Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
VEECO INSTRUMENTS INC.,
VEECO ACQUISITION CORP.,
ION TECH, INC.
AND
CERTAIN OF
ITS SECURITYHOLDERS
OCTOBER 14, 1999
TABLE OF CONTENTS
PAGE
I. DEFINITIONS.....................................................................................1
1.01 Certain Definitions....................................................................1
II. THE MERGER......................................................................................8
2.01 The Merger.............................................................................8
2.02 Effective Time of the Merger...........................................................9
2.03 Closing of the Merger..................................................................9
2.04 Effects of the Merger..................................................................9
2.05 Conversion of Shares..................................................................11
2.06 Escrow................................................................................12
2.07 Subsequent Action.....................................................................12
2.08 Stockholders' Committee...............................................................12
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
STOCKHOLDERS..........................................................................13
3.01 Organization of the Company...........................................................13
3.02 Capitalization........................................................................13
3.03 Subsidiaries..........................................................................14
3.04 Authorization.........................................................................14
3.05 Financial Statements..................................................................15
3.06 No Undisclosed Liabilities............................................................15
3.07 Compliance with Law; Governmental Authorizations......................................15
3.08 No Conflicts..........................................................................15
3.09 Contracts.............................................................................16
3.10 Litigation............................................................................17
3.11 Books and Records.....................................................................18
3.12 Taxes.................................................................................18
3.13 Absence of Certain Changes or Events..................................................19
3.14 Employee Benefit Plans................................................................20
3.15 Intellectual Property.................................................................22
3.16 Real Property.........................................................................25
3.17 Tangible Property.....................................................................25
3.18 Environmental Matters.................................................................26
3.19 Labor Relations.......................................................................27
3.20 Officers and Employees................................................................27
3.21 Insurance.............................................................................27
3.22 Brokers and Finders...................................................................27
3.23 Banking Relationships.................................................................28
3.24 Transactions with Stockholders and Affiliates.........................................28
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PAGE
3.25 Accounts Receivable...................................................................28
3.26 Inventory.............................................................................28
3.27 Accuracy of Representations and Warranties............................................28
3.28 Pooling of Interests..................................................................28
3.29 No Disposition........................................................................29
3.30 Solvency..............................................................................29
3.31 Disclosure............................................................................29
3.32 Year 2000 Compliance..................................................................29
IV. REPRESENTATIONS AND WARRANTIES OF VEECO AND ACQUISITION........................................30
4.01 Organization of Veeco and Acquisition.................................................30
4.02 Capitalization........................................................................31
4.03 Non-Contravention.....................................................................31
4.04 Reports...............................................................................32
4.05 Absence of Certain Changes............................................................32
4.06 No Undisclosed Liabilities............................................................33
4.07 Litigation............................................................................33
4.08 Restrictions on Business Activities...................................................33
4.09 Governmental Authorization............................................................33
4.10 Compliance With Laws..................................................................33
4.11 Pooling of Interests..................................................................34
4.12 Brokers and Finders...................................................................34
4.13 Accuracy of Representations and Warranties............................................34
4.14 Disclosure............................................................................34
V. COVENANTS......................................................................................34
5.01 Access................................................................................34
5.02 Conduct of the Business of the Company Pending the Closing Date.......................35
5.03 Conduct of Business of the Company and Veeco..........................................35
5.04 Consents..............................................................................36
5.05 Environmental Transfer Laws...........................................................36
5.06 Tax Matters...........................................................................36
5.07 Notice of Breach; Disclosure..........................................................36
5.08 Payment of Indebtedness by Affiliates.................................................37
5.09 No Negotiation........................................................................37
5.10 FIRPTA................................................................................37
5.11 Blue Sky Laws.........................................................................37
5.12 Listing of Additional Shares..........................................................37
5.13 Affiliate Agreements..................................................................37
5.14 Additional Agreements.................................................................38
5.15 HSR Act Compliance....................................................................38
5.16 Competition and Solicitation..........................................................38
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PAGE
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF VEECO AND ACQUISITION...............................39
6.01 Representations and Warranties........................................................39
6.02 Performance of Covenants..............................................................39
6.03 Litigation............................................................................39
6.04 Consents and Approvals; HSR Act Compliance............................................39
6.05 Fairness Opinion......................................................................40
6.06 Accounting Opinion....................................................................40
6.07 Appraisals............................................................................40
6.08 Material Changes......................................................................40
6.09 Delivery of Documents.................................................................40
6.10 Legal Opinion.........................................................................41
6.11 Affiliate Agreements..................................................................41
6.12 Tax Opinion...........................................................................41
6.13 Articles of Merger....................................................................41
6.14 Stockholder Approval..................................................................41
6.15 Real Property Acquisition.............................................................41
VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.............................................41
7.01 Representations and Warranties........................................................41
7.02 Performance of Covenants..............................................................42
7.03 Litigation............................................................................42
7.04 Consents and Approvals; HSR Act Compliance............................................42
7.05 Accounting Opinion....................................................................42
7.06 Material Changes......................................................................42
7.07 Delivery of Documents.................................................................42
7.08 Legal Opinion.........................................................................43
7.09 Affiliate Agreements..................................................................43
7.10 Tax Opinion...........................................................................43
7.11 Articles of Merger....................................................................43
7.12 Stockholder Approval..................................................................43
7.13 Real Property Acquisition.............................................................43
VIII. INDEMNIFICATION; REMEDIES......................................................................43
8.01 Survival..............................................................................43
8.02 Indemnification by the Company and the Stockholders...................................44
8.03 Indemnification by Veeco..............................................................45
8.04 Procedure for Indemnification -- Third Party Claims...................................45
8.05 Exclusive Remedy. ...................................................................46
IX. TERMINATION....................................................................................46
9.01 Termination Events....................................................................46
9.02 Effect of Termination.................................................................47
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PAGE
9.03 Amendment....................................................................47
X. MISCELLANEOUS.........................................................................47
10.01 Confidentiality..............................................................47
10.02 Expenses.....................................................................48
10.03 Public Announcements.........................................................48
10.04 Successors...................................................................48
10.05 Further Assurances...........................................................48
10.06 Waiver.......................................................................48
10.07 Entire Agreement.............................................................48
10.08 Governing Law................................................................48
10.09 Assignment...................................................................49
10.10 Notices......................................................................49
10.11 Headings.....................................................................50
10.12 Counterparts.................................................................50
10.13 Exhibits and Schedules.......................................................50
10.14 Severability.................................................................50
10.15 No Third-Party Beneficiaries.................................................50
Exhibit A-1 Articles of Merger to be filed with the Secretary of State of
the State of Colorado
Exhibit A-2 Certificate of Merger to be filed with the Secretary of
State of the State of Delaware
Exhibit B FIRPTA Notification Letter; Form of Notice to Internal
Revenue Service together with written authorization from the
Company
Exhibit C-1 Company Affiliates Agreement
Exhibit C-2 Veeco Affiliates Agreement
Exhibit D Registration Rights Agreement
Exhibit E Irrevocable Proxy
Exhibit F Employment and Noncompetition Agreement
Exhibit G Escrow Agreement
Exhibit H Real Estate Merger Agreement
Exhibit I Opinion of The Dow Law Firm and Xxxxxxx & Xxxxxx, LLC
Exhibit J Opinion of Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
Exhibit K Investment Agreement
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "MERGER AGREEMENT"), is made as
of October 14, 1999, by and among Veeco Instruments Inc., a Delaware corporation
("VEECO"), Veeco Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Veeco ("ACQUISITION"), Ion Tech, Inc., a Colorado corporation (the
"COMPANY"), and the stockholders listed on SCHEDULE 1.01 hereof (the "PARTY
STOCKHOLDERS").
The Boards of Directors of the Company, Acquisition and Veeco have
determined that it is advisable and in the best interests of their respective
stockholders for Acquisition to merge with and into the Company with the result
that the Company shall be the surviving corporation and shall become a
wholly-owned subsidiary of Veeco (the "MERGER"), upon the terms and conditions
set forth herein and in accordance with the provisions of the Colorado Business
Corporation Act (the "CBCA") and the Delaware General Corporation Law (the
"DGCL").
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, it is agreed as follows:
I. DEFINITIONS.
1.01 CERTAIN DEFINITIONS. For purposes of this Merger Agreement, the
following terms shall have the following meanings:
(a) "ACQUISITION" shall have the meaning set forth in the first
paragraph of this Merger Agreement.
(b) "AFFILIATE" of any Person shall mean a Person which directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.
(c) "ARTICLES OF MERGER" shall have the meaning set forth in Section
2.02.
(d) "BENEFIT PLANS" shall have the meaning set forth in Section 3.14(a).
(e) "CBCA" shall have the meaning set forth in the recitals to this
Merger Agreement.
(f) "CLOSING" shall have the meaning set forth in Section 2.03.
(g) "CLOSING DATE" shall have the meaning set forth in Section 2.03.
(h) "COBRA" shall have the meaning set forth in Section 3.14(f).
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(i) "CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
(j) "COMPANY" shall have the meaning set forth in the recitals to this
Merger Agreement.
(k) "COMPANY AFFILIATES" shall have the meaning set forth in Section
5.13(a).
(l) "COMPANY AGENT" shall have the meaning set forth in Section 3.15(h).
(m) "COMPANY COMMON STOCK" shall mean the common stock of the Company,
without par value.
(n) "COMPANY-OWNED IP" shall have the meaning set forth in Section
3.15(g).
(o) "COMPANY-OWNED IP REGISTRATIONS" shall have the meaning set forth in
Section 3.15(e).
(p) "CONFIDENTIAL IP INFORMATION" shall have the meaning set forth in
Section 3.15(k).
(q) "CONSTITUENT CORPORATIONS" shall have the meaning set forth in
Section 2.01.
(r) "CONTRACT" shall mean any agreement, arrangement, commitment,
indemnity, indenture, instrument or lease, including any and all amendments,
supplements, and modifications (whether oral or written) thereto, whether or not
in writing.
(s) "DAMAGES" shall have the meaning set forth in Section 8.02.
(t) "DGCL" shall have the meaning set forth in the recitals to this
Merger Agreement.
(u) "EFFECTIVE TIME" shall have the meaning set forth in Section 2.02.
(v) "ENVIRONMENT" shall mean the soil, land surface or subsurface
strata, surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwaters, drinking water supply,
stream sediments; ambient air (including indoor air), plant and animal life, and
any other environmental medium or natural resource.
(w) "ENVIRONMENTAL LAWS" shall mean any state, federal or local laws,
ordinances, codes, regulations, statutes, orders, judgments, decrees, permits or
licenses relating to
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pollution, natural resources, protection of the Environment or public health and
safety, including, without limitation, laws and regulations relating to the use,
treatment, storage, release, disposal or transportation of Hazardous Substances
or the handling and disposal of medical and biological waste.
(x) "ENVIRONMENTAL LIABILITIES" shall mean any notice of violation,
claim, demand, abatement or other order or direction by any Governmental
Authority or any claim by any Person for personal injury (including sickness,
disease or death), tangible property damage, damage to the Environment,
nuisance, trespass, pollution, contamination, other adverse effects on the
Environment, clean-up costs, remediation, removal, other response costs or
investigation costs (including, but not limited to, reasonable and necessary
fees of consultants, counsel and other experts in connection with any
environmental investigations, testing, audits or studies), and/or fines,
penalties, losses, liabilities (including any actual or punitive damages under
any Environmental Law or other statutory or common law cause of action,
regardless of whether the liabilities are imposed through operation of strict
liability or otherwise), or restrictions, resulting from or based upon (i) the
Release, or the continuation of the existence of a Release or Threatened Release
(including, but not limited to, sudden or non-sudden, accidental or
non-accidental Releases) of, or exposure to, any Hazardous Substances in, by,
from or related to any premises now or previously owned or occupied by the
Company, (ii) the environmental aspects of the transportation, storage,
treatment, disposal, generation, recycling, reclamation, use or other handling
of any Hazardous Substances in connection with the Company's operations or (iii)
the violation, or alleged violation, of Environmental Law relating to any
premises now or previously owned or occupied by the Company.
(y) "EQUITY SECURITIES" shall mean any (i) capital stock or any
securities representing any other equity interest or (ii) any securities
convertible into or exchangeable for capital stock or any other rights, warrants
or options to acquire any of the foregoing securities.
(z) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(aa) "ERISA AFFILIATE" shall mean with respect to any person (i) any
corporation which is a member of a controlled group of corporations, within the
meaning of Section 414(b) of the Code, of which that person is a member, (ii)
any trade or business (whether or not incorporated) which is a member of a group
of trades or businesses under common control, within the meaning of Section
414(c) of the Code, of which that person is a member and (iii) any member of an
affiliated service group, within the meaning of Section 414(m) and (o) of the
Code, of which that person or any entity described in clause (i) or (ii) is a
member.
(bb) "ESCROW AGREEMENT" shall have the meaning set forth in Section
2.06.
(cc) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(dd) "FAIRNESS OPINION" shall have the meaning set forth in Section
6.05.
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(ee) "FINANCIAL STATEMENTS" shall have the meaning set forth in Section
3.05.
(ff) "FIRPTA" shall mean the Foreign Investment in Real Property Tax Act
of 1980.
(gg) "GAAP" shall mean United States generally accepted accounting
principles.
(hh) "GOVERNMENTAL AUTHORITY" shall mean any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
(ii) "HAZARDOUS SUBSTANCES" shall mean (i) any hazardous or toxic waste,
substance or material defined as such in (or for the purposes of) any
Environmental Law, (ii) asbestos-containing material, (iii) medical and
biological waste, (iv) polychlorinated biphenyls, (v) petroleum products,
including gasoline, fuel oil, crude oil and other various constituents of such
products and (vi) any other chemicals, materials or substances, exposure to
which is prohibited, limited, or regulated by any Environmental Laws.
(jj) "HIPAA" shall have the meaning set forth in Section 3.14(f).
(kk) "HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
(ll) "INFORMATION TECHNOLOGY" shall mean computer software, computer
firmware, computer hardware (whether general or specific purpose) and other
similar or related items of automated, computerized and/or software systems
developed by or for the Company.
(mm) "INTELLECTUAL PROPERTY" shall have the meaning set forth in Section
3.15.
(nn) "IRS" shall mean the Internal Revenue Service of the United States
or any successor agency, and, to the extent relevant, the United States
Department of the Treasury.
(oo) "ISSUANCE DATE" shall have the meaning set forth in Section 8.01.
(pp) "KNOWLEDGE" shall mean, (i) with respect to an individual, the
actual knowledge, after reasonable inquiry, of such individual, and (ii) with
respect to any Person other than an individual, the actual knowledge, after
reasonable inquiry, of the officers and directors of a corporate entity or other
persons performing similar functions for any other type of entity.
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(qq) "LAW" shall mean any constitutional provision or any statute or
other law, rule or regulation of any Governmental Authority and any decree,
injunction, judgment, order, ruling, assessment or writ.
(rr) "LEASED REAL PROPERTY" shall have the meaning set forth in Section
3.16(b).
(ss) "LEASED TANGIBLE PROPERTY" shall have the meaning set forth in
Section 3.17(b).
(tt) "LEASES" shall have the meaning set forth in Section 3.16(b).
(uu) "LICENSED-IN AGREEMENTS" shall have the meaning set forth in
Section 3.15(f)(i).
(vv) "LICENSES" shall have the meaning set forth in Section 3.07(b).
(ww) "LIEN" shall mean any lien, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, encroachment or other survey defect, transfer restriction
or other encumbrance of any nature whatsoever.
(xx) "MATERIAL ADVERSE EFFECT" shall mean, with respect to any entity or
group of entities, any event, change or effect that is materially adverse to the
condition (financial or otherwise), properties, assets, liabilities, business,
operations or results of operations of such entity and its subsidiaries, taken
as a whole.
(yy) "MATERIAL CONTRACT" shall mean any Contract required to be listed
on SCHEDULE 3.09(A).
(zz) "MERGER" shall have the meaning set forth in the recitals to this
Merger Agreement.
(aaa) "MERGER AGREEMENT" shall mean this Agreement and Plan of Merger.
(bbb) "MERGER CONSIDERATION" shall have the meaning set forth in Section
2.05(a).
(ccc) "MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
3.14(a).
(ddd) "NASDAQ" shall mean The NASDAQ Stock Market, Inc.
(eee) "NON-PARTY STOCKHOLDERS" shall mean the stockholders of the
Company identified on SCHEDULE 3.02(A) hereto other than the Party Stockholders.
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(fff) "OWNED TANGIBLE PROPERTY" shall have the meaning set forth in
Section 3.17(a).
(ggg) "PARTY STOCKHOLDERS" shall have the meaning set forth in the
recitals to this Merger Agreement.
(hhh) "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
(iii) "PERMITTED LIENS" shall mean:
(i) Liens for Taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued, PROVIDED
that provision for the payment of all such Taxes has been made on the books of
the Company to the extent required by GAAP;
(ii) mechanics', processor's, materialmen's, carriers',
warehousemen's, repairmen's, landlord's and similar Liens arising by operation
of law and arising in the ordinary course of business and securing obligations
of the Company that are not overdue for a period of more than 60 days or are
being contested in good faith by appropriate proceedings diligently pursued,
PROVIDED that provision for the payment of such Liens has been made on the books
of the Company to the extent required by GAAP;
(iii) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits, PROVIDED
that provision for the payment of such Liens has been made on the books of the
Company to the extent required by GAAP;
(iv) customary rights of set off, revocation, refund or
chargeback under deposit agreements or under the Uniform Commercial Code as in
effect in the State of Colorado of banks or other financial institutions where
the Company maintains deposits in the ordinary course of business and similar
rights of sellers under Article 2 of the Uniform Commercial Code as in effect in
the State of Colorado; and
(v) Liens securing indebtedness disclosed in the Financial
Statements or on any Schedule to this Merger Agreement.
(jjj) "PERSON" shall mean any individual, corporation, limited liability
company, partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, or other organization, whether or not a
legal entity, and any Governmental Authority.
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(kkk) "REAL ESTATE MERGER AGREEMENT" shall mean the Agreement and Plan
of Merger, dated as of the date hereof, among Veeco, Veeco Real Estate Corp., a
Delaware corporation, Tulakes Real Estate Investments, Inc., a Colorado
corporation and its securityholders.
(lll) "RELEASE" shall mean any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing, whether intentional
or unintentional.
(mmm) "SEC" shall mean the United States Securities and Exchange
Commission.
(nnn) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(ooo) "STOCKHOLDER INDEMNITEES" shall have the meaning set forth in
Section 8.03.
(ppp) "STOCKHOLDERS" shall mean, collectively, the Party Stockholders
and the Non-Party Stockholders.
(qqq) "STOCKHOLDERS' COMMITTEE" shall have the meaning set forth in
Section 2.08.
(rrr) "SURVIVING CORPORATION" shall have the meaning set forth in
Section 2.01.
(sss) "TANGIBLE PROPERTY" shall have the meaning set forth in Section
3.17(c).
(ttt) "TANGIBLE PROPERTY LEASES" shall have the meaning set forth in
Section 3.17(b).
(uuu) "TAX" or "TAXES" shall mean any and all taxes (whether Federal,
state, local or foreign), including, without limitation, income, profits,
franchise, gross receipts, payroll, sales, employment, use, property,
withholding, excise, occupation, value added, ad valorem, transfer and other
taxes, duties or assessments of any nature whatsoever, together with any
interest, penalties or additions to tax imposed with respect thereto.
(vvv) "TAX RETURNS" shall mean any returns, reports and forms required
to be filed with any Governmental Authority.
(www) "THREATENED" shall mean the following: a claim, proceeding,
dispute, action, or other matter will be deemed to have been "Threatened" if any
demand or statement has been made or any notice has been given that would lead a
prudent Person to conclude that such a claim, proceeding, dispute, action or
other matter is likely to be asserted, commenced, taken or otherwise pursued in
the future.
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(xxx) "VEECO" shall have the meaning set forth in the recitals to this
Merger Agreement.
(yyy) "VEECO AFFILIATES" shall have the meaning set forth in Section
5.13(b).
(zzz) "VEECO AUTHORIZATIONS" shall have the meaning set forth in Section
4.09.
(aaaa) "VEECO BALANCE SHEET" shall have the meaning set forth in Section
4.06.
(bbbb) "VEECO BALANCE SHEET DATE" shall have the meaning set forth in
Section 4.05.
(cccc) "VEECO FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 4.04.
(dddd) "VEECO INDEMNITEES" shall have the meaning set forth in Section
8.02.
(eeee) "VEECO OPTIONS" shall have the meaning set forth in Section
4.02(b).
(ffff) "VEECO SEC DOCUMENTS" shall have the meaning set forth in Section
4.04.
(gggg) "VEECO SHARES" shall mean the common stock, $.01 par value per
share, of Veeco.
(hhhh) "VEECO'S BROKERS" shall have the meaning set forth in Section
4.12.
1.02 The words "hereof," "herein," "hereby" and "hereunder," and words
of like import, refer to this Merger Agreement as a whole and not to any
particular Section hereof. References herein to any Section, Schedule or Exhibit
refer to such Section of, or such Schedule or Exhibit to, this Merger Agreement,
unless the context otherwise requires. All pronouns and any variations thereof
refer to the masculine, feminine or neuter gender, singular or plural, as the
context may require.
II. THE MERGER.
2.01 THE MERGER. At the Effective Time of the Merger, Acquisition shall
be merged with and into the Company. The separate existence of Acquisition shall
thereupon cease and the Company shall continue its corporate existence as the
surviving corporation (the "SURVIVING CORPORATION") under the laws of the State
of Colorado under its present name. The Company and Acquisition are sometimes
referred to collectively herein as the "CONSTITUENT CORPORATIONS".
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2.02 EFFECTIVE TIME OF THE MERGER. At the Closing, the parties hereto
shall cause (i) articles of merger substantially in the form of EXHIBIT A-1
annexed hereto to be executed and filed with the Secretary of State of the State
of Colorado, as provided in Section 0-000-000 of the CBCA and (ii) a certificate
of merger substantially in the form of EXHIBIT A-2 annexed hereto to be executed
and filed with the Secretary of State of the State of Delaware, as provided in
Section 252 of the DGCL (collectively, the "ARTICLES OF MERGER"), and shall take
all such other and further actions as may be required by law to make the Merger
effective. The Merger shall become effective as of the date and time of the
filing of such Articles of Merger. The date and time of such effectiveness are
referred to herein as the "EFFECTIVE TIME".
2.03 CLOSING OF THE MERGER. Unless this Merger Agreement shall
theretofore have been terminated pursuant to the provisions of Section 9.01
hereof, the closing of the Merger (the "CLOSING") shall take place on the second
business day following the day on which the last of the conditions set forth in
Articles VI and VII hereof are fulfilled or waived, subject to applicable laws
(the "CLOSING DATE"), at the offices of Xxxx, Scholer, Fierman, Xxxx & Handler,
LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 unless another time, date or
place is agreed to in writing by the parties hereto.
2.04 EFFECTS OF THE MERGER. At the Effective Time of the Merger:
(a) the separate existence of Acquisition shall cease and
Acquisition shall be merged with and into the Company, which shall be the
Surviving Corporation;
(b) the Articles of Incorporation and By-Laws of the Company as
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation and By-Laws of the Surviving Corporation until each shall
thereafter be amended in accordance with each of their terms and as provided by
law; PROVIDED, HOWEVER, that the following amendments to the Articles of
Incorporation of the Surviving Corporation shall be effected by the Merger:
(i) Article III of the Articles of Incorporation is
hereby deleted in its entirety.
(ii) Article IV, Section 4.02.02 of the Articles of
Incorporation is hereby deleted in its entirety.
(iii) Article IV, Section 4.03 of the Articles of
Incorporation is hereby amended and restated to
read in its entirety as follows:
"4.03 DENIAL OF CUMULATIVE VOTING. Cumulative
voting of shares of Capital Stock in the
election of directors is not authorized."
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(iv) Article VI, Section 6.01 of the Articles of
Incorporation is hereby amended and restated to
read in its entirety as follows:
"6.01 DENIAL OF RIGHTS OF HOLDERS OF CAPITAL
STOCK. The registered holders of the shares of
Capital Stock shall have no preemptive rights to
acquire unissued shares of Capital Stock."
(v) Article VI, Section 6.02 of the Articles of
Incorporation is hereby amended and restated to
read in its entirety as follows:
"6.02 DENIAL OF RIGHTS OF HOLDERS OF
CONVERTIBLES. The holders of securities
convertible into or carrying options or warrants
to purchase shares of Capital Stock shall have
no preemptive rights to acquire unissued shares
of Capital Stock."
(vi) Article VII, Section 7.04 of the Articles of
Incorporation is hereby deleted in its entirety.
(vii) Article IX, Section 9.03 of the Articles of
Incorporation is hereby amended and restated to
read in its entirety as follows:
"9.03 INCREASE OR DECREASE OF DIRECTORS. The
number of Directors may be increased or
decreased form time to time by amendment of the
Code of Bylaws."
(c) Xxxxxx Xxxxx, Xxxx Xxxx and Xxxxxx Xxxxxxxx shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and By-Laws of the Surviving
Corporation, in each case until their respective successors are duly elected and
qualified;
(d) the Surviving Corporation shall possess all the rights,
privileges, immunities and franchises, of a public as well as of a private
nature, of each of the Constituent Corporations, and all property, real,
personal, and mixed, and all debts due on whatever account, and all other choses
in action, and all and every other interest of or belonging to or due to each of
the Constituent Corporations shall be taken and deemed to be transferred to and
vested in the Surviving Corporation without further act or deed; and
(e) the Surviving Corporation shall thenceforth be responsible
and liable for all liabilities and obligations of each of the Constituent
Corporations, and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if such
Merger had not taken place or the Surviving Corporation may be substituted in
its place.
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Neither the rights of creditors nor liens upon the property of either of the
Constituent Corporations shall be impaired by the Merger.
2.05 CONVERSION OF SHARES. As of the Effective Time, by virtue
of the Merger and without any further action on the part of Veeco, Acquisition,
the Company or any holder of any Equity Securities of the Constituent
Corporations:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive that number of Veeco Shares (the "MERGER CONSIDERATION") as determined
by dividing (x) 1,443,710 by (y) the aggregate number of shares of Company
Common Stock issued and outstanding immediately prior to the Effective Time,
upon surrender of the certificates to Veeco representing such shares of Company
Common Stock.
(b) Each share of common stock, par value $0.01 per share, of
Acquisition issued and outstanding immediately prior to the Effective Time shall
be converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(c) The Merger Consideration shall be adjusted to reflect fully
the effect of any stock split, reverse split, stock dividend (including any
dividend or distribution of securities convertible into Veeco Shares or Company
Common Stock), reorganization, recapitalization or other like change with
respect to Veeco Shares or Company Common Stock occurring after the date hereof
and prior to the Effective Time.
(d) No fraction of a Veeco Share will be issued, but in lieu
thereof each holder of shares of Company Common Stock who would otherwise be
entitled to a fraction of a Veeco Share (after aggregating all fractional shares
of Veeco Shares to be received by such holder) shall receive from Veeco an
amount of cash (rounded to the nearest whole cent) equal to the product of (i)
such fraction, multiplied by (ii) $29.784375.
(e) All Company Common Stock, by virtue of the Merger and
without any action on the part of the holders thereof, shall no longer be
outstanding and shall be canceled and retired and shall cease to exist, and each
holder of a certificate representing any Company Common Stock shall thereafter
cease to have any rights with respect to such Company Common Stock, except the
right to receive the Merger Consideration for the Company Common Stock upon the
surrender of such certificate in accordance with this Section.
(f) Promptly after the Effective Time, Veeco shall make
available to an exchange agent designated by the Company and Veeco the Merger
Consideration issuable in exchange for shares of Company Common Stock and cash
in an amount sufficient for payment in lieu of fractional shares pursuant to
Section 2.05(d).
11
(g) Promptly following proper delivery of a certificate
representing Company Common Stock by the holder thereof to the exchange agent
designated by the Company and Veeco, Veeco shall cause such exchange agent to
deliver to such holder a certificate representing the Merger Consideration times
the number of shares of Company Common Stock represented by the certificate so
delivered by such holder.
2.06 ESCROW. Veeco shall deposit a portion of the Merger
Consideration consisting of 144,371 Veeco Shares, with Norwest Bank Colorado,
National Association, as escrow agent on the Closing Date, in accordance with
the terms of an escrow agreement, substantially in the form and on the terms of
EXHIBIT G hereto (the "ESCROW AGREEMENT").
2.07 SUBSEQUENT ACTION. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances and any other actions or things are
necessary, desirable or proper to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of the Constituent Corporations as
a result of, or in connection with, the Merger, the officers and directors of
the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of the Constituent Corporations or otherwise, all such deeds,
bills of sale, assignments and assurances and to take and do, in the name and on
behalf of the Constituent Corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out this Merger Agreement.
2.08 STOCKHOLDERS' COMMITTEE.
(a) In order to efficiently administer (i) the defense or
settlement of any claims for which any of the Veeco Indemnitees may be entitled
to indemnification pursuant to Article VIII hereof after the Closing; and (ii)
any other matter arising under or relating to the Escrow Agreement, there is
hereby established a committee to represent the interests of the Stockholders
after the Effective Date, consisting of Xxxx Xxxxxx, Xxxxxx Xxxxxxxx and Xxxx X.
Xxxxxx (the "STOCKHOLDERS' COMMITTEE").
(b) The Stockholders' Committee shall be authorized to take all
actions which it deems appropriate in connection with the matters described in
Section 2.08(a), including, without limitation, to execute and deliver the
Escrow Agreement on behalf of the Stockholders and to perform the transactions
contemplated thereby.
(c) In the event that a member of the Stockholders' Committee
dies, becomes unable to perform his responsibilities hereunder or resigns from
such position, then the remaining members of the Stockholders' Committee shall
designate a replacement within 10 days of such death, inability to perform or
resignation, and notify the Stockholders in writing of such replacement within
10 days from the designation of such individual.
12
(d) All decisions and actions by the Stockholders' Committee
must be approved by at least two of its three members, whether at a meeting, in
writing or otherwise. Any decision or action so approved shall be binding upon
all of the Stockholders, and no Stockholder shall have the right to object,
dissent, protest or otherwise contest the same.
(e) (i) Each of the Veeco Indemnitees shall be entitled to rely
conclusively on the instructions and decisions of the Stockholders' Committee as
to any matter described in Section 2.08(a), and no party hereto shall have any
cause of action against any of the Veeco Indemnitees for any action taken by any
such Veeco Indemnitee in reliance upon the instructions or decisions of the
Stockholders' Committee.
(ii) No Stockholder shall have any cause of action
against any member of the Stockholders' Committee for any action taken, decision
made or instruction given by the Stockholders' Committee under this Merger
Agreement, except for fraud.
(iii) The provisions of this Section 2.08 are
independent and severable, are irrevocable and coupled with an interest and
shall be enforceable notwithstanding any rights or remedies that any Stockholder
may have in connection with the transactions contemplated by this Merger
Agreement.
(iv) The provisions of this Section 2.08 shall be
binding upon the executors, heirs, legal representatives, successors and assigns
of each of the Stockholders, and any references in this Merger Agreement to a
Stockholder or the Stockholders shall mean and include the successors to the
rights of each of the Stockholders hereunder.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.
(A) The Company and each of the Party Stockholders, jointly and
severally, represent and warrant to Veeco and Acquisition as follows:
3.01 ORGANIZATION OF THE COMPANY. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado, and is qualified or licensed as a foreign corporation to do
business in each other jurisdiction where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect upon its business or
operations. The jurisdictions where the Company is so qualified to do business
as a foreign corporation are set forth in SCHEDULE 3.01. The Company has all
requisite corporate power to own, operate and lease its assets and to carry on
its business as now being conducted. The Company has delivered to Veeco correct
and complete copies of its Articles of Incorporation and By-Laws as in effect on
the date hereof.
3.02 CAPITALIZATION. (a) The authorized capital stock of the
Company consists of 1,000 shares of Company Common Stock, of which 720 shares
are issued and outstanding as of the date hereof and 720 shares will be issued
and outstanding immediately prior to the Closing. A
13
complete list of the record owners of all the issued and outstanding shares of
Company Common Stock as of the date hereof and as of the time immediately prior
to the Closing and the holdings of each such record owner are set forth in
SCHEDULE 3.02(a), and such shares are or immediately prior to the Closing will
be owned of record by such persons. All of the outstanding shares of Company
Common Stock have been or immediately prior to the Closing will be duly
authorized and validly issued and are or immediately prior to the Closing will
be fully paid and nonassessable and were or immediately prior to the Closing
will have been issued in conformity with applicable laws. No other shares of
capital stock of the Company are or will be outstanding or held as treasury
shares. Except as set forth in SCHEDULE 3.02(a), no legend or other reference to
any purported Lien has been placed by the Company upon any certificate
representing shares of the Company Common Stock.
(b) Except as set forth in SCHEDULE 3.02(a), there are no
outstanding Equity Securities, or other obligations to issue or grant any rights
to acquire any Equity Securities, of the Company, or any Contracts to
restructure or recapitalize the Company. There are no outstanding Contracts of
the Company to repurchase, redeem or otherwise acquire any Equity Securities of
the Company. All outstanding Equity Securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable and were
issued in conformity with applicable laws. As of the Closing, no options,
warrants, convertible securities or rights will be exercisable or exchangeable
for, convertible into, or otherwise give its holder any right to acquire shares
of capital stock of the Company.
(c) Contemporaneously with the execution and delivery of this
Agreement, Stockholders holding not less than 67% of the outstanding Company
Common Stock, calculated on a fully-diluted basis, have each executed and
delivered an Irrevocable Proxy with respect to its shares of Company Common
Stock in the form attached as EXHIBIT E.
3.03 SUBSIDIARIES. The Company has no subsidiaries.
3.04 AUTHORIZATION. The Company has full corporate power and authority
to execute, deliver and perform this Merger Agreement and the Articles of Merger
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Merger Agreement, the Articles of Merger and all other
documents and agreements to be delivered pursuant hereto and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the board of directors and stockholders of the Company, and no other corporate
proceedings on the part of the Company are necessary to authorize this Merger
Agreement, the Articles of Merger and any related documents or agreements or to
consummate the transactions contemplated hereby. This Merger Agreement has been
duly and validly executed and delivered by the Company and the Articles of
Merger, when executed at the Closing, will be duly and validly executed and
delivered by the Company. This Merger Agreement constitutes a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms, and
the Articles of Merger, when executed at the Closing, will be legal, valid and
binding agreements of the Company, enforceable in accordance with their terms.
14
3.05 FINANCIAL STATEMENTS. The Company has delivered to Veeco balance
sheets for the Company as of June 30, 1999, 1998 and 1997, and related
statements of income, stockholders' equity and cash flows for the fiscal years
then ended, together with the audit reports thereon of Xxxxxxx & Associates (the
"FINANCIAL STATEMENTS"). The Financial Statements fairly present the financial
condition, results of operations and cash flows of the Company on the dates and
for the financial periods then ended, in accordance with GAAP consistently
applied. There has been no material change in the Company's accounting policies,
except as described in the notes to the Financial Statements.
3.06 NO UNDISCLOSED LIABILITIES. The Company does not have any
obligation or liability of any nature (matured or unmatured, fixed or
contingent) other than those (i) set forth or adequately provided for in the
balance sheet of the Company as at June 30, 1999, (ii) not required to be set
forth on such balance sheet under GAAP or (iii) incurred in the ordinary course
of business since June 30, 1999 and consistent with past practice.
3.07 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. (a) The Company
has complied in all material respects with, is not in violation of, and has not
received notices of violation with respect to, any Law with respect to the
conduct of its business, or the ownership or operation of its business.
(b) The Company has obtained all licenses, permits,
certificates, consents and approvals from Governmental Authorities (the
"LICENSES") that are necessary for the business and operations of the Company
and the failure to obtain which could reasonably be expected to have a Material
Adverse Effect on the Company. All such Licenses are listed in SCHEDULE 3.07(b),
are in full force and effect, and no notice of any material violation has been
received by the Company in respect of any such License. Except as set forth in
SCHEDULE 3.07(b), the consummation of the transactions contemplated hereunder
and the operation of the business of the Company by the Surviving Corporation in
the manner in which it is currently operated will not require the transfer of
any such License that may not be transferred to the Surviving Corporation
without the consent or approval of any Governmental Authority or other Person.
3.08 NO CONFLICTS. Except as set forth in SCHEDULE 3.08, the execution,
delivery and performance by the Company of this Merger Agreement and the
consummation of the transactions contemplated hereby will not (a) violate any
provision of the Articles of Incorporation or By-Laws or other organizational
documents of the Company, (b) subject to obtaining the consents identified in
Section 5.04, violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in, or provide the basis for, the termination of, or accelerate
the performance required by, or excuse performance by any Person of any of its
obligations under, or cause the acceleration of the maturity of any debt or
obligation pursuant to, or result in the creation or imposition of any Lien upon
any property or assets of the Company under, any Material Contract to which the
Company is a party or by which any of its property or assets is bound, or to
which any of the property or assets of the Company is subject, (c) subject to
compliance with the HSR Act, violate any Law applicable to the Company or (d)
violate or result in the revocation or suspension of any material License.
15
3.09 CONTRACTS. (a) SCHEDULE 3.09(a) contains a complete and
accurate list, and the Company has delivered or made available to Veeco true and
complete copies (or, in the case of oral contracts, summaries), of:
(i) each Contract that is executory in whole or in part and
involves performance of services or delivery of goods or materials by
the Company of an amount or value in excess of $200,000;
(ii) each Contract that is executory in whole or in part and
was not entered into in the ordinary course of business and that
involves expenditures or receipts of the Company in excess of $50,000;
(iii) each lease, rental or occupancy agreement, license
agreement, installment and conditional sale agreement, and any other
Contract affecting the ownership of, leasing of, title to, use of, or
any leasehold or other interest in, any real or personal property
(except personal property leases and installment and conditional sales
agreements having a value per item or annual payments of less than
$10,000);
(iv) other than licensing agreements entered into in connection
with product sales in the ordinary course of the Company's business,
each material licensing agreement or any other Material Contract with
respect to patents, trademarks, copyrights or other Intellectual
Property, including material Contracts with current or former
employees, consultants or contractors regarding the appropriation or
the non-disclosure of any of the Intellectual Property;
(v) each collective bargaining agreement and any other
Contract to or with any labor union or other employee representative of
a group of employees;
(vi) each joint venture, partnership and any other material
Contract (however named) involving a sharing of profits, losses, costs
or liabilities by the Company with any other Person;
(vii) each Contract containing covenants that in any way purport
to restrict the business activity of the Company or limit the freedom
of the Company to engage in any line of business or to compete with any
Person;
(viii) each Contract providing for material payments to or by any
Person based on sales, purchases or profits, other than direct payments
for goods;
(ix) each power of attorney that is currently effective and
outstanding granted by and relating to the Company;
16
(x) each Contract that contains or provides for an express
undertaking by the Company to be responsible for consequential damages;
(xi) each Contract that is executory in whole or in part and
involves capital expenditures in excess of $50,000;
(xii) each written warranty, guaranty and/or other similar
undertaking with respect to contractual performance extended by the
Company other than in the ordinary course of business; and
(xiii) each Contract with any employee, director or officer.
(b) Except as set forth in SCHEDULE 3.09(b), each Material
Contract is in full force and effect and enforceable in accordance with its
terms (subject to bankruptcy, insolvency and other proceedings at law or in
equity relating to the rights of creditors generally).
(c) Except as set forth in SCHEDULE 3.09(c), the Company has
fulfilled in all material respects all obligations required pursuant to each
Material Contract to have been performed by it.
(d) Except as set forth in SCHEDULE 3.09(d), the Company has not
received any written notice of default under any Material Contract, no default
(beyond any applicable grace or cure period) has occurred under any Material
Contract on the part of the Company or, to the Company's knowledge, on the part
of any other party thereto, nor has any event occurred which with the giving of
notice or the lapse of time, or both, would constitute any default on the part
of the Company under any Material Contract nor, to the Company's knowledge, has
any event occurred which with the giving of notice or lapse of time, or both,
would constitute any default on the part of any other party to any Material
Contract.
(e) Except as set forth in SCHEDULE 3.09(e), no consent or
approval of any party to any of the Material Contracts is required for the
execution, delivery or performance of this Merger Agreement or the consummation
of the transactions contemplated hereby to which the Company is a party.
(f) Except as set forth in SCHEDULE 3.09(f), to the knowledge of
the Company, no officer, director, agent or employee of the Company is bound by
any Contract that purports to limit the ability of such officer, director, agent
or employee to (i) engage in or continue any conduct, activity or practice
relating to the business of the Company, or (ii) assign to the Company or to any
other Person any rights to any invention, improvement or discovery.
3.10 LITIGATION. Except as set forth in SCHEDULE 3.10, there are no
actions, suits or legal, administrative, arbitration or other proceedings or
governmental investigations pending or Threatened against the Company before or
by any Governmental Authority, and, to the Company's knowledge, no basis exists
for any such action. Except as set forth in SCHEDULE 3.10, the Company
17
is not a party to or subject to any judgment, order, writ, injunction, decree or
award of any Governmental Authority.
3.11 BOOKS AND RECORDS. The books and records of the Company, all of
which have been made available to Veeco, set forth all material transactions
affecting the Company, and such books and records have been properly kept and
maintained and are complete and correct in all respects.
3.12 TAXES. Except as set forth in SCHEDULE 3.12, the Company does not
own stock, and has not previously owned stock, in any corporation. The Company
has filed or caused to be filed on a timely basis all Tax Returns that are or
were required to be filed by the Company pursuant to the Laws of each
Governmental Authority with taxing power over the Company and its assets and
business. Each Tax Return filed by the Company was true, correct and complete
when it was filed and each Tax Return that will be filed on or before the
Closing Date will be true, correct and complete when it is filed. The Company
has delivered to Veeco complete copies of all Tax Returns that it has filed for
the past three years. The Company has paid all Taxes that have or may have
become due pursuant to those Tax Returns, or otherwise, or pursuant to any
assessment received by the Company, except such Taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided in
the Financial Statements. All Tax Returns required to be filed by the Company
for the period from the date hereof up to and including the Closing Date have
been or will be timely filed, and all Taxes for such period will be paid by the
Company. Except as set forth in SCHEDULE 3.12, all Tax Returns of the Company
have been audited by the IRS or relevant Governmental Authorities or are closed
by the applicable statute of limitations for all taxable years through December
31, 1995. All deficiencies proposed (including interest, penalties and additions
to tax that were or are proposed to be assessed thereon, if any) as a result of
such audits have been paid, reserved against in the Financial Statements,
settled, or, as described in SCHEDULE 3.12, are being contested in good faith by
appropriate proceedings. All Taxes that the Company is, or was, required by Law
to withhold and collect have been duly withheld and collected and, to the extent
required, have been paid to the appropriate Governmental Authority. Except as
set forth in SCHEDULE 3.12, the Company has not given, or been requested to
give, waivers or extensions (or is or would be subject to a waiver or extension
given by any other entity) of any statute of limitations relating to the payment
of Taxes for which it may be liable. Except as set forth in SCHEDULE 3.12, there
are no Liens with respect to Taxes upon any of the properties or assets, real or
personal, tangible or intangible, of the Company. The Company has not agreed,
nor is it required, to include in income any adjustment pursuant to Section
481(a) of the Code (or similar provisions of other law or regulations) by reason
of a change in accounting method or otherwise. The Company has not, with regard
to any assets or property held by the Company, filed a consent to the
application of Section 341(f)(2) of the Code. There is no agreement, plan,
arrangement or other contract covering any employee or independent contractor of
the Company that could give rise to the payment of any amount that could not be
deductible by the Company or Veeco pursuant to Section 280G of the Code. The
Company is not a "U.S. real property holding corporation," as defined in Section
897(c)(2) of the Code. There is no tax sharing agreement that will require any
payment by the Company after the date of this Merger Agreement. No elections for
federal income tax purposes under Section 108, 168, 338, 441, 471, 1017, 1033,
1502 or 4977 of the Code have been made.
18
3.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth herein
and in SCHEDULE 3.13, since June 30, 1999, the Company has not:
(a) changed any of the Company's authorized or issued capital
stock; granted any stock option or right to purchase shares of capital stock of
the Company; issued any Equity Security; granted any registration rights;
purchased, redeemed, retired, or otherwise acquired any shares of any such
capital stock; or declared or paid any dividend or other distribution or payment
in respect of shares of capital stock;
(b) amended the Articles of Incorporation or By-laws or other
organizational documents of the Company;
(c) other than in the ordinary course of the Company's business,
paid or increased any bonuses, salaries, or other compensation to any
stockholder, director, officer or employee or entered into any employment,
severance or similar Contract with any director, officer or employee, since June
30, 1999;
(d) adopted, amended or otherwise increased the payments to or
benefits under any Benefit Plan for or with any employees of the Company;
(e) damaged, destroyed or lost any material asset or property of
the Company, whether or not covered by insurance;
(f) amended, terminated (other than due to any scheduled
expiration) or received written notice of termination (other than due to any
scheduled expiration) of any Material Contract (or any Contract which if in
existence would constitute a Material Contract), or defaulted (beyond any
applicable notice or grace period) on any of its obligations under any Material
Contract or entered into any new Material Contract or taken any action that
could reasonably be expected to jeopardize the continuance of its material
supplier or customer relationships;
(g) sold, leased or otherwise disposed of any material asset or
property of the Company except in the ordinary course of business or mortgaged,
pledged or imposed any Lien (other than Permitted Liens) on any material asset
or property of the Company, including the sale, lease or other disposition of
any of the Intellectual Property;
(h) (i) incurred or assumed any long-term debt (including
obligations in respect of capital leases), (ii) assumed, guaranteed, endorsed or
otherwise became liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person (other than endorsements of
checks in the ordinary course) or (iii) made any loans, advances or capital
contributions to, or investment in, any Person, other than advances to employees
in the ordinary course of business not exceeding $10,000 to any individual or
$100,000 in the aggregate;
19
(i) paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the ordinary course of business consistent with past
practice, or failed to pay or otherwise satisfy any material claims, liabilities
or obligations on a basis, and within the time, consistent with past practice;
(j) canceled or waived any material claims or rights;
(k) except as described in the notes to the Financial
Statements, materially changed any of the accounting methods used by the
Company;
(l) merged or consolidated with or into any other Person; or
(m) agreed, whether orally or in writing, to do any of the
foregoing.
Except as set forth herein and in SCHEDULE 3.13, since June 30, 1999, there has
not been any Material Adverse Effect with respect to the Company.
3.14 EMPLOYEE BENEFIT PLANS. (a) Except as set forth in SCHEDULE
3.14(a), the Company does not (i) maintain or contribute to or have any
obligation with respect to, and none of the current or former employees of the
Company is covered by, any bonus, deferred compensation, severance pay, pension,
profit-sharing, retirement, insurance, stock purchase, stock option or other
fringe benefit plan, arrangement or practice, written or otherwise, or any other
"employee benefit plan," as defined in Section 3(3) of ERISA, whether formal or
informal (collectively, the "BENEFIT PLANS"). None of the Benefit Plans is, and
the Company (or any of its ERISA Affiliates) has never maintained or had an
obligation to contribute to, or incurred any other obligation with respect to
(i) a plan subject to Title IV of ERISA or Section 412 of the Code or Title I,
Subtitle B, Part 3 of ERISA, (ii) a "multiemployer plan," as defined in Section
3(37) of ERISA (a "MULTIEMPLOYER PLAN"), (iii) a "multiple employer plan," as
defined in ERISA or the Code or (iv) a funded welfare benefit plan, as defined
in Section 419 of the Code. The Company does not have any agreement or
commitment to create any additional Benefit Plan, or to modify or change any
existing Benefit Plan. The Company does not have (and has never had) any other
ERISA Affiliates.
(b) With respect to each Benefit Plan, the Company has
heretofore delivered or caused to be delivered or made available to Veeco true,
correct and complete copies of (i) all documents which comprise the most current
version of each of such Benefit Plan, including any related trust agreements,
insurance contracts, or other funding or investment agreements and any
amendments thereto, and (ii) with respect to each Benefit Plan that is an
"employee benefit plan," as defined in Section 3(3) of ERISA (v) the three most
recent Annual Reports (Form 5500 Series) and accompanying schedules for each of
the Benefit Plans for which such a report is required, (w) the most current
summary plan description (and any summary of material modifications), (x) the
three most recent certified financial statements for each of the Benefit Plans
for which such a statement is required or was prepared, (y) for each Benefit
Plan intended to be "qualified" within the meaning of Section 401(a) of the
Code, all IRS determination letters issued with respect to such Plan and (z) all
material communications with any Governmental Authority. Since the date of the
docu-
20
ments delivered, there has not been any material change in the assets or
liabilities of any of the Benefit Plans or any change in their terms and
operations which could reasonably be expected to affect or alter the tax status
or materially affect the cost of maintaining such Plan, and none of the Benefit
Plans has been or will be amended prior to the Closing Date. Each of the Benefit
Plans can be amended, modified or terminated by the Company within a period of
thirty (30) days, without payment of any additional compensation or amount or
the additional vesting or acceleration of any such benefits, except to the
extent that such vesting is required under the Code upon the complete or partial
termination of any Benefit Plan intended to be qualified within the meaning of
Section 401(a) of the Code.
(c) The Company has performed and complied with all of its
obligations under and with respect to the Benefit Plans and each of the Benefit
Plans has, at all times, in form, operation and administration complied in all
material respects with its terms, and, where applicable, the requirements of the
Code, ERISA and all other applicable Laws. Each Benefit Plan which is intended
to be "qualified" within the meaning of Section 401(a) of the Code has been
determined by the IRS to be so qualified and nothing has occurred which could be
expected to adversely affect such qualified status.
(d) There are no unpaid contributions due prior to the date
hereof with respect to any Benefit Plan that are required to have been made
under its terms and provisions, any related insurance contract or any applicable
law, and there are no unfunded benefit obligations that have not been accounted
for by reserves, or otherwise property footnoted in the Financial Statements in
accordance with GAAP. Except as set forth in SCHEDULE 3.14(d), (i) no assets of
the Company are allocated or held in a trust or similar funding vehicle, and
(ii) there are no reserve assets, surpluses or prepaid premiums with respect to
any Benefit Plan that is a welfare plan.
(e) Except as set forth in SCHEDULE 3.14(e), the Company has not
incurred any liability or taken any action, and the Company has no knowledge of
any action or event, that could cause it to incur any liability (i) under
Section 412 of the Code or Title IV or ERISA with respect to any
"single-employer plan," as defined in Section 4001(a)(15) of ERISA, that is not
a Benefit Plan, or (ii) on account of a partial or complete withdrawal, as
defined in Sections 4203 and 4205 of ERISA, respectively, with respect to any
Multiemployer Plan or on account of unpaid contributions to any Multiemployer
Plan.
(f) All group health plans covering employees of the Company
have been operated in compliance with the continuation coverage requirements of
Section 4980B of the Code (and any predecessor provisions) and Part 6 of Title I
of ERISA ("COBRA"), the provisions of law enacted by the Health Insurance
Portability and Accountability Act of 1996 ("HIPAA") and any similar state law.
The Company does not have any obligation to provide health benefits or other
non-pension benefits to retired or other former employees (or their
beneficiaries), except as specifically required by COBRA, HIPAA or any similar
state law.
(g) Neither the Company nor any other "disqualified person" or
"party in interest," as defined in Section 4975 of the Code and Section 3(14) of
ERISA, respectively, has
21
engaged in any "prohibited transaction," as defined in Section 4975 of the Code
or Section 406 of ERISA, with respect to any Benefit Plan, nor have there been
any fiduciary violations under ERISA which could subject the Company (or any
officer, director or employee thereof) to any penalty or Tax under Section
502(i) of ERISA or Sections 4971 and 4975 of the Code.
(h) With respect to any Benefit Plan: (i) no filing, application
or other matter is pending with the IRS, the PBGC, the United States Department
of Labor or any other governmental body, (ii) there is no action, suit or claim
pending or Threatened, other than routine claims for benefits and (iii) there
are no outstanding liabilities for Taxes, penalties or fees.
(i) Neither the execution and delivery of this Merger Agreement
nor the consummation of any or all of the contemplated transactions will: (i)
entitle any current or former employee of the Company to severance pay,
unemployment compensation or any similar payment, (ii) accelerate the time of
payment or vesting or increase the amount of any compensation due to any such
employee or former employee or (iii) directly or indirectly result in any
payment made or to be made to or on behalf of any person to constitute a
"parachute payment" within the meaning of Section 280G of the Code.
3.15 INTELLECTUAL PROPERTY.
(a) "INTELLECTUAL PROPERTY" shall mean all new and useful
inventions, discoveries and all letters patent (including, but not limited to,
all reissues, extensions, renewals, divisions and continuations thereof and
thereto (including continuations-in-part)) and all applications therefor; all
copyrights, mask works, trademarks and service marks and all registrations and
applications for registration thereof; all trade secrets, know-how, algorithms,
methods, processes, protocols, methodologies, computer software (including, but
not limited to, source code in object code and source code form), design,
functional, technical and other specifications (for computer software and other
properties) and all other tangible and intangible proprietary materials and
information required for the conduct of the business of the Company. For the
purposes of this Section 3.15, "USE" (and, as the context requires, "USED")
means the right to use, including, without limitation, the right to make
modifications and prepare derivative works.
(b) Except as set forth on SCHEDULE 3.15(b), with respect to the
Intellectual Property which the Company owns, and to the extent of its rights
therein, after the Merger, the Surviving Corporation shall have the right to (i)
xxx for (and otherwise assert claims for) and shall have no limitation on its
ability to recover damages and obtain any and all other appropriate remedies
available at law or equity for any past, present or future infringement,
misappropriation or other violation thereof (and settle all such suits, actions
and proceedings); (ii) seek appropriate protection therefor (including, where
appropriate, the right to seek copyright, trademark and service xxxx
registrations and letters patent in the United States and all other countries
and governmental divisions); and (iii) claim all rights and priority thereunder,
in each case, to the extent, if any, that the Company is entitled to do so prior
to the Merger.
(c) The Company does not own, have an interest in or have a
right under
22
any license agreement to use any foreign patent or any application therefor. The
Company does not own, have an interest in or have a right under any copyright or
any application therefor. SCHEDULE 3.15(c) sets forth a complete and accurate
list (i) in subsection 1, of all letters patent owned by the Company; and (ii)
in subsection 2, of all U.S. Federal trademark and service xxxx registrations
owned by the Company. The Company does not own, have an interest in or have a
right under any U.S. common law trademarks or service marks. No U.S. letter
patent owned by the Company is, as of the date hereof, subject to a reissue
proceeding in the U.S. Patent and Trademark Office (the "PTO"). No applications
for U.S. letters patent have been filed by and are subject to ongoing
prosecution by the Company. No applications for letters patent in jurisdictions
other than the United States have been filed by and are subject to ongoing
prosecution by the Company. No applications for U.S. Federal trademark or
service xxxx registrations have been filed by and are subject to ongoing
prosecution by the Company. No applications for trademark or service xxxx
registrations in jurisdictions other than the United States have been filed by
and are subject to ongoing prosecution by the Company. The Company has not been
involved in any patent interference or similar proceedings including, but not
limited to, interferences and the like asserted against the Company and
interferences and the like which the Company has provoked.
(d) Except as set forth in SCHEDULE 3.15(d), (i) all authorship
in the computer software, documentation, software design, technical and
functional software specifications created by the Company and used in products
or services created by the Company is original and (ii) all computer software
and related documentation manuals contained or Used in products of (including
documentation and product and user manuals) or services provided by the Company
are owned by or licensed to the Company, and such licenses provide the Company
with the right to sublicense or otherwise authorize use of the licensed subject
matter to their customers and authorized third party users.
(e) (i) Except for third parties which have rights pursuant to
the agreements set forth in SCHEDULE 3.15(f)(ii) and except for rights granted
to the customers of the Company, the Company has the sole and exclusive right to
Use, sell and license each of the copyrights owned by the Company and to make,
Use, sell and license each item of Intellectual Property listed in SCHEDULE
3.15(c) hereto (the foregoing collectively referred to as "COMPANY-OWNED IP
REGISTRATIONS") and (ii) except as set forth in SCHEDULE 3.15(e), the Company
has no knowledge that any of the Company-Owned IP Registrations are invalid,
unenforceable or not subsisting. With the exception of copyright rights, all
Company-Owned IP Registrations have been and currently remain duly registered
with or issued by the appropriate governmental agency of the United States or of
foreign countries as indicated in SCHEDULE 3.15(c), and all required maintenance
and annuity fees have been paid in full to and all declarations required
pursuant to 15 U.S.C. Sections 1058 and 1065 (and foreign counterparts to the
same) have been accepted by the proper governmental authority.
(f) (i) SCHEDULE 3.15(f)(i) sets forth a complete and accurate
list of the agreements, including, but not limited to, license agreements, and
of all parties thereto under which the Company obtains or is the beneficiary of
any license or right to use any Intellectual Property right of any third party
(singularly or collectively, a "LICENSED-IN AGREEMENT" or the "LICENSED-IN
23
AGREEMENTS") and (ii) SCHEDULE 3.15(f)(ii) sets forth a complete and accurate
list of the material agreements, including, but not limited to, license
agreements, to which the Company is a party and pursuant to which a third party
is authorized to Use any of the Intellectual Property rights of the Company.
(g) Except as set forth in SCHEDULE 3.15(g), each of the
copyrights owned by the Company and each item of Intellectual Property listed in
the Schedules delivered pursuant to Section 3.15(c) hereto (the "COMPANY-OWNED
IP") (i) is free and clear of any attachments, liens, security interests, UCC
filings or any other encumbrances; (ii) is not subject to any outstanding
judicial order, decree, judgment or stipulation or to any agreement restricting
the scope of the Company's use thereof; and (iii) together with each item of
Intellectual Property which the Company has a right to Use or practice pursuant
to one or more Licensed-In Agreements, is not subject to any suits, actions,
claims or demands of any third party and no action or proceeding, whether
judicial, administrative or otherwise, has been instituted, is pending or, to
the Company's knowledge, Threatened which challenges or affects the rights of
the Company in the same.
(h) Except as set forth in SCHEDULE 3.15(h), (i) the Company has
not received any claim that, any cease and desist or equivalent letter
regarding, or any other notice of any allegation to the effect that any of the
Company's products, software, apparatus, methods or services which the Company
makes, Uses, sells, offers or provides infringes upon, misappropriates or
otherwise violates the Intellectual Property of any third party; (ii) the
Company has no knowledge of any unauthorized Use by, unauthorized disclosure to
or by or infringement, misappropriation or other violation of any of its
Intellectual Property by any third party or any current or former officer,
employee, independent contractor, consultant or any other agent of the Company
(a "COMPANY AGENT" or the "COMPANY AGENTS"); (iii) the Company has not entered
into any agreement to indemnify any third party against any claim of
infringement, misappropriation or other violation of Intellectual Property
rights other than indemnification provisions contained in purchase orders,
customer agreements, Licensed-In Agreements or software licenses arising in the
ordinary course of business; and (iv) during the last ten (10) years the Company
has not been charged in any suit, action or proceeding with, or has charged
others with, unfair competition, infringement, misappropriation, wrongful use of
or any other violation or improper or illegal activity with respect to or
affecting Intellectual Property or with claims contesting the validity,
ownership or right to make, Use, sell, license or dispose of Intellectual
Property.
(i) Except as set forth in SCHEDULE 3.15(i), all computer
software created by employees of the Company within the scope of their
employment by the Company and used in Company products or services and all
original copyrightable authorship therein is owned by the Company.
(j) Except as set forth in SCHEDULE 3.15(j), the Intellectual
Property owned by, licensed to or Used by the Company prior to the execution of
this Agreement will enable the Surviving Corporation subsequent to the Effective
Time to fully carry on without restriction all aspects of the business of the
Company as and to the extent such business was carried on by the Company prior
to the Merger. Except as set forth in SCHEDULE 3.15(j), the Company either owns
all
24
right, title and interest in, or has a valid, binding and continuing right to
Use, all of the Company's Intellectual Property.
(k) The Company believes that it has taken all reasonable and
practicable steps to protect and preserve the confidentiality of all of its
trade secrets, know-how, algorithms, methods, processes, protocols,
methodologies, computer software (including, but not limited to, source code in
object code and source code form), design, functional, technical and other
specifications (for computer software and other properties) and all other
tangible and intangible proprietary materials not subject to copyright or issued
letters patent ("CONFIDENTIAL IP INFORMATION"). The Company believes that all
Use by the Company of Confidential IP Information not owned by the Company has
been and is pursuant to the terms of a written agreement between the Company and
the owner of such Confidential Information, or is otherwise lawful.
3.16 REAL PROPERTY. (a) The Company does not own any real property.
(b) SCHEDULE 3.16(b) contains a list of all leases
(collectively, the "LEASES") pursuant to which the Company leases any real
property (the "LEASED REAL PROPERTY"). True and correct copies of the Leases
have been delivered or made available to Veeco. All of the Leases are valid,
binding and enforceable in accordance with their terms (subject to bankruptcy,
insolvency and other proceedings at law or in equity relating to the rights of
creditors generally), and are in full force and effect; the Company has received
no notice, and has no knowledge, of any default by the Company (beyond any
applicable grace or cure period) under any of the Leases, and to the Company's
knowledge, no other party to any of the Leases is in breach or default
thereunder; and all lessors under the Leases have, or by the Closing Date will
have, consented to the consummation of the transactions contemplated hereby, to
the extent that the applicable Lease requires such consent, without requiring
modification in the rights or obligations of the tenant under such Leases. No
sublease by the Company of any Leased Real Property is currently in effect. The
Company's leasehold interests are subject to no Lien or other encumbrance
created by the Company.
3.17 TANGIBLE PROPERTY. (a) SCHEDULE 3.17(a) contains the Company's
depreciation ledger of all material machinery, equipment, fixtures, motor
vehicles and other tangible personal property owned by the Company
(collectively, the "OWNED TANGIBLE PROPERTY"). Except as set forth in SCHEDULE
3.17(a), the Company has good title to all Owned Tangible Property free and
clear of all Liens (other than Permitted Liens).
(b) SCHEDULE 3.17(b) contains a list as of the date indicated in
such schedule of (i) all material machinery, equipment, fixtures and other
tangible personal property owned by another Person subject to any capital lease
or rental agreement that constitutes a Material Contract to which the Company is
a party (collectively, the "LEASED TANGIBLE PROPERTY") and (ii) a list of the
leases of the Leased Tangible Property (the "TANGIBLE PROPERTY LEASES"). Each of
the Tangible Property Leases is in full force and effect and constitutes a valid
and binding obligation of the Company and the other party thereto, enforceable
in accordance with its terms (subject to bankruptcy, insolvency and other
proceedings at law or in equity relating to the rights of creditors generally).
The Company has received no notice, and has no knowledge, of any default by the
25
Company (beyond any applicable grace or cure period) under any of the Tangible
Property Leases, and, to the Company's knowledge, no other party to any of the
Tangible Property Leases is in breach or default thereunder.
(c) Except as set forth in SCHEDULE 3.17(c), all Owned Tangible
Property and all Leased Tangible Property (collectively, the "TANGIBLE
PROPERTY") is in good and usable working condition, normal wear and tear
excepted, and is suitable for the purposes for which it is used or is being
replaced according to the Company's replacement policy.
3.18 ENVIRONMENTAL MATTERS. (a) The Company's ownership and operation of
its business is and has been in material compliance with all Environmental Laws.
The Company has obtained all approvals necessary or required under all
applicable Environmental Laws for the ownership and operation of its business,
all such approvals are in effect, the Company has not received written notice of
any action to revoke or modify any of such approvals, and the ownership and
operation of the Company's business is and has been in material compliance with
all terms and conditions thereof. Except as set forth in SCHEDULE 3.18(a), the
Company has not received notice of any pending or Threatened claim or
investigation by any Governmental Authority or any other Person concerning the
Company's potential liability under Environmental Laws in connection with the
ownership or operation of its business. Except as set forth in SCHEDULE 3.18(a),
there has not been a Release of any Hazardous Substance at, upon, in, from or
under any premises now or previously owned or occupied by the Company or upon
which its assets are or were located at any time during the Company's ownership
and/or occupancy thereof. None of the Leased Real Property is, and, to the
Company's knowledge, none of the Leased Real Property has been, used as a
treatment, storage or disposal facility for Hazardous Substances; PROVIDED, that
for purposes of this sentence, "knowledge" shall mean actual knowledge without
inquiry with respect to the Leased Real Property other than the Leased Real
Property located at 0000 Xxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000; and,
except as set forth in SCHEDULE 3.18(a), the Company has not caused any
Hazardous Substances to be deposited on any of the Leased Real Property and, to
the Company's knowledge, no such Hazardous Substances are present on any of the
Leased Real Property, except in such quantities as are handled in material
compliance with all applicable manufacturer's instructions and in material
compliance with all applicable Environmental Laws and as are used in the
operation of the Company's business; PROVIDED, that for purposes of this
sentence, "knowledge" shall mean actual knowledge without inquiry with respect
to the Leased Real Property other than the Leased Real Property located at 0000
Xxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000.
(b) The Company has (i) provided or made available to Veeco all
test results, records, notices, disclosures and reports in the Company's
possession or control with respect to the Leased Real Property and any real
property previously owned or occupied by the Company, including all
correspondence with any Governmental Authority as described in SCHEDULE 3.18(b),
concerning any and all past and/or present health, safety and/or environmental
issues or concerns and (ii) made all disclosures, including notice of a Release
or Threatened Release of a Hazardous Substance, required of the Company under
any Environmental Law.
26
(c) Except as set forth in SCHEDULE 3.18(c), the Company has not
received notice, or otherwise obtained knowledge, of the existence of any
circumstances or conditions that have a reasonable likelihood of resulting in
any Damages for which the Company could be liable arising pursuant to any
Environmental Law.
3.19 LABOR RELATIONS. Except as set forth in SCHEDULE 3.19, the Company
is conducting its business in material compliance with all applicable Laws
relating to employment or labor, including, without limitation, those Laws
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity and the payment and
withholding of Taxes. Except as set forth in SCHEDULE 3.19, no union or other
collective bargaining unit has been certified as representing any of the
employees of the Company, nor has the Company agreed to recognize any union or
other collective bargaining unit. Except as set forth in SCHEDULE 3.19, there
are no labor disputes pending or Threatened involving strikes, work stoppages,
slowdowns or lockouts. There are no grievance proceedings or claims of unfair
labor practices filed or Threatened to be filed with the National Labor
Relations Board against the Company. There is no union representation or
organizing effort pending or Threatened against the Company.
3.20 OFFICERS AND EMPLOYEES. The Company has previously delivered or
made available to Veeco a true and complete list of the names and current
salaries of all the employees of the Company. Except as disclosed in SCHEDULE
3.20, there is no employment agreement, employee benefit or incentive
compensation plan or program, severance policy or program or any other plan or
program to which the Company is a party (i) that is or could, pursuant to its
terms, be triggered or accelerated by reason of or in connection with the
execution of this Merger Agreement or the consummation of the transactions
contemplated by this Merger Agreement or (ii) which contains "change in control"
provisions pursuant to which the payment, vesting or funding of compensation or
benefits is triggered or accelerated by reason of or in connection with the
execution of or consummation of the transactions contemplated by this Merger
Agreement. Except as set forth in SCHEDULE 3.20, no employee whose annual salary
is in excess of $50,000 (exclusive of bonuses) has given notice to the Company
to cancel or otherwise terminate such person's relationship with the Company.
3.21 INSURANCE. SCHEDULE 3.21 contains a complete list of all of the
Company's policies of insurance in effect as of the date hereof. All of such
policies are in full force and effect, and there is no default (beyond any
applicable grace or cure period) with respect to any provision contained in any
such policy, nor has there been any failure to give any notice or present any
claim under any liability policy in a timely fashion or in the manner or detail
required by such liability policy. The Company has delivered or made available
copies of all such policies to Veeco. Except as set forth in SCHEDULE 3.21,
there are no outstanding unpaid premiums or claims, and no retroactive or
retrospective premium adjustments with respect to such policies, and no notice
of cancellation or nonrenewal has been received by the Company with respect to,
or disallowance of any claim under, any such policy.
3.22 BROKERS AND FINDERS. Except as set forth in SCHEDULE 3.22, no
broker, finder, agent or similar intermediary has acted on the Company's or any
Stockholder's behalf in connection
26
with this Merger Agreement or the transactions contemplated hereby, and there
are no brokerage commissions, finders' fees or similar fees or commissions
payable in connection therewith based on any Contract with the Company or any
Stockholder or any action taken by the Company or any Stockholder.
3.23 BANKING RELATIONSHIPS. SCHEDULE 3.23 sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which the Company has a banking relationship. At the
Closing, the Company will deliver to Veeco copies of all banking records in its
possession, including, without limitation, bank statements for the 12 months
prior to the date hereof, keys to safe deposit boxes and all signature or
authorization cards pertaining to such safe deposit boxes and bank accounts.
3.24 TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES. Except as set forth
in SCHEDULE 3.24 and except for salary, benefits, other compensation and expense
reimbursement payable in the ordinary course and consistent with past practices,
there are no amounts in excess of $5,000 owing from the Company to any present
or former shareholder or Affiliate of the Company, nor are there any amounts in
excess of $5,000 owing from any such Person to the Company, nor are there
currently pending any transactions between the Company and any such Person, nor
since June 30, 1999, have there been any transactions between the Company and
any such Person.
3.25 ACCOUNTS RECEIVABLE. Except as set forth in SCHEDULE 3.25, the
accounts receivable of the Company (a) are bona fide accounts receivable created
in the ordinary and usual course of business in connection with bona fide
transactions and consistent with past practice, (b) are current as of the date
set forth in SCHEDULE 3.25 and (c) have been properly accrued in accordance with
GAAP consistently applied and any reserves or allowances for doubtful accounts
have been properly accrued in accordance with GAAP consistently applied.
3.26 INVENTORY. Except as set forth in SCHEDULE 3.26, all the
inventories of the Company are suitable, useable and saleable in the ordinary
course of business consistent with past practices, except to the extent of
normal obsolescence or to the extent written down or reserved against. Except as
set forth in SCHEDULE 3.26, the inventories stated in the June 30, 1998 and June
30, 1999 balance sheets have been stated in accordance with GAAP consistently
applied.
3.27 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Company set forth in this Merger Agreement and in any
agreement, certificate or other document required to be delivered or given to
Veeco or Acquisition by the Company pursuant to this Merger Agreement will be
true and correct at the Closing Date with the same force and effect as if made
on that date.
3.28 POOLING OF INTERESTS. Neither the Company nor, to the knowledge of
the Company, any of its directors, officers or stockholders has taken any action
which would interfere with Veeco's ability to account for the Merger as a
pooling of interests.
28
3.29 NO DISPOSITION. To the Company's knowledge, none of the Company
Affiliates has any plan or intention to sell, exchange or otherwise dispose of a
number of shares of Veeco Shares received in the Merger that would reduce such
Company Affiliate ownership of Veeco Shares to a number of shares having a
value, as of the Effective Time, of less than 80 percent of the value of all of
the formerly outstanding stock of the Company held by such Company Affiliate as
of the Effective Time. For purposes of this representation, shares of Company
Common Stock surrendered by dissenters or exchanged for cash in lieu of
fractional shares of Veeco Shares will be treated as outstanding Company Common
Stock as of the Effective Time and shares of Company Common Stock and Veeco
Shares held by the Company Affiliates and otherwise sold, redeemed or disposed
of prior or subsequent to the Merger are considered in making this
representation.
3.30 SOLVENCY. The Company is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code
and the fair market value of the assets of the Company will, as of the Effective
Time, exceed the sum of its liabilities, plus the amount of liabilities, if any,
to which the assets are subject.
3.31 DISCLOSURE. The representations and warranties contained in this
Merger Agreement and the information furnished by the Company or any of the
Stockholders set forth herein, in the exhibits or schedules hereto or in any
other document required to be delivered by the Company or any of the
Stockholders to Veeco, Acquisition or Veeco's accountants, counsel or other
advisers pursuant to this Merger Agreement, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements herein or therein not misleading
3.32 YEAR 2000 COMPLIANCE. The Company's Information Technology is
designed to be used prior to, during and after the calendar year 2000, and such
Information Technology used during each such time period will accurately
receive, provide and process date/time data (including calculating, comparing
and sequencing) from, into and between the 20th and 21st centuries, including
the years 1999 and 2000, and leap year calculations, and will not malfunction,
cease to function or provide invalid or incorrect results as a result of
date/time data, to the extent that other Information Technology, used in
combination with the Company's Information Technology, properly exchanges
date/time data with it.
(B) Each of the Party Stockholders, jointly and severally, represents
and warrants to Veeco and Acquisition as follows:
(1) STOCK OWNERSHIP. Each of the Party Stockholders is the
record and beneficial owner of the shares of Company Common Stock set forth
opposite such Party Stockholder's name of SCHEDULE 3.02(a) as of the date
hereof, and will be the record and beneficial owner of such shares immediately
prior to the Closing, free and clear of all Liens. No legend or other reference
to any purported Lien appears upon any certificate representing shares of the
Company Common Stock identified on SCHEDULE 3.02(a) as being owned by any of the
Party Stockholders.
29
(2) AUTHORIZATION. Each of the Party Stockholders has the
right, capacity and all requisite authority to execute, deliver and perform this
Merger Agreement and to consummate the transactions contemplated hereby. This
Merger Agreement has been duly and validly executed and delivered by each of the
Party Stockholders. This Merger Agreement constitutes a legal, valid and binding
agreement of each of the Party Stockholders, enforceable in accordance with its
terms.
(3) NO DISPOSITION. None of the Company Affiliates has any
plan or intention to sell, exchange or otherwise dispose of a number of shares
of Veeco Shares received in the Merger that would reduce such Company Affiliate
ownership of Veeco Shares to a number of shares having a value, as of the
Effective Time, of less than 80 percent of the value of all of the formerly
outstanding stock of the Company held by such Company Affiliate as of the
Effective Time. For purposes of this representation, shares of Company Common
Stock surrendered by dissenters or exchanged for cash in lieu of fractional
shares of Veeco Shares will be treated as outstanding Company Common Stock as of
the Effective Time and shares of Company Common Stock and Veeco Shares held by
the Company Affiliates and otherwise sold, redeemed or disposed of prior or
subsequent to the Merger are considered in making this representation.
IV. REPRESENTATIONS AND WARRANTIES OF VEECO AND ACQUISITION.
Veeco and Acquisition, jointly and severally, hereby represent
and warrant to the Company and the Stockholders as follows:
4.01 ORGANIZATION OF VEECO AND ACQUISITION. (a) Each of Veeco
and Acquisition is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is qualified
or licensed as a foreign corporation to do business in each other jurisdiction
where the failure to so qualify would have a Material Adverse Effect upon its
business or operations. The jurisdictions in which Veeco and Acquisition are so
qualified to do business as a foreign corporation are set forth in SCHEDULE
4.01. Each of Veeco and Acquisition has all requisite corporate power to own,
operate and lease its assets and to carry on its business as now being
conducted. Each of Veeco and Acquisition has delivered to the Company correct
and complete copies of its Certificate or Articles of Incorporation and By-Laws
as in effect on the date hereof.
(b) Each of Veeco and Acquisition has full
corporate power and authority to execute, deliver and perform this Merger
Agreement and, in the case of Acquisition, the Articles of Merger, and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Merger Agreement, the Articles of Merger and all other
documents and agreements to be delivered pursuant hereto and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the boards of directors of Veeco and Acquisition. Prior to the Closing, the
execution, delivery and performance of this Merger Agreement, the Articles of
Merger and all other documents and agreements to be delivered pursuant hereto
and the consummation of the transactions contemplated hereby will be duly and
validly authorized by the stockholder of Acquisition, and no other corporate
proceedings on the part of Veeco or Acquisition are necessary to authorize this
Merger Agreement, the Articles of Merger and any related documents
30
or agreements or to consummate the transactions contemplated hereby. As of the
Closing, no stockholder of Veeco or Acquisition will have any rights to dissent
under applicable law. This Merger Agreement has been duly and validly executed
and delivered by Veeco and Acquisition, and the Articles of Merger, when
executed at the Closing, will be duly and validly executed and delivered by
Acquisition. This Merger Agreement constitutes a legal, valid and binding
agreement of both Veeco and Acquisition, enforceable in accordance with its
terms, and the Articles of Merger, when executed at the Closing, will be legal,
valid and binding agreements of Acquisition, enforceable in accordance with
their terms.
4.02 CAPITALIZATION. (a) The authorized capital stock of Veeco consists
of 25,000,000 Veeco Shares, of which 15,997,533 were issued and outstanding as
of September 30, 1999, and 500,000 shares of preferred stock, none of which are
outstanding. All of the outstanding Veeco Shares have been duly authorized and
validly issued and are fully paid and nonassessable and were issued in
conformity with applicable laws.
(b) As of September 30, 1999, 2,180,809 Veeco Shares were
issuable upon the exercise of options granted under the Veeco Instruments Inc.
Amended and Restated 1992 Employees' Stock Option Plan and under the Amended and
Restated Veeco Instruments Inc. 1994 Stock Option Plan for Outside Directors,
and 7,182 Veeco Shares were issuable upon the exercise of options granted to
shareholders of Wyko Corporation in the merger of a wholly-owned subsidiary of
Veeco with and into Wyko Corporation in July 1997 (collectively, the "VEECO
OPTIONS"). Except for the Veeco Options, there are no outstanding Equity
Securities, or other obligations to issue or grant any rights to acquire any
Equity Securities, of Veeco, or any Contracts to restructure or recapitalize
Veeco. There are no outstanding Contracts of Veeco to repurchase, redeem or
otherwise acquire any Equity Securities of Veeco. All outstanding Equity
Securities of Veeco have been duly authorized and validly issued in conformity
with applicable laws.
4.03 NON-CONTRAVENTION. The execution, delivery and performance by Veeco
and Acquisition of this Merger Agreement and the consummation of the
transactions contemplated hereby will not (a) violate any provision of the
Certificate or Articles of Incorporation or By-Laws of Veeco or Acquisition, (b)
violate, or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
excuse performance by any Person of any of its obligations under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any Lien upon any property or assets of Veeco
under, any material Contract to which Veeco or Acquisition is a party or by
which any of their respective property or assets are bound, or to which any of
the property or assets of Veeco or Acquisition is subject, except for Contracts
wherein the other party thereto has consented to the consummation of this
transaction, (c) subject to compliance with the HSR Act, violate any Law
applicable to Veeco or Acquisition or (d) violate or result in the revocation or
suspension of any material license, permit, certificate, consent or approval
from a Governmental Authority that is necessary for the business and operations
of Veeco or Acquisition.
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4.04 REPORTS. Veeco has furnished to the Company a true and complete
copy of each statement, report, registration statement (with the prospectus in
the form filed pursuant to Rule 424(b) of the Securities Act), definitive proxy
statement and other filings filed with the SEC by Veeco since January 1, 1996,
and, prior to the Effective Time, Veeco will have furnished the Company with
true and complete copies of any additional statements, reports and documents
filed with the SEC by Veeco prior to the Effective Time (collectively, the
"VEECO SEC DOCUMENTS"). All documents required to be filed as exhibits to the
Veeco SEC Documents have been so filed. All Veeco SEC Documents were filed as
and when required by the Exchange Act or the Securities Act, as applicable. The
Veeco SEC Documents include all statements, reports and documents required to be
filed by Veeco pursuant to the Exchange Act and the Securities Act. As of their
respective filing dates, the Veeco SEC Documents complied in all material
respects with the requirements of the Exchange Act and the Securities Act, as
applicable, and none of the Veeco SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent
corrected by a subsequently filed Veeco SEC Document. None of Veeco's
subsidiaries is required to file any statements, reports or documents with the
SEC. The financial statements of Veeco and its subsidiaries, including the notes
thereto, included in the Veeco SEC Documents (the "VEECO FINANCIAL STATEMENTS"),
complied in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto as of
their respective dates (except as may be indicated in the notes thereto or, in
the case of unaudited statements included in Quarterly Reports on Form 10-Q, as
permitted by Form 10-Q of the SEC). The Veeco Financial Statements fairly
present the consolidated financial condition, operating results and cash flows
of Veeco and its subsidiaries at the dates and during the periods indicated
therein in accordance with GAAP consistently applied (subject, in the case of
unaudited statements, to normal, recurring year-end adjustments and additional
footnote disclosures). There has been no material change in Veeco's accounting
policies except as described in the notes to the Veeco Financial Statements. At
all times since January 1, 1996 Veeco has (i) filed as and when due all
documents required to be filed with NASDAQ, and (ii) otherwise timely performed
all of Veeco's obligations pursuant to the rules and regulations of NASDAQ.
4.05 ABSENCE OF CERTAIN CHANGES. Since December 31, 1998 (the "VEECO
BALANCE SHEET DATE"), Veeco and its subsidiaries have conducted their business
in the ordinary course consistent with past practice and there has not occurred:
(i) any change, event or condition (whether or not covered by insurance) that
has resulted in, or might reasonably be expected to result in, a Material
Adverse Effect to Veeco; (ii) except as listed on SCHEDULE 4.05, any
acquisition, sale or transfer of any material asset of Veeco or any of its
subsidiaries other than in the ordinary course of business and consistent with
past practice; (iii) any change in accounting methods or practices (including
any change in depreciation or amortization policies or rates) by Veeco or any
revaluation by Veeco of any of its assets; (iv) any declaration, setting aside,
or payment of a dividend or other distribution with respect to the shares of
Veeco, or any direct or indirect redemption, purchase or other acquisition by
Veeco of any of its shares of capital stock; (v) except as listed on SCHEDULE
4.05, any material contract entered into by Veeco or any of its subsidiaries,
other than in the ordinary course of business and as provided to the Company, or
any material amendment or termination of,
32
or default under, any material contract to which Veeco or any of its
subsidiaries is a party or by which it or any of them is bound; or (vi) any
agreement by Veeco or any of its subsidiaries to do any of the things described
in the preceding clauses (i) through (v) (other than negotiations with the
Company and its representatives regarding the transactions contemplated by this
Agreement).
4.06 NO UNDISCLOSED LIABILITIES. Neither Veeco nor any of its
subsidiaries has any obligations or liabilities of any nature (matured or
unmatured, fixed or contingent) which are material to Veeco and its
subsidiaries, taken as a whole, other than those (i) set forth or adequately
provided for in the Balance Sheet of Veeco and its subsidiaries included in
Veeco's Quarterly Report on Form 10-Q for the period ended June 30, 1999 (the
"VEECO BALANCE SHEET"), (ii) not required to be set forth on the Veeco Balance
Sheet under GAAP, or (iii) incurred in the ordinary course of business since the
Veeco Balance Sheet Date and consistent with past practice.
4.07 LITIGATION. Except as disclosed in Veeco's Quarterly Report on Form
10-Q for the period ended June 30, 1999, (i) there is no private or governmental
action, suit, proceeding, claim, arbitration or investigation pending before any
agency, court or tribunal, foreign or domestic, or, to the knowledge of Veeco or
any of its subsidiaries, Threatened against Veeco or any of its subsidiaries or
any of their respective properties or any of their respective officers or
directors (in their capacities as such) that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on Veeco, and
(ii) there is no judgment, decree or order against Veeco or any of its
subsidiaries or, to the knowledge of Veeco or any of its subsidiaries, any of
their respective directors or officers (in their capacities as such) that could
prevent, enjoin, alter or materially delay any of the transactions contemplated
by this Agreement, or that could reasonably be expected to have a Material
Adverse Effect on Veeco.
4.08 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material
agreement, judgment, injunction, order or decree binding upon Veeco or any of
its subsidiaries which has or reasonably could be expected to have the effect of
prohibiting or materially impairing any current or future business practice of
Veeco or any of its subsidiaries, any acquisition of property by Veeco or any of
its subsidiaries or the conduct of business by Veeco or any of its subsidiaries
as currently conducted or as proposed to be conducted by Veeco or any of its
subsidiaries.
4.09 GOVERNMENTAL AUTHORIZATION. Veeco and each of its subsidiaries have
obtained each federal, state, county, local or foreign governmental consent,
license, permit, grant, or other authorization of a Governmental Authority that
is required for the operation of Veeco's or any of its subsidiaries' business or
the holding of any interest in its properties (collectively, the "VEECO
AUTHORIZATIONS"), and all of such Veeco Authorizations are in full force and
effect, except where the failure to obtain or have any of such Veeco
Authorizations could not reasonably be expected to have a Material Adverse
Effect on Veeco.
4.10 COMPLIANCE WITH LAWS. Each of Veeco and its subsidiaries has
complied with, are not in violation of, and have not received any notices of
violation with respect to, any federal, state, local or foreign statute, law or
regulation with respect to the conduct of its business,
33
or the ownership or operation of its business, except for such violations or
failures to comply as could not be reasonably expected to have a Material
Adverse Effect on Veeco.
4.11 POOLING OF INTERESTS. Neither Veeco nor any of its subsidiaries
nor, to the knowledge of Veeco, any of their respective directors, officers or
stockholders has taken any action which would interfere with Veeco's ability to
account for the Merger as a pooling of interests.
4.12 BROKERS AND FINDERS. Except for those Persons ("VEECO'S BROKERS")
previously disclosed to the Company or its agents or representatives, no broker,
finder, agent or similar intermediary has acted on Veeco's or Acquisition's
behalf in connection with this Merger Agreement or the transactions contemplated
hereby, and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection therewith based on any Contract with Veeco or
Acquisition or any action taken by Veeco or Acquisition. Veeco shall pay all
fees and disbursements of Veeco's Brokers.
4.13 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Veeco and Acquisition set forth in this Merger Agreement and in
any agreement, certificate or other document required to be delivered or given
to the Company by Veeco or Acquisition pursuant to this Merger Agreement will be
true and correct at the Closing Date with the same force and effect as if made
on that date.
4.14 DISCLOSURE. No representation or warranty contained in this Merger
Agreement and none of the information furnished by Veeco and Acquisition set
forth herein, in the exhibits or schedules hereto or in any other document
required to be delivered by Veeco and Acquisition to the Company, or its
accountants, counsel or other advisers pursuant to this Merger Agreement,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements herein or therein not misleading.
V. COVENANTS.
5.01 ACCESS. Between the date hereof and the Closing Date, the Company
shall provide Veeco, Acquisition and each of their authorized employees, agents,
officers and representatives with reasonable access to the properties, books,
records, Tax Returns, contracts, information, documents and personnel of the
Company as they relate to the Company's business as Veeco or Acquisition may
reasonably request for the purpose of making such investigation of the business,
properties, financial condition and results of operations of the Company's
business as it may deem appropriate or necessary. Between the date hereof and
the Closing Date, Veeco shall, and shall cause its subsidiaries to, provide the
Company and each of its authorized employees, agents, officers and
representatives with reasonable access to the properties, books, records, Tax
Returns, contracts, information, documents and personnel of Veeco and its
subsidiaries as they relate to Veeco's and its subsidiaries' businesses as the
Company may reasonably request for the purpose of making such investigation of
the business, properties, financial condition and results of operations of
Veeco's and its subsidiaries' businesses as they may deem appropriate or
necessary.
34
5.02 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE CLOSING DATE.
Except as otherwise expressly permitted by this Merger Agreement, between the
date hereof and the Closing Date, the Company shall not, without the prior
consent of Veeco, take any affirmative action, or fail to take any reasonable
action within its control, as a result of which any of the changes or events
listed in Section 3.13 is reasonably likely to occur.
5.03 CONDUCT OF BUSINESS OF THE COMPANY AND VEECO. During the period
from the date of this Merger Agreement and continuing until the earlier of the
termination of this Merger Agreement and the Effective Time, each of the Company
and Veeco agrees (except to the extent expressly contemplated by this Merger
Agreement or as consented to in writing by the other), to carry on its and its
subsidiaries' business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, to pay and to cause its
subsidiaries to pay debts and Taxes when due (subject (i) to good faith disputes
over such debts or taxes and (ii) in the case of Taxes of the Company, to
Veeco's consent (which consent will not be unreasonably withheld or delayed) to
the filing of material Tax Returns if applicable), to pay or perform other
obligations when due, and to use all reasonable efforts consistent with past
practice and policies to preserve intact its and its subsidiaries' present
business organizations, use its best efforts consistent with past practice to
keep available the services of its and its subsidiaries' present officers and
key employees and agents and use its best efforts consistent with past practice
to preserve its and its subsidiaries' relationships and good will with
customers, suppliers, distributors, licensors, licensees, landlords, creditors,
employees, agents and others having business dealings with it or its
subsidiaries, to the end that its and its subsidiaries' goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Each of the Company and
Veeco shall, and shall cause each of its subsidiaries to, confer with the other
concerning operational matters of a material nature and otherwise report
periodically to the other concerning the status of its business, operations and
finances, and those of its subsidiaries. Without limiting the foregoing, except
as expressly contemplated by this Merger Agreement, neither the Company nor
Veeco shall do, cause or permit any of the following, or allow, cause or permit
any of its subsidiaries to do, cause or permit any of the following, without the
prior written consent of the other:
(a) CHARTER DOCUMENTS. Cause or permit any amendments to its
Certificate or Articles of Incorporation or Bylaws;
(b) DIVIDENDS; CHANGES IN CAPITAL STOCK. Declare or pay any
dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it or its subsidiaries;
(c) POOLING. Take any action which would interfere with Veeco's
ability to account for the Merger as a pooling of interests; or
35
(d) OTHER. Take, or agree in writing or otherwise to take, any
of the actions described in Sections 5.03(a) through (c) above, or any action
which would make any of its representations or warranties contained in this
Merger Agreement untrue or incorrect in any material respect or prevent it from
performing or cause it not to perform its covenants hereunder in any material
respect.
5.04 CONSENTS. The Company, Veeco and Acquisition shall cooperate and
use their respective commercially reasonable efforts to obtain, prior to the
Effective Time, all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to the
Material Contracts as are necessary for consummation of the transactions
contemplated by this Merger Agreement and for the Surviving Corporation to enjoy
all rights under such Material Contracts after the consummation of the
transactions contemplated by this Merger Agreement.
5.05 ENVIRONMENTAL TRANSFER LAWS. The Company shall comply in a timely
fashion with the material requirements of all Environmental Laws applicable to
the transfer of its business and any licenses associated with the operation of
the business. The Company shall complete all necessary disclosure statements
required by Environmental Laws applicable to the transfer of its business and
provide the statements to Veeco prior to Closing, all in proper form for
appropriate recordation and filing.
5.06 TAX MATTERS. Between the date hereof and the Closing Date, the
Company shall file or cause to be filed on a timely basis all Tax Returns that
are required to be filed by it pursuant to the Laws of each Governmental
Authority with taxing power over it or its assets and businesses. Each of such
Tax Returns will be true, correct and complete when filed. The Company shall not
make any election or file any amended Tax Return reflecting any position that
could result in a material adverse Tax consequence to Veeco, Acquisition or the
Company for any period beginning on or after the Effective Time. All transfer,
documentary, gross receipts, sales, use and property gains Taxes, and
liabilities similar in nature, imposed or payable on the sale or transfer of the
Company's business pursuant to this Merger Agreement or the consummation of any
of the transactions contemplated hereby shall be paid by the Company. The
Company shall timely file all required transfer Tax Returns and/or notices of
the transfer of the Company's business with the appropriate Governmental
Authority. Veeco shall cooperate with the Company, which cooperation shall
include, without limitation, providing information and executing and delivering
documents, in connection with the Company's obligations under this Section.
5.07 NOTICE OF BREACH; DISCLOSURE. Each party shall promptly notify the
other of (i) any event, condition or circumstance of which such party becomes
aware after the date hereof and prior to the Closing Date that would constitute
a violation or breach of this Merger Agreement (or a breach of any
representation or warranty contained herein) or, if the same were to continue to
exist as of the Closing Date, would constitute the non-satisfaction of any of
the conditions set forth in Article VI or VII, as the case may be, or (ii) any
event, occurrence, transaction, or other item of which such party becomes aware
which would have been required to have been disclosed on any schedule or
statement delivered hereunder had such event, occurrence, transaction or item
existed as of the
36
date hereof. The disclosure of any matter as provided in this Section shall not
affect the right of any party to terminate this Merger Agreement under Section
9.01(c) or (d) on the basis thereof, but, absent fraud, neither party shall have
any right of recovery against the other on account of the matters so disclosed
and, for purposes of Article VIII, the matters so disclosed shall be deemed to
be set forth on the Schedules to this Merger Agreement and to be exceptions to
the representations, warranties and covenants of the parties hereunder.
5.08 PAYMENT OF INDEBTEDNESS BY AFFILIATES. Except as set forth in
SCHEDULE 5.08, the Company shall cause all indebtedness owed to the Company by
any Affiliate to be paid in full prior to Closing.
5.09 NO NEGOTIATION. Until such time, if any, as this Merger Agreement
is terminated pursuant to Section 9.01, the Company shall not solicit or
entertain offers from, negotiate with, or in any manner discuss, encourage,
recommend or agree to any proposal of, any other potential buyer or buyers of
all or any substantial portion of the Company's business or any equity interest
in the Company and any such offers received by the Company shall promptly be
rejected in writing. The Company shall promptly inform Veeco of any contact with
any third party relating to the subject matter set forth above.
5.10 FIRPTA. The Company shall, prior to the Closing Date, provide Veeco
with a properly executed FIRPTA Notification Letter, substantially in the form
of EXHIBIT B attached hereto, which states that shares of capital stock of the
Company do not constitute "United States real property interest" under Section
897(c) of the Code, for purposes of satisfying Veeco's obligations under
Treasury Regulation Section 1.1445-2(c)(3). In addition, simultaneously with
delivery of such Notification Letter, the Company shall have provided to Veeco,
as agent for the Company, a form of notice to the IRS in accordance with the
requirements of Treasury Regulation Section 1.897-2(h)(2) and substantially in
the form of EXHIBIT B annexed hereto along with written authorization for Veeco
to deliver such form of notice to the IRS on behalf of the Company upon the
Closing of the Merger.
5.11 BLUE SKY LAWS. Veeco shall take such steps as may be necessary to
comply with the securities and blue sky laws of all jurisdictions which are
applicable to the issuance of Veeco Shares in connection with the Merger. The
Company shall use its reasonable efforts to assist Veeco as may be necessary to
comply with the securities and blue sky laws of all jurisdictions which are
applicable in connection with the issuance of Veeco Shares in connection with
the Merger.
5.12 LISTING OF ADDITIONAL SHARES. Prior to the Effective Time, Veeco
shall file with NASDAQ a Notification Form for Listing of Additional Shares with
respect to the Merger Consideration.
5.13 AFFILIATE AGREEMENTS. (a) SCHEDULE 5.13(a) sets forth those Persons
who are directors or executive officers holding shares of, or who the Company
believes may otherwise be deemed to be "Affiliates" of, the Company
(collectively, the "COMPANY AFFILIATES"). The Company shall provide Veeco such
information and documents as Veeco shall reasonably request for purposes
37
of reviewing such list. The Company shall use its best efforts to deliver or
cause to be delivered to Veeco on or before October 21, 1999 (and in each case
prior to the Effective Time) from each of the Company Affiliates, an executed
Affiliate Agreement substantially in the form of EXHIBIT C-1 annexed hereto.
Veeco shall be entitled to place appropriate legends on the certificates
evidencing any Veeco Shares to be received by such Company Affiliates pursuant
to the terms of this Merger Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for Veeco Shares, consistent with the terms
of such Affiliates Agreements.
(b) SCHEDULE 5.13(b) sets forth those Persons who are directors
or executive officers holding shares of, or who Veeco believes may otherwise be
deemed to be "Affiliates" of, Veeco (collectively, the "VEECO AFFILIATES").
Veeco shall provide the Company such information and documents as the Company
shall reasonably request for purposes of reviewing such list. Veeco shall use
its best efforts to deliver or cause to be delivered to the Company on or before
October 21, 1999 (and in each case prior to the Effective Time) from each of the
Veeco Affiliates, an executed Affiliate Agreement substantially in the form of
EXHIBIT C-2 annexed hereto.
5.14 ADDITIONAL AGREEMENTS. Subject to the terms and conditions provided
in this Agreement, each of Veeco, Acquisition and the Company shall use its
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated by this Agreement (including the
satisfaction of the conditions contained in Articles VI and VII hereof as
required thereby).
5.15 HSR ACT COMPLIANCE. The parties have filed Pre-Merger Notification
and Report Forms in accordance with the HSR Act with respect to the transactions
contemplated by this Agreement. The parties shall (i) promptly file any other
required filings under the HSR Act, and (ii) respond in good faith, in
cooperation with each other, to all requests for information, documentary or
otherwise, by any Governmental Body pursuant to the HSR Act.
5.16 COMPETITION AND SOLICITATION. (a) In consideration of Veeco's
obligations hereunder, for the period set forth in Section 5.16(c) below, each
of the Party Stockholders agrees that he:
(i) shall not, in any capacity (A) own, operate, manage or
control, or (B) serve as a partner, agent, consultant, advisor or
developer or in any similar capacity to or (c) have any financial
interest in, or aid or assist anyone else in the conduct of, any Person
or enterprise which competes with former, current or currently
contemplated products or activities of Veeco or any of its subsidiaries;
(ii) shall not call upon, solicit, divert, take away or attempt
to solicit any of the customers of Veeco or any of its subsidiaries with
respect to sales or services related to former, current or currently
contemplated products or activities of Veeco or any of its subsidiaries;
38
(iii) shall not, directly or indirectly, solicit or attempt to
solicit any employee of Veeco or any of its subsidiaries with a view to
inducing or encouraging such employee to leave the employ of Veeco or
any of its subsidiaries for the purpose of being hired by such Party
Stockholder, an employer affiliated with such Party Stockholder or any
competitor of Veeco or any of its subsidiaries.
(b) Notwithstanding anything in this Merger Agreement to the
contrary, a Party Stockholder shall be entitled to invest in up to 2% of the
shares of a publicly traded company, regardless of its business, provided that
such Party Stockholder does not take an active role in the administration of the
business and does not appoint a representative on the board of directors of such
company.
(c) For purposes of this Section 5.16, the duration of the
covenant of each Party Stockholder under this Section 5.16 shall begin on the
Closing Date and shall terminate on the fifth anniversary of the Closing Date.
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF VEECO AND
ACQUISITION.
The obligations of Veeco and Acquisition to enter into and
complete the Closing is conditioned upon the satisfaction or waiver in writing
by Veeco (on behalf of Veeco and Acquisition), on or before the Closing Date, of
the following conditions:
6.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company and the Party Stockholders contained in this
Merger Agreement, the Schedules or Exhibits hereto or in any certificate or
document delivered to Veeco and Acquisition by the Company in connection with
the transactions contemplated by this Merger Agreement shall be true in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties were made on such date.
6.02 PERFORMANCE OF COVENANTS. The Company and each of the
Party Stockholders shall have performed and complied in all material respects
with all of the agreements, covenants and conditions required by this Merger
Agreement to be performed and complied with by them prior to or on the Closing
Date.
6.03 LITIGATION. No investigation, suit, action or other
proceeding, or injunction or final judgment relating thereto shall be Threatened
or pending on the Closing Date before any court or Governmental Authority in
which it is sought to restrain or prohibit or to obtain Damages or other relief
in connection with this Merger Agreement or the consummation of the transactions
contemplated hereby.
6.04 CONSENTS AND APPROVALS; HSR ACT COMPLIANCE. All licenses
and other consents or approvals of Governmental Authorities and the consents of
the parties to any Material Contracts referred to in Section 5.04 shall have
been obtained. The requirements of the HSR Act
39
applicable to the transactions contemplated by this Merger Agreement shall have
been complied with, and the waiting period thereunder shall have expired or been
terminated.
6.05 FAIRNESS OPINION. The board of directors of Veeco shall have
received the written opinion of Banc of America Securities LLC, financial
advisor to Veeco, in form and substance reasonably satisfactory to Veeco, to the
effect that the consideration to be paid to the stockholders pursuant to Section
2.05 hereof is fair from a financial point of view to Veeco (the "FAIRNESS
OPINION").
6.06 ACCOUNTING OPINION. The board of directors of Veeco shall have
received the written opinion of Ernst & Young LLP, the form and substance of
which is reasonably satisfactory to Veeco, regarding the appropriateness of
"pooling of interests" accounting for the Merger.
6.07 APPRAISALS. No holder of Company Common Stock outstanding
immediately prior to the Effective Time shall have validly elected, pursuant to
Colorado law, to demand appraisal of their Company Common Stock.
6.08 MATERIAL CHANGES. There shall not have been any material adverse
change in the assets, properties, condition (financial or otherwise), prospects
or results of operations of the Company from the date hereof to the Closing
Date, nor shall there exist any condition which could reasonably be expected to
result in such a material adverse change.
6.09 DELIVERY OF DOCUMENTS. There shall have been delivered to Veeco and
Acquisition the following:
(i) a certificate of the Company, dated the Closing Date, signed
by its Chief Executive Officer, to the effect that the conditions
specified in Sections 6.01 and 6.02 have been fulfilled;
(ii) a certificate of the Secretary of the Company certifying
copies of (x) the Articles of Incorporation and By-Laws of the Company;
(y) all requisite corporate resolutions of the Company approving the
execution and delivery of this Merger Agreement and the consummation of
the transactions contemplated herein; and (z) the identification and
signature of each officer of the Company executing this Merger
Agreement;
(iii) an employment and noncompetition agreement substantially
in the form of EXHIBIT F annexed hereto, duly executed by the officers
and employees of the Company identified on SCHEDULE 6.09(iii);
(iv) the Escrow Agreement, duly executed on behalf of the
Stockholders by the Stockholders' Committee;
(v) an investment agreement, substantially in the form of
EXHIBIT K annexed hereto, duly executed by the Stockholders.
40
6.10 LEGAL OPINION. Veeco and Acquisition shall have received opinions
of The Dow Law Firm and/or Xxxxxxx & Xxxxxx, LLC, counsel to the Company,
addressed to Veeco and Acquisition and dated the Closing Date, substantially in
the form of EXHIBIT I hereto.
6.11 AFFILIATE AGREEMENTS. Veeco and Acquisition shall have received on
or before the Closing Date from each of the Company Affiliates an executed
Affiliate Agreement substantially in the form of EXHIBIT C-1 annexed hereto.
6.12 TAX OPINION. Veeco and Acquisition shall have received a written
opinion of Xxxx, Scholer, Fierman, Xxxx & Handler, LLP, in form and substance
reasonably satisfactory to Veeco, dated on or about the Closing Date, to the
effect that the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code, and Acquisition and the Company will each be a party
to a reorganization within the meaning of Section 368(b) of the Code. In
rendering this opinion, counsel shall be entitled to rely upon, among other
things, reasonable assumptions as well as representations of Veeco, Acquisition,
the Company and the Party Stockholders.
6.13 ARTICLES OF MERGER. Prior to the Effective Time, each of the
Articles of Merger shall be accepted for filing with the Secretary of State of
the State of Colorado and the Secretary of State of the State of Delaware, as
applicable.
6.14 STOCKHOLDER APPROVAL. This Merger Agreement and the Merger
contemplated hereby shall have been approved and adopted by the requisite vote
of the stockholders of the Company.
6.15 REAL PROPERTY ACQUISITION. Veeco shall have consummated the
transactions contemplated by the Real Estate Merger Agreement, substantially on
the terms and in the form of EXHIBIT H hereto.
VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.
The Company's obligation to enter into and complete the Closing is
conditioned upon the satisfaction or waiver in writing by the Company, on or
before the Closing Date, of all of the following conditions:
7.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Veeco and Acquisition contained in this Merger Agreement, the Schedules
or Exhibits hereto or in any certificate or document delivered to the Company by
Veeco and Acquisition in connection with the transactions contemplated by this
Merger Agreement shall be true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties were
made on such date.
41
7.02 PERFORMANCE OF COVENANTS. Each of Veeco and Acquisition shall have
performed and complied in all material respects with all of the agreements,
covenants and conditions required by this Merger Agreement to be performed and
complied with by them prior to or on the Closing Date.
7.03 LITIGATION. No investigation, suit, action or other proceeding, or
injunction or final judgment relating thereto directly or indirectly shall be
Threatened or pending on the Closing Date before any court or Governmental
Authority in which it is sought to restrain or prohibit or to obtain Damages or
other relief in connection with this Merger Agreement or the consummation of the
transactions contemplated hereby.
7.04 CONSENTS AND APPROVALS; HSR ACT COMPLIANCE. All licenses and other
consents or approvals of Governmental Authorities and the consents of the
parties to any Material Contracts referred to in Section 5.04 shall have been
obtained. The requirements of the HSR Act applicable to the transactions
contemplated by this Agreement shall have been complied with, and the waiting
period thereunder shall have expired or been terminated.
7.05 ACCOUNTING OPINION. The board of directors of the Company shall
have received the written opinion of Xxxxxxx & Associates, the form and
substance of which is reasonably satisfactory to the Company, regarding the
appropriateness of "pooling of interests" accounting for the Merger.
7.06 MATERIAL CHANGES. There shall not have been any material adverse
change in the assets, properties, condition (financial or otherwise), prospects
or results of operations of Veeco and its subsidiaries taken as a whole from the
date hereof to the Closing Date, nor shall there exist any condition which could
reasonably be expected to result in such a material adverse change.
7.07 DELIVERY OF DOCUMENTS. There shall have been delivered to the
Company the following:
(i) a certificate of the Chief Executive Officer of each of
Veeco and Acquisition, dated the Closing Date, to the effect that the
conditions specified in Sections 7.01 and 7.02 have been fulfilled;
(ii) a certificate of the Secretary of each of Veeco and
Acquisition certifying copies of (x) the Certificate or Articles of
Incorporation and By-Laws of Veeco and Acquisition; (y) all requisite
corporate resolutions of Veeco and Acquisition approving the execution
and delivery of this Merger Agreement and the consummation of the
transactions contemplated herein; and (z) the identification and
signature of each officer of Veeco and Acquisition executing this Merger
Agreement;
(iii) a registration rights agreement substantially in the form
of EXHIBIT D annexed hereto, duly executed by Veeco for the benefit of
the Stockholders; and
42
(iv) the Escrow Agreement, duly executed by Veeco.
7.08 LEGAL OPINION. The Company shall have received an opinion of Xxxx,
Scholer, Fierman, Xxxx & Handler, LLP, counsel to Veeco and Acquisition,
addressed to the Company and dated the Closing Date, substantially in the form
of EXHIBIT J hereto.
7.09 AFFILIATE AGREEMENTS. The Company shall have received on or before
the Closing Date from each of the Veeco Affiliates an executed Affiliate
Agreement substantially in the form of EXHIBIT C-2 annexed hereto.
7.10 TAX OPINION. The Company shall have received a written opinion of
The Dow Law Firm, in form and substance reasonably satisfactory to the Company,
dated on or about the Closing Date, to the effect that the Merger will
constitute a reorganization within the meaning of Section 368(a) of the Code,
and Acquisition and the Company will each be a party to a reorganization within
the meaning of Section 368(b) of the Code. In rendering this opinion, counsel
shall be entitled to rely upon, among other things, reasonable assumptions as
well as representations of Veeco, Acquisition, the Company and the Party
Stockholders.
7.11 ARTICLES OF MERGER. Prior to the Effective Time, each of the
Articles of Merger shall be accepted for filing with the Secretary of State of
the State of Colorado and the Secretary of State of the State of Delaware, as
applicable.
7.12 STOCKHOLDER APPROVAL. This Merger Agreement and the Merger
contemplated hereby shall have been approved and adopted by the requisite vote
of the stockholders of the Company.
7.13 REAL PROPERTY ACQUISITION. Veeco shall have consummated the
transactions contemplated by the Real Estate Merger Agreement, substantially on
the terms and in the form of EXHIBIT H hereto.
VIII. INDEMNIFICATION; REMEDIES.
8.01 SURVIVAL. All representations, warranties and agreements contained
in this Merger Agreement or in any certificate or other document delivered
pursuant to this Merger Agreement shall survive the Closing or any termination
of this Agreement for the time periods set forth in this Section 8.01; PROVIDED,
that if the Closing occurs, (i) Veeco shall have no claim (for indemnification
or otherwise) with respect to any representation or warranty, or agreement to be
performed and complied with by the Company or the Stockholders prior to the
Closing, unless the Stockholders' Committee is given notice asserting a claim
with respect thereto and specifying the factual basis of that claim in
reasonable detail to the extent then known by Veeco on or before the date upon
which the audited financial statements of Veeco and its subsidiaries for the
fiscal year ended December 31, 1999 are issued (the "ISSUANCE DATE"); and (ii)
no Stockholder shall have a claim (for indemnification or otherwise) with
respect to any representation or warranty, or agreement to be performed and
complied with by Veeco prior to the Closing, unless on or before the Issuance
43
Date, Veeco is given notice asserting a claim with respect thereto and
specifying the factual basis of that claim in reasonable detail to the extent
known by the Stockholders.
8.02 INDEMNIFICATION BY THE COMPANY AND THE STOCKHOLDERS. The Company
and each of the Party Stockholders shall jointly and severally indemnify and
hold harmless Veeco, Acquisition and each of their respective agents,
representatives, employees, officers, directors, stockholders, controlling
persons and Affiliates (collectively, the "VEECO INDEMNITEES"), and shall
reimburse the Veeco Indemnitees for, any loss, liability, claim, damage, expense
(including, but not limited to, costs of investigation and defense and
reasonable attorneys' fees), whether or not involving a third-party claim
(collectively, "DAMAGES") arising from or in connection with (a) any inaccuracy
in any of the representations and warranties of any Party Stockholder or the
Company in this Merger Agreement or in any certificate or other document
required to be delivered by any Party Stockholder or the Company pursuant to
this Merger Agreement, (b) any failure of any Stockholder or the Company to
perform or comply with any agreement to be performed or complied with by it in
this Merger Agreement, (c) except as set forth on SCHEDULE 3.22, any claim by
any Person for brokerage or finder's fees or similar payments in connection with
any of the transactions contemplated hereunder as the result of brokers, finders
or investment bankers retained by any Stockholder or the Company, (d) any claim
by any direct or indirect holder or former holder of capital stock or warrants
or other securities of the Company in his or her capacity as such, (e) any
Damages arising from or relating to any Environmental Liabilities, regardless of
by whom caused, arising out of (i) any violation of any Environmental Laws
existing as of the Closing Date in respect of any premises now or previously
owned or occupied by the Company, (ii) any emission, migration, Release,
indirect or direct discharge from any such premises to any adjacent property
occurring prior to the Closing Date regardless of where such activities occurred
or had their effect or from offsite locations to which Hazardous Substances were
transported from such premises, (iii) any disposal, dumping, burial of, or the
hauling, transportation, treatment or removal of any Hazardous Substances from
any such premises prior to the Closing Date, (iv) any claim or demand by any
Governmental Authority for any response actions at any such premises, including,
without limitation, remediation of any such premises, required by applicable
Environmental Laws relating to Hazardous Substances present at any such premises
prior to the Closing Date in soil, surface waters, sediment, wetlands or ground
waters or for injury or damage or claim of injury or damage to natural resources
caused by such Hazardous Substances and (v) any injury or damage or claim of
injury or damage to any Person or property, including, but not limited to,
claims for medical surveillance, emotional distress, increased risk of illness
or disease or diminution in the value of property related to such Hazardous
Substances present at any such premises prior to the Closing Date except, in all
of the foregoing cases, for Environmental Liabilities caused solely by the
actions of Veeco, Acquisition or the Company or their invitees after the Closing
Date, (f) all Damages (including, without limitation, any fines, penalties or
voluntary compliance fees) arising, directly or indirectly, from or in
connection with any claim against the Company, Veeco, Acquisition or any Benefit
Plan (or a director, officer or employee of any one of them), including, without
limitation, any claim that any Benefit Plan that is intended to be "qualified"
under Section 401(a) of the Code is or was not so qualified at any time, that is
attributable to (i) the establishment, maintenance, operation and/or termination
of any Benefit Plan by the Company at any time prior to the Closing, or (ii) any
inaccuracy in the representations and warranties in Section 3.14(e) and (i) of
this Merger Agreement or (g) Veeco's enforcement of
44
the indemnification provisions contained herein. Notwithstanding the foregoing,
the Company and the Stockholders shall only be liable under Section 8.02(e) with
respect to periods prior to or after the Company's occupancy or ownership of any
such premises to the extent that the Company had knowledge of such violation
(which shall mean actual knowledge without inquiry in the case of any such
premises other than the premises located at 0000 Xxxx Xxxxxxxx, Xxxx Xxxxxxx,
Xxxxxxxx 00000). Notwithstanding the foregoing, the Company and the indemnifying
Stockholders shall have no liability to Veeco or Acquisition under clause (a),
(b), (d), (e) or (f) of this Section 8.02 until the aggregate amount of all
Damages under such clauses exceeds $143,333, and then for all such Damages
without deduction. Notwithstanding the foregoing, the maximum liability of the
Stockholders pursuant to this Section 8.02 shall not exceed the 144,371 Veeco
Shares placed in escrow pursuant to the Escrow Agreement; PROVIDED that the
limitations set forth in this Section 8.02 shall not apply to the extent of
Damages arising from fraud. The obligations of the Company and the Party
Stockholders to indemnify the Veeco Indemnitees under this Section 8.02 after
the Closing shall be satisfied solely out of the Veeco Shares deposited under
the Escrow Agreement. If the Veeco Shares so deposited are not adequate to
satisfy any claim by a Veeco Indemnitee, such Veeco Indemnitee shall have no
further right to recover from the Company or any Party Stockholder and shall
have no further claim against the Company or any Party Stockholder except to the
extent any Damages incurred or claim made by any of the Veeco Indemnitees arises
from or relates to fraud on the part of any Party Stockholder.
8.03 INDEMNIFICATION BY VEECO. Veeco shall indemnify and hold harmless
the Stockholders (the "STOCKHOLDER INDEMNITEES") and shall reimburse the
Stockholder Indemnitees for any Damages arising from or in connection with (a)
any inaccuracy in any of the representations and warranties of Veeco or
Acquisition in this Merger Agreement or in any certificate or other document
required to be delivered by Veeco or Acquisition pursuant to this Merger
Agreement, (b) any failure by Veeco or Acquisition to perform or comply with any
agreement to be performed or complied with by Veeco or Acquisition in this
Merger Agreement, (c) except as previously disclosed pursuant to Section 4.12,
any claim by any Person for brokerage or finder's fees or similar payments in
connection with any of the transactions contemplated hereunder as the result of
brokers, finders or investment bankers retained by Veeco or Acquisition or (d)
the Stockholder Indemnitees' enforcement of the indemnification provisions
contained herein. Notwithstanding the foregoing, Veeco shall have no liability
under clause (a) or (b) of this Section 8.03 until the aggregate amount of all
Damages under such clauses exceeds $143,333, and then for all such Damages,
without deduction. Notwithstanding the foregoing, the maximum liability of Veeco
pursuant to this Section 8.02 shall not exceed 144,371 Veeco Shares; PROVIDED
that the limitations set forth in this Section 8.03 shall not apply to the
extent of Damages arising from fraud.
8.04 PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS. Promptly after
receipt by an indemnified party under Section 8.02 or 8.03 of oral or written
notice of a claim or the commencement of any proceeding against it, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability that it may have to any indemnified
party except to the extent the indemnifying party demonstrates that the defense
of such action is prejudiced thereby. In case any
45
such proceeding shall be brought against an indemnified party and it shall give
notice to the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish (unless the indemnifying party is also a party to such proceeding and the
indemnified party determines in good faith that joint representation would
create a conflict of interest) to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such Section for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in each case, subsequently
incurred by such indemnified party in connection with the defense thereof. If an
indemnifying party assumes the defense of such proceeding, (a) no compromise or
settlement thereof may be effected by the indemnifying party without the
indemnified party's reasonable consent unless (i) there is no finding or
admission of any violation of law or any violation of the rights of any Person
and no effect on any other claims that may be made against the indemnified party
and (ii) the sole relief provided is monetary damages that are paid in full by
the indemnifying party and (b) the indemnifying party shall have no liability
with respect to any compromise or settlement thereof effected without its
consent. If notice is given to an indemnifying party of the commencement of any
proceeding and it does not, within fifteen (15) business days after the
indemnified party's notice is given, give notice to the indemnified party of its
election to assume the defense thereof, the indemnifying party shall be bound by
any determination made in such action or any compromise or settlement thereof
effected by the indemnified party. All indemnification obligations of the
parties hereto shall survive any termination of this Agreement pursuant to
Article IX hereof. After the Closing, in the case of a claim as to which Veeco
or Acquisition is the indemnified party, references in this Section 8.04 to the
indemnifying party shall be deemed to refer to the Stockholder's Committee;
PROVIDED, that any amounts payable by the indemnifying party shall be payable
solely from the Veeco Shares held pursuant to the Escrow Agreement.
8.05 EXCLUSIVE REMEDY. The rights of the Veeco Indemnitees and the
Stockholder Indemnitees to be indemnified under this Article VIII shall be their
exclusive remedy in respect of any matter against which indemnification is
provided herein or would be provided but for the application of any temporal,
monetary or other limitation established in this Article VIII. All other
remedies that might otherwise be available under this Merger Agreement, at law
or in equity, are hereby waived. Nothing in this Section 8.05 shall limit the
right of a party to recover for actual fraud.
IX. TERMINATION.
9.01 TERMINATION EVENTS. This Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time without
prejudice to any other rights or remedies either party may have:
(a) by mutual written consent, duly authorized by the boards of
directors of Veeco, Acquisition and the Company;
46
(b) by either Veeco and Acquisition or the Company if any
Governmental Authority shall have issued an order, decree, injunction or
judgment or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order or other action shall have
become final and nonappealable;
(c) by either Veeco and Acquisition or the Company if the
Effective Time shall not have occurred on or before 5:00 p.m., Eastern Time, on
November 30, 1999; PROVIDED that the right to terminate this Merger Agreement
under this Section 9.01(c) shall not be available to any party whose failure to
fulfill any obligation under this Merger Agreement has been the cause of, or
results in, the failure of the Effective Time to have occurred within such
period; or
(d) by either Veeco and Acquisition or the Company by notice to
the other if the satisfaction of any condition to the obligations of the
terminating party has been rendered impossible.
9.02 EFFECT OF TERMINATION. In the event this Merger Agreement is
terminated pursuant to Section 9.01, all further obligations of the parties
hereunder shall terminate, except that the obligations set forth in Article VIII
and Sections 10.01, 10.02 and 10.03 shall survive. Each party's right of
termination hereunder is in addition to any other rights it may have hereunder
or otherwise and the exercise of a right of termination shall not be an election
of remedies.
9.03 AMENDMENT. To the extent permitted by applicable law, this Merger
Agreement may be amended by action taken by or on behalf of the respective
boards of directors of the Company, Acquisition and Veeco, at any time;
PROVIDED, HOWEVER, that no amendment shall be made which under the DGCL would
require the further approval of the stockholders of Acquisition, and no
amendment shall be made which under the CBCA would require the further approval
of the stockholders of the Company without obtaining such approval. This Merger
Agreement may not be amended except by an instrument in writing signed on behalf
of all of the parties hereto.
X. MISCELLANEOUS.
10.01 CONFIDENTIALITY. Between the date of this Merger Agreement and the
Closing Date, each party will maintain in confidence, and cause its directors,
officers, employees, agents and advisors to maintain in strict confidence, all
written, oral or other information obtained from another party in connection
with this Merger Agreement or the transactions contemplated hereby, including,
without limitation, sources of supply, vendors, customers, costs, pricing
practices, trade secrets and other Intellectual Property, salaries and wages,
employee benefits, financial information, business plans, budgets, marketing
plans and projections and all other proprietary information (collectively, the
"CONFIDENTIAL INFORMATION"), unless (i) the use of such information is necessary
or appropriate in making any filing or obtaining any consent or approval
required for the consummation of the transactions contemplated hereby and the
other party consents to such disclosure or (ii) the furnishing or use of such
information is required by law. If the transactions contemplated by this Merger
Agreement are not consummated, each party receiving another party's Confidential
Information will return or, at the disclosing party's option, destroy all of
such Confidential
47
Information, including, but not limited to, all copies thereof and extracts
therefrom and shall not use such Confidential Information in any manner which
may be detrimental to the disclosing party or its Affiliates. Notwithstanding
the foregoing, the Company may inform employees of the Company as they deem
necessary or desirable of the existence of this Merger Agreement.
10.02 EXPENSES. Except as expressly otherwise provided herein, each
party shall bear its own expenses incurred in connection with the preparation,
execution and performance of this Merger Agreement and the Real Estate Merger
Agreement and the transactions contemplated hereby and thereby, including all
fees and expenses of agents, representatives, counsel, accountants and
investment banks; PROVIDED, that the Company shall pay for up to $1.1 million of
its own such expenses, and any such expenses incurred by the Company in excess
of $1.1 million shall be paid by the Stockholders.
10.03 PUBLIC ANNOUNCEMENTS. Subject to any requirement of applicable
law, all public announcements or similar publicity with respect to this Merger
Agreement or the transactions contemplated hereby shall be issued only with the
consent of Veeco and the Company. Unless consented to by each party hereto in
advance prior to the Closing, all parties hereto shall keep the provisions of
this Merger Agreement strictly confidential and make no disclosure thereof to
any Person, other than such party's respective legal and financial advisors,
subject to the requirements of applicable law or securities exchange
regulations.
10.04 SUCCESSORS. This Merger Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
10.05 FURTHER ASSURANCES. Each of the parties hereto agrees that it
will, from time to time after the date of this Merger Agreement, execute and
deliver such other certificates, documents and instruments and take such other
action as may be reasonably requested by the other party to carry out the
actions and transactions contemplated by this Merger Agreement.
10.06 WAIVER. Any provision of this Merger Agreement may be waived at
any time by the party which is entitled to the benefits thereof. No such waiver
shall be effective unless in writing and signed by the Company, Veeco and
Acquisition.
10.07 ENTIRE AGREEMENT. This Merger Agreement (together with the
certificates, agreements, Exhibits, Schedules, instruments and other documents
referred to herein) constitutes the entire agreement between the parties with
respect to the subject matter hereof and thereof and supersedes all prior
agreements, both written and oral, with respect to such subject matter.
10.08 GOVERNING LAW. THIS MERGER AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND PERFORMED IN SUCH STATE AND WITHOUT REGARD TO CONFLICTS OF
LAW DOCTRINES EXCEPT TO THE EXTENT THAT CERTAIN MATTERS ARE PREEMPTED BY FEDERAL
LAW OR ARE GOVERNED
48
BY THE LAW OF THE JURISDICTION OF ORGANIZATION OF THE RESPECTIVE PARTIES.
10.09 ASSIGNMENT. Neither Veeco, Acquisition nor the Company may assign
this Merger Agreement to any other Person without the prior written consent of
the other parties hereto.
10.10 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given (a) when delivered
personally, (b) when transmitted by telecopy (transmission confirmed), (c) on
the fifth business day following mailing by registered or certified mail (return
receipt requested), or (d) on the next business day following deposit with an
overnight delivery service of national reputation, to the parties at the
following addresses and telecopy numbers (or at such other address or telecopy
number for a party as may be specified by like notice):
If to Veeco or Acquisition:
Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx,
Chairman, President and Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Company:
0000 Xxxx Xxxxxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
And to:
Xxxx X. Reader
49
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
With a copy to:
The Dow Law Firm, LLC
000 X. Xxxxxxx Xxxxxx, Xxxxx 0
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
10.11 HEADINGS. The headings contained in this Merger Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Merger Agreement.
10.12 COUNTERPARTS. This Merger Agreement may be executed in multiple
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
10.13 EXHIBITS AND SCHEDULES. The Exhibits and Schedules to this Merger
Agreement are incorporated by reference herein and are made a part hereof as if
they were fully set forth herein.
10.14 SEVERABILITY. The invalidity of any term or terms of this Merger
Agreement shall not affect any other term of this Merger Agreement, which shall
remain in full force and effect.
10.15 NO THIRD-PARTY BENEFICIARIES. There are no third party
beneficiaries of this Merger Agreement or of the transactions contemplated
hereby and nothing contained herein shall be deemed to confer upon any one other
than the parties hereto (and their permitted successors and assigns) any right
to insist upon or to enforce the performance of any of the obligations contained
herein.
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IN WITNESS WHEREOF, the parties have executed this Merger Agreement as
of the date first above written.
VEECO INSTRUMENTS INC.
By: /s/ XXXXXX X. XXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
ION TECH, INC.
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
VEECO ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
/s/ XXXX XXXXXX
----------------------------------------------
Xxxx Xxxxxx
/s/ XXXXXX X. XXXXXXXX
----------------------------------------------
Xxxxxx Xxxxxxxx
/s/ XXXX X. XXXXXX
----------------------------------------------
Xxxx X. Xxxxxx
51
