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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
C-CUBE MICROSYSTEMS INC.,
LSI LOGIC CORPORATION
AND
CLOVER ACQUISITION CORP.
Dated as of March 26, 2001
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TABLE OF CONTENTS
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ARTICLE I THE OFFER AND THE MERGER............................................. 1
SECTION 1.1 THE OFFER............................................ 1
SECTION 1.2 COMPANY ACTION....................................... 3
SECTION 1.3 DIRECTORS............................................ 4
SECTION 1.4 THE MERGER........................................... 5
SECTION 1.5 EFFECT ON COMPANY COMMON STOCK....................... 6
SECTION 1.6 EXCHANGE OF CERTIFICATES............................. 8
SECTION 1.7 LOST CERTIFICATES.................................... 9
SECTION 1.8 MERGER CLOSING....................................... 10
SECTION 1.9 DISSENTING SHARES.................................... 10
ARTICLE II THE SURVIVING CORPORATION........................................... 10
SECTION 2.1 CERTIFICATE OF INCORPORATION......................... 10
SECTION 2.2 BYLAWS............................................... 10
SECTION 2.3 OFFICERS AND DIRECTORS............................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................... 11
SECTION 3.1 CORPORATE EXISTENCE AND POWER........................ 11
SECTION 3.2 CORPORATE AUTHORIZATION.............................. 12
SECTION 3.3 CONSENTS AND APPROVALS; NO VIOLATIONS................ 12
SECTION 3.4 CAPITALIZATION....................................... 13
SECTION 3.5 SUBSIDIARIES......................................... 14
SECTION 3.6 SEC DOCUMENTS........................................ 14
SECTION 3.7 FINANCIAL STATEMENTS................................. 15
SECTION 3.8 DISCLOSURE DOCUMENTS................................. 15
SECTION 3.9 ABSENCE OF UNDISCLOSED LIABILITIES................... 15
SECTION 3.10 ABSENCE OF MATERIAL ADVERSE CHANGES, ETC. ........... 15
SECTION 3.11 TAXES................................................ 17
SECTION 3.12 EMPLOYEE BENEFIT PLANS............................... 17
SECTION 3.13 LITIGATION; COMPLIANCE WITH LAWS..................... 19
SECTION 3.14 CERTAIN CONTRACTS AND ARRANGEMENTS................... 19
SECTION 3.15 ENVIRONMENTAL MATTERS................................ 21
SECTION 3.16 INTELLECTUAL PROPERTY................................ 22
SECTION 3.17 OPINION OF FINANCIAL ADVISOR......................... 25
SECTION 3.18 BOARD RECOMMENDATION................................. 25
SECTION 3.19 TAX TREATMENT........................................ 25
SECTION 3.20 FINDERS' FEES........................................ 25
SECTION 3.21 SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW.. 25
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB............. 25
SECTION 4.1 CORPORATE EXISTENCE AND POWER........................ 26
SECTION 4.2 AUTHORIZATION........................................ 26
SECTION 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS................ 26
SECTION 4.4 CAPITALIZATION....................................... 27
SECTION 4.5 SEC DOCUMENTS........................................ 27
SECTION 4.6 FINANCIAL STATEMENTS................................. 28
SECTION 4.7 DISCLOSURE DOCUMENTS................................. 28
SECTION 4.8 ABSENCE OF MATERIAL ADVERSE CHANGES, ETC. ........... 28
SECTION 4.9 LITIGATION; COMPLIANCE WITH LAWS..................... 28
SECTION 4.10 TAX TREATMENT........................................ 29
SECTION 4.11 INTERIM OPERATIONS OF MERGER SUB..................... 29
ARTICLE V COVENANTS OF THE PARTIES............................................. 29
SECTION 5.1 CONDUCT OF THE BUSINESS OF THE COMPANY............... 29
SECTION 5.2 STOCKHOLDER APPROVAL; PREPARATION OF REGISTRATION
STATEMENT AND PROXY STATEMENT/PROSPECTUS......... 31
SECTION 5.3 ACCESS TO INFORMATION; CONFIDENTIALITY AGREEMENT..... 32
SECTION 5.4 NO SOLICITATION...................................... 33
SECTION 5.5 DIRECTOR AND OFFICER LIABILITY....................... 35
SECTION 5.6 COMMERCIALLY REASONABLE EFFORTS...................... 35
SECTION 5.7 CERTAIN FILINGS...................................... 36
SECTION 5.8 PUBLIC ANNOUNCEMENTS................................. 37
SECTION 5.9 FURTHER ASSURANCES................................... 37
SECTION 5.10 EMPLOYEE MATTERS..................................... 37
SECTION 5.11 TAX-FREE REORGANIZATION TREATMENT.................... 38
SECTION 5.12 BLUE SKY PERMITS..................................... 38
SECTION 5.13 LISTING.............................................. 38
SECTION 5.14 STATE TAKEOVER LAWS.................................. 38
SECTION 5.15 CERTAIN NOTIFICATIONS................................ 38
SECTION 5.16 VOTING OF SHARES..................................... 38
SECTION 5.17 ACTION BY BOARD OF DIRECTORS......................... 38
SECTION 5.18 FORM S-8............................................. 39
SECTION 5.19 COMFORT LETTER....................................... 39
ARTICLE VI CONDITIONS TO THE MERGER............................................ 39
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS............... 39
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ARTICLE VII TERMINATION........................................................ 40
SECTION 7.1 TERMINATION.......................................... 40
SECTION 7.2 EFFECT OF TERMINATION................................ 42
SECTION 7.3 FEES; EXPENSES....................................... 42
ARTICLE VIII MISCELLANEOUS..................................................... 43
SECTION 8.1 NOTICES.............................................. 43
SECTION 8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES........... 44
SECTION 8.3 INTERPRETATION....................................... 44
SECTION 8.4 AMENDMENTS, MODIFICATION AND WAIVER.................. 44
SECTION 8.5 SUCCESSORS AND ASSIGNS............................... 44
SECTION 8.6 SPECIFIC PERFORMANCE................................. 44
SECTION 8.7 GOVERNING LAW........................................ 45
SECTION 8.8 SEVERABILITY......................................... 45
SECTION 8.9 THIRD PARTY BENEFICIARIES............................ 45
SECTION 8.10 ENTIRE AGREEMENT..................................... 45
SECTION 8.11 COUNTERPARTS; EFFECTIVENESS.......................... 45
SECTION 8.12 RULES OF CONSTRUCTION................................ 45
SECTION 8.13 SUBMISSION TO JURISDICTION........................... 46
SECTION 8.14 MERGER SUB COMPLIANCE................................ 46
EXHIBIT
A FORM OF STOCKHOLDER AGREEMENT
ANNEX
I CONDITIONS TO THE OFFER
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AGREEMENT AND PLAN OF REORGANIZATION, dated as of March 26, 2001 (this
"AGREEMENT"), by and among C-Cube Microsystems Inc., a Delaware corporation (the
"COMPANY"), LSI Logic Corporation, a Delaware corporation ("PARENT"), and Clover
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("MERGER SUB").
W I T N E S S E T H
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved this Agreement, and declared advisable that Merger Sub
make an exchange offer (the "OFFER") to exchange shares of common stock, par
value $0.01 per share, of Parent ("PARENT SHARES" or "PARENT COMMON STOCK"), for
shares of common stock, par value $0.001 per share, of the Company ("COMPANY
COMMON STOCK") and have approved the merger of Merger Sub with and into the
Company (the "MERGER") upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware ("DGCL");
WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to Parent's willingness to enter into this Agreement,
certain stockholders of the Company are entering into Stockholder Agreements in
substantially the form attached hereto as Exhibit A (the "STOCKHOLDER
AGREEMENTS"); and
WHEREAS, it is intended that, for United States federal income tax
purposes, the Offer and the Merger (together, the "TRANSACTION") shall be
treated as an integrated transaction and shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "CODE").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, agreements and conditions set forth herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND THE MERGER
SECTION 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 7.1 hereof, Merger Sub shall, as promptly as practicable
after the date hereof (and Merger Sub shall use commercially reasonable efforts
to, within ten (10) business days after the date hereof), commence the Offer.
Each Share accepted by Merger Sub pursuant to the Offer shall be exchanged for
the right to receive a fraction of share of Parent Common Stock (the "EXCHANGE
RATIO") equal to 0.79. The initial expiration date of the Offer shall be the
twentieth business day following commencement of the Offer. The Offer shall be
subject to the condition that there shall be validly tendered in accordance with
the terms of the Offer prior to the expiration date of the Offer (as it may be
extended in accordance with the requirements of this Section 1.1(a)) and not
withdrawn a
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number of shares of Company Common Stock which, together with the shares of
Company Common Stock then owned by Parent and Merger Sub (if any), represents at
least a majority of the sum of (i) the total number of shares of Company Common
Stock outstanding immediately prior to the expiration of the Offer (as it may be
extended in accordance with the requirements of this Section 1.1(a)), and (ii) a
number of shares of Company Common Stock determined by Parent up to a maximum of
the total number of shares of Company Common Stock issuable upon the exercise or
conversion of all options, warrants, rights and convertible securities (if any)
that will be vested by the Outside Date (as defined in Section 7.1(b)(ii)
hereof) (the number of shares determined by adding the shares referred to in
clause "(i)" and clause "(ii)" of this sentence being hereinafter referred to as
the "FULLY DILUTED SHARES") (and the condition previously referred to in this
sentence being referred to as the "MINIMUM CONDITION") and to the other
conditions set forth in Annex I hereto. Parent and Merger Sub expressly reserve
the right to waive the conditions to the Offer and to make any change in the
terms or conditions of the Offer; PROVIDED, HOWEVER, that without the prior
written consent of the Company, no change may be made which decreases the number
of shares of Company Common Stock sought in the Offer, changes the form or
amount of consideration to be paid, imposes conditions to the Offer in addition
to those set forth in Annex I, changes or waives the Minimum Condition or any of
the conditions set forth in clauses (2), (4), (5) or (7) of Annex I, extends the
Offer (except as set forth in the following two sentences), or makes any other
change to any of the terms and conditions to the Offer which is adverse to the
holders of shares of Company Common Stock. Subject to the terms of the Offer and
this Agreement and the satisfaction (or waiver to the extent permitted by this
Agreement) of the conditions to the Offer, Merger Sub shall accept for payment
all shares of Company Common Stock validly tendered and not withdrawn pursuant
to the Offer as soon as practicable after the applicable expiration date of the
Offer (as it may be extended in accordance with the requirements of this Section
1.1(a)) and shall pay for all such shares of Company Common Stock promptly after
acceptance; PROVIDED, HOWEVER, that (x) Merger Sub shall extend the Offer for
successive extension periods not in excess of ten (10) business days per
extension if, at the scheduled expiration date of the Offer or any extension
thereof, any of the conditions to the Offer shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived, and (y)
Merger Sub may extend the Offer if and to the extent required by the applicable
rules and regulations of the Securities and Exchange Commission ("SEC") or The
New York Stock Exchange (the "NYSE"). In addition, Merger Sub may extend the
Offer after the acceptance of shares of Company Common Stock thereunder for a
further period of time by means of a subsequent offering period under Rule
14d-11 promulgated under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"). No fraction of a share of Parent Common Stock will be issued in
connection with the exchange of Parent Common Stock for shares of Company Common
Stock upon consummation of the Offer, but in lieu thereof each tendering
stockholder who would otherwise be entitled to receive a fraction of a share of
Parent Common Stock (after aggregating all fractional shares of Parent Common
Stock that otherwise would be received by such stockholder) in the Offer shall
receive from Parent an amount of cash (rounded up to the nearest whole cent),
without interest, equal to the product obtained by multiplying such fraction by
the average closing sale price of one (1) share of Parent Common Stock on the
NYSE during the ten (10) trading days ending on the trading day immediately
prior to the expiration of the Offer (as it may be extended in accordance with
the requirements of this Section 1.1(a)).
(b) As soon as practicable after the date of this Agreement, Parent
shall prepare and file with the SEC a registration statement on Form S-4 to
register the offer and sale of Parent Common Stock pursuant to the Offer (the
"REGISTRATION STATEMENT"). The Registration
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Statement will include a preliminary prospectus containing the information
required under Rule 14d-4(b) promulgated under the Exchange Act (the
"PRELIMINARY PROSPECTUS"). As soon as practicable on the date of commencement of
the Offer, Parent and Merger Sub shall (i) file with the SEC a Tender Offer
Statement on Schedule TO with respect to the Offer which will contain or
incorporate by reference all or part of the Preliminary Prospectus and form of
the related letter of transmittal and summary advertisement, if any (together
with any supplements or amendments thereto, collectively the "OFFER DOCUMENTS"),
and (ii) cause the Offer Documents to be disseminated to holders of shares of
Company Common Stock. The Company shall promptly furnish to Parent and Merger
Sub all information concerning the Company, the Company's Subsidiaries and the
Company's stockholders that may be required or reasonably requested in
connection with any action contemplated by this Section 1.1(b). Parent, Merger
Sub and the Company each agree promptly to correct any information provided by
it for use in the Registration Statement or the Offer Documents if and to the
extent that such information shall have become false or misleading in any
material respect. Parent and Merger Sub agree to take all steps necessary to
cause the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of shares of Company Common Stock , in each case as and
to the extent required by applicable federal securities laws. The Company and
its counsel shall be given a reasonable opportunity to review and comment on the
Schedule TO, the Registration Statement and the Offer Documents prior to their
being filed with the SEC. Parent agrees to provide the Company and its counsel
with any comments Parent, Merger Sub or their counsel may receive in writing
from the SEC or its staff with respect to the Offer Documents as soon as
practicable after receipt of such written comments.
SECTION 1.2 COMPANY ACTION.
(a) The Company hereby represents that its Board of Directors, at a
meeting duly called and held on or prior to the date hereof, has by unanimous
vote (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, are advisable and are fair to and in
the best interests of the Company and its stockholders, (ii) approved and
adopted this Agreement and the transactions contemplated hereby, including the
Offer and the Merger and the Stockholder Agreements and the transactions
contemplated thereby, which approval constitutes approval under Section 203 of
the DGCL such that the Offer, the Merger, this Agreement and the other
transactions contemplated hereby, and the Stockholder Agreements and the
transactions contemplated thereby, are not and shall not be subject to any
restriction pursuant to Section 203 of the DGCL, and (iii) resolved to recommend
acceptance of the Offer and approval and adoption of this Agreement by the
Company's stockholders (the unanimous recommendations referred to in this clause
(iii) are collectively referred to in this Agreement as the "RECOMMENDATIONS").
(b) As soon as practicable on the day that the Offer is commenced,
the Company will file with the SEC and disseminate to holders of shares of
Company Common Stock a Solicitation/Recommendation Statement on Schedule 14D-9
(the "SCHEDULE 14D-9") which shall include the opinion of Credit Suisse First
Boston Corporation ("CREDIT SUISSE FIRST BOSTON") referred to in Section 3.17
hereof and, subject to Section 5.4 hereof, shall include the Recommendations.
Parent shall promptly furnish to the Company all information concerning Parent,
Parent's Subsidiaries and Parent's stockholders that may be required or
reasonably requested in connection with any action contemplated by this Section
1.2(b). Subject to Section 5.4 hereof, the
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Company hereby consents to the inclusion of the Recommendations in the Offer
Documents and agrees that none of the Recommendations shall be withdrawn,
modified or changed in a manner adverse to Parent or Merger Sub, and no
resolution by the Board of Directors of the Company or any committee thereof to
withdraw, modify or change any of the Recommendations in a manner adverse to
Parent or Merger Sub shall be adopted or proposed (it being understood that, for
purposes of this Agreement, a Recommendation shall be deemed to be withdrawn,
modified or changed in a manner adverse to Parent and Merger Sub if such
Recommendation ceases to be unanimous). Notwithstanding the foregoing, prior to
the Appointment Time (as defined in Section 1.3(a) hereof), the Board of
Directors of the Company may withhold, withdraw, modify or change in a manner
adverse to Parent, or fail to make, its Recommendations in accordance with the
terms of Section 5.4 hereof. The Company, Parent and Merger Sub each agree
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that such information shall have become false or misleading
in any material respect. The Company agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of shares of Company Common Stock, in each case as and
to the extent required by applicable federal securities laws. Parent and its
counsel shall be given a reasonable opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC. The Company agrees to
provide Parent and its counsel with any comments the Company or its counsel
receives in writing from the SEC or its staff with respect to the Schedule 14D-9
as soon as practicable after receipt of such written comments.
(c) The Company will promptly furnish Parent and Merger Sub with a
list of its stockholders, mailing labels and any available listing or computer
file containing the names and addresses of all record holders of shares of
Company Common Stock and lists of securities positions of shares of Company
Common Stock held in stock depositories, in each case as of the most recent
practicable date, and will provide to Parent and Merger Sub such additional
information (including, without limitation, updated lists of stockholders,
mailing labels and lists of securities positions) and such other assistance as
Parent or Merger Sub may reasonably request in connection with the Offer.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer, Parent and Merger Sub shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, shall, upon request, deliver to the Company all
copies of such information then in their possession.
SECTION 1.3 DIRECTORS.
(a) Effective upon the acceptance for payment by Merger Sub of
shares of Company Common Stock pursuant to the Offer (the "APPOINTMENT TIME"),
Parent shall be entitled to designate the number of directors, rounded up to the
next whole number, on the Company's Board of Directors that equals the product
of (i) the total number of directors on the Company's Board of Directors (giving
effect to the election of any additional directors pursuant to this Section 1.3)
and (ii) the percentage that the number of shares of Company Common Stock owned
by Parent or Merger Sub (including shares of Company Common Stock accepted for
payment) bears to the total number of shares of Company Common Stock
outstanding, and the Company shall take all action reasonably necessary to cause
Parent's designees to be elected or appointed to the Company's Board of
Directors, including, without limitation, at the option of
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Parent, increasing the number of directors, or seeking and accepting
resignations of incumbent directors, or both; PROVIDED, HOWEVER, that prior to
the Effective Time, the Company's Board of Directors shall always have at least
two members who were directors of the Company prior to consummation of the Offer
(each, a "CONTINUING DIRECTOR"). If the number of Continuing Directors is
reduced to fewer than two for any reason prior to the Effective Time, the
remaining and departing Continuing Directors shall be entitled to designate a
person to fill the vacancy. Notwithstanding anything in this Agreement to the
contrary, if Parent's designees are elected to the Company's Board of Directors
prior to the Effective Time, the affirmative vote of a majority of the
Continuing Directors shall be required for the Company to (a) amend or terminate
this Agreement or agree or consent to any amendment or termination of this
Agreement, (b) waive any of the Company's rights, benefits or remedies
hereunder, (c) extend the time for performance of Parent's and Merger Sub's
respective obligations hereunder, or (d) approve any other action by the Company
which is reasonably likely to adversely affect the interests of the stockholders
of the Company (other than Parent, Merger Sub and their affiliates (other than
the Company and its Subsidiaries)) with respect to the transactions contemplated
by this Agreement.
(b) The Company's obligations to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-l
promulgated thereunder. The Company shall promptly take all actions required
pursuant to this Section 1.3 and Rule 14f-l in order to fulfill its obligations
under this Section 1.3 and shall include in the Schedule 14D-9 such information
with respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-l. Parent will supply to the Company in writing and
be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
SECTION 1.4 THE MERGER.
(a) Upon the terms and subject to the conditions of this Agreement,
and in accordance with the DGCL, at the Effective Time (as defined hereinafter),
Merger Sub shall be merged with and into the Company, whereupon the separate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation (sometimes referred to herein as the "SURVIVING
CORPORATION").
(b) Concurrently with the Closing (as defined in Section 1.8
hereof), the Company and Parent shall cause a certificate of merger (the
"CERTIFICATE OF MERGER") with respect to the Merger to be executed and filed
with the Secretary of State of the State of Delaware (the "SECRETARY OF STATE")
as provided in the DGCL. The Merger shall become effective on the date and time
at which the Certificate of Merger has been duly filed with the Secretary of
State or at such other date and time as is agreed between the parties and
specified in the Certificate of Merger, and such date and time is hereinafter
referred to as the "EFFECTIVE TIME."
(c) The Merger shall have the effects set forth in the DGCL. Without
limiting the generality of the foregoing and subject thereto, from and after the
Effective Time, the Surviving Corporation shall possess all rights, privileges,
immunities, powers and franchises and be subject to all of the obligations,
restrictions, disabilities, liabilities, debts and duties of the Company and
Merger Sub.
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SECTION 1.5 EFFECT ON COMPANY COMMON STOCK. At the Effective Time:
(a) CANCELLATION OF SHARES OF COMPANY COMMON STOCK. Each share of
the Company Common Stock held by the Company as treasury stock and each share of
the Company Common Stock owned by Parent or Merger Sub immediately prior to the
Effective Time shall automatically be cancelled and retired and cease to exist,
and no consideration or payment shall be delivered therefor or in respect
thereto. All shares of Company Common Stock to be converted into Parent Shares
pursuant to this Section 1.5 shall, by virtue of the Merger and without any
action on the part of the holders thereof, cease to be outstanding, be cancelled
and retired and cease to exist; and each holder of a certificate (representing
prior to the Effective Time any such shares of Company Common Stock) shall
thereafter cease to have any rights with respect to such shares of Company
Common Stock, except the right to receive (i) the Parent Shares into which such
shares of Company Common Stock have been converted, (ii) any dividend and other
distributions in accordance with Section 1.6(c) hereof, and (iii) any cash,
without interest, to be paid in lieu of any fraction of any Parent Shares in
accordance with Section 1.6(d) hereof.
(b) CONVERSION OF SHARES OF COMPANY COMMON STOCK. Subject to
Sections 1.5(d) and 1.6(d) hereof, each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares of
Company Common Stock referred to in the first sentence of Section 1.5(a) hereof
and Dissenting Shares (as defined in Section 1.9 hereof) shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into that number of Parent Shares equal to the Exchange Ratio (together with the
cash in lieu of fractional shares of Parent Common Stock as specified below)
(the number of Parent Shares equal to the Exchange Ratio and the cash payable in
lieu of fractional shares as specified below being referred to as the "MERGER
CONSIDERATION").
(c) CAPITAL STOCK OF MERGER SUB. Each share of common stock, $0.001
par value per share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into one
(1) validly issued, fully paid and nonassessable share of common stock, $0.001
par value per share, of the Surviving Corporation. Each certificate evidencing
ownership of such shares of Merger Sub Common Stock shall evidence ownership of
shares of capital stock of the Surviving Corporation.
(d) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into or exercisable or exchangeable for Company Common Stock or
Parent Common Stock), extraordinary cash dividend, reorganization,
recapitalization, reclassification, combination, exchange of shares or other
like change with respect to Company Common Stock or Parent Common Stock
occurring or having a record date on or after the date hereof and prior to the
Effective Time.
(e) ASSUMPTION OF COMPANY OPTIONS. At the Effective Time, each
issued and outstanding option to purchase or otherwise acquire Company Common
Stock (whether or not vested) ("COMPANY OPTIONS") issued pursuant to the
Company's 2000 Stock Plan or the Director Stock Option Plan (the "OPTION PLANS")
or otherwise, will be assumed by Parent in connection with the Merger. Each
Company Option so assumed by Parent under this Agreement (the "ASSUMED OPTIONS")
shall continue to have, and be subject to, the same terms and
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conditions set forth in the Option Plans and/or as provided in the respective
option agreements immediately prior to the Effective Time (including, without
limitation, any vesting schedule or repurchase rights), except that (i) each
Company Option will be exercisable for that number of Parent Shares equal to the
product of the number of shares of Company Common Stock that were issuable upon
exercise of such Company Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, rounded down to the nearest whole number of
Parent Shares, and (ii) the per share exercise price for the Parent Shares
issuable upon exercise of such assumed Company Option will be equal to the
quotient determined by dividing the exercise price per share of Company Common
Stock at which such Company Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.
Parent shall comply with the terms of all such Company Options and use
commercially reasonable efforts to ensure, to the extent required by and subject
to the provisions of, the Option Plans, and to the extent permitted under the
Code, that any Company Options that qualified for tax treatment as incentive
stock options under Section 422 of the Code prior to the Effective Time continue
to so qualify after the Effective Time. Parent shall take all corporate actions
necessary to reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery upon exercise of assumed Company Options on the terms set
forth in this Section 1.5(e).
(f) TERMINATION OF COMPANY EMPLOYEE STOCK PURCHASE PLAN. Prior to
the Effective Time, the Company's Employee Stock Purchase Plan (the "COMPANY
ESPP") shall be terminated. The rights of participants in the Company ESPP with
respect to any offering period then underway under the Company ESPP shall be
determined by treating the last business day prior to, or if administratively
advisable, last payroll date of the Company immediately prior to, the Effective
Time, as the last day of such offering period and by making such other pro-rata
adjustments as may be necessary to reflect the shortened offering period but
otherwise treating such shortened offering period as a fully effective and
completed offering period for all purposes under the Company ESPP. Prior to the
Effective Time, the Company shall take all actions (including, if appropriate,
amending the terms of the Company ESPP) that are necessary to give effect to the
transactions contemplated by this Section 1.5(f). Parent agrees that, from and
after the Effective Time, the employees of the Company who become employees of
Parent or any of its Subsidiaries may participate in the employee stock purchase
plan sponsored by Parent (the "PARENT ESPP"), subject to the terms and
conditions of the Parent ESPP, and that service with the Company shall be
treated as service with Parent for determining eligibility of the Company's
employees under the Parent ESPP. Parent agrees to create a special offering
period under the Parent ESPP so that the employees of the Company who become
employees of Parent or any of its Subsidiaries can participate in the Parent
ESPP within fifteen (15) days from the Closing Date.
(g) ASSUMPTION OF COMPANY WARRANT. At the Effective Time, the
outstanding warrant issued by the Company to Thomson Multimedia S.A. (the
"WARRANT") will be assumed by Parent in connection with the Merger. The Warrant
shall continue to have, and be subject to, the same terms and conditions set
forth therein (including, without limitation, the vesting schedule set forth
therein), except that (i) the Warrant will be exercisable for that number of
shares of Parent Common Stock equal to the product of the number of shares of
Company Common Stock that were issuable upon exercise of the Warrant immediately
prior to the Effective Time multiplied by the Exchange Ratio, rounded up to the
nearest whole number of shares of Parent Common Stock, and (ii) the per share
exercise price for the Parent Shares issuable upon exercise of the Warrant will
be equal to the quotient determined by dividing the exercise price per share of
Company Common
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Stock at which the Warrant was exercisable immediately prior to the Effective
Time by the Exchange Ratio, rounded up to the nearest whole cent.
SECTION 1.6 EXCHANGE OF CERTIFICATES.
(a) Prior to the mailing of any proxy or information statement of
the Company prepared in connection with the Merger (the "PROXY STATEMENT"), such
bank, trust company, Person or Persons (as defined hereinafter) as shall be
designated by Parent and reasonably acceptable to the Company shall act as the
depositary and exchange agent for the delivery of the Merger Consideration in
exchange for shares of Company Common Stock (the "EXCHANGE AGENT") in connection
with the Merger. At or promptly following the Effective Time, Parent shall
deposit, or cause to be deposited, with the Exchange Agent the Merger
Consideration for the benefit of the holders of shares of Company Common Stock
which are converted into Parent Shares pursuant to Section 1.5(b) hereof
(together with cash as required to (i) pay any dividends or distributions with
respect thereto in accordance with Section 1.6(c) hereof and (ii) make payments
in lieu of fractional Parent Shares, pursuant to Section 1.6(d) hereof, being
hereinafter referred to as the "EXCHANGE FUND"). For purposes of this Agreement,
"PERSON" means any natural person, firm, individual, corporation, limited
liability company, partnership, association, joint venture, company, business
trust, trust or any other entity or organization, whether incorporated or
unincorporated, including a government or political subdivision or any agency or
instrumentality thereof.
(b) As of or promptly following the Effective Time but in no event
later than ten (10) business days thereafter, the Surviving Corporation shall
cause the Exchange Agent to mail (and to make available for collection by hand)
to each holder of record of a certificate or certificates, which immediately
prior to the Effective Time represented outstanding shares of Company Common
Stock (other than Dissenting Shares) (the "CERTIFICATES"), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and which shall be in the form and have such
other provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration into which the number of shares of Common Stock
previously represented by such Certificates shall have been converted pursuant
to this Agreement (which instructions shall provide that at the election of the
surrendering holder, Certificates may be surrendered, and the Merger
Consideration in exchange therefor collected, by hand delivery). Upon surrender
of a Certificate for cancellation to the Exchange Agent, together with a letter
of transmittal duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each share of Common Stock
formerly represented by such Certificate, to be mailed (or made available for
collection by hand if so elected by the surrendering holder) within ten (10)
business days of receipt thereof (but in no case prior to the Effective Time),
and the Certificate so surrendered shall be forthwith cancelled. The Exchange
Agent shall accept such Certificates upon compliance with such reasonable terms
and conditions as the Exchange Agent may impose to effect an orderly exchange
thereof in accordance with normal exchange practices. No interest shall be paid
or accrued for the benefit of holders of the Certificates on the cash payable
pursuant to subsections (c) and (d) below upon the surrender of the
Certificates.
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(c) No cash payment in lieu of fractional Parent Shares shall be
paid to any Person pursuant to Section 1.6(d) hereof until such Person's
Certificate is surrendered in accordance with this Article I. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid, without interest, to the Person in whose name the Parent Shares
being issued in respect of such Certificate are to be registered (i) at the time
of such surrender, the amount of any cash payable in lieu of fractional Parent
Shares to which such holder is entitled pursuant to Section 1.6(d) hereof and
the proportionate amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to Parent Shares, and
(ii) at the appropriate payment date or as promptly as practicable thereafter,
the proportionate amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such Parent Shares.
(d) Notwithstanding any other provision of this Agreement, no
fraction of a Parent Share will be issued and no dividend or other distribution,
stock split or interest with respect to Parent Shares shall relate to any
fractional Parent Shares, and such fractional interest shall not entitle the
owner thereof to vote or to any rights as a security holder of the Parent
Shares. In lieu of any such fractional security, each stockholder who would
otherwise be entitled to receive a fraction of a share of Parent Common Stock
(after aggregating all fractional shares of Parent Common Stock that otherwise
would be received by such stockholder) shall receive from Parent an amount of
cash (rounded to the nearest whole cent), without interest, equal to the product
obtained by multiplying such fraction by the average closing sale price of one
(1) share of Parent Common Stock on the NYSE during the ten (10) trading days
ending on the trading day immediately prior to the effective date of the Merger.
(e) Any portion of the Exchange Fund which remains undistributed to
the holders of the Certificates for one (1) year after the Effective Time shall
be delivered to Parent, upon demand, and any holders of shares of Company Common
Stock prior to the Merger who have not theretofore complied with this Article I
shall thereafter look for payment of their claim, as general creditors thereof,
only to Parent for their claim for Parent Shares, any cash without interest, to
be paid, in lieu of any fractional Parent Shares and any dividends or other
distributions with respect to Parent Shares to which such holders may be
entitled.
(f) None of Parent, the Company or the Exchange Agent shall be
liable to any Person in respect of any Parent Shares held in the Exchange Fund
(or any cash, dividends or other distributions payable in respect thereof)
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificates shall not have been surrendered
prior to one (1) year after the Effective Time (or immediately prior to such
earlier date on which (i) any Parent Shares, (ii) any cash in lieu of fractional
Parent Shares or (iii) any dividends or distributions with respect to Parent
Shares in respect of such Certificate would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section 3.3(b) hereof)), any
such Parent Shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of Parent, free and clear of any claims or interest of any Person
previously entitled thereto.
SECTION 1.7 LOST CERTIFICATES. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be
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lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such Person of a bond, in such reasonable amount as the Surviving
Corporation may direct (but consistent with past practice of the Company), as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Parent Shares to which the holder thereof is entitled
pursuant to this Article I.
SECTION 1.8 MERGER CLOSING. Subject to the satisfaction or waiver of the
conditions set forth in Article VI hereof, the closing of the Merger (the
"CLOSING") will take place at 10:00 a.m., California time, on a date to be
specified by the parties hereto, and no later than the second business day after
the satisfaction or waiver of the conditions set forth in Article VI hereof that
are to be satisfied other than on the day of the Closing, at the offices of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxx, unless another time, date or place is agreed to in
writing by the parties hereto (such date, the "CLOSING DATE").
SECTION 1.9 DISSENTING SHARES. If the Merger is effectuated pursuant to
Section 253 of the DGCL, shares of Company Common Stock outstanding immediately
prior to the Effective Time and held by a holder who is entitled to demand and
properly demands appraisal for such shares of Company Common Stock in accordance
with DGCL (the "DISSENTING SHARES") shall not be converted into a right to
receive Parent Shares, unless such holder fails to perfect or withdraws or
otherwise loses his or her right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his or her right to appraisal,
such shares of Company Common Stock shall be treated as if they had been
converted as of the Effective Time into a right to receive the Merger
Consideration without any interest thereon. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of shares of Company
Common Stock, and Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to, or settle
or offer to settle, any such demands. Any amounts paid to a holder pursuant to a
right of appraisal will be paid by the Company out of its own funds and will not
be reimbursed by Parent or any affiliate of Parent.
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 CERTIFICATE OF INCORPORATION. At the Effective Time, subject
to Section 5.5 hereof, the Certificate of Incorporation of the Surviving
Corporation shall be amended and restated in its entirety to be the same as the
Certificate of Incorporation of Merger Sub, as in effect immediately prior to
the Effective Time (except that the name of the Surviving Corporation shall
remain C-Cube Microsystems Inc.), and such Certificate of Incorporation of the
Surviving Corporation, as so amended and restated, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the DGCL and such Certificate of Incorporation.
SECTION 2.2 BYLAWS. At the Effective Time, subject to Section 5.5
hereof, the Bylaws of the Surviving Corporation shall be amended and restated to
read the same as the Bylaws
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of Merger Sub, as in effect immediately prior to the Effective Time, until
thereafter amended in accordance with the DGCL, the Certificate of Incorporation
of the Surviving Corporation and such Bylaws, PROVIDED, HOWEVER, that all
references in such Bylaws to Merger Sub shall be amended to refer to C-Cube
Microsystems Inc.
SECTION 2.3 OFFICERS AND DIRECTORS.
(a) From and after the Effective Time, the officers of Merger Sub at
the Effective Time shall be the officers of the Surviving Corporation, until
their respective successors are duly elected or appointed and qualified in
accordance with applicable law.
(b) The Board of Directors of the Surviving Corporation effective as
of, and immediately following, the Effective Time shall consist of the directors
of Merger Sub immediately prior to the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub, subject to
such exceptions as are specifically disclosed in writing in the disclosure
schedule supplied by the Company to Parent prior to the execution of this
Agreement (the "COMPANY DISCLOSURE SCHEDULE"), which disclosure shall provide an
exception to or otherwise qualify the representations or warranties of the
Company specifically referred to in such disclosure schedule and such other
representations and warranties to the extent such disclosure shall reasonably
appear to be applicable to such other representations or warranties as follows:
SECTION 3.1 CORPORATE EXISTENCE AND POWER. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals (collectively, "LICENSES") required to
carry on its business as now conducted except for failures to have any such
License which would not, in the aggregate, have a Company Material Adverse
Effect (as defined hereinafter). The Company is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned, leased or operated by it or the nature of its
activities makes such qualification necessary, except in such jurisdictions
where failures to be so qualified would not reasonably be expected to, in the
aggregate, have a Company Material Adverse Effect. As used herein, the term
"COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on or change
in the financial condition, business, assets or results of operations of the
Company and its Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that in no
event shall any effect that directly results from (i) any change in general
economic conditions that does not affect the Company and its Subsidiaries, taken
as a whole, in a substantially disproportionate manner, (ii) any adverse change
affecting the semiconductor industry generally that does not affect the Company
and its Subsidiaries, taken as a whole, in a substantially disproportionate
manner, (iii) any failure by the Company to meet revenue and earnings estimates
in and of itself, and (iv) the announcement or pendency of this Agreement
constitute, or be considered in determining the existence of, a Company Material
Adverse Effect.
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The Company has heretofore made available to Parent true and complete copies of
the Certificate of Incorporation and the Bylaws of the Company as currently in
effect.
SECTION 3.2 CORPORATE AUTHORIZATION.
(a) The Company has the requisite corporate power and authority to
execute and deliver this Agreement and, subject to approval of the Company's
stockholders, as set forth in Section 3.2(b) hereof and as contemplated by
Section 5.2 hereof, to perform its obligations hereunder. The execution and
delivery of this Agreement and the performance of the Company's obligations
hereunder have been duly and validly authorized, and this Agreement has been
approved, by the Board of Directors of the Company and no other corporate
proceedings, on the part of the Company, other than the approval of the
Company's stockholders, are necessary to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly executed and
delivered by the Company and constitutes, assuming due authorization, execution
and delivery of this Agreement by Parent and Merger Sub, a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(b) Under applicable law, the Certificate of Incorporation and the
rules of The Nasdaq National Market, the affirmative vote of the holders of a
majority of the shares of Company Common Stock outstanding on the record date,
established by the Board of Directors of the Company in accordance with the
Bylaws of the Company, applicable law and this Agreement, is the vote required
to approve the Merger and adopt this Agreement.
SECTION 3.3 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Neither the execution and delivery of this Agreement nor the
performance by the Company of its obligations hereunder will (i) conflict with
or result in any breach of any provision of the Certificate of Incorporation or
the Bylaws of the Company; (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration or
obligation to repurchase, repay, redeem or acquire or any similar right or
obligation) under any of the terms, conditions or provisions of any Company
Contract or (iii) assuming that the filings, registrations, notifications,
authorizations, consents and approvals referred to in subsection (b) below have
been obtained or made, as the case may be, violate any order, injunction,
decree, statute, rule or regulation of any Governmental Entity to which the
Company or any of its Subsidiaries is subject, excluding from the foregoing
clauses (ii) and (iii) such requirements, defaults, breaches, rights or
violations (A) that would not, in the aggregate, reasonably be expected to have
a Company Material Adverse Effect and would not have a material adverse effect
on the ability of the Company to perform its obligations hereunder or (B) that
become applicable as a result of the business or activities in which Parent or
any of its affiliates is or proposes to be engaged or any acts or omissions by,
or facts specifically pertaining to, Parent.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any government or any agency, court,
tribunal, commission, board, bureau, department, political subdivision or other
instrumentality of any government (including any regulatory or administrative
agency), whether federal, state, multinational (including, but not limited to,
the European Community), provincial, municipal, domestic or foreign (each, a
"GOVERNMENTAL ENTITY") or other Person is required in connection with the
execution and delivery of this
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Agreement by the Company or the performance by the Company of its obligations
hereunder, except (i) the filing of the Certificate of Merger in accordance with
the DGCL; (ii) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR ACT"), or any foreign laws regulating
competition, antitrust, investment or exchange controls; (iii) compliance with
any applicable requirements of the Securities Act of 1933, as amended, and the
rules and regulations thereunder (the "SECURITIES ACT") and the Exchange Act;
(iv) compliance with any applicable requirements of state blue sky or takeover
laws and (v) such other consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings (A) the failure of which
to be obtained or made would not, in the aggregate, reasonably be expected to
have a Company Material Adverse Effect and would not have a material adverse
effect on the ability of the Company to perform its obligations hereunder or (B)
that become applicable as a result of the business or activities in which Parent
or any of its affiliates is or proposes to be engaged or any acts or omissions
by, or facts specifically pertaining to, Parent.
SECTION 3.4 CAPITALIZATION. The authorized capital stock of the Company
consists of 200,000,000 shares of Company Common Stock and 10,000,000 shares of
preferred stock, par value $0.001 per share, of the Company (the "COMPANY
PREFERRED STOCK"). As of March 20, 2001, there were (i) 50,077,762 shares of
Company Common Stock issued and outstanding and (ii) no shares of Preferred
Stock issued and outstanding. All shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable and
were not issued in violation of any preemptive rights. None of the outstanding
shares of Company Common Stock is subject to any right of first refusal in favor
of the Company. Neither the Company nor any Subsidiary of the Company is a party
to or is bound by any Contract pursuant to which any Person has any registration
rights with respect to any Company Securities.
As of March 1, 2001, there were outstanding Company Options to purchase
15,958,441 shares of Company Common Stock and outstanding warrants exercisable
for 949,494 shares of Company Common Stock. As of March 1, 2001, 500,000 shares
of Company Common Stock are reserved for future issuance pursuant to the Company
ESPP. Schedule 3.4 of the Company Disclosure Schedule sets forth the following
information with respect to each Company Option outstanding as of the date of
this Agreement: (i) the particular plan (if any) pursuant to which such Company
Option was granted; (ii) the name of the optionee; (iii) the number of shares of
Company Common Stock subject to such Company Option; (iv) the exercise price of
such Company Option; (v) the date on which such Company Option was granted; and
(vi) the applicable vesting schedule, and the extent to which such Company
Option is vested and exercisable as of the date of this Agreement. The Company
has delivered to Parent accurate and complete copies of all stock option plans
pursuant to which the Company or any Subsidiary of the Company has ever granted
stock options, and the forms of all stock option agreements evidencing such
options. The Company has made available to Parent accurate and complete copies
of the Warrant. Schedule 3.4 of the Company Disclosure Schedule sets forth the
extent to which the Warrant has vested as of the date hereof.
Except as set forth in this Section 3.4, and for changes since March 1,
2001 resulting from the exercise of Company Options outstanding on such date,
there are outstanding (i) no shares of capital stock or other voting securities
of the Company, (ii) no securities of the Company or any Subsidiary of the
Company convertible into or exchangeable for shares of capital stock or voting
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securities of the Company and (iii) no options or other rights to acquire from
the Company, and no obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (the items in clauses (i), (ii) and
(iii) being referred to collectively as the "COMPANY SECURITIES"). There are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any Company Securities. No Subsidiary of the Company
owns any capital stock or other voting securities of the Company.
SECTION 3.5 SUBSIDIARIES.
(a) Each Subsidiary of the Company that is actively engaged in any
business or owns any material assets (each, an "ACTIVE COMPANY SUBSIDIARY") (i)
is a corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, (ii) has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and (iii) is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except for failures
of this representation and warranty to be true which would not, in the
aggregate, have a Company Material Adverse Effect. For purposes of this
Agreement, "SUBSIDIARY" means with respect to any Person, any corporation or
other legal entity of which such Person owns, directly or indirectly, more than
50% of the outstanding stock or other equity interests, the holders of which are
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity. All Subsidiaries of the Company
and their respective jurisdictions of incorporation are identified in Schedule
3.5 of the Company Disclosure Schedule.
(b) All of the outstanding shares of capital stock of each
Subsidiary of the Company are duly authorized, validly issued, fully paid and
nonassessable, and such shares are owned by the Company or by a Subsidiary of
the Company free and clear of any Liens (as defined in this Section 3.5) or
limitations on voting rights. There are no subscriptions, options, warrants,
calls, rights, convertible securities or Contracts of any character relating to
the issuance, transfer, sale, delivery, voting or redemption (including any
rights of conversion or exchange under any outstanding security or other
instrument) for any of the capital stock or other equity interests of any of
such Subsidiaries. There are no Contracts requiring the Company or any of its
Subsidiaries to make contributions to the capital of, or lend or advance funds
to, any Subsidiaries of the Company. For purposes of this Agreement, "LIEN"
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset.
SECTION 3.6 SEC DOCUMENTS. The Company has filed all required reports,
proxy statements, registration statements, forms and other documents with the
SEC since May 3, 2000 (the "COMPANY SEC DOCUMENTS"). As of their respective
dates, and giving effect to any amendments thereto, (a) the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the applicable rules
and regulations of the SEC promulgated thereunder and (b) none of the Company
SEC Documents contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
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SECTION 3.7 FINANCIAL STATEMENTS. The financial statements of the
Company (including, in each case, any notes and schedules thereto) included in
the Company SEC Documents and the audited consolidated balance sheet of the
Company and its Subsidiaries for the year ended December 31, 2000 (the "INTERIM
BALANCE SHEET") and the related statement of operations and cash flows of the
Company and its Subsidiaries for the period then ended, as provided to Parent,
(a) were prepared from the books and records of the Company and its
Subsidiaries, (b) comply as to form in all material respects with all applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto, (c) are in conformity with United States generally accepted accounting
principles ("GAAP"), applied on a consistent basis (except in the case of
unaudited statements, as permitted by the rules and regulations of the SEC)
during the periods involved and (d) fairly present, in all material respects,
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments which were not and
are not expected to be, individually or in the aggregate, material in amount).
SECTION 3.8 DISCLOSURE DOCUMENTS. Neither the Schedule 14D-9 nor the
Proxy Statement, nor any of the information supplied or to be supplied by the
Company or its Subsidiaries or Representatives for inclusion or incorporation by
reference in the Offer Documents, the Registration Statement or the
Post-Effective Amendment will, at the respective times any such documents or any
amendments or supplements thereto are filed with the SEC, are first published,
sent or given to stockholders or become effective under the Securities Act or,
in the case of the Proxy Statement, at the time of the Company Special Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Schedule 14D-9 and the Proxy Statement will comply as to
form in all material respects with the requirements of all applicable laws,
including the Exchange Act and the rules and regulations thereunder. No
representation or warranty is made by the Company with respect to statements
made or incorporated by reference in any such documents based on information
supplied by Parent or Merger Sub for inclusion or incorporation by reference
therein.
SECTION 3.9 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
the financial statements (and the notes thereto) contained in the Company SEC
Documents filed through the date of this Agreement and in the Interim Balance
Sheet, and except for liabilities and obligations incurred in the ordinary
course of business since the date of the Interim Balance Sheet, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) except for those
that would not, in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.10 ABSENCE OF MATERIAL ADVERSE CHANGES, ETC. Since December
31, 2000, there has not been a Company Material Adverse Effect and no event has
occurred or circumstance has arisen that would reasonably be expected to have a
Company Material Adverse Effect. Without limiting the foregoing, except as
contemplated by this Agreement, since December 31, 2000, (i) the Company and its
Subsidiaries have conducted their business in the ordinary course of business
and (ii) there has not been:
(a) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company or
any Subsidiary of the Company, or any
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repurchase, redemption or other acquisition by the Company or any Subsidiary
(other than any wholly owned Subsidiary) of the Company of any outstanding
shares of capital stock or other equity securities of, or other ownership
interests in, the Company or of any Subsidiary of the Company;
(b) any amendment of any provision of the Certificate of
Incorporation, Bylaws or similar organizational documents of, or of any material
term of any outstanding security issued by, the Company or any Subsidiary (other
than any wholly owned Subsidiary) of the Company;
(c) any incurrence, assumption or guarantee by the Company or any
Subsidiary of the Company of any indebtedness for borrowed money other than
borrowings under existing short term credit facilities not in excess of $500,000
in the aggregate;
(d) any change in any method of accounting or accounting practice by
the Company or any Subsidiary of the Company, except for any such change
required by reason of a change in GAAP;
(e) any (i) establishment, adoption or amendment of any Plan (as
defined in Section 3.12 hereof); (ii) grant of any severance, termination or
similar pay to any director, officer or employee of the Company or any
Subsidiary of the Company, (iii) employment, deferred compensation or other
similar Contract (or any amendment to any such existing Contract) with any
director, officer or employee of the Company or any Subsidiary of the Company
entered into, (iv) increase in benefits payable under any existing severance,
termination pay or similar policies or employment Contract or (v) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary of the Company, in each case other
than with respect to employees (other than officers of the Company or any
Subsidiary of the Company) in the ordinary course of business consistent with
past practice;
(f) sale, issuance or grant of Company Securities other than
pursuant to Options outstanding as of December 31, 2000 and the issuance of
Options after such date in the ordinary course of business (and the issuance of
Company Securities pursuant thereto);
(g) acquisition, lease, license or disposition of assets material to
the Company and its Subsidiaries, except for sales of inventory in the ordinary
course of business consistent with past practice, or any acquisition or
disposition of capital stock of any third party, or any merger or consolidation
or similar transaction with any third party, by the Company or any Subsidiary of
the Company;
(h) entry by the Company, or any Subsidiary of the Company, into any
joint venture, partnership or similar Contract with any Person other than a
wholly owned Subsidiary of the Company;
(i) any capital expenditure by the Company or any Subsidiary of the
Company (except for capital expenditures that, when added to all other capital
expenditures made on behalf of the Company since December 31, 2000, have not
exceeded the Company's forecasted capital expenditures for such period as
previously provided to Parent; or
(j) any authorization of, or commitment or agreement to take any of
the foregoing actions except as otherwise permitted by this Agreement.
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SECTION 3.11 TAXES.
(a) (1) All federal, state, local and foreign Tax Returns (as
defined in Section 3.11(b) hereof) required to be filed by or on behalf of the
Company, each of its Subsidiaries, and each affiliated, combined, consolidated
or unitary group of which the Company or any of its Subsidiaries is a member (a
"COMPANY GROUP") have been timely filed, and all returns filed are complete and
accurate except to the extent any failure to file or any inaccuracies in filed
returns would not, individually or in the aggregate, have a Company Material
Adverse Effect; (2) all Taxes (as defined hereinafter) due and owing by the
Company, any Subsidiary of the Company or any Company Group have been paid, or
adequately reserved on the financial statements of the Company in accordance
with GAAP, except to the extent any failure to pay or reserve would not,
individually or in the aggregate, have a Company Material Adverse Effect; (3)
there is no presently pending and, to the knowledge of the Company, contemplated
or scheduled and there has not been since May 3, 2000, any audit examination,
deficiency, refund litigation, proposed adjustment or matter in controversy
involving the Company, any Subsidiary of the Company or any Company Group with
respect to any Taxes nor has the Company or any Subsidiary of the Company filed
any waiver of the statute of limitations applicable to the assessment or
collection of any Tax; (4) all assessments for Taxes due and owing by the
Company, any Subsidiary of the Company or any Company Group with respect to
completed and settled examinations or concluded litigation have been paid; (5)
neither the Company nor any Subsidiary of the Company is a party to any tax
indemnity agreement, tax sharing agreement or other Contract under which the
Company or any Subsidiary of the Company could become liable to another Person
as a result of the imposition of a Tax upon any Person, or the assessment or
collection of such a Tax; and (6) the Company and each of its Subsidiaries has
complied in all material respects with all rules and regulations relating to the
withholding of Taxes.
(b) For purposes of this Agreement, (i) "TAXES" means all taxes,
levies or other like assessments, charges or fees (including estimated taxes,
charges and fees), including, without limitation, income, corporation, advance
corporation, gross receipts, transfer, excise, property, sales, use,
value-added, license, payroll, withholding, social security and franchise or
other governmental taxes or charges, imposed by any Governmental Entity and such
term shall include any interest, penalties or additions to tax attributable to
such taxes and (ii) "TAX RETURN" means any report, return, statement or other
written information required to be supplied to a taxing authority in connection
with Taxes.
SECTION 3.12 EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.12(a) of the Company Disclosure Schedule contains a
true and complete list of each deferred compensation, incentive compensation,
and equity compensation plan; "welfare" plan, fund or program (within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")); "pension" plan, fund or program (within the meaning of
Section 3(2) of ERISA); each material employment, termination or severance
Contract; and each other employee benefit plan, fund, program, agreement or
arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by the Company or by any trade or business,
whether or not incorporated (each, an "ERISA AFFILIATE"), that together with the
Company would be deemed a "single employer" within the meaning of Section
4001(b) of ERISA. The plans, funds, programs, agreements and arrangements listed
on Schedule 3.12(a) of the Company Disclosure Schedule are referred to herein
collectively as the "PLANS".
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(b) With respect to each Plan, the Company has heretofore delivered
or made available to Parent true and complete copies of the Plan and any
amendments thereto (or if the Plan is not a written Plan, a description
thereof), any related trust or other funding vehicle, the most recent reports or
summaries required under ERISA or the Code and the most recent determination
letter received from the Internal Revenue Service with respect to each Plan
intended to qualify under Section 401 of the Code.
(c) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, other than liability for premiums due the Pension Benefit Guaranty
Corporation (which premiums have been paid when due).
(d) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, rule or regulation,
including, but not limited to, ERISA and the Code.
(e) Each Plan intended to be "qualified" within the meaning of
Section 401(a) of the Code has received a favorable determination opinion,
notification and/or letter from the Internal Revenue Service, or in the case of
such a Plan for which a favorable determination, opinion, notification and/or
letter has not yet been received, the applicable remedial amendment period under
Section 401(b) of the Code has not expired.
(f) No Plan provides medical, surgical, hospitalization, death or
similar benefits (whether or not insured) for employees or former employees of
the Company or any Subsidiary for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his or her
beneficiary), dependant or other covered person.
(g) There are no pending, or to the knowledge of the Company,
threatened or anticipated, material claims, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
(h) The consummation of the transactions contemplated by this
Agreement will not, either alone or in combination with another event, (i)
entitle any current or former employee or officer of the Company or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement, or (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due any such employee
or officer.
(i) All employee benefit plans that are subject to the laws of any
jurisdiction outside the United States are in material compliance with such
applicable laws, including relevant Tax laws, and the requirements of any trust
deed under which they were established, except for such exceptions to the
foregoing which, in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(j) Schedule 3.12(j) of the Company Disclosure Schedule contains a
list of all salaried employees of the Company and each of its Subsidiaries as of
the date of this Agreement who customarily receive annual compensation in excess
of $125,000 per calendar year, and correctly reflects, in all material respects,
their salaries, any other material compensation payable to them
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(including compensation payable pursuant to bonus, deferred compensation or
commission arrangements), their dates of employment and their positions.
(k) Neither the Company nor any of its Subsidiaries is a party to
any collective bargaining contract or other Contract with a labor union
involving any of its employees.
SECTION 3.13 LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as set forth in the Company SEC Documents filed through
the date of this Agreement, there is no action, suit or proceeding pending
against, or to the knowledge of the Company threatened against, the Company or
any Subsidiary of the Company or any of their respective properties before any
court or arbitrator or any Governmental Entity which would reasonably be
expected to have a Company Material Adverse Effect.
(b) The Company and its Subsidiaries are in compliance with all
applicable laws, ordinances, rules and regulations of any Governmental Entity
applicable to their respective businesses and operations, except for such
violations, if any, which, in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. All governmental approvals, permits and
licenses (collectively, "PERMITS") required to conduct the business of the
Company and its Subsidiaries have been obtained, are in full force and effect
and are being complied with except for such violations and failures to have
Permits in full force and effect, if any, which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect. Without limiting the generality of the foregoing, neither the Company
nor any of its Subsidiaries, and (to the knowledge of the Company) no director,
officer, agent or employee of the Company or any of its Subsidiaries, has made
(in a manner that would result in liability to the Company) any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
SECTION 3.14 CERTAIN CONTRACTS AND ARRANGEMENTS.
(a) As used in this Agreement, "CONTRACT" means any legally binding
written, oral or other agreement, contract, subcontract, lease, instrument,
note, option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan, commitment or undertaking, and "COMPANY CONTRACT" means any
Contract: (i) to which the Company or any of its Subsidiaries is a party; (ii)
by which the Company or any of its Subsidiaries or any asset of the Company or
any of its Subsidiaries is bound or under which the Company or any of its
Subsidiaries has, or may become subject to, any obligation; or (iii) under which
the Company or any of its Subsidiaries has any legally enforceable right. For
purposes of this Agreement, each of the following shall be deemed to constitute
a "MATERIAL CONTRACT":
(i) any Contract (A) relating to the employment of, or the
performance of services by, any employee or consultant (other than ordinary
course, at-will offer letters), (B) pursuant to which the Company or any of its
Subsidiaries is or may become obligated to make any severance, termination or
similar payment to any current or former employee or director, or (C) pursuant
to which the Company or any of its Subsidiaries is or may become obligated to
make any
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bonus or similar payment (other than payments constituting base salary) in
excess of $100,000 to any current or former employee or director;
(ii) any Contract relating to the acquisition, transfer,
development, sharing or license of any Intellectual Property material to the
Company's business (except for any Contract pursuant to which non-customized
software is licensed to Company or any of its Subsidiaries under any third party
software license generally available to the public, if such software is not
incorporated into any product of the Company or any of its Subsidiaries or
otherwise redistributed or sublicensed by the Company or any of its
Subsidiaries);
(iii) any Contract that provides for indemnification of any
officer, director, employee or agent;
(iv) any Contract imposing any material restriction on the right
or ability of the Company or any of its Subsidiaries to compete in any line of
business or in any geographic region with any other Person or to transact
business or deal in any other manner with any other Person;
(v)any Contract (other than Contracts evidencing Company
Options) (A) relating to the acquisition, issuance, voting, registration, sale
or transfer of any securities, (B) providing any Person with any preemptive
right, right of participation, right of maintenance or similar right with
respect to any securities, or (C) providing Company or any of its Subsidiaries
with any right of first refusal with respect to, or right to repurchase or
redeem, any securities;
(vi) any Contract (A) to which any Governmental Entity is a
party or under which any Governmental Entity has any rights or obligations, or
(B) directly benefiting any Governmental Entity (including any subcontract or
other Contract between Company or any of its Subsidiaries and any contractor or
subcontractor to any Governmental Entity);
(vii) any Contract that contemplates or involves the payment or
delivery of cash or other consideration in an amount or having a value in excess
of $1,000,000 in the aggregate, or contemplates or involves the performance of
services having a value in excess of $1,000,000 in the aggregate;
(viii) any Contract pursuant to which Company or any of its
Subsidiaries distributes or sells any of its products, including distributor
agreements and sales representative agreements and similar agreements but
excluding those entered into in the ordinary course and cancelable without
penalty on notice of 90 days or fewer and excluding purchase orders for less
than $1,000,000;
(ix) any Contract pursuant to which another Person manufactures
or supplies any products, or components thereof, of the Company or any of its
Subsidiaries, but excluding those entered into in the ordinary course and
cancelable without penalty on notice of 90 days or fewer and excluding purchase
orders for less than $1,000,000;
(x)any Contract pursuant to which any Intellectual Property of
Company or any of its Subsidiaries has been or is required to be placed into
escrow for the benefit of any other Person; and
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(xi) any other Contract that is material to the business of the
Company and its Subsidiaries, taken as a whole.
(b) Each Company Contract that constitutes a Material Contract is,
with respect to the Company or the applicable Subsidiary of the Company and, to
the knowledge of the Company with respect to the other party thereto, valid and
in full force and effect, and is enforceable in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
(c) Neither the Company nor any of its Subsidiaries has violated or
breached, or committed any default under, any Material Contract, except for
violations, breaches and defaults that have not had and would not reasonably be
expected to have a Company Material Adverse Effect; and, to the best of the
knowledge of the Company, no other Person has violated or breached, or committed
any default under, any Company Contract, except for violations, breaches and
defaults that have not had and would not reasonably be expected to have a
Company Material Adverse Effect. To the knowledge of the Company, no event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) could reasonably be expected to result in (i) a default under
any of the provisions of any Company Contract or (ii) the disclosure, release or
delivery of any Intellectual Property owned by or exclusively licensed to the
Company or any of its Subsidiaries, except in each such case for defaults,
disclosures, releases or deliveries that have not had and would not reasonably
be expected to have a Company Material Adverse Effect.
SECTION 3.15 ENVIRONMENTAL MATTERS.
(a) (i) "CLEANUP" means all actions required to: (A) cleanup,
remove, treat or remediate Hazardous Materials (as defined hereinafter) in the
indoor or outdoor environment; (B) prevent the Release (as defined hereinafter)
of Hazardous Materials so that they do not migrate, endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; (C)
perform pre-remedial studies and investigations and post-remedial monitoring and
care; or (D) respond to any government requests for information or documents in
any way relating to cleanup, removal, treatment or remediation or potential
cleanup, removal, treatment or remediation of Hazardous Materials in the indoor
or outdoor environment.
(ii)"ENVIRONMENTAL CLAIM" means any claim, action, cause of
action, investigation or written notice by any Person alleging potential
liability (including, without limitation, potential liability for investigatory
costs, Cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or
resulting from (A) the presence or Release of any Hazardous Materials at any
location, whether or not owned or operated by the Company or any of its
Subsidiaries or (B) circumstances forming the basis of any violation of any
Environmental Law (as defined hereinafter).
(iii) "ENVIRONMENTAL LAWS" means all federal, state, local and
foreign laws and regulations relating to pollution or protection of the
environment, including, without limitation, laws relating to Releases or
threatened Releases of Hazardous Materials or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, transport or
handling of Hazardous Materials.
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(iv) "HAZARDOUS MATERIALS" means all substances defined as
Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5, or
defined as such by, or regulated as such under, any Environmental Law.
(v) "RELEASE" means any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration
into the environment (including, without limitation, ambient air, surface water,
groundwater and surface or subsurface strata) or into or out of any property,
including the movement of Hazardous Materials through or in the air, soil,
surface water, groundwater or property.
(b) (i) To the knowledge of the Company, the Company and its
Subsidiaries are in compliance with all applicable Environmental Laws (which
compliance includes, but is not limited to, the possession by the Company and
its Subsidiaries of all Permits and other governmental authorizations required
under applicable Environmental Laws, and compliance with the terms and
conditions thereof), except where failures to be in compliance would not, in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Since May 3, 2000, and prior to the date of this Agreement, neither the Company
nor any of its Subsidiaries has received any communication (written or oral),
whether from a Governmental Entity, citizens' group, employee or otherwise,
alleging that the Company or any of its Subsidiaries is not in such compliance,
except where failures to be in compliance would not, in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(ii)There is no Environmental Claim pending or, to the knowledge
of the Company, threatened against the Company or any of its Subsidiaries or, to
the knowledge of the Company, against any Person whose liability for any
Environmental Claim the Company or any of its Subsidiaries has or may have
retained or assumed either contractually or by operation of law that would
reasonably be expected to have a Company Material Adverse Effect.
(iii) There are no present or, to the knowledge of the Company,
past, actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the Release or presence of any Hazardous Material
that could form the basis of any Environmental Claim against the Company or any
of its Subsidiaries or, to the knowledge of the Company, against any Person
whose liability for any Environmental Claim the Company or any of its
Subsidiaries has or may have retained or assumed either contractually or by
operation of law that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(iv) The Company agrees to cooperate with Parent to effect the
retention of any Permits or other governmental authorizations under
Environmental Laws that will be required to permit the Company to conduct the
business as conducted by the Company and its Subsidiaries immediately prior to
the Closing Date.
SECTION 3.16 INTELLECTUAL PROPERTY.
(a) To the knowledge of the Company, the Company and its
Subsidiaries own or have a valid right to use all Intellectual Property (as
defined hereinafter) used by or reasonably necessary for the Company and its
Subsidiaries to conduct their business as it is currently conducted.
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Schedule 3.16(a)(i) of the Company Disclosure Schedule sets forth, with respect
to each item of Intellectual Property owned by the Company or any of its
Subsidiaries and registered with any Governmental Entity, or for which an
application has been filed and is currently pending with any Governmental
Entity, (i) a brief description of such item of Intellectual Property, and (ii)
the names of the jurisdictions covered by the applicable registration or
application. The Company and its Subsidiaries have good, valid and exclusive
title to all of the Intellectual Property registrations and applications
identified or required to be identified in Schedule 3.16(a)(i) of the Company
Disclosure Schedule, free and clear of all liens, claims and encumbrances of any
nature, except for (i) any lien for current taxes not yet due and payable, and
(ii) minor liens that have arisen in the ordinary course of business and that do
not (individually or in the aggregate) materially detract from the value of the
Intellectual Property subject thereto or materially impair the operations of
Company or any of its Subsidiaries. Neither Company nor any of its Subsidiaries
has developed jointly with any other Person any Intellectual Property that is
material to the business of Company or its Subsidiaries and the loss of which
would constitute a Company Material Adverse Effect and with respect to which
such other Person has any rights to restrict the Company's use of such
Intellectual Property. Neither the Company nor any of its Subsidiaries has
licensed any Intellectual Property owned by or exclusively licensed to Company
or any of its Subsidiaries and material to the business of the Company or its
Subsidiaries to any Person on an exclusive basis.
(b) To the knowledge of the Company: (i) all of the applications and
registrations relating to Intellectual Property owned by or exclusively licensed
to the Company and its Subsidiaries set forth in Schedule 3.16(a)(i) are
subsisting and unexpired, free of all liens, claims, or encumbrances of any
nature, and have not been abandoned in any respect; (ii) the Company and its
Subsidiaries, and all products manufactured, distributed or sold by the Company
or any of its Subsidiaries, have not infringed and do not infringe the
intellectual property rights (including, but not limited to, patent rights,
copyrights, maskwork rights, trademark and similar rights, and trade secret
rights) of any third party in any respect that would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect; (iii)
no judgment, decree, injunction, rule or order has been rendered by any
Governmental Entity which would or does limit, cancel or question the validity
of, or the Company's or its Subsidiaries' rights in and to, any Intellectual
Property owned by or exclusively licensed to the Company in any respect that
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect; and (iv) neither the Company nor any of its
Subsidiaries has received notice of any pending or threatened suit, action or
proceeding that seeks to limit, cancel or question the validity of, or the
Company's or its Subsidiaries' rights in and to, any Intellectual Property,
which would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, and, to the Company's knowledge, there is no
basis for any such suit, action or proceeding. To the knowledge of the Company,
no other Person is infringing, misappropriating or making any unlawful or
unauthorized use of, and no Intellectual Property owned or used by any other
Person infringes or conflicts with, any Intellectual Property owned by or
exclusively licensed to the Company or any of its Subsidiaries and material to
the business of the Company or its Subsidiaries.
(c) To the knowledge of the Company, the Company and its
Subsidiaries have not used and are not making use of any confidential or
proprietary information or trade secrets of any other Person in breach of any
Company Contract or in violation of any civil or criminal law.
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(d) The Company and its Subsidiaries have taken commercially
reasonable security measures to protect the secrecy, confidentiality and value
of their trade secrets, the loss or public disclosure of which would cause a
Company Material Adverse Effect (the "MATERIAL TRADE SECRETS"). Without limiting
the generality of the preceding sentence, neither the Company nor any of its
Subsidiaries has, to the best of their knowledge, disclosed any of their
Material Trade Secrets to any other Person who is not subject to binding
confidentiality obligations that restrict the further disclosure of such
Material Trade Secrets. Without limiting the generality of the foregoing, to the
knowledge of the Company, (i) each current or former employee of the Company or
any of its Subsidiaries who is or was involved on behalf of the Company or any
of its Subsidiaries in, or who has contributed on behalf of the Company or any
of its Subsidiaries to, the creation or development of any material Intellectual
Property owned or used by the Company or any of its Subsidiaries has executed
and delivered to the Company or the applicable Subsidiary of the Company an
agreement (containing no material exceptions to or exclusions from the scope of
its coverage deviating from the form referred to below in this clause (i)) that
is substantially identical to the form of Confidential Information and Invention
Assignment Agreement previously delivered by the Company to Parent, and (ii)
each current and former consultant and independent contractor to the Company or
any of its Subsidiaries who is or was involved on behalf of the Company or any
of its Subsidiaries in, or who has contributed on behalf of the Company or any
of its Subsidiaries to, the creation or development of any material Intellectual
Property owned or used by the Company or any of its Subsidiaries has executed
and delivered to the Company or the applicable Subsidiary of the Company an
agreement (containing no material exceptions to or exclusions from the scope of
its coverage deviating from the form referred to below in this clause (ii)) that
is substantially identical to the form of Consultant Confidential Information
and Invention Assignment Agreement previously delivered by the Company to
Parent. To the Company's knowledge, no current or former employee, officer,
director, stockholder, consultant or independent contractor has any right, claim
or interest in or with respect to any material Intellectual Property owned by or
exclusively licensed to the Company or any of its Subsidiaries that restricts
the Company's ability to use or otherwise fully exploit such Intellectual
Property. To the Company's knowledge, no employee of the Company or any
Subsidiary of the Company has entered into any agreement that restricts or
limits in any way the scope or type of work in which the employee may be engaged
in a manner materially adverse to the Company's business or requires the
employee to transfer, assign or disclose any Intellectual Property or
information concerning the employee's work for the Company or any Subsidiary of
the Company to anyone other than the Company or any Subsidiary of the Company.
(e) For purposes of this Agreement "INTELLECTUAL PROPERTY" shall
mean all rights, privileges and priorities provided under U.S., state and
foreign law relating to intellectual property, including without limitation all:
(x) (1) proprietary inventions, discoveries, processes, formulae, designs,
methods, techniques, procedures, concepts, developments, technology,
improvements and modifications thereof and proprietary know-how relating
thereto, whether or not patented or eligible for patent protection; (2)
copyrights and copyrightable works, including, but not limited to, computer
applications, programs, software, netlists, RTL tapeouts, test vectors,
reference designs, schematics, databases and related items; (3) trademarks,
service marks, trade names, and trade dress, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; (4) trade
secrets and other confidential information; and (5) semiconductor chip mask
works; (y) all registrations, applications and recordings for any of the
foregoing and continuations, continuations-in-part, counterparts, divisionals,
reexaminations, and reissues of any of the foregoing;
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and (z) licenses or other similar agreements granting to the Company or any of
its Subsidiaries the rights to use any of the foregoing.
SECTION 3.17 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Credit Suisse First Boston to the effect that, as of the date of such
opinion, and based upon and subject to the matters stated therein, the Exchange
Ratio is fair from a financial point of view to the holders of Company Common
Stock (other than Parent and its affiliates).
SECTION 3.18 BOARD RECOMMENDATION. The Board of Directors of the Company
has, as of the date of this Agreement, by unanimous vote (i) determined that
this Agreement and the transactions contemplated hereby, including the Offer and
the Merger, are advisable and are fair to and in the best interests of the
Company and its stockholders, (ii) approved and adopted this Agreement and the
transactions contemplated hereby, including the Offer and the Merger and the
Stockholder Agreements and the transactions contemplated thereby, and (iii)
resolved to recommend acceptance of the Offer and approval and adoption of this
Agreement by the Company's stockholders.
SECTION 3.19 TAX TREATMENT. Neither the Company nor any of its
affiliates has taken any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to prevent the Transaction from
qualifying as a reorganization under the provisions of Section 368(a) of the
Code.
SECTION 3.20 FINDERS' FEES. Except for Credit Suisse First Boston, whose
fees will be paid by the Company, there is no investment banker, broker, finder
or other intermediary which has been retained by, or is authorized to act on
behalf of, the Company or any Subsidiary of the Company that would be entitled
to any fee or commission from the Company, any Subsidiary of the Company, Parent
or any of Parent's affiliates upon consummation of the transactions contemplated
by this Agreement. The Company has furnished to Parent accurate and complete
copies of all agreements under which any such fees, commissions or other amounts
have been paid to or may become payable and all indemnification and other
agreements related to the engagement of Credit Suisse First Boston.
SECTION 3.21 SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW. The
Board of Directors of the Company has taken all actions so that the restrictions
contained in Section 203 of the DGCL applicable to a "business combination" (as
defined in such Section 203) will not apply to the execution, delivery or
performance of this Agreement or the Stockholder Agreements or to the
consummation of the Offer or the Merger or the other transactions contemplated
by this Agreement or the Stockholder Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally represent and warrant to
the Company, subject to such exceptions as are specifically disclosed in writing
in the disclosure schedule supplied by Parent and Merger Sub to the Company
prior to the execution of this Agreement (the "PARENT DISCLOSURE SCHEDULE"),
which disclosure shall provide an exception to or otherwise qualify
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the representations or warranties of Parent specifically referred to in such
disclosure and such other representations and warranties to the extent such
disclosure shall reasonably appear to be applicable to such other
representations or warranties, as follows:
SECTION 4.1 CORPORATE EXISTENCE AND POWER. Each of Parent and Merger Sub
is a corporation duly incorporated (or other entity duly organized), validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has all corporate or other power, as the case may be, and all
Licenses required to carry on its business as now conducted except for failures
to have any such License which would not, in the aggregate, have a Parent
Material Adverse Effect (as defined in this Section 4.1). Parent is duly
qualified to do business and is in good standing in each jurisdiction where the
character of the property owned, leased or operated by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where failures to be so qualified would not reasonably be expected to, in the
aggregate, have a Parent Material Adverse Effect. As used herein, the term
"PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on or change in
the financial condition, business, assets or results of operations of Parent and
its Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that in no event shall
any effect that directly results from (i) any change in general economic
conditions that does not affect Parent and its Subsidiaries, taken as a whole,
in a substantially disproportionate manner, (ii) any adverse change affecting
the semiconductor industry generally that does not affect Parent and its
Subsidiaries taken as a whole, in a substantially disproportionate manner, (iii)
any failure by Parent to meet revenue and earnings estimates in and of itself,
and (iv) the announcement or pendency of this Agreement, constitute, or be
considered in determining the existence of, a Parent Material Adverse Effect.
Parent has heretofore delivered or made available to the Company true and
complete copies of the governing documents or other organizational documents of
like import, as currently in effect, of Parent.
SECTION 4.2 AUTHORIZATION. Each of Parent and Merger Sub has the
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly and validly
authorized by both the Board of Directors of Parent and the Board of Directors
of Merger Sub, and no other proceedings on the part of Parent, including
stockholder approval, or on the part of Merger Sub are necessary to authorize
the execution, delivery and performance of this Agreement. This Agreement has
been duly executed and delivered by Parent and Merger Sub and constitutes,
assuming due authorization, execution and delivery of this Agreement by the
Company, a valid and binding obligation of Parent and Merger Sub, respectively
enforceable against each entity in accordance with its terms.
SECTION 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Neither the execution and delivery of this Agreement nor the
performance by Parent or Merger Sub of its respective obligations hereunder will
(i) conflict with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws (or other governing or organizational documents) of
Parent or of Merger Sub, as applicable, or (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or obligation to repurchase, repay, redeem or acquire or any similar right or
obligation) under any of the terms, conditions or provisions of any Contract to
which Parent or Merger Sub is a party or by which any of them or any of the
respective
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assets used or held for use by any of them may be bound or (iii) assuming that
the filings, registrations, notifications, authorizations, consents and
approvals referred to in subsection (b) below have been obtained or made, as the
case may be, violate any order, injunction, decree, statute, rule or regulation
of any Governmental Entity to which Parent or Merger Sub is subject, excluding
from the foregoing clauses (ii) and (iii) such requirements, defaults, breaches,
rights or violations (A) that would not, in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect and would not reasonably be
expected to have a material adverse effect on the ability of Parent to
consummate the transactions contemplated hereby or (B) that become applicable as
a result of any acts or omissions by, or facts specifically pertaining to, the
Company.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity is required in
connection with the execution and delivery of this Agreement by Parent or by
Merger Sub or the performance by either entity of its obligations hereunder,
except (i) the filing of the Certificate of Merger in accordance with the DGCL;
(ii) compliance with any applicable requirements of the HSR Act or any foreign
laws regulating competition, antitrust, investment or exchange controls; (iii)
compliance with any applicable requirements of the Securities Act and the
Exchange Act; (iv) compliance with any applicable requirements of state blue sky
or takeover laws and (v) such other consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings (A) the failure of which
to be obtained or made would not reasonably be expected to have a Parent
Material Adverse Effect and would not have a material adverse effect on the
ability of Parent or of Merger Sub to perform its obligations hereunder or (B)
that become applicable as a result of any acts or omissions by, or facts
specifically pertaining to, the Company.
SECTION 4.4 CAPITALIZATION. The authorized capital stock of Parent
consists of 1,300,000,000 shares of Parent Common Stock and 2,000,000 shares of
preferred stock of Parent (the "PARENT PREFERRED STOCK"). The authorized capital
stock of Merger Sub consists of 1,000 shares of Merger Sub Common Stock, 100
shares of which, as of the date hereof, are issued and outstanding and are held
by Parent. As of March 16, 2001, there were (i) 322,528,165 shares of Parent
Common Stock issued and outstanding and (ii) no shares of Parent Preferred Stock
issued and outstanding. All shares of capital stock of Parent and Merger Sub
have been duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any preemptive rights. As of
March 16, 2001, there were outstanding options to purchase approximately
60,400,000 shares of Parent Common Stock. Except as set forth in this Section
4.4 and except for changes since March 16, 2001, resulting from the exercise of
options to purchase shares of Parent Common Stock outstanding on such date, as
of the date of this Agreement there are outstanding (i) no shares of capital
stock or other voting securities of Parent, (ii) no securities of Parent or any
Subsidiary of Parent convertible into or exchangeable for shares of capital
stock or voting securities of Parent and (iii) no options or other rights to
acquire from Parent, and no obligation of Parent to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Parent (the items in clauses (i), (ii) and (iii)
being referred to collectively as the "PARENT SECURITIES"). As of the date of
this Agreement, there are no outstanding obligations of Parent or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Parent Securities.
No Subsidiary of Parent owns any capital stock or other voting securities of
Parent.
SECTION 4.5 SEC DOCUMENTS. Parent has filed all required reports, proxy
statements, registration statements, forms and other documents with the SEC
since January 1, 2000
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(the "PARENT SEC DOCUMENTS"). As of their respective dates, and giving effect to
any amendments thereto, (a) the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the applicable rules and regulations of the SEC promulgated
thereunder and (b) none of the Parent SEC Documents contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
SECTION 4.6 FINANCIAL STATEMENTS. The financial statements of Parent
(including, in each case, any notes and schedules thereto) included in the
Parent SEC Documents (a) were prepared from the books and records of Parent and
its Subsidiaries, (b) comply as to form in all material respects with all
applicable accounting requirements and the rules and regulations of the SEC with
respect thereto, (c) are in conformity with GAAP, applied on a consistent basis
(except in the case of unaudited statements, as permitted by the rules and
regulations of the SEC) and (d) fairly present, in all material respects, the
consolidated financial position of Parent and its consolidated Subsidiaries as
of the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments which were not and are not expected to be,
individually or in the aggregate, material in amount).
SECTION 4.7 DISCLOSURE DOCUMENTS. Neither the Offer Documents nor the
Registration Statement nor the Post-Effective Amendment, nor any of the
information supplied or to be supplied by Parent or its Subsidiaries or
Representatives for inclusion or incorporation by reference in the Schedule
14D-9 or the Proxy Statement will, at the respective times any such documents or
any amendments or supplements thereto are filed with the SEC, are first
published, sent or given to stockholders or become effective under the
Securities Act or, in the case of the Proxy Statement, at the time of the
Company Special Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading. The Offer Documents and the Registration
Statement and the Post-Effective Amendment will comply as to form in all
material respects with the requirements of all applicable laws, including the
Securities Act and the Exchange Act and the rules and regulations thereunder. No
representation or warranty is made by Parent or Merger Sub with respect to
statements made or incorporated by reference in any such documents based on
information supplied by the Company for inclusion or incorporation by reference
therein.
SECTION 4.8 ABSENCE OF MATERIAL ADVERSE CHANGES, ETC. Since December 31,
2000 there has not been any Parent Material Adverse Effect and no event has
occurred or circumstance has arisen that would reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.9 LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as set forth in the Parent SEC Documents filed through
the date of this Agreement, there is no action, suit or proceeding pending
against, or to the knowledge of Parent threatened against, Parent or any
Subsidiary of Parent or any of their respective properties before any court or
arbitrator or any Governmental Entity which would reasonably be expected to have
a Parent Material Adverse Effect.
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(b) Parent and its Subsidiaries are in compliance with all
applicable laws, ordinances, rules and regulations of any federal, state, local
or foreign governmental authority applicable to their respective businesses and
operations, except for such violations, if any, which, in the aggregate, would
not reasonably be expected to have a Parent Material Adverse Effect. All Permits
required to conduct the business of Parent and its Subsidiaries have been
obtained, are in full force and effect and are being complied with except for
such violations and failures to have Permits in full force and effect, if any,
which, individually or in the aggregate, would not reasonably be expected to
have a Parent Material Adverse Effect.
SECTION 4.10 TAX TREATMENT. Neither Parent nor any of its affiliates has
taken any action or knows of any fact, agreement, plan or other circumstance
that is reasonably likely to prevent the Transaction from qualifying as a
reorganization under the provisions of Section 368(a) of the Code.
SECTION 4.11 INTERIM OPERATIONS OF MERGER SUB. Merger Sub was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement and has not engaged in any business activities or conducted any
operations other than in connection with the transactions contemplated by this
Agreement.
ARTICLE V
COVENANTS OF THE PARTIES
SECTION 5.1 CONDUCT OF THE BUSINESS OF THE COMPANY. Except as (i)
contemplated by this Agreement, (ii) set forth on Schedule 5.1 of the Company
Disclosure Schedule, or (iii) agreed in writing by Parent, after the date hereof
and prior to the Appointment Time, the Company agrees as to itself and its
Subsidiaries that the Company and its Subsidiaries shall conduct their
respective operations according to the ordinary course of business consistent
with past practice, and each of the Company and its Subsidiaries will use
commercially reasonable efforts to preserve intact its present business
organization, to keep available the services of its present officers and
employees and to maintain satisfactory relationships with licensors, licensees,
suppliers, contractors, distributors, customers and others having business
relationships with it. Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the Appointment Time, neither the
Company nor any of its Subsidiaries shall, without the prior written consent of
Parent (which consent shall not be unreasonably withheld):
(a) declare, set aside or pay any dividend or other distribution
with respect to any shares of capital stock of the Company or any Subsidiary of
the Company (other than dividends or other distributions in the ordinary course
of business consistent with past practice from a wholly owned Subsidiary of the
Company to the Company), or repurchase, redeem or acquire any outstanding shares
of capital stock or other equity securities of, or other ownership interests in,
the Company or any Subsidiary of the Company;
(b) amend any provision of the Certificate of Incorporation, Bylaws
or similar organizational documents of, or any material term of any outstanding
security issued by, the Company or any Subsidiary (other than any wholly owned
Subsidiary) of the Company;
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(c) incur, assume or guarantee any indebtedness for borrowed money
other than borrowings under existing short term credit facilities not in excess
of $500,000 in the aggregate;
(d) change any method of accounting or accounting practice by the
Company or any Subsidiary of the Company, except for any such change required by
reason of a change in GAAP;
(e) (i) establish, adopt or amend any employee benefit plan, (ii)
grant any severance, termination or similar pay to any director, officer or
employee of the Company or any Subsidiary of the Company, (iii) enter into any
employment, deferred compensation or other similar Contract (or any amendment to
any such existing Contract) with any director, officer or employee of the
Company or any Subsidiary of the Company, (iv) increase benefits payable under
any existing severance or termination pay or similar policies or employment
Contract or (v) increase compensation, bonus or other benefits payable to
directors, officers or employees of the Company or any Subsidiary of the
Company, in each case other than with respect to employees (other than officers
of the Company or any Subsidiary of the Company) in the ordinary course of
business consistent with past practice;
(f) hire any employee at the level of Vice President or above or
with an annual base salary in excess of $150,000, or promote any employee except
in order to fill a position vacated after the date of this Agreement;
(g) sell, issue or grant (or authorize the sale, issuance or grant
of) any Company Securities or securities of any Subsidiary of the Company other
than pursuant to (i) Company Options outstanding as of the date of this
Agreement; (ii) the Warrant; or (iii) the terms of the Company ESPP;
(h) amend or waive any of its rights under, or accelerate the
vesting under, any provision of any of the Option Plans, any provision of any
agreement evidencing any outstanding Company Option or any restricted stock
purchase agreement, or otherwise modify any of the terms of any outstanding
option, warrant or other security or any related agreement;
(i) acquire, lease, license or dispose of assets material to the
Company and its Subsidiaries, except for sales of inventory in the ordinary
course of business consistent with past practice, or acquire or dispose of
capital stock of any third party or enter into any similar transaction, or merge
or consolidate with any third party;
(j) enter into any joint venture, partnership or similar agreement
with any Person other than a wholly owned Subsidiary of the Company;
(k) modify, amend or terminate any Material Contracts, or waive,
release or assign any material rights or claims under any Material Contracts, or
enter into any Material Contracts, except in the ordinary course of business
consistent with past practice;
(l) make any capital expenditure (except that the Company may make
capital expenditures that, when added to all other capital expenditures made on
behalf of the Company after the date of this Agreement and prior to the
Appointment Time, do not exceed the Company's forecasted capital expenditures
for such period as previously provided to Parent);
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(m) commence or settle any action, suit or proceeding except for
actions, suits or proceedings involving only the receipt of money by the Company
or any Subsidiary of the Company or the payment by the Company or any Subsidiary
of the Company of no more than $250,000 in the aggregate; or
(n) authorize, commit or agree to take any of the foregoing actions
except as otherwise permitted by this Agreement.
SECTION 5.2 STOCKHOLDER APPROVAL; PREPARATION OF REGISTRATION STATEMENT
AND PROXY STATEMENT/PROSPECTUS.
(a) If approval of the Company's stockholders is required by
applicable law in order to consummate the Merger other than pursuant to Section
253 of DGCL, Parent and the Company shall, as soon as practicable following the
Appointment Time, prepare and the Company shall file with the SEC the Proxy
Statement and Parent and the Company shall prepare and Parent shall file with
the SEC a post-effective amendment to the Registration Statement (the
"POST-EFFECTIVE AMENDMENT") for the offer and sale of Parent Shares pursuant to
the Merger and in which the Proxy Statement will be included as a prospectus.
Each of the Company and Parent shall use commercially reasonable efforts to have
the Post-Effective Amendment declared effective under the Securities Act as
promptly as practicable after such filing. The Company will use commercially
reasonable efforts to cause the Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after the Post-Effective Amendment is
declared effective under the Securities Act. Parent shall also take any action
(other than qualifying to do business in any jurisdiction in which it is not now
so qualified or filing a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the issuance
of Parent Shares in the Merger and the Company shall furnish all information
concerning the Company and the holders of capital stock of the Company as may be
reasonably requested in connection with any such action and the preparation,
filing and distribution of the Proxy Statement. No filing of, or amendment or
supplement to, or correspondence to the SEC or its staff with respect to, the
Post-Effective Amendment will be made by Parent, or with respect to the Proxy
Statement will be made by the Company, without providing the other party a
reasonable opportunity to review and comment thereon. Parent will advise the
Company, promptly after it receives notice thereof, of the time when the
Post-Effective Amendment has become effective or any supplement or amendment has
been filed, the issuance of any stop order, the suspension of the qualification
of the Parent Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or any request by the SEC for amendment of the
Post-Effective Amendment or comments thereon and responses thereto or requests
by the SEC for additional information. The Company will advise Parent, promptly
after it receives notice thereof, of any request by the SEC for the amendment of
the Proxy Statement or comments thereon and responses thereto or requests by the
SEC for additional information. If at any time prior to the Effective Time any
information relating to the Company or Parent, or any of their respective
affiliates, officers or directors, should be discovered by the Company or Parent
which should be set forth in an amendment or supplement to either of the
Post-Effective Amendment or the Proxy Statement, so that any of such documents
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto and an
appropriate amendment or
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supplement describing such information shall be promptly filed with the SEC and,
to the extent required by law, disseminated to the stockholders of the Company.
(b) If approval of the Company's stockholders is required by
applicable law in order to consummate the Merger, other than pursuant to Section
253 of the DGCL, the Company shall establish, prior to or as soon as practicable
following the date upon which the Post-Effective Amendment becomes effective, a
record date (which shall be prior to or as soon as practicable following the
date upon which the Post-Effective Amendment becomes effective) for, duly call,
give notice of, convene and hold a meeting of its stockholders (the "COMPANY
SPECIAL MEETING") for the purpose of considering the approval and adoption of
this Agreement and (with the consent of Parent) such other matters as may in the
reasonable judgment of the Company be appropriate for consideration at the
Company Special Meeting. Once the Company Special Meeting has been called and
noticed, the Company shall not postpone or adjourn the Company Special Meeting
(other than for the absence of a quorum) without the consent of Parent. The
Post-Effective Amendment and the Proxy Statement shall include the opinion of
Credit Suisse First Boston referred to in Section 3.17 hereof and, subject to
the Company's right, pursuant to Section 5.4 hereof, to withhold, withdraw,
modify, change or fail to make the Recommendations, the Board of Directors of
the Company shall include in the Post-Effective Amendment and the Proxy
Statement the Recommendations. Unless the Board of Directors of the Company
shall have withheld, withdrawn, modified, changed or failed to make its
Recommendations in compliance with Section 5.4, the Company shall use
commercially reasonable efforts to take all actions necessary or advisable to
secure the vote or consent of stockholders required by the DGCL to effect the
Offer and the Merger. Notwithstanding anything to the contrary contained in this
Agreement, the Company's obligation to establish a record date for, call, give
notice of, convene and hold the Company Special Meeting in accordance with this
Section 5.2(b) shall not be limited by or otherwise affected by the
commencement, disclosure, announcement or submission of any Acquisition Proposal
(as defined hereinafter).
(c) The Company and Parent shall cooperate with one another (i) in
connection with the preparation of the Proxy Statement and the Registration
Statement, (ii) in determining whether any action by or in respect of, or filing
with, any Governmental Entity is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement and (iii) in seeking any such actions, consents, approvals or waivers
or making any such filings, furnishing information required in connection
therewith or with the Proxy Statement and the Registration Statement and seeking
timely to obtain any such actions, consents, approvals or waivers.
(d) Notwithstanding clauses (a) and (b) above, if Merger Sub shall
own by virtue of the Offer or otherwise at least 90% of the outstanding shares
of Company Common Stock, the parties hereto shall take all necessary actions
(including actions referred to in clause (a) above, as applicable) to cause the
Merger to become effective, as soon as practicable after the expiration of the
Offer, as it may be extended in accordance with the requirements of Section
1.1(a) hereof, without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
SECTION 5.3 ACCESS TO INFORMATION; CONFIDENTIALITY AGREEMENT. Upon
reasonable advance notice, between the date hereof and the Closing Date, each of
the Company and Parent shall (i) give the other, its respective counsel,
financial advisors, auditors and
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other authorized representatives (collectively, "REPRESENTATIVES") reasonable
access during normal business hours to the offices, properties, books and
records of such party and its Subsidiaries, (ii) furnish to the other and the
other's Representatives such financial and operating data and other information
relating to such party, its Subsidiaries and their respective operations as such
Persons may reasonably request and (iii) instruct such party's employees,
counsel and financial advisors to cooperate with the other in its investigation
of the business of such party and its Subsidiaries; PROVIDED THAT any
information and documents received by the other party or its Representatives
(whether furnished before or after the date of this Agreement) shall be held in
accordance with the Confidentiality Agreement dated as of March 16, 2001 between
Parent and the Company (the "CONFIDENTIALITY AGREEMENT"), which, subject to
Section 8.10, shall remain in full force and effect until the Effective Time
pursuant to the terms thereof, notwithstanding the execution and delivery of
this Agreement or the termination hereof.
SECTION 5.4 NO SOLICITATION. From the date hereof until the Effective
Time or, if earlier, the termination of this Agreement, the Company shall not,
whether directly or indirectly through its respective officers, directors,
advisors, Representatives or other agents, (a) solicit, initiate or encourage
any Acquisition Proposal (as defined hereinafter); (b) engage in discussions or
negotiations with, or disclose any non-public information relating to the
Company or its Subsidiaries or afford access to the properties, books or records
of the Company or its Subsidiaries to, any Person (other than Parent or any
designees of Parent) concerning or in connection with an Acquisition Proposal,
(c) withhold, withdraw, modify or change in a manner adverse to Parent, or fail
to make, any of its Recommendations or approve, endorse or recommend an
Acquisition Proposal or (d) release or permit the release of any Person from, or
waive or permit the waiver of any provision of, any confidentiality,
"standstill" or similar agreement (other than as required pursuant to the terms
thereof as in effect on the date hereof) under which the Company or any of its
Subsidiaries has any rights, or fail to use commercially reasonable efforts to
enforce or cause to be enforced each such agreement at the request of Parent;
PROVIDED, HOWEVER, that in each case, if (i) after the date of this Agreement,
an unsolicited, bona fide written Acquisition Proposal is made to the Company
and is not withdrawn; (ii) the Company provides Parent with prior notice of any
meeting of the Company's Board of Directors (which notice shall be given at the
same time notice is given to the Company's directors) at which such Board of
Directors will consider and determine whether such Acquisition Proposal is, or
could reasonably be expected to be, a Superior Proposal (as defined
hereinafter); (iii) the Company's Board of Directors believes in good faith,
after consultation with the Company's financial advisor, that such Acquisition
Proposal is, or could reasonably be expected to be, a Superior Proposal; (iv)
the Company's Board of Directors believes in good faith, after consultation with
the Company's outside legal counsel, that the failure to engage in such
negotiations or discussions, provide such information, so withhold, withdraw,
modify, change or fail to make its Recommendations, so approve, endorse or
recommend such Acquisition Proposal or release or fail to enforce such
"standstill" or similar agreement is inconsistent with the fiduciary duties of
the Board of Directors of the Company under applicable law; (v) at or prior to
furnishing any such nonpublic information to, entering into discussions or
negotiations with, or releasing from a "standstill" or similar agreement, or
failing to enforce such a provision against, any Person, the Company gives
Parent written notice of the identity of such Person and of the Company's
intention to furnish nonpublic information to, enter into discussions or
negotiations with, or release from a "standstill" or similar agreement or fail
to enforce such a provision against, such Person, and the Company receives from
such Person an executed confidentiality agreement (including "standstill"
provisions) not substantially less favorable to the Company than the
Confidentiality Agreement; and
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(vi) at the time of or prior to furnishing any such nonpublic information to
such Person, the Company furnishes such nonpublic information to Parent (to the
extent such nonpublic information has not been previously furnished by the
Company to Parent), then the Company may furnish information with respect to the
Company and its Subsidiaries to such Person, participate with such Person in
negotiations regarding such Acquisition Proposal, enter into discussions or
negotiations with, or release from a "standstill" or similar agreement or fail
to enforce such a provision against, such Person, withhold, withdraw, modify or
change in a manner adverse to Parent, or fail to make, its Recommendations, or
fail to make, approve, endorse or recommend such Acquisition Proposal, as the
case may be.
The Company shall immediately cease and cause to be terminated any
existing discussions with any Person that relate to any Acquisition Proposal.
The Company shall promptly (and in any event within one (1) business
day) after receipt of any Acquisition Proposal provide Parent with a copy of any
written Acquisition Proposal and the name of the Person making such Acquisition
Proposal and a written statement with respect to any non-written Acquisition
Proposal received, which statement shall include the identity of the Person
making the Acquisition Proposal and the terms thereof. The Company shall
promptly (and in any event within one (1) business day) advise Parent of any
material modification or proposed modification thereto.
For purposes of this Agreement, "ACQUISITION PROPOSAL" means any offer
or proposal for a merger, consolidation, recapitalization, liquidation or other
business combination involving the Company or the acquisition or purchase of 15%
or more of any class of equity securities of the Company, or any tender offer
(including self-tenders) or exchange offer that if consummated would result in
any Person beneficially owning 15% or more of any class of any equity securities
of the Company, or any transaction involving the sale, lease, license or other
disposition (by sale, merger or otherwise) of 15% or more of the book or market
value of assets (including, without limitation, securities of any Subsidiary of
the Company) of the Company and its Subsidiaries, taken as a whole; PROVIDED,
HOWEVER, that for purposes of Section 7.3(a)(ii) hereof, all references in this
sentence to "15%" shall be deemed to be replaced with references to "40%." As
used herein, a "SUPERIOR PROPOSAL" shall mean an unsolicited, bona fide written
proposal made by a third party involving the purchase by such third party of a
majority of the outstanding Company Securities or 50% or more of the book or
market value of the assets (including, without limitation, securities of any
Subsidiary of the Company) of the Company and its Subsidiaries taken as a whole
which the Company's Board of Directors believes in good faith, after
consultation with the Company's financial advisor, (i) is reasonably likely to
result in a transaction providing greater benefits to the Company's stockholders
than those provided pursuant to this Agreement and (ii) if applicable, is
reasonably capable of being financed by the Person making such Acquisition
Proposal. Nothing contained in this Agreement shall prohibit the Company or the
Company's Board of Directors from taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making any disclosure required by applicable law; PROVIDED, HOWEVER, that
unless the conditions set forth in clauses (i) through (vi) of the proviso to
the first sentence of this Section 5.4 are satisfied, the Company's Board of
Directors may not withhold, withdraw, modify or change in a manner adverse to
Parent, or fail to make, any of its Recommendations in connection with, or
approve, endorse or recommend, any Acquisition Proposal. The Company also will
promptly
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request each Person that has executed, on or after January 1, 2000, a
confidentiality agreement in connection with its consideration of an Acquisition
Proposal or equity investment to return all confidential information heretofore
furnished to such Person by or on behalf of the Company or any of its
Subsidiaries.
SECTION 5.5 DIRECTOR AND OFFICER LIABILITY.
(a) Parent and the Company agree that all rights to indemnification
and all limitations on liability existing in favor of any Indemnitee (as defined
in Section 5.5(b) hereof) as provided in the Certificate of Incorporation or
Bylaws of the Company or an agreement between an Indemnitee and the Company or a
Subsidiary of the Company as in effect as of the date hereof shall survive the
Merger and continue in full force and effect in accordance with its terms.
(b) After the Effective Time, Parent shall cause the Surviving
Corporation to indemnify and hold harmless the individuals who on or prior to
the Effective Time were officers or directors of the Company and any of its
Subsidiaries (the "INDEMNITEES") to the same extent as set forth in subsection
(a) above.
(c) For six (6) years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering each
person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount at least as
favorable as those of such policy in effect on the date hereof; PROVIDED,
HOWEVER, that in no event shall the Surviving Corporation be required to expend
more than an amount per year equal to the lesser of $450,000 or 200% of current
annual premiums paid by the Company for such insurance (the "MAXIMUM AMOUNT") to
maintain or procure insurance coverage pursuant hereto; PROVIDED, FURTHER, that
if the amount of the annual premiums necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, the Surviving Corporation shall
maintain or procure, for such six-year period, the most advantageous policies of
directors' and officers' insurance obtainable for an annual premium equal to the
Maximum Amount.
(d) The obligations of Parent and the Surviving Corporation under
this Section 5.5 shall not be terminated or modified in such a manner as to
adversely affect any Indemnitee to whom this Section 5.5 applies without the
consent of such affected Indemnitee (it being expressly agreed that the
Indemnitees to whom this Section 5.5 applies shall be third party beneficiaries
of this Section 5.5).
(e) In the event Parent or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity in
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, honor the indemnification obligations set forth
in this Section 5.5.
SECTION 5.6 COMMERCIALLY REASONABLE EFFORTS. Upon the terms and subject
to the conditions of this Agreement, each party hereto shall use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary,
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proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
SECTION 5.7 CERTAIN FILINGS.
(a) Each party hereto shall file with the Department of Justice and
the Federal Trade Commission a Pre-Merger Notification and Report Form pursuant
to the HSR Act in respect of the transactions contemplated hereby as soon as
practicable (and each party hereto will use its commercially reasonable efforts
to cause such filings to be made within five (5) business days after the date of
this Agreement), and each party will use commercially reasonable efforts to take
or cause to be taken all actions necessary, including to promptly and fully
comply with any requests for information from regulatory Governmental Entities,
to obtain any clearance, waiver, approval or authorization relating to the HSR
Act that is necessary to enable the parties to consummate the transactions
contemplated by this Agreement. Without limiting the provisions of this Section
5.7, each party hereto shall use commercially reasonable efforts to promptly
make the filings required to be made by it with all foreign Governmental
Entities in any jurisdiction in which the parties believe it is necessary or
advisable.
(b) The Company and Parent shall each use commercially reasonable
efforts to resolve such objections, if any, as may be asserted with respect to
the Offer or the Merger or any other transaction contemplated by this Agreement
under any Antitrust Law (as defined in Section 5.7(d)). If any administrative,
judicial or legislative action or proceeding is instituted (or threatened to be
instituted) challenging the Offer or the Merger or any other transaction
contemplated by this Agreement as violative of any Antitrust Law, the Company
and Parent shall each cooperate to contest and resist any such action or
proceeding, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the Offer or the Merger or any other transaction contemplated by
this Agreement, including, without limitation, by pursuing all reasonable
avenues of administrative and judicial appeal. Notwithstanding anything to the
contrary in this Agreement, none of Parent, any of Parent's Subsidiaries or the
Surviving Corporation shall be required (and the Company shall not, without the
prior written consent of Parent, agree, but shall if so directed by Parent,
agree) to hold separate or divest any of their respective assets or operations
or enter into any consent decree or licensing or other arrangement with respect
to any of their assets or operations.
(c) Each of the Company and Parent shall promptly inform the other
party of any material communication received by such party from the Federal
Trade Commission, the Antitrust Division of the Department of Justice or any
other governmental or regulatory authority regarding any of the transactions
contemplated hereby.
(d) "ANTITRUST LAW" means the Xxxxxxx Antitrust Act, as amended, the
Xxxxxxx Antitrust Act, as amended, and all other federal, state and foreign
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate competition or actions having the purpose or effect of monopolization
or restraint of trade.
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SECTION 5.8 PUBLIC ANNOUNCEMENTS. Neither the Company, Parent nor any of
their respective affiliates shall issue or cause the publication of any press
release or other public announcement with respect to the Offer or the Merger,
this Agreement or the other transactions contemplated hereby without the prior
written consent of the other party, except as may be required by law or by any
listing agreement with, or the policies of, a national securities exchange in
which circumstance reasonable efforts to consult will still be required to the
extent practicable.
SECTION 5.9 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company, any deeds, bills
of sale, assignments or assurances and to take and do, in the name and on behalf
of the Company, any other actions to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest in,
to and under any of the rights, properties or assets of the Company acquired or
to be acquired by the Surviving Corporation, as a result of, or in connection
with, the Merger.
SECTION 5.10 EMPLOYEE MATTERS.
(a) From and for a period of one year following the date of Closing,
Parent shall, at its election, either (i) continue (or cause Parent's
Subsidiaries to continue) any Plans to which the Company and/or any of its
Subsidiaries is a party, as such Plans are in effect on the date hereof (the
"Company Plans"), or (ii) arrange for each participant in any Company Plans who
become employees of Parent or any of its Subsidiaries ("Company Participants")
to be eligible to participate in any similar plans or programs of Parent on
terms no less favorable than those offered to similarly situated employees of
Parent. On and after the date of Closing, employees of the Company and any of
its Subsidiaries who become and remain employees of Parent or any of its
Subsidiaries shall be treated no less favorably than similarly situated
employees of Parent or any of its Subsidiaries with respect to compensation,
employee benefits and terms and conditions of employment.
(b) No later than one year from the date of Closing, Parent shall,
or shall cause Parent's Subsidiaries to, arrange for all Company Participants
not then participating to become eligible to be participants in all employee
benefit plans of Parent on terms no less favorable than those offered to
similarly situated employees of Parent.
(c) To the extent service is relevant for purposes of eligibility,
participation or vesting under any employee benefit plan, program or arrangement
established or maintained by Parent or its Subsidiaries for the benefit of
employees of the Surviving Corporation or its Subsidiaries, or for benefit
accrual (other than under any defined benefits pension plan and other than where
it would result in a duplication of benefits), then, to extent permitted by law
and except as set forth on Schedule 5.10 of the Parent Disclosure Schedule, the
employees of the Surviving Corporation and its Subsidiaries shall be credited
for service accrued prior to the date of Closing with the Company or its
Subsidiaries, and with respect to any welfare benefit plans to which such
employee may become eligible, Parent and its Subsidiaries shall cause such plans
to provide credit for the year of Closing for documented co-payments,
deductibles and maximum out-of-pocket payments by such employees and shall, to
extent permitted by law, waive all pre-existing condition exclusions and waiting
periods, other than limitations or waiting periods that had not been satisfied,
under any welfare plans maintained by the Company and its Subsidiaries prior to
the date of Closing.
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SECTION 5.11 TAX-FREE REORGANIZATION TREATMENT. Prior to and after the
Appointment Time and through the Effective Time, each of Parent and the Company
shall take all reasonable actions necessary to cause the Transaction to qualify
as a reorganization under the provisions of Section 368(a) of the Code and to
obtain the opinions of counsel referred to in Annex I hereto, and neither party
will take any action inconsistent therewith. Each of the Company and Parent
shall provide customary tax representation letters prior to the Appointment
Time.
SECTION 5.12 BLUE SKY PERMITS. Parent shall use commercially reasonable
efforts to obtain, prior to the effective date of the Registration Statement,
all necessary state securities laws or "blue sky" permits and approvals required
to carry out the transactions contemplated by this Agreement, the Offer and the
Merger, and will pay all expenses incident thereto, PROVIDED, HOWEVER, that
Parent shall not be required (a) to qualify to do business as a foreign
corporation in any jurisdiction in which it is not now qualified or (b) to file
a general consent to service of process in any jurisdiction.
SECTION 5.13 LISTING. Parent shall use commercially reasonable efforts
to cause the Parent Shares to be issued in the Merger or upon exercise of
Assumed Options to be listed on the NYSE, subject to notice of official issuance
thereof, prior to the Closing Date.
SECTION 5.14 STATE TAKEOVER LAWS. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation is or may become applicable to the Offer, the Merger, or the
Stockholder Agreements, the Company and Parent shall each take such actions as
are necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of any such statute or
regulation on the Offer, the Merger and the Stockholder Agreements.
SECTION 5.15 CERTAIN NOTIFICATIONS. Between the date hereof and the
Effective Time, each party shall promptly notify the other party hereto in
writing after becoming aware of the occurrence of any event which will, or is
reasonably likely to, result in the failure to satisfy any of the conditions
specified in Annex I hereto or Article VI, as applicable.
SECTION 5.16 VOTING OF SHARES. Parent and Merger Sub agree to vote all
shares of Company Common Stock acquired in the Offer or otherwise beneficially
owned by them or any of their Subsidiaries as of the applicable record date in
favor of adoption of this Agreement at the Company Stockholder Meeting.
SECTION 5.17 ACTION BY BOARD OF DIRECTORS. If the Company delivers the
Section 16 Information (as defined in this Section 5.17) to Parent at least 10
days prior to the Effective Time, then, prior to the Effective Time, the Board
of Directors of Parent, or an appropriate committee of non-employee directors
thereof, shall adopt a resolution consistent with the interpretative guidance of
the SEC so that (i) the assumption of the Company Options held by Company
Insiders (as defined hereinafter) in the Merger, and (ii) the receipt by Company
Insiders of Parent Common Stock in exchange for Company Common Stock pursuant to
the Merger, shall in each case be an exempt transaction for purposes of Section
16 of the Exchange Act. For purposes of this Section 5.17, (1) "COMPANY INSIDER"
shall mean any officer or director of the Company who may become a covered
person of Parent for purposes of Section 16 of the Exchange Act and (2)
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"SECTION 16 INFORMATION" shall mean the following information for each Company
Insider: (A) the number of shares of Company Common Stock held by such
individual and expected to be exchanged for shares of Parent Common Stock in the
Merger; and (B) the number of Company Options held by such individual and
expected to be converted into options to purchase shares of Parent Common Stock
in connection with the Merger.
SECTION 5.18 FORM S-8. Parent agrees to file a registration statement on
Form S-8 for the shares of Parent Common Stock issuable with respect to the
Assumed Options as soon as is reasonably practicable following the Effective
Time, but in no event later than five (5) business days following the Effective
Time. Parent shall use its commercially reasonable efforts to maintain the
effectiveness of such registration statement (and maintain the current status of
the prospectus contained therein) for so long as such Assumed Options remain
outstanding.
SECTION 5.19 COMFORT LETTER. The Company shall use all reasonable
efforts to cause to be delivered to Parent a letter of the Company's independent
accountants, dated no more than two business days before the date on which the
Registration Statement becomes effective (and reasonably satisfactory in form
and substance to Parent), that is customary in scope and substance for "comfort
letters" delivered by independent public accountants in connection with
registration statements similar to the Registration Statement.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or, to the extent permitted by applicable law, the
waiver on or prior to the Effective Time of each of the following conditions:
(a) If required by the DGCL, this Agreement shall have been adopted
and the Merger approved by the stockholders of the Company;
(b) Merger Sub shall have accepted for exchange and exchanged all of
the shares of Company Common Stock tendered pursuant to the Offer;
(c) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Merger or the other transactions contemplated by this Agreement; and
(d) The Registration Statement or the Post-Effective Amendment, as
the case may be, shall have become effective under the Securities Act and shall
not be the subject of any stop order or proceedings seeking a stop order, and
any material "blue sky" and other state securities laws applicable to the
registration and qualification of the Company Common Stock shall have been
complied with.
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ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION. Notwithstanding anything herein to the
contrary, this Agreement may be terminated and the transactions contemplated by
this Agreement may be abandoned:
(a) by the mutual written consent of the Company and Parent;
(b) at any time prior to the Effective Time, by either the Company
or Parent, if:
(i)the Offer shall have expired or been terminated in accordance
with the terms of this Agreement without Parent or Merger Sub having accepted
for exchange any shares of Company Common Stock pursuant to the Offer; PROVIDED,
HOWEVER, that the right to terminate this Agreement under this Section 7.1(b)(i)
shall not be available to any party whose action or failure to act has been a
principal cause of the expiration or termination of the Offer without shares of
Company Common Stock having been accepted for exchange thereunder if such action
or failure to act constitutes a breach of this Agreement;
(ii) the Offer has not been consummated on or before September
30, 2001 (the "OUTSIDE DATE"); PROVIDED, HOWEVER, that the right to terminate
this Agreement under this Section 7.1(b)(ii) shall not be available to any party
whose action or failure to act has been a principal cause of the failure of the
Offer to have been consummated on or before such date if such action or failure
to act constitutes a breach of this Agreement; or
(iii) there shall be any applicable law or regulation that makes
consummation of the Offer or the Merger illegal or otherwise prohibited or any
judgment, injunction, order or decree of any Governmental Entity having
competent jurisdiction enjoining or otherwise prohibiting the Company or Parent
from consummating the Offer or the Merger is entered and such judgment,
injunction, judgment or order shall have become final and nonappealable;
(c) by Parent if, prior to the Appointment Time, (i) the Board of
Directors of the Company shall have withdrawn or modified or amended in any
respect adverse to Parent any of its Recommendations or shall otherwise have
made a disclosure to stockholders of the Company or a public announcement that
makes it reasonably apparent that, absent the restrictions of Section 5.4 of
this Agreement, the Board of Directors of the Company would so withdraw, modify
or amend any of its Recommendations, (ii) the Board of Directors of the Company
shall have recommended to the stockholders of the Company any Acquisition
Proposal or shall have resolved or announced an intention to do so, (iii) a
tender offer or exchange offer for 15% or more of the outstanding shares of
Company Common Stock (other than the Offer) is announced or commenced and either
(A) the Board of Directors of the Company recommends acceptance of such tender
offer or exchange offer by its stockholders, or (B) within ten (10) business
days of such commencement, the Board of Directors of the Company shall have
failed to recommend against acceptance of such tender offer or exchange offer by
its stockholders or (iv) a material breach of Section 5.4 occurs and Parent
provides a written termination notice relating thereto within ten (10) days of
Parent becoming aware thereof;
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(d) by the Company, prior to the Appointment Time (but not less than
five business days after Parent's receipt of the written notice referred to in
clause (ii) of this Section 7.1(d)), to enter into a definitive acquisition
agreement providing for the consummation of a Superior Proposal, PROVIDED that
if each of the following conditions is satisfied: (i) the Company is not in
breach of its obligations under Section 5.4 hereof in connection with such
Superior Proposal, (ii) the Company shall have notified Parent in writing that
the Company has received a Superior Proposal and intends to enter into a
definitive acquisition agreement providing for the consummation of such Superior
Proposal, attaching the most current version of such agreement to such notice,
and (iii) Parent shall not have made, within five (5) business days after
receipt of the Company's written notice of its intention to enter into a
definitive acquisition agreement providing for the consummation of a Superior
Proposal, an offer from Parent that the Board of Directors of the Company
determines in good faith, after consultation with its financial advisor and its
outside legal counsel, provides greater benefits to the Company's stockholders
than such Superior Proposal;
(e) by the Company, at any time prior to the Appointment Time, upon
a material breach of any covenant or agreement on the part of Parent set forth
in this Agreement, or if any representation or warranty of Parent shall have
been untrue or inaccurate when made or shall have become untrue or inaccurate
such that, in the aggregate, in the case of such representations and warranties,
such untruths or inaccuracies would reasonably be expected to have a Parent
Material Adverse Effect; PROVIDED, HOWEVER, that if such untruth or inaccuracy
in Parent's representations and warranties or breach by Parent is curable by
Parent through exercise of commercially reasonable efforts, then the Company may
not terminate this Agreement pursuant to this Section 7.1(e) until the earlier
of (i) the expiration of a thirty (30)-day period after delivery of written
notice from the Company to Parent of such untruth or inaccuracy or breach, or
(ii) the date on which Parent ceases to exercise commercially reasonable efforts
to cure such untruth or inaccuracy or breach (it being understood that the
Company may not terminate this Agreement pursuant to this Section 7.1(e) if such
untruth or inaccuracy or breach by Parent is cured during such thirty-day
period); or
(f) by Parent, at any time prior to the Appointment Time, upon a
breach of any covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have been
untrue or inaccurate when made or shall have become untrue or inaccurate such
that Merger Sub would not be required to accept for exchange any shares of
Company Common Stock tendered pursuant to the Offer by virtue of Sections (b),
(c) or (d) of Annex I hereto if the expiration of the Offer occurred on the
date the breach, untruth or inaccuracy is communicated in writing to the
Company by Parent; PROVIDED, HOWEVER, that if such untruth or inaccuracy in the
Company's representations and warranties or breach by the Company is curable by
the Company through exercise of commercially reasonable efforts, then Parent
may not terminate this Agreement pursuant to this Section 7.1(f) until the
earlier of (i) the expiration of a thirty (30) day period after delivery of
written notice from Parent to the Company of such untruth or inaccuracy or
breach, or (ii) the date on which the Company ceases to exercise commercially
reasonable efforts to cure such untruth or inaccuracy or breach (it being
understood that Parent may not terminate this Agreement pursuant to this Section
7.1(f) if such untruth or inaccuracy or breach by the Company is cured during
such thirty-day period).
The party desiring to terminate this Agreement shall give written notice
of such termination to the other party.
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SECTION 7.2 EFFECT OF TERMINATION. Except for any willful breach of this
Agreement by any party hereto (which willful breach and liability therefor shall
not be affected by the termination of this Agreement or the payment of any
Termination Fee (as defined in Section 7.3(a) hereof)), if this Agreement is
terminated pursuant to Section 7.1 hereof, then this Agreement shall become void
and of no effect with no liability on the part of any party hereto; PROVIDED,
HOWEVER, that notwithstanding such termination the agreements contained in
Sections 7.2, 7.3 and 8.7 hereof and, subject to Section 8.10, the proviso to
Section 5.3 hereof shall survive the termination hereof.
SECTION 7.3 FEES; EXPENSES.
(a) The Company agrees to pay Parent in immediately available funds
by wire transfer an amount equal to $33 million (the "TERMINATION FEE") if:
(i)this Agreement is terminated by Parent pursuant to Section
7.1(c) hereof;
(ii) this Agreement is terminated by Parent or the Company, as
applicable, pursuant to Section 7.1(b)(i) or Section 7.1(b)(ii) hereof, if (A)
following the date hereof and prior to such termination of this Agreement, an
Acquisition Proposal shall have been publicly announced and shall not have been
publicly and unconditionally withdrawn, and (B) within twelve (12) months
following such termination of this Agreement, either (1) the transaction
contemplated by any Acquisition Proposal (a "COMPANY ACQUISITION") is
consummated (it being understood that such Acquisition Proposal need not be the
same Acquisition Proposal identified in clause (A) of this Section 7.3(a)(ii)),
or (2) the Company enters into a definitive agreement providing for a Company
Acquisition and such Company Acquisition is later consummated; or
(iii) this Agreement is terminated by the Company pursuant to
Section 7.1(d) hereof.
(b) The Company shall pay the Termination Fee paid pursuant to this
Section 7.3 (if all conditions thereto have been satisfied) (i) at or prior to
the termination of this Agreement by the Company in the circumstances described
in Section 7.3(a)(iii) hereof, or (ii) not later than one (1) business day after
the termination of this Agreement by Parent in the circumstances described in
Section 7.3(a)(i) hereof, or (iii) at or prior to the consummation of the
applicable Company Acquisition in the case of a Termination Fee payable pursuant
to Section 7.3(a)(ii) hereof.
(c) All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses, PROVIDED, HOWEVER, that Parent and the Company shall
share equally all fees and expenses, other than attorneys' and accountants'
fees, incurred in connection with (i) the filing, printing and mailing of the
Registration Statement, the Preliminary Prospectus, the Offer Documents, the
Post-Effective Amendment and the Proxy Statement and any amendments or
supplements thereto and (ii) the filing by any of the parties hereto of the
Pre-Merger Notification and Report Forms relating to the Offer and the Merger
under the HSR Act and the filing of any notice or other document under any
applicable foreign Antitrust Law. No party shall pay any expenses of any
stockholder of the Company.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement to any
party hereunder shall be in writing and deemed given upon (a) personal delivery,
(b) transmitter's confirmation of a receipt of a facsimile transmission, (c)
confirmed delivery by a standard overnight carrier or when delivered by hand or
(d) when mailed in the United States by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by notice given hereunder):
If to the Company, to:
C-Cube Microsystems Inc.
0000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
If to Parent and Merger Sub, to:
LSI Logic Corporation
0000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxx Godward LLP
3000 El Camino Real
Xxxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx X. Xxxxx, Esq.
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SECTION 8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time. All
other covenants and agreements contained herein which by their terms are to be
performed in whole or in part, or which prohibit actions, subsequent to the
Effective Time, shall survive the Effective Time in accordance with their terms.
SECTION 8.3 INTERPRETATION. References herein to the "knowledge" of a
party shall mean the actual knowledge of the executive officers of such party.
Whenever the words "include," "includes" or "including" are used in this
Agreement they shall be deemed to be followed by the words "without limitation."
As used in this Agreement, the term "affiliate" shall have the meaning set forth
in Rule 12b-2 promulgated under the Exchange Act.
The article and section headings contained in this Agreement are solely
for the purpose of reference, are not part of the agreement of the parties
hereto and shall not in any way affect the meaning or interpretation of this
Agreement. Any matter disclosed pursuant to any Schedule of the Company
Disclosure Schedule or the Parent Disclosure Schedule shall not be deemed to be
an admission or representation as to the materiality of the item so disclosed.
SECTION 8.4 AMENDMENTS, MODIFICATION AND WAIVER.
(a) Except as may otherwise be provided herein, any provision of
this Agreement may be amended, modified or waived by the parties hereto, by
action taken by or authorized by their respective Board of Directors, prior to
the Closing Date if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Company and Parent or, in the case
of a waiver, by the party against whom the waiver is to be effective; PROVIDED,
HOWEVER, that after the adoption of this Agreement by the stockholders of the
Company, no such amendment shall be made except as allowed under applicable law.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 8.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that neither the Company
nor Parent may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other party hereto.
Merger Sub may assign any of its rights and delegate or otherwise transfer any
of its obligations under this Agreement to any wholly-owned Subsidiary of Parent
without the consent of the Company or any other Person.
SECTION 8.6 SPECIFIC PERFORMANCE. The parties acknowledge and agree that
any breach of the terms of this Agreement would give rise to irreparable harm
for which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.
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SECTION 8.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof) as to all matters, including, but not limited to, matters of
validity, construction, effect, performance and remedies.
SECTION 8.8 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated herein are not affected in any manner
materially adverse to any party hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner.
SECTION 8.9 THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the Company and its successors and permitted assigns, with respect to
the obligations of Parent under this Agreement, and for the benefit of Parent
and its successors and permitted assigns, with respect to the obligations of the
Company under this Agreement, and this Agreement shall not, except to the extent
necessary to enforce the provisions of Section 5.5 hereof, be deemed to confer
upon or give to any other third party any remedy, claim, liability,
reimbursement, cause of action or other right.
SECTION 8.10 ENTIRE AGREEMENT. This Agreement, including the Annex, the
Exhibit and the schedules hereto, constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
other prior agreements or understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof; PROVIDED,
HOWEVER, that Sections 1 through 7, Sections 9 through 13 and the third
paragraph of Section 8 of the Confidentiality Agreement shall not be superseded
and shall remain in full force and effect (it being understood that the first
two paragraphs of Section 8 of the Confidentiality Agreement, and the
"standstill" provisions contained therein, shall be deemed to have terminated as
of the date of this Agreement and shall be of no further force or effect);
PROVIDED, HOWEVER, that the first two (2) paragraphs of Section 8 of the
Confidentiality Agreement shall again become operative in accordance with their
terms upon the termination of this Agreement (other than (i) in the case of such
a termination of this Agreement pursuant to Section 7.1(c), Section 7.1(d) or
Section 7.1(f) or under circumstances pursuant to which the Termination Fee may
become payable pursuant to Section 7.3(a)(ii) and (ii) under circumstances
pursuant to which such provisions would have terminated by their terms if such
provisions had been operative during the period between the date hereof and such
termination of this Agreement).
SECTION 8.11 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be deemed an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 8.12 RULES OF CONSTRUCTION. The parties hereto agree that they
have been represented by counsel during the negotiation and execution of this
Agreement and, therefore,
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waive the application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.
SECTION 8.13 SUBMISSION TO JURISDICTION. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined
exclusively in any Delaware state or federal court sitting in Newcastle County.
The parties hereto hereby (a) submit to the exclusive jurisdiction of any state
or federal court sitting in the Newcastle County for the purpose of any action
arising out of or relating to this Agreement brought by any party hereto, and
(b) irrevocably waive, and agree not to assert by way of motion, defense or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the action is brought in an
inconvenient forum, that the venue of the action is improper or that this
Agreement or the transactions contemplated hereby may not be enforced in or by
any of the above-named courts.
SECTION 8.14 MERGER SUB COMPLIANCE. Whenever this Agreement requires
Merger Sub to take action, such requirement shall be deemed to include an
undertaking on the part of Parent to cause Merger Sub to take such action.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
LSI LOGIC CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
C-CUBE MICROSYSTEMS INC.
By: /s/ XXXXX XXXXXX
---------------------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive
Officer
CLOVER ACQUISITION CORP.
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Secretary
[Signature Page to Agreement and Plan of Reorganization]
52
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, subject to the terms
of the Agreement and Plan of Reorganization to which this Annex I is attached
(the "Agreement"), Merger Sub shall not be required to accept for exchange or
exchange or deliver any shares of Parent Common Stock for (subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Merger Sub's obligation to pay for or return tendered
shares of Company Common Stock after the termination or withdrawal of the
Offer)) any shares of Company Common Stock tendered, if by the expiration of the
Offer (as it may be extended in accordance with the requirements of Section
1.1(a) of the Agreement), (1) the Minimum Condition shall not have been
satisfied, (2) the applicable waiting period under the HSR Act shall not have
expired or been terminated, (3) any applicable waiting periods, consents or
clearances under foreign Antitrust Laws shall not have expired, been terminated
or been obtained, (4) the Registration Statement shall not have become effective
under the Securities Act or shall be the subject of any stop order or
proceedings seeking a stop order, (5) the shares of Parent Common Stock to be
issued in the Offer and the Merger shall not have been approved for listing on
the NYSE, subject to official notice of issuance, and shall not be exempt from
such requirement under then applicable laws, regulations and rules of the NYSE,
(6) Parent shall not have received (or Parent shall have received and Xxxxxx
Godward LLP shall have subsequently rescinded) an opinion of Cooley Godward LLP,
in form and substance reasonably satisfactory to Parent and to the Company, on
the basis of customary facts, representations and assumptions set forth in such
opinion, to the effect that the Transaction will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code, (7) the Company shall not have received (or the Company shall have
received and Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, shall
have subsequently rescinded) an opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, in form and substance reasonably satisfactory to
Parent and to the Company, on the basis of customary facts, representations and
assumptions set forth in such opinion, to the effect that the Transaction will
be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, or (8) at any time on or after the date
of the Agreement and prior to the acceptance for exchange of shares of Company
Common Stock pursuant to the Offer, any of the following conditions exist and
are continuing:
(a) there shall have been any action taken, or any statute, law,
ordinance, rule, regulation, injunction, judgment, order or decree proposed,
entered, enacted, enforced, promulgated, issued or deemed applicable to the
Offer or the Merger by any Governmental Entity, other than the application of
the waiting period provisions of the HSR Act to the Offer or the Merger or there
shall be pending or threatened any action, suit or proceeding by any
Governmental Entity against Parent, the Company, Merger Sub or any of their
respective Subsidiaries, that seeks to (or there shall be pending any action,
suit or proceeding by any other Person (which Person is party to a Company
Contract that was not provided or made available to Parent on or prior to the
date hereof) against Parent, the Company, Merger Sub or any of their respective
Subsidiaries (which action, suit or proceeding is based on such Person's rights
under such Company Contract) that is substantially likely to) (i) prohibit, or
make illegal, the acceptance for payment of or payment for shares of Company
Common Stock or the consummation of the Offer or the Merger, (ii) render Merger
Sub
53
unable to accept for payment or pay for some or all of the shares of Company
Common Stock, (iii) impose material limitations on the ability of Parent or
Merger Sub effectively to exercise full rights of ownership of the shares of
Company Common Stock, including the right to vote the shares of Company Common
Stock purchased by it on all matters properly presented to the Company's
stockholders, (iv) prohibit or impose any material limitations on Parent's
direct or indirect ownership or operation (or that of any of its affiliates) of
all or a material portion of their or the Company's businesses or assets, (v)
compel Parent or its affiliates to dispose of or hold separate any portion of
the business or assets of the Company or Parent and or their respective
Subsidiaries which would be material in the context of the Company and its
Subsidiaries taken as a whole or Parent and its Subsidiaries taken as a whole,
(vi) oblige the Company, Parent or any of their respective Subsidiaries to pay
material damages or otherwise become subject to materially adverse consequences
in connection with any of the transactions contemplated by the Agreement or
(vii) otherwise result in a Company Material Adverse Effect (disregarding for
this purpose the effect of clause (iv) of the definition of such term) or, as a
result of the transactions contemplated by the Agreement, a Parent Material
Adverse Effect;
(b) the Company shall have materially breached any of its covenants,
obligations or agreements under the Agreement;
(c) the representations and warranties of the Company contained in
the Agreement (other than those set forth in Section 3.4 of the Agreement) (i)
shall not have been true and correct as of the date of the Agreement or (ii)
shall not be true and correct on and as of the date of the expiration of the
Offer (as it may be extended in accordance with the requirements of Section
1.1(a) of the Agreement) with the same force and effect as if made as of such
date, except (A) in each case or in the aggregate, as does not constitute, and
is not reasonably expected to result in, a Company Material Adverse Effect, (B)
for changes contemplated by the Agreement, and (C) for those representations and
warranties which address matters only as of a particular date (which
representations shall have been true and correct (subject to the Company
Material Adverse Effect qualifications and limitations set forth in the
preceding clause (A)) as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties, (x)
all "Company Material Adverse Effect" and materiality qualifications and other
qualifications based on the word "material" contained in such representations
and warranties shall be disregarded, and (y) any update of or modification to
the Company Disclosure Schedule made or purported to have been made after the
date of the Agreement shall be disregarded);
(d) the representations and warranties of the Company contained in
Section 3.4 of the Agreement shall not have been true and correct in all
material respects as of the date of the Agreement;
(e) except as set forth in the Company Disclosure Schedule, since
December 31, 2000, there shall not have been a Company Material Adverse Effect
or the occurrence of any event or the arising of any circumstance that would
reasonably be expected to have a Company Material Adverse Effect; or
(f) the Merger Agreement shall have been terminated in accordance
with its terms;
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54
which in the good faith judgment of Parent, in any such case, makes it
inadvisable to proceed with the Offer or the acceptance for payment of or
payment for the shares of Company Common Stock.
The foregoing conditions are for the sole benefit of Parent and Merger
Sub and may, subject to the terms of the Agreement, be waived by Parent and
Merger Sub, in whole or in part at any time and from time to time, in the sole
discretion of Parent and Merger Sub. The failure by Parent and Merger Sub at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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