Section 7.5), if
Section 7.5 so requires.
7.4. Termination by Parent. This Agreement may be terminated and the
---------------------
Merger may be abandoned at any time prior to the Effective Time, by action of
the Board of Directors of Parent, if (a) the Company Board shall have (i)
withdrawn or modified in a manner materially adverse to Parent its approval or
recommendation of this Agreement or the Merger or (ii) recommended an
Alternative Proposal to the Company stockholders, or (b) there has been a breach
by the Company of any representation or warranty contained in this Agreement
that has had or is reasonably likely to have a Company Material Adverse Effect,
which breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by Parent to the Company, or (c) there
has been a material breach of any of the covenants or
36
agreements set forth in this Agreement on the part of the Company, which breach
is not curable or, if curable, is not cured within 30 days after written notice
of such breach is given by Parent to the Company.
7.5. Effect of Termination and Abandonment.
-------------------------------------
(a) If this Agreement is terminated by the Company or Parent
pursuant to Section 7.2(b), 7.3(a) or 7.4(a), and (x) prior to such termination,
a proposal with respect to a Transaction shall have been made, and (y) within
six (6) months after such termination, either the Company enters into any
agreement with respect to a Transaction, or any third party shall acquire
beneficial ownership of 50.1% or more of the Company's outstanding shares of
voting stock, then the Company shall pay Parent, by wire transfer of immediately
available funds, a fee (the "Termination Fee") of Two Million Dollars
($2,000,000) within two (2) business days after the execution of such agreement
or the consummation of such acquisition (whichever shall first occur).
(b) The Company acknowledges that the agreements contained in this
Section 7.5 are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, Parent and Merger Sub would not
enter into this Agreement; accordingly, if the Company fails to promptly pay the
Termination Fee when due and, in order to obtain such payment, Parent or Merger
Sub commences a suit which results in a judgment against the Company, the
Company shall reimburse Parent for its costs and expenses (including reasonable
attorneys' fees) incurred in connection with such suit, together with interest
on the amount of the Termination Fee at the prime rate, as then quoted in The
Wall Street Journal, from the date the Termination Fee was required to be paid.
(c) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article 7, all obligations of the
parties hereto shall terminate, except (i) the obligations of the parties set
forth in this Section 7.5 and Section 5.12, (ii) the provisions of Sections 8.3,
8.6, 8.9 and 8.13, and (iii) the Confidentiality Agreement previously executed
between the Company and Parent (the "Confidentiality Agreement"). Moreover, in
the event of termination of this Agreement pursuant to Section 7.3 or 7.4,
nothing herein shall prejudice the ability of the nonbreaching party from
seeking damages, after taking into account payment of the Termination Fee, if
such fee has been paid, from any other party for any willful breach of this
Agreement, including without limitation, attorneys' fees and the right to pursue
any remedy at law or in equity.
7.6. Extension; Waiver. At any time prior to the Effective Time, any
-----------------
party hereto, by action taken by its Board of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
37
ARTICLE 8
GENERAL PROVISIONS
8.1. Nonsurvival of Representations, Warranties and Covenants. The
--------------------------------------------------------
representations, warranties and covenants in this Agreement or in any instrument
delivered pursuant to this Agreement shall not survive the Merger; provided,
however, that the covenants contained in Article 2, the last sentence of Section
5.11, Section 5.12, Section 5.13, Section 5.16 and Section 5.17, and this
Article 8 shall survive the Merger, but not beyond the extent, if any, specified
therein.
8.2. Notices. Any notice required to be given hereunder shall be
-------
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to Parent or Merger Sub:
Advanced Energy Industries, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
Thelen, Marrin, ▇▇▇▇▇▇▇ & Bridges LLP
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
If to the Company:
RF Power Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
Facsimile:
38
with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile:
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3. Assignment; Binding Effect. Neither this Agreement nor any of the
--------------------------
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 5.13, 5.16 and 5.17, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
8.4. Entire Agreement. This Agreement, the Exhibits, the Company
----------------
Disclosure Schedule, the Parent Disclosure Schedule, the Confidentiality
Agreement and any documents delivered by the parties in connection herewith
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
8.5. Amendment. This Agreement may be amended by the parties hereto, by
---------
action taken by their respective Boards of Directors, at any time before or
after approval of the Merger by the stockholders of the Company, but after any
such stockholder approval, no amendment shall be made which by law requires the
further approval of stockholders without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
8.6. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New Jersey without regard to its rules
of conflict of laws.
8.7. Counterparts. This Agreement may be executed by the parties hereto
------------
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist
39
of a number of copies hereof each signed by less than all, but together signed
by all of the parties hereto.
8.8. Headings. Headings of the Articles and Sections of this Agreement
--------
are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
8.9. Interpretation. In this Agreement, unless the context otherwise
--------------
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations, partnerships and other
business entities and vice versa.
8.10. Waivers. Except as provided in this Agreement, no action taken
-------
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.11. Incorporation of Exhibits. The Company Disclosure Schedule, the
-------------------------
Parent Disclosure Schedule and all Exhibits attached hereto and referred to
herein are hereby incorporated herein and made a part hereof for all purposes as
if fully set forth herein.
8.12. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
8.13. Enforcement of Agreement. The parties hereto agree that irreparable
------------------------
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any Delaware Court, this being in addition to
any other remedy to which they are entitled at law or in equity.
8.14. Certain Definitions. As used in this Agreement, the following
-------------------
capitalized words shall have the meanings given to them in this Section 8.14,
except where the context otherwise requires:
(a) "Company Material Adverse Effect" means a material adverse
effect on or change in the business, results of operations or financial
condition of the Company and Company Subsidiary, taken as a whole, other than
any effects or changes arising out of, resulting from or
40
relating to (i) general economic, financial or industry conditions, or (ii) a
reduction in or cancellation of customer orders or contracts other than a
Material Cancellation (as defined in paragraph (c) of this Section 8.14).
(b) "Parent Material Adverse Effect" means a material adverse effect
on or change in the business, results of operations or financial condition of
Parent and its Subsidiaries, taken as a whole, other than any effects or changes
arising out of, resulting from or relating to (i) general economic, financial or
industry conditions, or (ii) a reduction in or cancellation of customer orders
or contracts other than a Material Cancellation.
(c) "Material Cancellation" means a reduction in or cancellation of
orders or contracts by a customer of the Company or Parent, as the case may be,
that results from: (i) the relevant company's products being designed out of one
or more of such customer's products, systems or platforms; (ii) a dispute
between the relevant company and such customer; (iii) discovery of a defect in
the relevant company's products that were being supplied to or ordered by such
customer; (iv) determination by a customer that the relevant company's products
are not of a quality adequate for use in such customer's products, systems or
platforms; (v) the relevant company's failure otherwise to perform to the
satisfaction of such customer and/or (v) any substantially similar event or
circumstance.
(d) "Subsidiary" of a party means any corporation or other
organization, whether incorporated or unincorporated, of which such party
directly or indirectly owns or controls at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the board of directors or others performing similar functions with respect to
such corporation or other organization, or any organization of which such party
is a general partner.
(e) "Significant Subsidiaries" of a party means Subsidiaries of such
party which constitute "significant subsidiaries" under Rule 405 promulgated by
the Commission under the Securities Act.
8.15 Knowledge. For purposes of this Agreement, (a) "to the knowledge of
---------
the Company" or words of like import shall mean to the knowledge of ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇, and (b) "to the knowledge of Parent" or words
of like import shall mean to the knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ ▇▇▇▇.
41
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year set forth in the
Preamble hereto.
COMPANY: RF Power Products, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: President, CEO & Chairman of the Board
--------------------------------------
MERGER SUB: Warpspeed, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: President
-------------------------------------
PARENT: Advanced Energy Industries, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: President, CEO & Chairman of the Board
---------------------------------------
42
