Exhibit 2.01
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INTERSIL CORPORATION,
ECHO ACQUISITION, INC.
and
ELANTEC SEMICONDUCTOR, INC.
March 10, 2002
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE MERGER.....................................................1
1.1. The Merger.....................................................1
1.2. Effective Time; Closing........................................2
1.3. Effects of the Merger..........................................2
1.4. Certificate of Incorporation and Bylaws........................2
1.5. Directors and Officers of the Surviving Corporation............2
1.6. Structure of Transaction.......................................2
ARTICLE II CONVERSION OF SECURITIES.......................................3
2.1. Conversion of Capital Stock....................................3
2.2. Fractional Shares; Adjustments.................................3
2.3. Exchange of Certificates.......................................4
2.4. Dissenting Shares..............................................6
2.5. Treatment of Stock Options; ESPP...............................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................8
3.1. Organization and Standing......................................8
3.2. Subsidiaries...................................................8
3.3. Corporate Power and Authority..................................9
3.4. Capitalization of the Company..................................9
3.5. Conflicts; Consents and Approvals.............................10
3.6. No Material Adverse Effect....................................11
3.7. Company SEC Documents.........................................11
3.8. Taxes.........................................................12
3.9. Compliance with Law...........................................13
3.10. Intellectual Property.........................................13
3.11. Title to Properties...........................................17
3.12. Registration Statement; Joint Proxy Statement.................17
3.13. Litigation....................................................17
3.14. Brokerage and Finder's Fees; Expenses.........................18
3.15. Reorganization................................................18
3.16. Employee Benefit Plans........................................18
3.17. Contracts.....................................................21
3.18. Labor Matters.................................................22
3.19. Undisclosed Liabilities.......................................22
3.20. Operation of the Company's Business; Relationships............22
3.21. Permits; Compliance...........................................23
3.22. Environmental Matters.........................................23
3.23. Opinion of Financial Advisor..................................24
3.24. Board Recommendation..........................................24
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3.25. Related Party Transactions....................................24
3.26. Takeover Statutes; Rights Plan................................24
3.27. Certain Transactions..........................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB......................................24
4.1. Organization and Standing.....................................24
4.2. Subsidiaries..................................................25
4.3. Corporate Power and Authority.................................25
4.4. Capitalization of Parent......................................26
4.5. Conflicts; Consents and Approvals.............................27
4.6. No Material Adverse Effect....................................27
4.7. Parent SEC Documents..........................................27
4.8. Registration Statement; Joint Proxy Statement.................28
4.9. Litigation....................................................28
4.10. Valid Issuance................................................28
4.11. Financing.....................................................28
4.12. Undisclosed Liabilities.......................................29
4.13. Operation of Parent's Business; Relationships.................29
4.14. Permits; Compliance...........................................29
4.15. Environmental Matters.........................................29
4.16. Board Recommendation..........................................30
4.17. Opinion of Financial Advisor..................................30
4.18. Related Party Transactions....................................30
4.19. Brokerage and Finder's Fees; Expenses.........................30
4.20. Reorganization................................................30
4.21. Takeover Statutes.............................................30
4.22. Taxes.........................................................31
4.23. Certain Transactions..........................................31
4.24. Intellectual Property.........................................31
ARTICLE V COVENANTS.....................................................32
5.1. Mutual Covenants..............................................32
5.2. Covenants of Parent...........................................34
5.3. Covenants of the Company......................................38
ARTICLE VI CONDITIONS....................................................43
6.1. Conditions to the Obligations of Each Party...................43
6.2. Conditions to Obligations of the Company......................44
6.3. Conditions to Obligations of Parent...........................45
ARTICLE VII TERMINATION AND AMENDMENT.....................................46
7.1. Termination...................................................46
7.2. Effect of Termination.........................................47
7.3. Termination Fee; Expenses.....................................48
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7.4. Amendment.....................................................49
7.5. Extension; Waiver.............................................49
ARTICLE VIII MISCELLANEOUS.................................................50
8.1. No Survival of Representations and Warranties.................50
8.2. Notices.......................................................50
8.3. Interpretation; Definitions...................................51
8.4. Counterparts..................................................52
8.5. Entire Agreement..............................................52
8.6. Third Party Beneficiaries.....................................53
8.7. Governing Law.................................................53
8.8. Specific Performance..........................................53
8.9. Assignment....................................................53
8.10. Expenses......................................................53
8.11. Disclosure Schedules..........................................53
Exhibit A-1 Form of Company Voting Agreement
Exhibit A-2 Form of Parent Voting Agreement
Exhibit B Form of Company Affiliate Letter
iii
DEFINED TERMS
Term Page
---- ----
1983 Option Plan.............................................................10
1994 Incentive Plan..........................................................10
1995 Incentive Plan..........................................................10
1995 Option Plan.............................................................10
2001 Incentive Plan..........................................................10
Agreement.....................................................................1
Antitrust Laws...............................................................33
Applicable Laws..............................................................13
Assumed Purchase Right........................................................7
Cash Consideration............................................................3
CERCLA.......................................................................24
Certificate of Merger.........................................................2
Certificates..................................................................4
Claim........................................................................35
Closing.......................................................................2
Closing Date..................................................................2
Code..........................................................................1
Commission....................................................................7
Company.......................................................................1
Company 423 Plan..............................................................7
Company Acquisition..........................................................49
Company Affiliate Letter.....................................................43
Company Board Recommendation.................................................24
Company Bylaws................................................................9
Company Certificate...........................................................9
Company Common Stock.........................................................10
Company Disclosure Schedule...................................................9
Company Employees............................................................38
Company Intellectual Property................................................14
Company Option................................................................7
Company Permits..............................................................23
Company Preferred Stock......................................................10
Company Registered Intellectual Property.....................................14
Company SEC Documents........................................................12
Company Stockholders Meeting.................................................38
Competing Transaction........................................................41
Confidentiality Agreement....................................................43
Contract.....................................................................21
Converted Option..............................................................7
Costs........................................................................48
CSFB.........................................................................31
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D&O Insurance................................................................36
DGCL..........................................................................1
Dissenting Common Stock.......................................................6
Effective Time................................................................2
Environmental Laws...........................................................24
Environmental Permit.........................................................24
Exchange Act.................................................................11
Exchange Agent................................................................4
Exchange Fund.................................................................4
Exchange Ratio................................................................3
Foreign Antitrust Laws.......................................................11
Governmental Authority.......................................................11
Hazardous Materials..........................................................24
HSR Act......................................................................11
HSR Authority................................................................33
Indemnified Person...........................................................35
Intellectual Property........................................................13
Joint Proxy Statement........................................................17
knowledge....................................................................53
Material Adverse Effect......................................................52
Merger........................................................................1
Merger Consideration..........................................................3
Merger Sub....................................................................1
Multiemployer Plan...........................................................20
Multiple Employer Plan.......................................................20
Parent........................................................................1
Parent 423 Plan...............................................................8
Parent Board Recommendation..................................................30
Parent Bylaws................................................................25
Parent Certificate...........................................................25
Parent Class A Common Stock..................................................26
Parent Class B Common Stock..................................................26
Parent Common Stock..........................................................26
Parent Disclosure Schedule...................................................25
Parent Permits...............................................................30
Parent Preferred Stock.......................................................26
Parent SEC Documents.........................................................28
Parent Stockholder Proposal..................................................26
Parent Stockholders Meeting..................................................34
Patents......................................................................14
Plan.........................................................................18
Prospectus...................................................................17
PTO..........................................................................14
Qualified Plan...............................................................19
Registered Intellectual Property.............................................14
Registration Statement.......................................................17
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Release......................................................................24
Rights........................................................................3
Rights Agreement..............................................................3
Xxxxxxxxx Xxxxxxxx...........................................................18
Secretary of State............................................................2
Securities Act................................................................5
Stated Percentage............................................................49
Stock Consideration...........................................................3
subsidiary...................................................................53
Superior Proposal............................................................41
Surviving Corporation.........................................................2
Takeover Statute.............................................................24
Tax..........................................................................13
Tax Return...................................................................13
Taxes........................................................................13
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and
entered into as of the 10th day of March, 2002, by and among Intersil
Corporation, a Delaware corporation ("Parent"), Echo Acquisition, Inc., a
Delaware corporation and wholly-owned subsidiary of Parent ("Merger Sub"), and
Elantec Semiconductor, Inc., a Delaware corporation (the "Company").
BACKGROUND
A. The Board of Directors of Parent has determined that a
combination with the Company is in the best interests of its stockholders.
B. The Board of Directors of the Company has determined that
a combination with Parent is in the best interests of its stockholders.
C. In effectuation of the foregoing, the respective Boards of
Directors of Parent, Merger Sub and the Company have approved and declared
advisable and in the best interests of their respective stockholders the merger
of the Company with and into Merger Sub, with Merger Sub as the surviving
corporation (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 (the "DGCL").
D. Concurrently with the execution of this Agreement, and as
a condition and inducement to Parent's and Merger Sub's and the Company's
willingness to enter into this Agreement, each of the directors and officers of
the Company and Parent is entering into a Voting Agreement in the forms attached
as Exhibits A-1 and A-2, respectively (the "Voting Agreements").
E. The parties intend that the Merger constitute a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
F. The parties intend that the Merger be accounted for as a
purchase transaction for financial accounting purposes.
TERMS
In consideration of the foregoing and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions hereof,
and in accordance with the provisions of the DGCL, at the Effective Time (as
defined in Section 1.2(a)), the Company shall be merged with and into Merger
Sub. As a result of the Merger, the
separate corporate existence of the Company shall cease and Merger Sub shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
1.2. Effective Time; Closing. (a) Concurrently with the Closing (as
defined in Section 1.2(b)), the parties shall cause the Merger to be consummated
by filing with the Secretary of State of the State of Delaware (the "Secretary
of State") a certificate of merger (the "Certificate of Merger") in accordance
with Section 251 of the DGCL. The Merger shall become effective (the "Effective
Time") when the Certificate of Merger has been filed with the Secretary of State
or at such later time as shall be agreed upon by the parties and specified in
the Certificate of Merger.
(b) The closing of the transactions contemplated hereby (the
"Closing") shall be held at the offices of Dechert, 0000 XxxXxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx Xxxxx, Xxxxxxxxxx, at 10:00 a.m. local time on the second business
day following the date on which the conditions set forth in Article VI shall
have been satisfied or waived, or at such other place or time or on such other
date as Parent and the Company may agree. The date on which the Closing takes
place is referred to herein as the "Closing Date."
1.3. Effects of the Merger. From and after the Effective Time, the
Merger shall have the effects set forth in the DGCL.
1.4. Certificate of Incorporation and Bylaws. At the Effective Time,
the Certificate of Incorporation and Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation and Bylaws, respectively, of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law, except
that as of the Effective Time the Certificate of Incorporation shall be amended
to change the name of the Surviving Corporation to "Elantec Semiconductor, Inc."
1.5. Directors and Officers of the Surviving Corporation. The
directors and corporate officers of Merger Sub immediately prior to the
Effective Time shall be the directors and corporate officers of the Surviving
Corporation immediately following the Effective Time.
1.6. Structure of Transaction. Notwithstanding the foregoing, Parent
may elect, by written notice delivered to the Company, and upon the terms and
subject to the conditions set forth in this Agreement, at any time prior to the
Effective Time, that instead of merging the Company into Merger Sub, Merger Sub
or another direct wholly owned subsidiary of Parent shall merge with and into
the Company, with the effects set forth in the DGCL; provided that no material
delay or adverse effect (including on the treatment of the Merger as a
"reorganization" under the Code) to the Merger or the other transactions
contemplated hereby results from the making of such election. In such event, the
separate corporate existence of Merger Sub shall cease and the Company shall
continue as the Surviving Corporation and shall continue under the name "Elantec
Semiconductor, Inc.," and references in this Agreement to the "Merger" shall
refer to the reverse merger described in this Section 1.6. None of the
Company's, Parent's or Merger Sub's representations, warranties or covenants
shall be affected by whether the Company or Merger Sub is the Surviving
Corporation in the Merger.
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ARTICLE II
CONVERSION OF SECURITIES
2.1. Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Sub, the Company
or their respective stockholders:
(a) Subject to the other provisions of this Article II, each
share of Company Common Stock (as defined in Section 3.4) issued and outstanding
immediately prior to the Effective Time (other than any shares of Company Common
Stock to be cancelled pursuant to Section 2.1(b) and Dissenting Common Stock (as
defined in Section 2.4)), including the associated preferred stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement dated as of
September 14, 1998 between the Company and Mellon Investor Services, LLC (the
"Rights Agreement"), shall be converted into and represent the right to receive
(i) 1.24 (the "Exchange Ratio") shares of Parent Class A Common Stock (as
defined in Section 4.4) (the "Stock Consideration") and (ii) $8.00 in cash
without interest (the "Cash Consideration," and together with the Stock
Consideration, the "Merger Consideration"). Subject to the other provisions of
this Article II, as of the Effective Time, each such share of Company Common
Stock shall, by virtue of the Merger, cease to be outstanding and shall be
cancelled and retired, and each holder of a certificate representing any such
shares shall thereafter cease to have any rights with respect thereto except the
right to receive (i) the Merger Consideration payable in respect of such shares
of Company Common Stock, (ii) certain dividends and other distributions in
accordance with Section 2.3(c) and (iii) cash in lieu of fractional shares of
Parent Class A Common Stock in accordance with Section 2.2(a), without interest.
(b) Each share of capital stock of the Company held in the
treasury of the Company shall be cancelled and retired and no Merger
Consideration or any other payment shall be made in respect thereof.
(c) Each issued and outstanding share of capital stock of
Merger Sub shall remain outstanding and shall represent capital stock of the
Surviving Corporation following the Effective Time; provided, that if, pursuant
to Section 1.6, the Company is the Surviving Corporation in the Merger, then
each issued and outstanding share of capital stock of Merger Sub shall be
converted into one issued and outstanding share of capital stock of the
Surviving Corporation following the Effective Time.
2.2. Fractional Shares; Adjustments. (a) No fractional shares of
Parent Class A Common Stock shall be issued as a result of the conversion
provided for in Section 2.1(a). In lieu of any such fractional shares, the
holder of a certificate previously evidencing Company Common Stock, upon
presentation of such fractional interest represented by an appropriate
certificate for Company Common Stock to the Exchange Agent (as defined in
Section 2.3) pursuant to Section 2.3, shall be entitled to receive a cash
payment therefor in an amount equal to the value (determined with reference to
the closing price of a share of Parent Class A Common Stock as quoted on the
Nasdaq National Market on the last full trading day immediately prior to the
Closing Date) of such fractional interest. Such payment with respect to
fractional shares is
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merely intended to provide a mechanical rounding off of, and is not a separately
bargained for, consideration. If more than one certificate representing shares
of Company Common Stock shall be surrendered for the account of the same holder,
the number of shares of Parent Class A Common Stock for which certificates have
been surrendered shall be computed on the basis of the aggregate number of
shares represented by the certificates so surrendered. Any payment owed with
respect to fractional shares shall be rounded upward to the nearest cent.
(b) If, prior to the Effective Time, Parent shall declare a
stock dividend or other similar distribution of Parent Class A Common Stock or
securities convertible into shares of Parent Class A Common Stock, or effect a
stock split, reclassification, recapitalization, stock combination or other
change with respect to the Parent Class A Common Stock, the Exchange Ratio shall
be adjusted to reflect such dividend, distribution, stock split,
reclassification, recapitalization, stock combination or other change.
2.3. Exchange of Certificates.
(a) Exchange Agent. Promptly following the Effective Time,
Parent shall deposit, or shall cause to be deposited, with EquiServe LLC or such
other exchange agent as may be designated by Parent and reasonably acceptable to
the Company (the "Exchange Agent"), for the benefit of the holders of Company
Common Stock, for exchange in accordance with this Section 2.3, certificates
representing shares of Parent Class A Common Stock issuable pursuant to Section
2.1(a) in exchange for outstanding shares of Company Common Stock and cash in an
amount required to be paid pursuant to this Article II (such shares of Parent
Class A Common Stock and cash, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as practicable after the
Effective Time, Parent shall instruct the Exchange Agent to mail to each holder
of record of a certificate or certificates that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock whose
shares were converted into the right to receive shares of Parent Class A Common
Stock pursuant to Section 2.1(a) ("Certificates"), (i) a letter of transmittal
in customary form, which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Parent may reasonably specify, including offering holders of
Certificates the ability to hold their shares of Parent Class A Common Stock in
book entry form in lieu of the certificates provided for below and (ii)
instructions for effecting the surrender of the Certificates in exchange for
certificates representing shares of Parent Class A Common Stock. Upon surrender
of a Certificate for cancellation to the Exchange Agent, together with a duly
executed letter of transmittal, the holder of such Certificate shall be entitled
to receive in exchange therefor (x) a certificate or certificates representing
that whole number of shares of Parent Class A Common Stock which such holder has
the right to receive pursuant to Section 2.1(a) in such denominations and
registered in such names as such holder may request and (y) a check representing
the amount of Cash Consideration and cash in lieu of
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fractional shares, if any, and unpaid dividends and distributions, if any, which
such holder has the right to receive pursuant to the provisions of this Article
II, after deduction of any required withholding tax. No interest will be paid or
accrued on the Cash Consideration or the cash in lieu of fractional shares, if
any, and unpaid dividends and distributions, if any, payable to holders of
shares of Company Common Stock. In the event of a transfer of ownership of
shares of Company Common Stock which is not registered on the transfer records
of the Company, a certificate representing the proper number of shares of Parent
Class A Common Stock, together with a check for the Cash Consideration plus cash
to be paid in lieu of fractional shares, if any, and unpaid dividends and
distributions, if any, may be issued to such transferee if the Certificate
representing such shares of Company Common Stock held by such transferee is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
(c) Distributions with Respect to Unexchanged Shares.
Notwithstanding any other provision of this Agreement, no dividend or other
distribution declared or made after the Effective Time with respect to any
shares of Parent Class A Common Stock having a record date after the Effective
Time shall be paid to the holder of any unsurrendered Certificate, and no Merger
Consideration or cash payment in lieu of fractional shares shall be paid to any
such holder, until the holder shall surrender such Certificate as provided in
this Section 2.3. Subject to the effect of Applicable Laws (as defined in
Section 3.9), there shall be paid to the holder of the certificates representing
whole shares of Parent Class A Common Stock issued in exchange therefor, without
interest, (i) at the time of surrender of such Certificate, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore payable with respect to such whole shares of Parent Class A Common
Stock and not paid, less the amount of any withholding taxes that may be
required thereon, and (ii) at the appropriate payment date subsequent to
surrender of such Certificate, the amount of dividends or other distributions
with a record date after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such whole shares of Parent
Class A Common Stock, less the amount of any withholding taxes that may be
required thereon.
(d) No Further Ownership Rights in Company Common Stock. The
Merger Consideration paid upon surrender of Certificates in accordance with the
terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock represented thereby, and
there shall be no further registration of transfers on the stock transfer books
of the Company of shares of Company Common Stock outstanding immediately prior
to the Effective Time. All Certificates presented to the Surviving Corporation
after the Effective Time for any reason shall be cancelled and exchanged as
provided in this Section 2.3. Certificates surrendered for exchange by any
person constituting an "affiliate" of the Company for purposes of Rule 145(c)
under the Securities Act of 1933, as amended (together with the rules and
regulations thereunder, the "Securities Act"), shall not be exchanged until
Parent has received written undertakings from such person in the form attached
as Exhibit B.
(e) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to holders of Company Common Stock 180 days
after the date of the mailing required by Section 2.3(b) shall be delivered to
Parent upon demand therefor, and holders of Certificates previously representing
shares of Company Common Stock who have not theretofore complied with this
Section 2.3 shall thereafter look only to Parent for the Merger Consideration
payable in respect of such shares of Company Common Stock, any cash in lieu of
fractional shares of Parent Class A Common Stock to which they are entitled
pursuant to Section
5
2.2(a), or any dividends or other distributions with respect to Parent Class A
Common Stock to which they are entitled pursuant to Section 2.3(c), in each
case, without any interest thereon.
(f) No Liability. Neither Parent, the Surviving Corporation
nor the Exchange Agent shall be liable to any person in respect of any shares of
Parent Class A Common Stock (or dividends or distributions with respect thereto)
or cash from the Exchange Fund 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 seven years after the Effective Time of the
Merger (or immediately prior to such earlier date on which any shares of Parent
Class A Common Stock, any dividends or distributions with respect thereto, or
any cash in lieu of fractional shares in respect of such Certificate would
otherwise escheat to or become the property of any Governmental Authority (as
defined in Section 3.5)), any such shares, dividends or distributions or cash in
respect of such Certificate shall, to the extent permitted by Applicable Laws,
become the property of Parent, free and clear of all claims or interest of any
person previously entitled thereto.
(g) Investment of Exchange Fund. The Exchange Agent shall
invest the cash included in the Exchange Fund, as directed by Parent, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to Parent upon termination of the Exchange Fund pursuant to Section 2.3(e).
(h) Missing Certificates. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact and providing an appropriate indemnity or surety bond by the person
claiming such Certificate to be lost, stolen or destroyed, the Exchange Agent
will pay in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration, cash in lieu of fractional shares and any dividends and other
distributions, if any, deliverable in respect thereof pursuant to this
Agreement.
2.4. Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, if and to the extent required by the DGCL, shares of
Company Common Stock that are issued and outstanding immediately prior to the
Effective Time and which are held by holders of such shares of Company Common
Stock who have properly exercised appraisal rights with respect thereto (the
"Dissenting Common Stock") in accordance with Section 262 of the DGCL, shall not
be converted into the right to receive the Merger Consideration, and each holder
of such shares of Dissenting Common Stock shall be entitled to receive payment
of the appraised value of such shares of Dissenting Common Stock in accordance
with the provisions of Section 262 of the DGCL unless and until such holder
fails to perfect or effectively withdraw or otherwise loses his, her or its
right to appraisal and payment under the DGCL. If, after the Effective Time, any
such holder fails to perfect or effectively withdraws or loses such right, such
shares of Dissenting Common Stock shall thereupon be treated as if they had been
converted into and have become exchangeable for, at the Effective Time, the
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 appraisals of shares of Dissenting Common Stock. The Company shall not,
except with the prior written consent of Parent, make any payment with respect
to any demands for appraisals or offer to settle or settle any such demands, and
Parent shall have the right to participate in all negotiations and proceedings
with respect to such demands.
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2.5. Treatment of Stock Options; ESPP. (a) Prior to the Effective
Time, the Company shall take all such actions as may be necessary to cause each
unexpired and unexercised option to purchase Company Common Stock (each, a
"Company Option") outstanding as of the Effective Time to be automatically
converted at the Effective Time into an option (a "Converted Option") to
purchase that number of shares of Parent Class A Common Stock equal to the
number of shares of Company Common Stock issuable immediately prior to the
Effective Time upon exercise of the Company Option (without regard to actual
restrictions on exercisability) multiplied by the Option Exchange Ratio (with
the number of shares rounded down to the nearest whole share), with an exercise
price equal to the exercise price which existed under the corresponding Company
Option divided by the Option Exchange Ratio (with the exercise price rounded up
to the nearest whole cent), and with other terms and conditions that are the
same as the terms and conditions of such Company Option immediately before the
Effective Time. "Option Exchange Ratio" means the sum of (x) the Exchange Ratio
plus (y) the quotient of (A) $8.00 divided by (B) the closing price of a share
of Parent Class A Common Stock on the Nasdaq National Market on the last full
trading day immediately prior to the Closing Date, rounded to the nearest third
decimal place. In connection with the issuance of Converted Options, Parent
shall (i) reserve for issuance the number of shares of Parent Class A Common
Stock that will become subject to Converted Options pursuant to this Section 2.5
and (ii) from and after the Effective Time, upon exercise of Converted Options,
make available for issuance all shares of Parent Class A Common Stock covered
thereby, subject to the terms and conditions applicable thereto. Notwithstanding
the foregoing, any Company Option that was subject to Section 422 of the Code
immediately prior to the Effective Time shall be substituted with a Converted
Option in accordance with Section 424 of the Code. Holders of a Company Option
shall be credited with service for purposes of vesting in the Converted Option
to the same extent such holders were credited with service for purposes of
vesting in the Company Option immediately prior to Closing.
(b) Parent agrees to use its reasonable efforts to file with
the Securities and Exchange Commission (the "Commission") within five business
days after the Closing Date a registration statement on Form S-8 or other
appropriate form under the Securities Act to register the shares of Parent Class
A Common Stock issuable upon exercise of the Converted Options and use its
reasonable efforts to cause such registration statement to remain effective
until the exercise or expiration of such options.
(c) All outstanding purchase rights (each an "Assumed Purchase
Right") under the Company's 1995 Employee Stock Purchase Plan (the "Company 423
Plan") shall be assumed by Parent. The Assumed Purchase Rights shall continue to
have, and be subject to, the terms and conditions set forth in the Company 423
Plan and the documents governing the Assumed Purchase Rights, except that the
number of shares of Parent Class A Common Stock issuable upon exercise thereof
shall equal the number of shares of Company Common Stock otherwise issuable upon
exercise thereof multiplied by the Option Exchange Ratio and the purchase price
of such shares of Parent Class A Common Stock on the Purchase Date (as defined
in the Company 423 Plan) shall be the lower of (i) the quotient determined by
dividing 85% of the fair market value per share of the Company Common Stock on
the commencement date of the Assumed Purchase Right by the Option Exchange Ratio
or (ii) 85% of the fair market value per share of the Parent Class A Common
Stock on the applicable Purchase Date (with the
7
number of shares rounded down to the nearest whole share and the purchase price
rounded up to the nearest whole cent). Notwithstanding the foregoing, any
assumed Purchase Right shall be converted from a right to purchase Company
Common Stock under the Company 423 Plan to the right to purchase Parent Class A
Common Stock in accordance with Section 424 of the Code. The Assumed Purchase
Rights shall be exercised on the applicable Purchase Date, and each participant
shall, accordingly, be issued shares of Parent Class A Common Stock at such
time. The Company 423 Plan and all outstanding purchase rights thereunder shall
terminate on the last day of any Offering Period (as defined in the Company 423
Plan) in effect on the date hereof, and no additional purchase rights shall be
granted and no additional Offering Periods shall commence following the date
hereof. Parent agrees that from and after the Effective Time, employees of
Company may participate in Parent's employee stock purchase plan (the "Parent
423 Plan"), to the extent permitted by the Code, beginning with the first
Purchase Period (as defined in the Parent 423 Plan), subject to the terms and
conditions of such plan, following the cessation of participation in the Company
423 Plan.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce Parent and Merger Sub to enter into this
Agreement, the Company hereby represents and warrants to Parent and Merger Sub
as follows:
3.1. Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease, use and operate
its properties and to conduct its business as and when now owned, leased, used,
operated and conducted. Each subsidiary (as defined in Section 8.3) of the
Company is a corporation duly organized and validly existing and will be, as of
the Effective Time, in good standing under the laws of the jurisdiction of its
incorporation with full corporate power and authority to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted. Each of the Company and each subsidiary of
the Company is duly qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the property
it owns, leases or operates requires it to so qualify, except where the failure
to be so qualified or in good standing in such jurisdiction, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect (as defined in Section 8.3) on the Company. The Company is not in default
in the performance, observance or fulfillment of any provision of its
Certificate of Incorporation or its Bylaws, each as in effect on the date hereof
(the "Company Certificate" and the "Company Bylaws," respectively). The Company
has heretofore made available to Parent a complete and correct copy of the
Company Certificate and the Company Bylaws.
3.2. Subsidiaries. The Company does not own, directly or indirectly,
any equity or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise, except for the subsidiaries and other
entities listed in Exhibit 21 to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 2001, or set forth in Section 3.2 to the
disclosure schedule delivered by the Company to Parent and dated the date
8
hereof (the "Company Disclosure Schedule"). Except as set forth in Section 3.2
to the Company Disclosure Schedule, the Company is not subject to any obligation
or requirement to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any entity or enterprise that is not
wholly owned by the Company. Except as set forth in Section 3.2 to the Company
Disclosure Schedule, the Company owns directly or indirectly each of the
outstanding shares of capital stock (or other ownership interests having by
their terms ordinary voting power to elect a majority of directors or others
performing similar functions with respect to such subsidiary) of each of the
Company's subsidiaries, free and clear of all liens, pledges, security
interests, claims or other encumbrances. Each of the outstanding shares of
capital stock of each of the Company's subsidiaries is duly authorized, validly
issued, fully paid and nonassessable. Except as set forth in Section 3.2 of the
Company Disclosure Schedule, all of the capital stock of each subsidiary of the
Company is owned by the Company and/or one or more wholly-owned subsidiaries of
the Company. Other than as set forth in Section 3.2 to the Company Disclosure
Schedule, there are no outstanding subscriptions, options, warrants, puts,
calls, agreements, understandings, claims or other commitments or rights of any
type relating to the issuance, sale, repurchase or transfer of any capital stock
or other securities of any subsidiary of the Company, nor are there outstanding
any securities that are convertible into or exchangeable for any shares of
capital stock or other securities of any subsidiary of the Company, and neither
the Company nor any subsidiary of the Company has any obligation of any kind to
issue any additional shares of capital stock or other securities of any
subsidiary of the Company or to pay for or repurchase any shares of capital
stock or other securities of any subsidiary of the Company or any predecessor
thereof.
3.3. Corporate Power and Authority. The Company has all requisite
corporate power and authority to enter into and deliver this Agreement, to
perform its obligations hereunder and, subject to approval of the Merger and the
transactions contemplated hereby by the stockholders of the Company, to
consummate the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement by the Company have been duly
authorized by all necessary corporate action on the part of the Company, subject
to approval of the Merger and the transactions contemplated hereby by the
stockholders of the Company. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company enforceable against it in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, or (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
3.4. Capitalization of the Company. The authorized capital stock of
the Company consists solely of (a) 100,000,000 shares of common stock, par value
$.01 per share ("Company Common Stock"), and (b) 5,000,000 shares of preferred
stock, par value $.01 per share ("Company Preferred Stock"). As of March 4,
2002, (i) 23,311,485 shares were issued and outstanding, (ii) 233,000 shares
were issued and held in treasury (which does not include the shares reserved for
issuance set forth in clauses (iii) through (viii) below) and no shares were
held by subsidiaries of the Company, (iii) 32,414 shares were issuable upon the
exercise of outstanding options and no shares were reserved for issuance for
future grants pursuant to the Company's 1983 Stock Option Plan ("1983 Option
Plan"), (iv) 103,635 shares were issuable
9
upon the exercise of outstanding options and no shares were reserved for
issuance for future grants pursuant to the Company's 1994 Equity Incentive Plan
("1994 Incentive Plan"), (v) 354,993 shares were reserved for issuance pursuant
to the Company 423 Plan, (vi) 4,941,531 shares were issuable upon the exercise
of outstanding options and 37,845 shares were reserved for issuance for future
grants pursuant to the Company's 1995 Equity Incentive Plan ("1995 Incentive
Plan"), (vii) 381,667 shares were issuable upon the exercise of outstanding
options and 34,798 shares were reserved for issuance for future grants pursuant
to the Company's 1995 Directors Stock Option Plan ("1995 Option Plan"), and
(viii) 1,081,811 shares were issuable upon the exercise of outstanding options
and 967,025 shares were reserved for issuance for future grants pursuant to the
Company's 2001 Equity Incentive Plan ("2001 Incentive Plan"). As of the date
hereof, no shares of Company Preferred Stock were issued and outstanding or
reserved for issuance, except for a series of 200,000 shares of Company
Preferred Stock designated as Series A Junior Participating Preferred Stock
reserved for issuance pursuant to the Rights Agreement, none of which is issued
and outstanding as of the date hereof. Each outstanding share of Company capital
stock is duly authorized and validly issued, fully paid and nonassessable, and
has not been issued in violation of any preemptive or similar rights. Other than
as set forth in the first sentence hereof or in Section 3.4 to the Company
Disclosure Schedule, there are no outstanding subscriptions, options, warrants,
puts, calls, agreements, understandings, claims or other commitments or rights
of any type relating to the issuance, sale, repurchase or transfer by the
Company of any securities of the Company, nor are there outstanding any
securities that are convertible into or exchangeable for any shares of capital
stock of the Company, and neither the Company nor any subsidiary of the Company
has any obligation of any kind to issue any additional securities or to pay for
or repurchase any securities of the Company or any predecessor. The Company
Disclosure Schedule accurately sets forth as of March 4, 2002 the names of the
holders of, and the number of shares of Company Common Stock issuable upon
exercise of, Company Options and the exercise price and vesting schedule with
respect thereto. Between March 4, 2002 and the date of this Agreement, the
Company has not granted any options to purchase capital stock of the Company.
The Company has no agreement, arrangement or understandings to register any
securities of the Company or any of its subsidiaries under the Securities Act or
under any state securities law and has not granted registration rights to any
person or entity (other than agreements, arrangements or understandings with
respect to registration rights that are no longer in effect as of the date of
this Agreement).
3.5. Conflicts; Consents and Approvals. Except as set forth in Section
3.5 to the Company Disclosure Schedule and, in the case of (b), for any of the
following that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, neither the execution
and delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will:
(a) conflict with, or result in a breach of any provision of,
the Company Certificate or the Company Bylaws;
(b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the
10
passage of time or otherwise, would constitute a default) under, or entitle any
party (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a default under, or result in the creation
of any lien, security interest, charge or encumbrance upon any of the properties
or assets of the Company under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, contract,
undertaking, agreement, lease or other instrument or obligation to which the
Company or any of its subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Company or any of its subsidiaries or any of
their respective properties or assets; or
(d) require any action or consent or approval of, or review
by, or registration or filing by the Company or any of its affiliates with, any
local, domestic, foreign or multi-national or supra-national court, tribunal,
administrative agency or commission or other governmental or regulatory body,
agency, instrumentality or authority (a "Governmental Authority"), other than
(i) approval of the Merger and the transactions contemplated hereby by
stockholders of the Company, (ii) actions required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act"), (iii) filings and consents under
non-U.S. laws and regulations intended to prohibit, restrict or regulate actions
or transactions having the purpose or effect of monopolization, restraint of
trade, harm to competition or effectuating foreign investment ("Foreign
Antitrust Laws"), (iv) registrations, filings, consents, approvals or other
actions required under federal and state securities laws and the rules of the
Nasdaq Stock Market, Inc. as are contemplated by this Agreement, and (v) the
filing of the Certificate of Merger with the Secretary of State.
3.6. No Material Adverse Effect. Except as specifically disclosed in
the Company SEC Documents (as defined in Section 3.7) filed with the Commission
prior to the date of this Agreement, since December 30, 2001, there has been no
Material Adverse Effect on the Company.
3.7. Company SEC Documents. The Company has timely filed with the
Commission all forms, reports, schedules, statements and other documents
required to be filed by it since December 31, 1998 under the Securities Exchange
Act of 1934, as amended (together with the rules and regulations thereunder, the
"Exchange Act") or the Securities Act (such documents, as supplemented and
amended since the time of filing, collectively, the "Company SEC Documents").
The Company SEC Documents, including, without limitation, any financial
statements or schedules included or incorporated by reference therein, at the
time filed (and, in the case of registration statements and proxy statements, on
the dates of effectiveness and the dates of mailing, respectively) (a) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein (and, in the case of any prospectus, in light of the circumstances under
which they were made), not misleading, and (b) complied in all material respects
with the applicable requirements of the Exchange Act and the Securities Act, as
the case may be. The financial statements of the Company included in the Company
SEC Documents at the time filed (and, in the case of registration statements and
proxy statements, on the dates of effectiveness and the dates of mailing,
respectively) complied as to form in all material respects with applicable
accounting
11
requirements and with the published rules and regulations of the Commission with
respect thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto or, in the case of unaudited statements,
as permitted by Form 10-Q of the Commission), and fairly presented (subject, in
the case of the unaudited interim financial statements, to normal, recurring
year-end audit adjustments consistent with past practice), in all material
respects, the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. No subsidiary of
the Company is subject to the periodic reporting requirements of the Exchange
Act or required to file any form, report or other document with the Commission,
the Nasdaq Stock Market, Inc., any stock exchange or any other comparable
Governmental Authority.
3.8. Taxes. (a) The Company and its subsidiaries (i) have duly filed
all material Tax Returns (as defined in Section 3.8(d)) (including, but not
limited to, those filed on a consolidated, combined or unitary basis) required
to have been filed by the Company or its subsidiaries, all of which Tax Returns
are true and correct in all material respects; (ii) have within the time and
manner prescribed by Applicable Laws paid all material Taxes (as defined in
Section 3.8(d)), required to be paid in respect of the periods covered by such
Tax Returns or otherwise due to any Governmental Authority; (iii) have
established in accordance with their normal accounting practices and procedures,
accruals and reserves that are adequate for the payment of all Taxes not yet due
and payable; (iv) are not delinquent in the payment of any material Tax; and (v)
have not received written notice of any deficiencies for any Tax from any
Governmental Authority against the Company or any of its subsidiaries, which
deficiency has not been satisfied. Neither the Company nor any of its
subsidiaries is the subject of any currently ongoing Tax audit. With respect to
any taxable period ended prior to September 30, 1998, all federal income Tax
Returns including the Company or any of its subsidiaries have been audited by
the Internal Revenue Service or are closed by the applicable statute of
limitations. There are no liens with respect to Taxes upon any of the properties
or assets, real or personal, tangible or intangible, of the Company or any of
its subsidiaries (other than liens for Taxes not yet due). No claim has ever
been made in writing by a Governmental Authority in a jurisdiction where the
Company or its subsidiaries do not file Tax Returns that the Company or any of
its subsidiaries is or may be subject to taxation by that jurisdiction. Neither
the Company nor any of its subsidiaries has filed an election under Section
341(f) of the Code to be treated as a consenting corporation.
(b) Neither the Company nor any of its subsidiaries is
obligated by any contract, agreement or other arrangement to indemnify any other
person with respect to Taxes. Neither the Company nor any of its subsidiaries is
now or has ever been a party to or bound by any contract, agreement or other
arrangement (whether or not written and including, without limitation, any
arrangement required or permitted by Applicable Laws (including pursuant to
Treasury Regulation Section 1.1502-6 or any analogous provision of state, local
or foreign law)) that (i) requires the Company or any of its subsidiaries to
make any Tax payment to or for the account of any other person, (ii) affords any
other person the benefit of any net operating loss, net capital loss, investment
Tax credit, foreign Tax credit, charitable deduction or any other credit or Tax
attribute which could reduce Taxes (including, without limitation, deductions
and credits related to alternative minimum Taxes) of the Company or any of its
subsidiaries, or (iii)
12
requires or permits the transfer or assignment of income, revenues, receipts or
gains to the Company or any of its subsidiaries from any other person.
(c) The Company and its subsidiaries have withheld and paid
all material Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party.
(d) For purposes of this Agreement, (i) "Tax" (and, with
correlative meaning, "Taxes") means any federal, state, local or foreign income,
gross receipts, property, sales, use, license, excise, franchise, employment,
payroll, premium, withholding, alternative or added minimum, ad valorem,
inventory, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any Governmental Authority, and (ii) "Tax
Return" means any return, report or similar statement required to be filed with
respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
3.9. Compliance with Law. Except as specifically disclosed in the
Company SEC Documents filed with the Commission prior to the date hereof, the
Company is in material compliance with all applicable laws, statutes, orders,
rules, regulations, policies or guidelines promulgated, or judgments, decisions
or orders entered, by any Governmental Authority (all such laws, statutes,
orders, rules, regulations, policies, guidelines, judgments, decisions and
orders, collectively, "Applicable Laws"), relating to the Company or its
business or properties. Except as specifically disclosed in the Company SEC
Documents filed with the Commission prior to the date hereof, no material
investigation or review by any Governmental Authority with respect to the
Company is pending, or, to the knowledge of the Company, threatened, nor has any
Governmental Authority indicated in writing an intention to conduct the same.
3.10. Intellectual Property.
(a) Definitions. For the purposes of this Section 3.10, the
following terms have the following definitions:
(i) "Intellectual Property" shall mean any or all of
the following and all rights in, arising out of, or associated therewith: (i)
all United States and foreign patents and applications therefor and all
reissues, divisions, renewals, extensions, provisional, continuations and
continuations-in-part thereof ("Patents"); (ii) all inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing; (iii) all works
of authorship, copyrights, copyright registrations and applications therefor and
all other rights corresponding thereto throughout the world; (iv) all
semiconductor and semiconductor circuit designs; (v) all rights to all mask
works and reticles, mask work registrations and applications therefor; (vi) all
industrial designs and any registrations and applications therefor throughout
the world; (vii) all trade names, logos, common law trademarks and service
marks, trademark and service xxxx registrations and applications therefor and
all goodwill associated therewith throughout the world; (viii) all databases and
data collections and all rights therein throughout the world; (ix) all computer
software, including all source code,
13
object code, firmware, development tools, files, records and data, all media on
which any of the foregoing is recorded, all Web addresses, sites and domain
names; (x) any similar, corresponding or equivalent rights to any of the
foregoing; and (xi) all technical, design, end-user and other documentation
related to any of the foregoing.
(ii) "Company Intellectual Property" shall mean any
Intellectual Property that is owned by or exclusively licensed to the Company or
any of its subsidiaries. Without in any way limiting the generality of the
foregoing, Company Intellectual Property includes all Intellectual Property
owned or exclusively licensed by the Company related to the Company's products,
including without limitation all rights in any design code, documentation, masks
and tooling for packaging of semiconductors in connection with all current
products and products in design and development.
(iii) "Registered Intellectual Property" shall mean all
United States, international and foreign: (i) patents, patent applications
(including provisional applications); (ii) registered trademarks, applications
to register trademarks, intent-to-use applications, or other registrations or
applications related to trademarks, and any domain name registrations; (iii)
registered copyrights and applications for copyright registration; (iv) any mask
work registrations and applications to register mask works; and (v) any other
Intellectual Property that is the subject of an application, certificate,
filing, registration or other document issued by, filed with, or recorded by,
any state, government or other public legal authority.
(iv) "Company Registered Intellectual Property" means
all of the Registered Intellectual Property owned by, or filed in the name of,
the Company or any of its subsidiaries.
(b) Section 3.10(b) of the Company Disclosure Schedule is a
complete and correct list of all Company Registered Intellectual Property and
specifies, where applicable, the jurisdictions in which each such item of
Company Registered Intellectual Property has been filed, issued or registered
and lists any proceedings or actions before any court, tribunal (including the
United States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere in the world) related to any of the Company Registered Intellectual
Property.
(c) No Company Intellectual Property or product of the Company
is subject to any proceeding or outstanding decree, order, judgment, contract,
license, agreement, or stipulation restricting in any material manner the use,
transfer, or licensing thereof by the Company or any of its subsidiaries, or
which may affect the validity, use or enforceability of such Company
Intellectual Property or product of the Company.
(d) Each material item of Company Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance and
renewal fees currently due in connection with such Company Registered
Intellectual Property have been made, and all necessary documents, recordations
and certificates in connection with such Company Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Company Registered Intellectual Property.
14
(e) The Company owns and has good and exclusive title to, each
material item of Company Intellectual Property free and clear of any lien or
encumbrance (excluding non-exclusive licenses and related restrictions granted
in the ordinary course). Without limiting the foregoing: (i) the Company is the
exclusive owner of all trademarks and trade names used in connection with the
operation or conduct of the business of the Company and its subsidiaries,
including the sale, distribution or provision of any of the Company's products
by the Company or its subsidiaries; (ii) the Company owns exclusively, and has
good title to, all copyrighted works that are products of the Company or which
the Company or any of its subsidiaries otherwise purports to own; and (iii) to
the knowledge of the Company, to the extent that any Patents would be infringed
by any of the Company's products, the Company is the exclusive owner of such
Patents or has obtained a license to such Patents from the owner sufficient to
permit the Company to conduct its business as currently conducted.
(f) To the extent that any technology, software or
Intellectual Property has been developed or created independently or jointly by
a third party for the Company or any of its subsidiaries or is incorporated into
any of the Company's products, the Company has a written agreement with such
third party with respect thereto, and the Company thereby either (i) has
obtained ownership of, and is the exclusive owner of, or (ii) has obtained a
license (sufficient for the conduct of its business as currently conducted and
as currently proposed to be conducted) to such third party's Intellectual
Property in such work, material or invention.
(g) Neither the Company nor any of its subsidiaries has
transferred ownership of, or granted any exclusive license with respect to, any
material Intellectual Property that is or was Company Intellectual Property, to
any third party, or, within the last five years, permitted the Company's rights
in such material Company Intellectual Property to lapse or enter the public
domain.
(h) Section 3.10(h) of the Company Disclosure Schedule is a
complete and correct list of all material contracts, licenses and agreements to
which the Company or any of its subsidiaries is a party: (i) with respect to
Company Intellectual Property licensed or transferred to any third party (other
than licenses in the ordinary course in conjunction with the sale of products);
or (ii) pursuant to which a third party has licensed or transferred any material
Intellectual Property to the Company.
(i) Except as set forth in Section 3.10(h) of the Company
Disclosure Schedule, all contracts, licenses and agreements listed in Section
3.10(h) of the Company Disclosure Schedule are in full force and effect. Except
as set forth in Section 3.10(h) of the Company Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination or
suspension of such contracts, licenses and agreements. Except as set forth in
Section 3.10(h) of the Company Disclosure Schedule, each of the Company and its
subsidiaries is in material compliance with, and has not materially breached any
term of any such contracts, licenses and agreements and, to the knowledge of the
Company, all other parties to such contracts, licenses and agreements are in
material compliance with, and have not materially breached any term of, such
contracts, licenses and agreements. Except as set forth in Section 3.10(h) of
the Company Disclosure Schedule, following the Closing Date, the Surviving
Corporation will be permitted to
15
exercise all of the Company's and its subsidiaries' rights under such contracts,
licenses and agreements to the same extent the Company and its subsidiaries
would have been able to had the transactions contemplated by this Agreement not
occurred and without the payment of any additional amounts or consideration
other than ongoing fees, royalties or payments that the Company would otherwise
be required to pay. Except as set forth in Section 3.10(h) of the Company
Disclosure Schedule, neither this Agreement nor the transactions contemplated by
this Agreement, including the assignment to Parent or Merger Sub, by operation
of law or otherwise, of any contracts or agreements to which the Company or any
of its subsidiaries is a party, will result in (i) either Parent's or the Merger
Sub's granting to any third party any right to or with respect to any
Intellectual Property right owned by, or licensed to, either of them, (ii)
either the Parent's or the Merger Sub's being bound by, or subject to, any
non-compete or other restriction on the operation or scope of their respective
businesses (other than standard non-disclosure agreements entered into in the
ordinary course), or (iii) either the Parent's or the Merger Sub's being
obligated to pay any royalties or other amounts to any third party in excess of
those payable by the Company prior to the Closing.
(j) To the knowledge of the Company, the operation of the
business of the Company and its subsidiaries as such business is currently
conducted, including (i) the Company's and its subsidiaries' design,
development, manufacture, distribution, reproduction, marketing or sale of the
products or services of the Company and its subsidiaries (including the
Company's products) and (ii) the Company's use of any product, device or
process, has not, does not and will not infringe or misappropriate the
Intellectual Property of any third party or constitute unfair competition or
trade practices under the laws of any jurisdiction.
(k) Except as set forth in Section 3.10(k) to the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has
received written notice from any third party that the operation of the business
of the Company or any of its subsidiaries or any act, product or service of the
Company or any of its subsidiaries, infringes or misappropriates the
Intellectual Property of any third party or constitutes unfair competition or
trade practices under the laws of any jurisdiction.
(l) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company, to the
Company's knowledge, no third party is infringing on any of the Intellectual
Property owned by the Company.
(m) The Company and each of its subsidiaries has taken
reasonable steps to protect the Company's and its subsidiaries' rights in the
Company's confidential information and trade secrets that it wishes to protect
or any trade secrets or confidential information of third parties provided to
the Company or any of its subsidiaries, and, without limiting the foregoing,
each of the Company and its subsidiaries has and enforces a policy requiring
each employee and contractor to execute a proprietary
information/confidentiality agreement substantially in the form made available
to Parent, and all current and, to the Company's knowledge, former employees,
other than lower level support personnel, and the consultants of the Company and
any of its subsidiaries have executed such an agreement.
16
3.11. Title to Properties. Except as disclosed in the Company SEC
Documents filed prior to the date hereof, each of the Company and its
subsidiaries (i) has good and marketable title to all of its material properties
(real, personal or intangible) and assets that are reflected on the latest
balance sheet included in such Company SEC Documents as being owned by the
Company or one of its subsidiaries or acquired after the date thereof which are,
individually or in the aggregate, material to the Company's business on a
consolidated basis (except properties sold or otherwise disposed of since the
date thereof in the ordinary course of business), free and clear of (A) all
liens, mortgages, easements, irregularities of title or other encumbrances of
any nature except (1) statutory liens securing payments not yet due and (2) such
imperfections or irregularities of title or other liens (other than real
property mortgages or deeds of trust) as do not materially affect the use of the
properties or assets subject thereto or affected thereby or otherwise materially
impair business operations at such properties, and (B) all real property
mortgages and deeds of trust except that secured indebtedness that is properly
reflected in the latest Company SEC Documents filed prior to the date hereof,
and (ii) is the lessee or sublessee of all leasehold estates listed in the
Company SEC Documents or acquired after the date thereof and is in possession of
the properties purported to be leased thereunder, and each such lease is valid
without material default thereunder by the lessee (or event which with notice or
lapse of time, or both, would constitute a material default) or, to the
Company's knowledge, the lessor.
3.12. Registration Statement; Joint Proxy Statement. None of the
information provided by the Company for inclusion in the registration statement
on Form S-4 (such registration statement as amended, supplemented or modified,
the "Registration Statement") to be filed with the Commission by Parent under
the Securities Act, including the prospectus relating to the shares of Parent
Class A Common Stock to be issued in the Merger (as amended, supplemented or
modified, the "Prospectus") and the joint proxy statement and form of proxies
relating to the vote of the stockholders of the Company with respect to the
Merger and the vote of the stockholders of Parent with respect to the Parent
Stockholder Proposal (as defined in Section 4.3) (as amended, supplemented or
modified, the "Joint Proxy Statement"), at the time the Registration Statement
becomes effective or, in the case of the Joint Proxy Statement, at the date of
mailing and at the date of the Company Stockholders Meeting or the Parent
Stockholders Meeting, will contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein (and, in the case of the Joint Proxy
Statement, in light of the circumstances under which they were made), not
misleading. The Joint Proxy Statement, except for such portion thereof that
relates to Parent and its subsidiaries (as to which no representations or
warranties are made), will comply as to form in all material respects with the
provisions of the Exchange Act.
3.13. Litigation. Except as specifically disclosed in the Company SEC
Documents filed with the Commission prior to the date of this Agreement, there
is no suit, claim, action, proceeding, audit or investigation pending or, to the
knowledge of the Company, threatened against the Company or its subsidiaries
which, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company. Since December 31, 1998 the Company has
not been subject to any outstanding order, writ, injunction or decree
specifically applicable to the Company which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the Company.
17
3.14. Brokerage and Finder's Fees; Expenses. Except in connection with
the retention of Xxxxxxxxx Xxxxxxxx, Inc. ("Xxxxxxxxx Xxxxxxxx") (the fees of
which firm shall be the sole responsibility of the Company), neither the Company
nor any stockholder, director, officer or employee thereof has incurred or will
incur on behalf of the Company any brokerage, finder's or similar fee in
connection with the transactions contemplated by this Agreement. The Company has
heretofore made available to Parent a complete and correct copy of the
engagement letter between the Company and Xxxxxxxxx Xxxxxxxx.
3.15. Reorganization. Neither the Company nor any of its affiliates has
taken or agreed to take any action that would prevent the Merger from
constituting a reorganization qualifying under the provisions of Section 368(a)
of the Code.
3.16. Employee Benefit Plans. (a) For purposes of this Agreement, the
following terms have the definitions given below:
"Controlled Group Liability" means any and all liabilities under
(i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of
the Code, (iv) the continuation coverage requirements of Section 601 et seq. of
ERISA and Section 4980B of the Code, or (v) corresponding or similar provisions
of foreign laws or regulations, in each case other than pursuant to the Plans.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.
"ERISA Affiliate" means, with respect to any entity, trade or
business, any other entity, trade or business that is a member of a group
described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1)
of ERISA that includes the first entity, trade or business, or that is a member
of the same "controlled group" as the first entity, trade or business pursuant
to Section 4001(a)(14) of ERISA.
"Plan" means each plan, program, policy, practice or other
arrangement providing for compensation, severance, retirement benefits, fringe
benefits, equity-based awards or other benefits of any kind (including all
employee welfare benefit plans within the meaning of Section 3(l) of ERISA and
all employee pension benefit plans within the meaning of Section 3(2) of ERISA)
with respect to which a party or any of its subsidiaries or ERISA Affiliates has
or may have any liability, contingent or otherwise, and further including any of
the foregoing which cover directors or former directors of a party or any
subsidiary.
"Withdrawal Liability" means liability to a Multiemployer Plan
(as defined in Section 3.16(f)) as a result of a complete or partial withdrawal
from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E
of Title IV of ERISA.
(b) With respect to each Company Plan, the Company has made
available to Parent a correct and complete copy of each document relating to a
material liability with respect thereto, including without limitation the
following (where applicable): (i) each writing constituting a part of such Plan,
including without limitation all plan documents, trust agreements, and insurance
contracts and other funding vehicles; (ii) the most recent Annual
18
Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current
summary plan description, if any; (iv) the most recent annual financial report,
if any; and (v) the most recent determination letter from the Internal Revenue
Service, if any. No Plan is now nor at any time has been subject to Part 3,
Subtitle B of Title I of ERISA or Title IV of ERISA.
(c) The Plans which are "employee pension benefit plans"
within the meaning of Section 3(2) of ERISA and which are intended to meet the
qualification requirements of Section 401(a) of the Code, or Sections 401(k) or
401(m) of the Code, as applicable (each a "Qualified Plan"), now meet, and at
all times since their inception have met, the requirements for such
qualification, and the related trusts are now, and at all times since their
inception have been, exempt from taxation under Section 501(a) of the Code. Each
of the Qualified Plans has received a favorable determination from the Internal
Revenue Service, and no such determination letter has been revoked nor, are
there any existing circumstances why any such determination letter should be
revoked nor has any Qualified Plan been amended since the date of its most
recent determination letter in any respect which would adversely affect the
qualified status of any Company Qualified Plan or the related trust.
(d) All contributions required to be made to any Company Plan
by Applicable Laws or by any plan document or other contractual undertaking, and
all premiums due or payable with respect to insurance policies funding any
Company Plan, before the date hereof have been made or paid in full on or before
the final due date thereof and through the Effective Time will be made or paid
in full on or before the final due date thereof.
(e) The Company and its subsidiaries have complied, and are
now in compliance, with all applicable provisions of ERISA and the Code and all
Applicable Laws relating to employees and employee benefits, except for such
non-compliance which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company. Each Company Plan has
been established and operated in compliance with its terms and Applicable Laws,
except for such non-compliance which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the Company.
There is not now, and there are no existing circumstances that, individually or
in the aggregate, would reasonably be expected to give rise to, any requirement
for the posting of security with respect to a Company Plan or the imposition of
any lien on the assets of the Company or any of its subsidiaries under ERISA or
the Code. The Company and its subsidiaries are each in compliance with all
Applicable Laws respecting employment, except for such non-compliance which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company.
(f) No Company Plan is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that
has two or more contributing sponsors at least two of whom are not under common
control, within the meaning of Section 4063 of ERISA (a "Multiple Employer
Plan"), nor has the Company or any of its subsidiaries or any of their
respective ERISA Affiliates, at any time within six years before the date
hereof, contributed to or been obligated to contribute to any Multiemployer Plan
or Multiple Employer Plan. With respect to each Multiemployer Plan: (i) neither
the Company nor any of its ERISA Affiliates has incurred any Withdrawal
Liability that has not been satisfied in full; (ii)
19
neither the Company nor any ERISA Affiliate has received any notification, nor
has any reason to believe, that any such plan is in reorganization, is
insolvent, or has been terminated, or could reasonably be expected to be in
reorganization, to be insolvent, or to be terminated; and (iii) no circumstances
exist which individually or in the aggregate could reasonably be expected to
result in Withdrawal Liability with respect to a Plan.
(g) There does not now exist, and there are no existing
circumstances that individually or in the aggregate would reasonably be expected
to result in, any material Controlled Group Liability. Without limiting the
generality of the foregoing, neither the Company nor any of its subsidiaries nor
any of their respective ERISA Affiliates has engaged in any transaction
described in Section 4069 or Section 4204 of ERISA.
(h) Except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA, neither the Company nor
any of its subsidiaries has any material liability for life, health, medical or
other welfare benefits to former employees or beneficiaries or dependents
thereof.
(i) Except as disclosed in Section 3.16(i) to the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will result in, or
constitute an event which, with the passage of time or the giving of notice or
both will result in, cause the accelerated vesting or delivery of, or increase
the amount or value of, any payment or benefit to any employee, officer,
director or consultant of the Company or any of its subsidiaries. Without
limiting the generality of the foregoing, except as set forth in Section 3.16(i)
to the Company Disclosure Schedule, no amount paid or payable by the Company or
any of its subsidiaries or affiliates in connection with the transactions
contemplated hereby either solely as a result thereof or as a result of such
transactions in conjunction with any other events will be an "excess parachute
payment" within the meaning of Section 280G of the Code. Except as disclosed in
Section 3.16(i) of the Company Disclosure Schedule, there is no agreement, plan,
arrangement or other contract covering any employee or independent contractor or
former employee or independent contractor of the Company that, considered
individually or considered collectively with any other such Contracts (as
defined in Section 3.17), will, or could reasonably be expected to, give rise
directly or indirectly to the payment of any amount that would not be deductible
pursuant to Section 280G or Section 162 of the Code, nor will the Company be
required to "gross up" or otherwise compensate any such person because of the
imposition of any excise tax as a payment to such person.
(j) There are no pending, or, to the knowledge of the Company,
threatened actions (other than claims for benefits in the ordinary course) with
respect to the Company Plans which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company or any
of its subsidiaries.
(k) Section 3.16(k) to the Company Disclosure Schedule sets
forth a list of each employment, consulting, severance or similar agreement
under which the Company or any of its subsidiaries is or could become obligated
to provide compensation or benefits in excess of $100,000, and the Company has
made available to Parent a copy of each such agreement.
20
(l) No employer securities, employer real property or other
employer property is included in the assets of any Plan.
(m) No event has occurred, and there exists no condition or
set of circumstances in connection with any Plan, under which the Parent, Merger
Sub, the Company or any of its subsidiaries, directly or indirectly, could
reasonably be expected to be subject to any risk of material liability under
Sections 409 or 502 of ERISA or Section 4975 of the Code.
(n) Company maintains policies or practices on the proper
classification for all employees, leased employees, consultants and independent
contracts, for all purposes (including, without limitation, for all tax purpose
and for purposes of determining eligibility to participate in any Plan.)
3.17. Contracts. Section 3.17 to the Company Disclosure Schedule lists
all contracts, agreements, guarantees, leases and executory commitments (each a
"Contract"), other than Plans and any Contracts heretofore filed as an exhibit
to any Company SEC Document since September 30, 1998, that exist as of the date
hereof to which the Company is a party or by which it is bound and which fall
within any of the following categories: (a) Contracts not entered into in the
ordinary course of the Company's business other than those that individually or
in the aggregate are not material to the business of the Company, (b) Contracts
containing covenants purporting to limit the freedom of the Company or any of
its affiliates to compete in any line of business in any geographic area or to
hire any individual or group of individuals, (c) Contracts which after the
Effective Time would have the effect of limiting the freedom of Parent or its
subsidiaries (including the Surviving Corporation) to compete in any line of
business in any geographic area or to hire any individual or group of
individuals, (d) Contracts which contain minimum purchase conditions in excess
of $1,000,000 with respect to inventory purchases for resale, and $500,000 in
the case of everything else, or requirements or other terms that restrict or
limit the purchasing relationships of the Company or its affiliates, or any
customer, licensee or lessee thereof, (e) Contracts relating to any outstanding
commitment for capital expenditures in excess of $500,000, (f) indentures,
mortgages, promissory notes, loan agreements or guarantees of borrowed money in
excess of $1,000,000 in the aggregate, letters of credit or other agreements or
instruments of the Company or commitments for the borrowing or the lending by
the Company of amounts in excess of $1,000,000 in the aggregate, or providing
for the creation of any charge, security interest, encumbrance or lien upon any
of the assets of the Company with an aggregate value in excess of $1,000,000,
(g) Contracts providing for "earn-outs" or other contingent payments by the
Company involving more than $100,000 in the aggregate over the terms of all such
Contracts, and (h) stock purchase agreements, asset purchase agreements or other
acquisition or divestiture agreements relating to material transactions since
January 1, 1997. All material Contracts are valid and binding obligations of the
Company and, to the knowledge of the Company, the valid and binding obligation
of each other party thereto. Neither the Company nor, to the knowledge of the
Company, any other party thereto is in violation of or in default in respect of,
nor has there occurred an event or condition which with the passage of time or
giving of notice (or both) would constitute a default under or permit the
termination of, any Contract listed in Section 3.17 of the Company Disclosure
Schedule. Set forth in Section 3.17(i) to the Company Disclosure Schedule is a
description of any material changes to the amount and terms of the indebtedness
of the Company and its subsidiaries from (i) the Exhibits
21
to the Company's Form 10-Q for the period ended December 31, 2001 filed with the
Commission, with respect to the terms of such indebtedness, and (ii) the
description in the financial statements (including the notes thereto)
incorporated in the Company's Form 10-Q for the period ended December 31, 2001
filed with the Commission, with respect to the amount of such indebtedness. Set
forth in Section 3.17(j) to the Company Disclosure Schedule is the amount of the
annual premium currently paid by the Company for its directors' and officers'
liability insurance.
3.18. Labor Matters. The Company does not have any labor contracts or
collective bargaining agreements with any persons employed by the Company or any
persons otherwise performing services primarily for the Company, nor as of the
date hereof is the Company in the process of negotiating any such agreement.
There is no labor strike, dispute or stoppage pending or, to the knowledge of
the Company, threatened against the Company which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on the
Company, and the Company has not experienced any such labor strike, dispute or
stoppage since September 30, 1999.
3.19. Undisclosed Liabilities. Except (i) as and to the extent
disclosed or reserved against in the consolidated balance sheet of the Company
as of September 30, 2001 included in the Company SEC Documents, or disclosed in
the footnotes to the financial statements as of such date or the footnotes to
the September 30, 2001 financial statements included in the Company SEC
Documents filed prior to the date hereof, (ii) as incurred after September 30,
2001 in the ordinary course of business consistent with prior practice and not
prohibited by this Agreement, or (iii) as described in the Company SEC documents
filed since September 30, 2001 but prior to the date hereof, the Company does
not have any liabilities or obligations of any nature, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to become due,
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company.
3.20. Operation of the Company's Business; Relationships. (a) Since
December 30, 2001 through the date of this Agreement and except for entering
into this Agreement, the Company has not engaged in any transaction which, if
done after execution of this Agreement, would violate in any material respect
Section 5.3(c), except as set forth in Section 3.20(a) to the Company Disclosure
Schedule or as specifically disclosed in the Company SEC Documents filed with
the Commission prior to the date of this Agreement.
(b) Section 3.20(b) to the Company Disclosure Schedule sets
forth the Company's top ten customers (determined by fiscal year 2001 annual
revenue) and the Company's top ten suppliers (determined by fiscal year 2001
annual expense). Except as set forth in Section 3.20(b) to the Company
Disclosure Schedule, (i) from January 1, 2000 to the date hereof, none of the
customers of the Company set forth on Section 3.20(b) to the Company Disclosure
Schedule has indicated that it will stop or materially decrease purchasing
materials, products or services from the Company, and (ii) since January 1,
2000, no supplier of the Company set forth on Section 3.20(b) to the Company
Disclosure Schedule has indicated that it will stop or materially decrease the
supply of materials, products or services to the Company, or impose conditions
or credit limits on the Company.
22
3.21. Permits; Compliance. The Company is in possession of all material
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "Company Permits"), except where the failure to be
in possession of such Company Permits would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
3.22. Environmental Matters. (a) The properties, operations and
activities of the Company and its subsidiaries or their predecessors have for
all applicable periods of limitation, and are, in material compliance with all
applicable Environmental Laws and Environmental Permits (each as defined below);
(b) the Company and its subsidiaries and the properties and operations of the
Company and its subsidiaries and, with respect to the operations of the Company,
its predecessors, are not subject to any pending or, to the knowledge of the
Company, threatened action under any Environmental Law, including without
limitation with respect to any present or former operations, facilities or
subsidiaries and, with respect to the operations of the Company, its
predecessors; (c) to the knowledge of the Company, there has been no Release (as
defined below) of any Hazardous Materials (as defined below) into the
environment by the Company or its subsidiaries or their predecessors, and there
are no Hazardous Materials present at, on, under, within or which have migrated
from, any properties of the Company or its subsidiaries or, with respect to the
operations of the Company, its predecessors; and (d) neither the Company nor any
of its subsidiaries nor, to the knowledge of the Company and with respect to the
operations of the Company, its or its subsidiaries' predecessors (x) has
received any written notice that the Company, any of its subsidiaries or their
predecessors or any of their respective present or former operations or
facilities is or may be a potentially responsible party or otherwise liable in
connection with any site used for the disposal of or otherwise containing
Hazardous Materials, or (y) has disposed of, arranged for the disposal of, or
transported any Hazardous Materials to any site which is listed on the U.S.
Environmental Protection Agency's National Priorities List or which is otherwise
subject to remediation or investigation. The Company and its subsidiaries have
made available to Parent all material internal and external environmental audits
and reports (in each case relevant to the Company, any of its subsidiaries or
their predecessors) in the possession of the Company or its subsidiaries. The
term "Environmental Laws" means all Applicable Laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or industrial,
toxic or hazardous substances or wastes, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
(collectively, "Hazardous Materials") into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder, as in effect on
the date hereof. "Environmental Permit" means any permit, approval,
identification number, license or other authorization required under or issued
pursuant to any applicable Environmental Law. "Release" shall have the meaning
as defined in are interpreted under CERCLA.
23
3.23. Opinion of Financial Advisor. the Company has received the
written opinion of Xxxxxxxxx Xxxxxxxx to the effect that, as of the date of this
Agreement, the Merger Consideration is fair from a financial point of view to
the Company Stockholders, and such opinion has not been withdrawn or revoked or
modified in any material respect.
3.24. Board Recommendation. The Board of Directors of the Company, at a
meeting duly called and held at which a quorum was present throughout, has by
the requisite vote of the directors (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interests of the Company Stockholders and (ii) resolved to recommend that
the holders of the shares of Company Common Stock entitled to vote thereon
approve and adopt this Agreement and the transactions contemplated herein,
including the Merger (the "Company Board Recommendation"). As of the date of
this Agreement, the Company Board Recommendation has not been withdrawn, revoked
or modified.
3.25. Related Party Transactions. Since the date of the Company's proxy
statement filed on December 28, 2001, no event has occurred that would be
required to be reported under Item 404 of Regulation S-K promulgated by the
Commission.
3.26. Takeover Statutes; Rights Plan. The Company has taken all actions
such that no restrictive provision of any "fair price," "moratorium," "control
share acquisition," "interested shareholder" or other similar anti-takeover
statute or regulation (including, without limitation, Section 203 of the DGCL)
(each a "Takeover Statute") or restrictive provision of any applicable
anti-takeover provision in the governing documents of the Company is, or at the
Effective Time will be, applicable to the Company, Parent, Merger Sub, the
Merger, this Agreement, the Voting Agreements or any of the other transactions
contemplated hereby or thereby. After giving effect to the amendment to the
Rights Plan effective as of the date hereof, the Rights Plan is inapplicable to
the Merger, this Agreement, the Voting Agreement, and the transactions
contemplated hereby or thereby.
3.27. Certain Transactions. Neither the Company nor any of its
subsidiaries is a party to, or has any commitment to become a party to, any
joint venture agreement, partnership agreement or any Contract associated with
off balance sheet financing, including arrangements for the sale of receivables.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
In order to induce Parent to enter into this Agreement, Parent
and Merger Sub hereby represent and warrant to the Company as follows:
4.1. Organization and Standing. Each of Parent and Merger Sub and each
subsidiary (as defined in Section 8.3) of Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with full corporate power and authority to
own, lease, use and operate its properties and to conduct its business as and
where now owned, leased, used, operated and conducted. Each of Parent and each
subsidiary of Parent is duly qualified to do business and in good standing in
each jurisdiction in which the nature of
24
the business conducted by it or the property it owns, leases or operates
requires it to so qualify, except where the failure to be so qualified or in
good standing in such jurisdiction individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on Parent. Parent is
not in default in the performance, observance or fulfillment of any provision of
its Restated Certificate of Incorporation or its Bylaws, each as in effect on
the date hereof (the "Parent Certificate" and the "Parent Bylaws,"
respectively). Parent has heretofore made available to the Company a complete
and correct copy of the Parent Certificate and the Parent Bylaws.
4.2. Subsidiaries. Parent does not own, directly or indirectly, any
equity or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise, except for the subsidiaries and other
entities listed in Exhibit 21 to Parent's Annual Report on Form 10-K for the
fiscal year ended December 28, 2001, or set forth in Section 4.2 to the
disclosure schedule delivered by Parent to the Company and dated the date hereof
(the "Parent Disclosure Schedule"). Except as set forth in Section 4.2 to the
Parent Disclosure Schedule, Parent is not subject to any obligation or
requirement to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any entity or enterprise that is not
wholly owned by Parent. Except as set forth in Section 4.2 to the Parent
Disclosure Schedule, Parent owns directly or indirectly each of the outstanding
shares of capital stock (or other ownership interests having by their terms
ordinary voting power to elect a majority of directors or others performing
similar functions with respect to such subsidiary) of each of Parent's
subsidiaries, free and clear of all liens, pledges, security interests, claims
or other encumbrances. Each of the outstanding shares of capital stock of each
of Parent's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All of the capital stock of each subsidiary of Parent is owned by
Parent and/or one or more wholly-owned subsidiaries of Parent. Other than as set
forth in Section 4.2 to the Parent Disclosure Schedule, there are no outstanding
subscriptions, options, warrants, puts, calls, agreements, understandings,
claims or other commitments or rights of any type relating to the issuance,
sale, repurchase or transfer of any capital stock or other securities of any
subsidiary of Parent, nor are there outstanding any securities which are
convertible into or exchangeable for any shares of capital stock or other
securities of any subsidiary of Parent, and neither Parent nor any subsidiary of
Parent has any obligation of any kind to issue any additional shares of capital
stock or other securities of any subsidiary of Parent or to pay for or
repurchase any shares of capital stock or other securities of any subsidiary of
Parent or any predecessor thereof.
4.3. Corporate Power and Authority. Parent and Merger Sub have all
requisite corporate power and authority to (a) enter into and deliver this
Agreement, (b) perform their obligations hereunder and (c) subject to approval
by the stockholders of Parent of the issuance of shares of Parent Class A Common
Stock issuable in the Merger (such proposal to approve the issuance of shares of
Parent Class A Common Stock, the "Parent Stockholder Proposal"), to consummate
the transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement by Parent and Merger Sub have been duly authorized
by all necessary corporate action on the part of Parent and Merger Sub, subject
to approval of the Parent Stockholder Proposal by the stockholders of Parent.
This Agreement has been duly executed and delivered by Parent and Merger Sub and
constitutes the legal, valid and binding obligation of Parent and Merger Sub
enforceable against them in accordance with its terms,
25
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, or (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
4.4. Capitalization of Parent. (a) As of March 1, 2002, Parent's
authorized capital stock consisted solely of (x) 300,000,000 shares of Class A
common stock, par value $.01 per share ("Parent Class A Common Stock"), of which
(i) 90,622,241 shares were issued and outstanding, (ii) 498,000 shares were
issued and held in treasury (which does not include the shares reserved for
issuance set forth in clause (iii) below) and no shares were held by
subsidiaries of Parent, (iii) 6,304,352 shares were reserved for issuance upon
the exercise of outstanding options, (iv) 16,282,475 shares were reserved for
issuance upon the conversion of Parent Class B Common Stock (as defined below)
into Parent Class A Common Stock, (v) 10,223,921 shares were reserved for future
issuance under outstanding options granted by Parent, and (vi) 1,059,439 shares
reserved for issuance upon the exercise of outstanding warrants issued by
Parent; (y) 300,000,000 shares of Class B common stock, par value $.01 per share
("Parent Class B Common Stock" and, with the Parent Class A Common Stock, the
"Parent Common Stock"), of which (i) 16,282,475 shares were issued and
outstanding, (ii) no shares were issued and held in treasury and no shares were
held by subsidiaries of Parent, and (iii) 90,622,241 shares were reserved for
issuance upon the conversion of Parent Class A Common Stock into Parent Class B
Common Stock; and (z) 100,000 shares of Preferred Stock, par value $.01 per
share ("Parent Preferred Stock"), of which (i) no shares were issued and
outstanding, (ii) no shares were issued and held in treasury and no shares were
held by subsidiaries of Parent, and (iii) no shares were reserved for issuance.
Each outstanding share of Parent capital stock is duly authorized and validly
issued, fully paid and nonassessable, and has not been issued in violation of
any preemptive or similar rights. Other than as set forth in the first sentence
hereof or in Section 4.4 to the Parent Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale, repurchase or transfer by Parent of any securities of
Parent, nor are there outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of Parent, and neither Parent nor
any subsidiary of Parent has any obligation of any kind to issue any additional
securities or to pay for or repurchase any securities of Parent or any
predecessor. Except as set forth in Section 4.4 to the Parent Disclosure
Schedule, Parent has no agreement, arrangement or understandings to register any
securities of Parent or any of its subsidiaries under the Securities Act or
under any state securities law and has not granted registration rights to any
person or entity (other than agreements, arrangements or understandings with
respect to registration rights that are no longer in effect as of the date of
this Agreement); copies of all such agreements have previously been made
available to the Company.
(b) The authorized capital stock of Merger Sub consists solely
of 3,000 shares of common stock, $.01 par value per share, all of which, as of
the date hereof, are issued and outstanding and are held directly by Parent. All
of the outstanding shares of Merger Sub's common stock have been duly authorized
and validly issued, and are fully paid and nonassessable. Merger Sub has no
subsidiaries. Merger Sub was formed for the purpose of consummating the Merger
and has no material assets or liabilities except as necessary for such purpose.
26
4.5. Conflicts; Consents and Approvals. Except, in the case of (b), as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent, neither the execution and delivery of this
Agreement by Parent or Merger Sub, nor the consummation of the transactions
contemplated hereby or thereby, will:
(a) conflict with, or result in a breach of any provision of,
the Parent Certificate or the Parent Bylaws or the Certificate of Incorporation
and Bylaws of Merger Sub;
(b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate, modify or call a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Parent under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license, contract,
undertaking, agreement, lease or other instrument or obligation to which Parent
or any of its subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Parent or any of its subsidiaries or any of their
respective properties or assets; or
(d) require any action or consent or approval of, or review
by, or registration or filing by Parent or Merger Sub or any of their affiliates
with, or any Governmental Authority, other than (i) approval of the Parent
Stockholder Proposal by stockholders of Parent, (ii) actions required by the HSR
Act, (iii) filings and consents under Foreign Antitrust Laws, and (iv)
registrations, filings, consents, approvals or other actions required under
federal and state securities laws and the rules of the Nasdaq Stock Market, Inc.
as are contemplated by this Agreement, and (v) the filing of the Certificate of
Merger with the Secretary of State.
4.6. No Material Adverse Effect. Except as specifically disclosed in
the Parent SEC Documents (as defined in Section 4.7) filed with the Commission
prior to the date of this Agreement, since December 28, 2001, there has been no
Material Adverse Effect on Parent.
4.7. Parent SEC Documents. Parent has timely filed with the Commission
all forms, reports, schedules, statements and other documents required to be
filed by it since November 10, 1999 under the Exchange Act or the Securities Act
(such documents, as supplemented and amended since the time of filing,
collectively, the "Parent SEC Documents"). The Parent SEC Documents, including,
without limitation, any financial statements or schedules included or
incorporated by reference therein, at the time filed (and, in the case of
registration statements and proxy statements, on the dates of effectiveness and
the dates of mailing, respectively) (a) did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein (and in the case of any
prospectus, in light of the circumstances under which they were made), not
misleading, and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be. The
financial statements of Parent included in the Parent SEC Documents at the time
filed (and, in the case of registration statements and proxy statements, on the
dates of effectiveness and the dates of mailing, respectively) complied as to
form in all material respects with applicable accounting requirements and with
the published
27
rules and regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q of
the Commission), and fairly presented (subject, in the case of the unaudited
interim financial statements, to normal, recurring year-end audit adjustments
consistent with past practice), in all material respects, the consolidated
financial position of Parent and its consolidated subsidiaries as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended. No subsidiary of Parent is or has been subject to the
periodic reporting requirements of the Exchange Act or required to file any
form, report or other document with the Commission, the Nasdaq Stock Market,
Inc., any stock exchange or any other comparable Governmental Authority.
4.8. Registration Statement; Joint Proxy Statement. None of the
information provided by Parent for inclusion in the Registration Statement or
the Joint Proxy Statement, at the time the Registration Statement becomes
effective or, in the case of the Joint Proxy Statement, at the date of mailing
and at the date of the Company Stockholders Meeting or the Parent Stockholders
Meeting, will contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein (and, in the case of the Joint Proxy Statement, in light of
the circumstances under which they were made), not misleading. The Joint Proxy
Statement, except for the portion thereof that relates to the Company and its
subsidiaries (as to which no representations or warranties are made), will
comply as to form in all material respects with the provisions of the Exchange
Act, and the Registration Statement, except for such portion thereof that
relates to the Company and its subsidiaries (as to which no representations or
warranties are made), will comply as to form in all material respects with the
provisions of the Securities Act.
4.9. Litigation. Except as specifically disclosed in the Parent SEC
Documents filed with the Commission prior to the date of this Agreement, there
is no action pending or, to the knowledge of Parent, threatened against Parent
or its subsidiaries which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Parent or a material adverse
effect on the ability of Parent to consummate the transactions contemplated
hereby. Since December 31, 2001, Parent has not been subject to any outstanding
order, writ, injunction or decree specifically applicable to Parent which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Parent.
4.10. Valid Issuance. The Parent Class A Common Stock to be issued in
the Merger and upon the exercise of Converted Options, when issued in accordance
with the provisions of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable, free of all liens and encumbrances and not subject
to preemptive rights, and will be issued in compliance with the Securities Act
and applicable state securities laws.
4.11. Financing. Parent possesses and will possess sufficient cash
funds and has and will have available to it adequate financial resources to pay
all required cash amounts to the Company's stockholders pursuant to Article II
of this Agreement.
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4.12. Undisclosed Liabilities. Except (i) as and to the extent
disclosed or reserved against in the consolidated balance sheet of Parent as of
December 28, 2001 included in the Parent SEC Documents, or disclosed in the
footnotes to the financial statements as of such date or the footnotes to the
December 28, 2001 financial statements included in the Parent SEC Documents
filed prior to the date hereof, (ii) as incurred after December 28, 2001 in the
ordinary course of business consistent with prior practice and not prohibited by
this Agreement, or (iii) as described in the Parent SEC Documents filed since
December 28, 2001 but prior to the date hereof, Parent has not incurred through
the date hereof any liabilities or obligations of any nature, whether known or
unknown, absolute, accrued, contingent or otherwise and whether due or to become
due, that, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on Parent.
4.13. Operation of Parent's Business; Relationships.
(a) Since December 28, 2001 through the date of this Agreement
and except for entering into this Agreement, Parent has not engaged in any
transaction, except in the ordinary course of business or as specifically
disclosed in the Parent SEC Documents filed with the Commission prior to the
date of this Agreement. From December 28, 2001 until the date hereof, Parent has
not declared, set aside or paid any dividend or other distribution in respect of
any capital stock of Parent, nor split, combined or reclassified any of its
capital stock.
(b) From December 28, 2001 to the date hereof, no material
customer of Parent has indicated that it will stop or materially decrease
purchasing materials, products or services from Parent and since December 28,
2001, no material supplier of Parent has indicated that it will stop or
materially decrease the supply of materials, products or services to Parent, in
each case, the effect of which individually or in the aggregate would reasonably
be expected to have a Material Adverse Effect on Parent.
4.14. Permits; Compliance. Parent is in possession of all material
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "Parent Permits"), except where the failure to be
in possession of such Parent Permits would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Parent.
4.15. Environmental Matters. Except for matters disclosed in the Parent
SEC Documents filed prior to the date hereof and except for matters that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent, (a) the properties, operations and activities of
Parent and its subsidiaries or their predecessors have for all applicable
periods of limitation, and are, in compliance with all applicable Environmental
Laws and Environmental Permits; (b) Parent and its subsidiaries and the
properties and operations of Parent and its subsidiaries and, with respect to
the operations of Parent, its predecessors, are not subject to any pending or,
to the knowledge of Parent, threatened action under any Environmental Law,
including without limitation with respect to any present or former operations,
facilities or subsidiaries and, with respect to the operations of Parent, its
predecessors; (c) to the knowledge of Parent, there has been no Release of any
Hazardous
29
Materials into the environment by Parent or its subsidiaries or their
predecessors, and there are no Hazardous Materials present at, on, under, within
or which have migrated from, any properties of Parent or its subsidiaries or,
with respect to the operations of Parent, its predecessors; and (d) neither
Parent nor any of its subsidiaries nor, to the knowledge of Parent and with
respect to the operations of Parent, its subsidiaries or their predecessors (x)
has received any written notice that Parent, any of its subsidiaries or their
predecessors or any of their respective present or former operations or
facilities is or may be a potentially responsible party or otherwise liable in
connection with any site used for the disposal of or otherwise containing
Hazardous Materials, or (y) has disposed of, arranged for the disposal of, or
transported any Hazardous Materials to any site which is listed on the U.S.
Environmental Protection Agency's National Priorities List or which is otherwise
subject to remediation or investigation. Parent and its subsidiaries have made
available to the Company all material internal and external environmental audits
and reports (in each case relevant to Parent, any of its subsidiaries or their
predecessors) in the possession of Parent or its subsidiaries.
4.16. Board Recommendation. The Board of Directors of Parent, at a
meeting duly called and held at which a quorum was present throughout, has by
the requisite vote of the directors resolved to recommend that the holders of
the shares of Parent Common Stock entitled to vote thereon approve the Parent
Stockholder Proposal (the "Parent Board Recommendation"). As of the date hereof,
the Parent Board Recommendation has not been withdrawn, revoked or modified.
4.17. Opinion of Financial Advisor. Parent has received the written
opinion of Credit Suisse First Boston Corporation ("CSFB") to the effect that,
as of the date of this Agreement, the Merger Consideration is fair from a
financial point of view to Parent, and such opinion has not been withdrawn or
revoked or modified in any material respect.
4.18. Related Party Transactions. Since the date of Parent's proxy
statement filed on April 27, 2001, no event has occurred that would be required
to be reported under Item 404 of Regulation S-K promulgated by the Commission.
4.19. Brokerage and Finder's Fees; Expenses. Except in connection with
the retention of CSFB (the fees of which firm shall be the sole responsibility
of Parent), neither Parent nor any director, officer or employee thereof has
incurred or will incur on behalf of Parent any brokerage, finder's or similar
fee in connection with the transactions contemplated by this Agreement.
4.20. Reorganization. Neither Parent nor any of its affiliates has
taken or agreed to take any action that would prevent the Merger from
constituting a reorganization qualifying under the provisions of Section 368(a)
of the Code.
4.21. Takeover Statutes. Other than pursuant to this Agreement or the
Company Voting Agreement, as of the date hereof, neither Parent nor any
affiliate of Parent is, or has been, during the prior three years an "interested
stockholder" (as defined in Section 203 of the DGCL) of the Company.
30
4.22. Taxes. (a) Parent and its subsidiaries (i) have duly filed all
material Tax Returns (including, but not limited to, those filed on a
consolidated, combined or unitary basis) required to have been filed by Parent
or its subsidiaries, all of which Tax Returns are true and correct in all
material respects; (ii) have within the time and manner prescribed by Applicable
Laws paid all material Taxes required to be paid in respect of the periods
covered by such Tax Returns or otherwise due to any Governmental Authority;
(iii) have established in accordance with their normal accounting practices and
procedures, accruals and reserves that are adequate for the payment of all Taxes
not yet due and payable; (iv) are not delinquent in the payment of any material
Tax; and (v) have not received written notice of any deficiencies for any Tax
from any Governmental Authority against Parent or any of its subsidiaries, which
deficiency has not been satisfied. Neither Parent nor any of its subsidiaries is
the subject of any currently ongoing Tax audit. There are no liens with respect
to Taxes upon any of the properties or assets, real or personal, tangible or
intangible, of Parent or any of its subsidiaries (other than liens for Taxes not
yet due). No claim has ever been made in writing by a Governmental Authority in
a jurisdiction where Parent or its subsidiaries do not file Tax Returns that
Parent or any of its subsidiaries is or may be subject to taxation by that
jurisdiction. Neither Parent nor any of its subsidiaries has filed an election
under Section 341(f) of the Code to be treated as a consenting corporation.
(b) Except as set forth in Section 4.22(b) of the Parent
Disclosure Schedule, neither Parent nor any of its subsidiaries is obligated by
any contract, agreement or other arrangement to indemnify any other person with
respect to Taxes. Neither Parent nor any of its subsidiaries is now or has ever
been a party to or bound by any contract, agreement or other arrangement
(whether or not written and including, without limitation, any arrangement
required or permitted by Applicable Laws (including pursuant to Treasury
Regulation Section 1.1502-6 or any analogous provision of state, local or
foreign law)) that (i) requires Parent or any of its subsidiaries to make any
Tax payment to or for the account of any other person, (ii) affords any other
person the benefit of any net operating loss, net capital loss, investment Tax
credit, foreign Tax credit, charitable deduction or any other credit or Tax
attribute which could reduce Taxes (including, without limitation, deductions
and credits related to alternative minimum Taxes) of Parent or any of its
subsidiaries, or (iii) requires or permits the transfer or assignment of income,
revenues, receipts or gains to Parent or any of its subsidiaries from any other
person.
(c) Parent and its subsidiaries have withheld and paid all
material Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party.
4.23. Certain Transactions. Neither Parent nor any of its subsidiaries
are a party to, or has any commitment to become a party to, any joint venture
agreement, partnership agreement or any Contract associated with off-balance
sheet financing, including arrangements for the sale of receivables.
4.24. Intellectual Property. Except as disclosed in the Parent SEC
Documents, Parent and its subsidiaries own, possess or can acquire on reasonable
terms, adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other Intellectual
Property necessary to conduct the business now operated by them and, except as
disclosed in the Parent SEC Documents, have not received any notice of
infringement
31
of or conflict with asserted rights of others with respect to any Intellectual
Property rights that, if determined adversely to Parent or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect on Parent.
ARTICLE V
COVENANTS
5.1. Mutual Covenants.
(a) HSR Act Filings; Reasonable Efforts; Notification. (i)
Each of Parent and the Company shall (A) make or cause to be made the filings
required of such party or any of its subsidiaries or affiliates under the HSR
Act with respect to the transactions contemplated hereby as promptly as
practicable and in any event within five business days after the date of this
Agreement, (B) cooperate with the other party in connection with any such filing
and in connection with resolving any investigation or other inquiry of any such
agency or other Governmental Authority under any Foreign Antitrust Laws with
respect to any such filing or any such transaction. Each party shall use all
reasonable efforts to furnish to each other all information required for any
application or other filing to be made pursuant to any Applicable Laws in
connection with the Merger and the other transactions contemplated by this
Agreement. Each party shall promptly inform the other party of any communication
with, and any proposed understanding, undertaking, or agreement with, any
Governmental Authority regarding any such filings or any such transaction.
Neither party shall independently participate in any formal meeting with any
Governmental Authority in respect of any such filings, investigation, or other
inquiry without giving the other party prior notice of the meeting and, to the
extent permitted by such Governmental Authority, the opportunity to attend
and/or participate. The parties hereto will consult and cooperate with one
another in connection with any analyses, appearances, presentations, memoranda,
briefs, arguments, opinions and proposals made or submitted by or on behalf of
any party hereto in connection with proceedings under or relating to the HSR Act
or other Antitrust Laws.
(ii) Each of Parent and the Company shall use all
reasonable efforts to resolve such objections, if any, as may be asserted by the
Federal Trade Commission or the Department of Justice (either, an "HSR
Authority") or any Governmental Authority with respect to the transactions
contemplated by this Agreement under the HSR Act, the Xxxxxxx Act, as amended,
the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as amended, any
Foreign Antitrust Laws, and any other federal, state or foreign statutes, rules,
regulations, orders, decrees, administrative or judicial doctrines or other laws
that are designed to prohibit, restrict or regulate actions having the purpose
or effect of monopolization or restraint of trade (collectively, "Antitrust
Laws"); provided, however, that neither Parent nor the Company, nor any of their
respective affiliates, shall be required, as a result of this Section
5.1(a)(ii), to propose or agree to accept any undertaking or condition, to enter
into any consent decree, to make any divestiture or accept any operational
restriction, or take or commit to take any action that could reasonably be
expected to limit (A) the freedom of action of Parent or its subsidiaries or
affiliates with respect to operation of, or Parent's or its subsidiaries' or
affiliates' ability to retain, the Company or any
32
business, product lines or assets of the Company, or (B) the ability to retain,
own or operate any portion of the businesses, product lines or assets, of the
Parent or its subsidiaries or alter or restrict in any way the business or
commercial practices of the Company, the Parent, or either of their subsidiaries
or affiliates. Parent shall be entitled to direct any proceedings or
negotiations with any Governmental Authority relating to any of the foregoing
described in this paragraph (ii) or to the matters described in paragraph (i) of
this Section 5.1(a), provided that it shall afford the Company a reasonable
opportunity to participate therein, and provided, further, that nothing in this
sentence shall affect the parties' rights and obligations contained in the
third, fourth and fifth sentences of Section 5.1(a)(i). Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this Section
5.1(a) shall limit a party's right to terminate this Agreement pursuant to
Section 7.1, so long as such party has up to then complied in all material
respects with its obligations under this Section 5.1(a). Each of Parent and the
Company shall use all reasonable efforts to take such action as may be required
to cause the expiration or early termination of the notice period under the HSR
Act or other Antitrust Laws with respect to such transactions as promptly as
possible after the execution of this Agreement.
(iii) Each of the parties shall use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including (A) the obtaining of all other
necessary actions or nonactions, waivers, consents, licenses, permits,
authorizations, orders and approvals from Governmental Authorities and the
making of all other necessary registrations and filings (including other filings
with Governmental Authorities, if any), subject to the limitations of Section
5.1(a)(ii), (B) the obtaining of all consents, approvals or waivers from third
parties related to or required in connection with the Merger that are necessary
to consummate the Merger and the transactions contemplated by this Agreement or
required to prevent a Material Adverse Effect on Parent or the Company from
occurring prior to or after the Effective Time, (C) the preparation of the Joint
Proxy Statement, the Prospectus and the Registration Statement, (D) the taking
of all action necessary to ensure that the Merger constitutes a reorganization
within the meaning of Section 368(a) of the Code and (E) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
(iv) Notwithstanding anything to the contrary in this
Agreement, neither Parent nor the Company shall be required to (i) hold separate
(including by trust or otherwise) or divest any of their respective businesses
or assets or (ii) waive any of the conditions to the Merger set forth in Article
VI of this Agreement as they apply to such party.
(b) Public Announcements. Each of the parties agrees that it
shall not, nor shall any of their respective affiliates, issue or cause the
publication of any press release or other public announcement with respect to
the Merger, this Agreement or the other transactions contemplated hereby without
the prior approval of the other party, except such disclosure as may be required
by law or by any listing agreement with the Nasdaq Stock Market, Inc., or a
national securities exchange; provided, if such disclosure is required by law or
any such listing agreement, such disclosure may not be made without prior
consultation of the other parties.
33
(c) Joint Proxy Statement; Registration Statement. As promptly
as practicable after the execution of this Agreement, Parent and the Company
shall jointly prepare the Joint Proxy Statement, and Parent and the Company
shall each file the Joint Proxy Statement with the Commission. Each of Parent
and the Company shall, as promptly as practicable, furnish the other party with
all information concerning it as may be required for inclusion in the Joint
Proxy Statement and the Registration Statement.
(d) Section 16 Matters. Prior to the Effective Time, Parent
and the Company shall take all such steps as may be required to cause the Merger
and the transactions contemplated hereby, including any dispositions of Company
Common Stock (including derivative securities with respect to the Company Common
Stock) and acquisitions of Parent Common Stock (including derivative securities
with respect to Parent Common Stock) by each individual who is or will be
subject to the reporting requirements of Section 16(a) of the Exchange Act with
respect to the Company or Parent, as the case may be, to be exempt under Rule
16b-3 promulgated under the Exchange Act, such steps to be taken in accordance
with the No-Action Letter dated January 12, 1999 issued by the SEC regarding
such matters.
5.2. Covenants of Parent.
(a) Parent Stockholders Meeting. Parent shall take all action
in accordance with the federal securities laws, the DGCL and the Parent
Certificate and Parent Bylaws necessary to convene a special meeting of the
stockholders of Parent (the "Parent Stockholders Meeting") to be held and
completed on the earliest practicable date following the effectiveness of the
Registration Statement and mutually determined by the parties (which date shall
be the same date as the date of the Company Stockholders Meeting or as close to
one another as reasonably practicable), to consider and vote upon the Parent
Stockholder Proposal. Unless prior to the approval by the Parent stockholders of
the Parent Stockholder Proposal, it determines in good faith by a majority vote,
after consultation with its outside legal counsel, that failure to do so would
constitute a breach of the fiduciary duties of the Board of Directors of Parent
under Applicable Laws, neither the Board of Directors of Parent nor any
committee thereof shall withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify, in a manner adverse to the Company, the Parent Board
Recommendation. Nothing contained in this Section 5.2(a) shall limit Parent's
obligation to hold and convene the Parent Stockholders Meeting (regardless of
whether the Parent Board Recommendation shall have been withdrawn, amended or
modified).
(b) Joint Proxy Statement; Registration Statement. The Joint
Proxy Statement shall include the recommendation of Parent's Board of Directors
referred to in Section 4.16. Consistent with the timing for the Parent
Stockholders Meeting and the Company Stockholders Meeting, Parent shall prepare
and file the Registration Statement with the Commission as soon as is reasonably
practicable and shall use all reasonable efforts to have the Registration
Statement declared effective by the Commission as promptly as practicable and to
maintain the effectiveness of the Registration Statement through the Effective
Time. If, at any time prior to the Effective Time, Parent shall obtain knowledge
of any information pertaining to Parent that would require an amendment or
supplement to the Registration Statement or the Joint Proxy Statement, Parent
shall so advise the Company in writing and shall promptly furnish the
34
Company with all information as shall be required for such amendment or
supplement and shall promptly take such action as shall be required to amend or
supplement the Registration Statement and/or the Joint Proxy Statement. Parent
shall use all reasonable efforts to mail at the earliest practicable date to the
stockholders of Parent the Joint Proxy Statement, which shall include all
information required by Applicable Laws to be furnished to the stockholders of
Parent in connection with the Merger, the transactions contemplated thereby and
the Parent Stockholder Proposal and shall include the opinion of CSFB referred
to in Section 4.17 and, to the extent not withdrawn in compliance with Section
5.2(a), the Parent Board Recommendation. Parent also shall take such other
reasonable actions required to be taken under any applicable state securities
laws in connection with the issuance of shares of Parent Class A Common Stock in
the Merger.
(c) Indemnification; Directors' and Officers' Insurance.
(i) From and after the Effective Time, Parent shall,
and shall cause the Surviving Corporation to indemnify, defend and hold harmless
any person who is now, or has been at any time prior to the date hereof, or who
becomes prior to the Effective Time, a director or officer (an "Indemnified
Person") of the Company or any of its subsidiaries against all losses, claims,
damages, liabilities, costs and expenses (including reasonable fees and expenses
of legal counsel selected by the Indemnified Person with the consent of Parent,
which consent will not be unreasonably withheld), judgments, fines and amounts
paid in settlement in connection with any actual or threatened action, suit,
claim, proceeding or investigation (each a "Claim") to the extent that any such
Claim is based on, or arises out of: (x) the fact that such Indemnified Person
is or was a director or officer of the Company or any of its subsidiaries or is
or was serving at the request of the Company or any of its subsidiaries as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise; or (y) this Agreement or any of the transactions contemplated
hereby, in each case to the extent that any such Claim pertains to any matter or
fact arising, existing or occurring prior to or at the Effective Time,
regardless of whether such Claim is asserted or claimed prior to, at or after
the Effective Time, to the full extent permitted under the DGCL, the Company
Certificate or the Company Bylaws or any indemnification agreement in effect
prior to the date hereof and listed in Section 5.2(c) to the Company Disclosure
Schedule (complete and correct copies of which have been previously provided to
Parent), including provisions relating to advancement of expenses incurred in
the defense of any such Claim. Without limiting the generality of the preceding
sentence, in the event any Indemnified Person becomes involved in any Claim,
after the Effective Time, Parent shall periodically advance to such Indemnified
Person its legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the provisions of
paragraph (ii) of this Section 5.2(c), and subject to the providing by such
Indemnified Person of an undertaking to reimburse all amounts so advanced in the
event of a final non-appealable determination by a court of competent
jurisdiction that such Indemnified Person is not entitled thereto.
(ii) The Indemnified Person shall control the defense of
any Claim with counsel selected by the Indemnified Person, which counsel shall
be reasonably acceptable to Parent, provided that Parent shall be permitted to
participate in the defense of such Claim at its own expense. Parent shall not be
obligated to pay the fees and expenses of more than one counsel for all
Indemnified Persons in any single Claim except to the extent that, in the
opinion
35
of independent legal counsel selected by the Indemnified Person, which counsel
shall be reasonably acceptable to Parent, representation of two or more of such
Indemnified Persons would present a conflict of interest under applicable
standards of conduct in the legal profession. Parent shall not be liable for any
settlement effected without its written consent, which consent shall not
unreasonably be withheld.
(iii) Parent and the Company agree that all rights to
indemnification of liabilities, and all limitations with respect thereto,
existing in favor of any Indemnified Person, as provided in the Company
Certificate or the Company Bylaws and any indemnification agreement in effect at
the date hereof and listed in Section 5.2(c) to the Company Disclosure Schedule,
shall survive the Merger and shall continue in full force and effect, without
any amendment thereto; provided, however, that in the event any Claim is
asserted or made, any determination required to be made with respect to whether
an Indemnified Person's conduct complies with the standards set forth under the
DGCL, the Company Certificate or the Company Bylaws or any such agreement, as
the case may be, shall be made by independent legal counsel selected by such
Indemnified Person and reasonably acceptable to Parent; and provided further
that nothing in this Section 5.2(c) shall impair any rights or obligations of
any current or former director or officer of the Company or its subsidiaries,
including pursuant to the respective certificates of incorporation or bylaws of
Parent or the Company, or their respective subsidiaries, under the DGCL or
otherwise.
(iv) Parent shall maintain the Company's existing
directors' and officers' liability insurance policy ("D&O Insurance") for a
period of not less than six years after the Effective Time; provided, however,
that Parent may substitute therefor policies of substantially similar coverage
and amounts (with carriers comparable to the Company's existing carriers)
containing terms no less advantageous to such former directors or officers;
provided further that if the existing D&O Insurance expires or is canceled
during such period, Parent shall use its reasonable efforts to obtain
substantially similar D&O Insurance; provided further that Parent shall not be
required to pay an aggregate premium for D&O Insurance in excess of $1.75
million, but in such case shall purchase as much coverage as possible for such
amount.
(v) The provisions of this Section 5.2(c) are intended
to be for the benefit of, and shall be enforceable by, each Indemnified Person,
his or her heirs and his or her personal representatives.
(vi) From and after the Effective Time, Parent shall (A)
provide to the directors of the Company who become directors of Parent
directors' and officers' liability insurance on the same basis and to the same
extent as that, if any, provided to other directors of Parent, and (B) enter
into indemnification agreements with the directors of the Company who become
directors of Parent on the same terms, if any, entered into with other directors
of Parent generally.
(d) Parent Board of Directors and Officers; Integration and
Transition. Parent shall take all requisite action to cause its Board of
Directors to include as members thereof effective at the Effective Time, (i) the
Chief Executive Officer of Parent at the Effective Time as provided in
paragraph (e) below and (ii) Xxxxx X. Xxxxxx.
36
(e) Chief Executive Officer of Parent. Parent shall take all
requisite action (i) to appoint Xxxxxxx X. Xxxxx to serve, effective at the
Effective Time and at the discretion of the Board of Directors of Parent, as the
Chief Executive Officer of Parent, and (ii) to appoint Xxxxxxx X. Xxxxxxxx to
serve, effective at the Effective Time at the discretion of the Board of
Directors of Parent, as the Executive Chairman of the Board of Directors of
Parent.
(f) Nasdaq Listing. Parent shall use all reasonable efforts to
cause the shares of Parent Class A Common Stock issuable pursuant to the Merger
(including, without limitation, the shares of Parent Class A Common Stock
issuable upon the exercise of the Converted Options) to be approved for listing
on the Nasdaq National Market, subject to official notice of issuance, prior to
the Effective Time.
(g) Notification of Certain Matters. Parent shall give prompt
notice to the Company of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would likely cause any Parent
representation or warranty contained in this Agreement to be untrue or
inaccurate at or prior to the Effective Time in any material respect and (ii)
any material failure of Parent to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 5.2(g) shall
not limit or otherwise affect the remedies available hereunder to the Company.
(h) Employees and Employee Benefits. As soon as practicable
after the execution of this Agreement, the Company and Parent shall confer and
work together in good faith to agree upon mutually acceptable employee benefit
and compensation arrangements. From and after the Effective Time, except as
otherwise provided in Section 2.5, Parent shall treat all service for vesting
and eligibility purposes by the Company Employees (as defined below) with the
Company and their respective predecessors prior to the Effective Time, to the
extent credited under the terms of the Company Plans prior to the Effective
Time, as service with Parent for eligibility and vesting purposes under Parent's
employee benefits plans. With respect to any medical or dental benefit plan in
which the Company Employees participate after the Effective Time, Parent shall
use all reasonable efforts to waive or cause to be waived any pre-existing
condition exclusions and actively-at-work requirements (provided, however, that
no such waiver shall apply to a pre-existing condition of any Company Employee
who was, as of the Effective Time, treated under a Company Plan as a
pre-existing condition), and shall provide that any covered expenses incurred on
or before the Effective Time by a Company Employee or a Company Employee's
covered dependent shall be taken into account for purposes of satisfying
applicable deductible, coinsurance and maximum out-of-pocket provisions after
the Effective Time to the same extent as such expenses are taken into account
for the benefit of similarly situated employees of Parent and subsidiaries of
Parent. For purposes of this Section 5.2(i), "Company Employees" shall mean
persons who are, as of the Effective Time, employees of the Company.
(i) Prohibition on Certain Transactions. Prior to the date of
the Parent Stockholders Meeting, Parent shall not enter into a definitive
agreement, or publicly announce an intention to enter into a definitive
agreement, with respect to any acquisition, disposition, merger or other
business combination involving Parent or any of its subsidiaries, if (x) in
order to
37
consummate such transaction, the approval by the holders of Parent Class A
Common Stock shall be required or (y) such transaction presents a material risk
of making it materially more difficult to obtain any approval or authorization
required to consummate the Merger under Antitrust Laws.
5.3. Covenants of the Company.
(a) The Company Stockholders Meeting. The Company shall take
all action in accordance with the federal securities laws, the DGCL and the
Company Certificate and the Company Bylaws necessary to convene a special
meeting of the stockholders of the Company entitled to vote (the "Company
Stockholders Meeting") to be held and completed on the earliest practicable date
following the effectiveness of the Registration Statement and mutually
determined by the parties (which date shall be the same date as the date of the
Parent Stockholders Meeting or as close to one another as reasonably
practicable), to consider and vote upon approval of the Merger, this Agreement
and the transactions contemplated hereby. Subject to Section 5.3(d), neither the
Board of Directors of the Company nor any committee thereof shall withdraw,
amend or modify, or propose or resolve to withdraw, amend or modify, in a manner
adverse to Parent, the Company Board Recommendation. Nothing contained in this
Section 5.3(a) shall limit the Company's obligation to hold and convene the
Company Stockholders Meeting (regardless of whether the Company Board
Recommendation shall have been withdrawn, amended or modified).
(b) Joint Proxy Statement; Registration Statement. The Company
shall cooperate with Parent in the preparation and filing of the Registration
Statement in a timely fashion and shall use all reasonable efforts to assist
Parent in having the Registration Statement declared effective by the Commission
as promptly as practicable and in maintaining the effectiveness of the
Registration Statement through the Effective Time. If, at any time prior to the
Effective Time, the Company shall obtain knowledge of any information pertaining
to the Company that would require any amendment or supplement to the
Registration Statement or the Joint Proxy Statement, the Company shall so advise
Parent in writing and shall promptly furnish Parent with all information as
shall be required for such amendment or supplement and shall promptly take such
action as shall be required to amend or supplement the Registration Statement
and/or Joint Proxy Statement. The Company shall use all reasonable efforts to
mail at the earliest practicable date to the stockholders of the Company the
Joint Proxy Statement, which shall include all information required under
Applicable Laws to be furnished to the stockholders of the Company in connection
with the Merger and the transactions contemplated thereby and shall include the
written opinion of Xxxxxxxxx Xxxxxxxx described in Section 3.23 and the Company
Board Recommendation to the extent not previously withdrawn in compliance with
Section 5.3(d).
(c) Conduct of the Company's Operations. During the period
from the date of this Agreement to the Effective Time, the Company shall use all
reasonable efforts to conduct its operations in the ordinary course, except as
expressly contemplated by this Agreement and the transactions contemplated
hereby, and shall use all reasonable efforts to maintain and preserve its
business organization and to retain the services of its officers and key
employees and use all reasonable efforts to maintain relationships with
customers, suppliers, lessees, licensees and
38
other third parties with the intent that its goodwill and ongoing business shall
not be impaired in any material respect. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the earlier of
the termination of this Agreement or the Effective Time, the Company shall not,
except as otherwise expressly contemplated by this Agreement and the
transactions contemplated hereby or as set forth in Section 5.3(c) to the
Company Disclosure Schedule, without the prior written consent of Parent:
(i) do or effect any of the following actions with
respect to its securities: (A) adjust, split, combine or reclassify its capital
stock, (B) make, declare or pay any dividend or distribution on, or directly or
indirectly redeem, purchase or otherwise acquire, any shares of its capital
stock or any securities or obligations convertible into or exchangeable for any
shares of its capital stock, (C) grant any person any right or option to acquire
any shares of its capital stock, other than the rights or options granted to
newly hired or promoted employees, not in excess of 300,000 shares of Company
Common Stock in the aggregate, which options shall have an exercise price not
less than the fair market value of the Company Common Stock on the date of
grant, (D) issue, deliver or sell or agree to issue, deliver or sell any
additional shares of its capital stock or any other securities or obligations
convertible into or exchangeable or exercisable for any shares of its capital
stock or such securities (except pursuant to (1) the exercise of Company Options
which are outstanding as of the date hereof or which are granted by the Company
prior to the Effective Time in compliance with the terms of this Agreement, (2)
the Company 423 Plan in accordance with Section 2.5, or (3) the Company's 401(k)
plan as in effect on the date hereof) or (E) enter into any agreement,
understanding or arrangement with respect to the sale, voting, registration or
repurchase of its capital stock;
(ii) directly or indirectly sell, transfer, lease,
pledge, mortgage, encumber or otherwise dispose of any of its property or assets
other than in the ordinary course of business;
(iii) amend the Company Certificate or the Company
Bylaws;
(iv) merge or consolidate with any other person;
(v) acquire assets or capital stock of or other equity
interests in any other person;
(vi) incur, create, assume or otherwise become liable
for any indebtedness for borrowed money or, assume, guarantee, endorse or
otherwise as an accommodation become responsible or liable for the obligations
of any other individual, corporation or other entity;
(vii) except as set forth in Section 5.3(c)(vii) of the
Company Disclosure Schedule, enter into or modify any employment, severance,
stay-put termination or similar agreements or arrangements with, or grant any
bonuses, salary increases, severance or termination pay to, any officer,
director, consultant or employee other than ordinary course offer letters to
newly hired employees that provide for employment that is "at will" and which do
not provide any post termination benefits except as may be required by
Applicable Laws, or
39
otherwise increase the compensation or benefits provided to any officer,
director, consultant or employee except as may be required by Applicable Laws;
(viii) enter into, adopt or amend any employee benefit or
similar plan except as may be required by Applicable Laws;
(ix) change any method or principle of accounting in a
manner that is inconsistent with past practice except to the extent required by
generally accepted accounting principles as advised by Deloitte & Touche LLP, or
make any material Tax election (unless required by law or consistent with prior
practice) or settle any material Tax liability which is the subject of dispute
between the Company and a Governmental Authority;
(x) amend, terminate or modify any Contract listed in
Section 3.17 of the Company Disclosure Schedule or enter into any Contract that,
if it were in effect as of the date hereof, would be required to be listed in
Section 3.17 of the Company Disclosure Schedule;
(xi) enter into any confidentiality, standstill or
non-compete agreements or arrangements which after the Effective Time would
apply or purport to apply to Parent or any of its subsidiaries (other than the
Company or any of its subsidiaries);
(xii) incur or commit to any capital expenditures,
individually or in the aggregate, in excess of the amount set forth in Section
5.3(c) to the Company Disclosure Schedule;
(xiii) modify or waive any of its rights under any
provision of any confidentiality agreement or standstill agreement;
(xiv) enter into or carry out any other transaction other
than in the ordinary and usual course of business or other than as permitted
pursuant to the other clauses in this Section 5.3(c);
(xv) permit or cause any subsidiary to do any of the
foregoing or agree or commit to do any of the foregoing; or
(xvi) agree in writing or otherwise to take any of the
foregoing actions.
(d) No Solicitation. (i) During the term of this Agreement,
the Company shall not, and shall not authorize or permit any of its subsidiaries
or any of its or its subsidiaries' directors, officers, employees, agents or
representatives, directly or indirectly, to (A) solicit, initiate, intentionally
encourage or facilitate, or furnish or disclose non-public information in
furtherance of, any inquiries or the making of any proposal with respect to any
recapitalization, merger, consolidation or other business combination involving
the Company, or acquisition of any capital stock from the Company (other than
upon exercise of Company Options that are outstanding as of the date hereof or
that are granted in accordance with this Agreement) or 15% or more of the assets
of the Company and its subsidiaries, taken as a whole, in a single transaction
or a series of transactions, or any acquisition by the Company of any material
assets or capital stock of any other person, or any combination of the foregoing
(a "Competing
40
Transaction"), or (B) negotiate or otherwise engage in discussions with any
person (other than Parent or its respective directors, officers, employees,
agents and representatives) with respect to any Competing Transaction or (C)
enter into any agreement, arrangement or understanding requiring the Company to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, that, at any time before the approval
of the Merger by the stockholders of the Company, the Company may furnish
information to, and negotiate or otherwise engage in discussions with, any
person who delivers a bona fide written proposal for a Competing Transaction
that was not solicited or intentionally encouraged after the date of this
Agreement if and to the extent the Board of Directors of the Company determines
in good faith by a majority vote, after consultation with its outside legal
counsel, that failing to take such action would constitute a breach of the
fiduciary duties of the Board of Directors of the Company under Applicable Laws
and determines that such proposal for the Competing Transaction is, if accepted,
reasonably likely to be consummated and is, after consulting with Xxxxxxxxx
Xxxxxxxx (or any other nationally recognized investment banking firm), more
favorable to the Company's stockholders from a financial point of view than the
transactions contemplated by this Agreement (including any adjustment to the
terms and conditions proposed by Parent in response to such Competing
Transaction) (a "Superior Proposal"); provided, further, that the Company
notifies Parent not less than two business days prior to taking such action
(which notice shall identify the person making the proposal and describe the
terms thereof) and receives from the person making the proposal an executed
confidentiality agreement in reasonably customary form and in any event
containing terms at least as restrictive on the other person as the terms of the
Confidentiality Agreement (as defined in Section 5.3(f)) are to Parent. The
Company shall notify Parent of any proposal for a Competing Transaction
(including the material terms and conditions thereof and the identity of the
person making it) as promptly as practicable (but in no event more than 24
hours) after its receipt thereof, and shall thereafter inform Parent on a prompt
basis of the status of any discussion or negotiations with such third party and
any material changes to the terms and conditions of such proposal, and shall
promptly give Parent a copy of any information delivered to such person that has
not previously been reviewed by Parent. The Company shall immediately cease, and
shall cause its and its subsidiaries' respective officers, directors and
representatives to cease, all existing activities, discussions and negotiations
with any parties conducted heretofore with respect to any proposal for a
Competing Transaction.
(ii) Notwithstanding any other provision of this Section
5.3(d), in the event that before the approval of the Merger by the stockholders
of the Company, the Board of Directors of the Company determines in good faith
by a majority vote, after consultation with outside legal counsel, that failure
to do so would constitute a breach of the fiduciary duties of the Company Board
of Directors under Applicable Laws, the Board of Directors of the Company may
(subject to this and the following sentences) withdraw, amend or modify, in a
manner adverse to Parent, the Company Board Recommendation and (if the reason
for the change in the Company Board Recommendation is the existence of a
Superior Proposal) take and disclose to the stockholders of the Company a
position with respect to such Superior Proposal by disclosing such withdrawn,
amended or modified Company Board Recommendation and, to the extent applicable,
a recommendation with respect to such Superior Proposal in connection with a
tender or exchange offer for the Company securities; provided that the Company
has complied with its obligations under this Section 5.3(d) and it gives Parent
two business days prior written notice of
41
its intention to do so. Consistent with the terms of this Section 5.3(d), the
Company may take any action to the extent necessary in order to comply with
Rules 14d-9 and 14e-2 promulgated under the Exchange Act. The Company Board of
Directors shall not, in connection with any such withdrawal, amendment or
modification of the Company Board Recommendation, take any action to change the
approval of the Board of Directors of the Company for purposes of causing any
state takeover statute or other state law to be applicable to the transactions
contemplated hereby, including this Agreement and the Merger. If the reason for
the change in the Company Board Recommendation is the Company's receipt of a
proposal for a Competing Transaction that it has determined to be a Superior
Proposal, and within such two business day period, Parent proposes in writing to
modify the terms and conditions of this Agreement, the Company's Board of
Directors shall determine in good faith whether such terms as modified by Parent
are at least as favorable to the Company's stockholders from a financial point
of view as such Superior Proposal, and if the Company's Board of Directors
determines that such terms as modified are at least as favorable as such
Superior Proposal, the Board of Directors of the Company may not withdraw, amend
or modify, in a manner adverse to Parent, the Company Board Recommendation.
(e) Affiliates of the Company. The Company shall use all
reasonable efforts to cause each person listed in Section 5.3(e) of the Company
Disclosure Schedule and each additional person, if any, who may be at the
Effective Time an "affiliate" of the Company for purposes of Rule 145 under the
Securities Act to execute and deliver to Parent no less than 30 days prior to
the date of the Company Stockholders Meeting, the written undertakings in the
form attached hereto as Exhibit B (the "Company Affiliate Letter"). The
foregoing notwithstanding, Parent shall be entitled to place legends as
specified in the Company Affiliate Letter on the certificates evidencing any of
the shares of Parent Class A Common Stock to be received by (i) any such
"affiliate" of the Company specified in such letter or (ii) any person Parent
reasonably identifies (by written notice to the Company) as being a person who
may be deemed an "affiliate" for purposes of Rule 145 under the Securities Act,
pursuant to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the shares of Parent Class A Common
Stock, consistent with the terms of the Company Affiliate Letter, regardless of
whether such person has executed the Company Affiliate Letter and regardless of
whether such person's name appears on the letter to be delivered pursuant to the
preceding sentence.
(f) Access. The Company shall permit representatives of Parent
to have full access at all reasonable times to the Company's premises,
properties, books, records, contracts, documents, customers and suppliers, and
shall cause its independent accountants to give Parent access to such
accountants' work papers. Information obtained by Parent pursuant to this
Section 5.3(f) shall be subject to the provisions of the Confidentiality
Agreement by and between Parent and the Company, dated as of June 14, 2001 (the
"Confidentiality Agreement"), which agreement remains in full force and effect.
No investigation conducted pursuant to this Section 5.3(f) or otherwise shall
affect or be deemed to modify any representation or warranty made in this
Agreement. Notwithstanding the foregoing, the Company shall have no obligation
to provide Parent with information if the Company determines in good faith, upon
written advice of its outside antitrust counsel, that providing information may
violate any Applicable Laws.
42
(g) Notification of Certain Matters. The Company shall give
prompt notice to Parent of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would likely cause any representation or
warranty by the Company contained in this Agreement to be untrue or inaccurate
at or prior to the Effective Time in any material respect and (ii) any material
failure of the Company to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 5.3(g) shall not limit
or otherwise affect the remedies available hereunder to Parent.
(h) Subsequent Financial Statements. The Company shall provide
to Parent, sufficiently in advance so as to permit a reasonable period of time
to review and discuss the contents thereof, its financial results for any period
after the date of this Agreement prior to making such results publicly available
and prior to filing any Company SEC Documents after the date of this Agreement,
it being understood that Parent shall have no liability by reason of such review
and discussion.
(i) Letters of the Company's Accountants. The Company shall
use all reasonable efforts to cause to be delivered to Parent letters of the
Company's independent accountants, dated a date within two business days before
the date on which the Registration Statement shall become effective, the date
the Joint Proxy Statement is mailed and the date of the Parent Stockholders
Meeting, in form and substance reasonably satisfactory to Parent and customary
in scope and substance for letters delivered by independent accountants in
connection with registration statements similar to the Registration Statement.
(j) No Redemption of Rights Plan. Between the date of this
Agreement and the earlier of the Effective Time and the termination of this
Agreement, the Company shall not (a) redeem, amend or waive any provisions of
the Rights Plan (other than such amendments as are necessary to accommodate this
Agreement and the transactions contemplated hereby, but not with respect to any
Competing Transaction) or (b) implement or adopt any other so-called "poison
pill," shareholder rights plan or other similar plan.
ARTICLE VI
CONDITIONS
6.1. Conditions to the Obligations of Each Party. The obligations of
the Company, Merger Sub and Parent to consummate the Merger shall be subject to
the satisfaction of the following conditions:
(a) (i) This Agreement, the Merger and the transactions
contemplated hereby shall have been approved and adopted by the stockholders of
the Company entitled to vote thereon, and (ii) the issuance of the shares of
Parent Class A Common Stock to be issued in the Merger shall have been approved
by the stockholders of Parent entitled to vote thereon, in each case in the
manner required by all Applicable Laws and the applicable rules of the Nasdaq
Stock Market, Inc.
43
(b) Any applicable waiting periods (and any extensions
thereof, including any written commitment to an HSR Authority to defer or delay
consummation of the Merger notwithstanding expiration of such waiting periods)
under the HSR Act or any Foreign Antitrust Laws relating to the Merger and the
transactions contemplated by this Agreement shall have expired or been
terminated.
(c) No provision of any Applicable Laws and no judgment,
injunction, order or decree shall prohibit or enjoin the consummation of the
Merger or the transactions contemplated by this Agreement.
(d) There shall not be pending any action by any Governmental
Authority (i) challenging or seeking to restrain or prohibit the consummation of
the Merger or any of the other transactions contemplated by this Agreement, (ii)
seeking to prohibit or limit the ownership or operation by Parent, the Surviving
Corporation or any of their respective subsidiaries of, or to compel Parent, the
Surviving Corporation or any of their respective subsidiaries to dispose of or
hold separate, any portion of the business or assets of Parent, the Company or
any of their respective subsidiaries, as a result of the Merger or any of the
other transactions contemplated by this Agreement or (iii) seeking to prohibit
Parent or any subsidiary of Parent from effectively controlling the business or
operations of the Company or the subsidiaries of the Company.
(e) The Commission shall have declared the Registration
Statement effective under the Securities Act, and no stop order or similar
restraining order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending before
or threatened by the Commission or any state securities administrator.
6.2. Conditions to Obligations of the Company. The obligations of the
Company to consummate the Merger and the transactions contemplated hereby shall
be subject to the fulfillment of the following conditions unless waived by the
Company:
(a) The representations and warranties of Parent and Merger
Sub set forth in Article IV (which for purposes of this paragraph (a) shall be
read as though none of them contained any Material Adverse Effect or materiality
qualifier) shall be true and correct in all respects on and as of the Closing
Date with the same effect as though made on and as of the Closing Date (except
for such representations and warranties made as of a specified date, the
accuracy of which will be determined as of the specified date), except where the
failure of the representations and warranties in the aggregate to be true and
correct in all respects would not have a Material Adverse Effect on Parent.
(b) Parent shall have performed in all material respects each
obligation and agreement and shall have complied in all material respects with
each covenant to be performed and complied with by it hereunder at or prior to
the Effective Time.
(c) Parent shall have furnished the Company with a certificate
dated the Closing Date signed on behalf of it by its President or any Vice
President to the effect that the conditions set forth in Sections 6.2(a) and (b)
have been satisfied.
44
(d) Since the date of this Agreement, there shall not have
been and be continuing a Material Adverse Effect on Parent.
(e) the Company shall have received an opinion from Fenwick &
West LLP, dated the Closing Date, based upon certain factual representations of
the Company and Parent reasonably requested by such counsel, to the effect that
the Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, provided, however, that if
Fenwick & West LLP does not render such opinion, this condition shall
nonetheless be deemed to be satisfied with respect to the Company if counsel to
Parent renders such opinion to the Company.
(f) Parent shall have taken all requisite action in order that
each of the Chief Executive Officer of Parent as of immediately following the
Effective Time and Xxxxx X. Xxxxxx shall, effective upon the Effective Time,
become members of Parent's Board of Directors, provided that if Parent shall
have taken all such requisite action and either of such persons shall be unable
or unwilling to serve as a director of Parent, this condition shall nevertheless
be deemed satisfied.
6.3. Conditions to Obligations of Parent. The obligations of Parent to
consummate the Merger and the other transactions contemplated hereby shall be
subject to the fulfillment of the following conditions unless waived by Parent:
(a) The representations and warranties of the Company set
forth in Article III (which for purposes of this paragraph (a) shall be read as
though none of them contained any Material Adverse Effect or materiality
qualifier) shall be true and correct in all respects on and as of the Closing
Date with the same effect as though made on and as of the Closing Date (except
for such representations and warranties made as of a specified date, the
accuracy of which will be determined as of the specified date), except for
changes permitted by Section 5.3(c) and except where the failure of the
representations and warranties in the aggregate to be true and correct in all
respects would not have a Material Adverse Effect on the Company.
(b) The Company shall have performed in all material respects
each obligation and agreement and shall have complied in all material respects
with each covenant to be performed and complied with by it hereunder at or prior
to the Effective Time.
(c) The Company shall have furnished Parent with a certificate
dated the Closing Date signed on its behalf by its President or any Vice
President to the effect that the conditions set forth in Sections 6.3(a) and (b)
have been satisfied.
(d) Since the date of this Agreement, there shall not have
been and be continuing a Material Adverse Effect on the Company.
(e) Parent shall have received an opinion from Dechert, dated
the Closing Date, based upon certain factual representations of Parent and the
Company reasonably requested by such counsel, to the effect that the Merger will
be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, provided, however, that if Dechert does
not render such opinion, this condition shall nonetheless be
45
deemed to be satisfied with respect to Parent if counsel to the Company renders
such opinion to Parent.
(f) The Company shall have obtained all consents, waivers and
approvals identified on Section 6.3(f) of the Company Disclosure Schedule, and
such consents, waivers and approvals shall not have expired or been revoked.
(g) Holders of no more than ten percent of the outstanding
shares of Company Common Stock shall have validly delivered to the Company a
demand for appraisal rights with respect thereto and shall not have failed to
perfect or withdraw such rights under Section 262 of the DGCL.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1. Termination. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time (notwithstanding any
approval of this Agreement by the stockholders of the Company and the
stockholders of Parent):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if a judgment, injunction,
order or decree of a court or other competent Governmental Authority enjoining
Parent or the Company from consummating the Merger shall have been entered and
such judgment, injunction, order or decree shall have become final and
nonappealable; provided, that a party may not terminate the Agreement pursuant
to this Section 7.1(b) if its or its affiliates' failure to perform its
obligations under this Agreement resulted in or contributed to the issuance of
such judgment, injunction, order or decree;
(c) by either Parent or the Company if the Merger shall not
have been consummated before September 30, 2002 (the "Termination Date");
provided, however, that the right to terminate this Agreement under this Section
7.1(c) shall not be available to any party whose failure or whose affiliates'
failure to perform any material covenant or obligation under this Agreement has
been the cause of or resulted in the failure of the Merger to occur on or before
such date;
(d) by Parent or the Company if at the Company Stockholders
Meeting (including any adjournment or postponement thereof) the requisite vote
of the stockholders of the Company to approve the Merger, the Merger Agreement
and the transactions contemplated hereby shall not have been obtained;
(e) by Parent or the Company if at the Parent Stockholders
Meeting (including any adjournment or postponement thereof) the requisite vote
of the stockholders of Parent to approve the Parent Stockholder Proposal shall
not have been obtained;
46
(f) by Parent or the Company if there shall have been a
material breach by the other of any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach would result
in the failure to satisfy one or more of the conditions set forth in Section
6.2(a) or 6.2(b) (in the case of a breach by Parent) or Section 6.3(a) or 6.3(b)
(in the case of a breach by the Company) or would materially interfere with the
ability of Parent and/or the Company to consummate the transactions contemplated
hereby, and such breach, if it is of a nature that it may be cured, shall not
have been cured within 30 days after notice thereof shall have been received by
the party alleged to be in breach;
(g) by Parent or the Company if there shall have occurred a
Material Adverse Effect on the other;
(h) by Parent if, before the Company Stockholders Meeting, (i)
the Board of Directors of the Company or any committee thereof shall have
withdrawn or modified, in a manner adverse to Parent, the Company Board
Recommendation; (ii) the Company shall have failed to include in the Joint Proxy
Statement the recommendation of the Board of Directors of the Company in favor
of the adoption and approval of this Agreement and the approval of the Merger;
(iii) the Board of Directors of the Company shall have failed to reaffirm its
recommendation in favor of the adoption and approval of this Agreement and the
approval of the Merger within ten days after Parent requests in writing that
such recommendation be reaffirmed; (iv) the Board of Directors of the Company or
any committee thereof having authority to bind the Board of Directors of the
Company shall have approved or publicly recommended any Competing Transaction;
(v) a tender or exchange offer relating to securities of the Company in excess
of 20% of its outstanding voting securities shall have been commenced by a
person unaffiliated with Parent, and the Company shall not have sent to its
stockholders pursuant to Rule 14e-2 promulgated under the Exchange Act, within
ten business days after such tender or exchange offer is first published, sent
or given, a statement disclosing that the Company's Board of Directors
recommends rejection of such tender or exchange offer; or (vi) the Company shall
have intentionally breached its obligations under Sections 5.3(a), 5.3(d) or
5.3(j); or
(i) by the Company if, before the Parent Stockholders Meeting,
(i) the Board of Directors of Parent or any committees thereof shall have
withdrawn or modified, in a manner adverse to the Company, the Parent Board
Recommendation; (ii) Parent shall have failed to include in the Joint Proxy
Statement the recommendation of the Board of Directors of Parent in favor of the
Parent Stockholders Proposal; (iii) the Board of Directors of Parent shall have
failed to reaffirm its recommendation in favor of the Parent Stockholders
Proposal within ten days after the Company requests in writing that such
recommendation be reaffirmed; or (iv) Parent shall have intentionally breached
its obligations under Section 5.2(a).
7.2. Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 7.1, this Agreement, except for this
Section 7.2, the provisions of the second sentence of Section 5.3(f) and
Sections 7.3, 8.7 and 8.10, shall become void and have no effect, without any
liability on the part of any party or its directors, officers or stockholders.
Notwithstanding the foregoing, nothing in this Section 7.2 shall relieve any
party to this Agreement of liability for an intentional breach of any provision
of this Agreement; provided, however, that if it shall be judicially determined
that termination of this Agreement was caused by an intentional breach of
47
this Agreement, then, in addition to other remedies at law or equity for breach
of this Agreement, the party so found to have intentionally breached this
Agreement shall indemnify and hold harmless the other parties for their
respective out-of-pocket costs, fees and expenses of their counsel, accountants,
financial advisors and other experts and advisors as well as fees and expenses
incident to negotiation, preparation and execution and performance of this
Agreement and related documentation and stockholders' meetings and consents
("Costs").
7.3. Termination Fee; Expenses.
(a) In the event that this Agreement is terminated (i) by
Parent pursuant to Section 7.1(f) due to a material breach by the Company of its
obligations under Section 5.3(a) or Section 5.3(d) and, if such breach is of a
nature that it may be cured by the Company, the Company does not cure such
breach within 48 hours after such breach; (ii) pursuant to Section 7.1(h); or
(iii) by Parent in the event (A) prior to the Company Stockholders Meeting, a
Competing Transaction shall have been made known to the Company, and the fact of
such Competing Transaction shall have become publicly known or shall have been
made directly to the stockholders of the Company generally, or any person shall
have publicly announced its intention (whether or not conditional) to make a
proposal for a Competing Transaction, (B) the condition set forth in Section
6.1(a)(i) is not satisfied, and (C) within 12 months of such termination, the
Company enters into a definitive agreement with respect to, or consummates, a
Company Acquisition (as defined below), then in any such event, the Company
shall pay to Parent a termination fee equal to $32 million and shall pay to
Parent an amount equal to Parent's reasonable, out-of-pocket expenses incurred
in connection with the transactions contemplated by this Agreement. "Company
Acquisition" means (x) a merger, consolidation, share exchange, business
combination or similar transaction involving the Company as a result of which
the stockholders of the Company prior to such transaction in the aggregate cease
to own at least the Stated Percentage (as defined below) of voting securities of
the entity surviving or resulting from such transaction (or the ultimate parent
entity thereof), (y) a sale, lease, exchange, transfer or other disposition of
more than the Stated Percentage of the assets of the Company and its
subsidiaries, taken as a whole, in a single transaction or series of
transactions or (z) the acquisition, by a person (other than Parent or any
affiliate thereof) or group (as such term is defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) of beneficial ownership
of more than the Stated Percentage of the Company Common Stock, in either case
whether by tender or exchange offer or otherwise. The "Stated Percentage" shall
be 50% unless the Company Acquisition involves a person (including successors
and affiliates) referred to in clause (A) above, in which case the "Stated
Percentage" shall be 75% in the case of clause (x) and 25% in the case of
clauses (y) and (z).
(b) Provided that the Company has not committed an act with
the intent and effect of breaching this Agreement, the fee and expense
arrangements contemplated hereby are the sole remedies for breach of the
Company's obligations under Section 5.3(d) (other than equitable or injunctive
relief under Section 8.8) and shall constitute complete and reasonable
liquidated damages for any such breach. The amounts payable by the Company
pursuant to this Section 7.3 shall be paid pursuant to this Section 7.3
regardless of any alleged breach, other than a willful or intentional breach, by
Parent of its obligations hereunder; provided, that no payment made by the
Company pursuant to this Section 7.3 shall operate or be construed as a waiver
by
48
the Company of any breach of this Agreement by Parent or Merger Sub or of any
rights of the Company in respect thereof.
(c) Any payment required to be made pursuant to paragraph (a)
of this Section 7.3 shall be made to the Parent not later than two business days
after delivery to the Company of notice of demand for payment, or, if earlier,
upon the Company's entering into an agreement for or the consummation of a
Company Acquisition if such payment is required pursuant to Section 7.3(a)(iii),
and shall be made by wire transfer of immediately available funds to an account
designated by Parent.
(d) In the event that this Agreement is terminated by the
Company (i) pursuant to Section 7.1(f) due to a material breach by Parent of its
obligations under Section 5.2(a) and, if such breach is of a nature that it may
be cured by Parent, Parent does not cure such breach within 48 hours after such
breach; or (ii) pursuant to Section 7.1(i), then Parent shall pay to the Company
a termination fee equal to $10 million and shall pay to the Company an amount
equal to the Company's reasonable, out-of-pocket expenses incurred in connection
with the transactions contemplated by this Agreement.
(e) Provided that Parent has not committed an act with the
intent and effect of breaching this Agreement, the fee and expense arrangements
contemplated hereby are the sole remedies for breach of Parent's obligations
under Section 5.2(a) (other than equitable or injunctive relief under Section
8.8) and shall constitute complete and reasonable liquidated damages for any
such breach. The amounts payable by Parent pursuant to this Section 7.3 shall be
paid pursuant to this Section 7.3 regardless of any alleged breach, other than a
willful or intentional breach, by the Company of its obligations hereunder;
provided, that no payment made by Parent pursuant to this Section 7.3 shall
operate or be construed as a waiver by Parent of any breach of this Agreement by
the Company or, except as set forth herein, of any rights of Parent in respect
thereof.
(f) Any payment required to be made pursuant to paragraph (d)
of this Section 7.3 shall be made to the Company not later than two business
days after delivery to Parent of notice of demand for payment and shall be made
by wire transfer of immediately available funds to an account designated by the
Company.
7.4. Amendment. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time before or after adoption of this Agreement by stockholders of Parent or the
Company, but after any such approval, no amendment shall be made which by law
requires further approval or authorization by the stockholders of Parent or the
Company without such further approval or authorization. Notwithstanding the
foregoing, this Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
7.5. Extension; Waiver. At any time prior to the Effective Time,
Parent (with respect to the Company) and the Company (with respect to Parent) by
action taken or authorized by their respective Boards of Directors, may, to the
extent legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of such party, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto
49
and (c) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party.
ARTICLE VIII
MISCELLANEOUS
8.1. No Survival of Representations and Warranties. The
representations and warranties made herein by the parties hereto shall not
survive the Effective Time. This Section 8.1 shall not limit any covenant or
agreement of the parties hereto which by its terms contemplates performance
after the Effective Time or after the termination of this Agreement.
8.2. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or dispatched by a nationally recognized overnight courier service
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent:
Intersil Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
with a copy to:
Dechert
0000 Xxxx Xxxxxx
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn.: G. Xxxxxx X'Xxxxxxx, Esq.
Xxxxxxxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
50
(b) if to Merger Sub:
Echo Acquisition, Inc.
c/o Intersil Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
with a copy to:
Dechert
0000 Xxxx Xxxxxx
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn.: G. Xxxxxx X'Xxxxxxx, Esq.
Xxxxxxxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
(c) if to the Company:
Elantec Semiconductor, Inc.
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx
Fax: 000-000-0000
with a copy to:
Fenwick & West LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Fax: 000-000-0000
8.3. Interpretation; Definitions. (a) When a reference is made in this
Agreement to an Article or Section, such reference shall be to an Article or
Section of this Agreement unless otherwise indicated. The headings and the table
of contents contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
(b) For the purposes of any provision of this Agreement, a
"Material Adverse Effect" with respect to any party shall be deemed to occur if
any event, change or effect, individually or in the aggregate with such other
events, changes or effects, has occurred which would reasonably be expected to
have a material adverse effect on (i) the business, assets
51
(including intangible assets), liabilities (contingent or otherwise), prospects,
results of operations or financial condition of such party and its subsidiaries
taken as a whole or (ii) the ability of such party to consummate the
transactions contemplated by this Agreement; provided, however, that a Material
Adverse Effect shall not include any change in or effect upon the business,
assets (including intangible assets), liabilities (contingent or otherwise),
prospects, results of operations or financial condition of such party or any of
its subsidiaries directly or indirectly arising out of or attributable to (x)
any decrease in the market price of the shares of Company Common Stock in the
case of the Company or Parent Class A Common Stock in the case of Parent (but
not any change or effect underlying such decrease to the extent such change or
effect would otherwise constitute a Material Adverse Effect on such party) or
(y) conditions, events, or circumstances generally affecting the economy as a
whole or the semiconductor industry generally. For purposes of analyzing whether
any state of facts, change, development, effect, condition or occurrence
constitutes a Material Adverse Effect under this definition, the parties agree
that (A) materiality shall be analyzed from the viewpoint of whether there is a
significant likelihood that the disclosure of such state of facts, change,
development, effect, condition or occurrence would be viewed by a reasonable
investor as having significantly altered the total mix of information available
to such investor if the total mix consisted solely of (I) the representations
and warranties contained in this Agreement (other than Section 3.6 in the case
of the Company and Section 4.6 in the case of Parent), (II) the Company SEC
Documents or the Parent SEC Documents, as the case may be, and (III) the Company
Disclosure Schedule and the Parent Disclosure Schedule, as the case may be, and
(B) the analysis of materiality shall not be limited to the standpoint of a
long-term investor.
(c) For purposes of this Agreement, a "subsidiary" of any
person means another person, an amount of the voting securities or other voting
ownership or voting partnership interests (or, in the case of a trust,
beneficial interests) of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such voting
securities or interests, 50% or more of the equity interests of which is owned
directly or indirectly by such first person).
(d) For purposes of this Agreement, "knowledge" of a party
shall mean the actual knowledge after due inquiry of all elected officers of
such party or any of its subsidiaries with a title of vice president or higher.
(e) For purposes of this Agreement, references to any
financial statements or any component thereof shall be deemed to include the
footnotes thereto.
(f) For purposes of this Agreement, the term "including" shall
mean "including, without limitation."
8.4. Counterparts. This Agreement may be executed in counterparts,
which together shall constitute one and the same Agreement. The parties may
execute more than one copy of the Agreement, each of which shall constitute an
original.
8.5. Entire Agreement. This Agreement (including the documents and the
instruments referred to herein), the Voting Agreements, and the Confidentiality
Agreement, constitute the entire agreement among the parties and supersede all
prior agreements and understandings,
52
agreements or representations by or among the parties, written and oral, with
respect to the subject matter hereof and thereof.
8.6. Third Party Beneficiaries. Except for the agreement set forth in
Section 5.2(c), nothing in this Agreement, express or implied, is intended or
shall be construed to create any third party beneficiaries.
8.7. Governing Law. This Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the conflict of laws principles
thereof. Each party hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of Delaware and of the
United States of America, in each case located in the State of Delaware, for any
action (and agrees not to commence any action except in any such court), and
further agrees that service of process, summons, notice or document by U.S.
registered mail to its respective address set forth in Section 8.2 shall be
effective service of process for any action brought against it in any such
court. Each party hereby irrevocably and unconditionally waives any objection to
the laying of venue of any action in the courts of the State of Delaware or of
the United States of America, in each case located in the State of Delaware, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any action brought in any such court has been
brought in an inconvenient forum.
8.8. Specific Performance. The transactions contemplated by this
Agreement are unique. Accordingly, each of the parties acknowledges and agrees
that, in addition to all other remedies to which it may be entitled, each of the
parties hereto is entitled to a decree of specific performance and injunctive
and other equitable relief, and the parties hereto agree to waive any
requirement for the securing or posting of any bond in connection with the
obtaining thereof.
8.9. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties; provided, that Parent or Merger Sub may assign any
of Merger Sub's rights and obligation under this Agreement to any other
wholly-owned direct or indirect subsidiary of Parent upon notice to the Company.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
8.10. Expenses. Subject to the provisions of Section 7.3, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby shall be paid by the party incurring such
expenses, except that those expenses incurred in connection with filing,
printing and mailing the Registration Statement and the Joint Proxy Statement
other than the registration fee, which shall be paid by Parent, and the filing
fee required under HSR Act will be shared equally by Parent and the Company.
8.11. Disclosure Schedules. The Company Disclosure Schedule and the
Parent Disclosure Schedule shall be arranged in separate parts corresponding to
the numbered and lettered Sections contained in this Agreement. The information
disclosed in any numbered or lettered part shall be deemed to relate to,
supplement and qualify: (i) the particular representation, warranty or other
provision set forth in the corresponding numbered or lettered Section of this
Agreement, (ii) any representation, warranty or other provision cross-referenced
53
to such numbered or lettered part and (iii) any other provision of this
Agreement to which such disclosed information is relevant but only if the
relevance of such disclosure to such other provision of this Agreement is
readily apparent from the actual text of such disclosure.
[Signature Page for Merger Agreement to Follow]
54
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have signed this
Agreement as of the date first written above.
INTERSIL CORPORATION
By: XXXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
ELANTEC SEMICONDUCTOR, INC.
By: XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
ECHO ACQUISITION, INC.
By: XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Secretary and
Treasurer
