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EXHIBIT 99.1
June 25, 2000
Xx. Xxxx X. Xxxxx
Xxxxxxxxxxxx Partners
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Xx. Xxxxxx X. Xxxxxxxx
International Flex Technologies, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxx and Xxxx:
This letter sets forth our understanding concerning certain exclusivity rights
granted in connection with a possible transaction pursuant to which Xxxxxxxxxxxx
Partners ("Xxxxxxxxxxxx") and certain other investors will make a cash
investment in a new class of convertible preferred securities of Xxxxxxxx, Inc.
("Sheldahl" or the "Company") (the "Investment") and Sheldahl will
simultaneously acquire all of the outstanding shares of capital stock of
International Flex Technologies, Inc. ("IFT") in exchange for shares of Xxxxxxxx
common stock (the "Acquisition").
1. The Company, Xxxxxxxxxxxx and IFT each agrees that until such time as
this Letter Agreement has terminated in accordance with the provisions
of Section 4 hereof, neither it nor any of its representatives,
officers, directors, agents, stockholders or affiliates shall initiate,
solicit, entertain, negotiate, accept or discuss, directly or
indirectly, (a) any proposal or offer (an "Acquisition Proposal") to
acquire all or any material part of the business, assets, properties or
associated technology rights of the Company (with respect to the
Company) or IFT (with respect to Xxxxxxxxxxxx and IFT) whether by
merger, purchase of assets, or otherwise (a "Third Party Acquisition")
or (b) any proposal or offer (a "Financing Proposal") to acquire
securities from or make a loan or advance to the Company (with respect
to the Company) or IFT (with respect to IFT) except as explicitly
contemplated hereby in connection with the Investment and except
proposals or offers from banking institutions with respect to credit
facilities to extend or replace the Company's existing credit facility
or from other third parties to provide credit to the Company in the
ordinary course of business consistent with past practices. The
Company, Xxxxxxxxxxxx and IFT each represents that neither it nor any
of its shareholders or affiliates is party to or bound by any agreement
with respect to an Acquisition Proposal or Financing Proposal other
than under this Letter Agreement. Further, the Company has represented
to Xxxxxxxxxxxx and IFT that the Company has had prior discussions with
other potential acquirers. The Company represents and agrees that, in
accordance with the terms of this Letter Agreement, no further
discussions will take place during the term of this agreement and that
the Company is not obligated to pay any expense reimbursement,
termination, breakup, alternate transaction or any similar fees or
expenses to any third party (other than U.S. Bancorp Xxxxx Xxxxxxx and
other Company advisors) in connection with or as a result of the
transactions contemplated hereby,
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including the Investment and the Acquisition on the terms and
conditions contemplated. IFT and Xxxxxxxxxxxx each agrees that the
provisions of this paragraph 1 shall apply equally to any Acquisition
Proposal made by IFT with respect to a Third Party Acquisition by IFT
of any third party; provided, however, that IFT may continue to discuss
a current potential Third Party Acquisition by IFT of a third party,
but shall not, during the term of this letter, enter into any agreement
or arrangement, whether written or oral, or discussion which would
impose any liability on IFT to the third party, nor shall any
confidential information of the Company be provided to such third
party.
2. If the Investment and Acquisition are not consummated and, within 225
days after the acceptance of this Letter Agreement, a Third Party
Acquisition is completed due to a breach of Section 1 by the Company,
on the one hand, or Xxxxxxxxxxxx or IFT, on the other hand, then the
breaching Party shall pay to the non-breaching Party, in complete
satisfaction of any and all obligations to the non-breaching Party, and
as its exclusive remedy, an amount equal to such Party's reasonable
out-of-pocket expenses incurred from the date hereof forward in
connection with the transactions contemplated hereby. Notwithstanding
the foregoing, in no event shall amounts be paid in the event the
Investment and Acquisition is not consummated for any reason other than
due to a breach of Section 1 by any breaching Party. Nothing herein
shall restrict any Party's ability to enter into a Third Party
Acquisition notwithstanding a breach of Section 1, if a third party
makes an unsolicited proposal to the extent determined by the Board of
Directors of such Party to be required pursuant to its fiduciary duties
under applicable law.
3. Each Party agrees that until this letter is terminated as provided in
Section 4, they will provide the other Parties reasonable access,
during normal business hours and upon reasonable notice, to all of
their respective officers, key employees, premises and books and
records, and shall furnish the other Parties and their respective
representatives with such financial and operating data and other
information with respect to their business and properties as shall be
reasonably requested; provided, however, that access to proprietary
manufacturing processes and technologies will be granted only upon such
conditions and at such times as the Parties may mutually agree.
4. This letter will automatically terminate and be of no further force and
effect upon the earlier of (i) execution of definitive investment and
acquisition documentation by and among Xxxxxxxxxxxx, IFT and the
Company; (ii) mutual agreement of Xxxxxxxxxxxx and the Company; and
(iii) 12:01 a.m., Central Standard Time, August 7, 2000.
Notwithstanding anything in the previous sentence, Section 2, shall
survive the termination of this Letter Agreement and the termination of
this Letter Agreement shall not affect any rights any party has with
respect to the breach of this Letter Agreement by another party prior
to such termination.
5. This Letter Agreement shall be governed by and construed in accordance
with internal substantive laws of the State of Minnesota, regardless of
the laws that might otherwise govern under applicable principles of
conflicts of law or choice of law.
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6. The terms and conditions of the letter agreement dated December 3, 1999
executed by IFT and by U.S. Bancorp Xxxxx Xxxxxxx on behalf of the
Company (the "December Letter") shall remain in full force and effect,
as modified by letter dated March 13, 2000, and Xxxxxxxxxxxx agrees to
be bound by the terms and conditions of the December Letter as if it
were a party thereto and shall be subject to the rights of the Company
in the event it violates any of the provisions thereof. Notwithstanding
the terms of the December Letter, during the term of this agreement,
none of the Company, Xxxxxxxxxxxx or IFT will make any press release
regarding the transactions contemplated hereby, without providing all
of the other parties with a copy of the same and a reasonable
opportunity to comment, although each party hereto will retain ultimate
control of its own press releases. Notwithstanding the foregoing, in no
event shall Xxxxxxxxxxxx or IFT issue a press release regarding any
update or termination of negotiations without receiving the prior
written consent of the Company. Xxxxxxxxxxxx and IFT acknowledge that
the Company will file a Form 8-K with regard to the press release in
the form provided them as of the date of this letter and will attach as
exhibits this letter and the press release. Except to the extent
disclosed in the press release or Form 8-K, Xxxxxxxxxxxx and IFT shall
not disclose to any third party (other than their advisors,
representatives or agents on a need to know basis) information
concerning the transactions contemplated hereby, or any of the terms,
conditions or other facts with respect thereto, including the status
thereof. Xxxxxxxxxxxx and IFT shall have no discussions with Company
shareholders.
7. Except as specifically set forth or referred to herein, nothing herein
is intended or shall be construed to confer upon any person or entity
other than the parties hereto and their successors or assigns, any
rights or remedies under or by reason of this letter.
8. This Letter Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute one agreement.
If you are in agreement with the terms set forth above, please sign this Letter
Agreement in the designated space provided below and return an executed copy to
the attention of the undersigned.
Very truly yours,
XXXXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Xxxxxxxx, Inc.
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Agreed to and accepted for Xxxxxxxxxxxx Partners
on this 25th day of June, 2000.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
President
Xxxxxxxxxxxx Partners
Agreed to and accepted for IFT on this
25th day of June, 2000.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President and CEO
International Flex Technologies, Inc.
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