EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
ARMATRON INTERNATIONAL, INC.
and
ARMATRON MERGER CORPORATION
dated as of
April __, 1999
TABLE OF CONTENTS
ARTICLE I 1
THE MERGER 1
SECTION 1.1 THE MERGER 1
SECTION 1.2 EFFECTIVE TIME 1
SECTION 1.3 CLOSING 2
SECTION 1.4 ARTICLES OF ORGANIZATION; BY-LAWS 2
SECTION 1.5 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION 2
ARTICLE II 2
CONVERSION OF SHARES 2
SECTION 2.1 CONVERSION OF CAPITAL STOCK 2
SECTION 2.2 PAYMENT OF MERGER CONSIDERATION 3
SECTION 2.3 DISSENTING SHARES 4
ARTICLE III 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4
SECTION 3.1 ORGANIZATION 4
SECTION 3.2 CAPITALIZATION 5
SECTION 3.3 AUTHORIZATION; VALIDITY OF AGREEMENT 6
SECTION 3.4 NO VIOLATIONS; CONSENTS AND APPROVALS 6
SECTION 3.5 SEC REPORTS AND FINANCIAL STATEMENTS 7
SECTION 3.6 ABSENCE OF CERTAIN CHANGES 8
SECTION 3.7 ABSENCE OF UNDISCLOSED LIABILITIES 8
SECTION 3.8 PROXY STATEMENT; EXCHANGE ACT SCHEDULES 8
SECTION 3.9 EMPLOYEE BENEFIT PLANS; ERISA 9
SECTION 3.10 LITIGATION; COMPLIANCE WITH LAW 9
SECTION 3.11 INTELLECTUAL PROPERTY 10
SECTION 3.12 CONTRACTS 11
SECTION 3.13 TAXES 13
SECTION 3.14 ENVIRONMENTAL MATTERS 13
SECTION 3.15 REQUIRED VOTE BY COMPANY STOCKHOLDERS 15
SECTION 3.16 BROKERS 15
SECTION 3.17 OPINION OF FINANCIAL ADVISOR 15
SECTION 3.18 ASSETS 15
SECTION 3.19 REAL PROPERTY 16
SECTION 3.20 INSURANCE 16
SECTION 3.21 LABOR MATTERS, ETC 16
SECTION 3.22 DISCLOSURE 17
SECTION 3.23 TAKEOVER STATUTES 17
ARTICLE IV 17
REPRESENTATIONS AND WARRANTIES OF MERGERCO 17
SECTION 4.1 ORGANIZATION 17
SECTION 4.2 AUTHORIZATION; VALIDITY OF AGREEMENT 17
SECTION 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS 18
SECTION 4.4 PROXY STATEMENT; EXCHANGE ACT SCHEDULES 18
SECTION 4.5 BROKERS 19
SECTION 4.6 FORMATION OF MERGERCO; NO PRIOR ACTIVITIES 19
ARTICLE V 19
COVENANTS 19
SECTION 5.1 INTERIM OPERATIONS OF THE COMPANY 19
SECTION 5.2 ACCESS TO INFORMATION 21
SECTION 5.3 FURTHER ACTION; REASONABLE BEST EFFORTS 21
SECTION 5.4 SHAREHOLDERS' MEETING; PROXY STATEMENT 21
SECTION 5.5 NOTIFICATION OF CERTAIN MATTERS 23
SECTION 5.6 DIRECTORS' AND OFFICERS' INDEMNIFICATION 23
SECTION 5.7 RECAPITALIZATION 23
SECTION 5.8 CONVEYANCE TAXES 23
SECTION 5.9 DELISTING 24
SECTION 5.10 CONDUCT OF THE COMPANY AFTER THE MERGER 24
ARTICLE VI 24
CONDITIONS 24
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER 24
SECTION 6.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY TO EFFECT
THE MERGER 24
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF MERGERCO TO EFFECT
THE MERGER 25
ARTICLE VII 25
TERMINATION 25
SECTION 7.1 TERMINATION 25
SECTION 7.2 EFFECT OF TERMINATION 26
ARTICLE VIII 27
MISCELLANEOUS 27
SECTION 8.1 FEES AND EXPENSES 27
SECTION 8.2 AMENDMENT; WAIVER 27
SECTION 8.3 SURVIVAL 28
SECTION 8.4 NOTICES 28
SECTION 8.5 INTERPRETATION 29
SECTION 8.6 HEADINGS; SCHEDULES 29
SECTION 8.7 COUNTERPARTS 29
SECTION 8.8 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES 29
SECTION 8.9 SEVERABILITY 29
SECTION 8.10 GOVERNING LAW 29
SECTION 8.11 ASSIGNMENT 30
SCHEDULES
Schedule 3.1 Subsidiaries
Schedule 3.2 (a) Capitalization
Schedule 3.2 (b) Ownership
Schedule 3.4 (a) No Violations; Consents and Approvals
Schedule 3.4 (b) Filings by the Company
Schedule 3.6 Absence of Certain Changes
Schedule 3.7 Absence of Undisclosed Liabilities
Schedule 3.9 (b) Employee Benefit Plans
Schedule 3.9 (c) Severance Benefits
Schedule 3.10 (a) Litigation
Schedule 3.10 (b) Compliance with Laws
Schedule 3.11 Intellectual Property
Schedule 3.12 (a) Contracts
Schedule 3.13 Taxes
Schedule 3.14 (c) Environmental Matters
Schedule 3.18 Assets
Schedule 3.18 (b) Certain Liens
Schedule 3.19 (i) Formerly Owned Property
Schedule 3.19 (ii) Leases
Schedule 3.20 Insurance Policies
Schedule 4.3 (b) Filings by the MergerCo
Schedule 5.1 (iii) Interim Operations
EXHIBITS
Exhibit A List of Stockholders of MergerCo
TABLE OF DEFINED TERMS
----------------------
Term Section
---- -------
Articles of Merger 1.2
Articles of Organization 3.1
Assets 3.18(a)
Certificates 2.2(a)
Closing 1.3
Closing Date 1.3
Code 3.9(a)
Company Recitals
Company Common Stock 2.1
Company Intellectual Property 3.11
Company Preferred Stock 2.1
Company Reports 3.5
Company SEC Documents 3.5
Consolidated Group 3.13(b)
Disclosure Schedule 3.1
Dissenting Shares 2.3
Effective Time 1.2
Environmental Law 3.14(d)
Exchange Act 3.4(b)
Fairness Opinion 3.17
Financial Advisor 3.17
Formerly Owned Property 3.19
GAAP 3.5
Governmental Entity 3.4(b)
Hazardous Materials 3.14(d)
Identified Contracts 3.12(a)
Indemnified Parties 5.6(a)
Intellectual Property 3.11
Laws 3.4(a)
Leased Real Property 3.19
Leases 3.19
Lien 3.18(b)
Litigation 3.10(a)
Massachusetts Secretary of State 1.2
Material Adverse Effect 3.1
Material Contracts 3.12(a)
MBCL Recitals
Merger 1.1
MergerCo Recitals
MergerCo Common Stock 2.1
MergerCo Disclosure Schedule 4.3(b)
Merger Consideration 2.1(a)
Owned Real Property 3.19
Permits 3.10(c)
Permitted Liens 3.18(b)
Person 3.1
Plans 3.9(a)
Proxy Statement 5.4(a)
Real Property 3.19
Recapitalized Common Stock 2.1(b)
Recapitalized Preferred Stock 2.1(d)
Schedule 13E-3 5.4(c)
SEC 3.5
Securities Act 3.4(b)
September 30, 1998 Balance Sheet 3.7
Shares 2.1
Special Meeting 5.4(a)
Subsidiary 3.1
Surviving Corporation 1.1
Tax Returns 3.13(b)
Taxes 3.13(b)
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of April __, 1999, by and
between Armatron International, Inc., a Massachusetts corporation (the
"Company"), and Armatron Merger Corporation, a Massachusetts corporation
("MergerCo"), formed by certain stockholders of the Company.
WHEREAS, the Board of Directors of MergerCo has approved, and deems
it advisable and in the best interests of the stockholders of MergerCo to
participate in the recapitalization of the Company, upon the terms and
subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company, has approved, and
deems it advisable and in the best interests of the shareholders of the
Company to consummate, the recapitalization of the Company, upon the terms
and subject to the conditions set forth herein; and
WHEREAS, in furtherance of such recapitalization, the Board of
Directors of MergerCo and the Board of Directors of the Company have each
approved this Agreement and the merger of MergerCo with and into the
Company in accordance with the terms of this Agreement and the Business
Corporation Law of the Commonwealth of Massachusetts (the "MBCL").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the applicable
provisions of the MBCL, at the Effective Time (as defined in Section 1.2
hereof), MergerCo shall be merged (the "Merger") with and into the Company
and the separate corporate existence of MergerCo shall cease. After the
Merger, the Company shall continue as the surviving corporation (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue
to be governed by the laws of the Commonwealth of Massachusetts. The
Merger shall have the effect as provided in the applicable provisions of
the MBCL. Without limiting the generality of the foregoing, upon the
Merger, all the rights, privileges, immunities, powers and franchises of
the Company and MergerCo shall vest in the Surviving Corporation and all
restrictions, obligations, duties, debts and liabilities of the Company and
MergerCo shall be the obligations, duties, debts and liabilities of the
Surviving Corporation.
SECTION 1.2 Effective Time. On or as promptly as practicable
following the Closing (as defined in Section 1.3), MergerCo and the Company
will cause the appropriate articles of merger (the "Articles of Merger") to
be executed and filed with the Secretary of State of the Commonwealth of
Massachusetts (the "Massachusetts Secretary of State") in such form and
executed as provided in Section 78 of the MBCL. The Merger shall become
effective on the date on which the Articles of Merger have been duly filed
with the Massachusetts Secretary of State, or such time as is agreed upon
by the parties and specified in the Articles of Merger, but not later than
30 days after such filing, and such time is hereinafter referred to as the
"Effective Time."
SECTION 1.3 Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., Boston time, on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of all of the conditions set forth in Article VI
hereof (the "Closing Date"), at the offices of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., One Financial Center, Boston, Massachusetts,
unless another date or place is agreed to by the parties hereto.
SECTION 1.4 Articles of Organization; By-Laws. Pursuant to the
Merger, (x) the articles of organization of the Surviving Corporation shall
be amended and restated at and as of the Effective Time to read as did the
articles of organization of MergerCo immediately prior to the Effective
Time, until thereafter amended as provided by applicable law and such
articles of organization, except that the name of the Surviving Corporation
will remain unchanged and (y) the By-laws of the Surviving Corporation
shall be amended and restated, at and as of the Effective Time, to read as
did the By-laws of MergerCo immediately prior to the Effective Time, until
thereafter amended as provided by applicable law, the articles of
organization or the By-laws of the Surviving Corporation, except that the
name of the Surviving Corporation will remain unchanged.
SECTION 1.5 Directors and Officers of the Surviving Corporation.
(a) The directors of MergerCo immediately prior to the Effective
Time shall, from and after the Effective Time, be the directors of the
Surviving Corporation until their successors shall have been duly elected
or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's articles of
organization and By-laws.
(b) The officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall
hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1 Conversion of Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders
of any shares of common stock, par value $1.00 per share, of the Company
(referred to herein, as the "Shares" or "Company Common Stock"), Series A
Preferred Stock, par value $100 per share, of the Company (the "Company
Preferred Stock") or the common stock, par value $.01 per share, of
MergerCo (the "MergerCo Common Stock"):
(a) Each issued and outstanding share of Company Common Stock
(other than (i) Shares to be contributed to MergerCo in accordance with
Section 2.1(b), (ii) Shares to be canceled in accordance with Section
2.1(c) and (iii) Dissenting Shares covered by Section 2.3) shall be
converted into the right to receive $.27 in cash, payable to the holder
thereof, without interest (the "Merger Consideration"), upon surrender of
the certificate formerly representing such share of Company Common Stock in
the manner provided in and otherwise in accordance with Section 2.2. All
such shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any such Shares
shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor in accordance with Section 2.2.
(b) Each issued and outstanding share of Company Common Stock held
by the persons and entities listed on Exhibit A attached hereto shall be
contributed to MergerCo in exchange for one hundredth of one fully paid and
nonassesable share of MergerCo Common Stock (or fraction thereof) and each
such share of MergerCo Common Stock shall then be converted into and become
one fully paid and nonassessable share of common stock, $.01 par value per
share (or fraction thereof), of the Surviving Corporation (the
"Recapitalized Common Stock").
(c) All shares of Company Common Stock that are held by the Company
as treasury stock or that are held by MergerCo shall be canceled and
retired and shall cease to exist and no Merger Consideration shall be
delivered in exchange therefor.
(d) Each issued and outstanding share of Company Preferred Stock
shall be converted into and become one fully paid and nonassessable share
of Series A Preferred Stock, $.01 par value per share, of the Surviving
Corporation (the "Recapitalized Preferred Stock").
SECTION 2.2 Payment of Merger Consideration.
(a) The Company will promptly, and in any event not later than ten
business days following the Effective Time, mail to each holder of record
of a certificate or certificates, which immediately prior to the Effective
Time represented outstanding shares of Company Common Stock (the
"Certificates"), whose Shares were converted pursuant to Section 2.1(a)
into the right to receive the Merger Consideration, a check from the
Company representing the Merger Consideration for each share of Company
Common Stock formerly represented by such Certificate. Each Certificate
(other than Certificates representing Dissenting Shares) shall be deemed at
any time after the Effective Time to be canceled and represent only the
right to receive the Merger Consideration as contemplated by this Section
2.2.
(b) After the Effective Time, the stock transfer books of the
Company shall be closed and there shall be no transfers on the stock
transfer books of the Surviving Corporation of Shares which were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation,
they shall be canceled and exchanged for the Merger Consideration as
provided in this Article II. Any former shareholders of the Company shall
after the Effective Time, look only to the Surviving Corporation for
payment of any Merger Consideration that may be payable upon surrender of
any Certificates such shareholder holds, as determined pursuant to this
Agreement, without any interest thereon.
(c) None of MergerCo, the Company, the Surviving Corporation, or
any other person shall be liable to any former holder of shares of Company
Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(d) Any payment made pursuant to this Section 2.2 shall be subject
to and made net of applicable withholding taxes.
SECTION 2.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares which are issued and outstanding
immediately prior to the Effective Time and which are held by shareholders
who have validly demanded payment of the fair value for such shareholders'
shares as determined by appraisal in accordance with the MBCL (the
"Dissenting Shares"), shall not be converted into or be exchangeable for
the right to receive the Merger Consideration provided in Section 2.1(a) of
this Agreement, unless and until such holder shall have failed to perfect
or shall have effectively withdrawn or lost such holder's right to
appraisal and payment under the MBCL. If such holder shall have so failed
to perfect or shall have effectively withdrawn or lost such right, such
holder's Shares shall thereupon be deemed to have been converted into and
to have become exchangeable for, at the Effective Time, the right to
receive the consideration provided for in Section 2.1 of this Agreement,
without any interest thereon.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to MergerCo as of the date hereof
that:
SECTION 3.1 Organization. Each of the Company and its Subsidiaries
(as hereinafter defined) is a corporation or other entity duly organized,
validly existing, and in good standing under the laws of the jurisdiction
of its incorporation or organization, and has all requisite corporate power
and authority to own, lease, use and operate its properties and to carry on
its business as it is now being conducted. Each of the Company and its
Subsidiaries (as hereinafter defined) is qualified or licensed to do
business as a foreign corporation and is in good standing in each
jurisdiction in which it owns real property or in which the nature of the
business conducted by it makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed in the aggregate
would not have or result in a Material Adverse Effect. The term "Material
Adverse Effect" shall mean any change, effect, event, occurrence or state
of facts that is, or would reasonably be expected to be, materially adverse
to the business, assets, liabilities, results of operations or financial or
other condition of the Company and its Subsidiaries taken as a whole. None
of the Company or any of its Subsidiaries is in breach or violation of any
of its articles of organization, by-laws or other organizational documents.
The Company has previously delivered to MergerCo a complete and correct
copy of each of its restated articles of organization, as amended (the
"Articles of Organization") and By-Laws, as currently in effect. Schedule
3.1 of the disclosure schedule delivered by the Company to MergerCo on or
prior to the date hereof (the "Disclosure Schedule") sets forth a complete
and correct list of the Subsidiaries of the Company and their respective
jurisdictions of incorporation or organization. "Subsidiary" shall mean
with respect to any Person, any corporation or other entity of which 50% or
more of the securities or other interests having by their terms ordinary
voting power for the election of directors or others performing similar
functions with respect to such entity is directly or indirectly owned by
such Person. "Person" shall mean any natural person, firm, individual,
partnership, joint venture, business trust, trust, association,
corporation, company, unincorporated entity or Governmental Entity (as
defined in Section 3.4(b)).
SECTION 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
6,000,000 shares of Company Common Stock and 100,000 shares of preferred
stock, of which 6,667 shares have been designated as Company Preferred
Stock. At the close of business on April 30, 1999: (i) 2,459,749 shares of
Company Common Stock were issued and outstanding; (ii) 146,732 shares of
Company Common Stock were issued and held by the Company in its treasury;
(iii) 6,667 shares of Company Preferred Stock were issued and outstanding;
(iv) no shares of Company Common Stock were reserved for issuance pursuant
to the Company Stock Plan, of which no shares are subject to outstanding
options; and (v) no shares of Company Preferred Stock have been designated
(except for the 6,667 shares of Company Preferred Stock referenced above)
or issued. All outstanding shares of capital stock of the Company are, and
all shares thereof which may be issued will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as expressly provided in this Agreement or in
the Articles of Organization, (x) there are not issued, reserved for
issuance or outstanding (A) any shares of capital stock or other voting
securities of the Company, (B) any securities of Company or any of its
Subsidiaries convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company, (C) any warrants, calls,
options or other rights to acquire from Company or any of its Subsidiaries,
and any obligation of Company or any of its Subsidiaries to issue, any
capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company, and (y) there are no outstanding obligations of Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered
or sold, any such securities, in each case. Except as set forth in Schedule
3.2(a) of the Disclosure Schedule, there are no existing or outstanding (i)
options, warrants, calls, preemptive rights, subscriptions or other rights,
convertible securities, agreements or commitments of any character
obligating the Company or any of its Subsidiaries to issue, transfer or
sell any shares of capital stock or other equity interest in, the Company
or any of its Subsidiaries or securities convertible into or exchangeable
for such shares or equity interests, (ii) contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any capital stock of the Company or any Subsidiary of the Company
or (iii) voting trusts or similar agreements to which the Company or any of
its Subsidiaries is a party with respect to the voting of the capital stock
of the Company or any of its Subsidiaries.
(b) Except as set forth in Schedule 3.2(b) of the Disclosure
Schedule, (i) all of the outstanding shares of capital stock of each of the
Company's Subsidiaries are beneficially owned, directly or indirectly, by
the Company and (ii) neither the Company nor any of its Subsidiaries owns
any shares of capital stock or other securities of, or interest in, any
other Person (other than any Subsidiaries listed on Schedule 3.1), or is
obligated to make any capital contribution to or other investment in any
other Person, provided that Schedule 3.2(b) shall not be required to set
forth any cash equivalents held by the Company or any of its Subsidiaries
or any Person in which the Company or any of its Subsidiaries owns less
than 100 shares of publicly traded securities.
SECTION 3.3 Authorization; Validity of Agreement. The Company has
the requisite corporate power and authority to execute and deliver this
Agreement and, subject to approval of its stockholders as contemplated by
Section 5.6 hereof, to consummate the transactions contemplated hereby.
The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company and, other than
approval and adoption of this Agreement by the holders of two-thirds of the
outstanding shares of Company Common Stock and Company Preferred Stock,
voting together as a single class, no other corporate proceedings on the
part of the Company are necessary to authorize the execution and delivery
of this Agreement by the Company and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by the Company and, assuming due authorization, execution and delivery of
this Agreement by MergerCo, is a valid and binding obligation of the
Company in accordance with its terms, except that such enforcement may be
subject to or limited by (i) bankruptcy, insolvency or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
SECTION 3.4 No Violations; Consents and Approvals.
(a) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the transactions
contemplated hereby will (i) violate any provision of the Articles of
Organization or By-Laws of the Company, (ii) except as set forth in
Schedule 3.4(a) of the Disclosure Schedule, conflict with, result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration, or to the imposition of any Lien
(as defined in Section 3.18(b))) under, or result in the acceleration or
trigger of any payment, time of payment, vesting or increase in the amount
of any compensation or benefit payable pursuant to, the terms, conditions
or provisions of any note, bond, mortgage, indenture, guarantee or other
evidence of indebtedness, or any lease, license, contract, agreement, plan
or other instrument or obligation, to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their assets may
be bound, or (iii) conflict with or violate any federal, state, local or
foreign order, writ, injunction, judgment, award, decree, statute, law,
rule or regulation (collectively, "Laws") applicable to the Company, any of
its Subsidiaries or any of their properties or assets; except in the case
of clauses (ii) or (iii) for such conflicts, violations, breaches or
defaults which in the aggregate would not have or result in a Material
Adverse Effect or materially impair or delay the consummation of the
transactions contemplated hereby.
(b) Except as disclosed in Schedule 3.4(b) of the Disclosure
Schedule, no filing or registration with, declaration or notification to,
or order, authorization, consent or approval of, any federal, state, local
or foreign court, legislative, executive or regulatory authority or agency
(a "Governmental Entity") or any other Person is required in connection
with the execution, delivery and performance of this Agreement by the
Company or the consummation by the Company of the transactions contemplated
hereby, except (i) applicable requirements under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), (ii) applicable requirements
under the Securities Act of 1933, as amended (the "Securities Act"), (iii)
the filing of the Articles of Merger with the Massachusetts Secretary of
State, (iv) applicable requirements under "blue sky" laws of various states,
(v) such other consents, approvals, orders, authorizations, notifications,
registrations, declarations and filings the failure of which to be obtained
or made in the aggregate would not have or result in a Material Adverse
Effect or materially impair or delay the consummation of the transactions
contemplated hereby.
SECTION 3.5 SEC Reports and Financial Statements. The Company has
timely filed with the Securities and Exchange Commission (the "SEC"), any
applicable state securities authorities and any other Governmental Entity
all forms and documents required to be filed by it since October 1, 1993
(collectively, the "Company Reports") and has heretofore made available to
the MergerCo (i) its Annual Reports on Form 10-K, as amended, for the
fiscal years ended September 30, 1994, September 30, 1995, September 30,
1996, September 30, 1997 and September 30, 1998, respectively, (ii) its
Quarterly Report on Form 10-Q for the period ended December 30, 1998, (iii)
all proxy statements relating to meetings of stockholders of the Company
since October 1, 1993 (in the form mailed to stockholders) and (iv) all
other forms, reports and registration statements filed by the Company with
the SEC since October 1, 1993 (other than registration statements on Form
S-8 or Form 8-A or preliminary materials and registration statements in
forms not declared effective). The documents described in clauses (i)-(iv)
above (whether filed before, on or after the date hereof) are referred to
in this Agreement collectively as the "Company SEC Documents". As of their
respective dates, the Company Reports (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, in
light of the circumstances under which they were made, not misleading and
(b) complied in all material respects with the applicable requirements of
Law, including in the case of SEC filings, the Exchange Act and the
Securities Act, as the case may be, and the applicable rules and
regulations of the SEC thereunder. The consolidated financial statements
included in the Company SEC Documents have been prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except as otherwise noted
therein and except that the quarterly financial statements are subject to
year end adjustment and do not contain all footnote disclosures required by
GAAP) and fairly present in all material respects the consolidated
financial position and the consolidated results of operations and cash
flows of the Company and its consolidated Subsidiaries as at the dates
thereof or for the periods presented therein.
SECTION 3.6 Absence of Certain Changes. Except as disclosed in the
Company SEC Documents filed prior to the date hereof or as disclosed in
Schedule 3.6 of the Disclosure Schedule, since September 30, 1998, (i) the
Company and its Subsidiaries have conducted their respective operations
only in the ordinary course consistent with past practice, (ii) there has
not been a Material Adverse Effect and (iii) the Company and the
Subsidiaries have not taken action that if taken after the date hereof
would constitute a violation of Section 5.1 (other than clause (a)
thereof).
SECTION 3.7 Absence of Undisclosed Liabilities. Except as and to
the extent disclosed (a) in the Company's Annual Report on Form 10-K, as
amended, for the period ended September 30, 1998, including as reflected or
reserved against in the balance sheet dated as of and as at September 30,
1998 constituting a portion of the financial statements included therein
(the "September 30, 1998 Balance Sheet") or in the notes thereto, (b) in
the Company SEC Documents filed prior to the date hereof or (c) in Schedule
3.7 of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries had as of that date any liabilities or obligations (accrued,
contingent or otherwise) which would be material to the Company and its
Subsidiaries taken as a whole or which would be required to be set forth in
an audited consolidated balance sheet of the Company and its Subsidiaries
as of that date or the notes thereto prepared in accordance with GAAP.
SECTION 3.8 Proxy Statement; Exchange Act Schedules.
(a) The Proxy Statement (as defined in Section 5.4(a)) (and any
amendment thereof or supplement thereto) at the date mailed to Company
stockholders and at the time of the Special Meeting (as defined in Section
5.4(b)), (i) will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they are made, not misleading and (ii) will comply in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder; except that no representation is made by the
Company with respect to statements made in the Proxy Statement based on
information supplied by MergerCo specifically for inclusion in the Proxy
Statement.
(b) Any Schedule 13E-3 (as defined in Section 5.4(c)) and any
related schedules (and any amendment or supplement to any of the foregoing)
filed with the SEC at the date so filed (i) will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading and
(ii) will comply in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder; except that no
representation is made by the Company with respect to statements made in
any such document based on information supplied by MergerCo specifically
for inclusion therein.
SECTION 3.9 Employee Benefit Plans; ERISA.
(a) No material liability under Title I or IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or the penalty
or excise tax provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), relating to employee plans has been incurred by the Company
or any of its Subsidiaries and, to the Company's best knowledge, no
condition exists or event has occurred that presents a risk to the Company
or any of its Subsidiaries of incurring any such material liability.
(b) Each bonus, incentive or deferred compensation, stock option or
other equity based, severance, termination, change in control, retention,
employment, medical, life, disability, other welfare, profit-sharing,
retirement or other material compensation or benefit plan, agreement or
policy in respect of which the Company or any of its Subsidiaries has any
material liability has been filed with the Company SEC Documents or is
listed on Schedule 3.9(b) of the Disclosure Schedule (collectively, the
"Plans"). No such Plan is subject to Section 302 of ERISA or section 412
of the Code and no such Plan has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA or Section 412 of the
Code), whether or not waived. Each such Plan that is intended to be
"qualified" within the meaning of section 401(a) of the Code has received a
determination letter from the Internal Revenue Service confirming its
qualified status and no condition exists or event has occurred since the
date of such determination letter that would adversely affect the qualified
status of any such Plan. Each Plan has been operated and administered in
all respects in substantial compliance with its terms and applicable Law,
including but not limited to ERISA and the Code. There are no pending, or
to the best knowledge of the Company, threatened claims by or on behalf of
any Plan, by any employee or beneficiary or otherwise involving any such
Plan or the assets thereof, except for claims the resolution of which would
not individually or in the aggregate have or result in a material liability
to the Company or a Subsidiary.
(c) Assuming that no amount is paid to any employee listed on
Schedule 3.9(c)(i) as a severance benefit with respect to a termination of
employment, no payment, benefit or other amount paid, payable or required
to be paid in respect of any employee will fail to be deductible under
Section 280G of the Code. Except as set forth on Schedule 3.9(c)(ii) of the
Disclosure Schedule, (i) no current or former employee or director of the
Company or any Subsidiary is or will become entitled to any additional or
new compensation, benefits or other compensatory payment or an increase in
the amount of any compensation, benefits or other compensatory payment in
connection with or as a result of the consummation of the transactions
contemplated by this Agreement and (ii) neither the vesting nor the timing
of the payment of any such compensation, benefit or other compensatory
payment in respect of any such employee or director has been or will be
accelerated in connection with or as a result of the consummation of the
transactions contemplated by this Agreement.
SECTION 3.10 Litigation; Compliance with Law.
(a) Except as disclosed in the Company SEC Documents filed prior to
the date hereof or in Schedule 3.10(a) of the Disclosure Schedule, (i)
there is no suit, claim, action, arbitration, proceeding or investigation
or other Litigation (as defined below) pending or, to the knowledge of the
Company, threatened, against the Company or any of its Subsidiaries or any
of their properties or assets which, individually or in the aggregate, if
determined adversely to the Company or any such Subsidiary, would have or
result in a Material Adverse Effect, and (ii) neither the Company nor any
of its Subsidiaries is subject to any settlement or similar agreement with
any Governmental Entity, or to any order, judgment, decree, injunction or
award of any Governmental Entity or arbitrator, that individually or in the
aggregate, would have or result in a Material Adverse Effect. "Litigation"
means any action, cause of action, claim, demand, suit, proceeding,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, by or before any
court, tribunal, arbitrator or other Governmental Entity.
(b) Except as disclosed in the Company SEC Documents filed prior to
the date hereof, the operations of the Company and its Subsidiaries have
not been and are not being conducted, and no Real Property (as defined in
Section 3.19) is, in violation of any law, statute or regulation, any
judgment, decree, order or injunction of any Governmental Entity, any other
Law, or any Permit (as defined below), except where such violations in the
aggregate would not have or result in a Material Adverse Effect. Except as
set forth in Schedule 3.10(b) of the Disclosure Schedule, neither the
Company nor any of its Subsidiaries has received any notice, or has
knowledge of any claim, alleging any such violation.
(c) The Company and its Subsidiaries hold all licenses, permits,
variances, consents, authorizations, waivers, grants, franchises,
concessions, exemptions, orders, registrations and approvals of
Governmental Entities or other Persons necessary for the ownership,
leasing, operation, occupancy and use of the Real Property and the conduct
of their respective businesses as currently conducted ("Permits"), except
where the failure to hold such Permits in the aggregate would not have or
result in a Material Adverse Effect. There is no Litigation pending or, to
the knowledge of the Company, threatened, that would result in the
termination, modification or nonrenewal of any Permit, and neither the
Company nor any of its Subsidiaries has received notice that any Permit
will be terminated or modified or cannot be renewed in the ordinary course
of business, and there is no reasonable basis for any such termination,
modification or nonrenewal, except for such terminations, modifications or
nonrenewals as in the aggregate would not have or result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do not and
will not violate any Permit, or result in any termination, modification or
nonrenewal thereof, except for such violations terminations, modifications
or nonrenewals thereof as in the aggregate would not have or result in a
Material Adverse Effect.
SECTION 3.11 Intellectual Property. The Company and its
Subsidiaries own (beneficially and as of record), or possess valid and
legally enforceable licenses or rights to use, any and all United States
and foreign patents, patent applications, patent disclosures, mask works,
software, trademarks, trade names, copyrights and service marks, including
applications to register and registrations for any of the foregoing, as
well as trade secrets, know-how and other proprietary rights and
information (collectively, "Intellectual Property") necessary for the
conduct of, or otherwise material to, their business and operations as
currently conducted or as proposed to be conducted (the "Company
Intellectual Property"), free and clear of any Liens (except for any
Permitted Liens, as defined in Section 3.18(b)). Except as disclosed in
Schedule 3.11 of the Disclosure Schedule, the conduct of the business of
the Company and its Subsidiaries as currently conducted does not infringe
or conflict with any Intellectual Property of any Person; and neither the
Company nor any of its Subsidiaries has received notice or has actual
knowledge of any such current infringement or conflict except where such
infringements and conflicts as in the aggregate would not have or result in
a Material Adverse Effect. All of the patents, patent applications and
patent disclosures included in Company Intellectual Property are valid,
subsisting and enforceable. To the knowledge of the Company, no Person is
infringing or allegedly infringing any Intellectual Property of the Company
or its Subsidiaries except where such actual and alleged infringements as
in the aggregate would not have or result in a Material Adverse Effect.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the loss of, or
creation of any Lien on, the rights of the Company or any Subsidiary with
respect to the Intellectual Property owned or used by them, except where
such losses and such Liens as in the aggregate would not have or result in
a Material Adverse Effect. Schedule 3.11 of the Disclosure Schedule
contains a complete and correct list of all patents, patent applications,
patent disclosures, mask works, software (other than any software that is
commercially available for an amount less than $10,000), trademarks, trade
names, registered copyrights and service marks, including applications to
register and registrations for any of the foregoing, included in Company
Intellectual Property except that Schedule 3.11 need not disclose any
trademarks, trade names or service marks that are not (a) registered or
applied for and (b) not material to the business of the Company or any of
its Subsidiaries as currently conducted. Except as disclosed in Schedule
3.11 of the Disclosure Schedule, all software used by the Company or any of
its Subsidiaries, or sold, licensed or otherwise made available to any
other Person by the Company or any of its Subsidiaries, that in each case,
contains or calls on a calendar function, including but not limited to any
function that is indexed to a computer processing unit clock, provides
specific dates or calculates spans of dates, is and will be able to record,
store, process and provide true and accurate dates and calculations for
dates and spans of dates including and following January 1, 2000.
SECTION 3.12 Contracts.
(a) Other than the contracts or agreements of the Company listed as
exhibits to the Company's Annual Report on Form 10-K, as amended, for the
year ended September 30, 1998 (the "Material Contracts"), Schedule 3.12(a)
of the Disclosure Schedule sets forth a complete and correct list of each
of the following contracts, commitments and agreements to which the Company
or any of its Subsidiaries is a party or by which any of them is bound (the
contracts, commitments and agreements of the types described below that are
scheduled or required to be scheduled, collectively, the "Identified
Contracts"), in each case, as such Identified Contract is in effect on the
date hereof:
(i) contracts, commitments and agreements governing the
terms of indebtedness for borrowed money, or guarantees of
indebtedness, of, or secured by assets of, the Company or any of its
Subsidiaries;
(ii) shareholder, voting trust or similar contracts and
agreements relating to the voting of shares or other equity or debt
interests of the Company or any of its Subsidiaries;
(iii) contracts, commitments and agreements entered into since
1995 providing for the acquisition or disposition of assets having a
value in excess of $500,000, other than sales of inventories in the
ordinary course of business and sales of obsolete equipment;
(iv) leases, subleases and licenses or real property,
occupancy, use and other agreements relating to or constituting real
property, each with a term of one year or more and an annual payment
obligation in excess of $500,000;
(v) (a) joint venture agreements, partnership agreements and
other similar contracts, commitments and agreements involving a
sharing of profits and expenses; contracts, commitments and
agreements providing for a "strategic alliance" or "preferred vendor"
relationship; or (b) contracts, commitments or agreements with
distributors, brokers or sales agents except, in the case of (b),
only to the extent that any such distributors, brokers or sales
agents are responsible for revenues to the Company or any of its
Subsidiaries in excess of $500,000 per year;
(vi) contracts, commitments and agreements governing the
terms of indebtedness (other than trade payables in the ordinary
course of business) of third parties to the Company or by any of its
Subsidiaries, or guarantees by the Company or any of its Subsidiaries
of indebtedness of third parties;
(vii) contracts, commitments and agreements prohibiting or
materially restricting the ability of the Company or any of its
Subsidiaries to conduct its business, to engage in any business or
operate in any geographical area or to compete with any Person;
(viii) contracts, commitments and agreements with "change of
control" provisions except to the extent that if a "change of
control" event occurred, it would not result in a termination or
other alteration of such contract, commitment or agreement that would
have or would reasonably be expected to have a material adverse effect
on the business of the Company or its Subsidiary that is a party
thereto;
(ix) contracts, commitments, and agreements with any federal
or state Governmental Entity;
(x) licenses, licensing arrangements and other contracts and
agreements either (x) providing, in whole or in part, for the use of,
or limiting the use of, any Intellectual Property or (y) relating to
the development, support or maintenance of any Intellectual Property
(in each case, that is material to the business of the Company or any
of its Subsidiaries that is a party thereto and other than relating
to software that is commercially available for less than $10,000);
and
(xi) contracts and agreements that are or will be material to
the business, operations, results of operations, condition (financial
or otherwise), assets or properties of the Company and its
Subsidiaries involving amounts in excess of $250,000.
(b) Each of the Identified Contracts and Material Contracts is in
full force and effect, and neither the Company nor any of its Subsidiaries,
nor, to the knowledge of the Company, any other Person, is in breach of, or
default under, any such contract, commitment or agreement, and no event has
occurred that with notice or passage of time or both would constitute such
a breach or default thereunder by the Company or any of its Subsidiaries,
or, to the knowledge of the Company, any other Person, except for such
failures to be in full force and effect and such conflicts, violations,
breaches or defaults as in the aggregate would not have or result in a
Material Adverse Effect or materially delay the consummation of the
transactions contemplated hereby.
SECTION 3.13 Taxes.
(a) Except as disclosed in Schedule 3.13 of the Disclosure Schedule:
(i) each of the Company, its Subsidiaries, and any Consolidated Group (as
defined below) has timely filed all material Tax Returns (as defined below)
required to be filed by it and has paid all Taxes (as defined below) shown
thereon to be owing, and each of the Company and its Subsidiaries has
provided reserves in accordance with GAAP in its most recent financial
statements included in the Company SEC Documents for any Taxes (as defined
below) that have not been paid for the periods covered by such financial
statements; (ii) none of the Company or its Subsidiaries has granted any
extension or waiver of the statute of limitations period applicable to any
material Tax Return, which period (after giving effect to such extension or
waiver) has not expired; (iii) no audits or other administrative
proceedings or court proceedings are presently pending with regard to any
Taxes or Tax Return of any of the Company, its Subsidiaries or any
Consolidated Group as to which any taxing authority has asserted in writing
any claim which, if adversely determined, individually or in the aggregate
would have or result in a Material Adverse Effect; and (iv) none of the
Company or any of its Subsidiaries has received any notice of deficiency or
assessment from any taxing authority with respect to liabilities for income
or any material other Taxes which has not been fully paid or finally
settled.
(b) "Consolidated Group" shall mean any consolidated, combined,
unitary or aggregate group for Tax purposes of which the Company or any of
its Subsidiaries is a member. "Taxes" shall mean all federal, state, local
and foreign taxes, and other assessments of a similar nature (whether
imposed directly or through withholding), including interest and penalties,
and additions thereto. "Tax Returns" shall mean all federal, state, local
and foreign tax returns, declarations, statements, reports, schedules,
forms and information returns, and any amendments to any of the foregoing,
relating to Taxes.
SECTION 3.14 Environmental Matters.
Except as disclosed in Schedule 3.14 of the Disclosure Schedule:
(a) Each of the Company and its Subsidiaries has complied and is in
compliance in all respects with all applicable Environmental Laws (as
defined below) pertaining to any of the properties and assets of the
Company or any of its Subsidiaries (including the Real Property and the
properties currently or formerly owned or leased) and the use and ownership
thereof, and to their businesses and operations. No violation by the
Company or any of its Subsidiaries is being alleged or has been alleged of
any applicable Environmental Law relating to any of their respective
properties and assets including (the Real Property and the properties
currently or formerly owned or leased) or the use or ownership thereof, or
to their respective businesses and operations.
(b) Neither the Company nor any of its Subsidiaries nor any other
Person (including any tenant or subtenant) has caused or taken any action
that will result in, and neither the Company nor any of its Subsidiaries is
subject to, any liability or obligation on the part of the Company or any
of its Subsidiaries relating to (x) the environmental conditions on, under,
or about the Real Property or other properties or assets currently or
formerly owned, leased, operated or used by the Company or any of its
Subsidiaries or any predecessor thereto at the present time or in the past,
including without limitation, the air, soil and groundwater conditions at
such properties or (y) the past or present use, management, handling,
transport, treatment, generation, storage, disposal, discharge, leak,
emission, or other manner of release of any Hazardous Materials (as defined
below).
(c) The Company has disclosed and made available to MergerCo all
information, including, without limitation, all studies, analyses and test
results, in the possession, custody or control of or otherwise known to the
Company or any of its Subsidiaries relating to (x) the environmental
conditions on, under or about the Real Property or other properties or
assets currently or formerly owned, leased, operated or used by the Company
or any of its Subsidiaries or any predecessor in interest thereto at the
present time or in the past, and (y) any Hazardous Materials used, managed,
handled, transported, treated, generated, stored, discharged, leaked,
emitted, or otherwise released by the Company or any of its Subsidiaries or
any other Person on, under, about or from any of the Real Property and the
properties currently or formerly owned or leased, or otherwise in
connection with the use or operation of any of the properties and assets of
the Company or any of its Subsidiaries, or their respective businesses and
operations. Except as disclosed in Schedule 3.14(c), none of the current or
past operations of the Company or any of its Subsidiaries, or any by-
product thereof, and none of the currently or formerly owned or leased
property or assets of the Company or any of its Subsidiaries, including
without limitation the Real Property, is related to or subject to any
Litigation related to any Environmental Law.
(d) "Environmental Law" means any foreign, federal, state or local
law, regulation, rule, ordinance or case law relating to pollution or
protection of human health and safety or the environment, including, but
not limited to, laws relating to releases or threatened releases of
Hazardous Materials into the environment and including laws pertaining to
the protection of the health and safety of employees. "Hazardous
Materials" means any substance or material that is classified or regulated
as "hazardous" or "toxic" pursuant to any Environmental Law, including
without limitation, asbestos, polychlorinated biphenyls and petroleum.
SECTION 3.15 Required Vote by Company Stockholders. The affirmative
vote of the holders of two-thirds of the outstanding shares of Company
Common Stock and Company Preferred Stock is the only vote of any class of
capital stock of the Company required by the MBCL, the Articles of
Organization or the By-Laws of the Company to adopt this Agreement and
approve the transactions contemplated hereby.
SECTION 3.16 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its
Subsidiaries, that is or will be payable by the Company or any of its
Subsidiaries.
SECTION 3.17 Opinion of Financial Advisor. The Company has received
from Xxxxxx Associates Inc. (the "Financial Advisor"), and provided to
MergerCo on or prior to the date hereof, an executed copy of its opinion
that the Merger Consideration to be received by the holders of Shares in
the Merger is fair, from a financial point of view, to such holders (the
"Fairness Opinion"). The Company has been authorized by the Financial
Advisor to include the Fairness Opinion in the Proxy Statement and has not
been notified by the Financial Advisor that the Fairness Opinion has been
withdrawn or modified.
SECTION 3.18 Assets.
(a) The Company and its Subsidiaries own, or otherwise have
sufficient and legally enforceable rights to use, all of the properties and
assets (real, personal or mixed, tangible or intangible), reasonably
necessary for the conduct of, or otherwise material to, their business and
operations (the "Assets"). The Company and its Subsidiaries have good,
valid and marketable title to, or in the case of leased property have good
and valid leasehold interests in, all Assets, including but not limited to
all such Assets reflected in the September 30, 1998 Balance Sheet or
acquired since the date thereof (except as may have been disposed of in the
ordinary course of business consistent with past practices prior to the
date hereof or in accordance herewith), in each case free and clear of any
Lien (as defined below), except Permitted Liens (as defined below). All
tangible Assets are reasonably adequate and suitable for the purposes for
which they are presently being used.
(b) "Lien" means any mortgage, pledge, deed of trust,
hypothecation, right of others, claim, security interest, encumbrance,
burden, title defect, title retention agreement, lease, sublease, license,
occupancy agreement, easement, covenant, condition, encroachment, voting
trust agreement, interest, option, right of first offer, negotiation or
refusal, proxy, lien, charge or other restrictions of any nature
whatsoever. "Permitted Liens" means (a) Liens reserved against in the
September 30, 1998 Balance Sheet, to the extent so reserved, (b) Liens for
Taxes not yet due and payable or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided
in accordance with GAAP or that are statutory Liens for Taxes not yet
delinquent, (c) those Liens that are set forth in Schedule 3.18(b) of the
Disclosure Schedule and (d) those Liens that, in the aggregate with all
other Permitted Liens, do not and will not materially detract from the
value of the properties and assets of any of the Company and its
Subsidiaries, materially interfere with the present use of any thereof or
otherwise have a Material Adverse Effect.
SECTION 3.19 Real Property. There is no Owned Real Property (as
defined below). Schedule 3.19(i) contains a complete and correct list of
each parcel of Formerly Owned Property (as defined below) setting forth the
street address, current owner and date of disposition to the current owner
of Formerly Owned Property. Schedule 3.19(ii) of the Disclosure Schedule
contains a complete and correct list of all Leases (as defined below)
setting forth the address, tenant for each Lease and the documents of which
each Lease is comprised. No material damage or destruction has occurred
since December 31, 1998 with respect to any of the Leased Real Property.
"Formerly Owned Property" means any Real Property previously owned by the
Company or any of its Subsidiaries since 1990, but not owned by the Company
or any of its Subsidiaries as of the date of this Agreement. "Leases"
means the leases, subleases, licenses and use or occupancy agreements
pursuant to which the Company or any of its Subsidiaries is the lessee,
sublessee, licensee, user or occupant of Real Property. "Leased Real
Property" means all interests in Real Property pursuant to the Leases.
"Owned Real Property" means the real property owned by the Company and its
Subsidiaries. "Real Property" means real property and structures,
facilities and improvements located thereon or attached or appurtenant
thereto and all easements, licenses, rights and appurtenances relating to
the foregoing.
SECTION 3.20 Insurance. Schedule 3.20 of the Disclosure Schedule
contains a complete and correct list and summary description of all
insurance policies maintained at present or at any time during the past
three calendar years by or on behalf of any of the Company and its
Subsidiaries. Such policies are in full force and effect, and all premiums
due thereon have been paid. The Company and its Subsidiaries have complied
in all material respects with the terms and provisions of such policies.
The insurance coverage provided by such policies is adequate and suitable
for the business and operations of the Company and its Subsidiaries, and is
on such terms (including without limitation as to deductibles and self-
insured retentions), covers such risks, contains such deductibles and
retentions, and is in such amounts, as the insurance customarily carried by
comparable companies of established reputation similarly situated and
carrying on the same or similar business and operations.
SECTION 3.21 Labor Matters, etc. Neither the Company nor any of its
Subsidiaries is a party to or bound by and none of their respective
employees is subject to any collective bargaining agreement, memorandum of
understanding or other written document relating to the terms and
conditions of employment for any group of employees, and there are no labor
unions or other organizations representing or purporting or attempting to
represent any employees employed by any of the Company and its
Subsidiaries. The Company and its Subsidiaries have complied with all
applicable Laws pertaining to the employment or termination of employment
of their respective employees, including, without limitation, all such Laws
relating to labor relations, equal employment opportunities, fair
employment practices, prohibited discrimination or distinction and other
similar employment activities, except for any failures so to comply that
individually or in the aggregate would not have or result in a Material
Adverse Effect.
SECTION 3.22 Disclosure. To the actual knowledge of the Company,
this Agreement and each certificate or other instrument or document
furnished by or on behalf of the Company to MergerCo pursuant hereto, taken
as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein in light of
the circumstances under which they were made, not misleading.
SECTION 3.23 Takeover Statutes. No "Fair price," "Moratorium,"
"control share acquisition" or other similar anti-takeover statute or
regulation enacted under state or federal laws in the United States
including, without limitation, Chapters 110C, 110D and 110F of the
Massachusetts General Laws, applicable to the Company or any of its
Subsidiaries is applicable to the execution, delivery and performance of
this Agreement or the consummation of the Merger or the other transactions
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGERCO
MergerCo represents and warrants to the Company as of the date hereof
and as of the Closing Date as follows:
SECTION 4.1 Organization. MergerCo is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts. MergerCo has all requisite corporate power and authority to
own, lease, operate or use its properties and to carry on its business as
now being conducted and is qualified or licensed to do business and is in
good standing in each jurisdiction in which it owns real property or in
which the nature of the business conducted by it makes such qualification
or licensing necessary. MergerCo is not in breach of its articles of
organization or by-laws. MergerCo has previously delivered to the Company
complete and correct copies of the articles of organization and by-laws of
MergerCo, as currently in effect.
SECTION 4.2 Authorization; Validity of Agreement. MergerCo has the
requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance by MergerCo of this Agreement and the
consummation by MergerCo of the transactions contemplated hereby have been
duly authorized by its Board of Directors and, other than the approval and
adoption of this Agreement by the stockholders of MergerCo, no other
corporate proceedings on the part of MergerCo are necessary to authorize
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by MergerCo and, assuming due authorization, execution and
delivery of this Agreement by the Company, is a valid and binding
obligation of MergerCo enforceable against it in accordance with its terms,
except that such enforcement may be subject to or limited by (i)
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors rights generally, and (ii) the effect of general
principles of equity (regardless of whether enforceability is considered in
a proceeding at law or in equity).
SECTION 4.3 Consents and Approvals; No Violations.
(a) Neither the execution and delivery of this Agreement by
MergerCo nor the consummation by MergerCo of the transactions contemplated
hereby will (i) violate any provision of the articles of organization or
by-laws of MergerCo, (ii) conflict with, result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation
or acceleration) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, guarantee, other evidence of indebtedness,
license, or any material lease, contract, agreement or other instrument or
obligation, to which MergerCo is a party or by which any of them or any of
their assets may be bound or (iii) conflict with or violate any Laws
applicable to MergerCo, any of its Subsidiaries or any of their properties
or assets; except in the case of clauses (ii) and (iii) for such conflicts,
violations, breaches or defaults which in the aggregate would not have a
material adverse effect on the business, assets, liabilities, results of
operations or financial or other condition of MergerCo, or materially
impair or delay the consummation of the transactions contemplated by this
Agreement.
(b) Except as set forth in Schedule 4.3(b) of the disclosure
schedule delivered by MergerCo to the Company on or prior to the date
hereof (the "MergerCo Disclosure Schedule") and assuming that the
representation and warranty of the Company set forth in Section 3.4(b) is
true and correct, no filing or registration with, declaration or
notification to, or order, authorization, consent or approval of, any
Governmental Entity is required in connection with the execution and
delivery of this Agreement by MergerCo or the consummation by MergerCo of
the transactions contemplated hereby, except (i) applicable requirements
under the Exchange Act, (ii) applicable requirements under the Securities
Act, (iii) the filing of the Articles of Merger with the Massachusetts
Secretary of State, (iv) applicable requirements under "blue sky" laws of
various states, and (v) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings (x)
required to be obtained or made by the Company or any of its Subsidiaries
or (y) the failure of which to be obtained or made would not have a
material adverse effect on the business, assets, liabilities, results of
operations or financial or other condition of MergerCo and its
Subsidiaries, taken as a whole, or materially impair or delay the
consummation of the transactions contemplated by this Agreement.
SECTION 4.4 Proxy Statement; Exchange Act Schedules.
(a) None of the information supplied in writing by MergerCo
specifically for inclusion in the Proxy Statement (including any amendments
or supplements thereto) will, at the date mailed to stockholders and at the
time of the Special Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(b) None of the information supplied in writing by MergerCo
specifically for inclusion in the Schedule 13E-3 (and any amendment or
supplement to any of the foregoing) will, at the date such document is
filed with the SEC, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
SECTION 4.5 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of MergerCo, that is or will be payable
by the Company or any of its Subsidiaries.
SECTION 4.6 Formation of MergerCo; No Prior Activities. MergerCo
was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement. As of the date hereof and the Effective
Time, except for (i) obligations or liabilities incurred in connection with
its incorporation or organization and the transactions contemplated by this
Agreement, (ii) this Agreement and any other agreements or arrangements
contemplated by this Agreement or in furtherance of the transactions
contemplated hereby and (iii) the contribution by the individuals and
entities listed on Exhibit A attached hereto of the shares of Company
Common Stock owned by them in exchange for shares of MergerCo Common Stock,
MergerCo has not incurred, directly or indirectly, through any subsidiary
or affiliate, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any Person.
ARTICLE V
COVENANTS
SECTION 5.1 Interim Operations of the Company. The Company covenants
and agrees that, except as (i) required by this Agreement, (ii) required by
applicable law, (iii) required by any Material Contract or Identified
Contract or by any Plan disclosed on Schedule 3.9(b), in each case to the
extent such requirement is specifically described on Schedule 5.1(iii) or
(iv) agreed to in writing by MergerCo, after the date hereof and prior to
the Effective Time:
(a) the business of the Company and its Subsidiaries shall be
conducted only in the ordinary course consistent with past practice and, to
the extent consistent therewith, each of the Company and its Subsidiaries
shall use its reasonable efforts to preserve its business organization and
the business organization of its Subsidiaries intact and maintain existing
relations with customers, suppliers, employees and creditors;
(b) the Company shall not amend its Articles of Organization or By-
Laws;
(c) the Company shall not declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to its
capital stock (except for cash dividends on Company Common Stock in the
ordinary course of business consistent with past practice); and neither the
Company nor any of its Subsidiaries shall (i) issue, sell, grant, transfer,
pledge, dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock
of any class of the Company or any of its Subsidiaries (except pursuant to
the exercise of stock options outstanding on the date hereof to the extent
contemplated by this Agreement); (ii) incur any long term indebtedness
(whether evidenced by a note or other instrument, pursuant to a financing
lease, sale-leaseback transaction, or otherwise) or incur short-term
indebtedness other than under lines of credit existing on the date hereof,
except for borrowings under existing credit facilities or lines of credit
in the ordinary course of business consistent with past practice; (iii)
redeem, purchase or otherwise acquire directly or indirectly any of its
capital stock or other securities; or (iv) enter into or amend in any
material respect any Lease, Material Contract or Identified Contract;
(d) neither the Company nor any of its Subsidiaries shall (i)
except for normal salary increases in the ordinary course of business
consistent with past practice, grant any increase in the compensation or
benefits payable or to become payable by the Company or any of its
Subsidiaries to any officer or other management employee of the Company or
any Subsidiary; (ii) adopt, enter into or amend or increase, or accelerate
the payment or vesting of the amounts, benefits or rights payable or
accrued or to become payable or accrued under, any bonus, incentive or
deferred compensation, severance, termination, change in control,
retention, stock option or other equity based or other material employee
compensation or benefit plan, agreement or policy; or (iii) enter into or
amend in any material respect any employment, severance, retention or
collective bargaining agreement or, except in accordance with the existing
written policies of the Company or existing contracts or agreements, grant
any severance or termination pay to any officer, director or employee of
the Company or any of its Subsidiaries;
(e) neither the Company nor its Subsidiaries shall change the
accounting principles used by it unless required by GAAP;
(f) neither the Company nor any of its Subsidiaries shall acquire
or agree to acquire, by merging or consolidating with, by purchasing an
equity interest in or a portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire
any assets of any other Person (other than the purchase of assets in the
ordinary course of business consistent with past practice);
(g) neither the Company nor any of its Subsidiaries shall sell,
lease, exchange, mortgage, pledge, transfer or otherwise dispose of, or
agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, any of its Assets, except in the ordinary course of business
consistent with past practice;
(h) neither the Company nor its Subsidiaries shall enter into any
material arrangement, agreement or contract, or any material amendment,
supplement, waiver or other modification in respect of any existing
arrangement, agreement or contract, with any third party (other than
customers in the ordinary course of business) that provides for an
exclusive arrangement with that third party or is substantially more
restrictive on the Company or its Subsidiaries or substantially less
advantageous to the Company or its Subsidiaries than arrangements,
agreements or contracts existing on the date hereof; and
(i) neither the Company nor any of its Subsidiaries shall make any
material Tax election, amend any Tax Return or settle or compromise any
material federal, state, local or foreign Tax liability; and
(j) neither the Company nor any of its Subsidiaries will enter into
an agreement, contract, commitment or arrangement to do any of the
foregoing.
SECTION 5.2 Access to Information. From the date of this Agreement
until the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to, afford to MergerCo and its authorized representatives
reasonable access during normal business hours upon reasonable prior notice
to all of its books and records, including but not limited to tax,
financial and accounting books and records. In addition, during such
period, the Company shall, and shall cause each of its Subsidiaries to,
furnish promptly to MergerCo (a) a copy of each report, schedule,
registration statement and other document filed or received by it during
such period pursuant to the requirements of the Exchange Act or other
applicable Law and (b) such other information concerning its business,
properties and personnel as MergerCo may reasonably request. MergerCo and
its authorized representatives will use all reasonable efforts to conduct
all such inspections in a manner which will minimize any material
disruptions of the business and operations of the Company and its
Subsidiaries.
SECTION 5.3 Further Action; Reasonable Best Efforts. Upon the terms
and subject to the conditions herein provided, each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using
reasonable best efforts to satisfy the conditions precedent to the
obligations of any of the parties hereto, to obtain all necessary
authorizations, consents and approvals, and to effect all necessary
registrations and filings. Each of the parties hereto will furnish to the
other parties such necessary information and reasonable assistance as such
other parties may reasonably request in connection with the foregoing and
will provide the other parties with copies of all filings made by such
party with any Governmental Entity or any other information supplied by
such party to a Governmental Entity in connection with this Agreement and
the transactions contemplated hereby.
SECTION 5.4 Shareholders' Meeting; Proxy Statement.
(a) As promptly as practicable after the date hereof, the Company
shall prepare the Proxy Statement (as defined below). The Company will use
its best efforts, after consultation with MergerCo, to respond promptly to
any comments made by the SEC with respect to the Proxy Statement. The
Company will use its best efforts to cause a definitive proxy statement
(the "Proxy Statement") to be mailed to its stockholders as promptly as
practicable after it has been approved by the SEC. The Company shall
include in the Proxy Statement the recommendation of the Board of Directors
that shareholders of the Company approve and adopt this Agreement and the
transactions contemplated hereby.
(b) The Company shall in accordance with applicable law and the
Articles of Organization and By-laws of the Company, duly call, set a
record date for, give notice of, convene and hold a special meeting of its
stockholders (the "Special Meeting") as promptly as practicable for the
purpose of considering and taking action upon this Agreement and such other
matters as may be appropriate at the Special Meeting. The Company shall,
through its Board of Directors, recommend that its shareholders approve the
Merger and shall use all reasonable efforts to solicit from shareholders of
the Company proxies in favor of the approval and adoption of this Agreement
and the transactions contemplated hereby.
(c) The Company and MergerCo shall together prepare and file a
Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3") under the
Exchange Act. Each of MergerCo and the Company shall furnish all
information concerning it, its affiliates and the holders of its capital
stock required to be included in the Schedule 13E-3 and, after consultation
with each other, shall respond promptly to any comments made by the SEC
with respect to the Schedule 13E-3.
(d) The information supplied by the Company for inclusion in the
Proxy Statement or the Schedule 13E-3 shall not, at the time the Proxy
Statement is mailed, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or, at the time of the Special
Meeting, as then amended or supplemented, or at the Effective Time, omit to
state any material fact necessary to correct any statement originally
supplied by the Company for inclusion in the Proxy Statement or the
Schedule 13E-3 which has become false or misleading. If at any time prior
to the Effective Time any event relating to the Company or any of its
affiliates, or its, or its affiliates', respective officers, directors or
shareholders, should be discovered which should be set forth in an
amendment of, or a supplement to such Proxy Statement or Schedule 13E-3,
the Company shall promptly so inform MergerCo and will furnish all
necessary information to MergerCo relating to such event and an appropriate
amendment or supplement to such Proxy Statement or Schedule 13E-3 will
thereafter be filed with the SEC by the Company. All documents that the
Company is responsible for filing with the SEC in connection with the
transactions contemplated by this Agreement shall comply in all material
respects, both as to form and otherwise, with the Exchange Act and/or the
Securities Act, as the case may be, and the rules and regulations
thereunder.
(e) The information supplied or to be supplied by MergerCo for
inclusion in the Proxy Statement or the Schedule 13E-3 shall not at the
time the Proxy Statement is mailed contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or, at the
time of the Special Meeting, as then amended or supplemented, or at the
Effective Time, omit to state any material fact necessary to correct any
statement originally supplied by MergerCo for inclusion in the Proxy
Statement or the Schedule 13E-3 which has become false or misleading. If at
any time prior to the Effective Time any event relating to MergerCo or any
of its affiliates, or its affiliates' respective officers, directors or
shareholders should be discovered which should be set forth in an amendment
of, or a supplement to, such Proxy Statement or Schedule 13E-3, MergerCo
shall promptly so inform the Company and will furnish all necessary
information to the Company relating to such event and an appropriate
amendment or supplement to such Proxy Statement or Schedule 13E-3 will
thereafter be filed with the SEC by the Company. All documents that
MergerCo is responsible for filing with the SEC in connection with the
transactions contemplated by this Agreement shall comply in all material
respects, both as to form and otherwise, with the Exchange Act and the
rules and regulations thereunder.
SECTION 5.5 Notification of Certain Matters. The Company shall give
prompt notice to MergerCo, and MergerCo 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 cause any representation or
warranty of the Company, or of MergerCo, as the case may be, contained in
this Agreement to be untrue or inaccurate in any material respect at the
Effective Time, (ii) any material failure of the Company, or MergerCo, as
the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder and (iii) any
event, occurrence, fact, condition, change, development or effect that,
individually or in the aggregate, would have or result in a Material
Adverse Effect or a breach of Section 5.1.
SECTION 5.6 Directors' and Officers' Indemnification.
(a) For a period of six years after the Effective Time, the
Surviving Corporation shall indemnify, defend and hold harmless the present
and former officers, directors, employees and agents of the Company and its
Subsidiaries in such capacities ("Indemnified Parties") against all losses,
claims, damages, expenses or liabilities arising out of actions or
omissions or alleged actions or omissions occurring at or prior to the
Effective Time to the same extent and on the same terms and conditions
(including with respect to advancement of expenses) provided for in the
Company's Articles of Organization and By-Laws in effect at the date hereof
(to the extent consistent with applicable law).
(b) The provisions of this Section 5.6 are intended for the benefit
of, and shall be enforceable by, the respective Indemnified Parties.
Nothing in this Section 5.6 shall limit or restrict the right or ability of
the Surviving Corporation to change its state of domicile.
SECTION 5.7 Recapitalization. Each of the Company and MergerCo
shall use its best efforts to cause the transactions contemplated by this
Agreement, including the Merger, to be accounted for as a recapitalization
and such accounting treatment to be accepted by their respective
accountants and by the SEC, and each of the Company and MergerCo agrees
that it shall take no action that would cause such accounting treatment not
to be obtained.
SECTION 5.8 Conveyance Taxes. MergerCo and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and
stamp taxes, any transfer, recording, registration and other fees or any
similar taxes which become payable by the Company or any of its
Subsidiaries in connection with the transactions contemplated by this
Agreement that are required or permitted to be filed on or before the
Effective Time.
SECTION 5.9 Delisting. Each of the parties agrees to cooperate with
each other in taking, or causing to be taken, all actions necessary to
delist the Company Common Stock from the Over the Counter Bulletin Board,
provided that such delisting shall not be effective until after the
Effective Time of the Merger.
SECTION 5.10 Conduct of the Company After the Merger. Each of the
parties agree that until one year after the Effective Time of the Merger,
the Surviving Corporation shall not be a party to any merger,
reorganization, liquidation, relocation of operations, sale or transfer of
assets not in the ordinary course of business, or any other material
changes in its corporate structure.
ARTICLE VI
CONDITIONS
SECTION 6.1 Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions (any or all of which may be waived by the parties
hereto in writing, in whole or in part, to the extent permitted by
applicable law):
(a) No statute, rule, order, decree or regulation shall have been
enacted or promulgated by any Governmental Entity of competent jurisdiction
(whether temporary, liminary or permanent) which is in effect and has the
effect of prohibiting the consummation of the Merger or making the Merger
illegal.
(b) There shall be no order or injunction of a Governmental Entity
of competent jurisdiction (whether temporary, preliminary or permanent) in
effect precluding, restraining, enjoining or prohibiting consummation of
the Merger.
(c) Other than filing the Articles of Merger in accordance with the
MBCL, all authorizations, consents and approvals of all Governmental
Entities required to be obtained prior to consummation of the Merger shall
have been obtained, except for such authorizations, consents, and approvals
the failure of which to be obtained would not have a Material Adverse
Effect.
SECTION 6.2 Conditions to the Obligation of the Company to Effect
the Merger. The obligation of the Company to effect the Merger is further
subject to the satisfaction or waiver at or prior to the Effective Time of
the following conditions:
(a) The representations and warranties of MergerCo contained in
this Agreement shall be true and correct at and as of the date hereof, and
true and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material
respects (in the case of any representation or warranty without any
materiality qualification) at and as of the Effective Time as if made at
and as of such time; and
(b) MergerCo shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior
to the Effective Time pursuant to the terms hereof.
SECTION 6.3 Conditions to Obligations of MergerCo to Effect the
Merger. The obligations of MergerCo to effect the Merger are further
subject to the satisfaction or waiver at or prior to the Effective Time of
the following conditions:
(a) The representations and warranties of the Company contained in
this Agreement shall be true and correct at and as of the date hereof, and
true and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material
respects (in the case of any representation or warranty without any
materiality qualification) at and as of the Effective Time as if made at
and as such time;
(b) The Company shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior
to the Effective Time pursuant to the terms hereof;
(c) The number of Dissenting Shares shall not exceed 10% of the
issued and outstanding shares of Company Common Stock; and
(d) No event, occurrence, fact, condition, change, development or
effect shall exist or have occurred or come to exist or been threatened
since September 30, 1998 that, individually or in the aggregate, has had or
resulted in, or could reasonably be expected to become or result in, a
Material Adverse Effect.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. Notwithstanding any thing herein to the
contrary, this Agreement may be terminated and the Merger may be abandoned
at anytime prior to the Effective Time, whether before or after shareholder
approval thereof:
(a) By the mutual consent of the Boards of Directors of MergerCo
and the Company.
(b) By either the Company, on the one hand, or MergerCo, on the
other hand, if: (i) the Merger has not been consummated on or prior to
September 30, 1999 or such other date, if any, as MergerCo and the Company
shall agree upon (provided that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to a party whose failure to
fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Effective Time to occur on or before such
date); or (ii) any Governmental Entity shall have issued a statute, order,
decree or regulation or taken any other action (which statute, order,
decree, regulation or other action the parties hereto shall use their best
efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the Merger or making the Merger illegal and such
statute, order, decree, regulation or other action shall have become final
and non-appealable.
(c) By the Company, (i) if holders of two-thirds of the outstanding
Company Common Stock and Company Preferred Stock, voting as a single class,
fail to approve and adopt this Agreement and the transactions contemplated
hereby at the Special Meeting (including any postponement or adjournment
thereof).
(d) By the Company, upon 15 days' prior written notice, in the
event of a material breach of any representation, warranty, covenant or
agreement on the part of MergerCo such that the condition set forth in
Section 6.2(a) or 6.2(b) would not be satisfied as of the Effective Time,
which breach is not cured prior to the expiration of such 15 day period
(provided that if such breach is not curable, the Company may terminate
this Agreement immediately under this Section 7.1(d)); except where the
Company is in material breach of any representation, warranty, covenant or
agreement as provided in Section 7.1(e).
(e) By MergerCo, upon 15 days' prior written notice, in the event
of a material breach of any representation, warranty, covenant or agreement
on the part of the Company such that the condition set forth in Section
6.3(a) or 6.3(b) would not be satisfied as of the Effective Time, which
breach is not cured prior to the expiration of such 15 day period (provided
that if such breach is not curable, MergerCo may terminate this Agreement
immediately under this Section 7.1(e)); except where MergerCo is in
material breach of any representation, warranty, covenant or agreement as
provided in Section 7.1(d).
(f) By MergerCo, if (i) holders of at least two-thirds of the
outstanding Company Common Stock and Company Preferred Stock, voting as a
single class, fail to approve and adopt this Agreement and the transactions
contemplated hereby at the Special Meeting (including any postponement or
adjournment thereof); or (ii) the Board of Directors of the Company
withdraws, modifies or changes its recommendation of this Agreement or the
Merger in a manner adverse to MergerCo or shall have resolved to do any of
the foregoing.
SECTION 7.2 Effect of Termination. In the event of the termination
of this Agreement as provided in Section 7.1, written notice thereof shall
forthwith be given by the terminating party or parties to the other party
or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and
void, and there shall be no liability on the part of MergerCo or the
Company, except as set forth in Section 8.1 hereof; provided that nothing
herein shall relieve any party from any liability or obligation with
respect to any willful breach of this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Fees and Expenses. (a) Except as contemplated by this
Agreement, all costs and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses except that the Company
shall bear and pay the costs and expenses incurred in connection with (i)
the preparation, filing, printing and mailing of the Proxy Statement
(including SEC filing fees) and (ii) the filing of the Schedule 13E-3.
(b) This Section 8.1 shall survive any termination of this
Agreement.
SECTION 8.2 Amendment; Waiver.
(a) 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 approval by the shareholders of the Company of the matters
presented in connection with the Merger, but after any such approval no
amendment shall be made without the approval of such shareholders if such
amendment changes the Merger Consideration or alters or changes any of the
other terms or conditions of this Agreement if such alteration or change
would materially adversely affect the rights of such shareholders. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
(b) At any time prior to the Effective Time, the parties may (i)
extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties of the other parties contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii)
waive compliance with any of the agreements or conditions of the other
parties hereto contained herein. Any such extension or waiver by the
Company shall require the consent of the Board of Directors of the Company.
Any agreement on the part of any party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Any such waiver shall constitute a waiver only with
respect to the specific matter described in such writing and shall in no
way impair the rights of the party granting such waiver in any other
respect or at any other time. Neither the waiver by any of the parties
hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions,
to enforce any of the provisions of this Agreement or to exercise any right
or privilege hereunder, shall be construed as a waiver of any other breach
or default of a similar nature, or as a waiver of any of such provisions,
rights or privileges hereunder. The rights and remedies herein provided
are cumulative and none is exclusive of any other, or of any rights or
remedies that any party may otherwise have at law or in equity. The rights
and remedies of any party based upon, arising out of or otherwise in
respect of any inaccuracy or breach of any representation, warranty,
covenant or agreement or failure to fulfill any condition shall in no way
be limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such inaccuracy or breach is based may
also be the subject matter of any other representation, warranty, covenant
or agreement as to which there is no inaccuracy or breach. The
representations and warranties of the Company shall not be affected or
deemed waived by reason of any investigation made by or on behalf of
MergerCo (including but not limited to any of its advisors, counsel,
consultants or representatives) or by reason of the fact that MergerCo or
any of such advisors, counsel, consultants or representatives knew or
should have known that any such representation or warranty is or might be
inaccurate.
SECTION 8.3 Survival. The respective representations and warranties
of MergerCo and the Company contained herein or in any certificates or
other documents delivered prior to or as of the Effective Time shall not
survive beyond the Effective Time. The covenants and agreements of the
parties hereto (including the Surviving Corporation after the Merger) shall
survive the Effective Time without limitation (except for those which, by
their terms, contemplate a shorter survival period).
SECTION 8.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed
delivery by a standard overnight carrier or when delivered by hand or (c)
the expiration of five business days after the day when mailed in the
United States by certified or registered mail, postage prepaid, addressed
at the following addresses (or at such other address for a party as shall
be specified by like notice):
(a) if to the Company, to: Armatron International, Inc.
0 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: President
with a copy to: Bass, Xxxxxxx & Xxxxx, P.C.
00 Xxxxxxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esquire
(b) if to MergerCo, to: Armatron Merger Corporation
0 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: President
with a copy to Mintz, Levin, Xxxx, Xxxxxx
Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esquire
SECTION 8.5 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words "include",
"includes" or "including" are used in this Agreement they shall be deemed
to be followed by the words "without limitation". The phrase "made
available" when used in this Agreement shall mean that the information
referred to has been made available to the party to whom such information
is to be made available. The words "affiliates" and "associates" when used
in this Agreement shall have the respective meanings ascribed to them in
Rule 12b-2 under the Exchange Act. The phrase "beneficial ownership" and
words of similar import when used in this Agreement shall have the meaning
ascribed to it in Rule 13d-3 under the Exchange Act.
SECTION 8.6 Headings; Schedules. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Disclosure of any matter
pursuant to any Schedule to the Disclosure Schedule shall not be deemed to
be an admission or representation as to the materiality of the item so
disclosed.
SECTION 8.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which shall be considered one and the same agreement.
SECTION 8.8 Entire Agreement; Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement, and supersedes all prior
agreements and understandings (written and oral), among the parties with
respect to the subject matter hereof and (b) except for the provisions of
Sections 5.6 and 5.9, are not intended to confer upon any person other than
the parties any rights or remedies.
SECTION 8.9 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
SECTION 8.10 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Massachusetts.
SECTION 8.11 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. This Agreement will be binding upon,
inure to the benefit of and be enforceable by, the parties and their
respective successors and assigns.
IN WITNESS WHEREOF, MergerCo and the Company have caused this
Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
ARMATRON INTERNATIONAL, INC.
By:___________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
[Seal]
ARMATRON MERGER CORPORATION
By:___________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
[Seal]
