Exhibit 2.1
Agreement and Plan of Merger
by and among
3D Systems, Corporation,
a Delaware corporation,
Tiger Deals, Inc.,
a Delaware corporation,
and
DTM Corporation,
a Texas corporation
Dated April 2, 2001
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.............................................................................................. 1
ARTICLE 2. THE TENDER OFFER......................................................................................... 10
2.1 The Tender Offer............................................................................................ 10
2.2 Company Actions............................................................................................. 12
2.3 Board of Directors.......................................................................................... 14
ARTICLE 3. THE MERGER............................................................................................... 15
3.1 The Merger.................................................................................................. 15
3.2 Merger Consideration And Cancellation Of Shares............................................................. 16
3.3 Payment of Cash for Shares.................................................................................. 16
3.4 Dissenting Shares........................................................................................... 18
3.5 Stock Options............................................................................................... 19
3.6 The Closing................................................................................................. 20
3.7 Deliveries at the Closing................................................................................... 20
ARTICLE 4. REPRESENTATIONS AND WARRANTIES CONCERNING PARENT AND BUYER............................................... 20
4.1 Entity Status............................................................................................... 20
4.2 Power and Authority; Enforceability......................................................................... 21
4.3 Consents and Approvals; No Defaults......................................................................... 21
4.4 Capitalization.............................................................................................. 21
4.5 Litigation.................................................................................................. 22
4.6 Share Ownership............................................................................................. 22
4.7 Buyer's Operations.......................................................................................... 22
4.8 Brokers' Fees............................................................................................... 22
4.9 Ability to Consummate the Transactions...................................................................... 22
4.10 Statements True and Correct................................................................................. 22
4.11 Regulatory Approvals........................................................................................ 23
ARTICLE 5. REPRESENTATIONS AND WARRANTIES CONCERNING THE ACQUIRED ENTITIES.......................................... 23
5.1 Corporate Status............................................................................................ 23
5.2 Power and Authority; Enforceability......................................................................... 23
5.3 Consents and Approvals; No Defaults......................................................................... 23
5.4 Brokers' Fees............................................................................................... 24
5.5 Capitalization.............................................................................................. 24
5.6 Records..................................................................................................... 25
5.7 Acquired Subsidiaries....................................................................................... 25
5.8 Company Reports and Financial Statement..................................................................... 25
5.9 Subsequent Events........................................................................................... 26
5.10 Intentionally Deleted....................................................................................... 26
5.11 Legal Compliance............................................................................................ 26
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5.12 Tax Matters......................................................................................... 27
5.13 Title to Assets..................................................................................... 27
5.14 Real Property and Leaseholds........................................................................ 27
5.15 Intellectual Property............................................................................... 28
5.16 Inventory........................................................................................... 31
5.17 Material Contracts; Defaults........................................................................ 31
5.18 Receivables......................................................................................... 31
5.19 Insurance........................................................................................... 32
5.20 Litigation.......................................................................................... 32
5.21 Product Warranty.................................................................................... 32
5.22 Product Liability................................................................................... 32
5.23 Labor; Employees.................................................................................... 32
5.24 Employee Benefits................................................................................... 33
5.25 Environmental, Health, and Safety Matters........................................................... 34
5.26 Statements True and Correct......................................................................... 35
5.27 Regulatory Approvals................................................................................ 36
5.28 Vote Required....................................................................................... 36
5.29 Opinion of Financial Advisor........................................................................ 36
5.30 Takeover Statutes................................................................................... 36
5.31 Representations Complete............................................................................ 36
ARTICLE 6. PRE-CLOSING COVENANTS............................................................................ 36
6.1 Notices and Consents................................................................................ 37
6.2 Operation of Business............................................................................... 37
6.3 Access to Information............................................................................... 40
6.4 Acquisition Proposal................................................................................ 40
6.5 Charges, Fees, and Prepayment Obligations........................................................... 42
6.6 Financing........................................................................................... 43
6.7 Covenants to Satisfy Conditions..................................................................... 43
6.8 Disclosure Prior to Closing......................................................................... 43
6.9 Publicity........................................................................................... 43
6.10 Preparation of the Company Proxy Statement; Company Shareholders Meeting; Merger Without a Company
Shareholders Meeting................................................................................ 43
6.11 Indemnification and Directors' and Officer's Insurance.............................................. 44
6.12 Employee Benefits................................................................................... 46
6.13 Works in Progress/Finished Goods.................................................................... 46
ARTICLE 7. INTENTIONALLY DELETED............................................................................ 47
ARTICLE 8. CLOSING CONDITIONS............................................................................... 47
8.1 General Conditions.................................................................................. 47
ARTICLE 9. TERMINATION...................................................................................... 48
9.1 Termination of Agreement............................................................................ 48
9.2 Manner and Effect of Termination.................................................................... 49
9.3 Certain Payments Upon Termination................................................................... 49
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ARTICLE 10. MISCELLANEOUS................................................................................. 50
10.1 Disclosure Letters................................................................................ 50
10.2 Entire Agreement.................................................................................. 51
10.3 Successors........................................................................................ 51
10.4 Assignments....................................................................................... 51
10.5 Notices........................................................................................... 51
10.6 Specific Performance.............................................................................. 52
10.7 Time.............................................................................................. 52
10.8 Counterparts...................................................................................... 52
10.9 Headings.......................................................................................... 52
10.10 Governing Law..................................................................................... 53
10.11 Amendments and Waivers............................................................................ 53
10.12 Severability...................................................................................... 53
10.13 Expenses.......................................................................................... 53
10.14 Construction...................................................................................... 53
10.15 Non-Survival of Representations and Warranties.................................................... 54
ATTACHMENTS
Exhibits
Exhibit A Tender Agreement
Exhibit B Certificates of Merger
Exhibit C Form of the Company's Officers' Certificate
Exhibit D Form of the Company's Secretary's Certificate
Exhibit E Form of Parent's Officers' Certificate
Exhibit F Form of Parent's Secretary's Certificate
Exhibit G Form of Buyer's Officer's Certificate
Exhibit H Form of Buyer's Secretary's Certificate
Annex A Offer Conditions
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into
as of April 2, 2001 by and among 3D Systems Corporation, a Delaware corporation
("Parent"), Tiger Deals, Inc., a Delaware corporation and an indirect wholly-
owned subsidiary of Buyer ("Buyer"), and DTM Corporation, a Texas corporation
(the "Company," and together with its Subsidiaries from time to time (except as
the context herein may otherwise require), the "Acquired Entities"), with
respect to the facts and circumstances set forth below. Capitalized terms used
herein without definition have the meanings set forth in ARTICLE 1 or elsewhere
in this Agreement.
RECITALS
WHEREAS, the Company Board and the respective Board of Directors of
each of Parent and Buyer each has approved and determined that it is fair,
advisable and in the best interests of its respective stockholders to effect a
merger of Buyer with and into the Company, with the Company as the surviving
corporation, pursuant to the Certificates of Merger and upon the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Buyer shall,
promptly following receipt by Parent of commitments in customary form from
financial institutions or other equity or debt sources sufficient in amount to
allow Buyer to consummate the Transactions (the "Financing Commitments"),
commence a tender offer (the "Offer") to acquire any and all of the outstanding
shares of Company Common Stock at a price of $5.80 per share (such amount, or
any greater amount per share paid pursuant to the Offer, being hereinafter
referred to as the "Offer Price"), net to the seller in cash, without interest,
less any required withholding taxes, in accordance with the terms and subject to
the conditions provided herein; and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent and
Buyer to enter into this Agreement, certain Company Shareholders have entered
into Tender and Voting Agreements, dated as of the date of this Agreement, in
the form attached hereto as Exhibit A (the "Tender Agreement"), pursuant to
which those shareholders have agreed to tender to Buyer all shares of Common
Stock beneficially owned by those shareholders and to vote, if necessary, all
voting securities of the Company beneficially owned by them in favor of approval
and adoption of this Agreement and the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants contained herein and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
"14F-1 Information Statement" is defined in Section 2.3(b).
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"Acquired Entities" is defined in the Preamble hereto.
"Acquired Subsidiary" means each wholly-owned subsidiary of the
Company.
"Acquisition Proposal" is defined in Section 6.4.
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"Action" means any action, appeal, petition, plea, charge, complaint,
claim, suit, litigation, arbitration, mediation, hearing, inquiry, investigation
or similar event, occurrence or proceeding.
"Affiliate" with respect to any specified Person, means a Person that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person.
"Affiliated Group" means any affiliated group under Code Section
1504(a) or any similar group defined under provisions of applicable Law.
"Balance Sheet Date" is defined in Section 5.8.
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"Basis" means any past or current fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction about which the relevant Person has
Knowledge that forms the Basis for any specified consequence.
"Breach" means any Breach, inaccuracy, failure to perform, failure to
comply, conflict with, default, violation, acceleration, termination,
cancellation, modification, or required notification.
"Business Day" means any day other than a day on which the NASDAQ is
closed for trading.
"Buyer" is defined in the preamble to this Agreement.
"Buyer Medical Plans" is defined in Section 6.12(d).
`Cash Amount" is defined in Section 3.5(a)
"Certificates of Merger" is defined in Section 3.1(b).
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"Closing" is defined in Section 3.6.
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"Closing Date" is defined in Section 3.6.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined in the preamble to this Agreement.
"Company Board" means the Board of Directors of the Company.
"Company Common Stock" means the Company's common stock, $.0002 par
value.
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"Company Disclosure Letter" is defined in ARTICLE 5.
"Company Option" is defined in Section 3.5.
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"Company Proxy Statement" is defined in Section 6.10(a).
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"Company Reports" is defined in Section 5.8.
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"Company Shareholders" means the shareholders of the Company as they
may be constituted from time-to-time.
"Confidentiality Agreement" is defined in Section 6.3(c).
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"Confidential Information" means any non-public information concerning
the businesses and affairs of Parent or any Acquired Entity.
"Consent" means any consent, approval, notification, waiver, or other
similar action required pursuant to a Contract.
"Contract" means any Enforceable contract, agreement, arrangement,
commitment, letter of intent, memorandum of understanding, promise, obligation,
right, instrument, document, or other similar understanding, whether written or
oral.
"Copyrights" means all copyrights in both published works and
unpublished works including any registrations and applications therefor and
whether registered or unregistered.
"Credit Facility" is defined in Section 6.3(f).
"Damages" means all damages (including incidental and consequential
damages), losses (including any diminution in value), Liabilities, payments,
amounts paid in settlement, obligations, fines, penalties, costs, expenses
(including reasonable fees and expenses of outside attorneys, accountants and
other professional advisors and of expert witnesses and other costs (including
the allocable portion of the Indemnitee's internal costs) of investigation,
preparation and litigation in connection with any Action or Threatened Action)
of any kind or nature whatsoever.
"Developers" is defined in Section 5.15(d).
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"Disclosure Letters" means the Company Disclosure Letter and the
Parent Disclosure Letter.
"Dissenting Shares" is defined in Section 3.4.
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"DGCL" means the Delaware General Corporation Law.
"Effective Time" is defined in Section 3.1(b).
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"Employee Benefit Plans" means all employee benefit plans or
arrangements of any kind, including without limitation, bonus deferred
compensation, incentive compensation, equity
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compensation, equity purchase, equity option, equity appreciation rights,
restricted equity, severance or termination pay, fringe benefit, vacation,
hospitalization, medical, life or other insurance, supplemental unemployment
benefits, profit-sharing, savings, pension, retirement, or supplemental
retirement plan, program, agreement or arrangement, whether or not a plan
described in Section 3(3) of ERISA.
"Employee Pension Benefit Plan" is defined in ERISA Section 3.2.
"Employee Welfare Benefit Plan" is defined in ERISA Section 3.1.
"Encumbrance" means any Order, Security Interest, Contract, easement,
covenant, community property interest, equitable interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other general attribute of
ownership.
"Enforceable" - a Contract is "Enforceable" if it is the legal, valid,
and binding obligation of the applicable Person, enforceable against such Person
in accordance with its terms, except as such enforceability may be subject to
the effects of bankruptcy, insolvency, reorganization, moratorium, or other Laws
relating to or affecting the rights of creditors, and general principles of
equity.
"Environment" means soil, land surface or subsurface strata, waters
(including, navigable ocean, stream, pond, reservoirs, drainage, basins,
wetland, ground, and drinking), sediments, ambient air (including indoor), plant
life, animal life, and all other environmental media or natural resources.
"Environmental, Health, and Safety Requirements" means all Orders,
Contracts and Laws concerning or relating to public health and safety,
worker/occupational health and safety, and pollution or protection of the
environment, including those relating to the presence, use, manufacturing,
refining, production, generation, handling, transportation, treatment, transfer,
storage, disposal, labeling, testing, processing, discharge, release, control,
or other action or failure to act involving cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls or radiation, each as amended and as now in effect and
in effect at Closing.
"Equity Commitment" means (a) options, warrants, convertible
securities, exchangeable securities, subscription rights, conversion rights,
exchange rights, or other Contracts that could require a Person to issue any of
its Equity Interests or to sell any Equity Interests it owns in another Person;
(b) any other securities convertible into, exchangeable or exercisable for, or
representing the right to subscribe for any Equity Interest of a Person or owned
by a Person; (c) statutory pre-emptive rights or pre-emptive rights granted
under a Person's Organizational Documents; and (d) stock appreciation rights,
phantom stock, profit participation, or other similar rights with respect to a
Person.
"Equity Interest" means (a) with respect to a corporation, any and all
shares of capital stock and any Equity Commitments with respect thereto, (b)
with respect to a partnership, limited liability company, trust or similar
Person, any and all units, interests or other
4
partnership/limited liability company interests, and any Equity Commitments with
respect thereto, and (c) any other direct equity ownership or participation in a
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each business or entity which is a member of a
"controlled group of corporations," under "common control" or an "affiliated
service group" with any Acquired Entity within the meaning of Sections 414(b),
(c) or (m) of the Code, or required to be aggregated with any Acquired Entity
under Section 414(o) of the Code, or is under "common control" with any Acquired
Entity, within the meaning of Section 4001(a)(14) of ERISA.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" is defined in Section 9.1.
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"Expiration Date" is defined in Section 2.1(a).
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"Financial Advisor" is defined in Section 2.2(a).
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"Financial Statements" is defined in Section 5.8.
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"Financing Commitments" is defined in the Recitals to this Agreement.
"Funding Date" is defined in Section 6.10(a).
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"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" means any legislature, agency, bureau, branch,
department, division, commission, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar
recognized organization or body of any federal, state, county, municipal, local,
or foreign government or other similar recognized organization or body
exercising similar powers or authority.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Indemnified Liabilities" is defined in Section 6.11(a).
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"Indemnified Persons" is defined in Section 6.11(a).
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"Independent Directors" is defined in Section 2.3(c).
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"Insurance Policies" is defined in Section 5.19.
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"Insured Parties" is defined in Section 6.11.
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"Intellectual Property" means any Marks, Patents, Copyrights, Trade
Secrets or rights, licenses, liens, security interests, charges, encumbrances,
equities and other claims that any Person may have to claim ownership,
authorship or invention, to use, to object to or prevent the
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modification of, to withdraw from circulation or control the publication or
distribution of any Marks, Patents, Copyrights, or Trade Secrets.
"Knowledge" (i) when used in this Agreement with reference to the
Company, shall be deemed to mean and refer to the actual knowledge of the
Company's executive officers and directors after the Company's Chief Executive
Officer and Chief Financial Officer have made due and diligent inquiry of those
managerial employees of the Company whom such executive officers reasonably
believe would have knowledge of the matters presented, and (ii) when used in
this Agreement with reference to Parent or Buyer, shall be deemed to mean and
refer to the actual knowledge of Parent's executive officers and directors after
Parent's Chief Executive Officer and Chief Financial Officer have made due and
diligent inquiry of those managerial employees of Parent whom such executive
officers reasonably believe would have knowledge of the matters presented.
"Law" means any law (statutory, common, or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, executive order, or other
similar authority enacted, adopted, promulgated, or applied by any Governmental
Entity, each as amended and now in effect.
"Leased Real Estate" is defined in Section 5.14(b).
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"Liability" means any liability or obligation, whether known or
unknown, asserted or unasserted, absolute or contingent, matured or unmatured,
conditional or unconditional, latent or patent, accrued or unaccrued, liquidated
or unliquidated, or due or to become due.
"Marks" means all fictitious business names, trading names, corporate
names, registered and unregistered trademarks, service marks, designs and
general intangibles of like nature and applications, together with all goodwill
related to the foregoing.
"Material Adverse Change (or Effect)" means a change (or effect) that
is materially adverse to the condition (financial or otherwise), properties,
assets, Liabilities, rights, obligations, operations, results of operations or
business of a Person, which in the case of the Company or Parent shall be viewed
together with its respective Subsidiaries on a consolidated basis (other than,
in the case of the Company, the following in and of themselves, either alone or
in combination: (i) any effect or change occurring as a result of (A) general
economic or financial conditions or (B) conditions affecting the Company's
industry as a whole; (ii) any change or effect resulting from any announcement
of the Agreement or Merger or the transactions contemplated in connection
therewith, except that the termination or asserted termination or modification
in any manner adverse to the Company, to any material Contract of the Company
shall not fall within this subsection (ii); (iii) a change in the market price
or trading volume of Company Common Stock; and (iv) a failure by the Company to
meet the revenue or earnings predictions of equity analysts as reflected in any
consensus estimate, or any other revenue or earnings predictions or expectations
(other than those earnings predictions or expectations which have been disclosed
publicly by the Company), for any period ending (or for which earnings are
released) on or after the date of this Agreement and on or prior to the Closing
Date).
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"Merger" is defined in Section 3.1(a).
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"Merger Consideration" means the cash paid to the holders of the
Shares pursuant to ARTICLE 3 hereof.
"Multi-employer Plan" is defined in ERISA Section 3(37).
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" is defined in Section 3.5(b).
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"Order" means any Order, ruling, decision, verdict, decree, writ,
subpoena, mandate, precept, command, directive, consent, approval, award,
judgment, injunction, or other similar determination or finding by, before, or
under the supervision of any Governmental Entity, arbitrator or mediator.
"Offer" is defined in the Recitals hereof.
"Offer Conditions" is defined in Section 2.1(a).
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"Offer Documents" is defined in Section 2.1(b).
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"Offer Price" is defined in the Recitals hereof.
"Options" means the options to purchase shares of capital stock of the
Company.
"Ordinary Course of Business" means, with respect to any Person, that
Person's ordinary course of business consistent with past custom and practice
(including with respect to quantity, quality and frequency).
"Organizational Documents" means the articles of incorporation,
certificate of incorporation, charter, bylaws, articles of formation,
regulations, operating agreement, certificate of limited partnership,
partnership agreement, and all other similar documents, instruments or
certificates executed, adopted, or filed in connection with the creation,
formation, or organization of a non-natural Person, including any amendments
thereto.
"Owned Real Estate" is defined in Section 5.14(a)
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"Parent" is defined in the preamble to this Agreement
"Parent Common Stock" means Parent's common stock, $.001 par value.
"Parent Disclosure Letter" is defined in ARTICLE 5 below.
"Parties" means Parent, Buyer and the Company.
"Patents" means all (A) patents and patent applications and any
continuations, continuations in part, renewals and applications therfor, and (B)
any inventions and discoveries that may be patentable.
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"Paying Agent" is defined in Section 3.3(a).
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"Permit" means any permit, license, certificate, approval, consent,
notice, waiver, franchise, registration, filing, accreditation, or other similar
authorization required by any Law or Governmental Entity.
"Per Share Amount" is defined in Section 3.2(a)
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"Person" means any individual, partnership, limited liability company,
corporation, association, joint stock company, trust, entity, joint venture,
labor organization, unincorporated organization, or Governmental Entity.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Prohibited Transactions" is defined in ERISA Section 406 and Code
Section 4975.
"Receivables" means all receivables of the Acquired Entity, including
all Contracts in transit, manufacturers warranty receivables, notes receivable,
accounts receivable, trade account receivables, and insurance proceeds
receivable.
"Release" means any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other release into the Environment.
"Retained Employees" means those employees of the Company who are
employed by the Company just prior to the Effective Time and who have not given
or been given by the Company written notice of their termination or severance
from the employ of the Company.
"Schedule 14D-9" is defined in Section 2.2(b).
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"Schedule TO" is defined in Section 2.1(b).
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"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Laws" is defined in Section 5.8
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"Security Interest" means any security interest, deed of trust,
mortgage, pledge, lien, charge, claim, or other similar interest or right except
for (i) liens for taxes, assessments, governmental charges, or claims which are
not yet due and payable or are being duly contested in good faith by appropriate
Actions, (ii) statutory liens of landlords and warehousemen's, carriers',
mechanics', suppliers', materialmen's, repairmen's, or other like liens
(including Contractual landlords' liens) arising in the Ordinary Course of
Business or with respect to amounts not yet delinquent and being contested in
good faith by appropriate Actions; and (iii) liens incurred or deposits made in
the Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other similar types of social security.
"Severance Arrangements" is defined in Section 6.12(b).
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"Share" means any share of the Company Common Stock.
"Share Certificates" is defined in Section 3.3(a).
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"Software" means any and all (i) computer programs, including any and
all software implementations of algorithms, models and methodologies, whether in
source code or object code; (ii) testing, validation, verification and quality
assurance materials; (iii) databases, conversion, interpreters and compilations,
including any and all data and collections of data, whether machine readable or
otherwise; (iv) descriptions, schematics, flow-charts and other work product
used to design, plan, organize and develop any of the foregoing; (v) software
development processes, practices, methods and policies recorded in permanent
form, relating to any of the foregoing; (vi) performance metrics, sightings, bug
and feature lists, build, release and change control manifests recorded in
permanent form, relating to any of the foregoing; and (vii) all documentation,
including user manuals, web materials, and architectural and design
specifications and training materials, relating to any of the foregoing.
"Stock Option Plans" is defined in Section 3.5.
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"Subsidiary" means, with respect to any Person: (a) any corporation of
which more than 10% of the total voting power of all classes of the Equity
Interests entitled (without regard to the occurrence of any contingency) to vote
in the election of directors is owned by such Person directly or through one or
more other Subsidiaries of such Person and (b) any Person other than a
corporation of which at least a 10% of the Equity Interest (however designated)
entitled (without regard to the occurrence of any contingency) to vote in the
election of the governing body, partners, managers or others that will control
the management of such entity is owned by such Person directly or through one or
more other Subsidiaries of such Person.
"Surviving Corporation" is defined in Section 3.1(a).
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"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs, ad valorem, duties, capital stock, franchise, profits,
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund
or information return or statement relating to any Taxes required to be filed
with any Governmental Entity, including any schedule or attachment thereto, and
including any amendment thereof.
"TBCA" means the Texas Business Corporation Act.
"Tender Agreement" is defined in the Recitals hereof.
"Termination Fee" is defined in Section 9.3(a).
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"Threatened" means a demand or statement has been made (orally or in
writing) or a notice has been given (orally or in writing), has been or is
likely to be asserted, commenced, or otherwise taken.
"Trade Secrets" means all know-how, trade secrets, confidential
information, customer lists, Software, databases, works of authorship, mask
works, technical information, data, process technology, plans, drawings, blue
prints know-how, proprietary processes, formulae, algorithms, models, user
interfaces, inventions, discoveries, concepts, ideas, techniques, methods,
methodologies and, with respect to all of the foregoing, related confidential
data or information.
"Transaction Documents" means this Agreement and the Tender Agreement.
"Transactions" means all of the transactions contemplated by this
Agreement, including: (a) the sale of the Shares to Buyer and Buyer's delivery
of the Merger Consideration therefor; (b) the execution, delivery, and
performance of all of the documents, instruments and agreements to be executed,
delivered, and performed in connection herewith, including each Transaction
Document; and (c) the performance by Parent, Buyer and the Company of their
respective covenants and obligations (pre- and post-Closing) under this
Agreement.
"Treas. Reg." means the proposed, temporary and final regulations
promulgated under the Code.
"Year 2000 Financial Statement" is defined in Section 5.8.
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ARTICLE 2.
THE TENDER OFFER
2.1 The Tender Offer.
(a) Provided that this Agreement has not been terminated in accordance
with ARTICLE 9 and none of the events referred to in Annex A has occurred or is
existing (and shall not have been waived by Parent), as promptly as practicable,
but in no event later than five (5) Business Days after receipt by Parent of the
Financing Commitments, Buyer shall (and Parent shall cause Buyer to) commence
(within the meaning of Rule 14d-2 under the Exchange Act) the Offer for any and
all the Shares at the Offer Price, net to the seller in cash, without interest,
less any required withholding taxes. The Offer initially shall expire at 12:00
midnight Eastern time on the twentieth Business Day following the date of
commencement of the Offer (such date and time, as extended in accordance with
the terms hereof, the "Expiration Date"). The obligation of Parent and Buyer to
commence the Offer, accept for payment, purchase, and pay for any Shares validly
tendered and not withdrawn pursuant to the Offer shall be subject only to the
conditions set forth in Annex A hereto (the "Offer Conditions"). Buyer
specifically reserves the right to increase the Offer Price and to make any
other changes in the terms and conditions of the Offer; provided that, unless
previously approved by the Company in writing, no change may be made that (i)
decreases the Offer Price, (ii) changes the form of consideration to be paid in
the Offer, (iii) reduces the maximum number of Shares to be purchased in the
Offer, (iv) imposes conditions to the Offer in addition to the Offer Conditions,
(v) except as expressly provided in this Section 2.1(a), extends the Offer (vi)
--------------
amends any other term of the Offer in any manner
10
adverse to the holders of the Shares or (vii) amends or waives the Minimum
Condition. Subject to the provisions of ARTICLE 9 hereof, if on the initial
Expiration Date of the Offer, all of the Offer conditions are not then satisfied
or waived, Buyer may, from time to time, in its sole discretion, extend the
Expiration Date. Without limiting the generality of the foregoing, Buyer may,
without the consent of the Company, extend any then scheduled Expiration Date of
the Offer for any period required by applicable rules, regulations,
interpretations or positions of the SEC or the staff thereof applicable to the
Offer or for any period required by applicable law. Notwithstanding the
foregoing, Buyer shall be obligated to extend the Offer from time to time until
a date which is no more than sixty days after the date of the commencement of
the Offer, if, at the Expiration Date as initially scheduled, or any extension
thereof, the Offer conditions have not been satisfied or waived, provided,
however, that Buyer shall not be required to extend the Offer as provided in
this sentence unless, in Parent's reasonable judgment, (i) each such condition
is reasonably capable of being satisfied; (ii) the Company is in material
compliance with all of its covenants in this Agreement, and (iii) the failure of
such condition to be satisfied shall not result from a Breach by the Company of
any of its covenants and agreements contained in this Agreement.
The Parties agree that the conditions set forth in Annex A are for the
sole benefit of Buyer and may be asserted by Buyer regardless of the
circumstances giving rise to any such condition or may be waived by Buyer, in
whole or in part, at any time and from time to time, in its sole discretion.
The failure by Buyer 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 other facts or circumstances, and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to time. Any
determination (which will be made in good faith after consultation with the
Company) by Buyer with respect to any of the foregoing conditions (including,
without limitation, the satisfaction of such conditions) shall be final and
binding on all parties.
Buyer may provide a "subsequent offering period" (as contemplated by
Rule 14d-11 of the Exchange Act) of not less than three Business Days following
its acceptance of and payment for the Shares in the Offer. Subject to the terms
and conditions of the Offer and this Agreement, Buyer shall (and Parent shall
cause Buyer to) accept for payment, and pay for, all Shares validly tendered and
not withdrawn pursuant to the Offer that Buyer becomes obligated to accept for
payment and pay for pursuant to the Offer, as promptly as practicable after the
expiration of the Offer.
(b) As soon as practicable on the date of commencement of the Offer,
Parent and Buyer shall file or cause to be filed with the SEC a Tender Offer
Statement on Schedule TO (together with all amendments and supplements thereto
and including the exhibits thereto, the "Schedule TO"). The Schedule TO shall
contain or shall incorporate by reference the offer to purchase, related letter
of transmittal, summary advertisement and other ancillary offer documents and
instruments pursuant to which the Offer will be made (such Schedule TO and the
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents") with respect
to the Offer. Parent and Buyer will take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of the
Shares, in each case as and to the extent required by
11
applicable federal securities laws. Parent and Buyer agree that the Offer
Documents shall comply as to form in all material respects with the Exchange Act
and the rules and regulations promulgated thereunder. The Offer Documents, on
the date first published, sent or given to the Company Shareholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by Parent or Buyer
with respect to information supplied by the Company or any of its shareholders
specifically for inclusion or incorporation by reference in the Offer Documents
and not subsequently corrected prior to filing. Each of Parent, Buyer and the
Company agrees promptly to correct any information provided by it for use in the
Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect. Parent and Buyer each further
agrees to take all steps necessary to cause the Schedule TO as so corrected to
be filed with the SEC and the other Offer Documents as so corrected to be
disseminated to the Company Shareholders, in each case as and to the extent
required by applicable Law. The Company and its counsel shall be given an
opportunity to review and comment upon the Offer Documents (and shall provide
any comments thereon as soon as practicable to counsel for Buyer) prior to their
filing with the SEC or dissemination to the Company Shareholders. Parent and
Buyer each agrees to provide the Company and its counsel any comments Parent,
Buyer or their counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments.
2.2 Company Actions
(a) The Company hereby represents and warrants that the Company Board,
at a meeting duly called and held at which all directors were present, duly and
unanimously: (i) determined that this Agreement and the Transactions are fair
to, advisable and in the best interests of, the Company and the Company
Shareholders; (ii) resolved subject to Section 6.4 hereof to recommend that the
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Company Shareholders accept the Offer, tender their Shares pursuant to the Offer
and approve the Merger; and (iii) approved the execution, delivery and
performance of this Agreement, such approval constituting approval of the
foregoing for purposes of Section 5.03 of the TCBA and approved the acquisition
of Shares by Buyer pursuant to the Offer and the Transactions. The Company also
represents and warrants that its Board of Directors has received the written
opinion of Xxxx Xxxxxxxxx Xxxxxxxx & Co. (the "Financial Advisor") that, as of
the date hereof, the proposed consideration to be offered to the Company
Shareholders pursuant to the Offer and the Merger is fair to the Company
Shareholders from a financial point of view. The Company further represents and
warrants that it has been authorized by the Financial Advisor to permit, subject
to prior review and consent by the Financial Advisor (such consent not to be
unreasonably withheld), and the Company hereby consents to, the inclusion of
such fairness opinion (or a reference thereto) in the Offer Documents and in the
Schedule 14D-9 referred to below. The Company hereby consents to the inclusion
in the Offer Documents of the recommendations of the Company Board described in
this Section 2.2(a) (subject to the right of the Board of Directors to modify or
--------------
withdraw such recommendation in accordance with Section 6.4).
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(b) The Company shall file with the SEC concurrently with the
commencement of the Offer or as promptly thereafter as practicable a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
schedules, amendments and supplements, the "Schedule 14D-
12
9") containing the recommendations of the Company Board in favor of the Offer
and the Merger (subject to the right of the Board of Directors to modify or
withdraw such recommendation in accordance with Section 6.4) and the opinion of
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the Financial Advisor referred to in Section 2.2(a). The Schedule 14D-9 shall
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder. The Company shall
cause the Schedule 14D-9 to be mailed to the Company Shareholders promptly after
commencement of the Offer and at the same time the Offer Documents are first
mailed to the Company Shareholders. On the date filed with the SEC and on the
date first published, sent or given to the Company Shareholders, the Schedule
14D-9 shall not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation or warranty is made by the
Company with respect to information supplied by Parent or Buyer specifically for
inclusion in the Schedule 14D-9. Each of the Company, Parent and Buyer agrees
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that such information shall have become false or misleading
in any material respect, and the Company further agrees to take all steps
necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule
14D-9 as so amended or supplemented to be filed with the SEC and disseminated to
the Company Shareholders, in each case as and to the extent required by
applicable Law. Parent, Buyer and their counsel shall be given an opportunity to
review and comment upon the Schedule 14D-9 (and shall provide any comments
thereon as soon as practicable to counsel for the Company) prior to its filing
with the SEC or dissemination to Company Shareholders. The Company agrees to
provide Parent, Buyer and their counsel any comments the Company or its counsel
may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer and the Merger, the Company shall
promptly furnish or cause its transfer agent to promptly furnish Buyer with
mailing labels containing the names and addresses of the record holders of
Shares as of the latest practicable date and of those Persons becoming record
holders subsequent to such date, together with copies of all lists of
stockholders, security position listings and computer files and all other
information in the Company's possession or control regarding the beneficial
owners of Shares, and shall furnish to Parent such information and assistance
(including updated lists of stockholders, security position listings and
computer files) as Parent may reasonably request in communicating the Offer and
the Merger to the Company Shareholders. Subject to the requirements of
applicable Law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Parent, Buyer and their agents shall hold in confidence the information
contained in any such labels, listings and files, and will use such information
only in connection with the Offer and the Merger. In connection with the Offer,
the Company will furnish Parent with such information (which will be treated and
held in confidence by Parent) and assistance as Parent or its officers,
employees, accountants, counsel and other representatives may reasonably request
in connection with the preparation of the Offer and communicating the Offer to
the record and beneficial holders of shares of Common Stock. If this Agreement
is terminated, Parent and Buyer will upon the written request of the Company
promptly deliver or cause to be delivered to the Company all copies of any such
information provided under this paragraph then in its possession or in the
possession of its agents or representatives.
13
2.3 Board of Directors.
(a) Effective upon the purchase by Buyer pursuant to the Offer of such
number of Shares which represents at least 67% of the outstanding shares of
Common Stock on a fully diluted basis (as defined in Annex A), and from time to
time thereafter, Parent shall be entitled to designate up to that number of
directors of the Company, rounded up to the next whole number as will make the
percentage of the Company's directors designated by Parent equal to the
percentage of outstanding shares of Common Stock held by Parent and any of its
wholly owned Subsidiaries (including Buyer), including shares of Company Common
Stock accepted for payment pursuant to the Offer. The Company shall take all
action necessary to cause the designees of Parent to be elected to or appointed
by the Company Board, including, without limitation, increasing the number of
directors, amending its bylaws, or using its best efforts to obtain resignations
of incumbent directors, subject in all cases to Section 14 (f) of the Exchange
Act. Upon written request by Parent, the Company shall use its best efforts to
cause the designees of Parent to constitute the same percentage of
representation as is on the Company Board after giving effect to this Section
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2.3 on (i) each committee of the Company Board; (ii) the Board of Directors of
---
each of the Acquired Entities; and (iii) each committee of each such board. The
provisions of this Section 2.3 are in addition to and shall not limit any rights
-----------
that Parent, or any of its affiliates may have as a holder or beneficial owner
of Shares as a matter of law with respect to the election of directors or
otherwise.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under Section 2.3(a), including mailing to
--------------
shareholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Parent's designees to be elected or appointed to the
Company's Board (the "14f-1 Information Statement"). Parent shall supply the
Company and be solely responsible for any information with respect to it and its
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The 14f-1 Information Statement, on the date filed with the SEC and
on the date first published, sent or given to the Company Shareholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in Order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation or warranty is made by the Company
with respect to information supplied by Parent specifically for inclusion in the
14f-1 Information Statement.
(c) Following the election or appointment of Parent's designees to the
Company Board, and prior to the Effective Time (as defined in Section 3.1(b)),
--------------
the Company Board shall have at least two directors who are directors on the
date hereof and who are not officers of the Company or affiliates of Parent or
Buyer (the "Independent Directors"), provided that, in such event, if the number
of Independent Directors shall be reduced below two for any reason whatsoever,
any remaining Independent Directors (or Independent Director, if there be only
one remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Director then remains, the other directors shall designate two
persons to fill such vacancies who shall not be affiliates of Parent or Buyer or
officers of the Company and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Notwithstanding anything in this
Agreement to the contrary, following the election or appointment of Parent's
designees to the
14
Company Board, and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (a) amend or
terminate this Agreement by the Company or (b) exercise or waive any of the
Company's rights, benefits or remedies hereunder.
ARTICLE 3.
THE MERGER
3.1 The Merger.
(a) Subject to the terms and conditions hereof, and in accordance with
the DGCL and the TBCA, Buyer shall be merged with and into the Company at the
Effective Time (the "Merger"). Upon consummation of the Merger, the separate
existence of Buyer shall cease and the Company shall be the surviving
corporation (the "Surviving Corporation") and an indirect wholly-owned
subsidiary of Parent.
(b) As soon as practicable after satisfaction of (or, to the extent
permitted hereunder, waiver of) all conditions to the Merger, the Company and
Buyer will file a certificate of merger with the Secretary of State of the State
of Delaware and deliver articles of merger to the Secretary of State of the
State of Texas in accordance with the DGCL and TBCA (in the forms attached
hereto as Exhibit B) and make all other filings or recordings required by
---------
applicable Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is filed with the Secretary of State
of the State of Delaware and a certificate of merger is issued to the Surviving
Corporation by the Secretary of State of the State of Texas or at such later
time as is specified in the respective certificates of merger (the "Effective
Time"). The certificates and articles of merger filed with the Secretary of
States of of the States of Delaware and Texas are referred to throughout the
remainder of this Agreement as the "Certificates of Merger."
(c) At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of Delaware Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and Buyer
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Buyer shall become the debts, liabilities and duties of the
Surviving Corporation.
(d) The Articles of Incorporation of the Surviving Corporation shall
be amended and restated to read the same as the Certificate of Incorporation of
Buyer in effect at the Effective Time until amended in accordance with
applicable Law, provided however, that Section I of the amended and restated
----------------
Articles of Incorporation of the Company as the Surviving Corporation, instead
of reading the same as Section I of the Certificate of Incorporation of Buyer,
shall read as follows: "The name of the corporation is DTM Corporation." The
bylaws of the Surviving Corporation shall be amended and restated to read the
same as the bylaws of Buyer in effect at the Effective Time until amended in
accordance with applicable Law, except that all references in such Bylaws to
Buyer shall be changed to refer to DTM Corporation.
(e) The directors of Buyer at the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation
15
and bylaws of the Surviving Corporation until such director's successor is duly
elected or appointed and qualified or until such director's earlier death,
resignation or removal in accordance with the Certificate of Incorporation and
bylaws of the Surviving Corporation.
(f) The officers of Buyer at the Effective Time shall be the initial
officers of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and bylaws of the Surviving Corporation until
such officer's successor is duly elected or appointed and qualified or until
such officer's earlier death, resignation or removal in accordance with the
Certificate of Incorporation and bylaws of the Surviving Corporation.
3.2 Merger Consideration And Cancellation Of Shares.
At the Effective Time, pursuant to this Agreement and by virtue of the
Merger and without any action on the part of Parent, Buyer, the Company, or the
holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (including shares of Common Stock issued upon exercise of Options
and other convertible securities of the Company, but excluding any Dissenting
Shares, and shares to be cancelled pursuant to Section 3.2(b)), shall be
--------------
converted automatically into the right to receive an amount in cash equal to the
Offer Price (the "Per Share Amount"), without interest, payable to the holder
thereof, less any required withholding taxes, upon surrender of the certificate
formerly representing such share of Common Stock in the manner provided in
Section 3.3.
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(b) Each Share held in the treasury of the Company or held by Parent
or Buyer or any other Subsidiary of Parent, if any, immediately prior to the
Effective Time, shall be cancelled without any conversion thereof and no payment
or distribution shall be made with respect thereto.
(c) Each outstanding share of common stock of Buyer shall be converted
into one (1) share of common stock of the Surviving Corporation.
(d) If between the date of this Agreement and the Effective Time the
number of outstanding shares of capital stock of the Company shall have been
changed into a different number of shares or a different class, by reason of any
stock dividend, subdivision, reclassification, recapitalization, split-up,
combination, exchange of shares or the like other than pursuant to the Merger,
the Per Share Amount payable to each holder of Shares shall be correspondingly
adjusted.
3.3 Payment of Cash for Shares.
(a) At the Effective Time, the Surviving Corporation shall irrevocably
deposit or cause to be deposited with a paying agent appointed by Buyer and
reasonably acceptable to the Company (the "Paying Agent"), as agent for the
holders of Shares to be cancelled in accordance with Section 3.2, cash in the
-----------
aggregate amount required to pay the Merger Consideration in respect of such
securities outstanding immediately prior to the Effective Time. Pending
distribution pursuant to Section 3.3(b) hereof of the cash deposited with the
--------------
Paying Agent, such cash shall be held in trust for the benefit of the holders of
the Shares converted pursuant to the
16
Merger and such cash shall not be used for any other purposes. Promptly after
the Effective Time, the Surviving Corporation shall cause the Paying Agent to
mail to each Person who was, at the Effective Time, a holder of record of Shares
entitled to receive the Per Share Amount pursuant to Section 3.2 hereof, a form
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of letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the certificates evidencing the Shares (the "Share
Certificates") shall pass, only upon proper delivery of the Share Certificate to
the Paying Agent) and instructions for use in effecting the surrender of the
Share Certificate pursuant to such letter of transmittal. Upon surrender to the
Paying Agent of a Share Certificate, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions, the
holder of such Share Certificate shall be entitled to receive in exchange
therefor the Per Share Amount for each Share formerly evidenced by such Share
Certificate, and such Share Certificate shall thereupon be cancelled. No
interest shall accrue or be paid on the Per Share Amount payable upon the
surrender of any Share Certificate for the benefit of the holder of such Share
Certificate and any required withholding taxes on the Per Share Amount may be
withheld by Buyer or the Paying Agent. All interest accrued in respect of the
cash deposited with the Paying Agent shall accrue to the benefit of and be paid
to the Surviving Corporation.
(b) After surrender to the Paying Agent of any Share Certificate or
other instrument which prior to the Effective Time shall have represented any
Shares, the Paying Agent shall promptly distribute to the Person in whose name
such Share Certificate or other instrument shall have been registered, a check
representing the Merger Consideration that such Person has the right to receive
pursuant to the provisions of this ARTICLE 3. Until so surrendered and
cancelled, each such Share Certificate or other instrument shall, after the
Effective Time, be deemed to represent only the right to receive the Per Share
Amount, and until such surrender and cancellation, no cash shall be paid to the
holder of such outstanding Share Certificate or other instrument in respect
thereof. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease, except for Dissenting
Shares and otherwise as required by law, to have any rights with respect to such
Shares, other than the right to receive the Per Share Amount as provided in this
Agreement.
(c) If payment is to be made to a Person other than the registered
holder of the Shares represented by the Share Certificate or other instrument so
surrendered in exchange therefor, it shall be a condition to such payment that
the Share Certificate or other instrument so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay to the Paying Agent any transfer or other
taxes required as a result of such payment to a Person other than the registered
holder of such Shares or establish to the satisfaction of the Paying Agent that
such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further transfers on
the stock transfer books of the Company of the Shares that were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Share
Certificates representing the Shares are presented to the Surviving Corporation,
they shall be cancelled and exchanged for the Per Share Amount provided for, and
in accordance with the procedures set forth in this ARTICLE 3.
(e) If any cash deposited with the Paying Agent for purposes of
payment in exchange for the Shares remains unclaimed six months after the
Effective Time, such cash shall
17
be returned to the Surviving Corporation, upon demand, and any such holder who
has not converted the Shares into the Per Share Amount or otherwise received the
Per Share Amount pursuant to this Agreement prior to that time shall thereafter
look only to the Surviving Corporation for payment of the Per Share Amount.
Notwithstanding the foregoing, the Surviving Corporation shall not be liable to
any holder of Shares for any amount paid to a public official pursuant to
applicable unclaimed property laws. Any amounts remaining unclaimed by holders
of Shares seven (7) years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity) shall, to the extent permitted by
applicable Law, become the property of the Surviving Corporation, free and clear
of any claims or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Paying Agent to pay for Shares for which dissenters' rights have been perfected
as provided in Section 3.4 hereof shall be returned to the Surviving Corporation
-----------
upon demand.
(g) No dividends or other distributions with respect to capital stock
of the Company with a record date after the Effective Time shall be paid to the
holder of any unsurrendered certificate for the Shares.
(h) In the event that any Share Certificate or other instrument
representing Shares shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such certificate or other
instrument to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such holder 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 Share Certificate or other instrument, the
Paying Agent will issue in exchange for and in lieu of such lost, stolen or
destroyed certificate or other instrument representing the Shares, the Per Share
Amount, and unpaid dividends and distributions on Shares deliverable in respect
thereof, pursuant to this Agreement and the Merger, without interest and less
any required withholding taxes.
3.4 Dissenting Shares.
Notwithstanding any other provisions of this Agreement, Shares which
are issued and outstanding immediately prior to the Effective Time and which are
held by a holder who has not voted such shares of capital stock of the Company
in favor of the Merger and who has otherwise complied with the relevant
provisions of Article 5.12 of the TBCA and who, as of the Effective Time, shall
not have effectively withdrawn or lost such right to relief as a dissenting
stockholder ("Dissenting Shares") shall not be converted into a right to receive
the Per Share Amount. The holders thereof shall be entitled only to such rights
as are granted by Article 5.12 of the TBCA. Each holder of Dissenting Shares
who becomes entitled to payment for such Dissenting Shares pursuant to Article
5.12 of the TBCA shall receive payment therefor from the Surviving Corporation
in accordance with the TBCA; provided, however, that if any such holder of
Dissenting Shares (i) shall have failed to establish his entitlement to relief
as a dissenting stockholder as provided in Article 5.12 of the TBCA, (ii) shall
have effectively withdrawn his demand for relief as a dissenting stockholder
with respect to such Dissenting Shares or lost his right to relief as a
dissenting stockholder and payment for his Dissenting Shares under Article
18
5.12 of the TBCA, or (iii) shall have failed to file a complaint with the
appropriate court seeking relief as to determination of the value of all
Dissenting Shares within the time provided in Article 5.12 of the TBCA, such
holder shall forfeit the right to relief as a dissenting stockholder with
respect to such Dissenting Shares and each such Dissenting Share shall be
converted into the right to receive the Per Share Amount from the Surviving
Corporation as provided in Section 3.2. The Company shall give Parent prompt
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notice of any demands received by the Company prior to the Effective Time any
attempted withdrawals of such demands and any other instruments served pursuant
to the TBCA and received by the Company relating to stockholders' rights
appraisal, and Parent shall have the right to direct all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
3.5 Stock Options.
(a) At the Effective Time, each outstanding and unexercised option to
purchase Shares (a "Company Option") pursuant to the existing and duly
administered 1996, 1998 and 1999 stock option plans of the Company (the "Company
Option Plans"), whether vested or unvested, shall be converted into an
obligation of the Company to pay, and the right of the holder thereof to
receive, in full satisfaction of each Company option, the "Cash Amount." with
respect to such Company Option. The "Cash Amount" for any Company Option shall
equal the product of (1) the excess, if any, of the Per Share Offer Amount over
the exercise price per Share of such Company Option and (2) the number of Shares
underlying such Company Option. Company shall take all actions necessary to
cause the Company's employees and directors to consent, to the extent required,
to the transactions contemplated by this Section 3.5 no later than immediately
-----------
prior to the Effective Time. Except as may be otherwise agreed to by Parent or
Buyer and the Company, as of the Effective Time, (A) the Company Option Plans
shall terminate, (B) the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any or the Acquired Subsidiaries shall be
deleted and (C) no holder of Company Options or any participant in the Company
Option Plans or any other plans, programs or arrangements shall have any rights
thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof. All Company Options outstanding as of
the date of this Agreement and the price at which they are exercisable are
listed on Section 3.5(a) of the Company Disclosure Letter. The Company and
Parent agree that the Cash Amounts are the sole payments that will be made with
respect to or in relation to the Company Options.
(b) All warrants and other convertible securities to purchase shares
of Company Common Stock shall be canceled as of the Closing Date. At or before
the Effective Time, the Company shall take all actions, in a manner reasonably
satisfactory to Parent, necessary or advisable to give effect to the foregoing
provisions of this Section 3.5.
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(c) As soon as practicable following the Effective Time, Parent shall
cause to be mailed to the holder of each Company Option, the Cash Amount payable
with respect to such Company Option to such holder pursuant to Section 3.5(a)
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hereof.
19
3.6 The Closing.
The closing of the Merger (the "Closing") shall take place (i) at the
offices of Akin, Gump, Strauss, Xxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxx Xxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 at 9:00 A.M. (Los Angeles time) on the Business Day
on which the Parties hereto designate as the closing date following the
fulfillment or waiver of the conditions set forth in ARTICLE 8 hereof in
accordance with this Agreement or (ii) at such other place and time and/or on
such other date as the Company and Parent may agree (the "Closing Date").
3.7 Deliveries at the Closing.
At the Closing:
(a) The Company will deliver to Parent:
(i) An Officers' certificate, substantially in the form of
Exhibit C, duly executed on the Company's behalf.
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(ii) A Secretary's certificate, substantially in the form of
Exhibit D, duly executed on the Company's behalf.
---------
(b) Parent and Buyer will deliver to the Company:
(i) Officers' certificates, substantially in the form of
Exhibits E and G, duly executed on Parent's and Buyer's behalf, respectively.
----------------
(ii) Secretary's certificates, substantially in the form of
Exhibit F and H, duly executed on Parent's and Buyer's behalf, respectively.
---------------
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
CONCERNING PARENT AND BUYER
Parent and Buyer each represent and warrant to the Company that the
statements contained in this are correct and complete, except as set forth in
the disclosure letter delivered at or prior to the execution of this Agreement
(the "Parent Disclosure Letter") prepared in accordance with Section 10.1
hereof.
4.1 Entity Status.
Parent and Buyer each is a corporation duly created, formed or
organized, validly existing and in good standing under the Laws of the State of
Delaware. Parent and Buyer each has the requisite power and authority to own or
lease its properties and to carry on its business as currently conducted.
Parent and Buyer each are qualified to do business in all jurisdictions where
such qualification is required. There is no pending or Threatened Action (or
Basis therefor) for the dissolution, liquidation, insolvency, or rehabilitation
of Parent or Buyer.
20
4.2 Power and Authority; Enforceability.
Parent and Buyer each has the relevant entity power and authority to
execute and deliver each Transaction Document to which it is party, and to
perform and consummate the Transactions. The execution, delivery and
performance by Parent and Buyer of this Agreement and the consummation of the
Merger and the other Transactions have been duly authorized by the boards of
directors of each of Parent and Buyer and by the sole stockholder of Buyer, and
no other corporate action on the part of Parent or Buyer is necessary to
authorize the execution and delivery by Parent and Buyer of this Agreement or
the consummation of the Transactions. Each Transaction Document to which Parent
and Buyer is a party has been duly authorized, executed and delivered by, and is
Enforceable against, Parent and Buyer, respectively.
4.3 Consents and Approvals; No Defaults.
(a) No consents or approvals of, or filings or registrations with, any
Governmental Entity or with any third party are required to be made or obtained
by Parent or Buyer in connection with the execution, delivery or performance by
Parent or Buyer of this Agreement except for (i) filings of applications,
registrations, statements, reports or notices (and expiration of any applicable
notice periods) with the United States Department of Justice, the Federal Trade
Commission, the NASD, the SEC and state securities authorities, (ii) the filing
of the Certificates of Merger with the Secretary of State of the States of
Delaware and Texas and (iii) consents, approvals, filings, or registrations, the
absence of which would not, individually or in the aggregate, have a Material
Adverse Effect on Parent or Buyer or adversely affect or delay any of the
Transactions.
(b) Subject to receipt of the approvals referred to in the preceding
paragraph, and the expiration of related waiting periods, the execution,
delivery and performance of this Agreement, the consummation of the transactions
contemplated hereby, and compliance with the provisions hereof do not and will
not (i) result in any Breach of the terms, conditions, or provisions of the
Organizational Documents of Parent or Buyer; (ii) result in a Breach of any
provisions of, or result in the creation or imposition of (or the obligation to
create or impose) any Encumbrance under, any of the terms, conditions or
provisions of any Contract, Order or Permit to which Parent or Buyer is a party
or by which it or any of its properties or assets may be bound or affected; or
(iii) to the Knowledge of Parent or Buyer, violate any Law or Order applicable
to Parent or Buyer, except for any Breach, or Encumbrance which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent or Buyer or adversely affect or delay any of the
Transactions.
4.4 Capitalization.
The authorized capital stock of Parent at March 30, 2001 consists of
(a) 25,000,000 shares of Parent Common Stock $0.001 par value per share, of
which 12,304,572 shares outstanding; and 225,000 shares are held in treasury and
(b) 5,000,000 shares of Preferred Stock, $0.001 par value per share, of which no
shares are issued and outstanding. As of the date hereof, (i) all of the issued
and outstanding shares of Parent Common Stock are duly authorized, validly
issued, fully paid and non-assessable and were not issued in violation of any
preemptive rights or any federal or state securities laws, (ii) no shares of
Parent Common Stock are held by
21
Subsidiaries of Parent, and (iii) 2,306,309 shares of Parent Common Stock are
reserved for future issuance under outstanding Options.
4.5 Litigation.
Section 4.5 of the Parent Disclosure Letter sets forth each instance
-----------
in which Parent or Buyer (a) is subject to any outstanding Order or (b) is a
party or is Threatened to be made a party to any Action. No Action required to
be set forth in Section 4.5 of the Parent Disclosure Letter questions the
-----------
Enforceability of this Agreement or the Transactions, or could result in any
Material Adverse Change with respect to Parent, and Buyer and Parent do not have
any Basis to believe that any such Action may be brought against Parent or
Buyer.
4.6 Share Ownership.
To the Knowledge of Parent, none of Parent, Buyer or any of their
respective Affiliates or associates beneficially owns more than 100 in the
aggregate.
4.7 Buyer's Operations.
Buyer was formed solely for the purpose of engaging in the
Transactions and has not engaged in any business activities or conducted any
operations other than in connection with the Transactions.
4.8 Brokers' Fees.
Neither Parent nor Buyer has any liability to pay any compensation to
any broker, finder, or agent with respect to the Transactions.
4.9 Ability to Consummate the Transactions.
Based on existing cash on hand and anticipated sources of equity or
debt financing, Parent and Buyer have a good faith reasonable belief that Buyer
will have the means to purchase the Shares and to consummate the Transactions.
4.10 Statements True and Correct.
None of the information (including this Agreement) supplied or to be
supplied by Parent or Buyer to any Governmental Entity in connection with the
Transactions will, at the respective time such documents are supplied, be false
or misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or omit to state any material fact
necessary to correct any statement in any earlier communication to any
Governmental Entity.
22
4.11 Regulatory Approvals.
Neither Parent nor Buyer has taken any action or has any Knowledge of
any fact or circumstance that is reasonably likely to materially impede or delay
receipt of any consents of a Governmental Entity necessary in connection with
the consummation of the Merger, which if not obtained, individually or in the
aggregate, would be reasonably expected to have a Material Adverse Effect on
Parent or Buyer or materially alter or delay the Transactions.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
CONCERNING THE ACQUIRED ENTITIES
The Company represents and warrants to Parent and Buyer that the
statements contained in this ARTICLE 5 are correct and complete, except as set
forth in the disclosure letter delivered at or prior to the execution of this
Agreement (the "Company Disclosure Letter") prepared in accordance with Section
10.1 hereof.
5.1 Corporate Status.
Each Acquired Entity is an entity duly created, formed or organized,
validly existing, and in good standing under the Laws of the jurisdiction of its
creation, formation, or organization. Each Acquired Entity is duly authorized
to conduct its business and is in good standing under the laws of each
jurisdiction where such qualification is required. Each Acquired Entity has the
requisite power and authority necessary to own or lease its properties and to
carry on its businesses as currently conducted and in which it currently
proposes to engage. Section 5.1 of the Company Disclosure Letter lists each
-----------
Acquired Entity's directors and officers. Each Acquired Entity has delivered to
Parent correct and complete copies of each Acquired Entity's Organizational
Documents, as amended to date. No Acquired Entity is in Breach of any provision
of its Organizational Documents. There is no pending or Threatened Action (or
Basis therefor) for the dissolution, liquidation, insolvency, or reorganization
of any Acquired Entity.
5.2 Power and Authority; Enforceability.
Each Acquired Entity has the relevant entity power and authority
necessary to execute and deliver each Transaction Document to which it is a
party and to perform and consummate the Transactions. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Merger and the other Transactions have been duly authorized by the Company
Board, and no other corporate action on the part of the Company (other than
approval by the Company's Shareholders of the Merger) or any Acquired Entity is
necessary to authorize the execution and delivery by each Acquired Entity of
this Agreement or the consummation of the Transactions. Each Transaction
Document to which any Acquired Entity is a party has been duly authorized,
executed and delivered by, and is Enforceable against, each Acquired Entity.
5.3 Consents and Approvals; No Defaults.
23
(a) No consents or approvals of, or filings or registrations with, any
Governmental Entity or with any third party are required to be made or obtained
by any Acquired Entity in connection with the execution, delivery or performance
by any Acquired Entity of this Agreement except for (i) filings of applications,
registrations, statements, reports or notices (and expiration of any applicable
notice periods) with the United States Department of Justice, the Federal Trade
Commission, the NASD, the NASDAQ, the SEC and state securities authorities, (ii)
the requisite approval of this Agreement by the holders of the capital stock of
the Company entitled to vote thereon, (iii) the filing of the Certificates of
Merger with the Secretary of State of the States of Delaware and Texas and (iv)
consents, approvals, filings, or registrations, the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company
or adversely affect or delay any of the Transactions.
(b) Subject to receipt of the approvals referred to in the preceding
paragraph, and the expiration of related waiting periods, the execution,
delivery and performance of this Agreement, the consummation of the transactions
contemplated hereby, and compliance with the provisions hereof do not and will
not (i) result in any Breach of the terms, conditions, or provisions of, the
respective Organizational Documents of the Acquired Entities; (ii) result in a
Breach of any provisions of, or result in the creation or imposition of (or the
obligation to create or impose) any Encumbrance upon any of the properties or
assets of an Acquired Entity under, any of the terms, conditions or provisions
of any Contract, Order or Permit to which an Acquired Entity is a party or by
which it or any of its properties or assets may be bound or affected so as in
any such case to result in a Material Adverse Effect on the Company; or (iii) to
the Knowledge of the Company, violate any Law or Order applicable to an Acquired
Entity except for any Breach, or Encumbrance which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or adversely effect or delay any of the Transactions.
5.4 Brokers' Fees.
No Acquired Entity has any Liability to pay any compensation to any
broker, finder, or agent with respect to the Transactions.
5.5 Capitalization.
The Company's authorized capital stock consists of (a) 60,000,000
Shares of Company Common Stock, of which 7,090,989 Shares are issued and
outstanding as of April 2, 2001 and no Shares are held in treasury, and (b)
3,000,000 shares of preferred stock, $.001 par value per share, of which none
are issued and outstanding. All of the issued and outstanding Shares: (a) have
been duly authorized and are validly issued, fully paid, and nonassessable, (b)
were issued in compliance with all applicable state and federal securities Laws,
and (c) were not issued in Breach of any Equity Commitments. No Equity
Commitments exist with respect to any Equity Interest of the Company, and no
such Equity Commitments will arise in connection with the Transactions. There
are no Contracts with respect to the voting or transfer of the Company's Equity
Interests. The Company is not obligated to redeem or otherwise acquire any of
its outstanding Equity Interests.
24
5.6 Records.
The copies of the Acquired Entities' Organizational Documents that
were provided to Parent are accurate and complete and reflect all amendments
made through the date hereof. The Acquired Entities' minute books and other
records made available to Parent for review were correct and complete as of the
date of such review, no further entries have been made through the date of this
Agreement, such minute books and records contain the true signatures of the
persons purporting to have signed them, and such minute books and records
contain an accurate record of all actions of the shareholders and directors of
the Acquired Entities taken by written consent, at a meeting, or otherwise since
formation.
5.7 Acquired Subsidiaries.
Set forth in Section 5.7 of the Company Disclosure Letter for each
-----------
Acquired Subsidiary is (a) its name and jurisdiction of creation, formation, or
organization, (b) if such Acquired Subsidiary is a corporation, (i) the number
of authorized Equity Interests of each class of its Equity Interests, (ii) the
number of issued and outstanding Equity Interests of each class of its Equity
Interests, the names of the holders thereof, and the number of Equity Interests
held by each such holder, and (iii) the number of Equity Interests held in
treasury, and (c) if such Acquired Subsidiary is not a corporation, (i) the
class of Equity Interests created under such Acquired Subsidiary's
Organizational Documents and (ii) the holder(s) of such Equity Interests. All
of the issued and outstanding Equity Interests of each Acquired Subsidiary (A)
that is a corporation have been duly authorized and are validly issued, fully
paid, and nonassessable and (B) that is not a corporation have (i) been duly
created pursuant to the Laws of the jurisdiction of such Acquired Subsidiary,
(ii) have been issued and paid for in accordance with the Organizational
Documents governing such Acquired Subsidiary, and (iii) except as expressly
contemplated by the Organizational Documents governing such Acquired Subsidiary,
are fully paid and non-assessable and require no further capital contribution.
The Acquired Entities hold of record and own beneficially all of the outstanding
Equity Interests of the Acquired Subsidiaries, free and clear of any
Encumbrances (other than restrictions under the Securities Act and state
securities Laws). No Equity Commitments exist with respect to any Equity
Interests of such Acquired Subsidiaries and no such Equity Commitments will
arise in connection with the Transactions. There are no outstanding or
authorized Equity Commitments with respect to any Acquired Subsidiary or its
Equity Interests. There are no Contracts with respect to the voting or transfer
of any Acquired Subsidiary's Equity Interests. No Acquired Subsidiary is
obligated to redeem or otherwise acquire any of its Equity Interests. No
Acquired Entity controls, directly or indirectly, or has any direct or indirect
Equity Interest in any Person that is not an Acquired Subsidiary.
5.8 Company Reports and Financial Statement.
The Company has filed with the SEC all forms, reports, registration
statements, proxy statements and other documents (collectively, the "Company
Reports") required to be filed by the Company under the Securities Act, the
Exchange Act, and the rules and regulations promulgated thereunder
(collectively, the "Securities Laws"), except failures to file which,
individually or collectively, do not have a Material Adverse Effect on the
Company. The Company has heretofore made available (which, for these purposes,
shall include items available
25
in the XXXXX database) to Parent true and complete copies of all Company Reports
filed as of the date hereof. As of their respective dates, or, if amended, as of
the date of the last such amendment and prior to the date of this Agreement, or,
in the case of registration statements, as of their effective dates, all of the
Company Reports, including all exhibits and schedules thereto and all documents
incorporated by reference therein, (i) complied as to form in all material
respects with the requirements of the Securities Laws applicable thereto, and
(ii) did not 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,
in light of the circumstances under which they were made, not misleading. The
Company has filed with the SEC all documents and agreements which were required
to be filed as exhibits to the Company Reports, except failures to file, if any,
which, individually or collectively, do not have a Material Adverse Effect on
the Company. The audited consolidated financial statements and unaudited interim
consolidated financial statements of the Company included or incorporated by
reference in the Company Reports (collectively, the "Financial Statements") have
been prepared in accordance with GAAP applied on a consistent basis (except as
may be indicated therein or in the notes thereto) and fairly present in all
material respects the financial position of the Company as of and at the dates
thereof and the results of operations and cash flows for the periods then ended,
subject in the case of the unaudited interim financial statements, to normal,
recurring year-end adjustments and any other adjustments described therein,
which were not and are not expected to be material in amount or effect. Except
as set forth or reflected in the Financial Statement at December 31, 2000 (the
"Year 2000 Financial Statement"), neither the Company nor any Acquired
Subsidiary, has any liabilities or obligations of any kind or nature (whether
accrued, absolute, contingent or otherwise) which would be required to be
reflected or reserved against in any balance sheet of the Company or any
Acquired Subsidiary, or in the notes thereto, prepared in accordance with GAAP
consistently applied, except liabilities arising since December 31, 2000 (the
"Balance Sheet Date") either (i) in the Company's Ordinary Course of Business;
or (ii) which, individually or collectively, would not have a Material Adverse
Effect on the Company.
5.9 Subsequent Events.
Except (a) as disclosed in the Financial Statements and (b) for
liabilities and obligations incurred in the Ordinary Course of Business since
the Balance Sheet Date, neither the Company nor any of its Subsidiaries has any
Liabilities that have had, or could reasonably be expected to have, a Material
Adverse Effect on the Company. Since the Balance Sheet Date, the business of
the Company and each of its Subsidiaries has been conducted only in the Ordinary
Course of Business. Since the Balance Sheet Date, the Company has not
experienced a Material Adverse Change.
5.10 Intentionally Deleted
5.11 Legal Compliance.
Each Acquired Entity (i) is in compliance with all Laws and Orders
applicable thereto or to the business of the Acquired Entity, except where the
failure to so comply would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company; (ii) has all Permits,
Orders and approvals of, and has made all filings, applications and
registrations with, all Governmental Entities that are required in order to
permit
26
them to own or lease their properties and to conduct their businesses as
presently conducted; all such Permits, Orders and approvals are in full force
and effect and, to the Knowledge of the Company no suspension or cancellation of
any of them is Threatened, other than such failure to obtain or maintain the
same would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company; and (iii) has not received any
notification or communication, from any Governmental Entity (a) asserting that
any Acquired Entity is not in compliance with any of the statutes, regulations
or ordinances which such Governmental Entity enforces or (b) Threatening to
revoke any license, franchise, permit or governmental authorization (nor, to the
Knowledge of the Company, does a Basis for any of the foregoing exist), except
such notifications or communications which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
5.12 Tax Matters.
(i) All Tax Returns that are required to be filed (taking into account
any extensions of time within which to file) by or with respect to any Acquired
Entity have been duly filed, (ii) each Acquired Entity has paid all Taxes shown
as due and payable on such Tax Returns or adequate reserves for such Taxes are
reflected on the Year 2000 Financial Statement, (iii) all deficiencies asserted
or assessments made as a result of an examination by any taxing authority have
been paid in full or adequate reserves therefor are reflected on the Year 2000
Financial Statement, (iv) in connection with the examination of any of the Tax
Returns referred to in clause (i), no issues have been raised by any taxing
authority that are currently pending, and (v) there are no outstanding or
pending waivers of statutes of limitation that have been given by or requested
with respect to any Taxes of any Acquired Entity. The Company has made
available to Parent true and correct copies of the United States federal income
Tax Returns filed by each Acquired Entity for each of the three most recent
fiscal years ended on or before December 31, 2000. None of the Acquired
Entities has any liability with respect to income, franchise or similar Taxes
that accrued on or before the end of the most recent period covered by the
Financial Statement included in the Company Reports filed prior to the date
hereof in excess of the amounts accrued with respect thereto that are reflected
in such Financial Statements. No Acquired Entity is a party to any Tax
allocation or sharing agreement (other than agreements among members of the
affiliated group of which the Company is the common parent), is or has been a
member of an affiliated group filing consolidated or combined Tax Returns (other
than a group the common parent of which is or was the Company is the common
parent) or otherwise has any liability for the Taxes of any Person (other than
an Acquired Entity).
5.13 Title to Assets.
Each Acquired Entity holds good and marketable title to, or a valid
leasehold, consignment or License in each item of material tangible personal
property owned or used by or in the possession of that Acquired Entity.
5.14 Real Property and Leaseholds.
(a) The Company owns all material parcels of real property currently
indicated as owned in fee by the Company on the Financial Statements (the "Owned
Real Estate"). The Company holds marketable and legal title to each of the real
properties constituting Owned Real
27
Estate, free and clear of all Encumbrances, except for Encumbrances the
existence of which would not have a Material Adverse Effect on the Company.
(b) The Company holds valid and subsisting leasehold interests in all
material parcels of real property leased or subleased to the Company
(collectively, the "Leased Real Estate"), free and clear of all Encumbrances,
except for Encumbrances the existence of which would not have a Material Adverse
Effect on the Company.
5.15 Intellectual Property.
(a) Section 5.15(a) of the Company Disclosure Letter lists and
---------------
contains the title and registration or application number, if applicable, of
each Acquired Entity's issued Patents and patent applications.
(b) Section 5.15(b) of the Company Disclosure Letter lists each
---------------
Acquired Entity's Marks. All such Marks that have been registered with the
United States Patent and Trademark Office or with a corresponding state office
are (or trademark office of the applicable foreign country) currently in
compliance with all formal legal requirements (including the timely post-
registration filing of affidavits of use and incontestability and renewal
applications), are valid and Enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within 90 days after the Closing Date. No
such Xxxx has been or is now involved in any opposition, invalidation, or
cancellation and no such action is Threatened with the respect to any such Xxxx.
The Company has taken made all reasonable efforts to ensure that all products
and materials containing such a Xxxx xxxx the proper legal notice where
permitted by Law.
(c) Section 5.15(c) of the Company Disclosure Letter lists each
---------------
Acquired Entity's registered Copyrights. All such registered Copyrights are
currently in compliance with formal legal requirements, are valid and
Enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within 90 days after the Closing Date. All works encompassed by
such Copyrights have been marked with the proper copyright notice.
(d) Section 5.15(d) of the Company Disclosure Letter lists all
---------------
Software developed by or for the Company. After Closing, the Acquired Entities
will have at least a non-exclusive right to use any such Software and there are
no third-party rights to such Software that will materially interfere with any
Acquired Entity's ownership and use of such Software. The Software owned or
purported to be owned by any Acquired Entity was either (i) developed within the
scope of their employment by employees of an Acquired Entity who have assigned
to the Company all rights to such software; (ii) developed by independent
contractors who have assigned their rights to the Company or any of its
subsidiaries pursuant to written agreements; or (iii) otherwise acquired by the
Company or a subsidiary from a third party. The Software does not contain any
programming code, documentation or other materials or development environments
that embody Intellectual Property rights of any Person other than the Acquired
Entities, except for any code incorporated into such Software that was not
specifically written or developed for use in such Software and with respect to
which the Company has all rights as are necessary to use such code as it is
currently used and proposed to be used, the ownership of which was retained by
the author or licensor, and with respect to which the Company has all rights as
are necessary to use such code as it is currently used and proposed to be used,
and such
28
materials or development environments obtained by the Acquired Entities from
other Persons who make such materials or development environments generally
available to all interested purchasers or end-users on standard commercial
terms.
(e) Each of the Acquired Entities has taken all reasonable steps to
protect their respective rights in Trade Secrets. The Acquired Entities have
taken all required steps to protect their respective rights in the Trade Secrets
of third parties in accordance with the terms of any Contracts relating to such
third-party Trade Secrets to which any Acquired Entity is a party.
(f) The Acquired Entities own or have the right to use pursuant to a
valid Contract, free and clear of any Encumbrances (other than those specified
in the Contract), all Intellectual Property used by each Acquired Entity
immediately prior to the Closing or necessary to the operation of the business
of the Acquired Entities as currently proposed to be conducted. Each item of
Intellectual Property owned or used by each Acquired Entity immediately prior to
the Closing will be owned or available for use by such Acquired Entity on
identical terms and conditions immediately subsequent to the Closing. Each
Acquired Entity has taken all necessary action to maintain and protect each item
of Intellectual Property that is material to its business that it owns or uses.
No such Intellectual Property is subject to any adverse claim of title. No
adverse claim of title has been Threatened with respect to such Intellectual
Property and there is no Basis therefor.
(g) Section 5.15(g) of the Company Disclosure Letter identifies each
---------------
Contract pursuant to which any Acquired Entity has granted to a third party
rights under or with respect to any of its Intellectual Property (together with
any exceptions other than Software, as to which reference is made to Section
5.15(j) below). The Company has delivered to Parent correct and complete copies
of all written documentation in its possession or control evidencing ownership
and prosecution (if applicable) of each item of Intellectual Property of the
Acquired Entities. With respect to each item of Intellectual Property required
to be identified in Sections 5.15(a), 5.15(b), 5.15(c) and 5.15(d) of the
---------------- ------- ------- -------
Company Disclosure Letter:
(i) An Acquired Entity possesses all right, title, and interest
in and to the item, free and clear of any Encumbrance;
(ii) the item is not subject to any outstanding Order;
(iii) no Action is pending or Threatened (and there is no Basis
therefor) which challenges the validity, Enforceability, use, or ownership of
the item; and
(iv) no Acquired Entity has ever agreed to indemnify any Person
for or against any interference, infringement, misappropriation, or other
conflict with respect to the item.
(h) No Acquired Entity has interfered with, infringed upon, (whether
directly, or by contribution or inducement), misappropriated, or otherwise come
into conflict with any other Person's Intellectual Property, and no Acquired
Entity has ever received any notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that each
Acquired Entity must license or refrain from using any other Person's
Intellectual Property), other than allegations set forth in the complaint filed
on December 15, 2000, case number SA
29
CV 00-1230 DOC (EEX). No third Person has any Intellectual Property that
interferes or would be likely to interfere with any Acquired Entity's use of any
of its Intellectual Property. No Acquired Entity will interfere with, infringe
upon, misappropriate, or otherwise come into conflict with, any Intellectual
Property rights of any other Person as a result of the continued operation of
its businesses as currently conducted and as currently proposed to be conducted.
To the Company's Knowledge, no other Person has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Acquired Entity's
Intellectual Property.
(i) Section 5.15(i) of the Company Disclosure Letter identifies each
---------------
item of Software, other than readily available "shrink wrap" Software, that any
other Person owns and that is material to the conduct of business of any
Acquired Entity. The Company has delivered to Parent correct and complete
copies of all Contracts with respect to such use as amended to date. With
respect to the Contracts related to each item of Intellectual Property required
to be identified in Section 5.15(i) of the Company Disclosure Letter:
---------------
(i) the Contract is Enforceable;
(ii) the Contract will continue to be Enforceable on
substantially the same terms following the consummation of the Transaction;
(iii) no party to the Contract is in Breach, and no event has
occurred with which notice or lapse of time would constitute a Breach
thereunder;
(iv) no party to the Contract has repudiated any provision
thereof;
(v) with respect to each sublicense Contract the
representations and warranties set forth in Sections 5.15(i)(i) through
-------------------
5.15(i)(iv) are true and correct with respect to the underlying license
-----------
Contract;
(vi) to the Company's Knowledge, the underlying item of
Intellectual Property is not subject to any outstanding Order;
(vii) no Action is pending or Threatened (and to the
Company's Knowledge, there is no Basis therefor) which challenges the validity
or Enforceability of the underlying item of Intellectual Property; and
(viii) no Acquired Entity has granted any sublicense or
similar Contract with respect to the Contract.
(j) All former and current employees of any Acquired Entity have
executed written Contracts with the applicable Acquired Entity that assign to
such Person all rights to any inventions, improvements, discoveries or
information relating to any Acquired Entity's business. No employee of any
Acquired Entity has entered into any Contract that restricts or limits in any
way the scope or type of work in which the employee may be engaged or requires
the employee to transfer, assign, or disclose information concerning his or
her work to any Person other than the Acquired Entities.
30
(k) Prior to December 14, 2000, neither the Company, nor any officer
or director of the Company, had actual notice of any alleged infringement of US
Patent No. 554,336.
(l) The Sinterstation equipment does not expose the build material in
first and second patterns of exposure that at least partially overlap and does
not twice expose the same layer of build material with a repeated pattern of
exposure.
5.16 Inventory.
The Acquired Entities' inventory whether reflected on the Financial
Statements or not, consists of raw materials and supplies, manufactured and
processed parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and, except as has been written down on the Year 2000 Financial Statement, none
of which is slow-moving, obsolete, damaged, or defective. There has been no
change in inventory valuation standards or methods with respect to the inventory
in the prior three years. The quantities of any kind of inventory are
reasonable in the current (and the currently foreseeable) circumstances of the
Acquired Entities. No Acquired Entity holds any items of inventory on
consignment from other Persons and no other Person holds any items of inventory
on consignment from any Acquired Entity.
5.17 Material Contracts; Defaults.
(a) Section 5.17 of the Company Disclosure Letter lists all Contracts
------------
that provide for an aggregate payment from an Acquired Entity in excess of
$150,000 in any Contract year other than (i) Contracts that can or in reasonable
probability will be completed within 90 days of the Closing Date or can be
terminated within such 90 day period without payment of a penalty, (ii)
Contracts for goods and services purchased in the Ordinary Course of Business of
the Company, and (iii) Contracts reflected on the Financial Statements included
as part of the Company Reports or disclosed in the Company Reports.
(b) The Company is not in Breach of any Contract except for such
Breaches that would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. None of the Contracts of the Company contain any
provisions that upon a change in control of the Company would have a Material
Adverse Effect on the Company.
5.18 Receivables.
All of the Receivables are Enforceable, represent bona fide
transactions, and arose in the Ordinary Course of Business of the Acquired
Entities, and are reflected properly in their books and records. All of the
Receivables are good and collectible receivables, are current, and will be
collected in accordance with past practice and the terms of such receivables
(and in any event within six months following the Closing Date), without set off
or counterclaims, subject only to the reserve for bad debts set forth on the
face of the Year 2000 Financial Statement (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
Ordinary Course of Business of the Acquired Entities, consistent with GAAP.
31
5.19 Insurance.
The Company has provided a list, which is attached to Section 5.19 of
------------
the Company Disclosure Letter of the insurance policies, binders, or bonds
maintained by any Acquired Entity or on which any Acquired Entity is named as a
beneficiary or loss payable ("Insurance Policies"). All the Insurance Policies
are in full force and effect; no Acquired Entity is in material default
thereunder; and all claims thereunder have been filed in due and timely fashion.
The Company has never made any material claim on or in respect of an insurance
policy or bond insurer or insurers.
5.20 Litigation.
No Acquired Entity (a) is subject to any outstanding Order or (b) is a
party or is Threatened to be made a party to any Action. No Action required to
be set forth in Section 5.20 of the Company Disclosure Letter questions the
------------
Enforceability of this Agreement or the Transactions, or would result in any
Material Adverse Change with respect to any Acquired Entity, and the Company
does not have any Basis to believe that any such Action may be brought against
any Acquired Entity.
5.21 Product Warranty.
Each product manufactured, sold, leased, or delivered by the Acquired
Entities has been in material conformity with all applicable Law, Contracts, and
all express and implied warranties, and no Acquired Entity has any material
Liability (and there is no Basis for any present or future Action against any of
them giving rise to any Liability) for replacement or repair thereof or other
Damages in connection therewith, subject only to the reserve for product
warranty claims set forth in the Year 2000 Financial Statement as adjusted for
the passage of time through the Closing Date in accordance with the Acquired
Entities' Ordinary Course of Business. No product designed, manufactured, sold,
leased, or delivered by any Acquired Entity is subject to any guaranty,
warranty, or other indemnity or similar Liability beyond the applicable standard
terms and conditions of sale or lease. Section 5.21 of the Company Disclosure
------------
Letter includes copies of the standard terms and conditions of sale or lease for
each Acquired Entity (containing applicable guaranty, warranty, and similar
Liability indemnity provisions).
5.22 Product Liability.
No Acquired Entity has any Liability (and there is no Basis for any
present or future Action against any of them giving rise to any Liability)
arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product designed, manufactured, sold,
leased, or delivered by any Acquired Entity.
5.23 Labor; Employees.
To the Company's Knowledge, no executive, key employee, or group of
employees has any current plans to terminate employment with any Acquired
Entity. No Acquired Entity is a party to or bound by any collective bargaining
Contract, nor have any of them experienced any strikes, grievances, claims of
unfair labor practices, or other collective
32
bargaining disputes. No Acquired Entity has committed any unfair labor practice.
The Company does not have any Knowledge of any organizational effort currently
being made or Threatened by or on behalf of any labor union with respect to
employees of any Acquired Entity.
5.24 Employee Benefits.
(a) Section 5.24(a) of the Company Disclosure Letter lists each
---------------
Employee Benefit Plan under which any ERISA Affiliate has or in the future could
have directly, or indirectly, any Liability with respect to any Acquired
Entity's or ERISA Affiliate's current or former employees.
(b) Each such Employee Benefit Plan (and each related trust, insurance
Contract, or fund) complies in form and in operation in all respects with the
applicable requirements of ERISA, the Code, and other Laws.
(c) All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports, and Summary Plan Descriptions) have been filed
or distributed appropriately with respect to each such Employee Benefit Plan.
The requirements of Part 6 of Title I of ERISA and of Code Section 4980B have
been met with respect to each such Employee Benefit Plan which is an Employee
Welfare Benefit Plan that provides group health benefits.
(d) All contributions and premiums required of any Acquired Entity by
any legal requirement or by the terms of any of its Employee Benefit Plans or
any Contract relating thereto have been timely made (without regard to any
waivers granted with respect thereto) or accrued. All obligations of the
Acquired Entities with respect to each of their Employee Benefit Plans have been
paid or performed. All such amounts properly accrued through the Closing with
respect to the current plan year thereof will be paid by the Company or another
Acquired Affiliate at or prior to Closing, or will be properly recorded on the
Company Statements.
(e) Each such Employee Benefit Plan that is an Employee Pension
Benefit Plan meets the requirements to be a "qualified plan" under Code Section
401(a) and has a current favorable determination letter (or similar ruling) from
the Internal Revenue Service.
(f) The market value of assets under each such Employee Benefit Plan
that is an Employee Pension Benefit Plan that is subject to Title IV of
ERISA(other than any Multiemployer Plan) equals or exceeds the present value of
all vested and nonvested Liabilities thereunder determined in accordance with
PBGC methods, factors, and assumptions applicable to an Employee Pension Benefit
Plan terminating on the date for determination.
(g) The Company has delivered to Parent correct and complete copies of
the plan Contracts and summary plan descriptions, the most recent determination
letter or similar ruling received from the Internal Revenue Service, the Form
5500 Annual Report (if applicable) for the three (3) most recent years
available, and all related trust, insurance, and other funding Contracts which
implement each such Employee Benefit Plan.
(h) With respect to each Employee Benefit Plan that each Acquired
Entity, and the ERISA Affiliates which includes the Acquired Entities, maintains
or ever has maintained or to which any of them contributes, ever has
contributed, or ever has been required to contribute:
33
(i) no such Employee Benefit Plan is an Employee Pension
Benefit Plan that is subject to the provisions of Title IV of ERISA.
(ii) there have been no Prohibited Transactions with respect to
any such Employee Benefit Plan;
(iii) no Fiduciary has any Liability for Breach of fiduciary duty
or any other failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan; and
(iv) no Action with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits or related to qualified domestic relations Orders (within
the meaning of Code Section 414(p)) is pending or Threatened (and there is no
Basis therefor), and no Acquired Entity has incurred, and no Acquired Entity has
any reason to expect that each Acquired Entity will incur, any Liability to the
PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to any such
Employee Benefit Plan that is an Employee Pension Benefit Plan.
(i) No Acquired Entity, and the other members of the ERISA Affiliates
that includes the Acquired Entities, contributes to, ever has contributed to, or
ever has been required to contribute to any Multiemployer Plan or has any
Liability (including withdrawal Liability) under any Multiemployer Plan.
(j) No Acquired Entity maintains or ever has maintained or
contributes, ever has contributed, or ever has been required to contribute, to
any Employee Welfare Benefit Plan providing post-employment medical, health, or
life insurance or other welfare-type benefits for current or future retired or
terminated employees, their spouses, or their dependents (other than in
accordance with Code Section 4980B and Part 6 of Title I of ERISA) or applicable
state law or pursuant to employment of severance agreements.
Notwithstanding anything in this Section 5.24 to the contrary, Breaches of this
------------
Section 5.24 shall only be taken into account to the extent that they,
------------
individually or in the aggregate, would have a Material Adverse Effect on the
Company.
5.25 Environmental, Health, and Safety Matters.
(a) Each Acquired Entity and its respective predecessors and
Affiliates are in compliance with all Environmental, Health, and Safety
Requirements.
(b) Without limiting Section 5.25 of the Company Disclosure Letter,
------------
each Acquired Entity and its respective Affiliates has obtained and is in
compliance with all Permits that are required pursuant to Environmental, Health,
and Safety Requirements for the occupation of its facilities and the operation
of its business. A list of all such Permits is set forth in Section 5.25(b) of
---------------
the Company Disclosure Letter. Such Permits are in full force and effect, free
from Breach, and will not be adversely affected by the Transactions.
34
(c) No Acquired Entity nor any of its respective predecessors or
Affiliates has received any written or oral notice, report or other information
regarding any actual or alleged violation of Environmental, Health, and Safety
Requirements or any Liabilities, including any investigatory, remedial or
corrective Liabilities, relating to any of them or its facilities arising under
Environmental, Health, and Safety Requirements.
(d) None of the following exists at any property or facility owned or
operated by the Acquired Entities: (i) under or above-ground storage tanks, (ii)
asbestos containing material in any form or condition, (iii) materials or
equipment containing polychlorinated biphenyls, or (iv) landfills, surface
impoundments, or disposal areas.
(e) No Acquired Entity nor any of its respective predecessors or
Affiliates has treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled, or Released any substance, including any
hazardous substance, or owned or operated any property or facility (and no such
property or facility is contaminated by any such substance) in a manner that has
given or would give rise to any Damages, including any Damages for response
costs, corrective action costs, personal injury, property damage or natural
resources damages, pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Solid Waste Disposal
Act, as amended, or any other Environmental, Health, and Safety Requirements.
(f) The Transactions will not result in any Liabilities for site
investigation or cleanup, or require the Consent of any Person, pursuant to any
of the so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
(g) No Acquired Entity nor any of their predecessors or Affiliates
has, either expressly or by operation of Law, assumed or undertaken any
Liability, including any obligation for corrective or remedial action, of any
other Person relating to Environmental, Health, and Safety Requirements which
would have a Material Adverse Effect on the Company. No facts, events or
conditions relating to the past or present facilities, properties or operations
of the Acquired Entities, nor any of their respective predecessors or
Affiliates, will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any Damages
pursuant to Environmental, Health, and Safety Requirements, or give rise to any
other Liabilities pursuant to Environmental, Health, and Safety Requirements.
Notwithstanding anything in this Section 5.25 to the contrary, Breaches of this
-------------
Section 5.25 shall only be taken into account to the extent that they,
-------------
individually or in the aggregate, would have a Material Adverse Effect on the
Company.
5.26 Statements True and Correct.
None of the information (including this Agreement) supplied or to be
supplied by any Acquired Entity to any Governmental Entity in connection with
the transactions contemplated hereby will, at the respective time such
documents are supplied, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
35
misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication to any Governmental Entity.
5.27 Regulatory Approvals.
No Acquired Entity has taken any action or has any Knowledge of any
fact or circumstance that is reasonably likely to materially impede or delay
receipt of any consents of a Governmental Entity necessary in connection with
the consummation of the Offer and the Merger, which if not obtained,
individually or in the aggregate, would be reasonably expected to have a
Material Adverse Effect on the Company or materially alter or delay the
Transactions.
5.28 Vote Required.
The affirmative vote of the holders of a majority of the outstanding
Shares is the only vote of the holders of any class or series of the Company's
capital stock necessary to approve and adopt the Merger.
5.29 Opinion of Financial Advisor.
The Company has received the written opinion of the Financial Advisor,
dated as of the date of this Agreement, to the effect that the Per Share Amount
to be received in the Offer and the Merger by the holders of the shares of
Common Stock is fair to such holders from a financial point of view.
5.30 Takeover Statutes.
TBCA Article 13. Assuming the accuracy of Parent's representation
---------------
contained in Section 4.6, the Board of Directors of the Company has approved the
transactions to be effected in accordance with this Agreement pursuant to
Article 13.03A(1) of the TBCA, and determined that such approval satisfies the
requirements of Article 13.03A(1) of the TBCA and, as a result, renders the
other provisions of Article 13.03 of the TBCA inapplicable to the Offer, the
Merger and this Agreement.
5.31 Representations Complete.
None of the representations or warranties made by the Company in this
Agreement, in the Company Disclosure Letter or any statement made in any
Schedule or certificate furnished by the Company pursuant to this Agreement
contains or will contain at the Effective Time, any untrue statement of a
material fact, or omits or will omit at the Effective Time to state any material
fact necessary in Order to make the statements contained herein or therein, in
the light of the circumstances under which made, not misleading.
ARTICLE 6.
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the earlier of the Closing and the Termination
Date:
36
6.1 Notices and Consents.
Each of the Company, Parent and Buyer, will give any notices to third
parties, and will use its best efforts to obtain any third party Consents listed
in Sections 4.3 and 5.3 of the Company Disclosure Letter and the Parent
---------------------
Disclosure Letter, respectively. Each Party will give any notices to, make any
filings with, and use its reasonable best efforts to obtain any Consents of
Governmental Authorities, if any, required or reasonably deemed advisable
pursuant to any applicable Law in connection with the Transactions including in
connection with the matters referred to in Sections 4.3 and 5.3, respectively,
--------------------
and to use such Party's reasonable best efforts to agree jointly on a method to
overcome any objections by any Governmental Entity to the Transactions. Nothing
in this Section 6.1 will require that Parent or its Affiliates divest, sell, or
-----------
hold separately any of its assets or properties, nor will this Section 6.1
-----------
require that Parent, its Affiliates, or the Acquired Entities take any actions
that could affect the normal and regular operations of Parent, its Affiliates,
or the Acquired Entities after the Closing.
6.2 Operation of Business.
Except as set forth in Section 6.2 of the Company Disclosure Letter or
------------
otherwise expressly contemplated by this Agreement during the period from the
date hereof to the Effective Time, the Company will and will cause each of the
Acquired Subsidiaries to (i) conduct its operations in the Ordinary Course of
Business and, to the extent consistent therewith, with no less diligence and
effort than would be applied in the absence of this Agreement, (ii) use its best
efforts to preserve intact its current business organizations, keep available
the service of its current officers and employees and preserve its relationships
with customers, suppliers, distributors, lessors, creditors, employees,
contractors and others having business dealings with it with the intention that
its goodwill and ongoing businesses shall be unimpaired at the Effective Time,
and (iii) continue to take all reasonable action that may be necessary or
advisable to protect and preserve its Intellectual Property. Without limiting
the generality of the foregoing, except as otherwise expressly provided in this
Agreement, prior to the Effective Time, neither the Company nor any of the
Acquired Subsidiaries will, without the prior written consent of Parent:
(a) amend its Organizational Documents;
(b) authorize for issuance, issue, sell, deliver or agree to commit to
issue, sell or deliver (whether through the issuance or granting of Equity
Commitments or otherwise) any stock of any class or any other debt or equity
securities or equity equivalents (including any stock options or stock
appreciation rights), except for the issuance and sale of Shares pursuant to the
exercise of Options granted prior to the date hereof;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
make any other actual, constructive or deemed distribution in respect of its
capital stock or otherwise make any payments to stockholders in their capacity
as such, or redeem or otherwise acquire any of its securities or any securities
of any of the Acquired Subsidiaries;
37
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of any Acquired Entity (other than the Merger);
(e) alter through merger, liquidation, reorganization, restructuring
or any other fashion the corporate structure of any Acquired Subsidiary;
(f) (i) incur or assume any long-term or short-term debt or issue any
debt securities in each case, except for borrowings under existing lines of
credit in the Company's Ordinary Course of Business, or modify or agree to any
amendment of the terms of any of the foregoing; (ii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person except for obligations of an
Acquired Subsidiary incurred in the Company's Ordinary Course of Business; (iii)
make any loans, advances or capital contributions to or investments in any other
Person (other than to an Acquired Subsidiary) or customary loans or advances to
employees in each case in the Ordinary Course of Business ; (iv) pledge or
otherwise create or suffer to exist any Encumbrance with respect to shares of
capital stock of the Company or an Acquired Subsidiary (other than pursuant to
Security Interests pursuant to certain existing lines of credit under the Loan
and Security Agreement(s) dated June 8, 2000 between the Company and Silicon
Valley Bank, as amended (the "Credit Facility")), or (v) mortgage or pledge any
of its assets, tangible or intangible, or create or suffer to exist any other
Encumbrance thereupon other than pursuant to Security Interests under the Credit
Facility;
(g) except for (i) increases in salary, wages and benefits of
employees of the Company or its Subsidiaries (other than officers and directors
of the Company) in accordance with past practices and (ii) increases in salary,
wages and benefits granted to employees of the Company or its Subsidiaries
(other than officers and directors of the Company) in conjunction with
promotions or other changes in job status consistent with past practice or
required under existing agreements, except as may be required by applicable Law,
enter into, adopt or amend or terminate any bonus, special remuneration,
compensation, severance, stock option, stock purchase agreement, retirement,
health, life, or disability insurance, severance or other employee benefit plan
agreement, trust, fund or other arrangement for the benefit or welfare of any
director, officer, employee or consultant in any manner or increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including the granting of stock appreciation rights or
performance units);
(h) grant any severance or termination pay to any director, officer,
employee or consultant, except payments made pursuant to written agreements
outstanding on the date hereof, the terms of which are completely and correctly
disclosed in the Company Disclosure Letter and copies of which have been
provided to Parent, or as required by applicable federal, state or local law or
regulations;
(i) exercise its discretion or otherwise voluntarily accelerate the
vesting of any Option as a result of the Merger, or otherwise;
38
(j) (i) acquire, sell, lease, license, transfer or otherwise dispose
of any material assets in any single transaction or series of related
transactions (including in any transaction or series of related transactions
having a fair market value in excess of Twenty-Five Thousand Dollars ($25,000)
in the aggregate), other than sales of its products in the Ordinary Course of
Business, (ii) enter into any exclusive license, distribution, marketing, sales
or other agreement, or (iii) sell, transfer (other than non-exclusive licenses
entered into in the Ordinary Course of Business of the applicable Acquired
Entity) or otherwise dispose of any Intellectual Property;
(k) except as may be required as a result of a change in applicable
Law or in GAAP, change any of the accounting principles, practices or methods
used by it;
(l) revalue in any material respect any of its assets, including
writing down the value of inventory or writing-off notes or accounts receivable;
(m) (i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other entity or division thereof or any
equity interest therein; (ii) enter into any Contract having a term in excess of
six (6) months, or any other material Contract; (iii) amend, modify or waive any
material right under any material Contract of the Company or any of the Acquired
Subsidiaries; (iv) modify, in any material respect, its standard warranty terms
for its products or amend or modify any product warranties in effect as of the
date hereof in any manner that is adverse to the Company or any of the Acquired
Subsidiaries; (v) authorize any new capital expenditure or expenditures in
excess of Twenty-Five Thousand Dollars ($25,000) in the aggregate in any
calendar quarter; or (vi) authorize any new or additional manufacturing capacity
expenditure or new expenditures for any manufacturing capacity Contracts or
arrangements;
(n) make or revoke any material tax election or settle or compromise
any income tax liability in excess of Twenty-Five Thousand Dollars ($25,000) or
permit any Insurance Policy to expire, or to be canceled or terminated, unless a
comparable insurance policy reasonably acceptable to Parent is obtained and in
effect;
(o) fail to file any Tax Returns when due (or, alternatively, fail to
file for available extensions) or fail to cause such Tax Returns when filed to
be complete and accurate in all material respects;
(p) fail to pay any Taxes or other material debts when due unless
being contested in good faith and promptly disclosed to Parent;
(q) settle or compromise any pending or Threatened suit, action or
claim that (i) relates to the Transactions contemplated hereby or (ii) the
settlement or compromise of which would involve more than Fifteen Thousand
Dollars ($15,000) or (iii) that (A) would otherwise be material to the Company
and the Acquired Subsidiaries or (B) relates to any Intellectual Property
matters;
(r) except for this Agreement and the transactions expressly
contemplated hereby, take any action or fail to take any action that could (i)
limit the utilization of any of the net operating losses, built-in losses, tax
credits or other similar items of the Acquired Entities under Section 382, 383,
384 or 1502 of the Code and the Treasury Regulations thereunder, or (ii) cause
39
any transaction in which any Acquired Entity was a party that was intended to be
treated as a reorganization under Section 368(a) of the Code to fail to qualify
as a reorganization under Section 368(a) of the Code;
(s) accelerate the collection of receivables or defer the payment of
payables, or modify the payment terms of any receivables or payables, other than
immaterial changes in a manner consistent with prudent business practice and
after prior consultation with Parent;
(t) sell, securitize, factor or otherwise transfer any accounts
receivable; or
(u) take or agree in writing or otherwise to take any of the actions
described in Sections 6.2(a) through 6.2(t) (and it shall not take any action
------------------------------
that would make any of the representations or warranties of the Company
contained in this Agreement (including the exhibits hereto) untrue or
incorrect).
6.3 Access to Information.
(a) Upon reasonable prior notice, the Company shall afford reasonable
access to the officers, employees, accountants, counsel and other
representatives of Parent and Buyer (including financing sources and their
employees, accountants, counsel and other representatives), during normal
business hours during the period prior to the Effective Time, to all its
properties, books, Contracts, and records; provided that the Company will not be
required to provide such information to the extent that, in the opinion of the
Company's legal counsel, such disclosure would constitute a waiver of the
attorney-client privilege with respect to the subject matter of underlying the
information sought to be disclosed or materially and adversely prejudice the
Company in any material Action.
(b) During the period prior to the Effective Time, the Company shall
promptly furnish to Parent and Buyer (i) a copy of each report, schedule,
registration statement and other document in advance of filing it with the SEC,
and shall provide Parent and Buyer a reasonable opportunity to review and
comment upon such document, during such period, (ii) a copy of each document
received by it from the SEC, during such period, and (iii) all other information
concerning its business, properties and personnel as Parent and Buyer may
reasonably request.
(c) That certain Confidentiality Agreement dated March 17, 2001, by
and between the Company and Parent (the "Confidentiality Agreement") shall apply
with respect to the information furnished pursuant to this Section 6.3 and
------------
otherwise pursuant to this Agreement.
-
6.4 Acquisition Proposal.
(a) The Company shall not, nor shall it authorize or permit any Company
Subsidiary to, nor shall it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor, agent or
representative (collectively, "Representatives") of, the Company or any Company
Subsidiary to, (i) directly or indirectly solicit, initiate or encourage the
submission of, any Acquisition Proposal (as defined below), (ii) enter into any
agreement with respect to any Acquisition Proposal or (iii) directly or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes,
40
or may reasonably be expected to lead to, any Acquisition Proposal; provided,
however, that nothing in this Section 6.4 or elsewhere in this Agreement shall
-----------
prohibit the Company Board from complying with Rules 14d-9 and 14e-2 under the
Exchange Act with regard to a tender or exchange offer not made in violation of
this Section 6.4; and provided, further, that nothing in this Section 6.4 or
----------- -----------
elsewhere in this Agreement shall prohibit the Company, before the expiration of
the Offer or adoption of this Agreement by the Company Shareholders, if
applicable, from furnishing information regarding the Company or entering into
negotiations or discussions with, any person in response to an Acquisition
Proposal made, submitted, or announced by such person (and not withdrawn) or
endorsing and/or recommending, or simultaneously with a termination of this
Agreement pursuant to Section 9.1(c), entering into an agreement accepting or
--------------
providing for, a Superior Proposal, and any such actions enumerated in this
provision shall not be considered a Breach of this Agreement if and to the
extent that each of the following conditions is satisfied: (1) such Acquisition
Proposal is not attributable to a Breach by the Company of this Section 6.4(a)
--------------
or Section 6.4(b); (2) the Board of Directors of the Company concludes in good
--------------
faith, after consultation with its outside legal counsel, that it is reasonably
likely that the failure to take such action would constitute a Breach of its
fiduciary duties to the Company Shareholders under applicable Law; (3) prior to
furnishing any such information to, or entering into discussions or negotiations
with, such person, the Company gives Parent written notice of the identity of
such person, the terms and conditions of such Acquisition Proposal and the
Company's intention to furnish information to, or enter into discussions or
negotiations with, such Person; (4) the Company receives from such Person an
executed confidentiality agreement which shall not in any way restrict the
Company from complying with its disclosure obligations under this Agreement and
which shall contain customary limitations on the use and disclosure of all
nonpublic written and oral information furnished to such Person by or on behalf
of the Company, restrictions on trading and hostile take-over activities and
other terms no less favorable to the Company than those set forth in the
Confidentiality Agreement; and (5) contemporaneously with furnishing any such
information to such Person, the Company furnishes such information to Parent (to
the extent that such information has not been previously furnished by the
Company to Parent). Subject to the foregoing provisions of this Section 6.4(a),
--------------
the Company shall, and shall cause its Representatives to, cease immediately all
existing activities, discussions and negotiations with Persons other than Parent
and Buyer regarding any proposal that constitutes, or may reasonably be expected
to lead to, a Acquisition Proposal, and will take the necessary steps to inform
the Persons referred to above of the obligations undertaken in this Section 6.4.
-----------
(b) Neither the Company Board nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Buyer, the approval or recommendation by the Company Board or any such
committee of this Agreement, the Offer or the Merger, (ii) approve any letter of
intent, agreement in principle, acquisition agreement or similar agreement
relating to any Acquisition Proposal, or (iii) approve or recommend, or propose
to approve or recommend, any Acquisition Proposal. Notwithstanding the
foregoing, if, prior to the acceptance for payment of Shares pursuant to the
Offer, the Company receives a Superior Proposal and a majority of the directors
of the Company determine in good faith, after consultation with outside legal
counsel, that it is reasonably likely that the failure to do so would constitute
a Breach of their fiduciary duties to Company Shareholders imposed by applicable
Law, the Company Board may withdraw its approval or recommendation of the Offer,
the Merger and this Agreement and, in connection therewith, approve or recommend
such Superior
41
Proposal, provided, that the Company Board shall give Parent two Business Days
notice prior to withdrawing its recommendation or entering into an agreement
with respect to or recommending a Superior Proposal; and pay to Parent the
Termination Fee Provided for in Section 9.3(a) pursuant to Section 9.3(d).
--------------- ---------------
(c) The Company promptly shall advise Parent of any Acquisition Proposal
or any inquiry with respect to or that could lead to any Acquisition Proposal,
the identity of the person or group making any such Acquisition Proposal or
inquiry and the material terms of any such Acquisition Proposal or inquiry. The
Company shall (i) keep Parent fully informed of the status, including any change
to the details, of any such Acquisition Proposal or inquiry and (ii) provide to
Parent as soon as practicable after receipt or delivery thereof with copies of
all correspondence with other written material sent or provided (unless
previously provided) to the Company from any third party in connection with any
Acquisition Proposal or sent or provided by the Company to any third party in
connection with any Acquisition Proposal.
(d) Nothing contained in this Section 6.4 shall prohibit the Company from
-----------
taking and disclosing to its Shareholders a position contemplated by Rule 14e-
2(a) promulgated under the Exchange Act or from making any required disclosure
to the Company's Shareholders if, in the good faith judgment of the Company
Board, after receiving advice from outside legal counsel, the failure so to
disclose would constitute a Breach of its fiduciary duties under applicable law.
(e) For purposes of this Agreement:
"Acquisition Proposal" means any offer or proposal (other than an offer
or proposal by Parent or an Affiliate of Parent) for (i) a merger, acquisition
consolidation, or similar transaction involving any equity security of the
Company or (ii) the acquisition (other than an acquisition by Parent or an
Affiliate of Parent) of all or substantially all of the assets of the Company.
"Superior Proposal" means an unsolicited bona fide Acquisition Proposal
made by a third party that the Board of Directors of the Company determines in
good faith has the good faith intent to proceed with negotiations, and financial
and other capabilities to consummate such Acquisition Proposal, taking into
account, among other things, the legal, financial, regulatory and other aspects
of such Acquisition Proposal, (i) on terms that a majority of the directors of
the Company Board determines in its good faith judgment to represent superior
value for the holders of the Shares than the Transactions (based on the written
opinion, with only customary qualifications, of an independent financial advisor
as to such proposal's financial superiority), and (ii) that is reasonably
capable of being completed, taking into account all financial, regulatory, legal
and other aspects of such proposal.
6.5 Charges, Fees, and Prepayment Obligations.
The Company will, prior to the Closing, take such commercially
reasonable steps as are necessary to ensure that (i) no sums are owed or payable
by the Acquired Entities to any Person in the nature of a transfer charge or
processing fee with respect to any Contracts of the Acquired Entities, and (ii)
no sums are owed or payable as a prepayment penalty if Parent or the Acquired
Entities elect to prepay any Liability of the Acquired Entities that is
outstanding as of the Closing Date.
42
6.6 Financing.
Parent agrees to use its reasonable best efforts to obtain, as
promptly as practical, on terms reasonably satisfactory to Parent, the Financing
Commitments. Parent will consult with and provide periodic reports at
reasonable intervals to the Company regarding the status of such financing.
Such consultation and reports may be made orally, by email or other
communications at the convenience of the Parties.
6.7 Covenants to Satisfy Conditions.
Each of the Company and Parent will use reasonable best efforts to
ensure, and to cause their respective Affiliates to ensure, that the conditions
set forth in Annex A and ARTICLE 8 hereof are satisfied, insofar as such matters
are within the control of such party. Parent and the Company further covenant
and agree, with respect to any pending or Threatened Action, preliminary or
permanent injunction or other Order, that would adversely affect the ability of
the Parties to consummate the Transactions, to use reasonable best efforts to
prevent or lift the entry, enactment or promulgation thereof, as the case may
be.
6.8 Disclosure Prior to Closing.
In the event that, at any time prior to the Closing, the Company or
Parent becomes aware of any matter that, if existing or known as of the date of
this Agreement, would have been required to be set forth or described in the
Company Disclosure Letter or the Parent Disclosure Letter hereto or would
otherwise have rendered any representation or warranty false, or would
materially alter or delay the Transaction, such Party shall promptly provide
written notice of such matters to the other Party. However, no such notice
provided under this Section 6.8 shall be deemed to cure any Breach of any
-----------
representation or warranty made in this Agreement whether for purposes of
determining whether or not the conditions set forth in ARTICLE 8 hereof have
been satisfied or otherwise. In addition, the Company shall promptly provide
written notice of any events occurring after the date hereof and prior to the
Closing that individually or in the aggregate have had or are reasonably
expected to have a Material Adverse Effect on the Company.
6.9 Publicity.
The initial press release relating to this Agreement shall be a joint
press release in a form mutually agreeable to Parent and the Company and Parent
and the Company shall, subject to their respective legal obligations of public
companies, use reasonable efforts to agree upon the text of any other press
release before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any federal or state governmental or regulatory agency or with
any national securities exchange with respect thereto.
6.10 Preparation of the Company Proxy Statement; Company Shareholders
Meeting; Merger Without a Company Shareholders Meeting.
(a) If adoption of this Agreement is required by applicable Law, the
Company will, as soon as practicable following the acceptance for payment of and
payment for Shares by
43
Buyer in the Offer, duly call, give notice of, convene and hold a meeting of the
Company Shareholders for the purpose of adopting this Agreement or, in lieu of
such meeting, Parent and Buyer, as soon as practicable following the Funding
Date (as defined below), shall cause this Agreement to be adopted by written
consent of stockholders. At such stockholders meeting (or in connection with any
consent in lieu thereof), Parent shall cause all of the Shares then owned by
Parent or Buyer to be voted in favor, or consented to, the adoption of this
Agreement. In the event that adoption of this Agreement requires a meeting of
the Company Shareholders, then the Company and Parent will, as soon as
practicable following the acceptance for payment of and payment for the Shares
by Buyer in the Offer (the date on which such acceptance and payment shall occur
shall be referred to herein as the "Funding Date"), prepare and file a Proxy
Statement (the "Company Proxy Statement") in preliminary form with the SEC. The
Company agrees that Parent shall be given reasonable opportunity to review and
comment on the Company Proxy Statement and such other materials and to approve
the Company Proxy Statement and such other materials prior to their filing and
thereafter to participate in discussions concerning the comments of the SEC
staff and to approve all responses thereto. The Company will use all reasonable
efforts to respond to all SEC comments with respect to the Company Proxy
Statement and to cause the Company Proxy Statement to be mailed the Company
Shareholders at the earliest practicable date. Parent will provide the Company
with the information concerning Parent and Buyer required to be included in the
Company Proxy Statement.
(b) Notwithstanding the foregoing clause (a), in the event that Parent
and Buyer shall acquire in the aggregate at least 90% of the Shares in the
Offer, the Parties agree to take all necessary and appropriate action to cause
the Merger to become effective, as soon as practicable after the expiration of
the Offer, without a meeting of the Company Shareholders, in accordance with
Section 5.03.G.of the TCBA.
6.11 Indemnification and Directors' and Officer's Insurance.
(a) After the acceptance of Shares for payment in the Offer, the
Company shall indemnify and hold harmless (and shall also advance expenses as
incurred to the fullest extent permitted under applicable Law to), to the extent
not covered by insurance, each person who is now or has been prior to the date
hereof or who becomes prior to the Effective Time an officer or director of the
Company or any of the Acquired Subsidiaries (the "Indemnified Persons") against
(i) all losses, claims, damages, costs, expenses (including counsel fees and
expenses), settlement, payments or liabilities arising out of or in connection
with any claim, demand, action, suit, proceeding or investigation based in whole
or in part on or arising in whole or in part out of the fact that such person is
or was an officer or director of the Company or any of the Acquired
Subsidiaries, whether or not pertaining to any matter existing or occurring at
or prior to the Effective Time and whether or not asserted or claimed prior to
or at or after the Effective Time ("Indemnified Liabilities"); and (ii) all
Indemnified Liabilities based in whole or in part on or arising in whole or in
part out of or pertaining to this Agreement or the transactions contemplated
hereby, in each case to the fullest extent required or permitted under
applicable Law. Nothing contained herein shall make Parent, Buyer, the Company
or the Surviving Corporation, an insurer, a co-insurer or an excess insurer in
respect of any insurance policies which may provide coverage for Indemnified
Liabilities, nor shall this Section 6.11 relieve the obligations of any insurer
------------
in respect thereto. The parties hereto intend, to the extent not prohibited by
applicable
44
Law, that the indemnification provided for in this Section 6.11 shall
------------
apply without limitation to negligent acts or omissions by an Indemnified
Person. Each Indemnified Person is intended to be a third party beneficiary of
this Section 6.11 and may specifically enforce its terms. This Section 6.11
------------ ------------
shall not limit or otherwise adversely affect any rights any Indemnified Person
may have under any agreement with the Company or under the Company's
Organizational Documents as presently in effect.
(b) From and after the Effective Time, Parent shall cause the
Surviving Corporation to fulfill and honor in all respects the obligations of
the Company pursuant to any indemnification agreements between the Company and
its directors and officers as of or prior to the date hereof (or indemnification
agreements in the Company's customary form for directors joining the Company
Board prior to the Effective Time) and any indemnification provisions under the
Company's Organizational Documents as in effect immediately prior to the
Effective Time. The Surviving Corporation's aggregate obligation to indemnify
and hold harmless all Indemnified Persons for all matters to which such
Indemnified Persons may be entitled to be indemnified or held harmless under
subsections (a) and (b) of this Section 6.11 shall in no event exceed the net
------------
worth of the Company at the Effective Time.
(c) For a period of six (6) years after the Effective Time, Parent
will maintain or cause the Surviving Corporation to maintain in effect, if
available, directors' and officers' liability insurance covering those persons
who, as of immediately prior to the Effective Time, are covered by the Company's
directors' and officers' liability insurance policy (the "Insured Parties") on
terms no less favorable to the Insured Parties than those of the Company's
present directors' and officers' liability insurance policy; provided however,
that in no event will Parent or the Company be required to expend in excess of
two hundred percent (200%) of the annual premium currently paid by the Company
for such coverage (or such coverage as is available for two hundred percent
(200%) of such annual premium); provided further, that, in lieu of maintaining
such existing insurance as provided above, Parent, at its election, may cause
coverage to be provided under any policy maintained for the benefit of Parent or
any of its subsidiaries, so long as the terms are not materially less
advantageous to the intended beneficiaries thereof than such existing insurance.
(d) Neither Parent nor any of its affiliates shall be obligated to
guarantee the payment or performance of the Company's obligations under clauses
(a) or (b) of this Section 6.11 so long as the Company honors such obligations
------------
to the extent of its shareholders' equity at the Effective Time, and neither
Parent nor any such affiliate shall have any liability or obligation to any
Indemnified Person arising from the Company's Breach of, or inability to perform
its obligations under, such clauses in excess of the difference between the
shareholders' equity of the Company at the Effective Time and the aggregate of
all amounts paid by the Company in satisfaction of such obligations. The
provisions of this Section 6.11 are intended to be for the benefit of, and will
-------------
be Enforceable by, each Indemnified Person and the heirs and representatives of
such Indemnified Person. Parent will not permit the Company to merge or
consolidate with any other Person unless the Company will ensure that the
surviving or resulting entity assumes the obligations imposed by this Section
-------
6.11.
----
(e) If any Action is brought for the enforcement of the provisions of
this Section 6.11 by any Indemnified Party, as a condition to bringing such
Action, such Indemnified Party
45
shall agree that the successful or prevailing party in any such Action shall be
entitled to recover, in addition to any other relief to which he or it may be
entitled, all of his or its actual out of pocket costs and expenses (including
attorneys fees) incurred in connection with such Action.
6.12 Employee Benefits.
(a) Parent and Buyer agree that, effective as of the Effective Time,
all Retained Employees shall become eligible employees and entitled to all
benefits under Employee Benefit Plans of Parent generally available to all
employees of Parent and its Subsidiaries
(b) Prior to the Effective Time, the Company shall adopt severance
plans and/or enter into Severance Agreements substantially as provided in
Section 6.12(b) of the Company Disclosure Letter (collectively referred to as
----------------
the "Severance Arrangements"). Parent and Buyer agree to honor, and cause the
Surviving Corporation to honor, without modification, all Severance
Arrangements. Parent and Buyer acknowledge that the consummation of the Offer
shall constitute a "Change in Control") for purpose of the Severance
Arrangements.
(c) Subject to the terms of any Employee Benefit Plan and ERISA, if
any employee of the Company, or any of its Subsidiaries becomes a participant in
any Employee Benefit Plan, of Parent or the Surviving Corporation, such employee
shall be given credit under such plan for all service prior to the Effective
Time with the Company and its Subsidiaries, or any predecessor employer (to the
extent such credit was given by the Company), for purposes of eligibility and
vesting (but not for benefit accrual purposes) for which such service is either
taken into account or recognized.
(d) To the extent practicable, Parent and the Surviving Corporation
shall administer their medical plans ("Buyer Medical Plans") so as to coordinate
deductibles, out-of-pocket maximums, and maximum benefit restrictions so that:
(i) Retained Employees receive credit under the Buyer Medical Plans toward any
deductibles under the Buyer Medical Plans for deductibles paid under any of the
medical, dental and prescription drug plans maintained by the Company or any
Acquired Entities ("Company Medical Plans") on or prior to the Closing which,
had the Retained Employees been covered by the Buyer Medical Plans at that time,
would have been taken into account by the Buyer Medical Plans, (ii) Retained
Employees receive credit for their eligible out-of-pocket costs with respect to
eligible claims incurred under the Company Medical Plans on or prior to the
Closing which, had the Retained Employee been covered by the Buyer Medical Plans
at that time would have been. taken into account by the Buyer Medical Plans
toward any out-of-pocket maximums under the Buyer Medical Plans, and (iii)
Retained Employees are credited with benefits received under the Company Medical
Plans on or prior to the Closing which, had the Retained Employee been covered
by the Buyer Medical Plans at that time, would have been taken into account by
the Buyer Medical Plans for purposes of applying the maximum benefit
restrictions under the Buyer Medical Plans.
6.13 Works in Progress/Finished Goods.
46
The Company shall take all commercially reasonable actions agreed to
in consultation with Parent in order to minimize the amount of work in process
and inventory that any Acquired Entity shall have in its possession or control
(whether in inventory or otherwise) as of the Effective Time.
ARTICLE 7.
INTENTIONALLY DELETED
ARTICLE 8.
CLOSING CONDITIONS
8.1 General Conditions.
The obligations of the parties to effect the Closing shall be subject
to the satisfaction or waiver, in whole or in part, at or prior to the closing,
of each of the following conditions unless waived in writing by Parent and the
Company:
(a) No Law Or Orders. No Law or Order shall have been enacted,
----------------
entered, issued or promulgated by any Governmental Entity (and be in effect)
which declares this Agreement invalid or unenforceable in any material respect
or which prohibits consummation of the Merger or the Transactions, and all
governmental consents, Orders and approvals required for the consummation of the
Merger and the Transactions contemplated hereby shall have been obtained and
shall be in effect at the Effective Time.
(b) Purchase of Shares in Offer. Buyer shall have purchased all
---------------------------
Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however that neither Parent nor Buyer may invoke this condition if Buyer shall
have failed to purchase Shares so tendered and not withdrawn in violation of the
terms of this Agreement or the Offer.
(c) HSR. Any applicable waiting period under the HSR Act or other
---
applicable antitrust or similar Law shall have expired or have been terminated
with respect to the Transactions.
(d) Legal Proceedings. No Governmental Entity shall have initiated
-----------------
proceedings to restrain or prohibit the Merger or force rescission, unless such
Governmental Entity shall have withdrawn and abandoned any such proceedings
prior to the time which otherwise would have been the Closing Date and there
shall not have been any Law or Order which would require the divestiture by the
Acquired Entities of a material portion of their respective businesses, assets
or properties, taken as a whole, or impose any material limitation on the
ability of the Acquired Entities, taken as a whole, to conduct their respective
businesses and own their assets and properties, taken as a whole, following the
Closing.
(e) Shareholder Approval. The Merger shall have been approved by the
--------------------
requisite vote of the holders of the outstanding capital stock of the Company
entitled to vote thereon.
47
ARTICLE 9.
TERMINATION
9.1 Termination of Agreement.
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and the Transactions abandoned at any time prior to
the Effective Time, whether before or after stockholder or shareholder approval
of the Merger:
(a) Mutual Consent. By mutual written consent of the Parties;
--------------
(b) Either Party. By either of the Company or the Parent (in each
------------
case acting pursuant to a valid Board action):
(i) if (x) Parent shall not have received the Financing
Commitments on or prior to May 3, 2001, or (y) Buyer shall not have accepted for
payment the Shares tendered pursuant to the Offer on or prior that date that is
65 days following the commencement of the Offer; provided, however, that the
-------- -------
right toterminate this Agreement under this Section 9.1(b)(i) shall not be
-----------------
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of Buyer to obtain
the Financing Commitments or purchase or accept for payment Shares pursuant to
the Offer; or
(ii) if any Governmental Entity shall have issued an Order, or
taken any action which permanently restrains, enjoins or otherwise prohibits the
acceptance for payment of, or payment for, Shares pursuant to the Offer or the
Merger and such Order or Action shall have become final and non-appealable;
provided, however, the party seeking to terminate this Agreement shall have used
its reasonable best efforts to remove or lift such Order or Action.
(c) by Parent, if (i) the Company Board (A) withdraws, modifies or
changes (including by amendment of the Schedule 14D-9) its recommendation of the
Offer, this Agreement or the Merger in a manner adverse to Parent or shall have
resolved pursuant to valid Board action to do any of the foregoing, (B) shall
have recommended to the Company Shareholders any Acquisition Proposal or
resolved by valid Board action to do so or (C) shall have failed to reaffirm
publicly and unconditionally its recommendation to the Company Shareholders that
they tender their Shares in the Offer, which public reaffirmation must be made
within five days after Parent's reasonable written request to do so; or (ii) the
Minimum Condition (as defined in Annex A) shall not have been satisfied by the
Expiration Date and (A) a third party shall have made or caused to be made an
Acquisition Proposal or (B) any "group" (as defined in Section 13(d)(3) of the
Exchange Act) or Person (including the Company or any of its Affiliates), other
than Parent or any of its Affiliates, shall have become the beneficial owner of
more than 50% of the Common Shares; provided, however, the current ownership of
Shares by the Company Shareholders who are party to the Tender Agreement shall
not be deemed to trigger this clause (B);
(d) by the Company, if, prior to the acceptance of and payment for the
Shares pursuant to the Offer, (x) the Company shall have entered into an
agreement with respect to a Superior Proposal or the Company Board shall have
recommended to the Company Shareholders
48
any Superior Proposal or, in either case, resolved by valid Board action to do
so and (y) the Company first makes the payment of the Termination Fee as
required by Section 6.4(b); provided, however, the Company may not terminate
this Agreement pursuant to this Section 9.1(d) if the Company has Breached the
provisions of Section 6.4 hereof with respect to the Superior Proposal that is
the subject of the termination;
(e) by the Company if there has been a material Breach by Parent or
Buyer of any representation, warranty, covenant or agreements set forth in this
Agreement which Breach (if susceptible of cure) has not been cured in all
material respects within five Business Days following receipt of notice of such
Breach; and
(f) by Parent, if the Company shall have Breached any of its
representations and warranties, which Breach shall have given rise to the
failure of the condition set forth in clause (e) of Annex A hereto to be
satisfied or if, prior to the consummation of the Offer, the Company shall have
failed to perform its covenants of other agreements continued in this Agreement
which failure to perform would give rise to the failure of the condition set
forth in clause (f) to be satisfied, which breach or failure to perform is
incapable of being cured in all material respects within five Business Days
following receipt of notice of such Breach.
9.2 Manner and Effect of Termination.
(a) Termination shall be effected by the giving of written notice to
that effect by the party seeking termination. If this Agreement is validly
terminated and the transactions contemplated hereby are not consummated, this
Agreement shall become null and void and of no further force and effect and no
party shall be obligated to the others hereunder; provided, however, that
-----------------
termination shall not affect (i) the rights and remedies available to a party as
a result of the Breach by the other party or parties hereunder, (ii) the
provisions of Sections 10.2, 0, and 10.13 hereof, or (iii) the obligations of
---------------------------
the Parties pursuant to Section 9.3 below.
-----------
9.3 Certain Payments Upon Termination.
(a) In the event that: (A) the Company terminates this Agreement under
Section 9.1(d) or (B) Parent terminates this Agreement under Section 9.1(c)(i),
-------------- ------------------
the Company shall pay to Parent a termination fee equal to $1,025,000 plus all
actual out of pocket expenses (including, but not limited to, fees of legal
counsel, accountants and financial and other advisors) incurred by Parent and
any of its Affiliates in connection with the negotiation and execution of this
Agreement and the exhibits hereto and the planned consummation of the necessary
financing therefor and the Transactions ("Parent Expenses"), provided that such
fee shall not exceed Two Million and No/100 Dollars ($2,000,000) in the
aggregate (the "Termination Fee").
(b) In the event that (A) a Termination Fee is not otherwise payable
to Parent pursuant to Section 9.3(a) and (B) (i) Parent terminates this
--------------
Agreement under Section 9.1(f), or (ii) this Agreement is terminated due to a
--------------
failure of the condition set forth in Section 8.1(e), the Company shall pay to
--------------
Parent an amount equal to the Parent Expenses; provided, however, the amount
payable pursuant to this Section 9.3 (b) shall not exceed $500,000.
49
(c) In the event that the Company terminates this Agreement under
Section 9.1(e), Parent shall pay to Company all actual out of pocket expenses
--------------
(including, but not limited to, fees of legal counsel, accountants and financial
and other advisors) incurred by Company and any of its Affiliates in connection
with the negotiation and execution of this Agreement and the exhibits hereto and
the planned consummation of the Transactions ("Company Expenses"); provided,
however, the amount payable pursuant to this Section 9.3(c) shall not exceed
$500,000.
(d) All payments required to be made hereunder shall be made by wire
transfer of immediately available funds within five (5) Business Days of the
event giving rise to the payment of such Expenses. Each of Parent and the
Company acknowledges that the agreements contained in this Section 9.3 are an
-----------
integral part of the Transactions and that, without said agreements, neither
Parent nor the Company would have entered into this Agreement; accordingly, if
either Party fails promptly to pay the Termination Fee or Expenses due pursuant
to this Section 9.3, and, in order to obtain such payment, the other Party
-----------
commences an Action which results in a judgment against the Party who has failed
to make such payments, the non-prevailing Party will pay to the prevailing
Party, its reasonable expenses (including attorneys' fees and expenses) in
connection with such Action, together with interest on the amounts due hereunder
at the legal rate determined by the court rendering such judgment.
ARTICLE 10.
MISCELLANEOUS
10.1 Disclosure Letters.
(a) The disclosures in the Disclosure Letters, and those in any
supplement thereto, relate only to the representations and warranties in the
Section or paragraph of the Agreement to which they expressly relate and not to
any other representation or warranty in this Agreement.
(b) If there is any inconsistency between the statements in the body
of this Agreement and those in the Disclosure Letters (other than an exception
expressly set forth as in the Disclosure Letters with respect to a specifically
identified representation or warranty), the statements in the body of this
Agreement will control.
(c) Nothing in the Disclosure Letters will be deemed adequate to
disclose an exception to a representation or warranty made herein, unless the
Disclosure Letters identify the exception with reasonable particularity and
describes the relevant facts in reasonable detail.
(d) The mere listing (or inclusion of a copy) of a document or other
item in a Disclosure Letter will not be deemed adequate to disclose an exception
to a representation or warranty made in this Agreement (unless the
representation or warranty pertains to the existence of the document or other
item itself).
50
10.2 Entire Agreement.
This Agreement, together with the Exhibits, Annexes and Disclosure
Letters hereto and the certificates, documents, instruments and writings that
are delivered pursuant hereto, and the Confidentiality Agreement, constitutes
the entire agreement and understanding of the Parties in respect of its subject
matters and supersedes all prior understandings, agreements, or representations
by or among the Parties, written or oral, to the extent they relate in any way
to the subject matter hereof or the Transactions.
10.3 Successors.
All of the terms, agreements, covenants, representations, warranties,
and conditions of this Agreement are binding upon, and inure to the benefit of
and are Enforceable by, the Parties and their respective successors.
10.4 Assignments.
No Party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of Parent
and the Company; provided, however, that Parent may (a) assign any or all of its
rights and interests hereunder to one or more of its wholly owned direct or
indirect Subsidiaries and (b) designate one or more of its wholly owned direct
or indirect Subsidiaries to perform its obligations hereunder (in any or all of
which cases Parent nonetheless will remain responsible for the performance of
all of its obligations hereunder).
10.5 Notices.
All notices, requests, demands, claims and other communications
hereunder will be in writing. Any Party may send any notice, request, demand,
claim, or other communication hereunder to the intended recipient at the address
set forth below using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic mail),
but no such notice, request, demand, claim, or other communication will be
deemed to have been duly given unless and until it actually is received by the
intended recipient.
If to Parent and after Closing to the Acquired Entities:
3D Systems Corporation
00000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Service
Fax: (000) 000-0000
Copy to (which will not constitute notice):
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
51
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Company and before Closing to the Acquired Entities:
DTM Corporation
0000 Xxxxxxx Xxxxxx, Xxxx. 0
Xxxxxx, Xx 00000
Attn: Xxxx X. Xxxxxxxxx, III
Fax: (000) 000-0000
Copy to (which will not constitute notice):
Xxxxxxx, Phleger & Xxxxxxxx LLP
4801 Plaza on the Lake
Xxxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxx, P.C.
Fax: (000) 000-0000
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
10.6 Specific Performance.
Each Party acknowledges and agrees that the other Parties would be
damaged irreparably if any provision of this Agreement is not performed in
accordance with its specific terms or is otherwise Breached. Accordingly, each
Party agrees that the other Parties will be entitled to an injunction or
injunctions to prevent Breaches of the provisions of this Agreement and to
enforce specifically this Agreement and its terms and provisions in any Action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter, subject to Section 0, in addition
---------
to any other remedy to which they may be entitled, at Law or in equity.
10.7 Time.
Time is of the essence in the performance of this Agreement.
10.8 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original but all of which together will constitute one
and the same instrument.
10.9 Headings.
The article and section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
52
10.10 Governing Law.
This Agreement and the performance of the Transactions and
obligations of the Parties hereunder will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
choice of Law principles.
10.11 Amendments and Waivers.
No amendment, modification, replacement, termination or
cancellation of any provision of this Agreement will be valid, unless the same
will be in writing and signed by Parent and the Company. No waiver by any Party
of any default, misrepresentation, or Breach of warranty or covenant hereunder,
whether intentional or not, may be deemed to extend to any prior or subsequent
default, misrepresentation, or Breach of warranty or covenant hereunder or
affect in any way any rights arising because of any prior or subsequent such
occurrence.
10.12 Severability.
The provisions of this Agreement will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or
enforceability of the other provisions hereof; provided that if any provision of
this Agreement, as applied to any Party or to any circumstance, is adjudged by a
Governmental Entity, arbitrator, or mediator not to be Enforceable in accordance
with its terms, the Parties agree that the Governmental Entity, arbitrator, or
mediator making such determination will have the power to modify the provision
in a manner consistent with its objectives such that it is Enforceable, and/or
to delete specific words or phrases, and in its reduced form, such provision
will then be Enforceable and will be enforced.
10.13 Expenses.
Except as otherwise expressly provided in this Agreement, each
Party will bear its own costs and expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Transactions
including all fees and expenses of agents, representatives, financial advisors,
legal counsel and accountants.
10.14 Construction.
The Parties have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party because of the authorship of any provision of this
Agreement. The word "including" means "including without limitation." Pronouns
in masculine, feminine, and neuter genders will be construed to include any
other gender, and words in the singular form shall be construed to include the
plural and vice versa, unless the context otherwise requires. The words "this
Agreement," "herein," "hereof," "hereby," "hereunder," and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The Parties intend that each representation,
warranty, and covenant contained herein will have independent significance. If
any Party has Breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of the
relative levels of
53
specificity) which the Party has not Breached will not detract from or mitigate
the fact that the Party is in Breach of the first representation, warranty, or
covenant.
10.15 Non-Survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement will survive the Effective
Time.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
DTM Corporation, a Texas corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer and
President
3D Systems Corporation, a Delaware
corporation
By: /s/ Xxxxx X. Service
----------------------------
Name: Xxxxx X. Service
Title: Chief Executive Officer and
President
Tiger Deals, Inc., a Delaware
corporation
By: /s/ Xxxxx X. Service
----------------------------
Name: Xxxxx X. Service
Title: Chief Executive Officer and
President
54
ANNEX A
OFFER CONDITIONS
Capitalized terms used in this Annex A have the meanings set forth in the
attached Agreement, except that the term "Merger Agreement" shall be deemed to
refer to the attached Agreement.
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) Parent's rights to extend and amend the Offer at any time
in its sole discretion (subject to the provisions of the Merger Agreement),
Buyer shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Parent's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may postpone the
acceptance for payment of and payment for any tendered Shares, and may terminate
or amend the Offer if as of the expiration of the Offer (as the Offer may have
been extended pursuant to Section 2.1(a) of the Merger Agreement) (i) a number
---------------
of Shares which constitutes at least 67% of the Shares outstanding on a fully
diluted basis shall not have been validly tendered and not withdrawn prior to
the expiration of the Offer (the "Minimum Condition") (for purposes hereof
"fully diluted basis" means issued and outstanding Shares plus Shares subject to
issuance under outstanding Equity Commitments then currently exercisable into
Shares); (ii) any applicable approvals or consents listed in Section 5.3 of the
Disclosure Letter have not been obtained, or waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
or (iii) at any time on or after the date of the Merger Agreement and prior to
the acceptance for payment for Shares, any of the following events shall occur
or shall be determined by Parent to have occurred:
(a) there shall have been any Action, Law or Order enacted or entered
into, issued or instituted or promulgated, or Threatened by any Governmental
Entity (i) challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain or prohibit or make materially more costly the
making of the Offer, the acceptance for payment of, or payment for, any Shares
by Buyer or any Affiliate of Buyer, or the consummation of any other
Transaction, or seeking to obtain material damages in connection with the Offer,
the Merger or any Transaction; (ii) seeking to prohibit or limit materially the
ownership or operation by Parent, Buyer or any Acquired Entity of all or any
material portion of the business or assets of the Company and Subsidiaries,
taken as a whole, or to compel the Company, Parent or any of their respective
Subsidiaries to dispose of or hold separate all or any portion of the business
or assets of the Company, Parent or any of their respective Subsidiaries, as a
result of the Offer, the Merger or any of the Transactions; (iii) seeking to
impose or confirm limitations on the ability of Parent or any affiliate of
Parent to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by Parent
pursuant to the Offer or otherwise on all matters properly presented to the
Company Shareholders, including, without limitation, the approval and adoption
of this Agreement and the Merger; (iv) seeking to require divestiture by Parent
or any Affiliate of Parent of any Shares; or (v) which otherwise has a Material
Adverse Effect on the Company;
(b) there shall be any Law or Order enacted, entered, enforced,
promulgated or deemed applicable to the Offer or the Merger, or any other action
shall be taken by any
1
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under the HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the NASDAQ SmallCap Market System, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States, (iv) any limitation (whether or not mandatory) by
any United States or foreign governmental authority on the extension of credit
by banks or other financial institutions, (v) a change in general financial,
bank or capital market conditions which materially adversely affects the ability
of financial institutions in the United States to extend credit or syndicate
loans or (vi) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any Material Adverse Change (or any
development that, insofar as reasonably can be foreseen, is reasonably likely to
result in any Material Adverse Change) in the consolidated financial condition,
businesses, or results of operations of the Acquired Entities, taken as a whole;
(e) (i) it shall have been publicly disclosed that the beneficial
ownership (determined for the purposes of this paragraph (e) as set forth in
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the outstanding
Shares has been acquired by any Person other than Parent and Buyer and except
for any Person having such beneficial ownership as of the date of the Merger
Agreement, (ii) the Board of Directors of the Company (A) withdraws, modifies or
changes (including by amendment of the Schedule 14D-9) its recommendation of the
Offer, this Agreement or the Merger in a manner adverse to Parent, (B) shall
have recommended to the Shareholders of the Company any Acquisition Proposal, or
(C) shall have failed to reaffirm publicly and unconditionally its
recommendation to the Company's Shareholders that they tender their Shares in
the Offer, which public reaffirmation must be made within five days after
Parent's written request to do so, (iii) a third party shall have entered into a
definitive agreement or a written agreement in principle with the Company with
respect to an Acquisition Proposal, or (iv) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the foregoing;
(f) (i) any of the representations and warranties of the Company set
forth in Sections 5.5 and 5.7 of the Merger Agreement shall not be true and
correct as if such representations and warranties were made at the time of such
determination (except as to any such representation or warranty that speaks as
of a specific date, which must be untrue or incorrect as of such date); or (ii)
any of the other representations and warranties of the Company set forth in the
Merger Agreement, when read without any exception or qualification as to
materiality or reference to Material Adverse Effect, shall not be true and
correct as if such representations and warranties were made at the time of such
determination (except as to any such representation and warranty which speaks as
of a specific date, which must be untrue or incorrect as of such date) except
where the failure to be so true and correct would not
2
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect on the Company;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Merger Agreement, which Breach has not been cured in all material
respects within five (5) Business Days following receipt by the Company of
written notice of such Breach; or
(h) the Merger Agreement shall have been terminated in accordance
with its terms or the Company and Buyer and Parent shall have reached an
agreement that the Offer or Merger Agreement be terminated;
(i) Parent shall have made or obtained all financing necessary to fund all
financial obligations arising in connection with the consummation of the Offer,
Merger and other Transactions.
The foregoing conditions are for the benefit of Parent and Buyer and may be
asserted by Parent or Buyer regardless of the circumstances giving rise to any
such conditions and other than clauses (i) and (ii) of the paragraph of this
Annex A may be waived by Parent or Buyer, in whole or in part, at any time and
from time to time in their reasonable discretion, in each case, subject to the
terms or the Merger Agreement. The conditions in clauses (i) and (ii) of the
second paragraph of this Annex A may not be waived without the written consent
of the Company. The failure by Parent or Buyer at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
3
