Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF JANUARY 22, 2001
AMONG
CORNING INCORPORATED,
TROPEL MERGER SUB, INC.,
TROPEL CORPORATION
AND
CERTAIN STOCKHOLDERS OF TROPEL CORPORATION
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER........................................................1
SECTION 1.1 THE MERGER....................................................1
SECTION 1.2 CLOSING.......................................................1
SECTION 1.3 EFFECTIVE TIME OF THE MERGER..................................1
SECTION 1.4 EFFECT OF THE MERGER..........................................2
ARTICLE II THE SURVIVING CORPORATION........................................2
SECTION 2.1 CERTIFICATE OF INCORPORATION..................................2
SECTION 2.2 BY-LAWS.......................................................2
SECTION 2.3 BOARD OF DIRECTORS; OFFICERS..................................2
ARTICLE III CONVERSION OF SHARES............................................3
SECTION 3.1 MERGER CONSIDERATION..........................................3
SECTION 3.2 SURRENDER OF SHARE CERTIFICATES AND PAYMENT OF MERGER
CONSIDERATION.................................................4
SECTION 3.3 NO FURTHER RIGHTS.............................................5
SECTION 3.4 CLOSING OF THE COMPANY'S TRANSFER BOOKS.......................5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND CERTAIN STOCKHOLDERS................................5
SECTION 4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.................5
SECTION 4.2 AUTHORIZATION.................................................6
SECTION 4.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS...................6
SECTION 4.4 CAPITALIZATION................................................6
SECTION 4.5 SUBSIDIARIES..................................................7
SECTION 4.6 FINANCIAL STATEMENTS..........................................7
SECTION 4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS..........................8
SECTION 4.8 MATERIAL CONTRACTS...........................................10
SECTION 4.9 REAL PROPERTY................................................11
SECTION 4.10 PROPERTY AND ASSETS..........................................12
SECTION 4.11 INTELLECTUAL PROPERTY........................................12
SECTION 4.12 INVENTORY; RECEIVABLES; PAYABLES.............................15
SECTION 4.13 CUSTOMERS AND SUPPLIERS......................................16
SECTION 4.14 LITIGATION...................................................16
SECTION 4.15 TAX RETURNS AND PAYMENTS.....................................16
SECTION 4.16 EMPLOYEE BENEFIT PLANS.......................................17
SECTION 4.17 LABOR MATTERS................................................19
SECTION 4.18 COMPLIANCE WITH APPLICABLE LAWS..............................19
SECTION 4.19 ENVIRONMENTAL................................................19
SECTION 4.20 CERTAIN BUSINESS PRACTICES...................................20
SECTION 4.21 CORPORATE DOCUMENTS..........................................21
SECTION 4.22 RESTRICTIONS ON BUSINESS ACTIVITIES..........................21
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SECTION 4.23 AFFILIATE TRANSACTIONS.......................................21
SECTION 4.24 INSURANCE....................................................21
SECTION 4.25 BROKERS......................................................21
SECTION 4.26 CORPORATE APPROVAL...........................................22
SECTION 4.27 DISCLOSURE...................................................22
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS................................................22
SECTION 5.1 AUTHORIZATION................................................22
SECTION 5.2 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS..................22
SECTION 5.3 COMPANY COMMON STOCK.........................................23
SECTION 5.4 LITIGATION...................................................23
SECTION 5.5 INVESTMENT IN PARENT COMMON STOCK............................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUBSIDIARY..........................................24
SECTION 6.1 ORGANIZATION AND QUALIFICATION...............................24
SECTION 6.2 AUTHORITY RELATIVE TO THIS AGREEMENT.........................24
SECTION 6.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS..................24
SECTION 6.4 PARENT REPORTS...............................................25
SECTION 6.5 FINANCING....................................................25
SECTION 6.6 LITIGATION...................................................25
SECTION 6.7 BROKERS AND FINDERS..........................................25
ARTICLE VII CONDUCT OF BUSINESS PENDING THE MERGER.........................26
SECTION 7.1 CONDUCT OF THE BUSINESS PENDING THE EFFECTIVE TIME...........26
SECTION 7.2 OPTION AMENDMENT AGREEMENTS..................................27
SECTION 7.3 ACQUISITION PROPOSALS........................................28
SECTION 7.4 FINANCIAL INFORMATION........................................28
SECTION 7.5 TREATMENT OF REAL ESTATE.....................................29
SECTION 7.6 ENVIRONMENTAL INSURANCE......................................29
SECTION 7.7 GENERAL SIGNAL AGREEMENT.....................................29
SECTION 7.8 APPROVAL OF TRANSACTION......................................29
ARTICLE VIII ADDITIONAL AGREEMENTS.........................................29
SECTION 8.1 ACCESS TO INFORMATION........................................29
SECTION 8.2 FURTHER ACTION; CONSENTS; FILINGS............................30
SECTION 8.3 EMPLOYEE AND OTHER ARRANGEMENTS..............................30
SECTION 8.4 PUBLIC ANNOUNCEMENTS.........................................31
SECTION 8.5 TRANSITION EFFORTS...........................................32
SECTION 8.6 NOTICES OF BREACH............................................32
SECTION 8.7 RESALE RESTRICTIONS..........................................32
SECTION 8.8 REGISTRATION OF PARENT COMMON STOCK..........................33
SECTION 8.9 PLAN OF REORGANIZATION.......................................33
SECTION 8.10 NYSE LISTING.................................................34
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ARTICLE IX CONDITIONS PRECEDENT............................................34
SECTION 9.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...34
SECTION 9.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER.34
SECTION 9.3 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY TO EFFECT THE MERGER..............................37
ARTICLE X TERMINATION, AMENDMENT AND WAIVER................................36
SECTION 10.1 TERMINATION..................................................36
SECTION 10.2 EFFECT OF TERMINATION........................................37
SECTION 10.3 FEES AND EXPENSES............................................37
SECTION 10.4 AMENDMENT....................................................37
SECTION 10.5 WAIVER.......................................................37
ARTICLE XI SURVIVAL AND INDEMNIFICATION....................................38
SECTION 11.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS........38
SECTION 11.2 INDEMNIFICATION BY THE STOCKHOLDERS..........................38
SECTION 11.3 INDEMNIFICATION BY PARENT....................................39
SECTION 11.4 CERTAIN LIMITATIONS ON INDEMNITIES...........................39
SECTION 11.5 ENVIRONMENTAL INDEMNIFICATION................................40
SECTION 11.6 PROCEDURE....................................................41
SECTION 11.7 NO IMPACT FROM INVESTIGATION.................................42
SECTION 11.8 NO RIGHT OF SUBROGATION......................................42
SECTION 11.9 RELEASE OF CLAIMS............................................42
SECTION 11.10 CERTAIN TERMS...............................................43
ARTICLE XII GENERAL PROVISIONS.............................................43
SECTION 12.1 NOTICES......................................................43
SECTION 12.2 SPECIFIC PERFORMANCE.........................................44
SECTION 12.3 ENTIRE AGREEMENT.............................................45
SECTION 12.4 ASSIGNMENTS; PARTIES IN INTEREST.............................45
SECTION 12.5 GOVERNING LAW................................................45
SECTION 12.6 HEADINGS.....................................................45
SECTION 12.7 CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION................45
SECTION 12.8 COUNTERPARTS.................................................52
SECTION 12.9 SEVERABILITY.................................................52
Exhibit A Form of Escrow Agreement
Exhibit B Form of Option Amendment Agreement
Exhibit C Form of Option Release
Exhibit D-1 List of Key Employees
Exhibit D-2 Form of Non-Competition Agreement for Key Employees
Exhibit E Form of Non-Competition Agreement for Stockholders
Exhibit F Form of Registration Rights Agreement
Exhibit G Form of Village Indemnification Agreement
Exhibit H Specifically Indemnified Liabilities
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of January
22, 2001, by and among Corning Incorporated, a New York corporation ("PARENT"),
Tropel Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent ("MERGER SUBSIDIARY"), Tropel Corporation, a Delaware corporation (the
"COMPANY"), Xxxx X. Xxxxxxx, an individual residing at 00 Xxxxxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx ("XXXXXXX"), and Xxxx X. Xxxxxxxxxxx, an individual residing
at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx ("XXXXXXXXXXX" and, together with
Xxxxxxx, the "STOCKHOLDERS"). References to capitalized terms not defined in
context are contained in Section 12.7.
WHEREAS, the respective Boards of Directors of Parent, Merger
Subsidiary and the Company have approved the merger of the Company with and into
Merger Subsidiary (the "MERGER"), upon the terms and subject to the conditions
set forth herein;
WHEREAS, Parent has adopted this Agreement and approved the Merger
in its capacity as the sole stockholder of Merger Subsidiary; and
WHEREAS, it is intended that, for federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "CODE");
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein the parties hereto
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in Section 1.3), the Company shall be
merged with and into Merger Subsidiary, the separate existence of the Company
shall thereupon cease, and Merger Subsidiary shall continue as the surviving
corporation in the Merger (the "SURVIVING CORPORATION") under the laws of the
State of Delaware under the name "Corning Tropel Corporation".
Section 1.2 CLOSING. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 10.1, and subject to the satisfaction or waiver of the
conditions set forth in Article IX, the closing of the Merger will take place as
promptly as practicable after satisfaction or waiver of the conditions set forth
in Article IX, at the offices of Xxxxx Peabody LLP, Rochester, New York, unless
another date, time or place is agreed to in writing by the parties hereto (the
"CLOSING DATE").
Section 1.3 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective upon the filing of a certificate of merger ("CERTIFICATE OF MERGER")
with the Secretary of State of
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the State of Delaware in accordance with the provisions of Section 251 of the
Delaware General Corporation Law (the "DGCL"). When used in this Agreement, the
term "EFFECTIVE TIME" shall mean the time at which the Certificate of Merger is
accepted for filing by the Secretary of State of Delaware.
Section 1.4 EFFECT OF THE MERGER. The Merger shall, from and after
the Effective Time, have all the effects provided by the DGCL and other
applicable Laws. If, at any time after the Effective Time the Surviving
Corporation shall consider or be advised that any further deeds, conveyances,
assignments or assurances in law or any other acts are necessary, desirable or
proper to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, the title to any property or rights of the Company or Merger
Subsidiary (the "CONSTITUENT CORPORATIONS") by reason of, or as a result of, the
Merger, or otherwise to carry out the purposes of this Agreement, the
Constituent Corporations agree that the Surviving Corporation and its proper
officers and directors shall approve, execute and deliver all such deeds,
conveyances, assignments and assurances in law and do all things necessary,
desirable or proper to vest, perfect or confirm title to such property or rights
in the Surviving Corporation and otherwise to carry out the purposes of this
Agreement, and that the proper officers and directors of the Surviving
Corporation are fully authorized in the name of each of the Constituent
Corporations or otherwise to take any and all such action.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Merger Subsidiary as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation after the Effective Time until thereafter changed or amended as
provided therein or by applicable Law, except that the name of the Surviving
Corporation shall be changed to "Corning Tropel Corporation".
Section 2.2 BY-LAWS. The By-laws of Merger Subsidiary as in effect
immediately prior to the Effective Time shall be the By-laws of the Surviving
Corporation, until thereafter changed or amended as provided therein or by
applicable Law.
Section 2.3 BOARD OF DIRECTORS; OFFICERS. The directors of Merger
Subsidiary immediately prior to the Effective Time shall be the directors of the
Surviving Corporation and the officers of Merger Subsidiary immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, in each
case, to serve until the earlier of their respective resignations or the time
that their respective successors are duly elected or appointed and qualified.
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ARTICLE III
CONVERSION OF SHARES
Section 3.1 MERGER CONSIDERATION. As of the Effective Time, by
virtue of the Merger and without any action on the part of any stockholder of
the Company or Merger Subsidiary:
(a) All shares of common stock of the Company, par value $.01 per
share ("COMPANY COMMON STOCK"), which are held by Parent, the Company or any
wholly-owned subsidiary of Parent (including Merger Subsidiary) or the Company
shall be canceled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor.
(b) Each share of Company Common Stock issued and outstanding at the
Effective Time, other than those to which Section 3.1(a) applies ("CLOSING
OUTSTANDING SHARES"), shall be converted into the right to receive:
(i) a number of shares of common stock of Parent, par value
$.50 per share ("PARENT COMMON STOCK"), which are validly issued, fully
paid and non-assessable equal to the quotient derived by dividing
1,950,000 by the number of Closing Outstanding Shares (the "STOCK
CONSIDERATION"); and
(ii) cash in the amount of the quotient derived by dividing
(x) $60,000,000 minus the aggregate amount of payments required to be made
by the Company or Parent pursuant to Option Amendment Agreements, Option
Releases and the General Signal Agreement, by (y) the number of Closing
Outstanding Shares (the "CASH CONSIDERATION" and, together with the Stock
Consideration, the "MERGER CONSIDERATION").
(c) The Stockholders agree that an aggregate of 292,500 shares of
Parent Common Stock (213,446 shares with respect to Xxxxxxx and 79,054 shares
with respect to Xxxxxxxxxxx) constituting a portion of the Stock Consideration
payable with respect to their Company Common Stock (the "ESCROW SHARES") shall
be paid into escrow to satisfy Claims as contemplated by Section 11.2(c) and the
Escrow Agreement to be entered into substantially in the form attached hereto as
Exhibit A (the "ESCROW AGREEMENT"). The right to receive any Escrow Shares shall
not be transferrable or assignable except by will, according to the laws of
descent and distribution or otherwise by operation of Law.
(d) Each issued and outstanding share of common stock of Merger
Subsidiary shall continue as an issued and outstanding share of common stock of
the Surviving Corporation, which shares in the aggregate shall continue to
constitute all of the issued and outstanding shares of capital stock of the
Surviving Corporation and shall continue to be owned by Parent.
(e) If, at any time during the period between the date of this
Agreement and the Effective Time, the Company changes the number of shares of
Company Common Stock issued and outstanding or Parent changes the number of
shares of Parent Common Stock issued and outstanding as a result of a stock
split, reverse stock split, stock dividend, recapitalization or redenomination
of share capital, the Stock Consideration and the Escrow Shares and any other
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items dependent thereon shall be appropriately adjusted so that the Merger
Consideration will be equivalent to that which it would have been if the change
had not occurred.
Section 3.2 SURRENDER OF SHARE CERTIFICATES AND PAYMENT OF MERGER
CONSIDERATION.
(a) At the Closing and immediately prior to the Effective Time, each
stockholder of the Company shall deliver to Parent the stock certificates
representing the shares of Company Common Stock held by such stockholder
(collectively, the "CERTIFICATES").
(b) At the Effective Time, Parent shall pay to each stockholder of
the Company the aggregate amount of the Merger Consideration payable with
respect to the shares of Company Common Stock held by such stockholder that are
represented by surrendered Certificates by (i) issuing a stock certificate to
and in the name of such stockholder representing the Stock Consideration payable
with respect to the shares of Company Common Stock represented by such
surrendered Certificates, and (ii) making a wire transfer of immediately
available funds to an account designated in writing by such stockholder in the
amount of the Cash Consideration payable with respect to the shares of Company
Common Stock represented by such surrendered Certificates; provided, however,
that the aggregate number of shares of Stock Consideration issued to Xxxxxxx
shall be reduced by 213,446 shares and the aggregate number of shares of Stock
Consideration issued to Xxxxxxxxxxx shall be reduced by 79,054 shares, which
shares shall be the Escrow Shares.
(c) At the Effective Time, Parent shall issue the Escrow Shares to
the escrow agent under the terms of the Escrow Agreement (the "ESCROW Agent").
The portion of the Escrow Shares to be delivered by the Escrow Agent to the
Stockholders or to Parent, and the timing and manner of such delivery, shall be
governed by the Escrow Agreement.
(d) If the Closing occurs even though not all Certificates have been
delivered to Parent prior to the Effective Time, Parent shall retain the Merger
Consideration (and, if applicable, the Escrow Shares) payable with respect to
Company Common Stock represented by any Certificates which have not been
delivered until such Certificates have been delivered. Until so delivered, each
Certificate formerly representing an outstanding share of Company Common Stock
shall, after the Effective Time, be deemed for all purposes to evidence only the
right to receive the Merger Consideration as provided in Section 3.1. Upon the
delivery of a Certificate after the Effective Time, Parent shall pay, in the
manner provided in paragraphs (b) and (c) above, the Merger Consideration (and,
if applicable, the Escrow Shares) payable with respect to the shares of Company
Common Stock represented by such Certificate to the Stockholder owning the
shares represented by such Certificate (or the Escrow Agent in the case of
Escrow Shares) as soon as practicable after the delivery of the Certificate.
(e) In the event that any stockholder of the Company has failed to
designate in writing an account to which any required wire transfer is to be
made at least twenty-four (24) hours prior to the time at which such wire
transfer is required to be made, Parent shall not be obligated to make such wire
transfer until after a reasonable period of time has elapsed since its receipt
of written wire transfer instructions from such stockholder.
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(f) None of the Company, Merger Subsidiary or Parent shall be liable
to any holder of shares of Company Common Stock with respect to any portion of
the Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law or Order.
(g) In the event any Certificates shall have been lost, stolen or
destroyed, Parent shall deliver and pay the Merger Consideration to which the
applicable stockholder is entitled with respect to the shares of Company Common
Stock represented by such lost, stolen or destroyed Certificates only after such
Stockholder has delivered to Parent an affidavit of that fact by such
Stockholder and such indemnification agreement as Parent may reasonably require.
Section 3.3 NO FURTHER RIGHTS. From and after the Effective Time,
holders of Certificates theretofore evidencing shares of Company Common Stock
shall cease to have any rights as stockholders of the Company, except to receive
the Merger Consideration as provided herein.
Section 3.4 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the
Effective Time, the stock transfer books of the Company shall be closed and no
transfer of shares of Company Common Stock shall be made thereafter. In the
event that, after the Effective Time, Certificates for shares of Company Common
Stock are presented to Parent or the Surviving Corporation, they shall be
canceled and the Merger Consideration payable with respect to the shares
represented by such Certificate shall be paid as provided in Section 3.3. In the
event that any Person other than the holder of record of the shares of Company
Common Stock represented by such Certificate claims to have an interest in such
shares as documented by a stock power, power of attorney, pledge or other
agreement or document executed by the holder of record thereof, Parent shall be
entitled to (i) retain the Merger Consideration with respect to such shares
until the holder of record and Person claiming an interest therein jointly
direct Parent in writing how to distribute the Merger Consideration with respect
to such shares, or (ii) deliver the Merger Consideration to a court of competent
jurisdiction pursuant to an interpleader or other appropriate action.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND CERTAIN STOCKHOLDERS
Each of the Company, Xxxxxxx and Xxxxxxxxxxx hereby jointly and severally
represents and warrants to Parent and Merger Subsidiary that, except as set
forth in the Company Disclosure Schedule delivered to Parent prior to the date
of this Agreement:
Section 4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now conducted and as presently
proposed to be conducted. The Company is duly qualified to transact business and
is in good standing in the State of New York and in each other jurisdiction
where the character of its properties or the nature of its activities make such
qualification necessary, except where the failure to be so qualified in a State
other than
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the State of New York would not have a Company Material Adverse Effect. The
Company has not used any other name, legal or fictitious, in the conduct of its
business except as set forth in Schedule 4.1 of the Company Disclosure Schedule.
Section 4.2 AUTHORIZATION. The Company has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each
Transaction Document to which the Company is a party or which it is required to
execute or deliver (A "COMPANY TRANSACTION DOCUMENT") and to consummate the
transactions contemplated hereby and thereby. All corporate action on the part
of the Company's Board of Directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Company
Transaction Documents, and the performance of all obligations of the Company
hereunder and thereunder, have been duly and validly taken. This Agreement has
been duly executed and delivered by the Company and constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms. The Company Transaction Documents, when executed and
delivered by the Company, shall constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms.
Section 4.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) None of the execution and delivery of this Agreement or Company
Transaction Documents by the Company, the consummation by the Company of the
Transactions or the performance by the Company of its obligations under this
Agreement or the Company Transaction Documents will (i) conflict with or violate
the Certificate of Incorporation or By-laws of the Company, (ii) subject to
receipt or filing of the Consents listed on Schedule 4.3, result in a Default of
any Law or Order applicable to the Company, or by which it or any of its
properties or assets may be bound or affected, or (iii) subject to receipt or
filing of the required Consents listed on Schedule 4.3, result in a Default
pursuant to, any Contract or Permit which the Company is a party or by which it
or any of its properties may be bound or affected, except in the case of the
foregoing clause (iii) for any such Defaults which would not have a Company
Material Adverse Effect.
(b) None of the execution and delivery of this Agreement or any
Company Transaction Documents by the Company, the consummation by the Company of
the Transactions or the performance by the Company of its obligations under this
Agreement or the Company Transaction Documents will require any Consent of any
Governmental Entity or other Person, except for the filing of the Certificate of
Merger pursuant to the DGCL and compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT").
Section 4.4 CAPITALIZATION. The authorized capital of the Company
consists solely of 1,050,000 shares of Company Common Stock, of which 745,805
shares (the "OUTSTANDING SHARES") are issued and outstanding as of the date of
this Agreement. The Outstanding Shares are validly issued, fully paid and
nonassessable and are held beneficially and of record by the Stockholders, free
and clear of all Liens in the denominations set forth on Schedule 4.4 of the
Company Disclosure Schedule. There are options to purchase 109,250 shares of
Company Common Stock under the Option Plan which are outstanding on the date of
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this Agreement (the "OPTIONS"), none of which are presently exercisable except
as provided in Schedule 4.4 of the Company Disclosure Schedule. Except for the
Outstanding Shares and 154,195 shares of treasury stock, and except for shares
of Company Common Stock issued between the date hereof and the Closing pursuant
to the exercise of Options outstanding under the Option Plan as of the date
hereof, there are no issued or outstanding shares of capital stock of the
Company or other proprietary or equity interests in the Company. Except for the
Options, there are no outstanding options, warrants or other rights of any kind
to acquire any shares of capital stock of the Company or other proprietary or
equity interests in the Company or securities convertible into or exchangeable
for, or which otherwise confer on the holder thereof any right to directly or
indirectly acquire, any shares of capital stock of the Company or other
proprietary or equity interests in the Company, nor is the Company committed to
issue any such option, warrant, right or security. Except as provided in
Schedule 4.4 of the Company Disclosure Schedule, the Company is not subject to
any obligation (contingent or otherwise) to repurchase, redeem or otherwise
acquire or retire any of the Outstanding Shares or Options. Other than the
Shareholders Agreement dated August 18, 1998 among the Company, Xxxxxxx,
Xxxxxxxxxxx and others (the "SHAREHOLDERS AGREEMENT"), the Company is not a
party to any agreement restricting the transfer of any shares of capital stock
of the Company or affecting the voting of any such shares of capital stock.
Section 4.5 SUBSIDIARIES. The Company does not own or control,
directly or indirectly, any capital stock or other proprietary or equity
interest in any other corporation, association, or other business entity except
Tropel Exports, Inc., a United States Foreign Sales Corporation. Tropel Exports,
Inc. has no assets, liabilities or other obligations other than those reflected
on the Financial Statements and a true and correct copy of its 1999 federal
income tax return on Form 1120-FSC has been furnished to Parent. The Company has
no right or obligation to purchase any interest in, make any capital
contribution to, loan or otherwise provide material funds to, or make any
material investment in any Person. The Company is not a participant in or member
of any joint venture, partnership, limited liability company, foundation or
similar arrangement. All references to the Company in this Article IV shall be
deemed to include Tropel Exports, Inc. except where the context otherwise
clearly requires.
Section 4.6 FINANCIAL STATEMENTS.
(a) The audited balance sheets of the Company as of December 31,
1999 and 1998 and the related audited statements of earnings, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1999 (including the related notes and schedules thereto) delivered to Parent
prior to the date hereof (the "FINANCIAL STATEMENTS") present fairly, in all
material respects, the financial position and the results of operations and cash
flows of the Company as of the dates or for the periods presented therein in
conformity with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods involved except as otherwise
noted therein.
(b) The unaudited balance sheets and the related unaudited
statements of earnings and cash flows of the Company for the nine-month period
ended September 30, 2000 delivered to Parent prior to the date hereof (the
"SEPTEMBER FINANCIAL STATEMENTS") have been prepared in accordance with GAAP
applied on a consistent basis during the
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periods involved and the periods covered by the Financial Statements except as
otherwise noted therein. The September Financial Statements reflect all
adjustments necessary to present fairly in accordance with GAAP (except as
indicated therein), in all material respects, the financial position, results of
operations and cash flows of the Company for all periods presented therein.
(c) The Company maintains and will continue to maintain through the
Effective Time a standard system of accounting established and administered in
accordance with GAAP and applicable Law.
(d) The Company does not have any indebtedness, obligations or
liabilities of any kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due or asserted or unasserted), which were not fully
reflected in, reserved against or otherwise described in the September Financial
Statements or the Company Disclosure Schedule other than (i) indebtedness,
obligations or liabilities incurred in the ordinary course of business
subsequent to September 30, 2000 which are not, individually or in the
aggregate, material to the Company in nature or amount, (ii) contractual
obligations or other liabilities incurred in the ordinary course of business
which are not required under GAAP to be reflected in the September Financial
Statements and are either disclosed on Schedule 4.8 of the Company Disclosure
Schedule or not required to be so disclosed, and (iii) such other indebtedness,
obligations or liabilities as are specifically disclosed on Schedule 4.6 of the
Company Disclosure Schedule. The Company knows of no facts (other than facts of
a general economic or political nature or facts generally known within the
industry) which have caused or in the future are reasonably likely to cause a
Company Material Adverse Effect which have not been set forth in the Financial
Statements, the September Financial Statements or the Company Disclosure
Schedule.
Section 4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth on Schedule 4.7 of the Company Disclosure Schedule, reflected in the
September Financial Statements or as expressly contemplated by this Agreement,
since December 31, 1999 the Company has conducted its business only in the
ordinary course and:
(a) there has not been any Company Material Adverse Effect nor has
any event occurred which is reasonably likely to result in any Company Material
Adverse Effect;
(b) there has not been any material damage, destruction or loss,
whether or not covered by insurance, with respect to the property and assets of
the Company;
(c) the Company has not issued any shares of capital stock,
declared, set aside or paid any dividend or other distribution in respect of any
shares of capital stock of the Company, or repurchased, redeemed or otherwise
acquired any outstanding shares of capital stock, securities or other
proprietary or equity interest of the Company;
(d) the Company has not amended its Certificate of
Incorporation or By-laws;
(e) there has not been any transfer, issue, sale or other
disposition by any Stockholder or the Company of any shares of capital stock,
proprietary or equity interests or other securities of the Company or any grant
of options, warrants, rights or other securities to
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purchase or otherwise acquire shares of such capital stock, proprietary or
equity interests or such other securities other than the Options;
(f) the Company has not (i) awarded or paid any bonuses to employees
of the Company except in the ordinary course of business consistent with past
practice or to the extent accrued on the September Financial Statements, (ii)
entered into any employment, deferred compensation, severance or similar
agreement (or amended any such agreement), (iii) agreed to increase the
compensation payable or to become payable by it to its directors, officers,
employees, agents or representatives except in the ordinary course of business
consistent with past practice, or (iv) agreed to increase the coverage or
benefits available under any severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, pension or other
employee benefit plan, payment or arrangement made to, for or with the Company's
directors, officers, employees, agents or representatives;
(g) there has not been any resignation or termination of employment
of any officer or key employee of the Company, and the Company does not know of
any impending resignation or termination of employment of any such officer or
key employee;
(h) the Company has not made any changes in its accounting
principles, methods or policies;
(i) other than in the ordinary course of business consistent with
past practice, the Company has not failed to pay and discharge current
liabilities of the Company except where disputed in good faith by appropriate
proceedings;
(j) the Company has not made any loans, advances or capital
contributions to, or investments in, any Person or paid any fees or expenses
(other than employment compensation and expense reimbursements in the ordinary
course of business) to any Stockholder or any Affiliate of any Stockholder;
(k) the Company has not mortgaged, pledged or subjected to any Lien
any of its assets, or acquired any assets or sold, assigned, transferred,
conveyed, leased or otherwise disposed of any assets of the Company, except for
assets of the Company acquired or sold, assigned, transferred, conveyed, leased
or otherwise disposed of in the ordinary course of business consistent with past
practice;
(l) the Company has not discharged or satisfied any Lien, or paid
any obligation or liability (fixed or contingent) of the Company, except in the
ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Company taken as a whole;
(m) the Company has not canceled or compromised any debt or claim of
the Company or amended, canceled, terminated, relinquished, waived or released
any Contract or right of the Company, except in the ordinary course of business
consistent with past practice and which, in the aggregate, would not be material
to the Company taken as a whole;
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(n) there has not been any material and adverse change to a
material Contract by which the Company or any of its assets is bound or
subject;
(o) the Company has not transferred, licensed or otherwise granted
to any Person any rights under any Intellectual Property Rights except for
Permitted Licenses;
(p) the Company has not made or committed to make any capital
expenditures or capital additions or betterments in excess of $50,000
individually or $500,000 in the aggregate;
(q) the Company has not instituted or settled any material
Legal Proceeding to which the Company is a party; and
(r) the Company has not agreed to do anything set forth in this
Section 4.7 and the Stockholders have not agreed to cause the Company to do
anything set forth in this Section 4.7.
Section 4.8 MATERIAL CONTRACTS.
Set forth on Schedule 4.8 to the Company Disclosure Schedule are
lists of the following documents (the "MATERIAL CONTRACTS"):
(a) All agreements with customers in existence on and not performed
as of December 15, 2000 and (i) involving a purchase price of more than $50,000
in the aggregate for products shipped to be shipped or requiring professional
services to be performed; or (ii) for which all or a portion of the purchase
price has been paid; in each case, for products that have not been shipped,
delivered or installed or for professional services which have not been fully
performed by the Company.
(b) All written contracts with any employee (or former employee
which has not been fully performed by the Company or the employee) and all
consulting contracts relating to professional services or product development
for the Company's Products.
(c) Any contracts which are to be performed in any material respect
on or after the Effective Time which (i) involve payments to or from the Company
in amounts greater than $50,000 annually or by their terms extend more than
twelve months after the date of this Agreement (other than pursuant to automatic
renewal provisions which permit cancellation without penalty upon 90 days or
less notice and other than agreements described in item (x) below whether or not
they satisfy the threshold specified in item (x)); (ii) agreements with respect
to the use, occupancy or acquisition of real property; (iii) agreements creating
or evidencing any indebtedness or obligation with respect to borrowed money of
the Company or assuming any direct or indirect responsibility for the
obligations of any other person; (iv) all Third Person Licenses, (v) any
contract, agreement or understanding which would limit or restrict the conduct
of the Business of the Company or its affiliates in the future, including any
confidentiality, non-compete or other similar agreement, (vi) any distributor,
agency or manufacturer's representative agreement; (vii) any agreement relating
to the acquisition, disposition (other than the sale of Company Products for
fair consideration in the ordinary course of business or the purchase of raw
materials or supplies in the ordinary course of business) or
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lease of assets, securities or businesses; (viii) any agreement requiring the
Company to satisfy all or a specified portion of its requirements for a
particular supply, raw material or component from one or more specified Persons
or to supply to one or more specified Persons all or a specified portion of the
products manufactured by the Company, (ix) any agreement for capital
expenditures in excess of $50,000; (x) any agreement pursuant to which the
Company is a lessor or lessee of any machinery, equipment, motor vehicles,
office furniture, fixtures or other personal property involving, in the case of
any such agreement, more than $12,000 annually; (xi) any agreement with any
Governmental Body, (xii) any agreement with respect to the discharge, storage or
removal of Hazardous Materials; or (xiii) any understanding, commitment or
agreement to enter into any of the foregoing.
(d) All forms of product or service warranty with respect
to the Company's Products.
Except as set forth on Schedule 4.8 there is no event or occurrence
with respect to any agreement, contract, indenture, lease, mortgage or other
instrument, the occurrence of which of itself or with the giving of notice or
the passage of time or both would constitute an event of default under or breach
of such agreement, contract, instrument or lease or would permit the other party
thereto to cancel or terminate performance or seek damages for breach
("DEFAULT") by the Company or, to the Company's knowledge, any notice of any
Default on the part of any other party in the performance of any obligation to
be performed or paid under any Material Contract listed on Schedule 4.8.
Without limiting the generality of the foregoing, the Asset Purchase
Agreement and, in particular, Section 12.8 thereof, is in full force and effect
and the Company is not in default thereunder. Neither General Signal
Corporation, General Signal Technology Corporation nor any of their successors
is in default thereunder or has provided any indication to the Company of any
dispute concerning its obligations under the Asset Purchase Agreement.
Section 4.9 REAL PROPERTY.
(a) The Company does not own any real property in fee simple. The
Company is the successor lessee under a certain Lease Agreement with the Village
of Fairport Industrial Development Agency dated as of December 1, 1980, as
amended (the "XXX LEASE"). Other than the property leased under the XXX Lease
(the "LEASED PROPERTY"), the Company is not a party to any lease, sublease,
license or other Contract for the use or occupancy of any real property. Other
than the XXX financing associated with the XXX Lease, the Company has not
assigned, sublet, mortgaged or otherwise encumbered in any respect whatsoever
its leasehold estate under the XXX Lease. The Company neither owns or holds, nor
is obligated under or a party to, any option, right of first refusal or other
contractual right to purchase, acquire, sell, assign or dispose of any real
estate or any portion thereof or interest therein other than under the XXX
Lease.
(b) The XXX Lease is a valid and binding obligation enforceable by
and against the Company in accordance with its terms, and there is no default
under the XXX Lease by the Company or, to the knowledge of the Company, by any
other party thereto and, to the
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knowledge of the Company, no event has occurred that with the lapse of time or
the giving of notice or both would constitute a default thereunder. No party to
the XXX Lease has given written notice of or made a Claim against the Company
with respect to any breach or Default thereunder which remains uncured or
otherwise in existence as of the date hereof. All rent and other sums and
charges payable by the Company under or in respect of the XXX Lease are current.
The XXX Lease covers the entire estate it purports to cover. A complete and
correct copy of the XXX Lease, together with all amendments, modifications,
supplements or side letters affecting the obligations of any party thereunder,
has been delivered to Parent. The Leased Property complies in all material
respects with all applicable Laws and no notice of violation of any such Law has
been received by the Company or, to the knowledge of the Company, no such notice
has been issued by any Governmental Entity with respect to such property. No
part of the Leased Property is subject to any building or use restrictions that
would restrict or prevent the present use and operation of the Leased Property,
such property is properly and duly zoned for its current use, such current use
is in all respects a conforming use and there is no proposal or dispute that
could negatively impact the present zoning, use or operation of the Leased
Property. During the term of the XXX Lease, no labor has been performed or
material furnished for any portion of the Leased Property for which any Lien
having a value in excess of $25,000 in the aggregate can be claimed.
(c) The Leased Property has direct, unobstructed access, both
pedestrian and vehicular, to public rights of way. All utility systems required
in connection with use, occupancy and operation of the Leased Property are
supplied directly to the Leased Property by facilities of public utilities, are
sufficient for their present purposes, are fully operational and in working
order, and are benefited by customary utility easements providing for the
continued use and maintenance of such systems.
Section 4.10 PROPERTY AND ASSETS. All assets, personal property
(tangible and intangible) and rights owned or used by the Company are owned by
the Company free and clear of all Liens except as set forth on Schedule 4.10 of
the Company Disclosure Schedule. The assets owned, leased or licensed by the
Company are sufficient and adequate to enable the Company to conduct its
business as conducted and presently intended to be conducted. Without limiting
the generality of the foregoing, there is no inherent defect in or limitation of
any material products under development that would reasonably be expected to
cause any of such products to be incapable of (i) performing the function for
which they are being developed, (ii) being available for manufacture, sale or
distribution at the times anticipated by the Company or required by any
Contract, or (iii) being manufactured, sold and distributed on an economically
viable basis. The tangible personal property owned, leased or otherwise held by
the Company is in good operating condition and repair, subject to normal wear
and tear and the need to continue routine maintenance and repairs, and is
suitable for the purposes used or presently intended to be used in the operation
of the business of the Company.
Section 4.11 INTELLECTUAL PROPERTY.
(a) The Company owns or is licensed and has all rights in and to the
following to the extent necessary to conduct its business as now conducted and
as presently proposed to be conducted, except where the failure to own or have
such rights would not
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have a Company Material Adverse Effect: (i) all products, tools, computer
programs, specifications, source code, object code, graphics, devices,
techniques, algorithms, methods, processes, procedures, packaging, trade dress,
formulae, drawings, designs, improvements, discoveries, development and other
tools, inventions (whether or not patentable or copyrightable and whether or not
reduced to practice), know-how and other technology that are now, have been or
are currently proposed to be developed, produced, used, marketed or sold by the
Company (collectively, the "TECHNOLOGY-RELATED ASSETS"); and (ii) all
intellectual property and other proprietary rights in the Technology-Related
Assets, including, without limitation, all trade secrets, copyrights, and
domestic and foreign letters patent, and the registrations, applications,
renewals, extensions and continuations (in whole or in part) thereof, all
goodwill associated therewith, and all rights and causes of action for
infringement, misappropriation, misuse, dilution or unfair trade practices
associated therewith.
(b) All products developed, produced, used, marketed or sold by the
Company currently or as to which the Company has any ongoing obligations,
including warranty or support, are listed on Schedule 4.11 to the Company
Disclosure Schedule (collectively, the "PRODUCTS"). Except for the Third Person
Technologies (as defined in Section 4.11(c) below), and except as noted on
Schedule 4.11(b) of the Company Disclosure Schedule, the Company owns all right,
title and interest in and to the following, free and clear of all liens and
encumbrances: (i) the right to make, have made, use, lease, sell and import the
Products; (ii) any and all updates, enhancements and corrections to the
Products; (iii) any and all technology and work in progress; and (iv) all
inventions, discoveries, processes, designs, trade secrets, know-how and other
confidential or proprietary information related thereto (collectively, the
"TECHNOLOGY"). The Technology, excluding the Third Person Technologies, is
sometimes referred to herein as the "COMPANY TECHNOLOGY."
(c) All Technology used in the business of the Company as currently
conducted or as presently proposed to be conducted (the "BUSINESS") to which the
Company does not own all right, title and interest (collectively, the "THIRD
PERSON TECHNOLOGIES") is listed in Schedule 4.11 to the Company Disclosure
Schedule. Schedule 4.11 to the Company Disclosure Schedule also lists all
license agreements pursuant to which the Company has the right to use the Third
Person Technologies (the "THIRD PERSON LICENSES"), other than license agreements
included in shrink-wrapped software packages for software which is readily and
generally commercially available to Parent and other than paid-up licenses
incorporated in or associated with machinery or equipment owned or leased by the
Company. The Company has the lawful right to use under the terms of the
applicable Third Person License (free of any material restriction not expressly
set forth in the Third Person Licenses) (i) all Third Person Technology that is
incorporated in or used in the development or production of the Company
Technology, and (ii) all other Third Person Technology necessary for the conduct
of the Business as now conducted and as presently proposed to be conducted.
(d) All patents, patent applications, copyright registrations and
applications and trademark registrations and applications (collectively, the "IP
REGISTRATIONS") are listed on Schedules 4.11(d) to the Company Disclosure
Schedule. The Company has taken reasonable steps consistent with industry
practice to protect its interest
-14-
and use of the Company Technology and trademarks, trade names, brand names,
service marks used in the Business (the "MARKS"). The Company owns all right,
title and interest, free and clear of any liens, pledges, licenses or other
encumbrances, in and to the IP Registrations, together with any other rights in
or to any copyrights (registered or unregistered), rights in the Marks
(registered or unregistered), trade secret rights and other intellectual
property rights (including, without limitation, rights of enforcement) contained
or embodied in the Company Technology and the Marks (collectively, the "IP
RIGHTs").
(e) The Company has not conducted its Business, or used or enforced
or taken any action (or, to its knowledge, failed to use or enforce or take any
action) with respect to the IP Rights, in a manner that would result in the
abandonment, cancellation, unenforceability or forfeiture or relinquishment of
any material item of the IP Rights or the IP Registrations. Except as set forth
in Schedule 4.11(e) of the Company Disclosure Schedule, the Company has not
granted to any third Person any rights or permissions to use any of the
Technology or the IP Rights except for Permitted Licenses. The Company is not
under any contractual or other obligation to disclose to any third Person any
Company Technology except as required by Permitted Licenses or set forth in
Section 4.11(e) of the Company Disclosure Schedule.
(f) (i) The Company has not received any notice or claim (whether
written, oral or otherwise) challenging its ownership or rights in the Company
Technology or the IP Rights or claiming that any other person or entity has any
legal or beneficial ownership with respect thereto; (ii) all the IP Rights are
legally valid and enforceable without any material qualification, limitation or
restriction on their use which would have a Company Material Adverse Effect, and
the Company has not received any notice or claim (whether written, oral or
otherwise) challenging the validity or enforceability of any of the IP Rights;
and (iii) to the Company's knowledge, no other person or entity is infringing or
misappropriating any part of the IP Rights or otherwise making any unauthorized
use of the Company Technology.
(g) (i) The use of any of the Technology in the Business does not
and will not infringe, violate or interfere with or constitute an appropriation
of any right, title or interest (including, without limitation, any patent,
copyright, trademark or trade secret right) held by any other person or entity,
and there have been no claims made with respect thereto; (ii) the use of any of
the Marks and other IP Rights in the Business will not infringe, violate or
interfere with or constitute an appropriation of any right, title or interest
(including, without limitation, any patent, copyright, trademark or trade secret
right) held by any other person or entity, and there have been no claims made
with respect thereto; and (iii) the Company has not received any notice or claim
(whether written, oral or otherwise) regarding any infringement,
misappropriation, misuse, abuse or other interference with any third Person's
intellectual property or proprietary rights (including, without limitation,
infringement of any patent, copyright, trademark or trade secret right of any
third Person) by the Company, the Technology or the Marks or other IP Rights or
claiming that any other entity has any claim of infringement with respect
thereto.
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(i) The Technology is free from known material defects and
substantially conforms to the applicable specifications and documentation for
such Technology. The Company has not received any claims, written or oral, that
its Products do not so conform.
(j) The Company has not entered into any agreement or offered to
indemnify any Person against any charge of infringement by the Technology or IP
Rights, or any other intellectual property or right except in Permitted
Licenses. The Company has not entered into any agreement granting any Person the
right to bring any infringement action with respect to, or otherwise to enforce,
any of the Technology or IP Rights.
(k) The Company has not conducted its business or any aspect thereof
in any manner which infringes any patent or valid intellectual property right of
any other Person.
(l) The Company has no obligation or commitment of any nature to
license or transfer any technology of the Company to a third party, other than
as required by the Permitted Licenses or as set forth on Schedule 4.11(l) to the
Company Disclosure Schedule, or to compensate any third party for the license or
transfer of technology to the Company.
Section 4.12. INVENTORY; RECEIVABLES; PAYABLES.
(a) The inventory of the Company is in good and marketable
condition, and is saleable in the ordinary course of the Company's business
except to the extent that obsolete, overstocked or unusable inventory (i) was
reserved for on the Financial Statements and the September Financial Statements
for such periods, which reserves are adequate and were calculated in a manner
consistent with past practice and in accordance with generally accepted
accounting principles consistently applied, or (ii) was written-off or
written-down in the ordinary course of business since the date of the September
Financial Statements, which write-offs and write-downs did not materially exceed
historical write-offs and write-downs. The Company has raw materials,
components, work-in-process and finished goods inventory which, when taken
together with the raw materials and components it is able to acquire in the
ordinary course of business, will enable it to conduct its business and satisfy
its customers orders in the ordinary course of its business as presently
conducted or presently intended to be conducted. Schedule 4.12 lists each raw
material or component for which the Company has only one supplier, and, except
as set forth on Schedule 4.12, to the knowledge of the Company, there is no
shortage or anticipated shortage of any raw material or component that would
materially impair its ability to satisfy its customer needs or materially
increase the cost of producing its products (except where it is entitled to pass
any increased cost on to its customers).
(b) All accounts receivable of the Company have arisen from bona
fide transactions in the ordinary course of business consistent with past
practice and are legally binding. All accounts receivable of the Company
reflected on the Financial Statements, the September Financial Statements or
arising after the date thereof are good and collectible at the aggregate
recorded amounts thereof, net of any applicable reserve for returns or doubtful
accounts reflected thereon, which reserves are adequate and were calculated in a
manner consistent with past practice and in accordance with GAAP consistently
applied.
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(c) All accounts payable of the Company reflected on the September
Financial Statements, or arising after the date thereof, are the result of bona
fide transactions in the ordinary course of business and have been paid or, in
the ordinary course of business consistent with the Company's past practices,
are not yet required to have been paid.
(d) Except for customer pre-payments in the ordinary course of
business which are reflected on the September Financial Statements or received
after the date thereof, the Company has not received any advance payments,
deposits or similar payments in respect of any goods sold or to be sold or
services performed or to be performed after the Closing Date.
Section 4.13 CUSTOMERS AND SUPPLIERS. Schedule 4.13 of the Company
Disclosure Schedule lists the twenty (20) largest customers in terms of sales
and the twenty (20) largest suppliers in terms of purchases of the Company taken
as a whole during each of the year ended December 31, 1999 and during the period
from January 1, 2000 through December 12, 2000. Such Schedule sets forth the
approximate amount of sales to each such customer and purchases from each such
supplier during each such period. Except as expressly set forth on Schedule 4.13
of the Company Disclosure Schedule, (i) the relationships of the Company taken
as a whole with its customers and suppliers have been entered into and are
conducted pursuant to arms' length transactions, and (ii) no customer or
supplier of the Company set forth on Schedule 4.13 of the Company Disclosure
Schedule or other material customer or supplier of the Company has canceled,
otherwise terminated, materially altered, or threatened in writing to cancel,
otherwise terminate or materially alter, its relationship with the Company or
withheld or materially delayed payment for, or shipment of, any products or
threatened in writing to do so; (iii) there is no claim or obligation of the
Company arising out of any termination or expiration of any sales representative
or distribution agreement or arrangement.
Section 4.14 LITIGATION. There is no Legal Proceeding involving the
Company which is pending, contemplated to be brought by the Company or, to the
knowledge of the Company, threatened or contemplated to be brought against the
Company by any other Person. The Company is not a party to, or subject to the
provisions of, any Order of any court or Government Entity. There is no Legal
Proceeding pending or, to the Company's knowledge, threatened against the
Company that questions the validity of this Agreement or the Transactions,
questions the right of the Company to enter into this Agreement and the Company
Transaction Documents, or seeks to delay, prevent or enjoin, or seeks damages as
a result of, the consummation of the Transactions by the Company; nor has the
Company received any notice that there is any basis for any of the foregoing.
The foregoing includes, to the Company's knowledge, Legal Proceedings pending or
threatened (or any basis therefor known to the Company) involving (i) any of the
Company's employees' use in connection with their employment by the Company of
any information or techniques allegedly proprietary to any of their former; or
(ii) any of the Company's employees' obligations under any confidentiality,
non-compete or assignment of invention agreements with prior employers; and
(iii) any workers' compensation, employment discrimination or other claims by
employees or former employees.
Section 4.15 TAX RETURNS AND PAYMENTS. The Company has duly filed
all federal, state, local and foreign income, franchise, excise, real, personal
property and other Tax returns and reports required to have been filed by the
Company prior to the date hereof. All of
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the foregoing returns and reports are true and correct in all material respects.
The Company has paid or, prior to the Effective Time will pay, all Taxes,
interest and penalties due or (except to the extent the same are contested in
good faith) claimed to be due to any federal, state, local, foreign or other
taxing authority. The Company has paid and will pay all installments of
estimated taxes due on or before the Effective Time. All Taxes and state
assessments and levies which the Company is required by Law to withhold or
collect have been withheld or collected and have been paid to the proper
governmental authorities or are held by the Company for such payment. The
Company has paid or made adequate provision in accordance with GAAP in the
Financial Statements and Quarterly Financial Statements for all Taxes payable in
respect of all periods ending on or prior to the periods covered by such
statements and will have made or provided for all Taxes payable in respect of
all periods ending on or prior to the Closing Date. As of the date hereof, all
deficiencies proposed as a result of any audits have been paid or settled and,
except as set forth in Schedule 4.15 of the Company Disclosure Schedule, there
are no ongoing Tax audits or, to the knowledge of the Company, any threatened
Tax audits. No issue has been raised by a Governmental Entity in any examination
or audit which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period. There are no claims or assessments pending against the Company
for any alleged deficiency in any Tax, and the Company has not been notified in
writing of any proposed Tax claims or assessments against the Company. There is
no Contract, plan or arrangement covering any Person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by the Company by reason of Section 162(m) or 28OG of the Code.
Section 4.16 EMPLOYEE BENEFIT PLANS.
(a) Schedule 4.16 of the Company Disclosure Schedule sets forth a
complete and correct list of all "employee benefit plans", as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and any other pension plans or employee benefit arrangements or
payroll practices (including, without limitation, severance pay, vacation pay,
company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, stock option or stock
purchase arrangements or policies) maintained, or contributed to, by the Company
or any trade or business (whether or not incorporated) which is treated with the
Company as a single employer under Section 414(b), (c), (m) or (o) of the Code
(an "ERISA AFFILIATE") with respect to current or former employees of the
Company or its ERISA Affiliates (each, a "COMPANY BENEFIT PLAN"). Each Company
Benefit Plan is in writing and the Company has furnished Parent with a true and
complete copy of each Company Benefit Plan document, including all amendments
thereto since the most recent restatement thereof, and a true and complete copy
of each material document prepared in connection with each Company Benefit Plan,
including, without limitation, (i) a copy of each trust or other funding
arrangement, (ii) the most current summary plan description and summary of
material modifications, (iii) the three most recently filed Form 5500's,
including all attachments thereto, and (iv) the most recently prepared actuarial
report and financial statement, if any, in connection with each Company Benefit
Plan. The Company does not have any commitment to (x) create or incur liability
with respect to or cause to exist any other employee benefit plan, program or
arrangement, (y) enter into any Contract to provide compensation or benefits to
any individual, or (z) modify, change or terminate any Company Benefit Plan,
other than with respect to a modification, change or termination required by
ERISA or the Code.
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(b) Neither the Company nor any current or former ERISA Affiliate of
the Company has ever maintained, sponsored or contributed to any benefit plan
subject to Title IV of ERISA, Section 412 of the Code, or Section 302 of ERISA.
Neither the Company nor any current or former ERISA Affiliate of the Company has
ever incurred any liability under, arising out of or by operation of Title IV of
ERISA and no fact or event exists which could give rise to any such liability.
(c) The Option Plan is the Company's only equity incentive plan.
Each of the Company Benefit Plans intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the Internal Revenue
Service that such Plan is so qualified, and nothing has occurred with respect to
the operation of any such Company Benefit Plan which, either individually or in
the aggregate, would cause the loss of such qualification or the imposition of
any liability, penalty or tax under ERISA or the Code.
(d) Except as set forth in Schedule 4.16(d) of the Company
Disclosure Schedule, there has been no prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any
Company Benefit Plan. The Company is not currently liable and has not previously
incurred any liability for any tax or penalty arising under Chapter 43 of
Subtitle D of the Code or Section 502 of ERISA, and no fact or event exists
which could give rise to any such liability.
(e) Each of the Company Benefit Plans has been maintained, in all
material respects, in accordance with its terms and all provisions of applicable
Laws. All amendments and actions required to bring each of the Company Benefit
Plans into conformity in all material respects with all of the applicable
provisions of ERISA and other applicable Laws have been made or taken except to
the extent that such amendments or actions are not required by law to be made or
taken until a date after the Closing Date.
(f) The Company has no predecessor in interest and has not
maintained a welfare benefit plan providing continuing benefits after the
termination of employment (other than as required by Section 4980B of the Code
and at the former employee's own expense), and the Company and each of its ERISA
Affiliates have complied in all material respects with the notice and
continuation requirements of Section 4980B of the Code and the regulations
thereunder.
(g) Neither the execution and delivery of this Agreement nor the
consummation of the Transactions will (i) result in any material payment
(including, without limitation, severance, "change of control" compensation or
golden parachute) becoming due to any director or employee of the Company, (ii)
materially increase any benefits otherwise payable under any Company Benefit
Plan or (iii) other than the acceleration of Options in accordance with their
terms, result in the acceleration of the time of payment or vesting of any such
benefits to any material extent.
(h) Except as set forth in Schedule 4.16(h) of the Company
Disclosure Schedule, there has been no violation of ERISA with respect to the
filing of applicable returns, reports, documents and notices regarding any of
the Company Benefit Plans with the Secretary of Labor or the Secretary of the
Treasury or the furnishing of such notices or documents to the
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participants or beneficiaries of the Company Benefit Plans which could result in
liability to the Company. All contributions and premiums required by law or by
the terms of any Company Benefit Plan or any agreement relating thereto have
been timely made, except for those contributions and premiums not yet due and
owing.
(i) There are no pending legal proceedings, claims or administrative
actions which have been asserted or instituted against any of the Company
Benefit Plans, the assets of any such plans or the Company or any ERISA
Affiliate or the plan administrator or any fiduciary of the Company Benefit
Plans with respect to the operation of such plans.
Section 4.17 LABOR MATTERS. The Company is not bound by or subject
to (and none of its assets or properties is bound by or subject to) any written
or oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the knowledge of the Company, has
sought to represent any of the employees, representatives or agents of the
Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, nor has the Company
received written notice of any labor organization activity involving its
employees. Except as set forth in Schedule 4.17 of the Company Disclosure
Schedule, no officer or employee of the Company is a party to an agreement or
arrangement that restricts the ability of the Company to terminate such
officer's or employee's employment by the Company. The Company has complied in
all material respects with all applicable state and federal equal employment
opportunity Laws and with other Laws related to employment, except for such
noncompliance as will not have a Company Material Adverse Effect.
Section 4.18 COMPLIANCE WITH APPLICABLE LAWS. The Company has not
conducted, and is not conducting, its business in violation of any Law, Order or
Permit of any Governmental Entity and no Product has been exported in violation
of the applicable provisions of the U.S. export control laws. No investigation
or review by any Governmental Entity with respect to the Company or its
operations or activities is pending or, to the Company's knowledge, threatened,
nor has any Governmental Entity indicated an intention to conduct the same. No
material change is required in the Company's operations, processes, properties
or procedures to comply in the future with any existing Law, Order or Permit,
and the Company has not received any notice or communication of any material
noncompliance with any such Company Permits that has not been cured as of the
date hereof. The Company has all Permits necessary to conduct its business as
presently conducted or contemplated to be conducted.
Section 4.19 ENVIRONMENTAL. Except as set forth in Section
4.19 of the Company Disclosure Schedule, to the knowledge of the Company and
the Stockholders:
(a) the operations of the Company have been and, as of the
Effective Time, will be in compliance with all Environmental
Laws;
(b) the Company has obtained, currently maintains and, as of the
Effective Time, will have all Environmental Permits required
for its operations; all such Environmental Permits are and, as
of the Effective Time, will be, in full force and effect and
in good standing; there are no Legal Proceedings pending or
threatened with respect to any such Environmental Permits; the
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Company is, and as of the Effective Time will be, in material
compliance with such Environmental Permits; and neither the
Company nor any Stockholder has received any notice from any
source, or has otherwise obtained knowledge, to the effect
that there is lacking any Environmental Permit required in
connection with the current operations of the Company or the
current use or operation of the Leased Property;
(c) the Company, its operations and the Leased Property are not
(i) subject to any outstanding written Order or Contract with
or in favor of any Governmental Entity or (ii) subject to any
investigation respecting (x) Environmental Laws, (y) any
Remedial Action or (z) any Environmental Claim;
(d) the Company is not subject to any Legal Proceeding alleging
the violation of any Environmental Law or Environmental Permit
or seeking any Remedial Action;
(e) neither the Company nor any Stockholder has received, nor has
there been issued, any written communication that alleges that
the Company is not in compliance with any Environmental Law or
Environmental Permit or that seeks the Company to take any
Remedial Action;
(f) the Company has not caused any Hazardous Materials, or
permitted any Hazardous Materials for which the Company is
responsible, to remain or be disposed of, either on or under
real property legally or beneficially owned or operated by the
Company or on any real property not permitted to accept, store
or dispose of such Hazardous Materials other than in
compliance with Environmental Laws and Permits, and the
Company has never disposed or Released any Hazardous Materials
on the Landfill Property;
(g) the Company has no liabilities (other than those related to
its disposal obligations) with respect to Hazardous Materials;
(h) none of the operations of the Company involve the generation,
transportation, treatment, storage or disposal of hazardous
waste or controlled waste other than in compliance with
Environmental Laws and Permits; and
(i) there is not now on or in the Leased Property, nor has there
been, (i) any underground storage tanks or surface tanks,
dikes or impoundments; (ii) any asbestos-containing materials
or (iii) any polychlorinated biphenyls.
Section 4.20 CERTAIN BUSINESS PRACTICES. Neither the Company nor any
director, officer or employee of the Company, or, to the Company's knowledge,
any agent thereof has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to any political activity,
(ii) made any unlawful payment to any foreign, domestic or supranational
government official or employee or to any foreign or domestic political party or
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campaign or violated any provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended, or the OECD Convention on Combating Bribery of Foreign Public
Officials in Business Transactions, or (iii) made any other unlawful payment.
The Company has complied in all material respects with all United States and
foreign export control Laws including, without limitation, the U.S. Export
Administration Act.
Section 4.21 CORPORATE DOCUMENTS. The Company has heretofore made
available to Parent a complete and correct copy of the Certificate of
Incorporation and By-laws of the Company, each as amended to the date hereof.
The Company has provided Parent with access to true and complete copies of the
records of proceedings of the Board of Directors of the Company and its
stockholders since the incorporation of the Company. Such records contain all
actions authorizing material transactions of the Company or which are required
by Law or Contract to be authorized by the Board of Directors or stockholders of
the Company. The Company is not in violation or Default in any material respect
of any provisions of its Certificate of Incorporation, as amended, or its
Bylaws.
Section 4.22 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no
Contract, Permit or Order binding upon the Company or any of its properties
which has, has had or could reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of the Company or the
conduct of its business as presently conducted or contemplated to be conducted.
Section 4.23 AFFILIATE TRANSACTIONS. The Company is not indebted,
directly or indirectly, to any of its officers or directors or to their
respective spouses or children, in any amount whatsoever other than in
connection with expenses or advances of expenses incurred in the ordinary course
of business or relocation expenses of employees. To the Company's knowledge,
none of the Company's officers or directors, or any members of their immediate
families, are, directly or indirectly, indebted to the Company or have any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship, or
any firm or corporation which competes with the Company other than ownership of
a less than five percent interest in the outstanding capital stock of any
publicly traded company that may compete with the Company. To the knowledge of
the Company, none of the Company's officers or directors or any members of their
immediate families has a direct or indirect interest in any material contract
with the Company other than in their capacity as an officer or employee. Except
as set forth in Schedule 4.23 of the Company Disclosure Schedule, the Company is
not a guarantor or indemnitor of any indebtedness of any other Person.
Section 4.24 INSURANCE. Set forth in Schedule 4.24 of the Company
Disclosure Schedule lists the insurance policies maintained by the Company and
describes the coverage, limits, retainages or deductibles thereof. Such policies
are in full force and effect. The Company has provided to Parent copies of its
insurance loss runs for the preceding three years.
Section 4.25 BROKERS. No agent, broker, finder, investment banker,
lawyer or other firm or Person is or will be entitled to any broker's or
finder's fee or other similar commission or other fee in connection with the
Transactions based upon arrangements made by or on behalf of the Company or the
Stockholders.
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Section 4.26 CORPORATE APPROVAL. The Board of Directors of the
Company, by resolutions duly adopted by unanimous vote of those voting at a
meeting duly called and held and not subsequently rescinded or modified in any
way (the "COMPANY BOARD APPROVAL"), has duly (i) determined that this Agreement
and the Merger are fair to and in the best interests of the Company and its
stockholders, (ii) approved this Agreement and the Merger, and (iii) recommended
that the stockholders of the Company adopt this Agreement and approve the Merger
and directed that this Agreement be adopted and the Merger be approved by a
written consent of the Company's stockholders or submitted to the Company's
stockholders for consideration at special meeting.
Section 4.27 DISCLOSURE. No representation or warranty of the
Company contained in this Agreement and the Exhibits attached hereto, or any
certificate furnished or to be furnished to Parent or Merger Subsidiary at the
Closing, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading, when read together, in light of the circumstances under
which they were made.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders hereby severally, but not jointly,
represents and warrants to Parent and Merger Subsidiary that:
Section 5.1 AUTHORIZATION. Such Stockholder has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each
Transaction Document to which such Stockholder is a party or which such
Stockholder is required to execute or deliver (a "STOCKHOLDER TRANSACTION
DOCUMENT") and to consummate the transactions contemplated hereby and thereby.
This Agreement has been duly executed and delivered by such Stockholder and
constitutes a valid and legally binding obligation of such Stockholder
enforceable against such Stockholder in accordance with its terms. The
Stockholder Transaction Documents relevant to each Stockholder, when executed
and delivered by such Stockholder, shall constitute valid and legally binding
obligations of such Stockholder, enforceable against such Stockholder in
accordance with their respective terms.
Section 5.2 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) None of the execution and delivery of this Agreement or any
Stockholder Transaction Documents by such Stockholder, the consummation by such
Stockholder of the Transactions or the performance by such Stockholder of such
Stockholder's obligations under this Agreement or the relevant Stockholder
Transaction Documents will (i) result in a Default of any Law or Order
applicable to such Stockholder, or by which such Stockholder or any of such
Stockholder's shares of Company Common Stock may be bound or affected, or (ii)
result in a Default pursuant to any Contract to which such Stockholder is a
party or by which such Stockholder or any of such Stockholder's shares of
Company Common Stock may be bound or affected.
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(b) None of the execution and delivery of this Agreement or any
Stockholder Transaction Documents by such Stockholder, the consummation by such
Stockholder of the Transactions or the performance by such Stockholder of such
Stockholder's obligations under this Agreement or the relevant Stockholder
Transaction Documents will require any Consent of any Governmental Entity or
other Person, except for the filing of the Certificate of Merger pursuant to
Delaware Law and compliance with the HSR Act.
Section 5.3 COMPANY COMMON STOCK. Such Stockholder holds the number
of shares of Company Common Stock set forth opposite such Stockholder's name on
Schedule 4.4 of the Company Disclosure Schedule beneficially and of record and
free and clear of all Liens. Except for the Shareholders Agreement, such
Stockholder is not a party to any Contract restricting the transfer of any
shares of capital stock of the Company or affecting the voting of any such
shares of capital stock.
Section 5.4 LITIGATION. There is no Legal Proceeding pending or, to
such Stockholder's knowledge, threatened against such Stockholder that questions
the validity of this Agreement or the Transactions, questions the right of such
Stockholder to enter into this Agreement and the relevant Stockholder
Transaction Documents, or seeks to delay, prevent or enjoin, or seeks damages as
a result of, the consummation of the Transactions by such Stockholder; nor has
such Stockholder received any notice that there is any basis for any of the
foregoing.
Section 5.5 INVESTMENT IN PARENT COMMON STOCK.
(a) Such Stockholder has, during the course of the Transactions, had
the opportunity to ask questions of, and has received answers from, Parent and
its representatives concerning Parent and the Transactions.
(b) Such Stockholder is acquiring the Parent Common Stock for its
own account, for investment, and not with a view to any resale or "distribution"
thereof within the meaning of the Securities Act of 1933, as amended (the
"SECURITIES ACT").
(c) Such Stockholder understands that because the sale of Parent
Common Stock to such Stockholder as Merger Consideration has not been registered
under the Securities Act, such Stockholder cannot dispose of any of such Parent
Common Stock until such Parent Common Stock is subsequently registered under the
Securities Act or an exemption from such registration is available.
(d) Such Stockholder is sufficiently knowledgeable and experienced
in financial matters so as to be able to evaluate the risks and merits of such
Stockholder's investment in Parent Common Stock, and such Stockholder is able to
bear the economic risk of loss of such Stockholder's entire investment in Parent
Common Stock. Such Stockholder is an "accredited investor" as such term is
defined in Rule 501 promulgated under the Securities Act.
(e) Such Stockholder has been advised that the Parent Common Stock
to be received by such Stockholder pursuant to the Transactions has not been
registered under the Securities Act or under the "blue sky" laws of any
jurisdiction and that Parent is issuing Parent
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Common Stock to such Stockholder pursuant to this Agreement in reliance upon,
among other things, the representations and warranties of such Stockholder
contained in this Section 5.5.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
Parent and Merger Subsidiary jointly and severally represent and
warrant to the Company and each of the Stockholders that:
Section 6.1 ORGANIZATION AND QUALIFICATION. Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York. Merger Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
Parent and Merger Subsidiary has the requisite corporate power and authority to
carry on its business as it is now being conducted and is duly qualified or
licensed to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification material to Parent.
Section 6.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Merger Subsidiary has all necessary power and authority to execute and deliver
this Agreement and each Transaction Document to which Parent or Merger
Subsidiary is a party or which Parent or Subsidiary is required to execute or
deliver (a "PARENT TRANSACTION DOCUMENT"), and to consummate Transactions
contemplated hereby and thereby. All corporate action on the part of Parent's
and Merger Subsidiary's Board of Directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the relevant Parent
Transaction Documents, and the performance of all obligations of each of Parent
and Merger Subsidiary hereunder and thereunder, have been duly and validly
taken. This Agreement has been duly executed and delivered by Parent and Merger
Subsidiary and constitutes a valid and legally binding obligation of each of
Parent and Merger Subsidiary, enforceable against each of Parent and Merger
Subsidiary in accordance with its terms. The relevant Parent Transaction
Documents, when executed and delivered by Parent and Merger Subsidiary, as
applicable, shall constitute valid and legally binding obligations of Parent and
Merger Subsidiary, as applicable, enforceable against Parent and/or Merger
Subsidiary, as applicable, in accordance with their respective terms.
Section 6.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement and the relevant
Parent Transaction Documents by each of Parent and Merger Subsidiary does not,
and the performance of this Agreement and the relevant Parent Transaction
Documents by Parent and Merger Subsidiary will not: (i) conflict with or violate
the Certificate of Incorporation or By-laws of Parent or Merger Subsidiary, (ii)
assuming the Consents specified in Section 6.3(b) have been received and the
waiting periods referred to therein have expired, and any condition precedent to
such Consent has been satisfied, conflict with or violate any Laws applicable to
Parent or Merger
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Subsidiary or by which any property or asset of Parent or Merger Subsidiary is
bound, or (iii) result in any Default under any Contract to which Parent or
Merger Subsidiary is a party or by which any property or asset of Parent or
Merger Subsidiary is bound which would have a Parent Material Adverse Effect or
prevent or materially delay the consummation of the Merger.
(b) The execution and delivery of this Agreement and the relevant
Parent Transaction Documents by each of Parent and Merger Subsidiary does not,
and the performance of this Agreement and the relevant Parent Transaction
Documents by Parent and Merger Subsidiary will not, require any Consent of any
Governmental Entity, except for applicable requirements of the Exchange Act, the
Securities Act, Blue Sky Laws, the HSR Act, such notifications, filings,
approvals, consents and waivers as may be required under other merger control
laws, filing and recordation of the Certificate of Merger as required by the
DGCL and applications for listing and other filings required by the rules of the
NYSE and except where failure to obtain such Consents, would not have a Parent
Material Adverse Effect or would not prevent or materially delay the
consummation of the Merger.
Section 6.4 PARENT REPORTS. Parent has provided the Stockholders
with access to all reports and statements that it has filed with the Securities
and Exchange Commission since January 1, 2000 (the "SEC Filings"). As of their
respective dates (and without giving effect to any amendments or modifications
filed after the date of this Agreement with respect to reports and documents
filed before the date of this Agreement), each of the SEC Filings, including the
financial statements, exhibits and schedules thereto, complied in all material
respects with all of the statutes, rules and regulations enforced or promulgated
by the Securities and Exchange Commission and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
Section 6.5 FINANCING. Parent has available, and on the Closing Date
will have available, sufficient funds, available lines of credit or other
sources of immediately available funds to enable it to pay the Cash
Consideration on the terms and conditions of this Agreement. Parent's
obligations hereunder are not subject to any condition regarding Parent's
ability to obtain financing for the consummation of the transactions
contemplated hereby.
Section 6.6 LITIGATION. There are no legal or governmental
proceedings pending or threatened to which Parent or any of its Affiliates is a
party or to which any of the properties of Parent or its Affiliates is subject
that are required to be described in the SEC Filings that are not so described.
Section 6.7 BROKERS AND FINDERS. No agent, broker, finder,
investment banker, lawyer or other firm or Person is or will be entitled to any
broker's or finder's fee or other similar commission or other fee in connection
with the Transactions based upon arrangements made by or on behalf of Parent or
the Merger Subsidiary.
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ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
Section 7.1 CONDUCT OF THE BUSINESS PENDING THE EFFECTIVE TIME.
(a) From and after the date hereof and prior to the Effective Time,
except as contemplated by this Agreement or required by Law, or unless Parent
shall otherwise agree in writing, the Company covenants and agrees that it shall
(a) carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted (b) use reasonable efforts
to conduct its business in a manner consistent with the budgets and plans
heretofore made available to Parent, including all capital expenditure and plant
expansion plans, (c) use all reasonable efforts to: preserve intact its present
business organizations; keep available the services of its employees and
consultants; and preserve its relationships and goodwill with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with the Company, and (d) to protect its Intellectual Property to the
end that its goodwill and on-going Business shall not be impaired in any
material respect at the Effective Time. Unless Parent shall otherwise agree in
writing, prior to the Effective Time, the Company shall not:
(i) declare, set aside, or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any other
equity securities thereof or any rights, warrants, or options to acquire
any such shares or other securities;
(ii) grant, award or enter into any compensation or change of
control arrangement with any employee including the repricing of any
Options;
(iii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock including treasury stock and any
Options, any other voting securities of the Company or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares or voting securities (other than the issuance of Company Common
Stock upon the exercise of Options outstanding on the date of this
Agreement) or, except pursuant to the Option Amendment Agreements, amend
the terms of any such securities, rights, warrants or options or, except
as set forth on the Company Disclosure Schedule take any action to
accelerate the vesting thereof;
(iv) amend the Certificate of Incorporation or By-laws of
the Company;
(v) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof, or any
assets that are material, individually or in the aggregate;
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(vi) subject to a Lien or sell, lease, license or otherwise
dispose of or transfer any of its properties or assets other than Company
Technology except in the ordinary course of business consistent with past
practice;
(vii) subject to a Lien or sell, lease, license or otherwise
dispose of or transfer any Company Technology except for Permitted
Licenses and except as described in Schedule 4.7(o) of the Company
Disclosure Schedule;
(viii) incur or modify any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any debt
securities, guarantee any debt securities of another person, or enter into
any "keep well" or other agreement to maintain any financial condition of
another person, except, in any such case, for borrowings or other
transactions incurred in the ordinary course of business under the
existing credit facility including to repay existing indebtedness pursuant
to the terms thereof, enter into any leases, guarantees, assumptions of
indebtedness or letters of comfort or similar instruments or make any
loans, advances or capital contributions to, or investments in, any other
person, or compromise any material claims or litigation;
(ix) alter, amend or delay in any material respect the
implementation of its plans for capital expenditures and
completion/expansion of plant and production facilities previously
delivered to Parent;
(x) take any action or omit to take any action that would
cause any of its representations and warranties herein to become untrue in
any material respect;
(xi) authorize any of, or commit or agree to take any of,
the foregoing actions; and
(xii) make any changes in its accounting principles,
methods or policies.
(b) Within 15 days after the end of each month following the date of
this Agreement, the Company shall deliver to Parent financial statements
presented on a basis consistent with the Financial Statements and September
Financial Statements and copies of any Material Contracts entered into in
accordance with this Agreement during the preceding month. The Company shall
promptly provide Parent copies of all filings made by the Company with any
Governmental Entity.
(c) The Company shall, before settling or compromising any material
Legal Proceeding, income tax or other liability, consult with Parent and its
advisors as to the positions and elections that will be taken or made with
respect to such matter and shall not enter into any such settlement or
compromise without the consent of Parent, which will not be unreasonably
withheld or delayed.
Section 7.2 OPTION AMENDMENT AGREEMENTS. The Company agrees to use
commercially reasonable efforts to cause each of its directors, officers,
employees, consultants and agents who hold Options to enter into an agreement
substantially in the form of Exhibit B hereto amending the term of such Options
(the "OPTION AMENDMENT AGREEMENTS"). The Company agrees to use commercially
reasonable efforts to cause each of
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its employees who have been employed by the Company for more than ninety (90)
days as of the Closing Date and who have not been granted any Options to sign a
release in substantially in the form of Exhibit C hereto releasing the Company
from any obligation to issue any Options to such employee in exchange for a cash
payment (the "OPTION RELEASES"). Parent hereby guarantees, effective upon the
Effective Time and only if the Merger occurs, the obligations of the Company
under each of the Option Amendment Agreements and Option Releases. In the event
that Parent elects to consummate the Merger even though Option Amendment
Agreements have not been signed with respect to all Options, the Company shall
use commercially reasonable efforts to cause the holders of all Options with
respect to which an Option Amendment Agreement has not been executed to exercise
all such Options prior to the Effective Time and shall use commercially
reasonable efforts to cause such holders to enter into agreements with Parent in
a form satisfactory to Parent containing representations and warranties
comparable to those included in Article V hereof and similar indemnification
provisions.
Section 7.3 ACQUISITION PROPOSALS. The Company and the Stockholders
will not, and will use commercially reasonable efforts to cause their respective
representatives not to, directly or indirectly (i) discuss, negotiate,
undertake, authorize, recommend, propose or enter into, either as the proposed
surviving, merged, acquiring or acquired corporation, any transaction involving
a merger, consolidation, business combination, purchase or disposition of any
amount of the assets or capital stock or other equity interest in the Company
other than the transactions contemplated by this Agreement (an "ACQUISITION
TRANSACTION"), (ii) facilitate, encourage, solicit or initiate discussions,
negotiations or submissions of proposals or offers in respect of an Acquisition
Transaction, (iii) furnish or cause to be furnished, to any Person, any
information concerning the business, operations, properties, prospects or assets
of the Company in connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other Person to do or seek any of the foregoing.
The Company and the Stockholders will promptly inform Parent upon receipt by the
Company, any Stockholder or any of their respective representatives of any
proposal or inquiry in respect of any Acquisition Transaction.
Section 7.4 FINANCIAL INFORMATION. As soon as practicable after the
date hereof, the Company shall use commercially reasonable efforts to cooperate
and assist Parent and Parent's independent public accountants in the compilation
and preparation of all financial statements and financial statement schedules of
the Company prepared in accordance with GAAP and reports and consents of the
Company's independent public accountants as may be necessary or deemed advisable
by Parent to comply with SEC reporting and disclosure requirements. Parent shall
pay any fees and other amounts charged by Parent's independent accountants in
connection with such financial statements and financial statement schedules and
the Company shall have no responsibility therefor. The Company shall deliver to
Parent's independent public accountants and/or the Company's independent public
accountants all engagement letters and management representation letters as may
be reasonably requested by Parent or such accountants. The Company shall use its
best efforts to cause its independent public accountants to cooperate with and
assist Parent and its independent public accountants in the preparation of the
financial statements contemplated by this Section 7.4.
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Section 7.5 TREATMENT OF REAL ESTATE. At or prior to the Effective
Time, the Company shall use reasonable efforts to cause the Leased Property to
be subdivided, to cause the Fairport XXX to convey to the Village of Fairport
the Landfill Property, and to enter into a new lease (the "REPLACEMENT LEASE")
with the Fairport XXX pursuant to which it will lease the remainder of the
Leased Premises from the XXX on an arms'-length basis. The Replacement Lease
shall be in a form which is acceptable to Parent in its reasonable discretion.
Section 7.6 ENVIRONMENTAL INSURANCE. Parent agrees to use reasonable
efforts to obtain environmental insurance (the "ENVIRONMENTAL INSURANCE"), which
shall have terms which are acceptable to Parent in its sole discretion, covering
the potential liability of the Company, Parent and Parent's Affiliates for
Environmental Matters including Environmental Claims and Remedial Actions.
Parent shall be responsible for the payment of the premium for the Environmental
Insurance. The deductible for the Environmental Insurance shall not exceed
$10,000,000. Parent shall cause each of the Stockholders to be named as
additional insureds on the policy or policies providing the Environmental
Insurance.
Section 7.7 GENERAL SIGNAL AGREEMENT. The Company and Parent agree
to use commercially reasonable efforts to cause General Signal Corporation and
General Signal Technology Corporation to enter into an Agreement with Parent
and, as applicable, the Company making certain representations, warranties,
covenants and agreements relating to the Merger and clarifying the status of
certain Technology and IP Rights (the "GENERAL SIGNAL AGREEMENT").
Section 7.8 APPROVAL OF TRANSACTION. The Stockholders agree to take
any and all actions necessary to cause this Agreement and the Merger to be
adopted and approved by the stockholders of the Company in accordance with the
DGCL and the Company's Certificate of Incorporation and By-laws, including
voting their shares of Company Common Stock in favor of such adoption and
approval.
ARTICLE VIII
ADDITIONAL AGREEMENTS
Section 8.1 ACCESS TO INFORMATION. From the date hereof through the
Effective Time, the Company shall afford to Parent and Parent's accountants,
counsel and other representatives full and reasonable access during normal
business hours to its properties, books, Contracts, records and personnel and,
during such period, shall furnish promptly to Parent (i) a copy of each report,
schedule and other document filed or received by it pursuant to the requirements
of any Law, and (ii) all other information concerning its business, properties
and personnel as Parent may reasonably request. Parent and its accountants,
counsel and other representatives shall, in the exercise of the rights described
in this Section 8.1, not unduly interfere with the operation of the business of
the Company.
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Section 8.2. FURTHER ACTION; CONSENTS; FILINGS.
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use its reasonable best efforts to (i) take, or cause to be
taken, all appropriate action and do, or cause to be done, all things necessary,
proper or advisable under applicable Law or otherwise to consummate and make
effective the Merger and the other Transactions, (ii) obtain from Governmental
Entities any Consents, Permits or Orders required to be obtained or made by
Parent, the Company, the Stockholders or any of their Affiliates in connection
with the authorization, execution and delivery of this Agreement and the
consummation of the Merger and the other Transactions, and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement, the Merger and the other Transactions that are
required under (x) the Exchange Act and the Securities Act and the rules and
regulations thereunder and any other applicable federal or state securities
Laws, (y) the HSR Act, and (z) any other applicable Law. Nothing herein shall be
construed to require the Company to dispose of, or make any change in, any
portion of its business. The parties hereto shall cooperate with each other in
connection with the making of all such filings, including by providing copies of
all such documents to the nonfiling party and its advisors prior to filing and,
if requested, by accepting all reasonable additions, deletions or changes
suggested in connection therewith. Without limiting the generality of the
foregoing, each of the Stockholders agrees not to take any action or vote any of
such Stockholder's shares of Company Common Stock in a manner which is contrary
to or inconsistent with the consummation of the Merger and the other
Transactions unless specifically permitted by this Agreement. Parent agrees to
pay the filing fee for any HSR Act filing for Parent or Xxxxxxx required as a
result of the Transactions.
(b) Parent, Xxxxxxx and the Company shall, and shall cause their
respective Affiliates which are required to do so to, file as soon as
practicable after the date of this Agreement but in no event later than January
31, 2001, notifications under the HSR Act and any other applications or notices
required under other Laws and shall respond as promptly as practicable to all
inquiries or requests that may be made pursuant to any Laws for additional
information or documentation and shall respond as promptly as practicable to all
inquiries and requests received from any Governmental Entity in connection with
antitrust matters. The parties shall cooperate with each other in connection
with the making of all such filings or responses, including providing copies of
all such documents to the other party and its advisors prior to filing or
responding. Each of Parent, Xxxxxxx and the Company, to the extent applicable,
further agrees to file contemporaneously with the filing of the applications any
requests for waivers of applicable Governmental Entities as may be required to
expeditiously prosecute such waiver requests and to diligently submit any
additional information or amendments for which the Governmental Entity may ask
with respect to such waiver requests.
Section 8.3 EMPLOYEE AND OTHER ARRANGEMENTS.
(a) Prior to the Effective Time, the Company shall use commercially
reasonable efforts to cause each employee of the Company listed on Exhibit D-1
to this Agreement to enter into an agreement with the Company in the form of
Exhibit D-2 to this Agreement agreeing that such employee shall preserve the
confidentiality of the proprietary
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information of the Company, Parent and their Affiliates, that all inventions of
employee as an employee of the Company or any of its Affiliates shall be
automatically assigned to the Company and that such employee shall not compete
with the business of the Company, Parent or their Affiliates.
(b) Xxxxxxx and Xxxxxxxxxxx agree to enter into a non-competition
agreement with the Company and Parent prior to the Effective Time, which
non-competition agreement shall be in substantially the form of Exhibit E hereto
(the "NON-COMPETITION AGREEMENTS").
(c) To the extent permitted by applicable Law, the employees of the
Company who continue as employees of the Surviving Corporation (the "CONTINUING
EMPLOYEES") shall continue to participate in the Company's Benefit Plans, except
where any such plan is terminated at the request of Parent prior to or at the
Effective Time. At or after the Effective Time, Parent may merge any Company
Benefit Plan with and into a benefit plan of Parent or any of its Affiliates (a
"PARENT BENEFIT PLAN") or substitute for a Company Benefit Plan any Parent
Benefit Plan. At or after the Effective Time, the Surviving Corporation, Parent
or any of its Affiliates may amend or terminate any Benefit Plan of the Company
or Parent Benefit Plan substituted for a Benefit Plan of the Company ; provided,
that if the termination or amendment adversely affects the benefits provided to
the Continuing Employees, Parent or a subsidiary of Parent shall provide the
Continuing Employees with benefits that are substantially equivalent to the
benefits being received by other similarly situated employees of Parent or such
other Affiliate of Parent under comparable plans then in effect, if any.
Whenever a Continuing Employee becomes a participant in a Parent Benefit Plan,
such Continuing Employee shall receive full credit for his past service with the
Company for purposes of determining eligibility to participate in and the
vesting of benefits under such Parent benefit plan (but not for the purpose of
accrual of benefits thereunder). Continuing Employees will not be subject to any
exclusion or penalty for preexisting conditions that were covered under the
Company's health plan immediately prior to the Effective Time or any waiting
period relating to coverage under health plans of Parent or any Affiliate of
Parent. Nothing herein shall require: (i) the continuation of any Benefit Plan
or prevent the amendment or termination thereof (subject to the maintenance, in
the aggregate, of the benefits as provided in this paragraph); or (ii) require
Parent or the Surviving Corporation to continue or maintain any stock purchase
or other equity plan related to the equity of the Company or the Surviving
Corporation, to change the eligibility requirements of any stock or other equity
plan of Parent, or to grant any equity-based awards to any Continuing Employees;
or (iii) constitute any obligation on the part of Parent, the Surviving
Corporation or any of their Affiliates to change the employment status of any of
the Continuing Employees to other than "at will."
Section 8.4 PUBLIC ANNOUNCEMENTS. On or before the Closing Date,
Parent and the Company shall not (nor shall they permit any of their respective
Affiliates to), without prior consultation with the other party and such other
party's review of and consent to any public announcement concerning the
transactions contemplated by this Agreement, issue any press release or make any
public announcement with respect to such transactions during such period, and
Parent and the Company shall, to the extent practicable, allow the other party
reasonable time to review and comment on such release or announcement in advance
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of its issuance and use reasonable efforts in good faith to reflect the
reasonable and good faith comments of such other party, provided, however, no
party shall be prevented from making any disclosure required by law at the time
so required because of any delay on the part of the other party. The parties
intend that the initial announcement of the terms of the transactions
contemplated by this Agreement shall be made by joint press release of Parent
and the Company.
Section 8.5 TRANSITION EFFORTS. Between the date hereof and the
Effective Time, the Company shall use its reasonable best efforts to assist
Parent in its integration of the acquisition of the Company, including the
prompt and orderly transition of employees, customers and suppliers of the
Company's business and providing assistance to Parent in connection with the
integration of the Company's lines of business and services with those of
Parent.
Section 8.6 NOTICES OF BREACH. Each party shall give prompt notice
to the other parties of: (i) any representation or warranty made by such party
contained in this Agreement which has become untrue or inaccurate in any
material respect, or (ii) the failure by such party to comply with or satisfy in
any material respect any covenant, condition, or agreement to be complied with
or satisfied by it under this Agreement. Unless the same is waived in writing by
the other parties, the party giving the notice shall use reasonable efforts to
remedy the same within ten (10) days, provided, however, that such notification
and such efforts, unless successful, shall not excuse or otherwise affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement and, provided
further, that nothing in this Section shall affect any party's right to
terminate the Agreement under Section 10.1.
Section 8.7 RESALE RESTRICTIONS.
(a) Each of the Stockholders hereby agrees not to offer or sell any
shares of Parent Common Stock unless such offer or sale is made (a) pursuant to
an effective registration of such Parent Common Stock under the Securities Act,
or (b) pursuant to an available exemption from the registration requirements of
the Securities Act. Parent shall refuse to register the transfer of any Parent
Common Stock not made in accordance with this Section 8.7 and for such purpose
may place stop order instructions with its transfer agent with respect to the
Parent Common Stock issued as Merger Consideration. A proposed transfer shall be
deemed to comply with this Section 8.7 if the applicable Stockholder delivers to
Parent a legal opinion in form and substance satisfactory to Parent from counsel
reasonably satisfactory to Parent to the effect that such transfer complies with
this Section 8.7.
(b) Each Stockholder agrees that at any time during which such
Stockholder is not permitted to sell its shares of Parent Common Stock that such
Stockholder will not (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer to dispose of,
directly or indirectly, any shares of Parent Common Stock or any securities
convertible into or exercisable or exchangeable for Parent Common Stock, or (ii)
enter into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Parent Common Stock
(regardless of whether any of the transactions described
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in clause (i) or (ii) is to be settled by the delivery of Parent Common Stock or
such other securities, in cash or otherwise).
(c) Each of the Stockholders understand that each certificate
representing shares of Parent Common Stock issued as Merger Consideration will
bear the following legend or one substantially similar thereto:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT AND ANY
APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO RESTRICTIONS ON
THE USE OF SUCH SECURITIES IN HEDGING TRANSACTIONS PURSUANT TO THE
TERMS OF AN AGREEMENT BETWEEN THE HOLDER OF SUCH SECURITIES AND THE
CORPORATION.
Section 8.8 REGISTRATION OF PARENT COMMON STOCK. Parent agrees to
enter into a Registration Rights Agreement with the Stockholders in
substantially the form of Exhibit F which grants the Stockholders certain rights
to have the Parent Common Stock registered for resale under the Securities Act
(the "REGISTRATION RIGHTS AGREEMENT").
Section 8.9 PLAN OF REORGANIZATION.
(a) The Merger is intended to constitute a "plan of reorganization"
under the provisions of Sections 368(a) of the Code. From and after the date of
this Agreement and until the Closing, each party hereto shall use its reasonable
best efforts to cause the Merger to qualify, and will not knowingly take any
action, cause any action to be taken, fail to take any action or cause any
action to fail to be taken which action or failure to act could prevent the
Merger from qualifying as a reorganization under the provisions of Section
368(a) of the Code. Following the Closing, neither the Surviving Corporation,
Parent nor any of their Affiliates shall knowingly take any action, cause any
action to be taken, fail to take any action or cause any action to fail to be
taken, which action or failure to act could cause the Merger to fail to qualify
as a reorganization under Section 368(a) of the Code.
(b) Parent and the Company each hereby agrees to deliver
certificates substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable
counsel to Parent and the Company to deliver the legal opinions contemplated by
Sections 9.2(c) and 9.3(c), which certificates shall be effective as of the date
of such opinions.
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Section 8.10 NYSE LISTING. Parent shall use its reasonable efforts
to cause the shares of Parent Common Stock to be issued in the Merger to be
approved for listing on the New York Stock Exchange, subject to official notice
of issuance, prior to the earlier of the date such shares are required to be
registered for resale under the Securities Act pursuant to the Registration
Rights Agreement or the first anniversary of the Effective Date.
ARTICLE IX
CONDITIONS PRECEDENT
Section 9.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated and any other Consents
from Governmental Entities and other third parties which in any case are
required to be received prior to the Effective Time with respect to the
Transactions shall have been received; and
(b) The consummation of the Merger or the other Transactions shall
not be restrained, enjoined or prohibited by any Order of a court of competent
jurisdiction; provided, however, that the parties shall comply with the
provisions of Section 8.2 and shall further use commercially reasonable efforts
to cause any such order, judgment, decree, injunction or ruling to be vacated or
lifted.
Section 9.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the additional conditions,
unless waived by the Company, that:
(a) Parent and Merger Subsidiary shall have performed in all
material respects their respective agreements contained in this Agreement
required to be performed at or prior to the Effective Time and the
representations and warranties of Parent and Merger Subsidiary contained in this
Agreement shall be true when made and (except for representations and warranties
made as of a specified date, which need only be true as of such date) at and as
of the Effective Time as if made at and as of such time, except as contemplated
by this Agreement or cured prior to the Effective Time and except for
inaccuracies that in the aggregate do not constitute a Parent Material Adverse
Effect; and the Company and each Stockholder shall have received a certificate
of an officer to that effect.
(b) The Escrow Agreement shall have been executed and delivered by
the parties thereto other than the Company and the Stockholders and shall be in
full force and effect.
(c) The Registration Rights Agreement shall have been executed and
delivered by Parent.
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(d) The Company shall have received from Xxxxxx Beach LLP counsel to
the Company, a written opinion dated as of the Closing Date, based on
appropriate representations, including representations of Parent and the
Company, that the Merger qualifies as a reorganization within the meaning of
Section 368(a) of the Code; provided, however, in the event that counsel to the
Company is unwilling to render such opinion this condition shall be satisfied if
counsel to Parent renders such an opinion that is reasonably satisfactory to the
Company.
Section 9.3 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY TO EFFECT THE MERGER. The obligations of Parent and Merger Subsidiary
to effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the additional following conditions, unless waived by Parent:
(a) The Company and the Stockholders shall have performed in all
material respects their agreements contained in this Agreement required to be
performed at or prior to the Effective Time and the representations and
warranties of the Company and the Stockholders contained in this Agreement shall
be true when made and (except for representations and warranties made as of a
specified date, which need only be true as of such date) at and as of the
Effective Time as if made at and as of such time, except as contemplated by this
Agreement or cured prior to the Effective Time; and Parent and Merger Subsidiary
shall have received a certificate of the President or a Vice President of the
Company and each Stockholder (with respect only to such Stockholder) to that
effect.
(b) Each holder of Options shall have entered into an Option
Amendment Agreement or exercised his or her Options; provided, however, that
this condition shall not be satisfied if Parent determines based upon advice of
counsel that, taking into account the nature and number of Option holders who
exercised Options rather than entered into an Option Amendment Agreement, there
is a reasonable chance that the issuance of Parent Common Stock in connection
with the Merger would not be exempt from registration under the Securities Act
based solely on Section 4(2) of the Securities Act.
(c) Parent shall have received from Xxxxx Xxxxxxx LLP, counsel to
Parent, a written opinion dated as of the Closing Date, based on appropriate
representations, including representations of Parent and the Company, that the
Merger qualifies as a reorganization within the meaning of Section 368(a) of the
Code; provided, however, in the event that counsel to Parent is unwilling to
render such opinion this condition shall be satisfied if counsel to the Company
renders such an opinion that is reasonably satisfactory to Parent.
(d) Each stockholder of the Company shall have delivered to Parent
the Certificates representing the shares of Company Common Stock held by such
stockholder.
(e) The Company and the Fairport XXX shall have entered into the
Replacement Lease and the Replacement Lease shall be in a form acceptable to
Parent in its reasonable discretion.
(f) The Company shall have received from the Village of Fairport an
indemnification agreement in substantially the form attached hereto as Exhibit
G.
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(g) The employees of the Company identified on Exhibit D-1 shall
have entered into non-competition and nondisclosure agreements with the Company
in the form of Exhibit D-2.
(h) The Stockholders shall have entered into the
Non-Competition Agreements.
(i) General Signal Corporation and General Signal Technology
Corporation shall have entered into the General Signal Agreement in a form
acceptable to Parent in its sole discretion.
(j) Parent shall have been able to procure the
Environmental Insurance.
(k) The Company Transaction Documents and Stockholder Transaction
Documents shall have been duly authorized executed and delivered by the parties
thereto other than the Parent and Merger Subsidiary and shall be in full force
and effect.
(l) There shall have been no material adverse change in the
business, operations or prospects of the Company since the date hereof, and
Parent shall have received a certificate of the President of the Company to that
effect.
(m) All Consents, approvals or other requirements to the
consummation of the Transactions, including the approval of the stockholders of
the Company contemplated by Section 7.8, shall have been granted or received.
(n) Parent and Merger Subsidiary shall have received such other
documents and instruments not inconsistent with the terms and conditions of this
Agreement as they may reasonably request in connection with the Transactions.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.1 TERMINATION. This Agreement may be terminated
at any time prior to the Effective Time:
(a) by mutual written consent of Parent and the Company;
(b) by the Company, upon a material breach of this Agreement on the
part of Parent or Merger Subsidiary which has not been cured and which would
cause any of the conditions set forth in Section 9.2 to be incapable of being
satisfied by March 31, 2001;
(c) by Parent, upon a material breach of this Agreement on the part
of the Company or any Stockholder which has not been cured and which would cause
any of the conditions set forth in Section 9.3 to be incapable of being
satisfied by March 31, 2001;
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(d) by Parent or the Company if any court of competent jurisdiction
shall have issued, enacted, entered, promulgated or enforced Order, after
reasonable efforts on the part of Parent and the Company to resist, resolve or
lift such Order, which permanently restrains, enjoins or otherwise prohibits the
Merger or any of the Transactions and such Order shall have become final and
nonappealable; or
(e) by either Parent or the Company if the Merger shall not have
been consummated on or before March 31, 2001 provided the terminating party is
not otherwise in material breach of its representations, warranties or
obligations under this Agreement.
Section 10.2 EFFECT OF TERMINATION. In the event of termination of
this Agreement by either Parent or the Company, as provided in Section 10.1,
this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of any of the Company, Parent, Merger Subsidiary, any
Stockholder or any of their respective officers or directors except as expressly
provided herein; provided, however, that this Section 10.2, Section 10.3 and
Article XI shall survive the termination and no termination of this Agreement
shall operate as a release of any obligations of any party as a result of any
breach of this Agreement prior to its termination (other than for an
unintentional breach of the representations or warranties contained in Articles
IV, V and VI).
Section 10.3 FEES AND EXPENSES. Whether or not the Merger is
consummated, Parent shall pay or cause to be paid the reasonable costs and
expenses incurred by the Company in connection with this Agreement and the
Transactions and the reasonable professional fees and expenses incurred by the
Stockholders in connection with the negotiation of this Agreement and the
closing of the Transactions; provided, that neither Parent nor the Company shall
pay any personal expenses of the Stockholders relating to tax, estate planning
or other services affected by the Transactions but not related to the
negotiation of this Agreement or the closing of the Transactions, and provided
further, Parent shall not be obligated to pay or cause to be paid any costs or
expenses of the Company or the Stockholders if the Merger is not consummated as
a result of a breach of this Agreement by the Company or the Stockholders.
Section 10.4 AMENDMENT. This Agreement may be amended by the parties
hereto at any time; provided, however, no amendment shall be made which (i)
changes the form or decreases the amount of the Merger Consideration, (ii) in
any other way materially adversely affects the rights of the Company's
stockholders or (iii) under applicable law would require approval of the
Company's stockholders, in any such case referred to in clauses (i), (ii) and
(iii), without the further approval of such stockholders of the Company in
accordance with the DGCL and the Certificate of Incorporation and By-laws of the
Company. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
Section 10.5 WAIVER. At any time prior to the Effective Time, the
parties hereto may, to the extent permitted by applicable Law, (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto, (ii) waive any inaccuracies in the representations and warranties
by any other party contained herein or in any documents delivered by any other
party pursuant hereto, and (iii) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations contained herein.
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Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party.
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
Section 11.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
The parties hereto hereby agree that the representations, warranties, covenants
and agreements contained in this Agreement or in any Transaction Document shall
survive the execution and delivery of this Agreement, and the Closing hereunder;
provided, however, that any Claims based on a breach of representations and
warranties other than those contained in Sections 4.1, 4.2, 4.4, 4.15, 4.16,
4.19, 4.26, 5.1, 5.3, 5.5, 6.1 and 6.2, the first sentence of Section 4.10, and
the first sentence of paragraph (a) and the second sentence of paragraph (b) of
Section 4.11, shall terminate eighteen (18) months after the Closing Date. The
representations and warranties contained in Sections 4.1, 4.2, 4.4, 4.26, 5.1,
5.3, 6.1 and 6.2, the first sentence of Section 4.10, and the first sentence of
paragraph (a) and the second sentence of paragraph (b) of Section 4.11, and any
Claims based thereon, shall survive in perpetuity. The representations and
warranties contained in Sections 4.15, 4.16 and 5.5 shall survive until six
months following the expiration of the statute of limitations applicable to
Claims that may be brought by Governmental Entities or other Persons against the
Company or Parent related to a breach of such representations or warranties. The
representations and warranties contained in Section 4.19 shall survive for the
period described in Section 11.5(c). Covenants and agreements of the parties
shall survive until fully performed. The obligations of the parties pursuant to
Sections 11.2 and 11.3 with respect to Claims made pursuant to a particular
representation, warranty or covenant shall expire simultaneously with such
representation, warranty or covenant; provided, however, that such obligations
shall survive with respect to any pending Claim until the pending Claim is
settled or otherwise satisfied if written notice of such Claim, specifying in
reasonable detail the factual basis therefor, is given to the party from whom
indemnification is sought prior to the expiration of the representation,
warranty or covenant upon which it is based. To the extent the survival periods
specified herein exceed an applicable statute of limitations, the provisions of
this Section 11.1 shall constitute a tolling by the Stockholders or Parent, as
applicable, of each such statute of limitations for a period of time not to
extend beyond the termination of such survival periods.
Section 11.2 INDEMNIFICATION BY THE STOCKHOLDERS.
(a) Subject to the provisions of Sections 11.4(a) and (b), from and
after the Closing Date, the Stockholders shall jointly and severally indemnify
and hold harmless Parent and its affiliates, and their respective employees,
directors, agents and representatives (collectively, the "PARENT INDEMNIFIED
PARTIES"), from and against any and all Loss and Litigation Expense which they
or any of them may suffer or incur as a result of or arising from any of the
following: (i) any misrepresentation or breach of any warranty by the Company;
(ii) the failure of the Company to obtain all Consents required to consummate
the Transactions; (iii) the failure by the Company to satisfy any liability or
obligation which is its obligation to satisfy under the terms of this Agreement;
or (iv) the failure by the
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Company to perform its covenants and agreements under this Agreement; (v) the
failure of the Stockholders of the Company to pay any costs or expenses which
are the responsibility of such Stockholders; or (vi) the liabilities and
obligations described on Exhibit H hereto.
(b) Subject to the provisions of Section 11.4(c), from and after the
Closing Date, each Stockholder shall severally, but not jointly, indemnify and
hold harmless the Parent Indemnified Parties from and against any and all Loss
and Litigation Expense which they or any of them may suffer or incur as a result
of or arising from any of the following: (i) any misrepresentation or breach of
any representation or warranty by such Stockholder; or (ii) the failure by such
Stockholder to perform its covenants and agreements under this Agreement.
(c) The Escrow Shares may be used to satisfy the obligations of the
Stockholders in the manner provided in the Escrow Agreement; provided, no Parent
Indemnified Party shall be entitled to collect an indemnification obligation
relating to a Capped Stockholder Indemnity directly from a Stockholder except
after the release of Escrow Shares as provided in, and to the extent permitted
by, Section 11.4(b). Nothing contained in this Agreement other than Section
11.4(b) as it relates to Capped Stockholder Indemnities shall be interpreted to
limit a Stockholder's indemnification obligation to the Escrow Shares.
Section 11.3 INDEMNIFICATION BY PARENT. From and after the Closing
Date, Parent shall indemnify and hold harmless each holder of Company Common
Stock at the Effective Time from and against any and all Loss and Litigation
Expense which such Stockholder may suffer or incur as a result of or arising
from any of the following: (a) any misrepresentation or breach of any warranty
by Parent or Merger Subsidiary; (b) the failure by either Parent or Merger
Subsidiary to perform its covenants and agreements under this Agreement.
Section 11.4 CERTAIN LIMITATIONS ON INDEMNITIES.
(a) The Stockholders shall not have any indemnification obligations
under Section 11.2(a)(i) or (ii) (other than indemnification obligations based
on a misrepresentation or breach of any warranty contained in Section 4.15)
unless the aggregate of all such Claims exceeds $100,000; provided, however,
that if such threshold is reached, the Stockholders shall be liable for all such
Claims, including the first $100,000.
(b) The Stockholders shall not have any indemnification obligations
under Section 11.2(a)(i) or (ii) (other than indemnification obligations based
on a misrepresentation or breach of any warranty contained in Sections 4.1, 4.2,
4.4, 4.11, 4.15, 4.19, 5.1, 5.3 or 5.5 or the first sentence of Section 4.10)
(collectively, "CAPPED STOCKHOLDER INDEMNITIES") once the Escrow Shares have
been exhausted; provided, however, if any Escrow Shares are released to either
Stockholder pursuant to the Escrow Agreement, such Stockholder shall continue to
be liable for up to an amount equal to the number of Escrow Shares released to
such Stockholder multiplied by the closing price of the Parent Common Stock on
the last trading day prior to the date of such release. The maximum liability of
the Stockholders under Section 11.2(a)(i) based on a misrepresentation or breach
of any
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warranty contained in Section 4.19 is set forth in Section 11.5(f). The
Stockholders shall have no further indemnification obligations under this
Agreement once the Stockholders have satisfied indemnification obligations in an
amount equal to $60,000,000 plus the aggregate Stock Consideration multiplied by
the closing price of the Parent Common Stock on the last trading day prior to
the Closing Date.
(c) Parent shall not have any indemnification obligations based on a
misrepresentation or breach of any warranty by Parent contained in Sections 6.4,
6.5, 6.6 or 6.7 (collectively, "CAPPED PARENT INDEMNITIES") once Parent has
satisfied indemnification obligations for Capped Parent Indemnities in an amount
equal to the number of Escrow Shares multiplied by the closing price of the
Parent Common Stock on the last trading day prior to the Closing Date. Parent
shall have no further indemnification obligation under this Agreement once
Parent has satisfied indemnification obligations in an amount equal to
$60,000,000 plus the aggregate Stock Consideration multiplied by the closing
price of the Parent Common Stock on the last trading day prior to the Closing
Date.
Section 11.5 ENVIRONMENTAL INDEMNIFICATION.
(a) From and after the Closing Date, each Stockholder shall
severally, but not jointly, indemnify and hold harmless the Parent Indemnified
Parties from and against any and all Loss and Litigation Expense which they or
any of them may suffer or incur as a result of or arising from any Environmental
Matters, including Environmental Claims and Remedial Actions, which are based on
any (i) action, inaction or event occurring prior to the Effective Time, (ii)
circumstance or condition existing at the Effective Time, or (iii) circumstance
or condition arising after the Effective Time that is caused or initiated by or
results from any development, exacerbation, deterioration or other worsening
after the Effective Time of any circumstance or condition existing at the
Effective Time.
(b) For purposes of paragraph (a) above, "several" indemnification
shall mean that each Stockholder is responsible for his proportionate share of
the aggregate liability determined by dividing the number of shares of Company
Common Stock owned by such Stockholder by the aggregate number of shares of
Company Common Stock owned by both Stockholders (as opposed to the aggregate
number of Closing Outstanding Shares so the Stockholders are liable for the
entire liability even though they do not own all of the outstanding Company
Common Stock).
(c) Notwithstanding anything to the contrary in this Agreement, the
obligations of each Stockholder under this Section 11.5 or based on a
misrepresentation or breach of any warranty contained in Section 4.19 shall
survive until the later of (i) the death of the Stockholder, or (ii) the tenth
anniversary of the Effective Date; provided, however, that such obligations
shall survive with respect to any pending Claim until the pending Claim is
settled or otherwise satisfied if written notice of such Claim, specifying in
reasonable detail the factual basis therefor, is given by the Parent Indemnified
Party to the Stockholders prior to the date on which the obligations would
otherwise expire.
(d) Parent agrees to, and agrees to cause each other Parent
Indemnified Party to, seek alternative sources of recovery prior to bringing any
Legal Proceeding or
-41-
otherwise pursuing a Claim pursuant to this Section 11.5 or based on a
misrepresentation or breach of any warranty contained in Section 4.19; provided,
nothing in this paragraph (d) shall limit any Parent Indemnified Party's right
to give written notice of a Claim as contemplated by paragraph (c) above or to
file a claim under the Environmental Insurance. A Parent Indemnified Party shall
be deemed to have satisfied its obligations under this paragraph if it has
sought recovery from the Village of Fairport and from General Signal Corporation
and General Signal Technology Corporation. For purposes of this paragraph, a
Parent Indemnified Party shall be deemed to have "sought recovery" from a
particular alternative source if (i) it has pursued a Legal Proceeding against
such source until a judgment on the merits has been issued by a trial level
court of competent jurisdiction or arbitration panel and has taken commercially
reasonable steps to collect any judgment or award in its favor, or (ii) it
determines in good faith upon the advice of counsel after reasonable
consultation with the Stockholders and their counsel that success on the merits
or recovery against such source would be unlikely. A Parent Indemnified Party
may proceed against the Stockholders once it has sought recovery from the
alternative sources with respect to particular items or portions of items to
which it is entitled to indemnification under this Section even though it is
still seeking recovery for other items or a portion of a particular item. Each
Parent Indemnified Party shall give the Stockholders notice of each proceeding
to seek an alternate source of recovery.
(e) Parent agrees that the Stockholders shall have a right of
subrogation against any alternative source to the extent that the Stockholders
indemnify a Parent Indemnified Party for obligations for which such alternative
source is liable, and Parent agrees, to the extent necessary or required by Law,
to assign to the Stockholder's the rights of the Company or Parent to the extent
that such obligations have been satisfied by the Stockholders so as to enable
the Stockholders to seek to recover from such alternative sources.
(f) Notwithstanding anything in this Agreement to the contrary, the
aggregate liability of the Stockholders under this Section 11.5 or based on a
misrepresentation or breach of any warranty contained in Section 4.19 shall not
exceed $10,000,000.
Section 11.6 PROCEDURE.
(a) Promptly after acquiring knowledge of any Loss, or any action,
suit, investigation, proceeding, demand, assessment, audit, judgment, or claim
("CLAIM") which may result in a Loss, the person seeking indemnity under this
Article XI (the "INDEMNITEE") shall give written notice thereof to the party or
parties against whom indemnification will be sought (collectively, the
"INDEMNITOR").
(b) If the Claim is based on an action brought by a person not
affiliated with the Indemnitee, the Indemnitor shall have the right, at its
expense, to defend, contest or compromise such Claim, through counsel of its
choice (unless the Indemnitor is relieved of its liability hereunder with
respect to such Claim and Loss and Litigation Expense by the Indemnitee) and
shall not then be liable for fees or expenses of the Indemnitee's attorneys
(unless the Indemnitor and Indemnitee are both parties to the action and there
exists a
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conflict of interest between the Indemnitor and the Indemnitee, in which event
the Indemnitor will be responsible for the reasonable fees and expenses of one
attorney representing Indemnitee(s)), and the Indemnitee and the Indemnitor
shall provide to each other all necessary and reasonable cooperation in the
defense of all Claims. In the event that the Indemnitor shall undertake to
compromise or defend any Claim, it shall promptly notify the Indemnitee of its
intention to do so. In the event that the Indemnitor, after written notice from
Indemnitee, fails to take timely action to defend the same, the Indemnitee shall
have the right to defend the same by counsel of its own choosing, but at the
cost and expense of the Indemnitor, provided, no settlement of a Claim by
Indemnitee shall be effected without the consent of the Indemnitor unless the
Indemnitee waives any right to indemnification therefor. The Indemnitor may
settle or compromise any Claim or consent to the entry of any judgment without
the consent of the Indemnitee only if such settlement or judgment (i) includes
the unconditional release by the person asserting the Claim and any related
claimants of Indemnitee from all liability with respect to such Claim in form
and substance reasonably satisfactory to Indemnitee, and (ii) would not
adversely affect the right of Indemnitee and its affiliates to own, hold use and
operate their respective assets and businesses.
(c) Parent and the Stockholders shall treat any payment under this
Article XI for all tax purposes as an adjustment of the Merger Consideration,
except to the extent such treatment is not permitted under applicable Law.
Section 11.7 NO IMPACT FROM INVESTIGATION. No investigation by or
knowledge of any party prior to or after the date of this Agreement shall alter,
diminish, obviate or impair any of the representations, warranties, covenants or
agreements of any other party contained in this Agreement or any of the
Transaction Documents or limit in any way any party's right to rely on such
representations, warranties, covenants or agreements or to bring a Claim based
on any misrepresentation or breach thereof.
Section 11.8 NO RIGHT OF SUBROGATION. If any indemnification claim
is satisfied by any Stockholder under the terms of this Agreement or otherwise,
such Stockholder shall have no rights against the Company or any director,
officer, employer or agent of the Company, whether by reason of contribution,
indemnification, subrogation or otherwise, in respect of any such payment or
other form of satisfaction, and such Stockholder shall take no action against
the Company with respect thereto. Any such rights which any such Stockholder may
have by operation of law, Contract or otherwise against the Company or any
director, officer, employer or agent of the Company shall, at the Closing Date,
be deemed to be hereby expressly and knowingly waived.
Section 11.9 RELEASE OF CLAIMS. EACH STOCKHOLDER HEREBY IRREVOCABLY
RELEASES, EFFECTIVE AS OF THE EFFECTIVE TIME, THE COMPANY FROM ANY AND ALL
ACTIONS OR CAUSES OF ACTION, CLAIMS, DEMANDS, LIABILITIES, JUDGMENTS, LOSSES,
DAMAGES, INJURIES, COSTS OR EXPENSES OF EVERY KIND, THAT SUCH STOCKHOLDER MAY
HAVE AGAINST THE COMPANY ARISING AT ANY TIME ON OR BEFORE THE CLOSING DATE,
WHETHER KNOWN OR UNKNOWN (COLLECTIVELY, "RELEASED CLAIMS"); PROVIDED, THIS
RELEASE SHALL NOT APPLY TO ANY RIGHTS ARISING UNDER THIS AGREEMENT OR THE
TRANSACTION DOCUMENTS. This release applies to Released Claims arising in any
manner, whether such Released Claims are based on any
-43-
tort, contract, statutory provision or other Law or theory of liability,
including, without limitation, negligence, gross negligence, recklessness,
willful misconduct or products liability, but does not apply to any claim for
wages for current periods, expense reimbursement, benefit reimbursement or
similar items arising in the ordinary course of business that a Stockholder may
have in his capacity as an employee of the Company.
Section 11.10 CERTAIN TERMS. For purposes of this Article XI, the
following terms have the definitions set forth below:
"LITIGATION EXPENSE" means any expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against under this Agreement, including,
court filing fees, court costs, arbitration fees or costs, witness fees and
reasonable fees and disbursements of legal counsel (whether incurred in any
action or proceeding between the parties to this Agreement or between any party
to this Agreement and any third person and whether or not any action or
proceeding is commenced), investigators, expert witnesses, accountants and other
professionals.
"LOSS" means any loss, obligation, claim, liability, settlement
payment, award, judgment, fine, penalty, interest charge, expense, damage or
deficiency or other charge, measured after accounting for any insurance proceeds
actually received with respect thereto, other than Litigation Expense.
ARTICLE XII
GENERAL PROVISIONS
Section 12.1 NOTICES. All notices or other communications under this
Agreement shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person or by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to the Company:
Tropel Corporation
00 X'Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: President
Telephone: 000-000-0000
With a copy to:
Xxxxx X. Xxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
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If to Xxxxxxx:
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone:
If to Xxxxxxxxxxx:
0 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
If to Parent or Merger Subsidiary:
Corning Incorporated
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
With a copy to:
Xxxxx Peabody LLP
X.X. Xxx 00000
Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
or, for courier or overnight delivery,
Xxxxx Xxxxxxx LLP
Clinton Square
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
Section 12.2 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent
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breaches of this Agreement and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which they are entitled at
law or in equity.
Section 12.3 ENTIRE AGREEMENT. This Agreement, the Company
Disclosure Schedule, and the Related Agreements constitute the entire agreement
and supersede all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof.
Section 12.4 ASSIGNMENTS; PARTIES IN INTEREST. Neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the parties hereto, whether by operation of law or otherwise,
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any person not a party hereto any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
including to confer Third Person beneficiary rights.
Section 12.5 GOVERNING LAW. This Agreement, except to the extent
that the DGCL is mandatorily applicable to the Merger and the rights of the
Stockholders of the Company, shall be governed in all respects by the laws of
the State of New York, without giving effect to the provisions thereof relating
to conflicts of law. Each party hereto hereby waives personal service of any and
all process and consents that all such service of process be made by registered
mail directed to the address stated in Section 12.1 hereof and service so made
shall be deemed to be completed upon actual receipt thereof. Each party hereto
waives any right to a trial by jury with respect to any matter arising under
this Agreement and the transactions contemplated hereby.
Section 12.6 HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
Section 12.7 CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION.
(a) As used in this Agreement:
"ACQUISITION TRANSACTION" has the meaning set forth in Section 7.3.
"AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement dated
as of April 22, 1994 among the Company, General Signal Corporation and General
Signal Technology Corporation.
"XXXXXXXXXXX" has the meaning set forth in the preamble to this
Agreement.
"XXXXXXX" has the meaning set forth in the preamble to this
Agreement.
"BUSINESS" has the meaning set forth in Section 4.11(c).
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"CAPPED PARENT INDEMNITEES" has the meaning set forth in Section
11.4.
"CAPPED STOCKHOLDER INDEMNITEES" has the meaning set forth in
Section 11.4.
"CASH CONSIDERATION" has the meaning set forth in Section 3.1(b).
"CERTIFICATE OF MERGER" has the meaning set forth in Section 1.3.
"CERTIFICATES" has the meaning set forth in Section 3.2(a).
"CODE" has the meaning set forth in the recitals to this Agreement.
"CLAIM" has the meaning set forth in Section 11.6(a).
"CLOSING DATE" has the meaning set forth in Section 1.2.
"CLOSING OUTSTANDING SHARES" has the meaning set forth in Section
3.1(b).
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY BENEFIT PLANS" has the meaning set forth in Section
4.16(a).
"COMPANY BOARD APPROVAL" has the meaning set forth in Section 4.26.
"COMPANY COMMON STOCK" has the meaning set forth in Section 3.1(a).
"COMPANY DISCLOSURE SCHEDULE" means the schedules of disclosures and
exceptions to the Company's representations and warranties delivered to Parent
prior to the date of this Agreement, each of which is numbered to correspond to
the appropriate provisions of Article IV of this Agreement.
"COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on
the business, results, financial condition, prospects or operations of the
Company.
"COMPANY TECHNOLOGY" has the meaning set forth in Section 4.11(b).
"COMPANY TRANSACTION DOCUMENTS" has the meaning set forth in Section
4.2.
"CONSENTS" means any consent by, approval of, or any notice or
filing with any Person required in order to effectuate the Transactions and
preserve the rights of Company in the Surviving Corporation.
"CONSTITUENT CORPORATIONS" has the meaning set forth in Section 1.4.
"CONTINUING EMPLOYEES" has the meaning set forth in Section 8.3(c).
"CONTRACT" shall mean any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale, mortgage, license, franchise,
insurance policy, commitment or other arrangement or agreement, whether written
or oral.
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"DGCL" has the meaning set forth in Section 1.3.
"DEFAULT" has the meaning set forth in Section 4.8.
"EFFECTIVE TIME" has the meaning set forth in Section 1.3.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
breach or violation, action, claim, Lien, demand, abatement or other order or
direction (conditional or otherwise) by any Governmental Entity or other Person
for personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or for fines,
penalties or restrictions resulting from or based upon (i) the existence,
whether known or unknown, or the continuation of the existence, of a Release
(including, without limitation, sudden or non-sudden accidental or
non-accidental Releases) and/or threat of a Release of, or exposure to, any
Hazardous Material or other substance, chemical, material, pollutant,
contaminant, odor, audible noise, or other Release in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to the operation of the Company, the
Leased Property, or any activities conducted on the Leased Property; (ii) the
environmental aspects of the transportation, storage, treatment or disposal of
Hazardous Materials in connection with the operation of the Company; or (iii)
the violation, or alleged violation, of any Environmental Laws, Orders or
Permits of or from any Governmental Entity arising out of or relating to
Environmental Matters connected with the Company.
"ENVIRONMENTAL INSURANCE" has the meaning set forth in Section 7.6.
"ENVIRONMENTAL LAWS" means any Law concerning Releases into any
part of the natural environment, or activities that might result in damage to
the natural environment, or any Law that is concerned in whole or in part
with the natural environment and with protecting or improving the quality of
the natural environment and protecting public and employee health and safety
and includes, but is not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C. Sections 9601
ET SEQ.), the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801
ET SEQ.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901
ET SEQ.), the Clean Water Act (33 U.S.C. Sections 1251 ET SEQ.), the Clean
Air Act (33 U.S.C. Sections 7401 ET SEQ.), the Toxic Substances Control Act
(15 U.S.C. Sections 2601 ET SEQ.), and the Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. Sections 136 ET SEQ.), as such laws have been
amended or supplemented, and the regulations promulgated pursuant thereto,
and any and all analogous state or local statutes, and the regulations
promulgated pursuant thereto.
"ENVIRONMENTAL MATTERS" means any matter arising out of or relating
to the production, storage, keeping, transportation, disposal or Release of any
Hazardous Material or otherwise arising out of or relating to safety, health or
the environment which could give rise to liability or require the expenditure of
money to address, and shall include, without limitation, the costs of
investigating and remediating any of the foregoing matters, any fines and
penalties arising in connection therewith, and any claim in respect thereof for
damages or injunctive relief for alleged personal injury, property damage or
damage to natural resources under common law or other Environmental Law.
-48-
"ENVIRONMENTAL PERMITS" means any Permit, approval, authorization,
consent, license, variance, registration, or permission required under any
applicable Environmental Laws and all supporting documents associated therewith.
"ERISA" has the meaning set forth in Section 4.16(a).
"ERISA AFFILIATES" has the meaning set forth in Section 4.16(a).
"ESCROW AGENT" has the meaning set forth in Section 3.2(c).
"ESCROW AGREEMENT" has the meaning set forth in Section 3.1(b).
"ESCROW SHARES" has the meaning set forth in Section 3.1(b).
"FINANCIAL STATEMENTS" has set forth meaning in Section 4.6(a).
"GAAP" has the meaning set forth in Section 4.6(a).
"GENERAL SIGNAL AGREEMENT" has the meaning set forth in Section 7.7.
"GENERAL SIGNAL CORPORATION" means the New York corporation that
signed the Asset Purchase Agreement, or its successors and assigns as
applicable.
"GENERAL SIGNAL TECHNOLOGY CORPORATION" means the Delaware
corporation that signed the Asset Purchase Agreement, or its successors and
assigns as applicable.
"GOVERNMENTAL ENTITY" means any federal, state or local government
entity or quasi governmental authority, court or any agency or instrumentality
thereof.
"HSR ACT" has the meaning set forth in Section 4.3(b).
"HAZARDOUS MATERIALS" means any substance, material or waste which
is regulated by any Governmental Body or Environmental Law, including, without
limitation, any material or substance which is defined as a "hazardous waste,"
"hazardous material," "hazardous substance," "extremely hazardous waste" or
"restricted hazardous waste," "controlled waste," "subject waste,"
"contaminant," "toxic waste" or "toxic substance" under any provision of any
Environmental Law, including but not limited to, petroleum products, asbestos
and polychlorinated biphenyls.
"XXX LEASE" has the meaning set forth in Section 4.9(a).
"IP REGISTRATIONS" has the meaning set forth in Section 4.11(d).
"IP RIGHTS" has the meaning set forth in Section 4.11(d).
"INDEMNITEE" has the meaning set forth in Section 11.6(a).
"INDEMNITOR" has the meaning set forth in Section 11.6(a).
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"LANDFILL PROPERTY" means the portion of the Leased Property
consisting of the solid waste disposal facility formerly operated by the Village
of Fairport.
"LAW" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, treaty, writ or order and any enforceable
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree, judgment, stipulation, injunction, permit,
authorization, policy, opinion, or agency requirement, in each case having force
and effect of law.
"LEASED PROPERTY" has the meaning set forth in Section 4.9(a).
"LEGAL PROCEEDING" means any judicial, administrative or arbitral
action, suit, proceeding (public or private), claim or governmental proceeding.
"LIEN" shall mean any lien, pledge, mortgage, deed or trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"LITIGATION EXPENSE" has the meaning set forth in Section 11.10.
"LOSS" has the meaning set forth in Section 11.10.
"MARKS" has the meaning set forth in Section 4.11(d).
"MATERIAL CONTRACTS" has the meaning set forth in Section 4.8.
"MERGER" has the meaning set forth in the recitals to this
Agreement.
"MERGER CONSIDERATION" has the meaning set forth in Section 3.1(b).
"MERGER SUBSIDIARY" has the meaning set forth in the preamble to
this Agreement.
"NON-COMPETITION AGREEMENTS" has the meaning set forth in Section
8.3(b).
"OPTION AMENDMENT AGREEMENTS" has the meaning set forth in Section
7.2.
"OPTION RELEASES" has the meaning set forth in Section 7.2.
"OPTIONS" has the meaning set forth in Section 4.4.
"OPTION PLAN" means the Company's 1994 Stock Option Plan, as
amended.
"OUTSTANDING SHARES" has the meaning set forth in Section 4.4.
"ORDER" shall mean any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award.
"PARENT" has the meaning set forth in the preamble to this
Agreement.
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"PARENT BENEFIT PLAN" has the meaning set forth in Section 8.3(c).
"PARENT COMMON STOCK" has the meaning set forth in Section 3.1(b).
"PARENT INDEMNIFIED PARTIES" has the meaning set forth in Section
11.2.
"PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on
the business, results, financial condition, prospects or operations of Parent.
"PARENT TRANSACTION DOCUMENTS" has the meaning set forth in Section
6.2.
"PERMIT" means any approvals, authorizations, consents, licenses,
permits or certificates of any Governmental Entity.
"PERMITTED LICENSES" means licenses granted by the Company to its
customers in the ordinary course of business which permit the customer to (i)
use Company Technology inherent in or integral to products sold by the Company
to such customer, or (ii) use Company Technology to make products that the
Company is unable to deliver to such customer on terms agreed to by the Company
and such customer.
"PERSON" shall include individuals, corporations, partnerships,
limited liability companies, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act).
"PRODUCTS" has the meaning set forth in Section 4.11(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in Section
8.8.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or migration into
the indoor or outdoor environment, or into or out of any of the Facilities,
including the movement of any Hazardous Material or other substance through or
in the air, soil, surface water, groundwater, or property.
"RELEASED CLAIMS" has the meaning set forth in Section 11.9.
"REMEDIAL ACTION" means all actions, including, without limitation,
any capital expenditures, required or voluntarily undertaken to (i) clean up,
remove, treat, or in any other way address any Hazardous Material or other
substance in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release, or minimize the further Release of any Hazardous Material or
other substance so it does not migrate or endanger or threaten to endanger
public health or welfare of the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(iv) bring any property into compliance with all Environmental Laws and
Environmental Permits.
"REPLACEMENT LEASE" has the meaning set forth in Section 7.5.
"SEC FILINGS" has the meaning set forth in Section 6.4.
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"SECURITIES ACT" has the meaning set forth in Section 5.5(b).
"SEPTEMBER FINANCIAL STATEMENTS" has the meaning set forth in
Section 4.6(b).
"SHAREHOLDERS AGREEMENT" has the meaning set forth in Section 4.4.
"STOCK CONSIDERATION" has the meaning set forth in Section 3.1(b).
"STOCKHOLDER TRANSACTION DOCUMENT" has the meaning set forth in
Section 5.1.
"STOCKHOLDERS" has the meaning set forth in the preamble to this
Agreement.
"SURVIVING CORPORATION" has the meaning set forth in Section 1.1.
"TAX" shall mean any federal, state, local, foreign or provincial
income, gross receipts, property, sales, service, use, license, lease, excise,
franchise, employment, payroll, withholding, employment, unemployment insurance,
workers' compensation, social security, alternative or added minimum, ad
valorem, value added, stamp, business license, occupation, premium,
environmental, windfall profit, customs, duties, estimated, transfer or excise
tax, or any other tax, custom, duty, premium, governmental fee or other
assessment or charge of any kind whatsoever, together with any interest, penalty
or additional tax imposed by any Governmental Entity.
"TECHNOLOGY" has the meaning set forth in Section 4.11(b).
"TECHNOLOGY-RELATED ASSETS" has the meaning set forth in Section
4.11(a).
"THIRD PERSON LICENSES" has the meaning set forth in Section
4.11(c).
"THIRD PERSON TECHNOLOGIES" has the meaning set forth in Section
4.11(c).
"TRANSACTION DOCUMENTS" shall mean the Company Transaction
Documents, the Stockholder Transaction Documents and the Parent Transaction
Documents.
(b) Other Rules of Construction.
(i) References in this Agreement to any gender shall include
references to all genders. Unless the context otherwise requires,
references in the singular include references in the plural and vice
versa. References to a party to this Agreement or to other agreements
described herein means those Persons executing such agreements.
(ii) The words "include", "including" or "includes" shall be
deemed to be followed by the phrase "without limitation" or the phrase
"but not limited to" in all places where such words appear in this
Agreement.
(iii) This Agreement is the joint drafting product of Parent,
Merger Subsidiary, the Company and the Stockholders and each provision has
been subject to
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negotiation and agreement and shall not be construed for or against either
party as drafter thereof.
(iv) Each case in this Agreement where a contract or agreement
is represented or warranted to be enforceable will be deemed to include as
a limitation to the extent that enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar Laws affecting the enforcement of creditors' rights
generally and to general equitable principles, whether applied in equity
or at law.
(v) All references in the Agreement to financial terms shall
be deemed to refer to such terms as they are defined under GAAP,
consistently applied.
Section 12.8 COUNTERPARTS. This Agreement may be executed in two or
more counterparts which together shall constitute a single agreement.
Section 12.9 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economics or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon determination that any term or other
provision hereof is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement,
or caused this Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
CORNING INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx, Vice President and
General Manager Specialty Materials
TROPEL MERGER SUB, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx, President
TROPEL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, President
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxx
