EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
PITNEY XXXXX INC.,
MAUI ACQUISITION CORP.
AND
ALYSIS TECHNOLOGIES, INC.
DATED AS OF MARCH 20, 2001
TABLE OF CONTENTS
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ARTICLE I THE OFFER....................................................... 1
Section 1.1 The Offer................................................... 1
Section 1.2 Company Actions............................................. 2
Section 1.3 Stockholder Lists........................................... 3
Section 1.4 Directors................................................... 4
ARTICLE II THE MERGER..................................................... 4
Section 2.1 The Merger.................................................. 4
Section 2.2 Consummation of the Merger.................................. 5
Section 2.3 Effects of the Merger....................................... 5
Section 2.4 Certificate of Incorporation and Bylaws..................... 5
Section 2.5 Directors and Officers...................................... 5
Section 2.6 Conversion of Shares........................................ 5
Section 2.7 Conversion of Common Stock of Purchaser..................... 6
Section 2.8 Stockholders' Meeting....................................... 6
Section 2.9 Merger Without Meeting of Stockholders...................... 6
Section 2.10 Withholding Taxes........................................... 6
ARTICLE III PAYMENT FOR SHARES; OPTIONS................................... 6
Section 3.1 Payment for Shares.......................................... 6
Section 3.2 Closing of the Company's Transfer Books..................... 8
Section 3.3 Existing Stock Options; Warrants............................ 8
Section 3.4 Dissenting Shares........................................... 9
Section 3.5 Adjustments................................................. 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. 10
Section 4.1 Organization and Qualification.............................. 10
Section 4.2 Capitalization.............................................. 10
Section 4.3 Authority for this Agreement................................ 11
Section 4.4 Consents and Approvals; No Violation........................ 11
Section 4.5 Reports; Financial Statements............................... 12
Section 4.6 Absence of Certain Changes.................................. 13
Section 4.7 Schedule 14D-9; Offer Documents and Proxy Statement......... 13
Section 4.8 Brokers..................................................... 13
Section 4.9 Employee Benefit Matters.................................... 14
Section 4.10 Litigation, etc............................................. 16
Section 4.11 Tax Matters................................................. 16
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Section 4.12 Compliance with Law......................................... 17
Section 4.13 Environmental Matters....................................... 17
Section 4.14 Intellectual Property....................................... 18
Section 4.15 Real Property............................................... 20
Section 4.16 Material Contracts.......................................... 20
Section 4.17 Opinion of Financial Advisor................................ 21
Section 4.18 Vote Required............................................... 21
Section 4.19 Anti-takeover Plan; State Takeover Statutes................. 21
Section 4.20 Insurance................................................... 21
Section 4.21 Trade Relations............................................. 22
Section 4.22 Warranties; Product Claims.................................. 22
Section 4.23 Potential Conflicts of Interest............................. 22
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.......... 22
Section 5.1 Organization and Qualification.............................. 22
Section 5.2 Authority for this Agreement................................ 23
Section 5.3 Offer Documents; Proxy Statement............................ 23
Section 5.4 Consents and Approvals; No Violation........................ 23
Section 5.5 Operations of Purchaser..................................... 24
Section 5.6 Brokers..................................................... 24
Section 5.7 Litigation.................................................. 24
Section 5.8 Funds....................................................... 24
ARTICLE VI COVENANTS...................................................... 24
Section 6.1 Conduct of Business of the Company.......................... 24
Section 6.2 No Solicitation............................................. 26
Section 6.3 Access to Information....................................... 27
Section 6.4 Reasonable Efforts; Further Actions......................... 28
Section 6.5 Indemnification and Insurance............................... 28
Section 6.6 Proxy Statement............................................. 29
Section 6.7 Notification of Certain Matters............................. 29
Section 6.8 Press Releases and Communications........................... 29
Section 6.9 Benefits.................................................... 29
Section 6.10 Purchaser Compliance........................................ 30
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER...................... 30
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger...................................................... 30
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER............................... 31
Section 8.1 Termination................................................. 31
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Section 8.2 Effect of Termination....................................... 32
Section 8.3 Fees and Expenses........................................... 32
Section 8.4 Amendment................................................... 33
Section 8.5 Extension; Waiver; Remedies................................. 33
ARTICLE IX MISCELLANEOUS.................................................. 34
Section 9.1 Definitions................................................. 34
Section 9.2 Survival of Representations and Warranties.................. 38
Section 9.3 Entire Agreement; Assignment................................ 38
Section 9.4 Validity.................................................... 38
Section 9.5 Notices..................................................... 38
Section 9.6 Governing Law............................................... 39
Section 9.7 Jurisdiction................................................ 39
Section 9.8 Waiver of Jury Trial........................................ 39
Section 9.9 Descriptive Headings........................................ 39
Section 9.10 Parties in Interest......................................... 39
Section 9.11 Counterparts................................................ 40
Section 9.12 Further Assurances.......................................... 40
Exhibits
Exhibit A Conditions to the Offer
Exhibit B Plan of Merger
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (as amended, this "AGREEMENT"), dated as of
March 20, 2001, by and among PITNEY XXXXX INC., a Delaware corporation
("PARENT"), MAUI ACQUISITION CORP., a Delaware corporation and a wholly owned
subsidiary of Parent ("PURCHASER"), and ALYSIS TECHNOLOGIES, INC., a Delaware
corporation (the "COMPANY"). Capitalized terms used and not otherwise defined
herein shall have the meaning ascribed to them in Section 9.1.
RECITALS
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each determined that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and fair to, and in the best interests of,
their respective stockholders;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the acquisition of the Company by Parent and Purchaser, this Agreement
and the transactions contemplated hereby, and has agreed to recommend that the
Company's stockholders approve the plan of merger (as such term is used in
Section 251 of the Delaware General Corporation Law (the "CORPORATION LAW"))
contained in this Agreement and the transactions contemplated hereby and tender
their Shares;
WHEREAS, simultaneously with the execution and delivery of this Agreement,
certain stockholders of the Company have entered into a Voting and Tender
Agreement, dated as of the date hereof, with Parent; and
WHEREAS, Parent, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE OFFER
Section 1.1 THE OFFER.
(a) (i) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1, Purchaser shall, and Parent shall cause
Purchaser to, as promptly as practicable (but in no event later than seven
(7) Business Days following the public announcement of the terms of this
Agreement) Commence an offer to purchase (x) all outstanding shares of the
Company's common stock, par value $0.01 per share (the "COMMON SHARES") and
(y) all of the outstanding shares of the Company's class B common stock, par
value $0.01 per share (the "CLASS B SHARES" and, together with the Common
Shares, the "SHARES"), at a price (such price, or any higher price as may be
paid in the Offer, the "OFFER PRICE") of ONE UNITED STATES DOLLAR AND
THIRTY-NINE CENTS ($1.39) per Share, net to the seller in cash (such tender
offer, as it may be amended and supplemented from time to time as permitted
under this Agreement, the "OFFER"). The obligation of Purchaser to Commence
and consummate the Offer and to accept for payment and to pay for any Shares
tendered pursuant thereto shall be subject only to the terms and conditions
set forth in this Agreement and to those conditions set forth in Exhibit A
hereto (the "OFFER CONDITIONS"), any of which (other than the Minimum Tender
Condition (as defined in Exhibit A)) may be waived by Purchaser in its sole
discretion. The initial expiration date of the Offer shall be the twentieth
(20th) Business Day following the Commencement of the Offer. Purchaser
expressly reserves the right to modify the terms of the Offer, except that,
without the prior written consent of the Company, Purchaser shall not
(A) decrease the Offer Price or change the form of the consideration payable
in the Offer, (B) decrease the number of Shares sought
pursuant to the Offer, (C) impose additional conditions to the Offer or
(D) change the conditions to the Offer or amend any other term of the Offer
if any such change or amendment would be in any manner adverse to the
holders of the Shares.
(ii) Subject to the terms and conditions of this Agreement and to the
satisfaction or waiver of the Offer Conditions as of any scheduled
expiration of the initial offering period of the Offer, Purchaser shall
accept for payment and pay for Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after such scheduled
expiration. Notwithstanding the foregoing, Purchaser and Parent shall have
the right to, (A) extend the Offer, from time to time, if at the expiration
date of the Offer (with respect to either the initial offering period or an
extended offering period, as the case may be) any of the conditions to the
Offer have not been satisfied or waived, (B) extend the Offer for any period
required by any regulation, interpretation or position of the Securities and
Exchange Commission (the "SEC") or the staff thereof applicable to the Offer
or (C) elect to provide one or more subsequent offering periods of up to an
additional twenty (20) Business Days in the aggregate (collectively, the
"SUBSEQUENT PERIOD") pursuant to Rule 14d-11 of the Exchange Act. Purchaser
shall immediately accept and promptly pay for all Shares as they are
tendered during the Subsequent Period. In addition, the Offer Price may be
increased and the Offer may be extended to the extent required by Law in
connection with such increase in each case without the consent of the
Company. Parent and Purchaser further agree that in the event of the failure
of one or more of the Offer Conditions set forth in clause (C) of Exhibit A
to be satisfied or waived on any date upon which the Offer would otherwise
expire, Purchaser shall extend the Offer for up to an additional ten
(10) Business Days or such shorter time during which such condition is or
conditions may be satisfied or waived; PROVIDED, HOWEVER, that Purchaser
shall not be required to extend the Offer as set forth in this sentence if
such condition or conditions could not reasonably be expected to be
satisfied within such ten (10) Business Day period; PROVIDED, FURTHER, that,
Purchaser shall not be required to extend the Offer beyond the date
specified in Section 8.1(b).
(b) On the date of Commencement of the Offer, Parent and Purchaser shall
file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, the "SCHEDULE TO") with
respect to the Offer which will comply in all material respects with the
provisions of, and satisfy in all material respects the requirements of, such
Schedule TO and all applicable federal securities laws and shall contain the
offer to purchase and related letter of transmittal and other ancillary Offer
documents and instruments pursuant to which the Offer will be made (collectively
with any supplements or amendments thereto, the "OFFER DOCUMENTS"). The Company
and its counsel shall be given a reasonable opportunity to review and comment on
the Offer Documents prior to their filing with the SEC. Parent and Purchaser
agree to provide the Company with, and to consult with the Company regarding,
any comments that may be received from the SEC or its staff with respect to the
Offer Documents promptly after receipt thereof. Parent, Purchaser and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that it shall have become false or
misleading in any material respect and Parent and Purchaser further agree to
take all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and be disseminated to holders of Shares, in each case, as
and to the extent required by Law.
Section 1.2 COMPANY ACTIONS.
(a) The Company hereby consents to the Offer and represents and warrants
that (i) its Board of Directors (at a meeting or meetings duly called and held
prior to the date hereof) has (A) determined that the terms of each of the Offer
and the Merger are advisable and fair to, and in the best interests of, the
stockholders of the Company, (B) approved and adopted this Agreement and the
transactions contemplated hereby (including the Offer and the Merger)
(C) resolved to recommend acceptance of the Offer and approval and adoption of
the plan of merger (as such term is used in Section 251 of the
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Corporation Law and attached as Exhibit B hereto (the "PLAN OF MERGER"))
contained in this Agreement by the stockholders of the Company and directed that
the Plan of Merger be submitted to the stockholders of the Company for approval,
and (D) taken all necessary steps to render Section 203 of the Corporation Law
inapplicable to Parent and Purchaser and to the Merger and the acquisition of
Shares pursuant to the Offer and (E) resolved to elect, to the extent permitted
by law, not to be subject to any "moratorium," "control share acquisition,"
"business combination," "fair price" or other form of anti-takeover laws and
regulations (collectively, "TAKEOVER LAWS") of any jurisdiction that may purport
to be applicable to this Agreement (PROVIDED, HOWEVER, that prior to the
purchase of any Shares pursuant to the Offer, such consent, determination,
recommendation, rendering and election by the Company's Board of Directors
specified in this Section 1.2(a)(i) may be withdrawn, modified, rescinded or
amended if the Company's Board of Directors determines to accept a Superior
Proposal in the manner specified and in accordance with the terms of this
Agreement, and (ii) First Union Securities, Inc. ("FIRST UNION"), the Company's
financial advisor, has delivered to the Company's Board of Directors its opinion
to the effect that, as of the date of such opinion, the consideration to be paid
in the Offer and the Merger to the Company's stockholders is fair, from a
financial point of view, to such stockholders.
(b) Upon Commencement of the Offer, the Company shall file with the SEC a
Solicitation/ Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "SCHEDULE 14D-9") containing the
recommendations of its Board of Directors described in Section 1.2(a)(i)(C). The
Company hereby consents to the inclusion of such recommendations in the Offer
Documents and shall disseminate the Schedule 14D-9 to stockholders of the
Company as required by Rule 14D-9 promulgated under the Exchange Act. The
Company shall cooperate with Parent and Purchaser to include a copy of the
Schedule 14D-9 with the Offer Documents mailed or furnished to the Company's
stockholders. Parent and Purchaser shall provide the Company all information
reasonably requested by the Company for inclusion in the Schedule 14D-9. Parent,
Purchaser and their counsel shall be given a reasonable opportunity to review
and comment on the Schedule 14D-9 prior to its filing with the SEC. The Company
agrees to provide Parent and Purchaser with, and to consult with Parent and
Purchaser regarding, any comments that may be received from the SEC or its staff
with respect to the Schedule 14D-9 promptly upon receipt thereof. Parent,
Purchaser and the Company each agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and be disseminated to holders of Shares, in each case,
as and to the extent required by Law.
Section 1.3 STOCKHOLDER LISTS. In connection with the Offer, upon Parent's
or Purchaser's request, the Company shall or shall cause Xxxxx Xxxxxx
Stockholder Services, the Company's transfer agent (the "TRANSFER AGENT"), to
furnish Parent and Purchaser promptly with mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date and shall
cause the Transfer Agent to furnish Parent and Purchaser with such information
and assistance (including, without limitation, updated lists of stockholders,
mailing labels and lists of securities positions) as Parent, Purchaser or their
agents may reasonably request in communicating the Offer to the record and
beneficial holders of the Shares. Subject to the requirements of Law, Parent and
Purchaser, except only as is necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Merger, shall hold in confidence
the information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger; and if this
Agreement is terminated, shall promptly deliver or cause to be delivered to the
Company all copies of such information then in their possession or under their
control.
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Section 1.4 DIRECTORS.
(a) Subject to applicable Law and to the extent permitted by the National
Association of Securities Dealers, Inc. promptly upon the purchase by Purchaser
pursuant to the Offer of such number of Common Shares as represents at least a
majority of the outstanding Common Shares (the "APPOINTMENT TIME"), and from
time to time thereafter, Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, to serve on the Board of
Directors of the Company as will give Purchaser representation on the Board of
Directors of the Company equal to the product of (i) the number of directors on
the Board of Directors of the Company (giving effect to the election of any
additional directors pursuant to this Section 1.4) and (ii) the percentage that
such number of Common Shares beneficially owned by Parent and/or Purchaser
(including Common Shares accepted for payment) so purchased bears to the number
of Common Shares outstanding. The Company shall, upon request by Purchaser,
promptly take all actions necessary to cause Purchaser's designees to be elected
or appointed to the Board of Directors of the Company, including without
limitation, increasing the size of the Board of Directors of the Company or
securing the resignations of such number of directors as is necessary to provide
Purchaser with such level of representation, or both; PROVIDED, HOWEVER, that
prior to the Effective Time, the Company's Board of Directors shall always have
at least two (2) members (the "INDEPENDENT DIRECTORS") who are neither officers
of Parent nor designees, shareholders or affiliates of Parent or Parent's
affiliates ("PARENT INSIDERS"); PROVIDED, FURTHER, that, in such event, if the
number of Independent Directors shall be reduced below two (2) for any reason
whatsoever, any remaining Independent Directors (or Independent Director, if
there shall be only one remaining) shall be entitled to designate individuals to
fill such vacancies who shall be deemed to be Independent Directors for purposes
of this Agreement or, if no Independent Directors then remain, the other
directors shall designate two (2) individuals to fill such vacancies who shall
not be Parent Insiders, and such individuals shall be deemed to be Independent
Directors for purposes of this Agreement. The Company shall cause individuals
designated by Purchaser to constitute the same percentage as is on the entire
Board of Directors of the Company (after giving effect to this Section 1.4(a))
to be on (i) each committee of the Board of Directors of the Company and
(ii) each Board of Directors and each committee thereof of each Subsidiary of
the Company. The Company's obligations to appoint designees to its Board of
Directors shall be subject to compliance with Section 14(f) of the Exchange Act.
At the request of Purchaser, the Company shall promptly take all actions
required pursuant to Section 14(f) and Rule 14f-1 under the Exchange Act in
order to fulfill its obligations under this Section 1.4(a) and shall include in
the Schedule 14D-9 or otherwise timely mail to its stockholders all necessary
information to comply therewith. Parent and Purchaser will supply to the
Company, and be solely responsible for, all information with respect to
themselves and their respective officers, directors and affiliates required by
Section 14(f) and Rule 14f-1 under the Exchange Act.
(b) Following the Appointment Time, any amendment of this Agreement, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or Purchaser or any waiver of any of the Company's rights hereunder or any other
determination with respect to any action to be taken or not to be taken by the
Company relating to this Agreement, shall require the concurrence of the
Independent Directors.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Corporation Law,
Purchaser shall be merged with and into the Company (the "MERGER") as soon as
practicable following the satisfaction or waiver, if permissible, of the
conditions set forth in Article VII hereof. The Company shall be the surviving
corporation in the Merger (the "SURVIVING CORPORATION") under the name "Alysis
Technologies, Inc." and shall continue its
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existence under the laws of Delaware. In connection with the Merger, the
separate corporate existence of Purchaser shall cease. At the election of
Parent, any direct or indirect wholly-owned subsidiary of Parent may be
substituted for Purchaser as a constituent corporation in the Merger. In such
event, this Agreement shall be deemed modified to reflect the foregoing, and if
requested by Parent, the Company agrees to execute an appropriate amendment to
this Agreement in order to reflect the foregoing.
Section 2.2 CONSUMMATION OF THE MERGER. Subject to the provisions of this
Agreement, as soon as practicable following the satisfaction or waiver of the
conditions set forth in Article VII, Purchaser and the Company shall cause the
Merger to be consummated by filing with the office of the Secretary of State of
the State of Delaware the executed original and a copy of the certificate of
merger, as required by Section 251 or 253 of the Corporation Law, and shall take
all such other and further actions as may be required by law to make the Merger
effective. Prior to the filing referred to in this Section 2.2, a closing (the
"CLOSING") will be held at 10 a.m. at the offices of Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx, 1285 Avenue of the Americas, New York, New York (or such
other time and place as the parties may agree) for the purpose of confirming all
the matters contained herein. The time the Merger becomes effective in
accordance with applicable Law is referred to as the "EFFECTIVE TIME."
Section 2.3 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth herein and in the applicable provisions of the Corporation Law.
Section 2.4 CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and the bylaws of Purchaser, in each case as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation and
bylaws of the Surviving Corporation, in each case until amended in accordance
with applicable Law; PROVIDED, HOWEVER, that (a) Article I of the certificate of
incorporation of the Surviving Corporation shall be amended to read in its
entirety as follows: "ARTICLE I. The name of the Corporation is Alysis
Technologies, Inc. (the "CORPORATION")" and (b) the certificate of incorporation
and the bylaws of Purchaser shall be amended to the extent necessary to comply
with the requirements of Section 6.5(a).
Section 2.5 DIRECTORS AND OFFICERS. The directors of Purchaser immediately
prior to the Effective Time and the officers of Purchaser immediately prior to
the Effective Time shall be the directors and officers, respectively, of the
Surviving Corporation until their respective death, permanent disability,
resignation or removal or until their respective successors are duly elected and
qualified all in accordance with applicable Law.
Section 2.6 CONVERSION OF SHARES.
(a) Each Share issued and outstanding immediately prior to the Effective
Time (other than (i) Shares owned by Parent, Purchaser or by any Subsidiary or
affiliate of Parent, Purchaser or by the Company, all of which shall be canceled
without any consideration being exchanged therefor and (ii) Dissenting Shares)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted at the Effective Time into the right to receive in cash an
amount per Share (subject to any applicable withholding tax specified in
Section 2.10 hereof) equal to the Offer Price, without interest (the "MERGER
CONSIDERATION"), upon the surrender of the certificate representing such Shares
as provided in Section 3.1. At the Effective Time, each (x) Existing Stock
Option shall be converted into the right to receive the Option Consideration, if
any, and (y) each Existing Warrant shall be converted into the right to receive
the Warrant Consideration, if any, in each case pursuant to Section 3.3 hereof.
(b) Each share of the Company's series B preferred stock, par value $0.01
per share (the "PREFERRED STOCK"), issued and outstanding immediately prior to
the Effective Time shall, in accordance with the Company's Certificate of
Designation, Preference and Rights of Series B Preferred Stock, as filed with
the Secretary of State of the State of Delaware on July 29, 1999 (the
"CERTIFICATE OF
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DESIGNATION"), and by virtue of the Merger and without any action on the part of
the holder thereof, be converted at the Effective Time into the right to receive
the Liquidation Preference (as such term is defined in the Certificate of
Designation), as calculated as of the Effective Time, without interest, upon
surrender of the certificate representing such shares of Preferred Stock as
provided in Section 3.1.
Section 2.7 CONVERSION OF COMMON STOCK OF PURCHASER. Each share of common
stock, no par value, of Purchaser issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and become one share of common
stock of the Surviving Corporation.
Section 2.8 STOCKHOLDERS' MEETING. Unless the Merger is consummated in
accordance with Section 253 of the Corporation Law as contemplated by
Section 2.9 and subject to applicable Law, the Company acting through its Board
of Directors shall in accordance with applicable Law duly call, give notice of,
convene and hold a special meeting (the "SPECIAL MEETING") of its stockholders
as soon as practicable following the consummation of the Offer for the purpose
of approving the Plan of Merger set forth in this Agreement and include in the
Proxy Statement the recommendation of its Board of Directors that stockholders
of the Company vote in favor of the adoption of the Plan of Merger set forth in
this Agreement. The Company shall use its reasonable best efforts to solicit
from stockholders of the Company proxies in favor of the Merger and shall take
all other action in its judgment necessary and appropriate to secure the vote of
stockholders required by the Corporate Law to effect the Merger. Parent and
Purchaser each agree that, at the Special Meeting, all of the Shares acquired
pursuant to the Offer or otherwise owned or acquired by Parent or Purchaser or
any of their affiliates shall be voted in favor of the Merger.
Section 2.9 MERGER WITHOUT MEETING OF STOCKHOLDERS. If Purchaser, in
combination with Parent or any other direct or indirect Subsidiary of Parent,
shall hold at least ninety percent (90%) of the outstanding shares of each class
of capital stock of the Company, each of Parent, Purchaser and the Company shall
take all necessary and appropriate action to cause the Merger to become
effective, as soon as practicable after the consummation of the Offer, without a
meeting of stockholders of the Company, in accordance with Section 253 of the
Corporation Law.
Section 2.10 WITHHOLDING TAXES. Parent, Purchaser and the Surviving
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable to a holder of Shares or Existing Stock Options pursuant to
the Offer or the Merger any stock transfer taxes and such amounts as are
required to be withheld under the Internal Revenue Code of 1986, together with
the rules and regulations promulgated thereunder, as amended (the "CODE"), or
any applicable provision of state, local or foreign tax law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement and the Offer as having been paid to the holder of the Shares
in respect of which such deduction and withholding was made.
ARTICLE III
PAYMENT FOR SHARES; OPTIONS
Section 3.1 PAYMENT FOR SHARES.
(a) Prior to the Effective Time, Parent will cause Purchaser to make
available to a bank or trust company designated by Parent (the "PAYING AGENT")
sufficient funds to make the payments pursuant to Section 2.6 hereof on a timely
basis to (i) holders (other than Parent or Purchaser or any of their respective
Subsidiaries) of Shares and (ii) if applicable, holders of shares of Preferred
Stock, in each case that are issued and outstanding immediately prior to the
Effective Time (such amounts being hereinafter referred to as the "PAYMENT
FUND"). The Paying Agent shall make the payments provided for in the preceding
sentence out of the Payment Fund. The Payment Fund shall not be used for any
other purpose, except as provided in this Agreement.
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(b) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall cause the Paying Agent to mail to each record holder
(other than Parent or Purchaser or any of their respective Subsidiaries), as of
the Effective Time, of an outstanding certificate or certificates which
immediately prior to the Effective Time represented (i) Shares (the "COMMON
STOCK CERTIFICATES") or (ii) shares of Preferred Stock (the "PREFERRED STOCK
CERTIFICATES" and together with the Common Stock Certificates, the
"CERTIFICATES"), a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Paying Agent) and
instructions for use in effecting the surrender of the Certificate and receiving
payment therefor. Following surrender to the Paying Agent of a Certificate,
together with such letter of transmittal duly executed and such other documents
as may be reasonably required by the Paying Agent, the holder of such
Certificate shall be paid in exchange therefor cash in an amount (subject to any
applicable withholding tax as specified in Section 2.10 hereof) equal to
(x) with respect to any Common Stock Certificate, the product of the number of
Shares represented by such Common Stock Certificate multiplied by the Merger
Consideration and (y) with respect to any Preferred Stock Certificate, the
product of the number of shares of Preferred Stock represented by such Preferred
Stock Certificate multiplied by the Liquidation Preference, and each such Common
Stock Certificate and Preferred Stock Certificate shall forthwith be canceled.
No interest shall be paid or accrued on the cash payable upon the surrender of
the Certificates. If payment is to be made to a Person other than the Person in
whose name the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment (A) pay any transfer or other taxes required by reason of the payment to
a Person other than the registered holder of the Certificate surrendered or
(B) establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. From and after the Effective Time and until
surrendered in accordance with the provisions of this Section 3.1, each
Certificate (other than Certificates representing Shares owned by Parent or
Purchaser or any of their respective Subsidiaries) shall represent for all
purposes solely the right to receive, in accordance with the terms hereof,
either (1) the Merger Consideration in cash multiplied by the number of Shares
evidenced by such Common Stock Certificate or (2) the Liquidation Preference in
cash multiplied by the number of shares of Preferred Stock evidenced by such
Preferred Stock Certificate, in each case without any interest thereon.
(c) If any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such Person of a bond in such reasonable amount as the Surviving
Corporation may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Paying Agent will deliver in exchange
for such affidavit, either (i) the applicable Merger Consideration with respect
to the Shares formerly represented by such Common Stock Certificate or (b) the
applicable Liquidation Preference with respect to the shares of the Preferred
Stock formerly represented by such Preferred Stock Certificate.
(d) Any portion of the Merger Consideration made available to the Paying
Agent to pay for Shares for which appraisal rights have been perfected shall be
returned to the Parent upon demand. Any portion of the Payment Fund (including
the proceeds of any investments thereof) that remains unclaimed by the former
stockholders of the Company for six (6) months after the Effective Time shall be
repaid to the Surviving Corporation. Any former stockholders of the Company who
have not complied with Section 3.1 hereof prior to the end of such six
(6) month period shall thereafter look only to the Surviving Corporation
(subject to abandoned property, escheat or other similar laws) but only as
general creditors thereof for payment of their claim for the Merger
Consideration or Liquidation Preference, as the case may be, without any
interest thereon, upon due surrender of the Certificates held by them. Neither
Parent, the Surviving Corporation nor the Paying Agent, shall be liable to any
holder of Shares or to any holder of shares of Preferred Stock for any monies
delivered from the Payment Fund or otherwise to a public official pursuant to
any applicable abandoned
7
property, escheat or similar Law. If any Certificates shall not have been
surrendered prior to two (2) years after the Effective Time (or such earlier
date as shall be immediately prior to the date that such unclaimed funds would
otherwise become subject to any abandoned property, escheat or similar law)
unclaimed funds payable with respect to such certificates shall, to the extent
permitted by applicable Law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously entitled
thereto.
Section 3.2 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the close of
business on the day of the Effective Time, the stock transfer books of the
Company shall be closed. At and after the Effective Time, there shall be no
registration of transfers of Shares or shares of Preferred Stock which were
outstanding immediately prior to the Effective Time on the stock transfer books
of the Surviving Corporation. From and after the Effective Time, the holders of
Shares or shares of Preferred Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares or
shares of Preferred Stock except as otherwise provided in this Agreement or by
applicable Law. All cash paid upon the surrender of Certificates in accordance
with the terms of this Article III shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Shares or shares of Preferred Stock
previously represented by such Certificates. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged for cash as provided in this Article III.
Section 3.3 EXISTING STOCK OPTIONS; WARRANTS.
(a) Each option or right to acquire Shares (the "EXISTING STOCK OPTIONS")
granted under any stock option or similar plan of the Company or under any
agreement to which the Company or any Subsidiary is a party (other than stock
purchase rights under the Company's Employee Stock Purchase Plan) (the "STOCK
OPTION PLANS") which is outstanding or otherwise reflected on Section 4.2(a) of
the Disclosure Letter on the date that the amendment to Schedule TO reporting
the initial acceptance by Purchaser of the Shares tendered in the Offer is filed
with the SEC (the "ACCEPTANCE DATE"), whether or not then exercisable or vested,
shall by virtue of the Merger and without any action on the part of the Company
or the holder thereof, be converted into and shall represent only the right to
receive an amount in cash, without interest, with respect to each Share subject
thereto equal to the excess, if any, of the Merger Consideration over the per
share exercise or purchase price of such Existing Stock Option. On and after the
date hereof, the Company shall grant no additional options or rights to acquire
Shares under the Stock Option Plans. On the Acceptance Date, each holder of an
Existing Stock Option shall be entitled to receive, in full satisfaction of such
Existing Stock Option, an amount in cash without interest in respect thereof
equal to the product of (i) the excess, if any, of the Merger Consideration over
the per share exercise or purchase price of such Existing Stock Option and
(ii) the number of Shares subject to such Existing Stock Option (such amount
being hereinafter referred to as the "OPTION CONSIDERATION") and each Existing
Stock Option shall be canceled on the Acceptance Date. Such payment shall be
reduced by any income or employment tax withholding required under the Code or
any provision of state, local or foreign tax law. To the extent that amounts are
so withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of such Existing Stock Option. The
Stock Option Plans shall terminate as of the Acceptance Date. In addition, the
Company shall take such actions as are reasonably necessary so that (1) no
offering period under the Company's Employee Stock Purchase Plan (the "STOCK
PURCHASE PLAN") commences after the date hereof, (2) any offering period under
the Stock Purchase Plan which commenced on or prior to the date hereof is
terminated prior to the Acceptance Date and (3) all funds contributed by
employees of the Company or its Subsidiaries under the Stock Purchase Plan that
are not applied on or prior to the Acceptance Date to the purchase of Shares are
returned to such employees as soon as practicable after the Acceptance Date. All
administrative and other rights and authorities granted under any Stock Option
Plan and under the Stock Purchase Plan to the Company, the Board of
8
Directors of the Company or any Committee or designee thereof, shall, following
the Acceptance Date, reside with the Surviving Corporation.
(b) The Company shall take all reasonable actions required to qualify for
the exemption contemplated by Rule 16b-3 under the Exchange Act for the
treatment of the Existing Stock Options contemplated hereby, including, if
necessary or appropriate, obtaining the approval of the Company's Board of
Directors, of the type described in a pertinent SEC no-action letter dated
January 12, 1999.
(c) Each warrant to acquire Shares (the "EXISTING WARRANTS") granted under
any warrant or similar agreement to which the Company or any Subsidiary is a
party which is outstanding on the Acceptance Date, whether or not then
exercisable or vested, shall by virtue of the Merger and without any action on
the part of the Company or the holder thereof, be converted into and shall
represent only the right to receive an amount in cash, without interest, with
respect to each Share subject thereto equal to the excess, if any, of the Merger
Consideration over the per share exercise price of such Existing Warrant. On and
after the date hereof, the Company shall grant no additional warrants. On the
Acceptance Date, each holder of an Existing Warrant shall be entitled to
receive, in full satisfaction of such Existing Warrant, an amount in cash
without interest in respect thereof equal to the product of (i) the excess, if
any, of the Merger Consideration over the per share exercise or purchase price
of such Existing Warrant and (ii) the number of Shares subject to such Existing
Warrant (such amount being hereinafter referred to as the "WARRANT
CONSIDERATION") and each Existing Warrant shall be canceled on the Acceptance
Date. Such payment shall be reduced by any income or employment tax withholding
required under the Code or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of such
Existing Warrant.
Section 3.4 DISSENTING SHARES.
(a) Notwithstanding anything in this Agreement to the contrary, Shares that
are held by any record holder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal rights in accordance
with Section 262 of the Corporation Law (the "DISSENTING SHARES") shall not be
converted into the right to receive the Merger Consideration but shall become
the right to receive such consideration as may be determined to be due in
respect of such Dissenting Shares pursuant to the Corporation Law; PROVIDED,
HOWEVER, that any holder of Dissenting Shares who shall have failed to perfect
or shall have withdrawn or lost his rights to appraisal of such Dissenting
Shares, in each case under the Corporation Law, shall forfeit the right to
appraisal of such Dissenting Shares, and such Dissenting Shares shall be deemed
to have been converted into the right to receive, as of the Effective Time, the
Merger Consideration without interest. Notwithstanding anything to the contrary
contained in this Section 3.4, if the Merger is rescinded or abandoned, then the
right of any stockholder to be paid the fair value of such stockholder's
Dissenting Shares shall cease. The Surviving Corporation shall comply with all
of its obligations under the Corporation Law with respect to holders of
Dissenting Shares.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal, and any withdrawals of such demands, received by the Company and any
other related instruments served pursuant to the Corporation Law, and received
by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the Corporation Law. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or negotiate, offer to settle
any such demands.
Section 3.5 ADJUSTMENTS. If during the period between the date of this
Agreement and the Effective Time, any change in the outstanding Shares shall
occur, including by reason of any reclassification, recapitalization, stock
dividend, stock split or combination, exchange or readjustment of Shares, or any
stock dividend thereon with a record date during such period, the price per
share to be paid to holders of Shares in the Offer and the Merger Consideration
shall be appropriately adjusted.
9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in specifically identified corresponding sections of the
disclosure letter, dated as of the date hereof (the "DISCLOSURE LETTER"),
delivered by the Company to Parent with respect to this Agreement, the Company
represents and warrants to Parent and Purchaser as follows:
Section 4.1 ORGANIZATION AND QUALIFICATION. The Company and each of its
Subsidiaries is a duly organized and validly existing corporation in good
standing under the laws of its jurisdiction of incorporation, with all corporate
power and authority to own its properties and conduct its business as currently
conducted on the date hereof, except where the failure to be so organized,
existing and in good standing or to have such power and authority has not had or
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; and is duly qualified and in good standing as a foreign
corporation authorized to do business in each of the jurisdictions in which the
character of the properties owned or held under lease by it or the nature of the
business transacted by it makes such qualification necessary, except where the
failure to be so qualified and in good standing, has not had or could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Section 4.1 of the Disclosure Letter sets forth a true and
complete list of each of the Company's Subsidiaries. Neither the Company nor any
of its Subsidiaries, directly or indirectly, owns any interest in any Person
other than in the Company's Subsidiaries.
Section 4.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 45,000,000
Shares (consisting of 40,000,000 Common Shares, of which 5,000,000 shares have
been designated Class B Shares) and 5,000,000 shares of Preferred Stock. As of
the close of business on March 19, 2001, 13,589,003 Shares were issued and
outstanding and 400 shares of Preferred Stock were issued and outstanding.
Section 4.2(a) of the Disclosure Letter contains a list, as of March 19, 2001,
of the name of each Existing Stock Option or Existing Warrant holder, the number
of outstanding Existing Stock Options or Existing Warrants held by such holder,
the number of Shares such holder is entitled to receive upon the exercise of
each Existing Stock Option or Existing Warrant and the corresponding exercise
price. Section 4.2(a) of the Disclosure Letter also contains a list, as of the
close of business on the day immediately preceding the date hereof, of any
Shares issued subsequent to March 19, 2001 upon the exercise of Existing Stock
Options and stock purchase rights under the Stock Purchase Plan, other than the
Shares to be issued subsequent to the date hereof pursuant to the Stock Purchase
Plan. Except as disclosed pursuant to the immediately preceding sentence, since
March 19, 2001, the Company has not issued any Shares, has not granted any
options, warrants or rights or entered into other agreements or commitments to
issue or purchase Shares (under the Stock Option Plans or otherwise) and has not
split, combined or reclassified any of its shares of capital stock. All of the
outstanding shares of capital stock of the Company have been, and all Shares
that may be issued pursuant to the exercise of options or conversion of the
Preferred Stock will be, when issued in accordance with the respective terms
thereof, duly authorized, validly issued and fully paid and nonassessable, and
have not been (and will not be) issued in violation of (nor are any of the
authorized shares of capital stock subject to) any preemptive or similar rights
created by statute, the certificate of incorporation or bylaws of the Company,
or any agreement to which the Company is a party or is bound. Except for the
Preferred Stock, Existing Stock Options, Existing Warrants and stock purchase
rights under the Stock Purchase Plan, there are not now and as of the Effective
Time there will not be, any (i) securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities or ownership
interests in the Company, (ii) options (including stock option plans and
programs), warrants, rights or other agreements or commitments to acquire from
the Company, or obligations of the Company to issue, sell, deliver, exchange,
convert, transfer or cause to be issued, sold, delivered, exchanged, converted
or transferred, any capital stock, voting securities or other ownership
interests in (or
10
securities convertible into or exchangeable for capital stock or voting
securities or other ownership interests in) the Company, (iii) obligations of
the Company to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment
relating to any capital stock, voting securities or other ownership interests in
the Company, (iv) bonds, debentures, notes or other indebtedness of the Company
having the right to vote on any matters on which stockholders of the Company may
vote (the items in clauses (i), (ii), (iii) and (iv), together with the capital
stock of the Company, being referred to collectively as "COMPANY SECURITIES") or
(v) obligations by the Company or any of its Subsidiaries to make any payments
based on the price or value of the Shares. There are no outstanding obligations
of the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any Company Securities. There are no voting trusts or other agreements
or understandings to which the Company or any of its Subsidiaries is a party
with respect to the voting of capital stock of the Company or any of its
Subsidiaries.
(b) The Company is directly or indirectly the record and beneficial owner of
all the outstanding shares of capital stock of each Company Subsidiary, except
as set forth in Section 4.2(b) of the Disclosure Letter, free and clear of any
lien, mortgage, pledge, charge, security interest or encumbrance of any kind,
and there are no irrevocable proxies with respect to any such shares. There are
no outstanding (i) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary of the Company,
(ii) options (including stock option plans and programs), warrants, rights or
other agreements or commitments to acquire from the Company or any of its
Subsidiaries (or obligations of the Company or any of its Subsidiaries to issue,
sell, deliver, exchange, convert, transfer or cause to be issued, sold,
delivered, exchanged, converted or transferred) any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership interests
in, any of its Subsidiaries, (iii) obligations of the Company or any of its
Subsidiaries to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment
relating to any capital stock, voting securities or other ownership interests in
any of the Company's Subsidiaries (the items in clauses (i), (ii) and (iii),
together with the capital stock of such Subsidiaries, being referred to
collectively as "SUBSIDIARY SECURITIES") or (iv) obligations of the Company or
any of its Subsidiaries to make any payment based on the value of any shares of
any Subsidiary. There are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
(c) Except as set forth in Section 4.2(c) of the Disclosure Letter, the
Company does not directly or indirectly own any equity or similar interest in,
or any interest convertible into or exchangeable or exercisable for any equity
or similar interest in, any Person.
Section 4.3 AUTHORITY FOR THIS AGREEMENT. The Company has all necessary
corporate power and authority to execute and deliver this Agreement and subject
to obtaining any necessary stockholder approval of the Plan of Merger contained
in this Agreement, if applicable, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated,
other than the approval of the Plan of Merger contained in this Agreement, by
the holders of a majority of the outstanding Shares prior to the consummation of
the Merger (unless the Merger is consummated pursuant to Section 253 of the
Corporation Law). This Agreement has been duly and validly executed and
delivered by the Company and constitutes a legal, valid and, assuming the due
authorization, execution and delivery of this Agreement by Purchaser and Parent,
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
Section 4.4 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution
and delivery of this Agreement by the Company nor the consummation of the
transactions contemplated hereby will
11
(a) conflict with or result in any breach of any provision of the respective
certificate of incorporation or bylaws (or other similar governing documents) of
the Company or any of its Subsidiaries, (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any foreign,
federal, state or local government or subdivision thereof, or governmental,
judicial, legislative, executive, administrative or regulatory authority,
agency, commission, tribunal, body or instrumentality (including tribal bodies
or any official thereof or any arbitrator or panel thereof) (each a
"GOVERNMENTAL ENTITY"), the Securities Act, the Exchange Act, the Corporation
Law and the "blue sky" or securities laws of any state, (c) except as set forth
in Section 4.4(c) of the Disclosure Letter, require any consent, waiver or
approval or result in a default (or give rise to any right of termination,
cancellation, modification or acceleration) under any of the terms, conditions
or provisions of any contract, agreement, lease or sub-lease, license,
franchise, loan or credit agreement, note, bond, mortgage, indenture or other
instrument, arrangement, commitment or obligation to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its Subsidiaries
or any of their respective assets may be bound, (d) result in the creation or
imposition of any imperfection of title, mortgage, lien, pledge, claim, charge,
security interest or encumbrance of any kind on any asset of the Company or any
of its Subsidiaries or (e) violate any order (including one issued by an
arbitrator), writ, injunction, decree, statute, rule or regulation applicable to
the Company or any of its Subsidiaries or by which any of their respective
assets are bound, except in the case of clauses (b), (c), (d) and (e) for any of
the foregoing that has not had or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the Offer or the
Merger.
Section 4.5 REPORTS; FINANCIAL STATEMENTS.
(a) Except as set forth in Section 4.5(a) of the Disclosure Letter, since
January 1, 1998, the Company has duly filed all forms, reports, schedules, proxy
statements and documents required to be filed by it with the SEC and any other
applicable state securities authorities. True and correct copies of all filings
made by the Company with the SEC since such date and prior to the date hereof
(the "COMPANY SEC REPORTS"), whether or not required by Law and including any
registration statement filed by the Company under the Securities Act, have been
either made available or are publicly available to Parent and Purchaser. As of
their respective dates, the Company SEC Reports (other than preliminary
material) complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the SEC thereunder applicable to such Company SEC Reports and none of the
Company SEC Reports, including any financial statements or schedules included or
incorporated by reference therein, at the time filed, contained any untrue
statement of a material fact or omitted 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. No Subsidiary of
the Company is subject to periodic reporting requirements of the Exchange Act or
is otherwise required to file documents with the SEC or comparable Governmental
Entity or any national securities exchange or quotation service.
(b) The audited consolidated financial statements of the Company for the
year ended December 31, 1999, and the audited and unaudited consolidated
financial statements of the Company included (or incorporated by reference) in
the Company SEC Reports (the "FINANCIAL STATEMENTS") comply as to form in all
material respects with applicable accounting requirements and with the rules and
regulations of the SEC with respect thereto and were prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis throughout the periods involved ("GAAP") (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of their respective
dates, and the consolidated income, stockholders equity, results of operations
and changes in consolidated financial position or cash flows for the periods
presented therein, except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which have not
12
been and are not reasonably likely to be materially adverse to the Company and
its Subsidiaries taken as a whole. The books and records of the Company and its
Subsidiaries have been, and are being, maintained, in all material respects, in
accordance with GAAP and all other legal and accounting requirements.
(c) Except (i) as reflected or reserved against or disclosed in the
Financial Statements, (ii) for liabilities that are not required to be recorded
or reflected on a balance sheet pursuant to GAAP, (iii) as incurred in the
ordinary course of business since December 31, 1999 and (iv) as set forth in
Section 4.5(c) of the Disclosure Letter, neither the Company nor any of its
Subsidiaries has any liabilities of any nature, whether accrued, absolute,
fixed, contingent or otherwise, or whether due or to become due, other than
liabilities that have not had or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 4.6 ABSENCE OF CERTAIN CHANGES. Except as set forth in Company SEC
Reports filed prior to the date hereof and except as set forth in Section 4.6 of
the Disclosure Letter, since December 31, 1999, (a) the Company and its
Subsidiaries have not suffered any change, condition, event or development that
has had, or could reasonably be expected to have, a Material Adverse Effect,
(b) the Company and its Subsidiaries have conducted in all material respects
their respective businesses only in the ordinary course consistent with past
practice, except for the negotiation and execution and delivery of this
Agreement and (c) there has not been any action by the Company or any of its
Subsidiaries which would constitute a breach of clauses (a)-(u) of Section 6.1.
Section 4.7 SCHEDULE 14D-9; OFFER DOCUMENTS AND PROXY STATEMENT.
(a) None of the information supplied or to be supplied by or on behalf of
the Company or any affiliate of the Company expressly for inclusion in the Offer
Documents will, at the times such documents are filed with the SEC and are
mailed to stockholders of the Company, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Schedule 14D-9 and any supplement or
amendment thereto will not, at the time they are filed with the SEC and at the
time of any distribution or dissemination thereof, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to information
supplied in writing by Parent, Purchaser or an affiliate of Parent or Purchaser
for inclusion therein.
(b) The Proxy Statement, and any other schedule or document required to be
filed by the Company in connection with the Merger, will not, at the time the
Proxy Statement is first mailed 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 to make the statements therein, in
light of the circumstances under which they are made, not misleading, except
that no representation or warranty is made by the Company with respect to
information supplied in writing by Parent, Purchaser or an affiliate of Parent
or Purchaser for inclusion therein.
(c) The 14D-9 and the Proxy Statement, and any amendments or supplements
thereto, when filed, distributed or disseminated, as applicable, will comply as
to form in all material respects with the applicable requirements of the
Exchange Act.
Section 4.8 BROKERS. Except for First Union, whose fees will be paid by
the Company pursuant to an engagement letter, a copy of which has previously
been provided to Parent, no Person is entitled to receive any brokerage,
finder's or other fee or commission in connection with this Agreement or the
transactions contemplated hereby based upon agreements made by or on behalf of
the Company or any of its Subsidiaries.
13
Section 4.9 EMPLOYEE BENEFIT MATTERS.
(a) Section 4.9(a) of the Disclosure Letter lists all material pension,
retirement, savings, disability, medical, dental, health, life (including all
individual life insurance policies as to which the Company or any of its
Subsidiaries is the owner, beneficiary or both), death benefit, group insurance,
profit sharing, deferred compensation, stock option or other equity-based
compensation, bonus, incentive, vacation pay, severance pay, "cafeteria" or
"flexible benefit" plan under Section 125 of the Code, or other employee benefit
plan, trust, arrangement, contract, agreement, policy or commitment (including
without limitation, all employee pension benefit plans as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all employee welfare benefit plans as defined in Section 3(l) of
ERISA), (A) under which current or former employees of the Company or any of its
Subsidiaries or their respective ERISA Affiliates are entitled to participate by
reason of their employment with the Company or any of its Subsidiaries or their
respective ERISA Affiliates, whether or not any of the foregoing is funded,
whether insured or self-funded and whether written or oral and with respect to
which the Company or any of its Subsidiaries or their respective ERISA
Affiliates are a party or a sponsor or a fiduciary thereof or by which the
Company or any of its Subsidiaries or their respective ERISA Affiliates (or any
of their rights, properties or assets) are bound or (B) with respect to which
the Company or any of its Subsidiaries otherwise may have any material liability
as described in Section 4.9(a) of the Disclosure Letter (collectively, the
"EMPLOYEE BENEFIT PLANS"). For each Employee Benefit Plan, the Company has made
available true and correct copies of all plan documents, summary plan
descriptions, determination letters, all material communications with any
government entity or agency (including the Internal Revenue Service and the PBGC
given or received with respect to any Employee Benefit Plan within the past five
(5) years, and the three (3) most recent Forms 5500, including all financial or
actuarial reports, if applicable, and all other attached schedules.
(b) The Company, its Subsidiaries and their respective ERISA Affiliates and,
to their knowledge, any "administrator(s)" (as described in Section 3(16)(A) of
ERISA) of the Employee Benefit Plans have complied in all material respects with
such Plans' terms and with the applicable requirements of ERISA, the Code and
any other applicable Law, specifically including the reporting and disclosure
requirements of Part 1 of Title I, and Title IV of ERISA and the Code, in a
timely and accurate manner, such that no material penalties are reasonably
expected to be imposed on the Company or its Subsidiaries or their respective
ERISA Affiliates, and no material penalties may be imposed on the Parent or the
Purchaser under ERISA, the Code or otherwise with respect to the Employee
Benefit Plans or any related trusts.
(c) For purposes of this Agreement, "ERISA AFFILIATES" shall mean any trade
or business (whether or not incorporated) that is part of the same controlled
group, or under common control with, or part of an affiliated service group that
includes, the Company or any of its Subsidiaries within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
(d) With respect to the Employee Benefit Plans:
(i) No Employee Benefit Plan is subject to Title IV of ERISA or
Section 412 of the Code, and no Employee Benefit Plan is a "multiemployer"
plan within the meaning of Section 3(37) of ERISA. No Employee Benefit Plan
is a "multiple employer plan" within the meaning of the Code or ERISA. Each
of the Employee Benefit Plans intended to be "qualified" within the meaning
of Section 401(a) of the Code has either (x) received a favorable
determination letter that the plan complies with the Tax Reform Act of 1986,
as amended, pursuant to a request which accurately described such plan, or
(y) has remaining a period of time under applicable pronouncements by the
Internal Revenue Service in which to apply for such a letter and make any
amendments necessary to obtain a favorable determination, and, in each case,
has been administered and operated in all material respects in accordance
with all Laws so as to maintain such qualification.
14
(ii) All contributions or other amounts payable by the Company or any of
its Subsidiaries or their ERISA Affiliates through the date hereof with
respect to each Employee Benefit Plan in respect of current or prior plan
years have been either paid or accrued on the Financial Statements to the
extent required under the terms of such plan or in accordance with GAAP.
(iii) There are no pending, or to the Company's knowledge, threatened or
anticipated material claims (other than routine claims for benefits) by, on
behalf of or against any of the Employee Benefit Plans or any trust related
thereto or, to the knowledge of the Company, by, on behalf of or against any
fiduciary of such plans.
(e) Neither the Company nor any of its Subsidiaries has any material
liability, whether absolute or contingent, direct or indirect, including any
obligations under any Employee Benefit Plan, with respect to any
misclassification of a person as an independent contractor rather than as an
employee or with respect to any employees "leased" from another employer.
(f) Except as set forth in Section 3.3, the consummation of the transactions
contemplated by this Agreement will not, with respect to employees or former
employees of the Company or any of its Subsidiaries: (A) entitle any individual
to severance pay; (B) accelerate the time of payment or vesting of, increase the
amount of, or satisfy a condition to the compensation due to any individual
under any Employee Benefit Plan; or (C) result in the payment of an amount that
could, individually or in combination with any other such payment, constitute an
"excess parachute payment" under Section 280G(b)(1) of the Code.
(g) Except as set forth in Section 4.9(g) of the Disclosure Letter or
Section 6.9(d) hereof, (A) neither the Company nor any of its Subsidiaries has
or will have any material liability or obligation under any Employee Benefit
Plan which provides medical or death benefits with respect to current or former
employees of the Company or any of its Subsidiaries beyond their termination of
employment (other than coverage mandated by Law); and (B) each of the Company,
its Subsidiaries and their respective ERISA Affiliates which maintains a "group
health plan," within the meaning of Section 607(l) of ERISA has materially
complied with the provisions of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, the Health Insurance Portability and Accountability Act
of 1996, as amended, and any other applicable Law.
(h) No "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) has occurred with respect to any Employee
Benefit Plan subject to ERISA, other than such a transaction subject to an
administrative or statutory exemption, with respect to which a material tax,
penalty or other amount may reasonably be expected to be imposed on the Company
or any of its Subsidiaries or their respective ERISA Affiliates.
(i) None of the Company or any of its Subsidiaries, or any of their
respective ERISA Affiliates, or any organization with respect to which any such
entity is a successor or parent corporation, within the meaning of
Section 4069(b) of ERISA, has engaged in any transaction described in
Section 4069 of ERISA which has had or could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(j) To the Company's knowledge, there has been no "mass layoff" or "plant
closing," as each such term is defined in the Worker Adjustment and Retraining
Notification Act of 1986, as amended ("WARN"), with respect to the employees of
the Company or any of its Subsidiaries, with respect to which there could be any
future material liability to such employees under WARN.
(k) Except as set forth in Section 4.9(k) of the Disclosure Letter, none of
the Company or any of its Subsidiaries is a party to any collective bargaining
or other labor union contract. To the Company's knowledge, there are no union
organization attempts underway with respect to any employees of the Company or
any of its Subsidiaries. There is no pending or, to the knowledge of the
Company, threatened material labor dispute, strike or work stoppage involving
such employees. To the knowledge
15
of the Company, neither the Company nor any of its Subsidiaries has committed
any material unfair labor practices (as defined in the National Labor Relations
Acts of 1947, as amended) in connection with the operation of its business and,
except as set forth in Section 4.9(k) of the Disclosure Letter, there is no
pending or, to the knowledge of the Company, threatened material charge or
complaint against the Company or any of its Subsidiaries by the National Labor
Relations Board or any comparable state or local agency.
Section 4.10 LITIGATION, ETC. Except as set forth in Section 4.10 of the
Disclosure Letter, there is no claim, action, suit, arbitration, proceeding or
investigation pending or, to the knowledge of the Company, threatened
(a) against the Company or any of its Subsidiaries, (b) affecting their
respective assets, rights or businesses, or (c) against any of their directors,
officers or employees that if adversely determined could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect or that, as
of the date hereof, in any manner challenges or seeks to prevent, enjoin, alter
or materially delay the Offer and the Merger or seeks an award of damages with
respect thereto. Neither the Company nor any of its Subsidiaries is subject to
any judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any Subsidiary of the Company that
has had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.11 TAX MATTERS.
(a) The Company and its Subsidiaries have duly filed all Tax Returns
required to be filed by Law with respect to the Company and its Subsidiaries (or
any of them) or any of their income, properties or operations as of the date
hereof in a timely manner (taking into account applicable filing extensions
listed), except to the extent that failure to make such filing has not had or
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. All such returns are accurate and complete in all
material respects. All Tax Returns required to be filed by or with respect to
the Company and its Subsidiaries (or any of them) after the date hereof and on
or before the Effective Time shall be prepared and timely filed (taking into
account applicable filing extensions) in a manner consistent with prior years
and applicable Law, except where a failure to make such filing has not had or
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. No penalties or other charges in a material amount are
or will become due with respect to the late filing of any Tax Return of the
Company and its Subsidiaries (or any of them) or payment of any Tax of the
Company and its Subsidiaries (or any of them), required to be filed or paid on
or before the Effective Time.
(b) Except where a failure of a statement contained in (i)-(iv) below to be
true or complete has not had or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect with respect to all
Tax Returns filed by or with respect to the Company and its Subsidiaries (or any
of them):
(i) the statute of limitations for the assessment of corporate income
taxes has expired for all years prior to 1997;
(ii) no audit is in progress and neither the Company nor any of its
Subsidiaries has received notice of any audit, nor is any audit threatened;
(iii) no waiver or agreement has been executed for the extension of time
for the assessment or payment of any Tax;
(iv) there is no deficiency proposed by a taxing authority or threatened
in writing by a taxing authority against the Company or any of its
Subsidiaries; and
(v) there are no liens for Taxes on the assets of the Company or any of
its Subsidiaries, other than liens for taxes not yet due and payable.
16
(c) Except as set forth in Section 4.11(c) of the Disclosure Letter:
(i) all material amounts required to be paid on or before the date
hereof by or with respect to the Company and its Subsidiaries (or any of
them) with respect to Taxes have been timely paid; and
(ii) any material amounts required to be paid by or with respect to the
Company and its Subsidiaries (or any of them) with respect to Taxes after
the date hereof and on or before the Effective Time shall be timely paid.
(d) Neither the Company nor any of its Subsidiaries has been or is a party
to any tax sharing agreement or similar arrangement.
(e) Section 4.11(e) of the Disclosure Letter identifies:
(i) with respect to Subsidiaries of the Company acquired from a common
parent of an affiliated group of corporations that filed a consolidated
federal income tax return, the common parent of such group, and the period
to which such returns related, that included the Subsidiaries;
(ii) all claims with respect to Taxes in a material amount that have
been asserted against the Company and its Subsidiaries (or any of them)
under any tax sharing agreement to which any of them is a party.
(f) The Company and its Subsidiaries have made adequate provisions in
accordance with GAAP to each of the Company and its Subsidiaries in the
Financial Statements for the payment of all Taxes for which each of the Company
and its Subsidiaries may be liable for the periods covered thereby that were not
yet due and payable as of the dates thereof, except for inadequate provision for
tax liabilities that has not had or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 4.12 COMPLIANCE WITH LAW. Neither the Company nor any of its
Subsidiaries (a) is, in any material respect, in conflict with, in default
under, in violation of or under investigation pursuant to any Law applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected or (b) has received
notice of or, to the knowledge of the Company, been threatened to be charged
with any of the foregoing. The Company and its Subsidiaries have all permits,
licenses, authorizations, consents, approvals, certificates and franchises from
Governmental Entities required to conduct their businesses as currently
conducted (the "COMPANY PERMITS"), except for such permits, licenses,
authorizations, consents, approvals, certificates and franchises the absence of
which has not had or could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect or a material adverse effect on the
ability of the parties to consummate the Offer or the Merger. The Company and
its Subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply has not had or could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect or a
material adverse effect on the ability of the parties to consummate the Offer or
the Merger.
Section 4.13 ENVIRONMENTAL MATTERS. The Company and each of its
Subsidiaries have been and are in compliance with all applicable Environmental
Laws except for such instances of non-compliance that have not had or could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company and each of its Subsidiaries have all material
permits, licenses, consents, approvals, certificates, waivers, variances and
other authorizations ("AUTHORIZATIONS") that are required with respect to the
operation of their respective businesses, properties and assets under the
Environmental Laws and are in compliance with such Authorizations and all such
Authorizations are in full force and effect except for such non-compliance or
failures to be in full force and effect that have not had and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Except as set forth in Section 4.13 of the Disclosure Letter,
none of the Company or
17
its Subsidiaries are subject to any material claims, actions, suits,
proceedings, investigations, decrees, judgments or orders pursuant to
Environmental Law or principles of common law relating to pollution of the
environment or health and safety which have had or could reasonably be expected
to have a Material Adverse Effect. There are no events, conditions or
circumstances which have resulted or are reasonably likely to result in
liability or costs pursuant to Environmental Laws or principles of common law
relating to pollution or protection of the environment or health and safety
which have had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.14 INTELLECTUAL PROPERTY.
(a) Except as set forth in Section 4.14(a) of the Disclosure Letter, the
Company and its Subsidiaries are the owners of, or have the license or right to
use all of, the material Intellectual Property that is used in connection with
the business of the Company and its Subsidiaries, as presently conducted or
reasonably contemplated in their respective business plans, free and clear of
any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance,
lien (statutory or other) or preference, priority, right or other security
interest.
(b) Section 4.14(b) of the Disclosure Letter sets forth all of the material
Intellectual Property owned by, and filings and applications for any
Intellectual Property filed by, the Company and its Subsidiaries. None of the
Intellectual Property listed in Section 4.14(b) of the Disclosure Letter is
subject to any outstanding judgment, injunction, writ, award, decree or order of
any nature, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the knowledge of the Company,
threatened, which challenges the validity, enforceability, use or ownership of
such Intellectual Property.
(c) Section 4.14(c) of the Disclosure Letter sets forth all material
Intellectual Property licenses, sublicenses, distributor agreements and other
agreements under which the Company or any of its Subsidiaries is either a
licensor, licensee or distributor, except such licenses, sublicenses and other
agreements relating to off-the-shelf software, that are commercially available
on a retail basis with annual fee obligations of less than $10,000. The Company
and its Subsidiaries have substantially performed all obligations imposed upon
them thereunder, and are not, nor to the knowledge of the Company is any other
party thereto, in breach of or default thereunder in any respect, nor is there
any event which with notice or lapse of time or both would constitute a material
default thereunder. All of the material Intellectual Property licenses listed in
Section 4.14(c) of the Disclosure Letter are valid, enforceable and in full
force and effect, and will continue to be so on identical terms immediately
following the Effective Time except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
(d) None of the material Intellectual Property currently licensed by the
Company or its Subsidiaries to any Person, or, to the knowledge of the Company,
used by or licensed to the Company or its Subsidiaries from any Person,
infringes upon or otherwise violates any Intellectual Property rights of others.
(e) Except as set forth in Section 4.14(e) of the Disclosure Letter, no
material litigation is pending and no action, suit, proceeding, claim,
complaint, dispute, arbitration or investigation has been made against the
Company or its Subsidiaries or, to the knowledge of the Company, is threatened,
contesting the right of the Company or its Subsidiaries to sell or license to
any Person or use any Intellectual Property presently licensed to such Person or
used by the Company or its Subsidiaries.
(f) Except as set forth in Section 4.14(f) of the Disclosure Letter, to the
knowledge of the Company, no Person is infringing upon or otherwise violating
any material Intellectual Property rights of the Company or its Subsidiaries.
18
(g) No former employer of any employee of the Company or its Subsidiaries,
and no current or former client of any independent contractor of the Company or
its Subsidiaries, has made or, to the knowledge of the Company, threatened a
claim against the Company or its Subsidiaries or, to the knowledge of the
Company, against any other Person, that such employee or such independent
contractor is utilizing material Intellectual Property of such former employer
or client.
(h) Except as set forth in Section 4.14(h) of the Disclosure Letter, neither
the Company nor any of its Subsidiaries is a party to or bound by any material
license or other agreement requiring the payment by the Company or any of its
Subsidiaries of any material royalty or license payment, excluding such
agreements relating to software licensed for use solely on the computers of the
Company or its Subsidiaries.
(i) To the knowledge of the Company, no employee of the Company or its
Subsidiaries is in material violation of any Law applicable to such employee, or
any term of any employment agreement, patent or invention disclosure agreement
or other contract or agreement relating to the relationship of such employee
with the Company or any of its Subsidiaries or any prior employer.
(j) To the knowledge of the Company, none of the Company's material
know-how, inventions, processes or other know-how or similar Intellectual
Property, wherever located, the value of which is contingent upon maintenance of
confidentiality thereof, has been disclosed to any Person other than to
employees, representatives and agents of the Company or its Subsidiaries or
pursuant to an obligation of confidentiality, except as required pursuant to the
filing of a patent application by the Company or its Subsidiaries or as
otherwise required by applicable Law.
(k) Except as set forth in Section 4.14(k) of the Disclosure Letter, it is
not necessary for the Company's or its Subsidiaries' business to use any
material Intellectual Property (i) owned by any director, officer, employee or
independent contractor of the Company or of any of its Subsidiaries (or persons
the Company or its Subsidiaries presently intend to hire) or (ii) owned by any
such Person but not assigned or licensed (or intended to be assigned or licensed
with respect to presently intended hires) to the Company pursuant to an
employment, consulting or similar agreement. To the knowledge of the Company, at
no time during the conception or reduction to practice of any of the Company's
or any of its Subsidiaries' material Intellectual Property was any developer,
inventor or other contributor to such Intellectual Property operating under any
grants from any Governmental Entity or subject to any employment agreement,
invention assignment, nondisclosure agreement or other contractual obligation
with any Person that could materially and adversely affect the Company's or any
of its Subsidiaries' rights to such Intellectual Property.
(l) All past and present employees and independent contractors of the
Company and/or any of its Subsidiaries, except those named in Section 4.14(l) of
the Disclosure Letter have executed and delivered proprietary invention
agreements with the Company or its Subsidiaries, as the case may be,
substantially in the form previously provided to Parent, and are obligated under
the terms thereof to assign all material inventions and other material
Intellectual Property made by them during the course of employment to the
Company or its Subsidiaries, as the case may be. To the knowledge of the
Company, no such employee or independent contractor of the Company and/or any of
its Subsidiaries has excluded works or inventions made prior to his employment
with or work for the Company or any of its Subsidiaries from his assignment of
inventions pursuant to such proprietary invention agreements.
(m) The term "INTELLECTUAL PROPERTY" means all proprietary and other rights,
including rights granted under license, in and to the following:
(i) trademarks, service marks, trademark registrations, service xxxx
registrations, trade names and applications for registration of trademarks
and service marks ("TRADEMARKS");
(ii) copyright registrations, applications for registration of
copyrights and unregistered copyrights ("COPYRIGHTS");
19
(iii) patents, design patents and utility patents, all applications for
grant of any such patents pending as of the date hereof or as of the
Effective Time or filed within five (5) years prior to the date hereof, and
all reissues, divisions, continuations-in-part and extensions thereof
("PATENTS");
(iv) computer software, including source code, object code, algorithms,
databases, and all related documentation ("SOFTWARE");
(v) technical documentation, trade secrets, domain names, websites and
content designs, inventions, processes, formulae, know-how, operating
manuals and guides, plans, new product development, technical and marketing
surveys, material specifications, product specifications, invention records,
research records, labor routings, inspection processes, equipment lists,
engineering reports and drawings, architectural or engineering plans,
know-how agreements; marketing and licensing records, sales literature,
customer lists, trade lists, sales forces and distributor networks lists,
advertising and promotional materials, service and parts records, warranty
records, maintenance records and similar records; and
(vi) all rights and incidents of interest in and to all noncompetition
or confidentiality agreements;
in each case including any and all applications therefor or registrations,
renewals, modifications and extensions thereof.
(n) The term "COMPANY INTELLECTUAL PROPERTY RIGHTS" shall mean all material
Intellectual Property owned or used under license by the Company or any of its
Subsidiaries.
Section 4.15 REAL PROPERTY.
(a) Neither the Company nor any of its Subsidiaries own any real property.
Section 4.15(a) of the Disclosure Letter sets forth a list of any real property
previously owned by the Company or any of its Subsidiaries.
(b) Section 4.15(b) of the Disclosure Letter sets forth a list of all
material leases, subleases and other agreements under which the Company or any
of its Subsidiaries uses or occupies or has the right to use or occupy, now or
in the future, any material real property (the "REAL PROPERTY LEASES").
Section 4.15(b) of the Disclosure Letter also sets forth a list of all material
leases, subleases and other agreements under which the Company or any of its
Subsidiaries has used or occupied any material real property during the last
five (5) years. Each Real Property Lease is valid, binding and in full force and
effect, and no termination event or termination condition or uncured default of
a material nature on the part of the Company or any such Subsidiary exists under
any Real Property Lease. Each of the Company and its Subsidiaries has a good and
valid leasehold interest in each parcel of real property leased by it free and
clear of all mortgages, pledges, liens, encumbrances and security interests,
except (i) those reflected or reserved against in the balance sheet of the
Company dated as of September 30, 2000, (ii) Taxes and general and special
assessments not in default and payable without penalty and interest and
(iii) other liens, mortgages, pledges, encumbrances and security interests that
do not materially interfere with the Company's use and enjoyment of such real
property or that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 4.16 MATERIAL CONTRACTS.
(a) Section 4.16(a) of the Disclosure Letter sets forth a list of all
contracts, agreements, commitments, arrangements, leases (including with respect
to personal property) and other instruments to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its Subsidiaries or any
of their respective assets is bound that involves or could involve aggregate
payments of more than $50,000 (each, a "MATERIAL CONTRACT").
20
(b) There is no contract, agreement or understanding that was required to be
described in or filed as an exhibit to any Company SEC Report that was not
described in or filed as required by the Securities Act or the Exchange Act, as
the case may be. The Material Contracts are valid and binding and are in full
force and effect and enforceable in accordance with their respective terms in
all material respects. The Company is not, in any material respect, in violation
or breach of or default under any Material Contract nor, to the Company's
knowledge, is any other party to any such Material Contract.
(c) Except as set forth in Section 4.16(c) of the Disclosure Letter, neither
the Company nor any of its Subsidiaries is a party to or bound by any contract,
agreement or arrangement (including any lease of real property) (i) restricting
the ability of the Company or any of its Subsidiaries (or after the Merger,
Parent or any or its Subsidiaries) to compete in or conduct any line of business
or to engage in business in any geographic area, (ii) containing covenants of
any other Person not to compete in any material respect with the Company or any
of its Subsidiaries or (iii) containing any so-called "most favored nation"
provisions or any similar provision requiring the Company or any Subsidiary (or
after the Merger, Parent or any of its Subsidiaries) to offer a third party
terms or concessions at least as favorable as offered to one or more other
parties.
Section 4.17 OPINION OF FINANCIAL ADVISOR. The Board of Directors of the
Company has received the opinion of First Union, a copy of which has been, or
will be as promptly as practicable, provided to Parent, to the effect that, as
of the date of this Agreement, the consideration to be received in the Offer and
the Merger, by the holders of Shares (other than Parent or its affiliates) is
fair to such holders from a financial point of view.
Section 4.18 VOTE REQUIRED. In the event that the Merger is not
consummated pursuant to Section 253 of the Corporation Law, the only vote of the
holders of any class or series of Company capital stock necessary to approve the
Merger is the affirmative vote of the holders of a majority of the outstanding
Shares.
Section 4.19 ANTI-TAKEOVER PLAN; STATE TAKEOVER STATUTES. Neither the
Company nor any Subsidiary has in effect any stockholder rights plan or similar
device or arrangement, commonly or colloquially known as a "poison pill" or
"anti-takeover" plan or any similar plan, device or arrangement and the Board of
Directors of the Company has not adopted or authorized the adoption of such a
plan, device or arrangement. The Board of Directors of the Company has taken all
necessary actions to exempt the Offer, the Merger, this Agreement and the
transactions contemplated by this Agreement from Section 203 of the Corporation
Law. To the knowledge of the Company, no other state takeover statute or similar
statute or regulation applies or purports to apply to the Offer, the Merger,
this Agreement, or any of the transactions contemplated by this Agreement.
Section 4.20 INSURANCE. Except as has not had or could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
(i) the Company and each of its Subsidiaries maintains, and has maintained,
without interruption, during its existence, policies or binders of insurance
covering such risk, and events, including personal injury, property damage and
general liability in amounts the Company believes in good faith are adequate for
its business and operations, (ii) the Company has not received notice of
termination or cancellation of any such policy and such policies shall not
terminate as a result of the consummation of the transactions contemplated
hereby, (iii) the Company or its Subsidiaries are named insureds under such
policies, (iv) all premiums required to be paid with respect thereto covering
all periods up to and including the Effective Time and (v) there has been no
lapse in coverage under such policies during any period for which the Company
and its Subsidiaries have conducted their respective operations. None of the
Company or its Subsidiaries has any obligation for retrospective premiums for
any period prior to the Effective Time which has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
All such policies are in full force and effect and will remain in full force and
effect to and including the Effective Time, unless replaced with comparable
insurance policies having
21
comparable terms and conditions. Except as set forth in Section 4.20 of the
Disclosure Letter, no insurer has put the Company or any of its Subsidiaries on
notice that coverage was denied with respect to any claim submitted to such
insurer by the Company or any such Subsidiary.
Section 4.21 TRADE RELATIONS. There exists no actual or, to the knowledge
of the Company, threatened termination, cancellation or limitation of, or any
adverse modification or change in, the business relationship of the Company or
any of its Subsidiaries with any distribution partner, customer or supplier or
any group of customers or suppliers whose purchases or inventories provided to
the Company's or any of its Subsidiaries' business are material to the Company
and its Subsidiaries.
Section 4.22 WARRANTIES; PRODUCT CLAIMS.
(a) The products manufactured by the Company and its Subsidiaries and sold
to end user customers and, to the Company's knowledge, the products manufactured
by the Company and its Subsidiaries and sold for use by original equipment
manufacturer customers or the products sold by the Company or its Subsidiaries
but manufactured by third parties, comply in all material respects with all
applicable Laws. To the Company's knowledge, there is no pending federal or
state legislation, not otherwise applicable to the Company's industry, which if
adopted or enacted could reasonably be expected to result in a Material Adverse
Effect as a result of the products sold by the Company and its Subsidiaries.
(b) Section 4.22(b) of the Disclosure Letter sets forth a summary of each
material recall (voluntary or involuntary) of products manufactured by the
Company or its Subsidiaries (or products containing products manufactured by the
Company or any of its Subsidiaries) during the three (3) year period prior to
the date hereof, describing in each case the nature of the problem giving rise
to such recall, the approximate number of products recalled and the aggregate
costs incurred by the Company or any of its Subsidiaries for each such recall.
Except as set forth in Section 4.22(b) of the Disclosure Letter, during the
three (3) year period prior to the date hereof, neither the Company nor any of
its Subsidiaries has experienced any material return or Warranty Claims with
respect to products sold or services performed by the Company and its
Subsidiaries, nor are there any pending or, to the Company's knowledge,
threatened material return or Warranty Claims with respect to products sold or
services performed by the Company and its Subsidiaries for which the Company or
its Subsidiaries may have continuing liability or obligations as of the date
hereof.
Section 4.23 POTENTIAL CONFLICTS OF INTEREST. Except as set forth in
Section 4.23 of the Disclosure Letter, no director, officer or the beneficial
owner of five percent (5%) or more of the Shares, (a) owns, directly or
indirectly, any interest in, or is an officer, director, employee or consultant
of, any Person which is, or is engaged in business as, a competitor, lessor,
distributor, sales agent or lender to or borrower from, the Company or any of
its Subsidiaries; (b) owns, directly or indirectly, in whole or in part, any
material tangible or intangible property that the Company or any of its
Subsidiaries has used, or that the Company or any of its Subsidiaries currently
contemplates using, in the conduct of their business; or (c) receives any
payment or other benefit from the Company or any of its Subsidiaries other than
in the ordinary course of business on an arm's length basis.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as follows:
Section 5.1 ORGANIZATION AND QUALIFICATION. Each of Parent and Purchaser
is a duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization. All of the issued and outstanding
capital stock of Purchaser is owned directly or indirectly by Parent.
22
Section 5.2 AUTHORITY FOR THIS AGREEMENT. Each of Parent and Purchaser has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Parent and Purchaser and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate proceedings on the part of Parent and Purchaser. This
Agreement has been duly and validly executed and delivered by Parent and
Purchaser and assuming the due authorization, execution and delivery of this
Agreement by the Company, constitutes a legal, valid and binding agreement of
each of Parent and Purchaser, enforceable against each of Parent and Purchaser
in accordance with its terms.
Section 5.3 OFFER DOCUMENTS; PROXY STATEMENT.
(a) None of the Offer Documents will, at the times such documents are filed
with the SEC and are mailed to the stockholders of the Company, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading, except that no
representation is made by Parent or Purchaser with respect to information
supplied in writing by the Company or an affiliate of the Company for inclusion
therein. The Offer Documents will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations of the SEC
thereunder.
(b) None of the information supplied by Parent, Purchaser or any affiliate
of Parent or Purchaser for inclusion in the Proxy Statement, if applicable, or
the Schedule 14D-9 will, at the date of filing with the SEC, and, in the case of
the Proxy Statement, if applicable, at the time the Proxy Statement is mailed
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 to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Section 5.4 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution
and delivery of this Agreement by Parent or Purchaser nor the consummation of
the transactions contemplated hereby will (a) conflict with or result in any
breach of any provision of the respective certificate of incorporation or bylaws
(or other similar governing documents) of Parent or Purchaser, (b) require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except (i) as may be required under the Securities
Act, the Exchange Act, the Corporation Law and the "takeover," "blue sky" or
securities laws of any state or (ii) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the parties hereto to consummate the
transactions contemplated hereby, (c) require any consent, waiver or approval or
result in a default (or give rise to any right of termination, cancellation,
modification or acceleration) under any of the terms, conditions or provisions
of any note, license, agreement, contract, indenture or other instrument or
obligation to which Parent or Purchaser or any of their respective Subsidiaries
is a party or by which Parent or any of its Subsidiaries or any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation, modification or acceleration) as to which requisite
waivers or consents have been obtained or which could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of the parties hereto to consummate the transactions contemplated hereby
or (d) violate any order (including one issued by an arbitrator), writ,
injunction, decree, statute, rule or regulation applicable to Parent, Purchaser
or any of their respective Subsidiaries or by which any of their respective
assets are bound, except for violations which could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of the parties hereto to consummate the transactions contemplated
hereby.
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Section 5.5 OPERATIONS OF PURCHASER. Purchaser was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted and will conduct its operations only
as contemplated hereby.
Section 5.6 BROKERS. No Person is entitled to receive any brokerage,
finder's or other fee or commission in connection with this Agreement or the
transactions contemplated hereby based upon the agreements made by or on behalf
of the Company or any of its Subsidiaries.
Section 5.7 LITIGATION. There is no claim, action, suit, proceeding or
governmental investigation pending or, to the knowledge of Parent or Purchaser,
threatened against either Parent or Purchaser or any of their Subsidiaries that
seeks to or could reasonably be expected to have a material adverse effect on
the ability of the parties hereto to consummate the transactions contemplated
hereby.
Section 5.8 FUNDS. Parent or Purchaser has or will have the funds
necessary to consummate the Offer and the Merger.
ARTICLE VI
COVENANTS
Section 6.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as set forth in
Section 6.1 of the Disclosure Letter and expressly contemplated by this
Agreement or as consented to in writing by Parent (provided that in the event
that the Company shall require the consent of Parent pursuant hereto, Parent
shall not unreasonably delay its response), during the period from the date of
this Agreement to the earlier of the Effective Time and the Appointment Time, or
until the earlier termination of this Agreement, the Company will conduct and
will cause each of its Subsidiaries to:
(a) act and carry on their respective businesses in the ordinary course of
business substantially consistent with past practice and use their respective
reasonable best efforts to preserve substantially intact their current material
business organizations, keep available the services of their current officers
and employees (except for terminations of employees in the ordinary course of
business) and preserve their material relationships with others having
significant business dealings with them;
(b) not issue, sell, grant options or rights to purchase, pledge, or
authorize or propose the issuance, sale, grant of options or rights to purchase
or pledge of (i) any Company Securities (including any Existing Stock Option) or
Subsidiary Securities, or grant or accelerate any right to convert or exchange
any Company Securities or Subsidiary Securities, other than Shares issuable upon
exercise of the Existing Stock Options and other than as may be required
pursuant to the Stock Purchase Plan or (ii) any other securities in respect of,
in lieu of or in substitution for Shares outstanding on the date hereof,
(c) not acquire or redeem, directly or indirectly, or amend any Company
Securities or Subsidiary Securities;
(d) not split, combine or reclassify its capital stock or declare, set
aside, make or pay any dividend or distribution (whether in cash, stock or
property) on any shares of its capital stock (other than cash dividends paid to
the Company by its wholly-owned Subsidiaries with regard to their capital
stock);
(e) not propose or adopt any amendment to their certificate of incorporation
or bylaws (or similar documents);
(f) not grant any stock related performance or similar awards or bonuses,
and not pay any accrued but unpaid bonuses to any employees of the Company, due
to the cash position of the Company. The Company further represents and warrants
to the Buyer and the Parent that neither the Board of Directors of the Company
nor any committee of the Board of Directors has approved,
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committed or taken any other action to approve any bonuses for the Company's
employees for the year ended December 31, 2000 and will not make any such
determination with respect to such bonuses;
(g) not (i) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, joint venture, association or
other business organization or division thereof or (ii) acquire or agree to
acquire, lease or manage any assets, other than in the ordinary course of
business consistent with past practice acquire assets that are immaterial to the
Company and its Subsidiaries taken as a whole;
(h) other than in the ordinary course of business consistent with past
practice, not sell, lease, license, mortgage or otherwise encumber or subject to
any lien or otherwise dispose of any of its properties or assets, or stock or
other ownership interest in any of its properties or subsidiaries other than
(i) any liens for taxes not yet due and payable or being contested in good faith
by appropriate proceedings for which adequate reserves have been provided in the
consolidated balance sheet of the Company at September 30, 2000 and (ii) such
mechanics and similar liens, if any, as do not materially detract from the value
of any of such properties, assets, stock or ownership interests or materially
interfere with the present use of any of such properties or assets;
(i) not make any binding commitment or enter into, or amend, modify, or
terminate any Material Contract;
(j) not (i) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of the Company or any of its
Subsidiaries, guarantee any debt securities of another Person, enter into any
"keep well" or other agreement to maintain any financial statement condition of
another Person or enter into any arrangement having the economic effect of any
of the foregoing, except for borrowings under its line of credit for working
capital purposes and the endorsement of checks in the normal course of business
or (ii) make any loans, advances or capital contributions to, or investments in,
any other Person, other than to the Company or any direct or indirect wholly
owned Subsidiary of the Company and other than travel and entertainment advances
to employees in the ordinary course of business consistent with past practice;
(k) not establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation stock option, restricted stock,
pension, retirement, deferred compensation, employment termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the benefit of any
current or former director, officer and employee;
(l) except as disclosed in the Company's SEC Reports and except as may be
required as a result of a change in law or in GAAP or a change in order to
comply with SEC requirements, not change any of their accounting policies or
procedures (including, without limitation, procedures with respect to the
payment of accounts payable and collection of accounts receivable);
(m) ensure that it and each of its Subsidiaries shall, use its reasonable
best efforts to keep or cause to be kept its material existing insurance
policies (or substantial equivalents) in such amounts duly in force until the
Effective Time and shall give Parent notice of any material change in its
insurance policies;
(n) not make any material election with regard to Taxes, file any material
amended Tax Returns or settle or compromise any material federal, state, local
or foreign income tax liability. All Tax Returns required to be filed by or with
respect to the Company and its Subsidiaries (or any of them) after the date
hereof and on or before the Effective Time shall be prepared and timely filed,
in a manner consistent with prior years. The Company and its Subsidiaries shall
pay in a manner consistent with prior years all Taxes shown as being required to
be paid on such returns;
25
(o) not (x) pay, discharge or satisfy any material claims (including claims
of stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge or
satisfaction of (i) liabilities or obligations in the ordinary course of
business consistent with past practice or in accordance with their terms as in
effect as of the date hereof, (ii) claims settled or compromised to the extent
permitted by Section 6.1(q) or (iii) professional fees in connection with the
foregoing not in excess of amounts previously disclosed to Parent, or
(y) waive, release, grant, or transfer any rights of material value pursuant to
any Material Contract, other than in the ordinary course of business consistent
with past practice;
(p) not adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or reorganization;
(q) not settle or compromise any litigation (whether or not commenced prior
to the date of this Agreement) other than settlements or compromises of
litigation where the settlement is limited solely to monetary payment and the
release of claims and the amount paid in all such settlements or compromises
does not exceed $100,00 in the aggregate or $25,000 for any individual
settlement or compromise;
(r) not engage in any transaction with, or enter into any agreement,
arrangement, or understanding with, directly or indirectly, any of the Company's
or its Subsidiaries' affiliates, including, without limitation, any
transactions, agreements, arrangements or understandings with any affiliate or
other Person covered under Item 404 of SEC Regulation S-K that would be required
to be disclosed under such Item 404;
(s) not effectuate a "plant closing" or "mass layoff," as those terms are
defined in WARN, affecting in whole or in part any site of employment, facility,
operating unit or employee of the Company or any of its Subsidiaries;
(t) not enter into any new, or amend any existing, employment, severance,
consulting or salary continuation agreements with or for the benefit of any
officers, directors or employees, or grant any increases in the compensation or
benefits to officers, directors and employees (other than normal increases to
persons who are not officers or directors in the ordinary course of business
consistent with past practices and that, in the aggregate, do not result in a
material increase in benefits or compensation expense of the Company);
(u) take any and all necessary or reasonable actions to apply for, perfect,
register or maintain appropriate protection for all its material Intellectual
Property; or
(v) not agree in writing or otherwise to take any of the foregoing actions.
Section 6.2 NO SOLICITATION.
(a) The Company shall not, and shall cause its Subsidiaries and the
officers, directors, key employees, representatives (including, without
limitation, investment bankers, attorneys and accountants), agents or affiliates
of the Company and its Subsidiaries (collectively, the "REPRESENTATIVES") not
to, directly or indirectly, (i) solicit, initiate or knowingly encourage or
facilitate any inquiries or the making of the proposal or offer with respect to
an Acquisition Proposal or (ii) participate in any discussions or negotiations
with, or provide any non-public information to, or afford any access to the
properties, books or records of the Company or any of its Subsidiaries, or
otherwise take any other action to assist or facilitate (including granting any
waiver or release under any standstill or similar agreement with respect to any
securities of the Company), any "person" or "group" (as such terms are used for
purposes of Section 13(d)(3) of the Exchange Act) (other than Parent or
Purchaser or any affiliate or associate of Parent or Purchaser) (each, a
"POTENTIAL ACQUIROR") concerning any Acquisition Proposal. In the event the
Company receives any Acquisition Proposal, the Company shall as promptly as
practicable (and in any event no later than one (1) Business Day
26
thereafter) notify Parent of such receipt and provide Parent with the identity
of the Potential Acquiror and a copy of such Acquisition Proposal.
(b) Notwithstanding the provisions of Section 6.2(a), the Company may take
any of the actions referred to in Section 6.2(a)(ii) with respect only to a
Potential Acquiror that has made an unsolicited written bona fide Acquisition
Proposal provided that all of the following conditions are satisfied: (i) the
Board of Directors of the Company determines in good faith, (A) after
consultation with its independent financial advisor, that such Acquisition
Proposal is reasonably likely to result in the making of a Superior Proposal and
(B) after consultation with its outside legal counsel, that such action is
consistent with its fiduciary duties pursuant to applicable Law; (ii) as
promptly as reasonably practicable (and in any event no later than one
(1) Business Day following receipt) the Company notifies Parent of the receipt
of such Acquisition Proposal and/or any request for nonpublic information
relating to the Company or any of its Subsidiaries or for access to the
properties, books or records of the Company or any of its Subsidiaries by the
Potential Acquiror that has made such Acquisition Proposal and that the Company
intends to engage in negotiations with, or to provide information to such
Potential Acquiror, (iii) the Company receives from such Potential Acquiror an
executed confidentiality or standstill agreement that is no more favorable to
such Person than the Confidentiality Agreement, dated November 1, 2000, between
Parent and the Company (the "CONFIDENTIALITY AGREEMENT"); and (iv) the Company
furnishes or makes available to Parent the same information provided to such
Person (to the extent not previously furnished or made available). If the
Company or any of its Subsidiaries or any of their Representatives participate
in discussions or negotiations with, or provides information to a Potential
Acquiror, the Company will notify Parent within one (1) Business Day after any
material amendment to the Acquisition Proposal made by such Potential Acquiror.
(c) The Company shall, and shall cause its Subsidiaries and their respective
Representatives to, immediately cease and cause to be terminated any existing
solicitation, activity, discussions or negotiations with any Person (other than
Parent, Purchaser or any of their respective affiliates or associates) conducted
prior to the date hereof with respect to any Acquisition Proposal.
(d) Unless the Company terminates this Agreement in accordance with the
provisions of Section 8.1(g), the Company shall not (i) withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Parent or
Purchaser, the approval or recommendation of the Offer or the Merger as set
forth in Section 1.2(a), (ii) approve or recommend, or propose publicly to
approve or recommend, any Acquisition Proposal, including, without limitation,
for purposes of Section 203 of the Corporation Law, or (iii) enter into any
letter of intent, agreement in principle or acquisition agreement related to any
Acquisition Proposal.
(e) Nothing contained in this Agreement shall prohibit the Company or its
Board of Directors from taking and disclosing to the Company's stockholders a
position with respect to an Acquisition Proposal by a third party pursuant to
Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or otherwise
communicating with the Company's stockholders to the extent required by Law.
Section 6.3 ACCESS TO INFORMATION.
(a) From and after the date of this Agreement, the Company shall (i) give
Parent and Purchaser and their Representatives reasonable access (during regular
business hours upon reasonable notice) to the facilities and books and records
of the Company and its Subsidiaries and (ii) cause its officers and those of its
Subsidiaries to furnish Parent and Purchaser with such financial and operating
data and other information with respect to the business, properties and
personnel of the Company and its Subsidiaries as Parent or Purchaser may from
time to time reasonably request.
(b) Information obtained by Parent or Purchaser pursuant to Section 6.3(a)
shall be subject to the provisions of the Confidentiality Agreement as if Parent
was a party thereto, the terms of which are incorporated herein by reference.
27
Section 6.4 REASONABLE EFFORTS; FURTHER ACTIONS.
(a) Subject to the terms and conditions herein provided for, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement. Without limiting the foregoing, (i) each of the
Company, Parent and Purchaser shall use its reasonable best efforts to make
promptly any required submissions under any applicable Law that the Company or
Parent determines should be made, in each case, with respect to the Offer, the
Merger and the transactions contemplated hereby and to respond as promptly as
practicable to all inquiries received from any Governmental Entity with respect
to such submissions for additional information or documentation, and
(ii) Parent, Purchaser and the Company shall cooperate with one another (A) in
promptly determining, in connection with the consummation of the transactions
contemplated by this Agreement, whether any filings are required to be or should
be made or consents, approvals, permits or authorizations are required to be or
should be obtained under any applicable Law or whether any consents, approvals
or waivers are required to be or should be obtained from other parties to any
Material Contract and (B) in promptly making any such filings, furnishing
information required in connection therewith and seeking to obtain timely any
such consents, permits, authorizations, approvals or waivers.
(b) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, Parent shall
cause the proper officers and directors of each party to this Agreement to take
all such necessary action.
(c) In the event that any action, suit, proceeding or investigation relating
hereto or to the transactions contemplated hereby is commenced, whether before
or after the Effective Time, the parties hereto agree to cooperate and use all
reasonable efforts to defend vigorously against it and respond thereto.
Section 6.5 INDEMNIFICATION AND INSURANCE.
(a) Parent and Purchaser agree that all rights to indemnification existing
in favor of the present or former directors, officers, employees and agents (or
any individual who served at the Company's or any of its Subsidiaries' request
as an officer, director, or agent) of the Company or any of its Subsidiaries (or
any other entity or enterprise, such as, a partnership, joint venture, trust or
employee benefit plan) (collectively, the "INDEMNIFIED PARTIES") as provided in
the Company's certificate of incorporation or bylaws, the articles of
organization, bylaws or similar documents of any of the Company's Subsidiaries
or other entity or enterprise or any of the indemnification agreements set forth
in Section 6.5(a) of the Disclosure Letter, as in effect as of the date hereof,
with respect to matters occurring prior to the Effective Time, shall survive the
Merger and shall continue in full force and effect without modification (other
than modifications that would enlarge the indemnification rights) for a period
of not less than the statutes of limitations applicable to such matters, and
Parent shall cause the Surviving Corporation to comply fully with its
obligations hereunder and thereunder.
(b) Parent shall or shall cause the Surviving Corporation to maintain in
effect for a period of six (6) years after the Effective Time, in respect of
acts or omissions occurring prior to the Effective Time, policies of directors'
and officers' liability insurance and fiduciary liability insurance and
fiduciary insurance covering the individuals described in Section 6.5(a) (which
may include naming such individuals under Parent's existing policies); and such
policies provided by Parent shall provide coverage no less favorable than that
provided for the individuals who are covered by the Company's existing policies;
PROVIDED, HOWEVER, that Parent shall not be required in order to maintain such
policies to pay an annual premium in excess of two hundred percent (200%) of the
aggregate annual amounts currently paid by the Company to maintain its existing
policies; PROVIDED, FURTHER, that, if equivalent coverage cannot be obtained, or
can be obtained only by paying an annual premium in excess of two
28
hundred percent (200%) of such amount, the Surviving Corporation shall only be
required to obtain as much coverage as can be obtained by paying an annual
premium equal to two hundred percent (200%) of such amount.
Section 6.6 PROXY STATEMENT. Unless the Merger is consummated as
contemplated by Section 2.9, the Company shall prepare and file with the SEC,
subject to the prior review and approval of Parent and Purchaser (which approval
shall not be unreasonably withheld), as soon as practicable after the
consummation of the Offer, a preliminary proxy or information statement (the
"PRELIMINARY PROXY STATEMENT") relating to the Merger as required by the
Exchange Act and the rules and regulations thereunder, with respect to the
transactions contemplated hereby. The Company shall obtain and furnish the
information required to be included in the Preliminary Proxy Statement, shall
provide Parent and Purchaser with, and consult with Parent and Purchaser
regarding, any comments that may be received from the SEC or its staff with
respect thereto, shall, subject to the prior review and approval of Parent and
Purchaser (which approval shall not be unreasonably withheld), respond promptly
to any such comments made by the SEC or its staff with respect to the
Preliminary Proxy Statement, shall cause the Proxy Statement to be mailed to the
Company's stockholders at the earliest practicable date and shall use all
reasonable efforts to obtain the necessary approval of the Merger by its
stockholders.
Section 6.7 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Parent and Purchaser, and Parent or Purchaser, as the case may be,
shall give prompt notice to the Company, of the occurrence, or non-occurrence,
of any event the occurrence, or non-occurrence, of which is likely to result in
any failure of the conditions set forth in Exhibit A; PROVIDED, HOWEVER, that
the delivery of any notice pursuant to this Section 6.7 shall not limit or
otherwise affect the remedies available hereunder to any of the parties sending
or receiving such notice.
Section 6.8 PRESS RELEASES AND COMMUNICATIONS.
(a) Parent, Purchaser and the Company will consult with each other before
issuing any press release or otherwise making any public statements with respect
to the Offer or the Merger or this Agreement and shall not issue any such press
release or make any such public statement absent the other party's prior consent
except as may be required by applicable Law or by the rules of any stock
exchange on which such party is listed.
(b) The Company, Parent and Purchaser shall, and shall cause each of their
respective Subsidiaries and Representatives, not to communicate with respect to
this Agreement and the transactions contemplated hereby except in compliance
with Rules 165 and 425 under the Securities Act and Rules 14a-12, 14d-2(d) and
14d-9(a) under the Exchange Act.
Section 6.9 BENEFITS.
(a) Prior to the Effective Time, the Company shall use its reasonable best
efforts to take such actions as may be necessary such that at the Effective
Time, each option under the Existing Stock Options, whether or not then
exercisable, shall be canceled and only entitle the holder thereof, upon
surrender thereof, to receive an amount in cash equal to the difference between
the Merger Consideration over the exercise price per Share of such Existing
Stock Option multiplied by the number of Shares previously subject to such
Existing Stock Option, less all applicable withholding Taxes. Such payment shall
be made by the Company as soon as administratively feasible after the Effective
Time.
(b) In accordance with the terms of the Company's Stock Purchase Plan, the
Company shall cause each option outstanding under the Stock Purchase Plan
immediately prior to the Effective Time to be automatically exercised
immediately prior to the Effective Time. The Company agrees to take such actions
as may be necessary so that each employee participating in the Stock Purchase
Plan immediately prior to the Effective Time shall only be entitled to receive
an amount in cash equal to the
29
result of multiplying (i) the Merger Consideration by (ii) a fraction, the
numerator of which is the accumulated payroll deductions in the employee's
account under the Stock Purchase Plan at the Effective Time, and the denominator
of which is the purchase price for the applicable "PURCHASE PERIOD" and/or
"OFFERING PERIOD" (as such terms are defined in the Stock Purchase Plan) in
effect immediately prior to the Effective Time. The Company agrees to take such
actions as may be necessary to cease as of the Effective Time all further
Offering Periods and Purchase Periods and payroll deductions under the Stock
Purchase Plan.
(c) Parent agrees that, for a period of one (1) year following the Effective
Time, it will cause the Company to continue to provide the employees of the
Surviving Corporation with compensation and employee benefit plans (other than
stock option or other plans involving the potential issuance of securities of
the Company or of the Parent or any of its affiliates) which in the aggregate
are substantially comparable to those currently provided by the Company to such
employees immediately prior to the Effective Time; PROVIDED, HOWEVER, that
(i) employees covered by collective bargaining agreements need not be provided
such benefits and (ii) nothing contained in this Agreement shall preclude Parent
or any of its affiliates from having the right to terminate the employment of
any employee, with or without cause, or to amend or to terminate in accordance
with its terms and applicable Law any employee benefit plan of Parent
established, maintained or contributed to by Parent or any of its affiliates
after the Effective Time.
(d) Employees of the Company and its Subsidiaries as of the Effective Time
shall receive credit for service with the Company and its predecessor companies
(including, without limitation, Tera, Teknekron Controls, Inc., Integrated
Automation, Inc. and Xxxxxx Industrial Systems, Inc.'s Integrated Automation
Division) Subsidiaries under the employee benefit plans, programs and policies
of Parent, the Surviving Corporation or their respective Subsidiaries in which
such employees become participants. Such past service credit shall be given only
for purposes of eligibility to participate, vesting, vacation entitlement and
severance benefits and only to the same extent that the employee had service
credit under a comparable Employee Benefit Plan of the Company and provided that
nothing herein shall result in the duplication of any benefits. The Parent has
agreed to provide the severance payments set forth in the disclosure letter,
dated as of the date hereof, delivered by Parent to the Company. In no event
shall service prior to the Effective Time be credited for purposes of benefit
accrual under any defined benefit pension plan or eligibility for
post-retirement medical benefits. Employees of the Company and its Subsidiaries
as of the Effective Time shall also receive credit under the employee benefit
plans, programs and policies of Parent, the Surviving Corporation or their
respective subsidiaries in which such employees become participants for
deductible and co-payment amounts made by such employees under the employee
benefit plans, programs and policies of the Company and its predecessor
companies or acquired companies and their respective subsidiaries prior to the
Effective Time in the plan years in which the Effective Time occurs.
Section 6.10 PURCHASER COMPLIANCE. Whenever this Agreement requires Parent
to take any action, such requirement shall be deemed to include an undertaking
on the part of Parent to cause Purchaser to take such action.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger are
subject to the satisfaction or waiver, where permissible, prior to the proposed
Effective Time, of the following conditions:
(a) unless the Merger is consummated as contemplated by Section 2.9, the
Plan of Merger contained in this Agreement shall have been approved by the
affirmative vote of the stockholders of the Company required by and in
accordance with applicable Law;
30
(b) no statute, rule, regulation, executive order, judgment, decree or
injunction shall have been enacted, entered, issued, promulgated or enforced by
any Governmental Entity against Parent, Purchaser or the Company and be in
effect that prohibits or restricts the consummation of the Merger or makes such
consummation illegal (each party agreeing to use all reasonable efforts to have
such prohibition lifted);
(c) all consents, authorizations, orders and approvals of (or filings or
registrations with) any Governmental Entity required in connection with the
execution, delivery and performance of this Agreement shall have been obtained
or made, except for filings in connection with the Merger and any other
documents required to be filed after the Effective Time and except where the
failure to have obtained or made any such consent, authorization, order,
approval, filing or registration would not make the Merger illegal or have had
or could reasonably be expected to have, individual or in the aggregate, a
Material Adverse Effect; and
(d) Purchaser shall have accepted for purchase and paid for the Shares
tendered pursuant to the Offer.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 TERMINATION. This Agreement may be terminated and the Merger
may be abandoned at any time (notwithstanding approval thereof by the
stockholders of the Company) prior to the Effective Time (with any termination
by Parent also being an effective termination by Purchaser):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Offer has not been consummated
on or before June 30, 2001 (provided that the right to terminate this Agreement
under this Section 8.1(b) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement results in or materially
contributes to the failure to consummate the Merger by such date);
(c) by either the Company or Parent, if there shall be any applicable law,
rule or regulation that makes consummation of the Offer or the Merger illegal or
otherwise prohibited or if any judgment, injunction, order or decree of a
Governmental Entity of competent jurisdiction shall restrain or prohibit the
consummation of the Offer or the Merger, and such judgment, injunction, order or
decree shall become final and nonappealable;
(d) by either the Company or Parent prior to acceptance for payment of the
Shares, if (i) there has been a breach by the other party of any representation
or warranty contained in this Agreement which has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
(ii) there has been a material breach of any of the covenants or agreements set
forth in this Agreement on the part of the other party, which breach is, in
either case, not curable or, if curable, is not cured within thirty (30) days
after written notice of such breach is given by the terminating party to the
other party;
(e) by Parent, if, prior to acceptance for payment of the Shares under the
Offer (i) the Board of Directors of the Company shall have failed to recommend,
or shall have withdrawn or modified in a manner adverse to Parent, its approval
or recommendation of this Agreement, the Offer or the Merger or shall have
recommended, or entered into, or publicly announced its intention to enter into,
an agreement or an agreement in principle with respect to a Superior Proposal
(or shall have resolved to do any of the foregoing), (ii) the Company shall have
breached any of its obligations under Section 6.2, or (iii) the Board of
Directors of the Company shall exempt any other Person from the provisions of
Section 203 of the Corporation Law;
31
(f) by Parent, if, prior to the acceptance for payment of the Shares under
the Offer, any Person or "group" (as defined in Section 13(d)(3) of the Exchange
Act), other than Parent or any of its affiliates shall have acquired beneficial
ownership of more than forty-five percent (45%) of the Shares or more than forty
five percent (45%) of the book value or fair market value of the assets of the
Company and its Subsidiaries taken as whole, or the right to acquire ownership
of such Shares or assets;
(g) by the Company, if the Board of Directors of the Company shall approve
and the Company shall enter into, a definitive agreement providing for the
implementation of a Superior Proposal; PROVIDED, HOWEVER, that (i) the Company
is not and has not been in breach of Section 6.2 in connection with such
Superior Proposal except for any such immaterial and inadvertent breach,
(ii) the Company's Board of Directors authorizes the Company, subject to
complying with the terms of this Agreement, to enter into a binding written
agreement concerning a transaction that constitutes a Superior Proposal and the
Company notifies the Parent in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such notice
(including any subsequent amendments or modifications), (iii) during the three
(3) Business Day period after the Company's notice, (x) the Company shall have
offered to negotiate with (and, if accepted, negotiate with), and shall have
caused its respective financial and legal advisors to have offered to negotiate
with (and if accepted, negotiate with), Parent to attempt to make such
commercially reasonable adjustments in the terms and conditions of this
Agreement as will enable the Company to proceed with this Agreement and (y) the
Board of Directors of the Company shall have concluded, after considering the
results of such negotiations and the revised proposal made by Parent, if any,
that any Superior Proposal giving rise to the Company's notice continues to be a
Superior Proposal, (iv) such termination is within three (3) Business Days
following the three (3) Business Day period referred to above and (v) no
termination pursuant to this Section 8.1(g) shall be effective unless the
Company shall simultaneously make the payment required by Section 8.3(b); or
(h) by Parent or the Company, if as the result of the failure of any of the
Offer Conditions and otherwise pursuant to the terms hereof, the Offer shall
have terminated or expired in accordance with its terms without Purchaser having
purchased any Shares pursuant to the Offer; PROVIDED, HOWEVER, that the right to
terminate this Agreement pursuant to this Section 8.1(h) shall not be available
to any party whose failure to fulfill any of its obligations under this
Agreement results in or materially contributes to the failure of any such
condition.
Section 8.2 EFFECT OF TERMINATION. If this Agreement is terminated and the
Merger is abandoned pursuant to Section 8.1 hereof, this Agreement, except for
the provisions of Sections 6.3(b), 8.2, 8.3 and Article IX hereof, shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or stockholders. Nothing in this
Section 8.2 shall, relieve any party to this Agreement of liability for any
willful breach of this Agreement.
Section 8.3 FEES AND EXPENSES.
(a) All fees, costs and expenses incurred in connection with the Offer, the
Merger, this Agreement and the transactions contemplated by this Agreement
(including, without limitation, legal, accounting and investment banking fees
and expenses) (collectively, "EXPENSES") shall be paid by the party incurring
such Expenses.
(b) In the event that this Agreement is terminated (i) pursuant to
Section 8.1(e) or (g) or (ii) pursuant to Section 8.1(d) or (h) following the
initial expiration of the Offer (provided that with respect to Section 8.1(d)
such termination is the result of a wilful breach by the Company) and, with
respect to this clause (ii) only, at the time of such termination (A) either
(x) the Minimum Tender Condition has not been satisfied or (y) the condition set
forth in clause (C)(7) of Exhibit A has not been satisfied and (B)(i) at the
time of such termination, an Acquisition Proposal (such term to be deemed to
include the term "50%" instead of the term "10%" for all purposes of this
Section 8.3(b))
32
had been publicly announced and not withdrawn and (ii) within twelve
(12) months thereafter an Acquisition Proposal shall have been consummated, then
the Company shall pay Parent a termination fee of One Million U.S. Dollars
($1,000,000), which shall include the reimbursement of all of the expenses of
Parent and Purchaser actually incurred by Parent and Purchaser (collectively,
the "TERMINATION FEE") in immediately available funds by wire transfer to an
account designated by Parent.
(c) Any amounts payable pursuant to Section 8.3(b) shall be payable as
promptly as practicable following termination of this Agreement (and in any
event no later than two (2) Business Days thereafter) and, if the Company is the
party seeking to terminate this Agreement, as a condition thereto.
(d) The Company acknowledges that the agreements contained in Section 8.3
are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Parent and Purchaser would not have entered into
this Agreement. Accordingly, if the Company fails to pay promptly any amounts
due pursuant to Section 8.3, and, in order to obtain such payment, Parent
commences a suit which results in a judgment against the Company for the fee or
expense reimbursement set forth in this Section 8.3, the Company shall pay to
Parent its costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with interest from the date of termination
of this Agreement on the amounts so owed at the prime rate of Chase Manhattan
Bank in effect from time to time during such period.
Section 8.4 AMENDMENT. To the extent permitted by applicable Law, this
Agreement may be amended by action taken by or on behalf of the Boards of
Directors of the Company, Parent and Purchaser, subject in the case of the
Company to Section 1.4(b), at any time before or after approval of this
Agreement by the stockholders of the Company but, after any such stockholder
approval, no amendment shall be made which decreases the Merger Consideration or
which adversely affects the rights of the Company's stockholders hereunder
without the approval of the stockholders of the Company. This Agreement may not
be amended, changed, supplemented or otherwise modified except by an instrument
in writing signed on behalf of all of the parties.
Section 8.5 EXTENSION; WAIVER; REMEDIES.
(a) At any time prior to the Effective Time, the parties hereto, by action
taken by or on behalf of the respective Boards of Directors of the Company,
Parent and Purchaser, subject in the case of the Company to Section 1.4(b), 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 contained herein by any other applicable party or in any
document, certificate or writing delivered pursuant hereto by any other
applicable party or (iii) waive compliance with any of the agreements or
conditions contained herein. 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.
(b) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party. The failure of any party hereto to exercise any rights,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
33
ARTICLE IX
MISCELLANEOUS
Section 9.1 DEFINITIONS.
(a) Definitions shall apply equally to both the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. All references herein to
Articles, Sections, Schedules and Exhibits shall be deemed to be references to
Articles and Sections of, and Schedules and Exhibits to, this Agreement unless
the context shall otherwise require. All Exhibits attached hereto shall be
deemed incorporated herein as if set forth in full herein and, unless otherwise
defined therein, all terms used in any Exhibit shall have the meaning ascribed
to such term in this Agreement. The words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise expressly provided herein, any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. For
the purposes of this Agreement, the following terms shall have the following
meanings:
"ACQUISITION PROPOSAL" shall mean (a) any offer or proposal, or (except
as the term "Acquisition Proposal" is used in Section 8.3) any indication of
interest in making an offer or proposal, made by a Person or group at any
time which is structured to permit such Person or group to acquire
beneficial ownership of at least ten percent (10%) of the assets of the
Company and its Subsidiaries taken as a whole, or at least ten percent (10%)
of the outstanding shares of capital stock of the Company pursuant to a
merger, consolidation or other business combination, sale of shares of
capital stock, sale of assets, tender offer or exchange offer or similar
transaction, including any single or multi-step transaction or series of
related transactions, in each case other than the Offer and the Merger and
(b) any offer or proposal made in the context of a proxy contest with
respect to any of the foregoing.
"AFFILIATE" and "ASSOCIATE" shall have the meanings given to such terms
in Rule 12b-2 under the Exchange Act.
"BENEFICIAL OWNERSHIP" shall have the meaning given to such term in
Rule 13d-3 under the Exchange Act.
"BUSINESS DAY" shall have the meaning given to such term in
Rule 14d-1(g)(3) under the Exchange Act.
"COMMENCE" or "COMMENCEMENT" shall have the meaning given to such term
pursuant to Rule 14d-2(a) under the Exchange Act.
"ENVIRONMENTAL LAW" shall mean any statute, law, ordinance, rule,
regulation, order, judgment or decree applicable to the Company or any of
its Subsidiaries relating to (i) pollution or the protection or preservation
of the environment or natural resources, (ii) Releases or threatened
Releases, and (iii) the management (including use, treatment, handling,
storage, disposal, transportation, recycling or remediation) of any
hazardous, toxic, dangerous or industrial substance, chemical or other
material or (iv) employee health and safety.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, as amended.
34
"HAZARDOUS SUBSTANCE" shall mean any substance, pollutant, contaminant,
chemical or other material (including petroleum or any fraction thereof,
asbestos or asbestos-containing material, polychlorinated biphenyls, urea
formaldehyde foam insulation) or waste that is identified or regulated under
any Environmental Law.
"LAW" shall mean any federal, state, local or foreign law, statute,
rule, regulation, order, judgment, writ, injunction, ordinance,
administrative order, decree or arbitration award in effect as of the date
hereof or as of the Effective Time.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse effect on
the financial condition, business, properties, assets, liabilities or
results of operations of the Company and its Subsidiaries taken as a whole
or the ability of the Company to consummate the transactions contemplated by
this Agreement in any material respect (excluding any such effect to the
extent that it results from (i) the announcement of this Agreement or the
transactions contemplated hereby, or (ii) changes in global economic
conditions, financial markets generally or conditions in the electronic xxxx
presentment and payment industry generally).
"PERSON" shall mean any natural person, firm, corporation, limited
liability company, partnership, association, joint venture, Governmental
Entity, labor union, trust, estate or other entity or organization.
"PROXY STATEMENT" shall mean the letter to stockholders, notice of
meeting, proxy statement and form of proxy, or the information statement, as
the case may be, that may be provided to stockholders of the Company in
connection with the Merger (including any amendments or supplements), and
any schedules required to be filed with the SEC in connection therewith, as
from time to time amended or supplemented.
"RELEASE" shall mean any spill, discharge, leak, emission, disposal,
injection, escape, dumping, leaching, dispersal, emanation, migration or
release of any kind whatsoever of any Hazardous Substance in, on, into,
through or onto the environment.
"SECURITIES ACT" shall mean the Securities Act of 1933 and the rules and
regulations promulgated thereunder, as amended.
"SUBSIDIARY" shall mean, when used with reference to an entity, any
other entity of which securities or other ownership interests having
ordinary voting power, directly or indirectly, to elect a majority of the
board of directors or other persons performing similar functions, or a
majority of the outstanding voting securities of which, are owned directly
or indirectly by such entity.
"SUPERIOR PROPOSAL" shall mean any unsolicited, bona fide written
Acquisition Proposal which the Board of Directors of the Company determines
in its good faith judgment (after consultation with its outside financial
advisors and outside legal counsel) taking into account applicable legal,
financial, regulatory and other relevant aspects of the Acquisition
Proposal, the identity of the Person making the proposal and other relevant
considerations, that (i) such Acquisition Proposal is more favorable from a
financial point of view to the Company's stockholders than this Agreement,
(ii) the conditions to the consummation of such Acquisition Proposal are
reasonably capable of being satisfied promptly or (iii) financing for such
transaction, to the extent required, is then committed or for which the
Board of Directors after consultation with its outside financial advisors
concludes in good faith is likely to be available.
"TAX" shall mean all taxes, charges, fees, levies, imposts, duties, and
other assessments, including without limitation any income, alternative
minimum or add-on tax, estimated, gross income, gross receipts, sales, use,
transfer, transactions, intangibles, ad valorem, value-added, franchise,
registration, title, license, capital, paid-up capital, profits,
withholding, employee withholding, payroll, worker's compensation,
unemployment insurance, social security, employment,
35
excise (including the federal communications excise tax under Section 4251
of the Code), severance, stamp, transfer occupation, premium, recording,
real property, personal property, federal highway use, commercial rent,
environmental (including taxes under Section 59A of the Code) or windfall
profit tax, custom, duty or other tax, fee or other like assessment or
charge of any kind whatsoever, together with any interest, penalties,
related liabilities, fines or additions to tax that may become payable in
respect thereof imposed by any country, any state, county, provincial or
local government or subdivision or agency thereof.
"TAX RETURNS" shall mean all returns and reports required to be filed by
the Company and its Subsidiaries (or any of them) with respect to Taxes.
"THREATENED" when used with respect to a claim, proceeding,
investigation, dispute action, or other matter, shall mean, if any demand or
statement has been made in writing or, to the knowledge of the Company,
orally.
"WARRANTY CLAIM" shall mean any claim arising out of any injury to
individuals or property as a result of the ownership, possession or use of
any product manufactured, sold or delivered by the Company or its
Subsidiaries (or products containing products manufactured by the Company or
its Subsidiaries).
(b) As used herein, the following terms shall have the meanings ascribed to
them in the Section of this Agreement opposite each such term:
TERM SECTION
---- -------
Acceptance Date 3.3(a)
Agreement Opening Paragraph
Appointment Time 1.4(a)
Authorizations 4.13(a)
Certificate of Designation 2.6(b)
Certificates 3.1(b)
Class B Shares 1.1(a)(i)(y)
Closing 2.2
Code 2.10
Common Shares 1.1(a)(i)(x)
Common Stock Certificates 3.1(b)
Company Opening Paragraph
Company Intellectual Property Rights 4.14(n)
Company Permits 4.12
Company SEC Reports 4.5(a)
Company Securities 4.2(a)
Confidentiality Agreement 6.2(b)(iii)
Copyrights 4.14(m)(ii)
Corporation 2.4
Corporation Law Recitals
Disclosure Letter 4
Dissenting Shares 3.4(a)
Effective Time 2.2
Employee Benefit Plans 4.9(a)
ERISA 4.9(a)
ERISA Affiliates 4.9(c)
Existing Stock Options 3.3(a)
Existing Warrants 3.3(c)
Expenses 8.3(a)
36
TERM SECTION
---- -------
Expiration Date Exhibit A
Financial Statements 4.5(b)
First Union 1.2(a)(ii)
GAAP 4.5(b)
Governmental Entity 4.4
Indemnified Parties 6.5(a)
Independent Directors 1.4(a)
Intellectual Property 4.14(m)
Material Contract 4.16(a)
Merger 2.1
Merger Agreement Exhibit A
Merger Consideration 2.6(a)
Minimum Tender Condition Exhibit A
Offer 1.1(a)(i)
Offer Conditions 1.1(a)(i)
Offer Documents 1.1(b)
Offer Price 1.1(a)(i)
Offering Period 6.9(b)
Option Consideration 3.3(a)
Parent Opening Paragraph
Parent Insiders 1.4(a)
Patents 4.14(m)(iii)
Paying Agent 3.1(a)
Payment Fund 3.1(a)
Plan of Merger 1.2(a)(i)(C)
Potential Acquiror 6.2(a)
Preferred Stock 2.6(b)
Preferred Stock Certificates 3.1(b)
Preliminary Proxy Statement 6.6
Purchase Period 6.9(b)
Purchaser Opening Paragraph
Real Property Leases 4.15(b)
Representatives 6.2(a)
Schedule TO 1.1(b)
Schedule 14D-9 1.2(b)
SEC 1.1(a)(ii)
Shares 1.1(a)(i)
Special Meeting 2.8
Software 4.14(m)(iv)
Stock Option Plans 3.3(a)
Stock Purchase Plan 3.3(a)
Subsequent Period 1.1(a)(ii)
Subsidiary Securities 4.2(b)
Surviving Corporation 2.1
Takeover Laws 1.2(a)(i)(E)
Termination Fee 8.3(b)
Trademarks 4.14(m)(i)
Transfer Agent 1.3
WARN 4.9(j)
Warrant Consideration 3.3(c)
37
Section 9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in Articles IV and V shall not survive
beyond the Effective Time. This Section 9.2 shall not limit any covenant or
agreement of the parties hereto that by its terms contemplates performance after
the Effective Time.
Section 9.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together with
Exhibit A, the Schedules and the Confidentiality Agreement, constitutes the
entire agreement between the parties with respect to subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to subject matter hereof. The Agreement shall
not be assigned by any party by operation of law or otherwise without the prior
written consent of the other parties; PROVIDED, HOWEVER, that Purchaser may
assign any of their respective rights and obligations to any direct or indirect
Subsidiary of Parent; in which event all references herein to Purchaser shall be
deemed references to such other Subsidiary except that all representations and
warranties made herein with respect to Purchaser as of the date of this
Agreement shall be deemed representations and warranties made with respect to
such other Subsidiary as of the date of such designation.
Section 9.4 VALIDITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable Law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable Law or rule in any jurisdiction such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Section 9.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be given (and shall be deemed to have been duly
received if given) by hand delivery or overnight courier in writing or by
facsimile transmission with confirmation of receipt of a legible copy, as
follows:
if to Parent or Purchaser:
Pitney Xxxxx Inc.
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxxx and
Deputy General Counsel
Facsimile: (000) 000-0000,
(000) 000-0000 and
(000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
if to the Company:
Alysis Technologies, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx XxXxxxx
Facsimile: (000) 000-0000
38
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xx.
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 9.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law principles thereof and except insofar as mandatory
provisions of the Securities Act and the Exchange Act apply to the Offer.
Section 9.7 JURISDICTION. All actions brought, arising out of, or related
to the transactions contemplated hereby shall be brought in the federal or state
courts of the State of Delaware. Each party hereby irrevocably submits to the
exclusive jurisdiction of the federal or state courts of the State of Delaware
in respect of any claim relating to the interpretation and enforcement of the
provisions of this Agreement, and hereby waives, and agrees not to assert, as a
defense in any action, suit or proceeding in which any such claim is made that
it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in such courts or that the venue thereof may not
be appropriate or that this Agreement may not be enforced in or by such courts.
The parties hereby consent to and grant any such court jurisdiction over such
parties and over the subject matter of any such claim and agree that mailing of
process or other papers in connection with any such action, suit or proceeding
in the manner provided in Section 9.5, or in such other manner as may be
permitted by Law, shall be valid and sufficient thereof.
Section 9.8 WAIVER OF JURY TRIAL. Each party acknowledges and agrees that
any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each party hereby irrevocably
and unconditionally waives any right such party may have to a trial by jury.
Each party certifies and acknowledges that (i) no Representative of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver, (ii) such
party understands and has considered the implications of this waiver,
(iii) such party makes this waiver voluntarily, and (iv) such party has been
induced to enter into this Agreement by, among other things, the mutual waivers,
agreements and certifications in this Section 9.8.
Section 9.9 DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.10 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer
39
upon any other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement except for Section 6.5 (which are intended to be for
the benefit of the individuals referred to therein, and may be enforced by any
such individuals).
Section 9.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
Section 9.12 FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Entity or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
40
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all at or on
the day and year first above written.
PITNEY XXXXX INC.
By: /s/ XXXXX XXXXX
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive VP and Chief Financial
Officer
MAUI ACQUISITION CORP.
By: /s/ XXXXX XXXXX
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive VP and Chief Financial
Officer
ALYSIS TECHNOLOGIES, INC.
By: /s/ XXXXX X. XXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive
Officer
41
EXHIBIT A
CONDITIONS TO THE OFFER
Capitalized terms used in this Exhibit A and not otherwise defined herein
shall have the meanings assigned to them in the Agreement to which it is
attached (the "MERGER AGREEMENT").
Notwithstanding any other provision of the Offer, Parent and Purchaser shall
not be required to accept for payment, purchase or pay for any Shares tendered
in connection with the Offer and may terminate or, subject to the terms of the
Merger Agreement, amend the Offer, if (A) there shall not have been validly
tendered and not properly withdrawn as of any scheduled expiration date of the
Offer (an "EXPIRATION DATE") that number of Common Shares which, together with
any Common Shares then beneficially owned by Purchaser or Parent, represents at
least a majority of the total number of outstanding Common Shares on a fully
diluted basis as of the date of purchase (excluding for such purpose all Common
Shares issuable upon the exercise of Existing Stock Options with an exercise
price greater than or equal to the Offer Price) (the "MINIMUM TENDER
CONDITION"), (B)(x) all applicable waiting periods under the Xxxx Xxxxx Xxxxxx
Antitrust Improvements Act of 1976, as amended, and (y) any other applicable
waiting periods pursuant to any applicable Law or imposed by any Governmental
Entity which if not obtained could reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, in each case with respect to
the Offer and/or the Merger shall have either expired or terminated, or (C) at
any time on or after the date of the Merger Agreement and prior to the time of
payment for any Shares, any of the following conditions occur and are continuing
at an Expiration Date:
(1) there shall be instituted or pending any action or proceeding by or
before any Governmental Entity (a) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
making of the Offer, the acceptance for payment of or payment for the Shares by
Parent or Purchaser or the consummation of the Merger, (b) seeking to obtain
material damages relating to the transactions contemplated by the Offer or the
Merger, (c) seeking to materially restrain or prohibit Parent's ownership or
operation (or that of its respective Subsidiaries or Affiliates) of all or any
material portion of the business or assets of the Company and its Subsidiaries,
taken as a whole, or of Parent and its Subsidiaries, taken as a whole, or to
compel Parent or any of its Subsidiaries or Affiliates to dispose of or hold
separate all or any material portion of the business or assets of the Company
and its Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken
as a whole, (d) seeking to impose material limitations on the ability of Parent,
Purchaser or any of Parent's other Subsidiaries or affiliates effectively to
exercise full rights of ownership of the Shares, including, without limitation,
the right to vote any Shares acquired or owned by Parent, Purchaser or any of
Parent's other Subsidiaries or affiliates on all matters properly presented to
the Company's stockholders, (e) seeking to require divestiture by Parent,
Purchaser or any of Parent's other Subsidiaries or affiliates of any Shares or
(f) that otherwise, in the good faith judgment of Parent, has had or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;
(2) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree, enacted, enforced, promulgated, issued
or deemed applicable to the Offer or the Merger, by any Governmental Entity,
that result in any of the consequences referred to in clauses (a) through
(f) of paragraph (1) above; or
(3) there has been any event, occurrence or development which, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect;
(4) there shall have occurred (a) any general suspension of, or limitation
on prices for, trading in securities on any national securities exchange or in
the over-the-counter market in the United States
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(other than any suspension or limitation on trading in any particular security
as a result of a computerized trading limit or any intraday suspension due to
"circuit breakers"), (b) any declaration of any banking moratorium or any
suspension of payments in respect of banks or any limitation (whether or not
mandatory) on the extension of credit by lending institutions in the United
States or (c) any commencement of armed hostilities or other national or
international calamity involving the United States that has a material adverse
effect on bank syndication for financial markets in the United States or, in the
case of any of the foregoing occurrences existing on or at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(5) any Person or "group" (as such term is used in Section 13(d)(3) of the
Exchange Act)--other than Parent, Purchaser or another Person (who on the date
hereof alone or as part of a "group" (as such term is used in Section 13(d)(3)
of the Exchange Act) is the beneficial owner of more than five percent (5%) of
the outstanding Shares) or any of their respective Affiliates--shall have become
the beneficial owner of more than forty five (45%) of the outstanding Shares;
(6) (a) the Board of Directors of the Company shall have failed to
recommend, or shall have withdrawn or modified in a manner adverse to Parent,
its approval or recommendation of this Agreement, the Offer or the Merger, or
shall have recommended, or entered into, or publicly announced its intention to
enter into, an agreement or an agreement in principle with respect to a Superior
Proposal (or shall have resolved to do any of the foregoing) or (b) the Company
shall have breached any of its obligations under Section 6.2;
(7) the Company shall have breached or failed to comply in any material
respect with any of its material obligations, covenants, or agreements under the
Merger Agreement; or (a) any representation or warranty of the Company contained
in the Merger Agreement that is qualified by reference to a Material Adverse
Effect or (b) any representation or warranty contained in the Merger Agreement
that is qualified by reference to "materiality" shall not be true and correct,
in either case without giving effect to such materiality standard (including
Material Adverse Effect); or any other such representation or warranty shall not
be true and correct in any respect that (when taken together with all such other
representations and warranties not true and correct) has had or could reasonably
be expected to have a Material Adverse Effect, in each case either as of the
date made or at and as of any time thereafter (except in the case of any
representation or warranty that by its terms is made as of a date specified
therein which need be accurate only as of such date);
(8) the Merger Agreement shall have been terminated pursuant to its terms or
shall have been amended pursuant to its terms to provide for such termination or
amendment of the Offer; or
(9) there shall have been no breach of or default under that certain Voting
and Tender Agreement, dated as of March 20, 2001, by and among Parent, Purchaser
and certain stockholders of the Company, by any such stockholder and no such
stockholder shall have asserted that the Voting and Tender Agreement is
unenforceable against him or it.
which, in the reasonable judgment of Parent and regardless of the circumstances
giving rise to such condition, makes it inadvisable to proceed with the Offer or
with acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted or, other than the Minimum Tender Condition, waived by
Parent or Purchaser in whole or in part at any time or from time to time in
their discretion subject to the terms of the Merger Agreement.
The failure of Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances and each such
right shall be deemed an ongoing right, which may be asserted at any time and
from time to time.
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EXHIBIT B
PLAN OF MERGER
OF
MAUI ACQUISITION CORP.
INTO
ALYSIS TECHNOLOGIES, INC.
FIRST: (a) The name of each constituent corporation is as follows:
1. Maui Acquisition Corp., a corporation organized under the laws of the
State of Delaware ("PURCHASER"); and
2. Alysis Technologies, Inc., a corporation organized under the laws of the
State of Delaware (the "COMPANY").
The Company shall be the surviving corporation in the Merger (the "SURVIVING
CORPORATION") and shall continue its existence under the laws of the State of
Delaware under the name "Alysis Technologies, Inc." In connection with the
Merger, the separate corporate existence of Purchaser shall cease.
SECOND: The terms and conditions of the Merger, including the manner and
basis of converting the shares of the Company and Purchaser are as
follows:
1. EFFECTIVE TIME. The effective time of the Merger (the "EFFECTIVE TIME")
shall be the time of filing of the Certificate of Merger with the Secretary of
State of the State of Delaware.
2. CONVERSION OF SHARES. (a) At the Effective Time, by virtue of the
Merger and without any action on the part of any stockholder of the Company,
each share of the Company's common stock, par value $0.01 per share (the "COMMON
SHARES") and each share of the Company's class B common stock, par value $0.01
per share (the "CLASS B SHARES" and together with the Common Shares, the
"SHARES") issued and outstanding immediately prior to the Effective Time (other
than shares owned by Parent, Purchaser or by any subsidiary or affiliate of
Parent or Purchaser, all of which shall be canceled without any consideration
being exchanged therefor), shall be converted into the right to receive cash in
an amount per Share (subject to any applicable withholding tax) equal to $1.39,
without interest (the "MERGER CONSIDERATION") upon the surrender of the
certificate representing such Shares.
(b) At the Elective Time, by virtue of the Merger and without any action
on the part of any stockholder of the Company, each share of the Company's
series B preferred stock, par value $0.01 per share (the "PREFERRED STOCK"),
issued and outstanding immediately prior to the Effective Time shall, in
accordance with the Company's Certificate of Designation, Preference and
Rights of Series B Preferred Stock, as filed with the Secretary of State of
the State of Delaware on July 29, 1999 (the "CERTIFICATE OF DESIGNATION"),
be converted into the right to receive the Liquidation Preference (as such
term is defined in the Certificate of Designation), as calculated as of the
Effective Time, without interest, upon surrender of the certificate
representing such shares of Preferred Stock.
(c) Each share of common stock no par value of Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on part of the holder thereof, be converted
into and become one share of common stock, no par value of the Surviving
Corporation.
3. GOVERNING DOCUMENTS; DIRECTORS AND OFFICERS. (a) The Certificate of
Incorporation and Bylaws of Purchaser as in effect immediately prior to the
Effective Time shall, from and after the Effective
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Time, be the Certificate of Incorporation and Bylaws of the Surviving
Corporation, in each case until amended in accordance with applicable law;
PROVIDED, HOWEVER, that Article I of the Certificate of Incorporation of the
Surviving Corporation shall be amended to read in its entirety as follows:
"ARTICLE I". The name of the Corporation is Alysis Technologies, Inc. (the
"CORPORATION").
(b) All persons who were directors of Purchaser immediately prior to the
Effective Time shall be the directors of the Surviving Corporation and all
persons who were officers of the Company immediately prior to the Effective
Time shall be the officers of the Surviving Corporation, in each case to
hold office in accordance with the Certificate of Incorporation and the
Bylaws of the Surviving Corporation and until their respective death,
resignation or removal or until their respective successors are duly elected
and qualified in accordance with applicable law.
4. FURTHER ASSURANCES. At any time, or from time to time, after the
Effective Time, the last acting officers of the Company or Purchaser or the
officers of the Surviving Corporation may, in the name of the Company or
Purchaser, execute and deliver all such proper deeds, assignments and other
instruments and take or cause to be taken all such further or other action as
the Surviving Corporation may deem necessary or desirable in order to vest,
perfect or confirm the Surviving Corporation's title to and possession of all of
the property, rights, privileges, powers, and franchises of the Company or
Purchaser and otherwise to carry out the purposes of this Plan of Merger.
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