Exhibit 2.1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXX AUTOMATION, INC., MT. HOOD CORPORATION
AND
HELIX TECHNOLOGY CORPORATION
-----------------------------
Dated as of July 11, 2005
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TABLE OF CONTENTS
ARTICLE I THE MERGER...................................................................... 1
1.1 The Merger............................................................... 1
1.2 Effective Time........................................................... 2
1.3 Closing.................................................................. 2
1.4 Directors and Officers of the Surviving Corporation...................... 2
1.5 Effects of the Merger.................................................... 2
1.6 Conversion of Common Stock............................................... 3
1.7 Company Options and Purchase Rights...................................... 3
1.8 Closing of Company Transfer Books........................................ 4
1.9 Exchange of Certificates................................................. 4
1.10 No Liability............................................................. 5
1.11 Lost Certificates........................................................ 5
1.12 Withholding Rights....................................................... 5
1.13 Distributions with Respect to Unexchanged Shares......................... 5
1.14 Additional Matters....................................................... 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY...................................... 6
2.1 Organization and Qualification........................................... 6
2.2 Authority to Execute and Perform Agreement............................... 7
2.3 Capitalization and Title to Shares....................................... 8
2.4 Company Subsidiaries..................................................... 9
2.5 SEC Reports.............................................................. 9
2.6 Financial Statements..................................................... 10
2.7 Absence of Undisclosed Liabilities....................................... 11
2.8 Absence of Adverse Changes............................................... 11
2.9 Compliance with Laws..................................................... 11
2.10 Actions and Proceedings.................................................. 12
2.11 Contracts and Other Agreements........................................... 12
2.12 Intellectual Property.................................................... 13
2.13 Assets................................................................... 15
2.14 Insurance................................................................ 16
2.15 Commercial Relationships................................................. 16
2.16 Tax Matters.............................................................. 16
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2.17 Employee Benefit Plans................................................... 18
2.18 Employee Relations....................................................... 21
2.19 Environmental Matters.................................................... 22
2.20 No Breach................................................................ 23
2.21 Board Approvals.......................................................... 23
2.22 Financial Advisor........................................................ 24
2.23 Interested Party Transactions............................................ 24
2.24 Information Supplied..................................................... 24
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.............................. 25
3.1 Organization and Qualification........................................... 25
3.2 Authority to Execute and Perform Agreement............................... 26
3.3 Capitalization and Title to Shares....................................... 26
3.4 Parent Subsidiaries...................................................... 27
3.5 SEC Reports.............................................................. 28
3.6 Financial Statements..................................................... 29
3.7 Absence of Undisclosed Liabilities....................................... 30
3.8 Absence of Adverse Changes............................................... 30
3.9 Compliance with Laws..................................................... 30
3.10 Actions and Proceedings.................................................. 30
3.11 Contracts and Other Agreements........................................... 31
3.12 Intellectual Property.................................................... 31
3.13 Assets................................................................... 33
3.14 Insurance................................................................ 34
3.15 Commercial Relationships................................................. 34
3.16 Tax Matters.............................................................. 34
3.17 Employee Benefit Plans................................................... 36
3.18 Employee Relations....................................................... 39
3.19 Environmental Matters.................................................... 40
3.20 No Breach................................................................ 40
3.21 Board Approvals.......................................................... 41
3.22 Financial Advisor........................................................ 41
3.23 Interested Party Transactions............................................ 42
3.24 Sub...................................................................... 42
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3.25 Information Supplied..................................................... 42
ARTICLE IV COVENANTS AND AGREEMENTS....................................................... 42
4.1 Conduct of Company Business.............................................. 42
4.2 Conduct of Parent Business............................................... 45
4.3 Corporate Examinations and Investigations................................ 48
4.4 Expenses................................................................. 49
4.5 Authorization from Others................................................ 49
4.6 Further Assurances....................................................... 49
4.7 Preparation of Disclosure Documents; Stockholders Meetings............... 50
4.8 Public Announcements..................................................... 52
4.9 Affiliate Letters........................................................ 52
4.10 Nasdaq Listings.......................................................... 52
4.11 No Solicitation.......................................................... 53
4.12 Regulatory Filings....................................................... 55
4.13 Notification of Certain Matters.......................................... 55
4.14 Registration of Certain Shares........................................... 55
4.15 Employee Matters......................................................... 55
4.16 Board Membership and Officers............................................ 56
4.17 Indemnification.......................................................... 57
4.18 Section 16 Approval...................................................... 57
4.19 Participation in Certain Actions and Proceedings......................... 58
4.20 Tax-Free Reorganization.................................................. 58
4.21 No Acquisition of Common Stock........................................... 58
4.22 FIRPTA Certificate....................................................... 58
ARTICLE V CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY TO CONSUMMATE
THE MERGER................................................................ 58
5.1 Stockholder Approval..................................................... 58
5.2 Registration Statement................................................... 59
5.3 Absence of Order......................................................... 59
5.4 Regulatory Approvals..................................................... 59
5.5 Pending Litigation....................................................... 59
5.6 HSR Act.................................................................. 59
5.7 Nasdaq................................................................... 59
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ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARENT AND SUB TO
CONSUMMATE THE MERGER.................. ................................... 60
6.1 Representations, Warranties and Covenants................................ 60
6.2 Corporate Certificates................................................... 60
6.3 Secretary's Certificate.................................................. 60
6.4 Tax Opinion.............................................................. 60
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF COMPANY TO
CONSUMMATE THE MERGER...................................................... 60
7.1 Representations, Warranties and Covenants................................ 61
7.2 Corporate Certificates................................................... 61
7.3 Secretary's Certificate.................................................. 61
7.4 Tax Opinion.............................................................. 61
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER............................................ 61
8.1 Termination.............................................................. 61
8.2 Effect of Termination.................................................... 63
8.3 Amendment................................................................ 65
8.4 Waiver................................................................... 65
ARTICLE IX MISCELLANEOUS.................................................................. 65
9.1 No Survival.............................................................. 65
9.2 Notices.................................................................. 65
9.3 Entire Agreement......................................................... 66
9.4 Governing Law............................................................ 66
9.5 Binding Effect; No Assignment; No Third-Party Beneficiaries.............. 67
9.6 Section Headings......................................................... 67
9.7 Counterparts............................................................. 67
9.8 Severability............................................................. 67
9.9 Submission to Jurisdiction; Waiver....................................... 67
9.10 Enforcement.............................................................. 68
9.11 Rules of Construction.................................................... 68
9.12 Waiver of Jury Trial..................................................... 68
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EXHIBITS AND SCHEDULES
Exhibit A Form of Affiliate Letter
Company Disclosure Schedule
Parent Disclosure Schedule
v
INDEX OF DEFINED TERMS
Section
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"Affiliate Letters"............................................................. 4.9
"Agreement"..................................................................... Preamble
"Certificate of Merger"......................................................... 1.2(a)
"Certificates".................................................................. 1.9(a)
"Closing Date".................................................................. 1.3
"Closing"....................................................................... 1.3
"Code".......................................................................... Recitals
"Company"....................................................................... Preamble
"Company 10-K".................................................................. 2.5(a)
"Company 10-Q................................................................... 2.6(a)
"Company Acquisition Proposal".................................................. 4.11
"Company Adverse Recommendation Change"......................................... 4.11(c)
"Company Agreements"............................................................ 2.11
"Company Balance Sheet"......................................................... 2.7
"Company Board of Directors".................................................... Recitals
"Company Common Stock".......................................................... 1.6(a)(i)
"Company Disclosure Schedule"................................................... Article II
"Company Foreign Plan".......................................................... 2.17(l)
"Company ERISA Affiliate"....................................................... 2.17(a)
"Company Joint Venture"......................................................... 2.4(c)
"Company Leased Real Property".................................................. 2.13(b)
"Company Material Adverse Effect"............................................... 2.1(a)
"Company Options"............................................................... 1.7
"Company Permits"............................................................... 2.9(b)
"Company Plans"................................................................. 2.17(a)
"Company Preferred Stock"....................................................... 2.3(c)
"Company Real Property"......................................................... 2.13
"Company Real Property Leases".................................................. 2.13(b)
"Company Real Property"......................................................... 2.13(b)
"Company SEC Reports"........................................................... 2.5(a)
"Company Stock Option Plans".................................................... 1.7
"Company Stockholder Approval".................................................. 4.7(b)
"Company Stockholders Meeting".................................................. 4.7(b)
"Company Subsidiary"............................................................ 2.4(a)
"Company Superior Proposal"..................................................... 4.11(b)
"Confidentiality Agreement"..................................................... 4.3
"Continuation Period"........................................................... 4.15(a)
"Continuing Employees".......................................................... 4.15(a)
"DGCL".......................................................................... Recitals
"DOJ"........................................................................... 4.12
"Effective Time"................................................................ 1.2(a)
"Environmental Laws"............................................................ 2.19(a)
"ERISA"......................................................................... 2.17(a)
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Section
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"Exchange Act".................................................................. 2.5(a)
"Exchange Agent"................................................................ 1.9(a)
"Exchange Ratio"................................................................ 1.6(a)(i)
"FTC"........................................................................... 4.12
"GAAP".......................................................................... 2.6(a)
"Hazardous Substance"........................................................... 2.19(a)(ii)
"HSR Act"....................................................................... 2.20
"IRS"........................................................................... 2.17(b)
"knowledge of Parent" or "to the Parent's knowledge"............................ 3.3(e)
"knowledge of the Company" or "to the Company's knowledge"...................... 2.3(e)
"Laws".......................................................................... 2.9(a)
"Merger Consideration".......................................................... 1.6(a)(iii)
"Merger"........................................................................ 1.1(a)
"Xxxxxx Xxxxxxx"................................................................ 2.22(a)
"Parent"........................................................................ Preamble
"Parent 10-K"................................................................... 3.5(a)
"Parent 10-Q"................................................................... 3.6(a)
"Parent Adverse Recommendation Change".......................................... 4.7(c)
"Parent Agreements"............................................................. 3.11
"Parent Balance Sheet".......................................................... 3.7
"Parent Board of Directors"..................................................... Recitals
"Parent Common Stock"........................................................... 1.6(a)(i)
"Parent Foreign Plan"........................................................... 3.17(l)
"Parent Disclosure Schedule".................................................... Article III
"Parent ERISA Affiliate"........................................................ 3.17(a)
"Parent Expenses"............................................................... 8.2(b)
"Parent Joint Venture".......................................................... 3.4(c)
"Parent Leased Real Property"................................................... 3.13(c)
"Parent Material Adverse Effect"................................................ 3.1(a)
"Parent Options"................................................................ 3.3(b)
"Parent Owned Real Property".................................................... 3.13(b)
"Parent Plans".................................................................. 3.17(a)
"Parent Preferred Stock"........................................................ 3.3(c)
"Parent Real Property Leases"................................................... 3.13(c)
"Parent Real Property".......................................................... 3.13(c)
"Parent Rights"................................................................. 3.3(c)
"Parent SEC Reports"............................................................ 3.5(a)
"Parent Stockholder Approval"................................................... 4.7(c)
"Parent Stockholders Meeting"................................................... 4.7(c)
"Parent Subsidiary"............................................................. 3.4(a)
"Permitted Encumbrances"........................................................ 2.13(a)
"Proprietary Rights"............................................................ 2.12(a)
"Joint Proxy Statement/Prospectus".............................................. 4.7(a)
"Registration Statement"........................................................ 4.7(a)
"Regulation M-A Filing"......................................................... 2.24
"Representatives"............................................................... 4.11(a)
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Section
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"Restraints".................................................................... 8.1(c)
"Secretary of State"............................................................ 1.2(a)
"Securities Act"................................................................ 2.5(b)
"Sub"........................................................................... Preamble
"Surviving Corporation"......................................................... 1.1(a)
"Tax Return".................................................................... 2.16(a)
"Tax", "Taxes" and "Taxable".................................................... 2.16(a)
"Termination Date".............................................................. 8.1(b)
"Termination Fee"............................................................... 8.2(b)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of July 11,
2005 is among Xxxxxx Automation, Inc. ("Parent"), a Delaware corporation, Mt.
Hood Corporation, a newly formed Delaware corporation and a direct, wholly-owned
subsidiary of Parent ("Sub"), and Helix Technology Corporation, a Delaware
corporation (the "Company").
R E C I T A L
WHEREAS, the board of directors of Company (the "Company Board of
Directors"), the board of directors of Parent (the "Parent Board of Directors")
and the board of directors of Sub deem it advisable and in the best interests of
its respective corporation and its respective stockholders to combine their
respective businesses;
WHEREAS, in furtherance of such combination, the Company Board of
Directors, the Parent Board of Directors and the Board of Directors of Sub have
each adopted resolutions (i) approving this Agreement and declaring its
advisability and approving this Agreement in accordance with the Delaware
General Corporation Law, as amended (the "DGCL"), upon the terms and subject to
the conditions set forth herein and (ii) recommending to its respective
stockholders the adoption of this Agreement;
WHEREAS, for United States federal income tax purposes, such merger (or
such merger together with the contemplated subsequent merger of the Surviving
Corporation with and into Parent) is intended to qualify as a reorganization
under the provisions of section 368(a) of the United States Internal Revenue
Code of 1986, as amended (the "Code"); and
WHEREAS, as part of the same plan of reorganization, the Parent intends to
merge the Surviving Corporation into itself after the Effective Time as soon as
reasonably practicable.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Sub and Company hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 1.2 hereof), Company and Sub shall
consummate a merger (the "Merger") pursuant to which (i) Sub will be merged with
and into Company and the separate corporate existence of Sub shall thereupon
cease, (ii) Company shall be the successor or surviving entity in the Merger
(sometimes referred to herein as the "Surviving Corporation") and shall continue
to be governed by the laws of the State of Delaware and (iii) the separate
corporate existence of Company, with all its rights, privileges, immunities,
powers and franchises, will continue unaffected by the Merger. The Surviving
Corporation will be a direct
wholly owned subsidiary of Parent and will succeed to and assume all the rights
and obligations of Sub and Company in accordance with the DGCL.
(b) Pursuant to the Merger, (i) the Certificate of Incorporation of
Company, as in effect immediately prior to the Effective Time, shall be amended
and restated so as to contain the provisions, and only the provisions, contained
immediately prior to the Effective Time in the Certificate of Incorporation of
Sub, except that references to the name of the Surviving Corporation shall be
amended to reflect a change in such name to "Helix Technology Corporation",
until amended in accordance therewith and with the DGCL, and (ii) the By-laws of
Sub, as in effect immediately prior to the Effective Time, shall be the By-laws
of the Surviving Corporation, until amended in accordance therewith and with the
DGCL.
1.2 Effective Time.
(a) Parent, Sub and Company shall cause a certificate of merger
pursuant to Section 251 of the DGCL with respect to the Merger (the "Certificate
of Merger") in such form as is required by, and executed in accordance with, the
relevant provisions of the DGCL to be filed on the Closing Date (as defined in
Section 1.3 hereof), or on such other date as Parent and Company may agree, with
the Secretary of State of the State of Delaware (the "Secretary of State") as
provided in the DGCL. The Merger shall become effective on the date on which the
Certificate of Merger and any other documents necessary to effect the Merger in
accordance with the DGCL are duly filed with the Secretary of State or such
other date and time as is specified in the Certificate of Merger, and such time
is hereinafter referred to as the "Effective Time."
1.3 Closing. The closing of the Merger (the "Closing") shall take place at
9:00 a.m., Eastern time, on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction or waiver of all of
the conditions set forth in Article V, Article VI and Article VII hereof that
are susceptible to satisfaction prior to the Closing (the "Closing Date"), at
the offices of Ropes & Xxxx LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, or such other date or place as agreed to in writing by the parties
hereto.
1.4 Directors and Officers of the Surviving Corporation. The directors and
officers of Sub at the Effective Time shall, from and after the Effective Time,
be the directors and officers, respectively, of the Surviving Corporation, until
their successors shall have been duly elected or appointed or qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws. Company shall cause each
current director of Company to submit his or her resignation at the Closing, and
if requested by Parent, its subsidiaries, to be effective at the effective time
of the Merger.
1.5 Effects of the Merger. At and after the Effective Time, the Merger
shall have the effects set forth in the DGCL. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of Company and Sub shall be vested in
the Surviving Corporation, and all debts, liabilities and duties of Company and
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
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1.6 Conversion of Common Stock.
(a) Merger Consideration. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Sub or Company:
(i) Subject to payment of cash in lieu of fractional shares as
provided below, each share of Company common stock, $1.00 par value per share
("Company Common Stock"), outstanding immediately prior to the Effective Time,
other than shares held by Company as treasury stock and shares held by Parent or
Sub, will be cancelled and extinguished and automatically converted into and
become the right to receive 1.11 (the "Exchange Ratio") shares of Parent common
stock, $.01 par value per share ("Parent Common Stock"), and the associated
Parent Rights (as defined in Section 3.3(c)).
(ii) If prior to the Effective Time there is a change in the
number of issued and outstanding shares of Parent Common Stock or Company Common
Stock as the result of reclassification, subdivision, recapitalization, stock
split (including reverse stock split), stock dividend or similar transactions,
the Exchange Ratio shall be equitably adjusted to give effect to such event to
provide the stockholders of Company Common Stock the same economic effect as
contemplated by this Agreement prior to such event.
(iii) The shares of Parent Common Stock payable pursuant to
this Section 1.6(a), together with cash payments in lieu of fractional shares
pursuant to Section 1.6(b), are referred to collectively as the "Merger
Consideration."
(b) No Fractional Shares. No fractional shares of Parent Common
Stock shall be issued pursuant to this Agreement. In lieu of fractional shares,
each Company stockholder who would otherwise have been entitled to a fraction of
a share of Parent Common Stock hereunder (after aggregating all fractional
shares to be received by such stockholder), shall receive, without interest, an
amount in cash (rounded to the nearest whole cent) determined by multiplying
such fraction by the average of the last sale prices of a share of Parent Common
Stock as reported by the Nasdaq National Market for the five (5) trading days
immediately preceding the Effective Time.
(c) Cancelled Stock. All shares of Company Common Stock held at the
Effective Time by Company as treasury stock or by Parent or Sub shall be
cancelled and extinguished and no payment shall be made with respect thereto.
(d) Sub Stock. In the Merger, each issued and outstanding share of
the capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
1.7 Company Options and Purchase Rights. At the Effective Time, each
outstanding option to purchase shares of Company Common Stock (the "Company
Options") granted under Company's 1996 Equity Incentive Plan and Company's
Amended and Restated Stock Option Plan for Non-Employee Directors (together, the
"Company Stock Option Plans") shall be assumed by Parent. Each Company Option so
assumed by Parent under this Agreement shall continue to have, and be subject
to, the same terms and conditions set forth in the applicable Company Stock
Option Plan and in the applicable stock option agreement or certificate
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immediately prior to the Effective Time (including, without limitation, any
repurchase rights), except (i) that each Company Option will be exercisable (or
will become exercisable in accordance with its terms) for that number of shares
of Parent Common Stock equal to the product of the number of shares of Company
Common Stock that were issuable upon exercise of such Company Option immediately
prior to the Effective Time multiplied by the Exchange Ratio, rounded down to
the nearest whole number of shares of Parent Common Stock, (ii) that the per
share exercise price for the shares of Parent Common Stock issuable upon
exercise of such assumed Company Option shall be equal to the quotient
determined by dividing the exercise price per share of Company Common Stock at
which such Company Option was exercisable immediately prior to the Effective
Time by the Exchange Ratio, rounded up to the nearest whole cent and (iii) for
the vesting of such options that may have been accelerated as indicated on
Section 2.3(b) of the Company Disclosure Schedule (as defined in Article II).
After the Effective Time, Parent shall issue to each holder of an outstanding
Company Option a notice describing the foregoing assumption of such Company
Options by Parent. The adjustments provided herein with respect to any Company
Options that are "incentive stock options" as defined in Section 422 of the Code
shall be and are intended to be effected in a manner which is consistent with
Section 424(a) of the Code so as to preserve the benefits of such "incentive
stock options."
1.8 Closing of Company Transfer Books. At the Effective Time, the stock
transfer books of Company shall be closed and no further registration of
transfers of shares of Company Common Stock shall thereafter be made. On or
after the Effective Time, any Certificates (as defined in Section 1.9) presented
to the Exchange Agent (as defined in Section 1.9) or Parent for any reason shall
be converted into the right to receive Merger Consideration with respect to the
shares of Company Common Stock formerly represented thereby and any dividends or
other distributions to which the holders thereof are entitled pursuant to
Section 1.13.
1.9 Exchange of Certificates.
(a) Parent shall authorize Computershare or one or more other
persons reasonably acceptable to Company to act as Exchange Agent in connection
with the Merger (the "Exchange Agent"). Promptly after the Effective Time,
Parent shall cause the Exchange Agent to mail to former record holders of shares
of Company Common Stock letters of transmittal and instructions for surrendering
their certificates formerly representing shares of Company Common Stock
("Certificates") in exchange for the Merger Consideration.
(b) Immediately after the Effective Time, Parent shall deliver to
the Exchange Agent sufficient shares of Parent Common Stock to satisfy the
Merger Consideration and cash reasonably sufficient for fractional shares. After
the Effective Time, upon receipt of Certificates for cancellation, together with
a properly completed letter of transmittal (which shall specify that delivery is
effected, and risk of loss of, and title to, the Certificates passes, only upon
delivery of the Certificates to the Exchange Agent) and other requested
documents and in accordance with the instructions thereon, the holder of such
Certificates shall be entitled to receive in exchange therefor (i) a certificate
representing that number of whole shares of Parent Common Stock into which the
shares of Company Common Stock theretofore represented by the Certificates so
surrendered shall have been converted pursuant to Section 1.6(a) and (ii) a
check in the amount of any cash due pursuant to Sections 1.6(b) and 1.13. No
interest shall be paid or shall accrue on any such amounts.
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(c) Until surrendered in accordance with the provisions of this
Section 1.9, each Certificate shall represent for all purposes only the right to
receive Merger Consideration and, if applicable, amounts under Section 1.13.
Shares of Parent Common Stock into which shares of Company Common Stock shall be
converted in the Merger at the Effective Time shall be deemed to have been
issued at the Effective Time. If any certificates representing shares of Parent
Common Stock are to be issued in a name other than that in which the Certificate
surrendered is registered, it shall be a condition of such exchange that the
person requesting such exchange deliver to the Exchange Agent all documents
necessary to evidence and effect such transfer and pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of a certificate
representing shares of Parent Common Stock in a name other than that of the
registered holder of the Certificate surrendered, or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Beginning the date which is one year following the Closing Date,
Parent shall act as the Exchange Agent and thereafter any holder of an
unsurrendered Certificate shall look solely to Parent for any amounts to which
such holder may be due, subject to applicable law. Notwithstanding any other
provisions of this Agreement, any portion of the Merger Consideration remaining
unclaimed seven years after the Effective Time (or such earlier date immediately
prior to such time as such amounts would otherwise escheat to, or become
property of, any governmental entity) shall, to the extent permitted by law,
become the property of Parent free and clear of any claims or interest of any
person previously entitled thereto.
1.10 No Liability. None of Company, Parent, the Surviving Corporation or
the Exchange Agent shall be liable to any person in respect of any shares (or
dividends or distributions with respect thereto) or cash payments delivered to a
public official pursuant to any applicable escheat, abandoned property or
similar law.
1.11 Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by Parent, the
posting by such person of a bond in such reasonable amount as Parent may direct
as indemnity against any claim that may be made against it or its affiliates or
agents with respect to such Certificate, the Exchange Agent shall deliver in
exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration and any amounts due pursuant to Section 1.13.
1.12 Withholding Rights. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as it reasonably
determines that it is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by Parent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such deduction
and withholding was made.
1.13 Distributions with Respect to Unexchanged Shares. No dividend or
other distribution declared with respect to Parent Common Stock with a record
date after the date during which the Effective Time occurs shall be paid to
holders of unsurrendered Certificates or holders who comply with the provisions
of Section 1.11 (with regard to lost certificates) until such holders surrender
such Certificates or submit an affidavit (and any required bond) in
5
accordance with Section 1.11. Upon the surrender of such Certificates in
accordance with Section 1.9 or submission of an affidavit (and any required
bond) in accordance with Section 1.11, there shall be paid to such holders,
promptly after such surrender or submission, as the case may be, the amount of
dividends or other distributions, without interest, declared with a record date
after the date during which the Effective Time occurs and not paid because of
the failure to surrender such Certificates for exchange.
1.14 Additional Matters. At and after the Effective Time, the officers and
directors of Company after the Merger shall be authorized to execute and
deliver, in the name and on behalf of Company or Sub, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of
Company or Sub, any other actions and things to vest, perfect or confirm of
record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except as described in Company SEC Reports (as defined in Section 2.5)
with specificity and with reference to specific events, in each case exclusive
of Exhibit 99.1 to the Company 10-K and other similar disclosures, and with
respect to a contract or agreement, filed as an exhibit to a Company SEC Report,
or on the disclosure schedule delivered by Company to Parent and Sub on the date
hereof (the "Company Disclosure Schedule"), the section numbers of which are
numbered to correspond to the section numbers of this Agreement to which they
refer, Company represents and warrants to Parent and Sub as set forth below. For
purposes of the representations and warranties of Company contained herein,
disclosure in any section of the Company Disclosure Schedule of any facts or
circumstances shall be deemed to be adequate response and disclosure of such
facts or circumstances with respect to all representations or warranties by
Company calling for disclosure of such information, whether or not such
disclosure is specifically associated with or purports to respond to one or more
or all of such representations or warranties, if it is reasonably apparent on
the face of the Company Disclosure Schedule that such disclosure is applicable.
The inclusion of any information in any section of the Company Disclosure
Schedule or other document delivered by Company pursuant to this Agreement shall
not be deemed to be an admission or evidence of the materiality of such item,
nor shall it establish a standard of materiality for any purpose whatsoever.
2.1 Organization and Qualification.
(a) Each of Company and each Company Subsidiary (as defined in
Section 2.4(a)) is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has corporate or similar power and authority to own, lease and operate its
assets and to carry on its business as now being and as heretofore conducted.
Each of Company and each Company Subsidiary is qualified or otherwise authorized
to transact business as a foreign corporation or other organization in all
jurisdictions in which such qualification or authorization is required by law,
except for jurisdictions in which the failure to be so qualified or authorized
has not had and would not reasonably be expected to have individually or in the
aggregate, a Company Material Adverse Effect. "Company Material
6
Adverse Effect" shall mean any adverse effect on the assets, properties,
business, results of operations or financial condition of Company or any Company
Subsidiary or the ability of the Company or any Company Subsidiary to complete
the transactions contemplated hereby on the terms set forth herein which, when
taken together with all other adverse events, facts or conditions with respect
to which such phrase is used in this Agreement, constitutes a material adverse
effect on (i) the assets, properties, business, results of operations or
financial condition of Company and the Company Subsidiaries taken as a whole
(provided that in no event shall effects primarily resulting from any of the
following be taken into account in determining whether there is, has been or is
reasonably likely to be a "Company Material Adverse Effect" under this clause
(i): (A) conditions affecting the regional, national or global economy or
securities markets in general that do not have a materially disproportionate
impact on Company and the Company Subsidiaries, (B) conditions affecting the
industry in which the Company and the Company Subsidiaries operate generally
that do not have a materially disproportionate impact on Company and the Company
Subsidiaries, (C) any change in the stock price or trading volume of Company
Common Stock (it being understood that the facts or occurrences giving rise or
contributing to such change may be deemed to constitute, or be taken into
account in determining whether there is, has been or would reasonably likely be,
a Company Material Adverse Effect), (D) any act of terrorism or war not
specifically directed at Company and that does not have a materially
disproportionate impact on Company, (E) the announcement of this Agreement and
the transactions contemplated hereby, (F) actions taken or omissions to act with
the prior written consent of Parent, (G) changes in laws of general
applicability or interpretations thereof by courts or governmental entities that
do not have a materially disproportionate impact on Company and the Company
Subsidiaries and (H) changes in generally accepted accounting principles) or
(ii) the ability of the Company or any Company Subsidiary to complete the
transactions contemplated hereby on the terms set forth herein.
(b) Company has made available to Parent true and complete copies of
the charter and By-laws or other organizational documents of Company as
presently in effect, and none of Company or any Company Subsidiary is in default
in the performance, observation or fulfillment of its organizational documents,
except, in the case of the Company Subsidiaries, such defaults that have not had
and would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
2.2 Authority to Execute and Perform Agreement. Company has the corporate
power and authority to enter into, execute and deliver this Agreement and,
subject, in the case of consummation of the Merger, to the adoption of this
Agreement by the holders of Company Common Stock, to perform fully its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Company Board of Directors. No other action on the part of Company is
necessary to consummate the transactions contemplated hereby (other than
adoption of this Agreement by the holders of Company Common Stock). This
Agreement has been duly executed and delivered by Company and constitutes a
valid and binding obligation of Company, enforceable in accordance with its
terms subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The affirmative approval of
the holders of a majority of the shares of Company Common Stock outstanding is
the only vote of holders of Company capital stock required to adopt this
Agreement.
7
2.3 Capitalization and Title to Shares
(a) Company is authorized to issue 60,000,000 shares of Company
Common Stock, of which 26,131,979 shares were issued and outstanding as of July
6, 2005. All of the issued and outstanding shares of Company Common Stock are
duly authorized, validly issued, fully paid, nonassessable and free of
pre-emptive rights. No shares of Company Common Stock are held in the Company's
treasury.
(b) Company has reserved 1,764,625 shares of Company Common Stock
for issuance pursuant to all Company Options. Company Options to purchase
715,375 shares of Company Common Stock were outstanding as of July 6, 2005.
Section 2.3(b) of the Company Disclosure Schedule includes a true and complete
list of all Company Options outstanding as of July 6, 2005, which schedule shows
the Company Stock Option Plan pursuant to which the Company Option was issued,
the underlying shares that have vested as of July 6, 2005, the applicable
vesting and acceleration provisions, the expiration date and whether the option
is intended to be an incentive stock option. True and complete copies of all
instruments (or the forms of such instruments) referred to in this section have
been furnished to Parent. Except as indicated in Section 2.3(b) of the Company
Disclosure Schedule, Company is not obligated to accelerate the vesting of any
Company Options as a result of the Merger. Each Company Stock Option Plan
(including all amendments) has been duly approved by Company's stockholders.
(c) Company is authorized to issue 2,000,000 shares of Preferred
Stock, $1.00 par value per share (the "Company Preferred Stock"), none of which
are issued and outstanding and none of which have been reserved for issuance.
(d) Except for (i) shares indicated as issued and outstanding on
July 6, 2005 in Section 2.3(a), (ii) shares issued after such date upon the
exercise of outstanding Company Options listed in Section 2.3(b) of the Company
Disclosure Schedule or granted after July 6, 2005 in the ordinary course of
business and in compliance with Section 4.1 and (iii) shares of Company Common
Stock and Company Options issued in compliance with Section 4.1, there are not
as of the date hereof, and at the Effective Time there will not be, any shares
of Company Common Stock issued and outstanding.
(e) Company's authorized capital stock consists solely of Company
Common Stock described in Section 2.3(a) and Company Preferred Stock described
in Section 2.3(c). There are not as of the date hereof, and at the Effective
Time there will not be, authorized or outstanding any subscriptions, options,
conversion or exchange rights, warrants, repurchase or redemption agreements,
rights (including pursuant to a so-called "poison pill") or other agreements,
claims or commitments of any nature whatsoever obligating Company to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered, sold,
repurchased or redeemed, additional shares of the capital stock or other
securities of Company or obligating Company to grant, extend or enter into any
such agreement, other than Company Options listed in Section 2.3(b) of the
Company Disclosure Schedule and Company Options to purchase shares of Company
Common Stock granted in the ordinary course of business with exercise prices
equal to the trading price of Company Common Stock on the date of grant
consistent with past practice since July 6, 2005. To the knowledge of Company,
there are no stockholder agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the voting of the capital stock of
Company. For the purposes of this Agreement, the
8
"knowledge of Company" or "to Company's knowledge" means the actual knowledge of
one or more executive officers of Company.
(f) Neither Company nor any Company Subsidiary beneficially owns any
shares of capital stock of Parent.
(g) Company has no outstanding bonds, debentures, notes or other
indebtedness that have the right to vote on any matters on which stockholders
may vote.
2.4 Company Subsidiaries.
(a) Section 2.4(a) of the Company Disclosure Schedule sets forth a
true and complete list of the names and jurisdictions of organization of each
Company Subsidiary. All issued and outstanding shares or other equity interests
of each Company Subsidiary are owned directly by Company free and clear of any
charges, liens, encumbrances, security interests or adverse claims. As used in
this Agreement, "Company Subsidiary" means any corporation, partnership or other
organization, whether incorporated or unincorporated, (i) of which Company or
any Company Subsidiary is a general partner or (ii) at least 50% of the
securities or other interests having voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation, partnership or other organization are directly or indirectly owned
or controlled by Company or by any Company Subsidiary, or by Company and one or
more Company Subsidiaries, provided, however, that for the purposes of Article
IV, the phrase "at least 50%" in the foregoing definition shall be "more than
50%."
(b) There are not as of the date hereof, and at the Effective Time
there will not be, any subscriptions, options, conversion or exchange rights,
warrants, repurchase or redemption agreements, or other agreements, claims or
commitments of any nature whatsoever obligating any Company Subsidiary to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered, sold,
repurchased or redeemed, shares of the capital stock or other securities of
Company or any Company Subsidiary or obligating Company or any Company
Subsidiary to grant, extend or enter into any such agreement. To the knowledge
of Company, there are no stockholder agreements, voting trusts, proxies or other
agreements, instruments or understandings with respect to the voting of the
capital stock of any Company Subsidiary.
(c) Section 2.4(c) of the Company Disclosure Schedule sets forth,
for each Company Joint Venture (as defined below), the interest held by Company
and the jurisdiction in which such Company Joint Venture is organized. Interests
in Company Joint Ventures held by Company are held directly by Company, free and
clear of any charges, liens, encumbrances, security interest or adverse claims.
The term "Company Joint Venture" means any corporation or other entity
(including partnership, limited liability company and other business
association) that is not a Company Subsidiary and in which Company or one or
more Company Subsidiaries owns an equity interest (other than equity interests
held for passive investment purposes which are less than 10% of any class of the
outstanding voting securities or other equity of any such entity).
2.5 SEC Reports.
9
(a) Company previously has made available to Parent (i) its Annual
Report on Form 10-K for the year ended December 31, 2004 (the "Company 10-K"),
as filed with the SEC, (ii) all proxy statements relating to Company's meetings
of stockholders held or to be held after December 31, 2004 and (iii) all other
documents filed by Company with, or furnished by Company to, the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since January
1, 2002 and prior to the date of this Agreement (the "Company SEC Reports"). As
of their respective dates, such documents complied, and all documents filed by
Company with the SEC between the date of this Agreement and the Closing Date
shall comply, in all material respects, with applicable SEC requirements
(including the Xxxxxxxx-Xxxxx Act of 2002 and the related rules and regulations
promulgated thereunder) and did not, or in the case of documents filed on or
after the date hereof will not, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. On and since January 1, 2002, Company has timely filed,
and between the date of this Agreement and the Closing Date shall timely file,
with the SEC all documents required to be filed by it under the Exchange Act. No
Company Subsidiary is required to file any form, report or other document with
the SEC.
(b) Company has made available to Parent a complete and correct copy
of any amendments or modifications which are required to be filed with the SEC,
but have not yet been filed with the SEC, if any, to (i) Company Agreements
which previously have been filed by Company with the SEC pursuant to the
Securities Act of 1933, as amended (the "Securities Act") or Exchange Act and
(ii) Company SEC Reports filed prior to the date hereof. Company has timely
responded to all comment letters and other correspondence of the staff of the
SEC relating to the Company SEC Reports, and the SEC has not notified Company
that any final responses are inadequate, insufficient or otherwise
non-responsive. Company has made available to Parent true and complete copies of
all correspondence between the SEC, on the one hand, and Company and any of the
Company Subsidiaries, on the other, occurring since January 1, 2002 and prior to
the date hereof and will, reasonably promptly following the receipt thereof,
make available to Parent any such correspondence sent or received after the date
hereof. To the knowledge of Company, none of the Company SEC Reports is the
subject of ongoing SEC review or outstanding SEC comment.
2.6 Financial Statements.
(a) The consolidated financial statements contained in the Company
10-K and in Company's quarterly report on Form 10-Q for the quarter ended March
31, 2005 (the "Company 10-Q") have been prepared from, and are in accordance
with, the books and records of Company and present fairly, in all material
respects, the consolidated financial condition and results of operations of
Company and the Company Subsidiaries as of and for the periods presented
therein, all in conformity with United States generally accepted accounting
principles applied on a consistent basis ("GAAP"), except as otherwise indicated
therein and subject in the case of the unaudited financial statements included
in the Company 10-Q to normal year-end adjustments, which in the aggregate are
not material in amount, and the absence of notes.
(b) Company maintains a system of "internal control over financial
reporting" (as defined in Rules 13a-15(f) of the Exchange Act) sufficient to
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in
10
conformity with GAAP, that transactions are executed only in accordance with the
authorization of management and regarding prevention or timely detection of the
unauthorized acquisition, use or disposition of Company's assets. Company's
"disclosure controls and procedures" (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) are reasonably designed to ensure that all
information (both financial and non-financial) required to be disclosed by
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that all such information is accumulated
and communicated to Company's management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of the
chief executive officer and chief financial officer of Company required under
the Exchange Act with respect to such reports. Company is not a party to, and
does not have any commitment to become a party to, any joint venture, off
balance sheet partnership or any similar contract (including any contract or
arrangement relating to any transaction or relationship between or among
Company, on the one hand, and any unconsolidated affiliate, including any
structured finance, special purpose or limited purpose entity or person, on the
other hand or any "off balance sheet arrangements" (as defined in Item 303(a) of
Regulation S-K under the Exchange Act)), where the result, purpose or intended
effect of such contract or arrangement is to avoid disclosure of any material
transaction involving, or material liabilities of, Company in Company's
published financial statements or other Company SEC Reports. Since January 1,
2005, Company has not received any oral or written notification of any (x)
"significant deficiency" or (y) "material weakness" in Company's internal
controls over financial reporting. There is no outstanding "significant
deficiency" or "material weakness" which Company's independent accountants
certify has not been appropriately and adequately remedied by Company. For
purposes of this Agreement, the terms "significant deficiency" and "material
weakness" shall have the meanings assigned to them in Release 2004-001 of the
Public Company Accounting Oversight Board.
2.7 Absence of Undisclosed Liabilities. Company has no liabilities of any
nature, whether accrued, absolute, contingent or otherwise, other than
liabilities (i) adequately reflected or reserved against on the balance sheet
(the "Company Balance Sheet") dated December 31, 2004 included in the Company
10-K or adequately disclosed (in accordance with GAAP) in the notes thereto,
(ii) reflected in Company's unaudited balance sheet dated March 31, 2005
included in the Company 10-Q or adequately disclosed (in accordance with GAAP)
in the notes thereto, (iii) incurred since March 31, 2005 in the ordinary course
of business or (iv) that have not had or would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
2.8 Absence of Adverse Changes. Since December 31, 2004, there has not
been any change, event or circumstance that has had, or is reasonably likely to
have, individually or in the aggregate, a Company Material Adverse Effect. There
has not been any action taken by Company or any Company Subsidiary during the
period from December 31, 2004 through the date of this Agreement that, if taken
during the period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 4.1.
2.9 Compliance with Laws.
(a) Company and the Company Subsidiaries have complied in a timely
manner and in all respects, with all laws, statutes, regulations, rules,
ordinances and judgments,
11
decrees, orders, writs and injunctions, of any court or governmental entity
(collectively, "Laws") relating to any of the property owned, leased or used by
them, or applicable to their business or products, except as has not had or
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(b) Company and the Company Subsidiaries including, to the knowledge
of Company, their respective employees (to the extent applicable) have obtained
each federal, state, county, local or foreign governmental consent, license,
permit, grant or other authorization of a governmental entity (i) pursuant to
which Company or any Company Subsidiary currently operates or holds any interest
in any of its properties or (ii) that is required for the operation of the
business of Company or any of its subsidiaries or the holding of any such
interest ((i) and (ii) are herein collectively called "Company Permits"), and
all of such Company Permits are valid and in full force and effect, except where
the failure to obtain or have any such Company Permit or for any such Company
Permit to be valid and in full force and effect would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect;
and no proceeding is pending or, to the knowledge of Company, threatened to
revoke, suspend, cancel, terminate, or adversely modify any material Company
Permit.
2.10 Actions and Proceedings. Except as would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect:
(i) there are no outstanding orders, judgments, injunctions, decrees or other
requirements of any court, arbitrator or governmental or regulatory body against
Company, any Company Subsidiary or any of their securities, assets or properties
and (ii) there are no actions, suits or claims or legal, administrative or
arbitration proceedings pending or, to the knowledge of Company, threatened
against Company, any Company Subsidiary, or any of their securities, assets or
properties. To the knowledge of Company, there is no fact, event or circumstance
now in existence that reasonably could be expected to give rise to any action,
suit, claim, proceeding or investigation that would be reasonably expected to
have, individually or in the aggregate, a Company Material Adverse Effect or
materially interfere with Company's ability to consummate the transactions
contemplated hereby. There has not been nor are there currently any internal
investigations or inquiries being conducted by Company or any Company
Subsidiary, the Company Board of Directors or any committee thereof, or any
third party at the request of any of the foregoing concerning any financial,
accounting, tax, conflict or interest, self-dealing, fraudulent or deceptive
conduct or other misfeasance or malfeasance issues.
2.11 Contracts and Other Agreements. There are no contracts or agreements
that are material contracts (as defined in Item 601(b)(10)) of Regulation S-K to
which Company or any Company Subsidiary is a party or by which Company or any
Company Subsidiary is bound (the "Company Agreements") other than (a) those
Company Agreements identified on the exhibit indices of Company SEC Reports and
(b) those Company Agreements entered into by the Company or a Company Subsidiary
after the date of this Agreement in compliance with Section 4.1. Each Company
Agreement is valid, subsisting, in full force and effect and is enforceable
against Company or the applicable Company Subsidiary, and, to the knowledge of
Company, the other parties thereto in accordance with its terms. Neither Company
or any Company Subsidiary, nor to the knowledge of Company, any other party, is
in breach of or in default under any provision of any Company Agreement, except
for breaches or defaults which have not had and are not reasonably likely to
have, individually or in the aggregate, a Company Material
12
Adverse Effect. To Company's knowledge, no condition or circumstance exists
which would reasonably be expected to constitute a default of a provision under
any Company Agreement, except for defaults which have not had, and are not
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect. True and complete copies of any Company Agreements listed on the
Company Disclosure Schedule pursuant to this Section 2.11 and of unredacted
copies of any Company Agreements filed with the SEC pursuant to a confidential
treatment request have been provided to Parent.
(a) To the knowledge of Company, no executive officer or director of
Company has (whether directly or indirectly through another entity in which such
person has a material interest, other than as the holder of less than 2% of a
class of securities of a publicly traded company) any material interest in any
property or assets of Company (except as a stockholder) or a Company Subsidiary,
any competitor, customer, supplier or agent of Company or a Company Subsidiary
or any person that is currently a party to any Company Agreement.
(b) Neither Company nor any Company Subsidiary is party to any
interest rate, equity or other swap or derivative instrument.
2.12 Intellectual Property.
(a) Each of Company and the Company Subsidiaries owns, or is validly
licensed or otherwise has the right to use all patents, patent applications,
trademarks, trademark rights, trade names, trade name rights, domain names,
service marks, service xxxx rights, copyrights, design rights, mask work rights,
trade secrets, inventions, know-how, information, privacy rights, data rights
computer programs, databases and all other intellectual property rights of any
kind or nature arising under U.S. or foreign law whether registered or
unregistered (collectively, "Proprietary Rights") which are used in the conduct
of the business of Company and the Company Subsidiaries or without which the
Company or the Company Subsidiaries would be infringing, misappropriating, or
violating a third party's Proprietary Rights, in each case free and clear of all
Liens. Company and each of the Company Subsidiaries have taken all reasonable
steps it believes to be required in accordance with sound business practices to
establish and preserve its ownership of all Proprietary Rights with respect to
its products, services and technology. Company and the Company Subsidiaries have
the right to sell their products and services (whether now offered for sale or
under development) free from any royalty or other obligations to third parties.
(b) Section 2.12(b) of the Company Disclosure Schedule identifies
all patents and patent applications, all registered trademarks and trademark
applications, and all registered copyrighted works and mask works owned by
Company and the Company Subsidiaries. With respect to each item required to be
so identified on Section 2.12(b) of the Company Disclosure Schedule: (i) Company
or a Company Subsidiary owns (free and clear of any claim, lien, charges and
legal duties, including duties owed to any third party under tort law, pursuant
to any contract or agreement, or stemming from any Proprietary Right) each such
item; (ii) the item is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge; (iii) no action is pending or, to the
knowledge of Company, threatened, which challenges the legality, validity,
enforceability, use, or ownership of the item; and (iv) Company owns, uses and
can transfer control of the item pursuant to the terms of this Agreement without
any breach or violation of any contract or agreement or any applicable Laws, in
each case except where any
13
such failure to possess clear title or any such outstanding injunction,
judgment, order, decree, ruling, charge or action or the failure of Company to
own, use or be able to transfer control of such item would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(c) Section 2.12(c) of the Company Disclosure Schedule identifies
all trade secrets, unregistered copyrightable works and other unpatented
proprietary technologies that are material to the conduct of the business of
Company and the Company Subsidiaries, taken as a whole. With respect to each
item required to be listed on Section 2.12(c) of the Company Disclosure Schedule
and the source code of any software owned or exclusively licensed by Company (as
opposed to software licensed from third parties on a non-exclusive basis),
Company and the Company Subsidiaries have not disclosed any material portion of
such Proprietary Rights to any third party.
(d) Except as would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect:
(i) to the knowledge of Company, (A) the business conducted by
Company and the Company Subsidiaries does not infringe upon the Proprietary
Rights of any third party, and (B) none of Company or any the Company
Subsidiaries has infringed upon, misappropriated or otherwise violated the
Proprietary Rights of any third party;
(ii) Company has never received any written charge, complaint,
claim, demand or notice alleging any such infringement, misappropriation, or
violation (including any claim that Company or a Company Subsidiary must license
or refrain from using any Proprietary Rights of any third party);
(iii) no claims are pending or, to the knowledge of Company
threatened, that Company or any of its Subsidiaries is infringing (including
with respect to the manufacture, use or sale by Company or any of its
Subsidiaries of their respective commercial products and services) the
Proprietary Rights of any person; and
(iv) as of the date of this Agreement, to the knowledge of
Company, no person or entity has infringed upon, misappropriated or otherwise
violated the Proprietary Rights of Company or any of its Subsidiaries.
(e) To the knowledge of Company, none of the activities of the
employees of Company or any Company Subsidiary on behalf of such entity violates
any agreement or arrangement which any such employees have with former
employers. All employees and consultants who contributed to the discovery or
development of any of the Proprietary Rights used in the conduct of the business
of Company and the Company Subsidiaries did so pursuant to written agreements
assigning all Proprietary Rights arising therefrom to Company or a Company
Subsidiary.
(f) No agreement pursuant to which Company or any Company Subsidiary
holds, uses or licenses material Proprietary Rights contains change of control
or other provisions that would, as a result of the Merger: (i) cause the
termination of such agreement or allow any
14
other party to such agreement to terminate the agreement or (ii) effect any
change in such agreement adverse to Company.
(g) Company and the Company Subsidiaries have complied in all
material respects with all applicable contractual and legal requirements
pertaining to information privacy and security. To the knowledge of Company, no
complaint relating to an improper use or disclosure of, or a breach in the
security of, any such information has been made or threatened against Company or
any Company Subsidiary. To the knowledge of Company, there has been no: (i)
unauthorized disclosure of any material third party proprietary or confidential
information in the possession, custody or control of Company or a Company
Subsidiary, or (ii) material breach of Company's or any Subsidiary's security
procedures wherein confidential information has been disclosed to a third
person.
(h) None of Company's material Proprietary Rights constitutes or is
dependent on any open source computer code, none of Company's products
incorporates, imbeds or is bundled with any open source computer code, and none
of Company's material Proprietary Rights is subject to any license or other
contractual obligation that would require Company to divulge to any person any
source code or trade secret that is part of Company's Proprietary Rights.
2.13 Assets.
(a) Company and each Company Subsidiary has all material assets,
properties, rights and contracts necessary to permit Company and the Company
Subsidiaries to conduct their business as it is currently being conducted.
Company and each Company Subsidiary has good and marketable title to all of its
properties, interests in properties and assets, real and personal, reflected in
the Company Balance Sheet (except properties, interests in properties and assets
sold or otherwise disposed of since the Company Balance Sheet Date in the
ordinary course of business consistent with past practice), or with respect to
leased properties and assets, valid leasehold interests in such properties and
assets, in each case, free and clear of all imperfections of title,
restrictions, encroachments, liens and easements, except (i) liens for current
taxes not yet due and payable that are not overdue or that are being contested
in good faith by appropriate proceedings, (ii) mechanics', carriers' workers',
repairers' and other similar liens imposed by law arising or incurred in the
ordinary course of business that are not overdue or that are being contested in
good faith by appropriate proceedings, (iii) deposits or pledges made in
connection with, or to secure payment of, worker's compensation, unemployment
insurance, old age pension programs mandated under applicable law or other
social security, (iv) restrictions on the transfer of securities arising under
federal and state securities laws, (v) such imperfections of title,
restrictions, encroachments, liens and easements as do not and would not
reasonably be expected to materially detract from or interfere with the use or
value of the properties subject thereto or affected thereby, or otherwise
materially impair business operations involving such properties and (vi) liens
securing debt which is reflected on the Company Balance Sheet (collectively,
"Permitted Encumbrances"). The buildings, property and equipment of Company and
each Company Subsidiary that are used in the operations of business are (i) in
good operating condition and repair and (ii) have been maintained in accordance
with normal industry practices.
15
(b) No Company or Company Subsidiary owns in fee any real property.
Section 2.13(b) of the Company Disclosure Schedule lists all real property
leased by Company and each Company Subsidiary (the "Company Leased Real
Property"). True and complete copies of all leases with respect to Company
Leased Real Property (the "Company Real Property Leases") in excess of 15,000
square feet have been provided to Parent. Each lease set forth on Section
2.13(b) is valid, subsisting, in full force and effect and is enforceable
against Company or the applicable Company Subsidiary, and, to the knowledge of
Company, the other parties thereto in accordance with its terms. Neither Company
or any Company Subsidiary, nor to the knowledge of Company, any other party, is
in breach of or in default under any provision of any Company Real Property
Lease, except for breaches or defaults which have not had, and are not
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect. To the knowledge of Company, no condition or circumstance exists
which would reasonably be expected to constitute a default of a provision under
any Company Real Property Lease, except for those conditions or circumstances
that have not had or would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
(c) There are no written or oral subleases, licenses, occupancy
agreements, rights of first offer, rights of first refusal or other contractual
obligations that grant the right of use or occupancy of Company Leased Real
Property, and there is no person in possession of Company Leased Real Property
other than Company and the Company Subsidiaries. There is no pending, or, to the
knowledge of Company, threatened, eminent domain, condemnation or similar
proceeding materially affecting any Company Leased Real Property.
2.14 Insurance. Company (or one of the Company Subsidiaries) now maintains
in full force and effect, and has maintained during the immediately preceding
three-year period, policies of insurance that to the Company's knowledge are
reasonably adequate with respect to all material properties, assets and business
activities of Company and each of the Company Subsidiaries against such
casualties, risks, and contingencies as are customarily insured against by
entities owning similar properties or assets or engaged in similar business
activities. There are no material outstanding unpaid claims under any of such
policies of insurance.
2.15 Commercial Relationships. None of Company's or the Company
Subsidiaries' material customers, suppliers, collaborators, distributors,
licensors or licensees has canceled or otherwise terminated its relationship
with Company or a Company Subsidiary or has, during the last twelve months,
altered its relationship with Company or a Company Subsidiary, except as would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. To the Company's knowledge, there is no plan or
intention of any such entity, and the Company has not received any threat or
notice from any such entity, to terminate, cancel or otherwise materially modify
its relationship with Company or a Company Subsidiary.
2.16 Tax Matters.
(a) For purposes of this Agreement, the term "Tax" (and, with
correlative meaning, "Taxes" and "Taxable") means all United States Federal,
state and local, and all foreign, income, profits, franchise, gross receipts,
payroll, transfer, sales, employment, social security, unemployment insurance,
workers' compensation, use, property, excise, value added, ad valorem,
estimated, stamp, alternative or add-on minimum, recapture, environmental,
capital, withholding and any other taxes and similar impositions or assessments
in the nature of taxes,
16
together with all interest, penalties and additions imposed on or with respect
to such amounts. "Tax Return" means any return, declaration, report, claim for
refund, return or statement filed or required to be filed with any taxing
authority in connection with the determination, assessment, collection or
imposition of any Taxes, including any attachments thereto and any amendments
thereof.
(b) All Tax Returns required to be filed by or with respect to
Company and the Company Subsidiaries have been filed within the time and in the
manner prescribed by law. All such Tax Returns are true, correct and complete in
all material respects, and all Taxes owed by Company or the Company
Subsidiaries, whether or not shown on any Tax Return, have been paid. Company
and the Company Subsidiaries file Tax Returns in all jurisdictions where they
are required to so file, and no claim has ever been made in writing by any
taxing authority in any other jurisdiction that Company or the Company
Subsidiaries are or may be subject to taxation by that jurisdiction.
(c) There are no material liens or other encumbrances with respect
to Taxes upon any of the assets or properties of Company or the Company
Subsidiaries, other than with respect to Taxes not yet due and payable.
(d) No material audit or proceeding is currently pending or, to the
knowledge of the Company, threatened, with respect to any Tax Return of Company
or the Company Subsidiaries. No material deficiency for any Taxes has been
proposed in writing against Company or the Company Subsidiaries, which
deficiency has not been paid in full.
(e) There are no outstanding agreements, waivers or arrangements
extending the statutory period of limitation applicable to any claim for, or the
period for the collection or assessment of, material Taxes due from or with
respect to Company or the Company Subsidiaries for any taxable period, no power
of attorney granted by or with respect to Company or the Company Subsidiaries
relating to material Taxes is currently in force.
(f) With respect to any period for which Tax Returns have not yet
been filed, or for which Taxes are not yet due or owing, Company has, in
accordance with GAAP, made due and sufficient accruals for such Taxes (excluding
any "deferred taxes" or similar items that reflect timing differences between
tax and financial accounting principles) in Company's books and records. All
Taxes attributable to the period beginning after March 31, 2005 have been
incurred in the ordinary course of the Company's business.
(g) All material withholding and payroll Tax requirements required
to be complied with by Company and the Company Subsidiaries (including
requirements to deduct, withhold and pay over material amounts to any
governmental authority in connection with material amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party and
to comply in all material respects with any associated record keeping and
reporting requirements) have been satisfied.
(h) Company and the Company Subsidiaries are not party to or bound
by, nor do they have any obligation under, any Tax sharing agreement or similar
contract or arrangement among members of a consolidated, combined or unitary
group other than a group of which the Company is the common parent. Neither
Company nor any Company Subsidiary has any
17
liability for the Taxes of any other person other than a group of which the
Company is the common parent under Treasury Regulation 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise.
(i) Neither Company nor any Company Subsidiary has made any
payments, or has been or is a party to any agreement, contract, arrangement or
plan that could result in it making payments, that have resulted or would
result, separately or in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Code Section 280G or in the imposition of an
excise Tax under Code Section 4999 (or any corresponding provisions of state,
local or foreign Tax law) or that could result in it making payments, that were
not or would not be deductible under Code Sections 162(m). Neither Company nor
any Company Subsidiary has agreed to, or is required to, make any adjustments
under Section 481 of the Code by reason of a change in accounting method or
otherwise.
(j) Neither Company nor any Company Subsidiary has distributed stock
of another corporation, or has had its stock distributed by another corporation,
in a transaction that was governed, or purported or intended to be governed, in
whole or in part, by Code Section 355 or 361.
(k) Company has delivered or made available to Parent (i) complete
and correct copies of all Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by Company or any Company Subsidiary
with respect to the prior three (3) taxable years.
(l) Neither Company nor any Company Subsidiary has participated in
any "reportable transaction" within the meaning of U.S. Treasury Regulation
Section 1.6011-4.
2.17 Employee Benefit Plans.
(a) Section 2.17(a) of the Company Disclosure Schedule contains a
complete list of all material pension, savings, profit sharing, retirement,
deferred compensation, employment, welfare, fringe benefit, insurance, short and
long term disability, medical, death benefit, incentive, bonus, stock, vacation
pay, severance pay and similar plans, programs or arrangements (the "Company
Plans") (other than oral employment agreements that (i) do not constitute an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or (ii),
individually or in the aggregate, are not material), including all employee
benefit plans as defined in Section 3(3) of ERISA, maintained by Company, the
Company Subsidiaries or a Company ERISA Affiliate (as defined below) or to which
Company, any of the Company Subsidiaries or a Company ERISA Affiliate are
parties or required to contribute or have any material obligation. "Company
ERISA Affiliate" means (i) any corporation included with Company in a controlled
group of corporations within the meaning of Section 414(b) of the Code; (ii) any
trade or business (whether or not incorporated) that is under common control
with Company within the meaning of Section 414(c) of the Code; (iii) any member
of an affiliated service group of which Company or any Company Subsidiary is a
member within the meaning of Section 414(m) of the Code; or (iv) any other
person or entity treated as aggregated with Company under Section 414(o) of the
Code.
18
(b) Company has delivered or made available to Parent current,
accurate and complete copies of (i) each Company Plan that has been reduced to
writing and all amendments thereto, (ii) a summary of the material terms of each
Company Plan that has not been reduced to writing, including all amendments
thereto, (iii) the summary plan description for each Company Plan subject to
Title I of ERISA, and in the case of each other Company Plan, any similar
employee summary (including but not limited to any employee handbook
description), (iv) for each Company Plan intended to be qualified under Section
401(a) of the Code, the most recent determination or opinion letter issued by
the Internal Revenue Service ("IRS"), (v) for each Company Plan with respect to
which a Form 5500 series annual report/return is required to be filed, the most
recently filed such annual report/return and the annual reports/returns for the
two preceding years, together with all schedules and exhibits, (vi) all
insurance contracts, administrative services contracts, trust agreements,
investment management agreements or similar agreements maintained in connection
with any Company Plan, and (vii) for each Company Plan that is intended to be
qualified under Code Section 401(a), copies of compliance testing results
(including nondiscrimination testing (401(a)(4), ADP and ACP), 402(g), 415 and
top-heavy tests) for the 2004 plan year.
(c) There is no entity (other than Company or any Company
Subsidiary) that together with Company or any Company Subsidiary would be
treated as a single-employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
(d) Each Company Plan maintained by Company, a Company Subsidiary or
a Company ERISA Affiliate which is intended to be qualified under Section 401(a)
of the Code has received an IRS determination letter to the effect that the
Company Plan is so qualified, and, to the knowledge of the Company, there is no
fact or circumstance that could reasonably be expected to result in the
revocation of such letter. Each Company Plan has been administered in all
material respects in accordance with the terms of such Company Plan and the
provisions of any and all statutes, orders or governmental rules or regulations,
including ERISA and the Code, and to the knowledge of Company, nothing has been
done or not done with respect to any Company Plan that could result in any
material liability on the part of Company or any Company Subsidiary under Title
I of ERISA or Chapter 43 of the Code. None of the Company Plans is currently
under examination by the IRS, Department of Labor or other U.S. government
agency or department, nor, is any such examination pending or, to the knowledge
of the Company, threatened. There are no lawsuits, claims or controversies
pending, or to the knowledge of the Company, threatened (other than claims in
the ordinary course of business consistent with past practice) with respect to
any Company Plan that could reasonably be expected to result in material
liability to the Company. All contributions, premiums and other amounts due to
or in connection with each Company Plan under the terms of the Company Plan or
applicable law have been timely made, and to the extent not yet due, accrued on
the financial statements of the Company in accordance with GAAP.
(e) Any Company Plan subject to Title IV of ERISA with respect to
which the Company or any Company Subsidiary has any liability is listed on
Section 2.17(e) of the Company Disclosure Schedule. The actuarial valuation with
respect to each such Company Plan, as of January 1, 2004, has been provided to
Parent and, to the knowledge of Company, the material facts underlying such
valuation remain true and correct as of the date hereof. Specifically, but not
in limitation of the foregoing, to the knowledge of Company, there have
19
been no material changes in such facts including with respect to the census of
employees, former employees and retirees, the fair market value of plan assets
and the provisions of the plan on which the valuation is based. All
contributions described in the valuation report with respect to periods prior to
the Closing Date have been made in the amounts and at the dates suggested by the
actuaries therein. There has been no waiver of any accumulated funding
deficiency requested or granted with respect to any Company Plan subject to
Section 412 of the Code or Section 302 of ERISA. No such Company Plan is
obligated or is reasonably expected to be required to make "deficit reduction
contributions" as defined in Section 412(l)(12) of the Code. No reportable event
(within the meaning of Section 4043) of ERISA, whether or not waived by
regulations, has occurred with respect to any Company Plan that is subject to
Title IV of ERISA.
(f) Except for continuation of health coverage to the extent
required under Section 4980B of the Code or Section 601 et seq. of ERISA, other
applicable law or as otherwise set forth in this Agreement, there are no
obligations under any Company Plan providing welfare benefits after termination
of employment.
(g) Except for individual employment agreements, each Company Plan
can be amended, modified or terminated without advance notice to or consent by
any employee, former employee or beneficiary, except as required by law.
(h) Neither Company nor any of the Company Subsidiaries nor any
Company ERISA Affiliate has ever maintained, sponsored, contributed to, been
required to contribute to, or incurred any liability under any:
(i) multi-employer plan as defined in Section 3(37) or Section
4001(a)(3) of ERISA,
(ii) multiple employer plan as defined in Section 413(c) of
the Code, or any plan that has two or more contributing sponsors at least two of
whom are not under common control, within the meaning of Section 4063(a) of
ERISA,
(iii) welfare benefit fund within the meaning of Section
419(e) of the Code, or
(iv) voluntary employees' beneficiary association, within the
meaning of Section 501(c)(9) of the Code.
(i) No employee of, consultant to, or other provider of services to
Company, any Company Subsidiary, or any Company ERISA Affiliate will be entitled
to any material payment becoming due from any Company Plan, any additional
benefit or the acceleration of the payment or vesting of any benefit under any
Company Plan by reason of the execution of this Agreement and the consummation
of the transactions contemplated hereby.
(j) Neither Company nor any Company Subsidiary nor any Company ERISA
Affiliate has any "leased employees" within the meaning of Section 414(n) of the
Code or any independent contractors or other individuals who provide
employee-type services but who are not recognized by Company as employees of
Company.
20
(k) Any Company Plan that is a plan or arrangement to provide
unfunded nonqualified deferred compensation is specifically identified in
Section 2.17(a) of the Company Disclosure Schedule. A list of participants in
such Company Plan, together with the projected account balances or accrued
benefits with respect to each such participant as of the of Closing, are set
forth in Section 2.17(k) of the Company Disclosure Schedule. The actuarial
valuation (if applicable) with respect to each such Company Plan that is an
unfunded nonqualified deferred compensation plan, as of January 1, 2004, has
been provided to Parent, to the knowledge of Company, and the material facts
underlying such valuation remain true and correct as of the date hereof.
Specifically, but not in limitation of the foregoing, to the knowledge of
Company, there have been no material changes in such facts including with
respect to the census of employees, former employees and retirees, and the
provisions of the plan on which the valuation is based. Each Company Plan that
is a "nonqualified deferred compensation plan" (as defined under Section
409A(d)(1) of the Code) has been operated and administered in good faith
compliance with Section 409A from the period beginning January 1, 2005 through
the date hereof and has not been materially modified since October 2, 2004.
(l) Each Company Plan maintained for employees of Company outside of
the United States (each a "Company Foreign Plan") has been administered in all
material respects in a manner that satisfies all applicable Laws. All
contributions to each Company Foreign Plan required to be made on or before the
Closing have been and will be made by Company or a Company Subsidiary prior to
the Closing. Each Company Foreign Plan is either fully funded (or fully insured)
based upon generally accepted local actuarial and accounting practices and
procedures or accruals for each Company Foreign Plan have been made in Company's
financial statements. There are no pending investigations by any governmental
entity involving any Company Foreign Plan nor any pending claims (except for
claims for benefits payable in the normal operation of the Company Foreign
Plans), suits or proceedings against any Company Foreign Plan or asserting any
rights or claims to benefits under any Company Foreign Plan. The consummation of
the transactions contemplated by this Agreement will not by itself create or
otherwise result in any material liability with respect to any Company Foreign
Plan.
2.18 Employee Relations.
(a) Upon termination of the employment of any employees of Company
or any Company Subsidiaries, none of Company, the Company Subsidiaries, the
Surviving Corporation, Parent or the Parent Subsidiaries will be liable, by
reason of the Merger or anything done at or before the Effective Time in
connection with the Merger, to any of such employees for severance pay or any
other similar payments (other than accrued salary, vacation or sick pay in
accordance with normal policies). True and complete information as to the name,
current job title and compensation for the current year of all current directors
and executive officers of Company has been provided to Parent.
(b) Except for matters that have not had or would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, Company and each Company Subsidiary (i) is in compliance in all respects
with all Laws respecting employment, employment practices, terms and conditions
of employment and wages and hours, in each case, with respect to employees, (ii)
has withheld all amounts required by law or by agreement to be withheld from the
wages, salaries and other payments to employees, (iii) is not liable for any
arrears of wages, salaries, commissions, bonuses or other direct compensation
for
21
any services performed or amounts required to be reimbursed to any employees or
consultants or any taxes or any penalty for failure to comply with any of the
foregoing, and (iv) is not liable for any payment to any trust or other fund or
to any governmental entity, with respect to unemployment compensation benefits,
social security or other benefits or obligations for employees (other than
routine payments to be made in the ordinary course of business and consistent
with past practice).
(c) No work stoppage or labor strike against Company or any Company
Subsidiary is pending or, to the knowledge of Company, threatened. Neither
Company nor any Company Subsidiary is involved in or, to the knowledge of
Company, threatened with, any labor dispute, grievance, or litigation relating
to labor, safety or discrimination matters involving any employee, including
without limitation charges of unfair labor practices or discrimination
complaints, that, if adversely determined, could reasonably be expected to
result, individually or in the aggregate, in a Company Material Adverse Effect.
Neither Company nor any Company Subsidiary has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act that could
reasonably be expected to result in, individually or in the aggregate, a Company
Material Adverse Effect. Neither Company nor any Company Subsidiary is
presently, nor has it been in the past, a party to or bound by any collective
bargaining agreement or union contract with respect to employees, and no
collective bargaining agreement is being negotiated by Company or any Company
Subsidiary. No union organizing campaign or activity with respect to non-union
employees of Company or any Company Subsidiary is ongoing, pending or, to the
knowledge of Company, threatened.
2.19 Environmental Matters.
(a) Except for those matters which have not had or would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect:
(i) Company and the Company Subsidiaries are, and have been,
in compliance in all respects with all Laws relating to (A) releases or
threatened releases of Hazardous Substances (as defined below), (B) pollution or
protection of public health or the environment or worker safety or health or (C)
the manufacture, handling, transport, use, treatment, storage, or disposal of
Hazardous Substances ("Environmental Laws");
(ii) there has been no release or threatened release of any
pollutant, petroleum or any fraction thereof, contaminant or toxic or hazardous
material, substance or waste (each a "Hazardous Substance") on, upon, into or
from any site currently or heretofore owned, leased or otherwise used by
Company, any Company Subsidiary or any predecessor of Company or any Company
Subsidiary;
(iii) there have been no Hazardous Substances generated by
Company, any Company Subsidiary or any predecessor of Company or any Company
Subsidiary that have been disposed of or come to rest at any site that has been
included in any published U.S. federal, state or local "superfund" site list or
any other similar list of hazardous or toxic waste sites published by any
governmental entity in the United States; and
(iv) there are no underground storage tanks located on, no
PCBs (polychlorinated biphenyls) or PCB-containing equipment used or stored on,
and no hazardous
22
waste as defined by the Resource Conservation and Recovery Act stored on, any
site owned or operated by Company, any Company Subsidiary or any predecessor of
Company or any Company Subsidiary, except for the storage of hazardous waste in
compliance with Environmental Laws.
(b) Company has made available to Parent true and complete copies of
all material environmental records, reports, notifications, certificates of
need, permits, pending permit applications, correspondence, engineering studies,
and environmental studies or assessments.
2.20 No Breach. Except for (a) filings with the SEC, (b) filings with the
Secretary of State of Delaware contemplated herein and (c) the filing of a
Notification and Report Form under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act, as amended (the "HSR Act") and any similar filings in foreign
jurisdictions, the execution, delivery and performance of this Agreement by
Company and the consummation by Company of the transactions contemplated hereby
will not (i) violate any provision of the Certificate of Incorporation or
By-laws of Company, (ii) violate, conflict with or result in the breach of any
of the terms or conditions of, result in modification of, or otherwise give any
other contracting party the right to terminate, accelerate obligations under or
receive payment under or constitute (or with notice or lapse of time or both
constitute) a default under, any instrument, contract or other agreement to
which Company or any Company Subsidiary is a party or to which any of them or
any of their assets or properties is bound or subject, (iii) violate any Law
applicable to Company or the Company Subsidiaries or by which any of Company's
or the Company Subsidiaries' assets or properties is bound, (iv) violate any
Company Permit, (v) require any filing with, notice to, or permit, consent or
approval of, any governmental or regulatory body, (vi) result in the creation of
any lien or other encumbrance on the assets or properties of Company or a
Company Subsidiary, or (vii) cause any of the assets owned by Company or any
Company Subsidiary to be reassessed or revalued by any taxing authority or other
governmental entity, excluding from the foregoing clauses (ii), (iii), (iv),
(vi) and (vii) violations, breaches and defaults which, and filings, notices,
permits, consents and approvals the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, would not reasonably be expected to materially interfere with the
ability of Company to consummate the transactions contemplated hereby or would
not materially increase the costs of consummation of the Merger. Neither Company
nor any Company Subsidiary is or will be required to give any notice to or
obtain any consent or waiver from, any individual or entity in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby other than failures that would not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
2.21 Board Approvals.
(a) The Company Board of Directors, as of the date of this
Agreement, has determined and resolved (i) that the Merger is in the best
interests of Company and its stockholders, (ii) to propose this Agreement for
adoption by Company's stockholders and to declare the advisability of this
Agreement, and (iii) to recommend that the stockholders of Company adopt this
Agreement.
23
(b) Company has taken all action necessary such that no restrictions
contained in any "fair price," "control share acquisition," "business
combination" or similar statute (including Section 203 of the DGCL) will apply
to the execution, delivery or performance of this Agreement.
2.22 Financial Advisor.
(a) The Company Board of Directors has received the opinion of
Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") to the effect that, as of
the date of this Agreement, the Exchange Ratio is fair, from a financial point
of view, to the holders of Company Common Stock; provided, however, that Parent
and Sub are not entitled to rely upon such opinion. Company shall forward to
Parent a copy of the written version of such opinion promptly following receipt
and in no event later than two business days after the date of this Agreement.
(b) Other than Xxxxxx Xxxxxxx, no broker, finder, agent or similar
intermediary has acted on behalf of Company in connection with this Agreement or
the transactions contemplated hereby, and there are no brokerage commissions,
finders' fees or similar fees or commissions payable in connection herewith
based on any agreement, arrangement or understanding with Company, or any action
taken by Company.
2.23 Interested Party Transactions. Since the date of the filing of
Company's 2004 annual meeting proxy statement with the SEC, no event has
occurred that would be required to be reported by Company pursuant to Item 404
of Regulation S-K promulgated by the SEC that has not yet been included in a
Company SEC Report filed with the SEC prior to the date hereof.
2.24 Information Supplied. None of the information supplied or to be
supplied by Company for inclusion or incorporation by reference in the
Registration Statement (as defined in Section 4.7(a)) or for inclusion in any
filing pursuant to Rule 165 and Rule 425 under the Securities Act or Rule 14a-12
under the Exchange Act (each a "Regulation M-A Filing"), contains or will
contain, as applicable, at the time the Registration Statement is filed with the
SEC, at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act or at the time of the Regulation M-A Filing,
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by Company for
inclusion or incorporation by reference in the Joint Proxy Statement/Prospectus
(as defined in Section 4.7(a)), on the date it is first mailed to holders of
Company Common Stock or holders of Parent Common Stock or at the time of the
Company Stockholders Meeting, the Parent Stockholders Meeting or at the
Effective Time, contains or will contain, any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Except as described in Parent SEC Reports (as defined in Section 3.5) with
specificity and with reference to specific events, in each case exclusive of the
third and fourth paragraphs under "Overview" in Item 7 of the Parent 10-K and
other similar disclosures, and with respect to a contract or agreement, filed as
an exhibit to a Parent SEC Report, on the disclosure schedule delivered by
Parent to Company on the date hereof (the "Parent Disclosure Schedule"), the
section numbers of which are numbered to correspond to the section numbers of
this Agreement to which they refer, Parent and Sub represent and warrant to
Company as set forth below. For purposes of the representations and warranties
of Parent and Sub contained herein, disclosure in any section of Parent
Disclosure Schedule of any facts or circumstances shall be deemed to be adequate
response and disclosure of such facts or circumstances with respect to all
representations or warranties by Parent and Sub calling for disclosure of such
information, whether or not such disclosure is specifically associated with or
purports to respond to one or more or all of such representations or warranties,
if it is reasonably apparent on the face of the Parent Disclosure Schedule that
such disclosure is applicable. The inclusion of any information in any section
of the Parent Disclosure Schedule or other document delivered by Parent pursuant
to this Agreement shall not be deemed to be an admission or evidence of the
materiality of such item, nor shall it establish a standard of materiality for
any purpose whatsoever.
3.1 Organization and Qualification.
(a) Each of Parent and each Parent Subsidiary (as defined in Section
3.4(a)) is a corporation or other legal entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and has
corporate or similar power and authority to own, lease and operate its assets
and to carry on its business as now being and as heretofore conducted. Each of
Parent and each Parent Subsidiary is qualified or otherwise authorized to
transact business as a foreign corporation or other organization in all
jurisdictions in which such qualification or authorization is required by law,
except for jurisdictions in which the failure to be so qualified or authorized
has not had and would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect. "Parent Material Adverse Effect"
shall mean any adverse effect on the assets, properties, business, results of
operations or financial condition of Parent or any Parent Subsidiary or the
ability of the Parent or any Parent Subsidiary to complete the transactions
contemplated hereby on the terms set forth herein which, when taken together
with all other adverse events, facts or conditions with respect to which such
phrase is used in this Agreement, constitutes a material adverse effect on (i)
the assets, properties, business, results of operations or financial condition
of Parent and the Parent Subsidiaries taken as a whole (provided that in no
event shall effects primarily resulting from any of the following be taken into
account in determining whether there is, has been or is reasonably likely to be
a "Parent Material Adverse Effect" under this clause (i): (A) conditions
affecting the regional, national or global economy or securities markets in
general that do not have a materially disproportionate impact on Parent and the
Parent Subsidiaries, (B) conditions affecting the industry in which the Parent
and the Parent Subsidiaries operate generally that do not have a materially
disproportionate impact on Parent and the Parent Subsidiaries, (C) any change in
the stock price or trading volume of Parent Common Stock (it being understood
that
25
the facts or occurrences giving rise or contributing to such change may be
deemed to constitute, or be taken into account in determining whether there is,
has been or would reasonably likely be, a Parent Material Adverse Effect), (D)
any act of terrorism or war not specifically directed at Parent and that does
not have a materially disproportionate impact on Parent, (E) the announcement of
this Agreement and the transactions contemplated hereby, (F) actions taken or
omissions to act with the prior written consent of Company, (G) changes in laws
of general applicability or interpretations thereof by courts or governmental
entities that do not have a materially disproportionate impact on Parent and the
Parent Subsidiaries and (H) changes in generally accepted accounting principles)
or (ii) the ability of the Parent or any Parent Subsidiary to complete the
transactions contemplated hereby on the terms set forth herein.
(b) Parent has previously made available to Company true and
complete copies of the charter and By-laws or other organizational documents of
Parent as presently in effect, and none of Parent or any Parent Subsidiary is in
default in the performance, observation or fulfillment of its organizational
documents, except, in the case of Parent Subsidiaries, such defaults that have
not had and would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
3.2 Authority to Execute and Perform Agreement. Parent has the corporate
power and authority to enter into, execute and deliver this Agreement and,
subject, in the case of the issuance of shares of Parent Common Stock pursuant
to the terms and conditions of this Agreement, to the approval of the holders of
Parent Common Stock, to perform fully its obligations hereunder. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Parent Board of Directors.
No other action on the part of Parent is necessary to consummate the
transactions contemplated hereby (other than approval of the issuance of shares
of Parent Common Stock pursuant to the terms and conditions of this Agreement by
the holders of Parent Common Stock). This Agreement has been duly executed and
delivered by Parent and constitutes a valid and binding obligation of Parent,
enforceable in accordance with its terms subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. The affirmative approval of the holders of a majority of the shares
of Parent Common Stock present at a meeting of holders of Parent Common Stock
where at least a quorum of such holders are present is the only vote of holders
of Parent capital stock required in connection with the transactions
contemplated hereby.
3.3 Capitalization and Title to Shares
(a) Parent is authorized to issue 100,000,000 shares of Parent
Common Stock, of which 45,316,497 shares were issued and outstanding as of July
6, 2005. All of the issued and outstanding shares of Parent Common Stock are
duly authorized, validly issued, fully paid, nonassessable and free of
pre-emptive rights. No shares of Parent Common Stock are held in the Parent's
treasury.
(b) Parent has reserved 9,712,263 shares of Parent Common Stock for
issuance pursuant to all options to purchase Parent Common Stock ("Parent
Options"). Parent Options to purchase 5,310,600 shares of Parent Common Stock
were outstanding as of July 6, 2005. Section 3.3(b) of the Parent Disclosure
Schedule includes a true and complete list of all
26
Parent Options outstanding as of July 6, 2005, which schedule shows the
underlying shares that have vested, and whether the option is intended to be an
incentive stock option. Each stock option plan of Parent (including all
amendments) has been duly approved by Parent's stockholders.
(c) Parent is authorized to issue 1,000,000 shares of preferred
stock, $0.01 par value per share (the "Parent Preferred Stock"), one share of
which is issued and outstanding. Shares of Parent Preferred Stock have been
designated as Series A Junior Participating Preferred Stock, all of which have
been reserved for issuance upon exercise of preferred stock purchase rights (the
"Parent Rights") issuable pursuant to the Shareholders Rights Agreement, dated
as of July 23, 1997, between Parent and Equiserve Trust Company, N.A., a
national banking association, as rights agent.
(d) Except for (i) shares indicated as issued and outstanding on
July 6, 2005 in Section 3.3(a), (ii) shares issued after such date upon the
exercise of Parent Options listed in Section 3.3(b) of the Parent Disclosure
Schedule or granted after July 6, 2005 in the ordinary course of business, (iii)
shares issued upon the conversion of Parent's 4.75% convertible subordinated
notes due in 2008 or (iv) shares of Parent Common Stock and Parent Options
issued in compliance with Section 4.2, there are not as of the date hereof, and
at the Effective Time there will not be, any shares of Parent Common Stock
issued and outstanding.
(e) Parent's authorized capital stock consists solely of Parent
Common Stock described in Section 3.3(a) and Parent Preferred Stock described in
Section 3.3(c). There are not as of the date hereof, and at the Effective Time
there will not be, authorized or outstanding any subscriptions, options,
conversion or exchange rights, warrants, repurchase or redemption agreements,
rights (including pursuant to a so-called "poison pill") or other agreements,
claims or commitments of any nature whatsoever obligating Parent to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered, sold,
repurchased or redeemed, additional shares of the capital stock or other
securities of Parent or obligating Parent to grant, extend or enter into any
such agreement, other than Parent Options listed in Section 3.3(b) of the Parent
Disclosure Schedule or granted in the ordinary course of business consistent
with past practice since July 6, 2005 and the Parent Rights. To the knowledge of
Parent, there are no stockholder agreements, voting trusts, proxies or other
agreements, instruments or understandings with respect to the voting of the
capital stock of Parent. For the purposes of this Agreement, the "knowledge of
Parent" or "to Parent's knowledge" means the actual knowledge of one or more
executive officers of Parent.
(f) Neither Parent nor any Parent Subsidiary beneficially owns any
shares of capital stock of Company.
(g) Parent has no outstanding bonds, debentures, notes or other
indebtedness that have the right to vote on any matters on which stockholders
may vote.
3.4 Parent Subsidiaries.
(a) Section 3.4(a) of the Parent Disclosure Schedule sets forth a
true and complete list of the names and jurisdictions of organization of each
Parent Subsidiary. All issued and outstanding shares or other equity interests
of each Parent Subsidiary are owned directly by
27
Parent or a Parent Subsidiary free and clear of any charges, liens,
encumbrances, security interests or adverse claims. As used in this Agreement,
"Parent Subsidiary" means any corporation, partnership or other organization,
whether incorporated or unincorporated, (i) of which Parent or any Parent
Subsidiary is a general partner or (ii) at least 50% of the securities or other
interests having voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation,
partnership or other organization are directly or indirectly owned or controlled
by Parent or by any Parent Subsidiary, or by Parent and one or more Parent
Subsidiaries, provided, however, that for the purposes of Article IV, the phrase
"at least 50%" in the foregoing definition shall be "more than 50%.".
(b) There are not as of the date hereof, and at the Effective Time
there will not be, any subscriptions, options, conversion or exchange rights,
warrants, repurchase or redemption agreements, or other agreements, claims or
commitments of any nature whatsoever obligating any Parent Subsidiary to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered, sold,
repurchased or redeemed, shares of the capital stock or other securities of
Parent or any Parent Subsidiary or obligating Parent or any Parent Subsidiary to
grant, extend or enter into any such agreement. To the knowledge of Parent,
there are no stockholder agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the voting of the capital stock of
any Parent Subsidiary.
(c) Section 3.4(c) of the Parent Disclosure Schedule sets forth, for
each Parent Joint Venture (as defined below), the interest held by Parent and
the jurisdiction in which such Parent Joint Venture is organized. Interests in
Parent Joint Ventures held by Parent are held directly by Parent, free and clear
of any charges, liens, encumbrances, security interest or adverse claims. The
term "Parent Joint Venture" means any corporation or other entity (including
partnership, limited liability company and other business association) that is
not a Parent Subsidiary and in which Parent or one or more Parent Subsidiaries
owns an equity interest (other than equity interests held for passive investment
purposes which are less than 10% of any class of the outstanding voting
securities or other equity of any such entity).
3.5 SEC Reports.
(a) Parent previously has made available to Company (i) its Annual
Report on Form 10-K for the year ended September 30, 2004 (the "Parent 10-K"),
as filed with the SEC, (ii) all proxy statements relating to Parent's meetings
of stockholders held or to be held after September 30, 2004 and (iii) all other
documents filed by Parent with, or furnished by Parent to, the SEC under the
Exchange Act, since January 1, 2002 and prior to the date of this Agreement (the
"Parent SEC Reports"). As of their respective dates, such documents complied,
and all documents filed by Parent with the SEC between the date of this
Agreement and the Closing Date shall comply, in all material respects, with
applicable SEC requirements (including the Xxxxxxxx-Xxxxx Act of 2002 and the
related rules and regulations promulgated thereunder) and did not, or in the
case of documents filed on or after the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. On and since January
1, 2002, Parent has timely filed, and between the date of this Agreement and the
Closing Date shall timely file, with the SEC all documents required to be filed
by it under the Exchange Act. No Parent Subsidiary is required to file any form,
report or other document with the SEC.
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(b) Parent has made available to Company a complete and correct copy
of any amendments or modifications which are required to be filed with the SEC,
but have not yet been filed with the SEC, if any, to (i) Parent Agreements which
previously have been filed by Parent with the SEC pursuant to the Securities Act
or Exchange Act and (ii) Parent SEC Reports filed prior to the date hereof.
Parent has timely responded to all comment letters and other correspondence of
the staff of the SEC relating to the Parent SEC Reports, and the SEC has not
notified Parent that any final responses are inadequate, insufficient or
otherwise non-responsive. Parent has made available to Company true and complete
copies of all correspondence between the SEC, on the one hand, and Parent and
any of the Parent Subsidiaries, on the other, occurring since January 1, 2002
and prior to the date hereof and will, reasonably promptly following the receipt
thereof, make available to Company any such correspondence sent or received
after the date hereof. To the knowledge of Parent, none of the Parent SEC
Reports is the subject of ongoing SEC review or outstanding SEC comment.
3.6 Financial Statements.
(a) The consolidated financial statements contained in the Parent
10-K and in Parent's quarterly report on Form 10-Q for the quarter ended March
31, 2005 (the "Parent 10-Q") have been prepared from, and are in accordance
with, the books and records of Parent and present fairly, in all material
respects, the consolidated financial condition and results of operations of
Parent and Parent Subsidiaries as of and for the periods presented therein, all
in conformity with GAAP, except as otherwise indicated therein and subject in
the case of the unaudited financial statements included in the Parent 10-Q to
normal year-end adjustments, which in the aggregate are not material in amount,
and the absence of notes.
(b) Parent maintains a system of "internal control over financial
reporting" (as defined in Rules 13a-15(f) of the Exchange Act) sufficient to
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP, that
transactions are executed only in accordance with the authorization of
management and regarding prevention or timely detection of the unauthorized
acquisition, use or disposition of Parent's assets. Parent's "disclosure
controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the
Exchange Act) are reasonably designed to ensure that all information (both
financial and non-financial) required to be disclosed by Parent in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC, and that all such information is accumulated and communicated to
Parent's management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the chief executive officer and
chief financial officer of Parent required under the Exchange Act with respect
to such reports. Parent is not a party to, and does not have any commitment to
become a party to, any joint venture, off balance sheet partnership or any
similar contract (including any contract or arrangement relating to any
transaction or relationship between or among Parent, on the one hand, and any
unconsolidated affiliate, including any structured finance, special purpose or
limited purpose entity or person, on the other hand or any "off balance sheet
arrangements" (as defined in Item 303(a) of Regulation S-K under the Exchange
Act)), where the result, purpose or intended effect of such contract or
arrangement is to avoid disclosure of any material transaction involving, or
material liabilities of, Parent in Parent's published financial statements or
other Parent SEC Reports. Since October 1, 2004, Parent has not received any
oral or written
29
notification of any (x) "significant deficiency" or (y) "material weakness" in
Parent's internal controls over financial reporting. There is no outstanding
"significant deficiency" or "material weakness" which Parent's independent
accountants certify has not been appropriately and adequately remedied by
Parent. For purposes of this Agreement, the terms "significant deficiency" and
"material weakness" shall have the meanings assigned to them in Release 2004-001
of the Public Company Accounting Oversight Board.
3.7 Absence of Undisclosed Liabilities. Parent has no liabilities of any
nature, whether accrued, absolute, contingent or otherwise, other than
liabilities (i) adequately reflected or reserved against on the balance sheet
(the "Parent Balance Sheet") dated September 30, 2004 included in the Parent
10-K or adequately disclosed (in accordance with GAAP) in the notes thereto,
(ii) reflected in Parent's unaudited balance sheet dated March 31, 2005 included
in the Parent 10-Q or adequately disclosed (in accordance with GAAP) in the
notes thereto, (iii) incurred since March 31, 2005 in the ordinary course of
business or (iv) that have not had or would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
3.8 Absence of Adverse Changes. Since September 30, 2004, there has not
been any change, event or circumstance that has had, or is reasonably likely to
have, individually or in the aggregate, a Parent Material Adverse Effect. There
has not been any action taken by Parent or any Parent Subsidiary during the
period from September 30, 2004 through the date of this Agreement that, if taken
during the period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 4.2.
3.9 Compliance with Laws.
(a) Parent and the Parent Subsidiaries have complied in a timely
manner and in all respects, with all Laws relating to any of the property owned,
leased or used by them, or applicable to their business or products, except as
has not had or would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
(b) Parent and the Parent Subsidiaries including, to the knowledge
of Parent, their respective employees (to the extent applicable) have obtained
each federal, state, county, local or foreign governmental consent, license,
permit, grant or other authorization of a governmental entity (i) pursuant to
which Parent or any Parent Subsidiary currently operates or holds any interest
in any of its properties or (ii) that is required for the operation of the
business of Parent or any of its subsidiaries or the holding of any such
interest ((i) and (ii) are herein collectively called "Parent Permits"), and all
of such Parent Permits are valid and in full force and effect, except where the
failure to obtain or have any such Parent Permit or for any such Parent Permit
to be valid and in full force and effect would not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect; and no
proceeding is pending or, to the knowledge of Parent, threatened to revoke,
suspend, cancel, terminate, or adversely modify any material Parent Permit.
3.10 Actions and Proceedings. Except as would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect: (i)
there are no outstanding orders, judgments, injunctions, decrees or other
requirements of any court, arbitrator or governmental or regulatory body against
Parent, any Parent Subsidiary or any of their securities,
30
assets or properties and (ii) there are no actions, suits or claims or legal,
administrative or arbitration proceedings pending or, to the knowledge of
Parent, threatened against Parent, any Parent Subsidiary, or any of their
securities, assets or properties. To the knowledge of Parent, there is no fact,
event or circumstance now in existence that reasonably could be expected to give
rise to any action, suit, claim, proceeding or investigation that would be
reasonably expected to have, individually or in the aggregate, a Parent Material
Adverse Effect or materially interfere with Parent's ability to consummate the
transactions contemplated hereby. There has not been nor are there currently any
internal investigations or inquiries being conducted by Parent or any Parent
Subsidiary, the Parent Board of Directors or any committee thereof, or any third
party at the request of any of the foregoing concerning any financial,
accounting, tax, conflict or interest, self-dealing, fraudulent or deceptive
conduct or other misfeasance or malfeasance issues.
3.11 Contracts and Other Agreements. There are no contracts or agreements
that are material contracts (as defined in Item 601(b)(10)) of Regulation S-K to
which Parent or any Parent Subsidiary is a party or by which Parent or any
Parent Subsidiary is bound (the "Parent Agreements") other than (a) Parent
Agreements identified on the exhibit indices of Parent SEC Reports and (b) those
Parent Agreements entered into by Parent or a Parent Subsidiary after the date
of this Agreement in compliance with Section 4.1. Each Parent Agreement is
valid, subsisting, in full force and effect and is enforceable against Parent or
the applicable Parent Subsidiary, and, to the knowledge of Parent, the other
parties thereto in accordance with its terms. Neither Parent or any Parent
Subsidiary, nor to the knowledge of Parent, any other party, is in breach of or
in default under any provision of any Parent Agreement, except for breaches or
defaults which have not had and are not reasonably likely to have, individually
or in the aggregate, a Parent Material Adverse Effect. To Parent's knowledge, no
condition or circumstance exists which would reasonably be expected to
constitute a default of a provision under any Parent Agreement, except for
defaults which have not had, and are not reasonably likely to have, individually
or in the aggregate, a Parent Material Adverse Effect. True and complete copies
of any Parent Agreements listed on the Parent Disclosure Schedule pursuant to
this Section 3.11 and unredacted copies of any Parent Agreements filed with the
SEC pursuant to a confidential treatment request have been provided to Company.
(a) To the knowledge of Parent, no executive officer or director of
Parent has (whether directly or indirectly through another entity in which such
person has a material interest, other than as the holder of less than 2% of a
class of securities of a publicly traded company) any material interest in any
property or assets of Parent (except as a stockholder) or a Parent Subsidiary,
any competitor, customer, supplier or agent of Parent or a Parent Subsidiary or
any person that is currently a party to any Parent Agreement.
(b) Neither Parent nor any Parent Subsidiary is party to any
interest rate, equity or other swap or derivative instrument.
3.12 Intellectual Property.
(a) Each of Parent and the Parent Subsidiaries owns, or is validly
licensed or otherwise has the right to use all Proprietary Rights which are used
in the conduct of the business of Parent and the Parent Subsidiaries, or without
which Parent or the Parent Subsidiaries would be infringing, misappropriating,
or violating a third party's Proprietary Rights, in each case free and clear of
all Liens. Parent and each of the Parent Subsidiaries have taken all reasonable
steps
31
it believes to be required in accordance with sound business practices to
establish and preserve its ownership of all Proprietary Rights with respect to
its products, services and technology. Parent and the Parent Subsidiaries have
the right to sell their products and services (whether now offered for sale or
under development) free from any royalty or other obligations to third parties.
(b) Section 3.12(b) of the Parent Disclosure Schedule identifies all
patents and patent applications, all registered trademarks and trademark
applications, and all registered copyrighted works and mask works owned by
Parent and the Parent Subsidiaries. With respect to each item required to be so
identified on Section 3.12(b) of the Parent Disclosure Schedule: (i) Parent or a
Parent Subsidiary owns (free and clear of any claim, lien, charges and legal
duties, including duties owed to any third party under tort law, pursuant to any
contract or agreement, or stemming from any Proprietary Right) each such item;
(ii) the item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge; (iii) no action is pending or, to the knowledge of
Parent, threatened, which challenges the legality, validity, enforceability,
use, or ownership of the item; and (iv) Parent owns, uses and can transfer
control of the item pursuant to the terms of this Agreement without any breach
or violation of any contract or agreement or any applicable Laws, in each case
except where any such failure to possess clear title or any such outstanding
injunction, judgment, order, decree, ruling, charge or action or the failure of
Parent to own, use or be able to transfer control of such item would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
(c) Section 3.12(c) of the Parent Disclosure Schedule identifies all
trade secrets, unregistered copyrightable works and other unpatented proprietary
technologies that are material to the conduct of the business of Parent and the
Parent Subsidiaries, taken as a whole. With respect to each item required to be
listed on Section 3.12(c) of the Parent Disclosure Schedule and the source code
of any software owned or exclusively licensed by Parent (as opposed to software
licensed from third parties on a non-exclusive basis), Parent and the Parent
Subsidiaries have not disclosed any material portion of such Proprietary Rights
to any third party.
(d) Except as would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect:
(i) to the knowledge of Parent, (A) the business conducted by
Parent and the Parent Subsidiaries does not infringe upon the Proprietary Rights
of any third party, and (B) none of Parent or any the Parent Subsidiaries has
infringed upon, misappropriated or otherwise violated the Proprietary Rights of
any third party;
(ii) Parent has never received any written charge, complaint,
claim, demand or notice alleging any such infringement, misappropriation, or
violation (including any claim that Parent or a Parent Subsidiary must license
or refrain from using any Proprietary Rights of any third party);
(iii) no claims are pending or, to the knowledge of Parent
threatened, that Parent or any of its Subsidiaries is infringing (including with
respect to the manufacture, use or sale by Parent or any of its Subsidiaries of
their respective commercial products and services) the Proprietary Rights of any
person; and
32
(iv) as of the date of this Agreement, to the knowledge of
Parent, no person or entity has infringed upon, misappropriated or otherwise
violated the Proprietary Rights of Parent or any of its Subsidiaries.
(e) To the knowledge of Parent, none of the activities of the
employees of Parent or any Parent Subsidiary on behalf of such entity violates
any agreement or arrangement which any such employees have with former
employers. All employees and consultants who contributed to the discovery or
development of any of the Proprietary Rights used in the conduct of the business
of Parent and the Parent Subsidiaries did so pursuant to written agreements
assigning all Proprietary Rights arising therefrom to Parent or a Parent
Subsidiary.
(f) No agreement pursuant to which Parent or any Parent Subsidiary
holds, uses or licenses material Proprietary Rights contains change of control
or other provisions that would, as a result of the Merger: (i) cause the
termination of such agreement or allow any other party to such agreement to
terminate the agreement or (ii) effect any change in such agreement adverse to
Parent.
(g) Parent and the Parent Subsidiaries have complied in all material
respects with all applicable contractual and legal requirements pertaining to
information privacy and security. To the knowledge of Parent, no complaint
relating to an improper use or disclosure of, or a breach in the security of,
any such information has been made or threatened against Parent or any Parent
Subsidiary. To the knowledge of Parent, there has been no: (i) unauthorized
disclosure of any material third party proprietary or confidential information
in the possession, custody or control of Parent or a Parent Subsidiary, or (ii)
material breach of Parent's or any Subsidiary's security procedures wherein
confidential information has been disclosed to a third person.
(h) None of Parent's material Proprietary Rights constitutes or is
dependent on any open source computer code, none of Parent's products
incorporates, imbeds, or is bundled with any open source computer code, and none
of Parent's material Proprietary Rights is subject to any license or other
contractual obligation that would require Parent to divulge to any person any
source code or trade secret that is part of Parent's Proprietary Rights.
3.13 Assets.
(a) Parent and each Parent Subsidiary has all material assets,
properties, rights and contracts necessary to permit Parent and the Parent
Subsidiaries to conduct their business as it is currently being conducted.
Parent and each Parent Subsidiary has good and marketable title to all of its
properties, interests in properties and assets, real and personal, reflected in
the Parent Balance Sheet (except properties, interests in properties and assets
sold or otherwise disposed of since the Parent Balance Sheet Date in the
ordinary course of business consistent with past practice), or with respect to
leased properties and assets, valid leasehold interests in such properties and
assets, in each case, free and clear of all imperfections of title,
restrictions, encroachments, liens and easements, except Permitted Encumbrances.
The buildings, property and equipment of Parent and each Parent Subsidiary that
are used in the operations of business are (i) in good operating condition and
repair and (ii) have been maintained in accordance with normal industry
practices.
33
(b) Section 3.13(b) of the Parent Disclosure Schedule lists all real
property owned in fee by Parent and each Parent Subsidiary ("Parent Owned Real
Property"). Parent or a Parent Subsidiary has indefeasible fee simple title in
and to Parent Owned Real Property, free and clear of all liens and encumbrances
except for Permitted Encumbrances.
(c) Section 3.13(c) of the Parent Disclosure Schedule lists all real
property leased by Parent and each Parent Subsidiary (the "Parent Leased Real
Property", and together with Parent Owned Real Property, the "Parent Real
Property"). True and complete copies of all leases with respect to Parent Leased
Real Property (the "Parent Real Property Leases") in excess of 40,000 square
feet have been provided to Company. Each lease set forth on Section 3.13(c) is
valid, subsisting, in full force and effect and is enforceable against Parent or
the applicable Parent Subsidiary, and, to the knowledge of Parent, the other
parties thereto in accordance with its terms. Neither Parent or any Parent
Subsidiary, nor to the knowledge of Parent, any other party, is in breach of or
in default under any provision of any Parent Real Property Lease, except for
breaches or defaults which have not had, and are not reasonably likely to have,
individually or in the aggregate, a Parent Material Adverse Effect. To the
knowledge of Parent, no condition or circumstance exists which would reasonably
be expected to constitute a default of a provision under any Parent Real
Property Lease, except for those conditions or circumstances that have not had
or would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.
(d) There are no written or oral subleases, licenses, occupancy
agreements, rights of first offer, rights of first refusal or other contractual
obligations that grant the right of use or occupancy of Parent Real Property,
and there is no person in possession of Parent Real Property other than Parent
and the Parent Subsidiaries. There is no pending, or, to the knowledge of
Parent, threatened, eminent domain, condemnation or similar proceeding
materially affecting any Parent Real Property.
3.14 Insurance. Parent (or one of the Parent Subsidiaries) now maintains
in full force and effect, and has maintained during the immediately preceding
three-year period, policies of insurance that to the Parent's knowledge are
reasonably adequate with respect to all material properties, assets and business
activities of Parent and each of the Parent Subsidiaries against such
casualties, risks, and contingencies as are customarily insured against by
entities owning similar properties or assets or engaged in similar business
activities. There are no material outstanding unpaid claims under any of such
policies of insurance.
3.15 Commercial Relationships. None of Parent's or the Parent
Subsidiaries' material customers, suppliers, collaborators, distributors,
licensors or licensees has canceled or otherwise terminated its relationship
with Parent or a Parent Subsidiary or has, during the last twelve months,
altered its relationship with Parent or a Parent Subsidiary, except as would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect. To Parent's knowledge, there is not plan or intention
of any such entity, and Parent has not received any threat or notice from any
such entity, to terminate, cancel or otherwise materially modify its
relationship with Parent or a Parent Subsidiary.
3.16 Tax Matters.
34
(a) All Tax Returns required to be filed by or with respect to
Parent and the Parent Subsidiaries have been filed within the time and in the
manner prescribed by law. All such Tax Returns are true, correct and complete in
all material respects, and all Taxes owed by Parent or the Parent Subsidiaries,
whether or not shown on any Tax Return, have been paid. Parent and the Parent
Subsidiaries file Tax Returns in all jurisdictions where they are required to so
file, and no claim has ever been made in writing by any taxing authority in any
other jurisdiction that Parent or the Parent Subsidiaries are or may be subject
to taxation by that jurisdiction.
(b) There are no material liens or other encumbrances with respect
to Taxes upon any of the assets or properties of Parent or the Parent
Subsidiaries, other than with respect to Taxes not yet due and payable.
(c) No material audit or proceeding is currently pending or, to the
knowledge of the Parent, threatened, with respect to any Tax Return of Parent or
the Parent Subsidiaries. No material deficiency for any Taxes has been proposed
in writing against Parent or the Parent Subsidiaries, which deficiency has not
been paid in full.
(d) There are no outstanding agreements, waivers or arrangements
extending the statutory period of limitation applicable to any claim for, or the
period for the collection or assessment of, material Taxes due from or with
respect to Parent or the Parent Subsidiaries for any taxable period, no power of
attorney granted by or with respect to Parent or the Parent Subsidiaries
relating to material Taxes is currently in force.
(e) With respect to any period for which Tax Returns have not yet
been filed, or for which Taxes are not yet due or owing, Parent has, in
accordance with GAAP, made due and sufficient accruals for such Taxes (excluding
any "deferred taxes" or similar items that reflect timing differences between
tax and financial accounting principles) in Parent's books and records. All
Taxes attributable to the period beginning after March 31, 2005 have been
incurred in the ordinary course of the Parent's business.
(f) All material withholding and payroll Tax requirements required
to be complied with by Parent and the Parent Subsidiaries (including
requirements to deduct, withhold and pay over material amounts to any
governmental authority in connection with material amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party and
to comply in all material respects with any associated record keeping and
reporting requirements) have been satisfied.
(g) Parent and the Parent Subsidiaries are not party to or bound by,
nor do they have any obligation under, any Tax sharing agreement or similar
contract or arrangement among members of a consolidated, combined or unitary
group other than a group of which Parent is the common parent. Neither Parent
nor any Parent Subsidiary has any liability for the Taxes of any other person
other than a group of which Parent is the common parent under Treasury
Regulation 1.1502-6 (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract, or otherwise.
(h) Neither Parent nor any Parent Subsidiary has made any payments,
or has been or is a party to any agreement, contract, arrangement or plan that
could result in it making
35
payments, that have resulted or would result, separately or in the aggregate, in
the payment of any "excess parachute payment" within the meaning of Code Section
280G or in the imposition of an excise Tax under Code Section 4999 (or any
corresponding provisions of state, local or foreign Tax law) or that could
result in it making payments that were not or would not be deductible under Code
Sections 162(m). Neither Parent nor any Parent Subsidiary has agreed to, or is
required to, make any adjustments under Section 481 of the Code by reason of a
change in accounting method or otherwise.
(i) Neither Parent nor any Parent Subsidiary has distributed stock
of another corporation, or has had its stock distributed by another corporation,
in a transaction that was governed, or purported or intended to be governed, in
whole or in part, by Code Section 355 or 361.
(j) Parent has delivered or made available to Company (i) complete
and correct copies of all Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by Parent or any Parent Subsidiary
with respect to the prior three (3) taxable years.
(k) Neither Parent nor any Parent Subsidiary has participated in any
"reportable transaction" within the meaning of U.S. Treasury Regulation Section
1.6011-4.
3.17 Employee Benefit Plans.
(a) Section 3.17(a) of the Parent Disclosure Schedule contains a
complete list of all material pension, savings, profit sharing, retirement,
deferred compensation, employment, welfare, fringe benefit, insurance, short and
long term disability, medical, death benefit, incentive, bonus, stock, vacation
pay, severance pay and similar plans, programs or arrangements (the "Parent
Plans") (other than oral employment agreements that (i) do not constitute an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or (ii),
individually or in the aggregate, are not material), including all employee
benefit plans as defined in Section 3(3) of ERISA, maintained by Parent, the
Parent Subsidiaries or a Parent ERISA Affiliate (as defined below) or to which
Parent, any of the Parent Subsidiaries or a Parent ERISA Affiliate are parties
or required to contribute or have any material obligation. "Parent ERISA
Affiliate" means (i) any corporation included with Parent in a controlled group
of corporations within the meaning of Section 414(b) of the Code; (ii) any trade
or business (whether or not incorporated) that is under common control with
Parent within the meaning of Section 414(c) of the Code; (iii) any member of an
affiliated service group of which Parent or any Parent Subsidiary is a member
within the meaning of Section 414(m) of the Code; or (iv) any other person or
entity treated as aggregated with Parent under Section 414(o) of the Code.
(b) Parent has delivered or made available to Company current,
accurate and complete copies of (i) each Parent Plan that has been reduced to
writing and all amendments thereto, (ii) a summary of the material terms of each
Parent Plan that has not been reduced to writing, including all amendments
thereto, (iii) the summary plan description for each Parent Plan subject to
Title I of ERISA, and in the case of each other Parent Plan, any similar
employee summary (including but not limited to any employee handbook
description), (iv) for each Parent Plan intended to be qualified under Section
401(a) of the Code, the most recent determination or opinion letter issued by
the IRS, (v) for each Parent Plan with respect to which a Form 5500
36
series annual report/return is required to be filed, the most recently filed
such annual report/return and the annual reports/returns for the two preceding
years, together with all schedules and exhibits, (vi) all insurance contracts,
administrative services contracts, trust agreements, investment management
agreements or similar agreements maintained in connection with any Parent Plan,
and (vii) for each Parent Plan that is intended to be qualified under Code
Section 401(a), copies of compliance testing results (including
nondiscrimination testing (401(a)(4), ADP and ACP), 402(g), 415 and top-heavy
tests) for the 2004 plan year.
(c) There is no entity (other than Parent or any Parent Subsidiary)
that together with Parent or any Parent Subsidiary would be treated as a
single-employer within the meaning of Section 414(b), (c), (m) or (o) of the
Code or Section 4001(b) of ERISA.
(d) Each Parent Plan maintained by Parent, a Parent Subsidiary or a
Parent ERISA Affiliate which is intended to be qualified under Section 401(a) of
the Code has received an IRS determination letter to the effect that the Parent
Plan is so qualified, and, to the knowledge of the Parent, there is no fact or
circumstance that could reasonably be expected to result in the revocation of
such letter. Each Parent Plan has been administered in all material respects in
accordance with the terms of such Parent Plan and the provisions of any and all
statutes, orders or governmental rules or regulations, including ERISA and the
Code, and to the knowledge of Parent, nothing has been done or not done with
respect to any Parent Plan that could result in any material liability on the
part of Parent or any Parent Subsidiary under Title I of ERISA or Chapter 43 of
the Code. None of the Parent Plans is currently under examination by the IRS,
Department of Labor or other U.S. government agency or department, nor, is any
such examination pending or, to the knowledge of the Parent, threatened. There
are no lawsuits, claims or controversies pending, or to the knowledge of the
Parent, threatened (other than claims in the ordinary course of business
consistent with past practice) with respect to any Parent Plan that could
reasonably be expected to result in material liability to the Parent. All
contributions, premiums and other amounts due to or in connection with each
Parent Plan under the terms of the Parent Plan or applicable law have been
timely made, and to the extent not yet due, accrued on the financial statements
of Parent in accordance with GAAP.
(e) Any Parent Plan subject to Title IV of ERISA with respect to
which the Parent or any Parent Subsidiary has any liability is listed on Section
3.17(e) of the Parent Disclosure Schedule. The actuarial valuation with respect
to each such Parent Plan, as of January 1, 2004, has been provided to Company
and, to the knowledge of Company, the material facts underlying such valuation
remain true and correct as of the date hereof. Specifically, but not in
limitation of the foregoing, to the knowledge of Company, there have been no
material changes in such facts including with respect to the census of
employees, former employees and retirees, the fair market value of plan assets
and the provisions of the plan on which the valuation is based. All
contributions described in the valuation report with respect to periods prior to
the Closing Date have been made in the amounts and at the dates suggested by the
actuaries therein. There has been no waiver of any accumulated funding
deficiency requested or granted with respect to any Parent Plan subject to
Section 412 of the Code or Section 302 of ERISA. No such Parent Plan is
obligated or is reasonably expected to be required to make "deficit reduction
contributions" as defined in Section 412(l)(12) of the Code. No reportable event
(within the meaning of Section 4043) of ERISA, whether or not waived by
regulations, has occurred with respect to any Parent Plan that is subject to
Title IV of ERISA.
37
(f) Except for continuation of health coverage to the extent
required under Section 4980B of the Code or Section 601 et seq. of ERISA, other
applicable law or as otherwise set forth in this Agreement, there are no
obligations under any Parent Plan providing welfare benefits after termination
of employment.
(g) Except for individual employment agreements, each Parent Plan
can be amended, modified or terminated without advance notice to or consent by
any employee, former employee or beneficiary, except as required by law.
(h) Neither Parent nor any of the Parent Subsidiaries nor any Parent
ERISA Affiliate has ever maintained, sponsored, contributed to, been required to
contribute to, or incurred any liability under any:
(i) multi-employer plan as defined in Section 3(37) or Section
4001(a)(3) of ERISA,
(ii) multiple employer plan as defined in Section 413(c) of
the Code, or any plan that has two or more contributing sponsors at least two of
whom are not under common control, within the meaning of Section 4063(a) of
ERISA,
(iii) welfare benefit fund within the meaning of Section
419(e) of the Code, or
(iv) voluntary employees' beneficiary association, within the
meaning of Section 501(c)(9) of the Code.
(i) No employee of, consultant to, or other provider of services to
Parent, any Parent Subsidiary, or any Parent ERISA Affiliate will be entitled to
any material payment becoming due from any Parent Plan, any additional benefit
or the acceleration of the payment or vesting of any benefit under any Parent
Plan by reason of the execution of this Agreement and the consummation of the
transactions contemplated hereby.
(j) Neither Parent nor any Parent Subsidiary nor any Parent ERISA
Affiliate has any "leased employees" within the meaning of Section 414(n) of the
Code or any independent contractors or other individuals who provide
employee-type services but who are not recognized by Parent as employees of
Parent.
(k) Any Parent Plan that is a plan or arrangement to provide
unfunded nonqualified deferred compensation is specifically identified in
Section 3.17(a) of the Parent Disclosure Schedule. A list of participants in
such Parent Plan, together with the projected account balances or accrued
benefits with respect to each such participant as of the of Closing, are set
forth in Section 3.17(k) of the Parent Disclosure Schedule. The actuarial
valuation (if applicable) with respect to each such Parent Plan that is an
unfunded nonqualified deferred compensation plan, as of January 1, 2004, has
been provided to Company and, to the knowledge of Parent, the material facts
underlying such valuation remain true and correct as of the date hereof.
Specifically, but not in limitation of the foregoing, to the knowledge of
Parent, there have been no material changes in such facts including with respect
to the census of employees, former employees and retirees, and the provisions of
the plan on which the valuation is based.
38
Each Parent Plan that is a "nonqualified deferred compensation plan" (as defined
under Section 409A(d)(1) of the Code) has been operated and administered in good
faith compliance with Section 409A from the period beginning January 1, 2005
through the date hereof and has not been materially modified since October 2,
2004.
(l) Each Parent Plan maintained for employees of Parent outside of
the United States (each a "Parent Foreign Plan") has been administered in all
material respects in a manner that satisfies all applicable Laws. All
contributions to each Parent Foreign Plan required to be made on or before the
Closing have been and will be made by Parent or a Parent Subsidiary prior to the
Closing. Each Parent Foreign Plan is either fully funded (or fully insured)
based upon generally accepted local actuarial and accounting practices and
procedures or accruals for each Parent Foreign Plan have been made in Parent's
financial statements. There are no pending investigations by any governmental
entity involving any Parent Foreign Plan nor any pending claims (except for
claims for benefits payable in the normal operation of the Parent Foreign
Plans), suits or proceedings against any Parent Foreign Plan or asserting any
rights or claims to benefits under any Parent Foreign Plan. The consummation of
the transactions contemplated by this Agreement will not by itself create or
otherwise result in any material liability with respect to any Parent Foreign
Plan.
3.18 Employee Relations.
(a) Upon termination of the employment of any employees of the
Parent or any Parent Subsidiary, none of Company, the Company Subsidiaries, the
Surviving Corporation, Parent or the Parent Subsidiaries will be liable, by
reason of the Merger or anything done at or before the Effective Time in
connection with the Merger, to any of such employees for severance pay or any
other similar payments (other than accrued salary, vacation or sick pay in
accordance with normal policies). True and complete information as to the name,
current job title and compensation for the current year of all current directors
and executive officers of Parent has been provided to Company.
(b) Except for matters that have not had or would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect, Parent and each Parent Subsidiary (i) is in compliance in all respects
with all Laws respecting employment, employment practices, terms and conditions
of employment and wages and hours, in each case, with respect to employees, (ii)
has withheld all amounts required by law or by agreement to be withheld from the
wages, salaries and other payments to employees, (iii) is not liable for any
arrears of wages, salaries, commissions, bonuses or other direct compensation
for any services performed or amounts required to be reimbursed to any employees
or consultants or any taxes or any penalty for failure to comply with any of the
foregoing, and (iv) is not liable for any payment to any trust or other fund or
to any governmental entity, with respect to unemployment compensation benefits,
social security or other benefits or obligations for employees (other than
routine payments to be made in the ordinary course of business and consistent
with past practice).
(c) No work stoppage or labor strike against Parent or any Parent
Subsidiary is pending or, to the knowledge of Parent, threatened. Neither Parent
nor any Parent Subsidiary is involved in or, to the knowledge of Parent,
threatened with, any labor dispute, grievance, or litigation relating to labor,
safety or discrimination matters involving any employee, including
39
without limitation charges of unfair labor practices or discrimination
complaints, that, if adversely determined, could reasonably be expected to
result in, individually or in the aggregate, a Parent Material Adverse Effect.
Neither Parent nor any Parent Subsidiary has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act that could
reasonably be expected to result in, individually or in the aggregate, a Parent
Material Adverse Effect. Neither Parent nor any Parent Subsidiary is presently,
nor has it been in the past, a party to or bound by any collective bargaining
agreement or union contract with respect to employees, and no collective
bargaining agreement is being negotiated by Parent or any Parent Subsidiary. No
union organizing campaign or activity with respect to non-union employees of
Parent or any Parent Subsidiary is ongoing, pending or, to the knowledge of
Parent, threatened.
3.19 Environmental Matters. Except for those matters which have not had or
would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect:
(i) Parent and the Parent Subsidiaries are, and have been, in
compliance in all respects with all Environmental Laws;
(ii) there has been no release or threatened release of any
Hazardous Substance on, upon, into or from any site currently or heretofore
owned, leased or otherwise used by Parent, any Parent Subsidiary or any
predecessor of Parent or any Parent Subsidiary;
(iii) there have been no Hazardous Substances generated by
Parent, any Parent Subsidiary or any predecessor of Parent or any Parent
Subsidiary that have been disposed of or come to rest at any site that has been
included in any published U.S. federal, state or local "superfund" site list or
any other similar list of hazardous or toxic waste sites published by any
governmental entity in the United States; and
(iv) there are no underground storage tanks located on, no
PCBs (polychlorinated biphenyls) or PCB-containing equipment used or stored on,
and no hazardous waste as defined by the Resource Conservation and Recovery Act
stored on, any site owned or operated by Parent, any Parent Subsidiary or any
predecessor of Parent or any Parent Subsidiary, except for the storage of
hazardous waste in compliance with Environmental Laws.
(b) Parent has made available to Company true and complete copies of
all material environmental records, reports, notifications, certificates of
need, permits, pending permit applications, correspondence, engineering studies,
and environmental studies or assessments.
3.20 No Breach. Except for (a) filings with the SEC, (b) filings with the
Secretary of State of Delaware contemplated herein, and (c) the filing of a
Notification and Report Form under the HSR Act and any similar filings in
foreign jurisdictions, the execution, delivery and performance of this Agreement
by Parent and the consummation by Parent of the transactions contemplated hereby
will not (i) violate any provision of the Certificate of Incorporation or
By-laws of Parent, (ii) violate, conflict with or result in the breach of any of
the terms or conditions of, result in modification of, or otherwise give any
other contracting party the right to terminate, accelerate obligations under or
receive payment under or constitute (or with notice or lapse of time or both
constitute) a default under, any instrument, contract or other agreement to
which
40
Parent or any Parent Subsidiary is a party or to which any of them or any of
their assets or properties is bound or subject, (iii) violate any Law applicable
to Parent or the Parent Subsidiaries or by which any of Parent's or the Parent
Subsidiaries' assets or properties is bound, (iv) violate any Parent Permit, (v)
require any filing with, notice to, or permit, consent or approval of, any
governmental or regulatory body, (vi) result in the creation of any lien or
other encumbrance on the assets or properties of Parent or a Parent Subsidiary,
or (vii) cause any of the assets owned by Parent or any Parent Subsidiary to be
reassessed or revalued by any taxing authority or other governmental entity,
excluding from the foregoing clauses (ii), (iii), (iv), (vi) and (vii)
violations, breaches and defaults which, and filings, notices, permits, consents
and approvals the absence of which would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect, would not
reasonably be expected to materially interfere with the ability of Parent to
consummate the transactions contemplated hereby or would not materially increase
the costs of consummation of the Merger. Neither Parent nor any Parent
Subsidiary is or will be required to give any notice to or obtain any consent or
waiver from, any individual or entity in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby other than failures that would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect
3.21 Board Approvals.
(a) The Parent Board of Directors, as of the date of this Agreement,
has determined and resolved (i) that the Merger is in the best interests of
Parent and its stockholders, (ii) to propose that the stockholders of the Parent
approve the issuance of Parent Common Stock pursuant to the terms and conditions
of this Agreement, and (iii) to recommend that the stockholders of Parent
approve such issuance.
(b) Parent has taken all action necessary such that no restrictions
contained in any "fair price," "control share acquisition," "business
combination" or similar statute (including Section 203 of the DGCL) will apply
to the execution, delivery or performance of this Agreement.
3.22 Financial Advisor.
(a) The Parent Board of Directors has received the opinion of
Xxxxxxx & Company, LLC to the effect that, as of the date of this Agreement, the
Exchange Ratio is fair, from a financial point of view, to the Parent; provided,
however, that Company is not entitled to rely upon such opinion. Parent shall
forward to Company a copy of the written version of such opinion promptly
following receipt and in no event later than two business days after the date of
this Agreement.
(b) Other than Xxxxxxx & Company, LLC and Credit Suisse First
Boston, no broker, finder, agent or similar intermediary has acted on behalf of
Parent in connection with this Agreement or the transactions contemplated
hereby, and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection herewith based on any agreement, arrangement
or understanding with Parent, or any action taken by Parent.
41
3.23 Interested Party Transactions. Since the date of the filing of
Parent's 2004 annual meeting proxy statement with the SEC, no event has occurred
that would be required to be reported by Parent pursuant to Item 404 of
Regulation S-K promulgated by the SEC that has not yet been included in a Parent
SEC Report filed with the SEC prior to the date hereof.
3.24 Sub. Sub is duly organized, validly existing and in good standing as
a Delaware corporation. Sub has the corporate power and authority to enter into,
execute and deliver this Agreement and to perform fully its obligations
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the board of
directors and stockholders of Sub, and no other action on the part of Sub is
necessary to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Sub and constitutes a valid and binding
obligation of Sub, enforceable in accordance with its terms.
3.25 Information Supplied. None of the information supplied or to be
supplied by Parent for inclusion or incorporation by reference in the
Registration Statement or for inclusion in any Regulation M-A Filing, contains
or will contain, as applicable at the time the Registration Statement is filed
with the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act or at the time of the Regulation M-A
Filing, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading. None of the information supplied or to be supplied by Parent for
inclusion or incorporation by reference in the Joint Proxy Statement/Prospectus,
on the date it is first mailed to holders of Company Common Stock or holders of
Parent Common Stock or at the time of the Company Stockholders Meeting, the
Parent Stockholders Meeting or at the Effective Time, contains or will contain,
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE IV
COVENANTS AND AGREEMENTS
4.1 Conduct of Company Business. Except with the prior written consent of
Parent and except as explicitly contemplated herein or referred to in Section
4.1 of the Company Disclosure Schedule, during the period from the date hereof
to the Effective Time, Company shall observe the following covenants:
(a) Affirmative Covenants Pending Closing. Company shall and shall
cause the Company Subsidiaries to:
(i) Preservation of Personnel. Use reasonable commercial
efforts to preserve intact and keep available the services of present employees
of Company and the Company Subsidiaries as a group;
(ii) Insurance. Use reasonable commercial efforts to keep in
effect casualty, public liability, worker's compensation and other insurance
policies in coverage amounts substantially similar to those in effect at the
date of this Agreement;
42
(iii) Preservation of the Business; Maintenance of Properties,
Contracts. Use reasonable commercial efforts to preserve the business of Company
and to develop, advertise, promote, market and sell Company's products, and use
reasonable commercial efforts to keep Company's properties substantially intact,
to preserve its goodwill and business, to maintain all physical properties in
such operating condition as will permit the conduct of Company's business on a
basis consistent with past practice, and to perform and comply in all material
respects with the terms of the contracts referred to in Section 2.11.
(iv) Intellectual Property Rights. Use its reasonable best
efforts to maintain, preserve and protect Company's Proprietary Rights;
(v) Ordinary Course of Business. Operate Company's business in
the ordinary course consistent with past practices;
(vi) Company Options. Take all reasonable actions necessary
with respect to Company Options to effectuate the terms of this Agreement,
provided, however, that Parent shall have the right to approve any agreements to
modify material terms of the underlying instruments; and
(b) Negative Covenants Pending Closing. Company shall not and shall
cause the Company Subsidiaries not to:
(i) Disposition of Assets. Sell or transfer, or mortgage,
pledge, lease, license or otherwise encumber any of its assets, including its
Proprietary Rights, other than sales or transfers of inventory in the ordinary
course of business and other sales and transfers in amounts not exceeding, in
the aggregate, $250,0000;
(ii) Liabilities. (A) Incur any indebtedness for borrowed
money in excess of $250,000 in the aggregate or (B) incur any obligation or
liability or enter into any contract or commitment involving potential payments
to or by Company or any Company Subsidiary in an amount aggregating in excess of
$250,000 other than in the ordinary course of business consistent with past
practice;
(iii) Compensation. Increase or agree to increase the
compensation payable to any officer, director, employee, agent or consultant, or
enter into any employment, severance, retention or other agreement or
arrangement with any officer, director, employee, agent or consultant of Company
or a Company Subsidiary, or adopt, or increase the benefits (including fringe
benefits) under, any employee benefit plan or otherwise, except (A), in each
case, as required by law or in accordance with existing agreements disclosed in
the Company Disclosure Schedule or filed as an exhibit to a Company SEC Report
and (B), in the case of compensation for employees, agents or consultants who
are not executive officers or directors, in the ordinary course of business
consistent with past practice; or make any loans to any of its directors,
officers or employees, agents or consultants, or make any change in its existing
borrowing or lending arrangements for or on behalf of any such persons pursuant
to an employee benefit plan or otherwise;
(iv) Capital Stock. Make any change in the number of shares of
Company's capital stock authorized, issued or outstanding or grant or accelerate
the
43
exercisability of any option, warrant or other right to purchase, or convert any
obligation into, shares of its capital stock, declare or pay any dividend (other
than in the ordinary course of business consistent with past practice, including
with respect to timing and amount) or other distribution with respect to any
shares of its capital stock, reclassify, combine, split or subdivide any of its
capital stock or issue or authorize any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, sell or transfer any
shares of its capital stock, or redeem or otherwise repurchase any shares of its
capital stock, except upon the exercise of convertible securities outstanding on
July 6, 2005 and disclosed herein or in connection with the grants of Company
Options to purchase not more than 75,000 shares of Company Common Stock after
July 6, 2005 with exercise prices equal to the trading price of Company Common
Stock on the date of grant in the ordinary course of business consistent with
past practice;
(v) Charter, By-laws, Directors and Officers. Cause, permit or
propose any amendment to the Certificate of Incorporation or By-laws of Company
or elect or appoint any new directors or officers;
(vi) Acquisitions. Make, or permit to be made, any
acquisition, lease, investment, or capital contribution in excess of $1,000,000
outside the ordinary course of business consistent with past practice;
(vii) Capital Expenditures. Authorize any single capital
expenditure in excess of $250,000 or capital expenditures which in the aggregate
exceed $2,500,000;
(viii) Investments. Except for cash management activities in
the ordinary course of business, purchase any securities or make any investment,
either by purchase of securities, contributions to capital, asset transfers, or
purchase of any assets (including any interests), in any person (including joint
ventures), or otherwise acquire in any way direct or indirect control over any
person, or agree to do any of the foregoing, in one transaction or a series of
related transactions;
(ix) Accounting Policies. Except as may be required as a
result of a change in law or in GAAP, change any of the accounting practices or
principles used by it;
(x) Tax Treatment. Take, or permit any of the Company
Subsidiaries to take, any action that would prevent the Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Code;
(xi) Taxes. Change any material Tax election or settle or
compromise any material federal, state, local or foreign Tax liability, change
any annual tax accounting period, change any method of Tax accounting, enter
into any closing agreement relating to any material Tax or surrender any right
to claim a material Tax refund;
(xii) Legal. Commence, settle or compromise any pending or
threatened suit, action or claim which (A) is material to Company and the
Company Subsidiaries or which relates to the transactions contemplated hereby,
(B) would involve material restrictions on the business activities of Company or
any Company Subsidiary, or (C) would involve the issuance of Company securities;
44
(xiii) Extraordinary Transactions. Adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Company or any of the Company
Subsidiaries (other than the Merger);
(xiv) Payment of Indebtedness. Pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of liabilities reflected or reserved against in the balance sheet
included in the Company 10-Q or incurred in the ordinary course of business;
(xv) WARN Act. Effectuate a "plant closing" or "mass layoff,"
as those terms are defined in the Worker Adjustment and Retraining Notification
Act of 1988 or effectuate any similar action under any foreign law;
(xvi) New Agreements/Amendments. Enter into, terminate or
materially modify, or permit a Company Subsidiary to enter into, terminate or
materially modify, any Company Agreement other than a contract or agreement that
is a Company Agreement solely because it is described in Item 601(b)(10)(iii) of
Regulation S-K;
(xvii) Intellectual Property Rights. Fail to pay any fee, take
any action or make any filing reasonably necessary to maintain material
Proprietary Rights of Company other than licenses of software to customers in
the ordinary course of business consistent with past practice;
(xviii) Confidentiality and Standstill Agreements. Modify,
amend or terminate, or waive, release or assign any material rights or claims
with respect to any confidentiality or standstill agreement to which Company or
any Company Subsidiary is a party and which relates to a business combination
involving Company or any Company Subsidiary;
(xix) Changes to Takeover Defenses. Amend, modify or waive any
of Company's existing takeover defenses or take any action to render any state
takeover statutes inapplicable to any transaction other than the transactions
contemplated by this Agreement;
(xx) Obligations. Obligate itself to do any of the foregoing.
(c) Control of Company's Business. Nothing contained in this
Agreement shall give Parent, directly or indirectly, the right to control or
direct Company's operations prior to the Effective Time. Prior to the Effective
Time, Company shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
4.2 Conduct of Parent Business. Except with the prior written consent of
Company and except as explicitly contemplated herein or referred to in Section
4.2 of Parent Disclosure Schedule, during the period from the date hereof to the
Effective Time, Parent shall observe the following covenants:
(a) Affirmative Covenants Pending Closing. Parent shall and shall
cause the Parent Subsidiaries to:
45
(i) Preservation of Personnel. Use reasonable commercial
efforts to preserve intact and keep available the services of present employees
of Parent and the Parent Subsidiaries as a group;
(ii) Insurance. Use reasonable commercial efforts to keep in
effect casualty, public liability, worker's compensation and other insurance
policies in coverage amounts substantially similar to those in effect at the
date of this Agreement;
(iii) Preservation of the Business; Maintenance of Properties,
Contracts. Use reasonable commercial efforts to preserve the business of Parent
and to develop, advertise, promote, market and sell Parent's products, and use
reasonable commercial efforts to keep Parent's properties substantially intact,
to preserve its goodwill and business, to maintain all physical properties in
such operating condition as will permit the conduct of Parent's business on a
basis consistent with past practice, and to perform and comply in all material
respects with the terms of the contracts referred to in Section 3.11.
(iv) Intellectual Property Rights. Use its reasonable best
efforts to maintain, preserve and protect Parent's Proprietary Rights;
(v) Ordinary Course of Business. Operate Parent's business in
the ordinary course consistent with past practices;
(b) Negative Covenants Pending Closing. Parent shall not and shall
cause the Parent Subsidiaries not to:
(i) Disposition of Assets. Sell or transfer, or mortgage,
pledge, lease, license or otherwise encumber any of its assets, including its
Proprietary Rights, other than sales or transfers of inventory in the ordinary
course of business and other sales and transfers in amounts not exceeding, in
the aggregate, $1,000,000;
(ii) Liabilities. (A) Incur any indebtedness for borrowed
money in excess of $500,000 in the aggregate or (B) incur any obligation or
liability or enter into any contract or commitment involving potential payments
to or by Parent or any Parent Subsidiary in an amount aggregating in excess of
$2,000,000 other than in the ordinary course of business consistent with past
practice;
(iii) Compensation. Increase or agree to increase the
compensation payable to any officer, director, employee, agent or consultant, or
enter into any employment, severance, retention or other agreement or
arrangement with any officer, director, employee, agent or consultant of Parent
or a Parent Subsidiary, or adopt, or increase the benefits (including fringe
benefits) under, any employee benefit plan or otherwise, except (A), in each
case, as required by law or in accordance with existing agreements disclosed in
the Parent Disclosure Schedule or filed as an exhibit to a Parent SEC Report and
(B), in the case of compensation for employees, agents or consultants who are
not executive officers or directors, in the ordinary course of business
consistent with past practice; or make any loans to any of its directors,
officers or employees, agents or consultants, or make any change in its existing
borrowing or lending arrangements for or on behalf of any such persons pursuant
to an employee benefit plan or otherwise;
46
(iv) Capital Stock. Make any change in the number of shares of
Parent's capital stock authorized, issued or outstanding or grant or accelerate
the exercisability of any option, warrant or other right to purchase, or convert
any obligation into, shares of its capital stock, declare or pay any dividend or
other distribution with respect to any shares of its capital stock, reclassify,
combine, split or subdivide any of its capital stock or issue or authorize any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, sell or transfer any shares of its capital stock, or redeem or
otherwise repurchase any shares of its capital stock, except upon the exercise
of convertible securities outstanding on July 6, 2005 and disclosed herein or in
connection with the grant of Parent Options with exercises prices equal to the
trading price of Company Common Stock on the date of grant or the grant of
restricted Parent Common Stock for compensatory purposes, in either case in the
ordinary course of business consistent with past practice;
(v) Charter, By-laws, Directors and Officers. Cause, permit or
propose any amendment to the Certificate of Incorporation or By-laws of Parent
or elect or appoint any new directors or officers;
(vi) Acquisitions. Make, or permit to be made, any
acquisition, lease, investment, or capital contribution in excess of $2,000,000
outside the ordinary course of business consistent with past practice;
(vii) Capital Expenditures. Authorize any single capital
expenditure in excess of $1,000,000 or capital expenditures which in the
aggregate exceed $5,000,000;
(viii) Investments. Except for cash management activities in
the ordinary course of business, purchase any securities or make any investment,
either by purchase of securities, contributions to capital, asset transfers, or
purchase of any assets (including any interests), in any person (including joint
ventures), or otherwise acquire in any way direct or indirect control over any
person, or agree to do any of the foregoing, in one transaction or a series of
related transactions;
(ix) Accounting Policies. Except as may be required as a
result of a change in law or in GAAP, change any of the accounting practices or
principles used by it;
(x) Tax Treatment. Take, or permit any of the Parent
Subsidiaries to take, any action that would prevent the Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Code;
(xi) Taxes. Change any material Tax election or settle or
compromise any material federal, state, local or foreign Tax liability, change
any annual tax accounting period, change any method of Tax accounting, enter
into any closing agreement relating to any material Tax, or surrender any right
to claim a material Tax refund;
(xii) Legal. Commence, settle or compromise any pending or
threatened suit, action or claim which (A) is material to Parent and the Parent
Subsidiaries or which relates to the transactions contemplated hereby, (B) would
involve material restrictions on the business activities of Parent or any Parent
Subsidiary, or (C) would involve the issuance of Parent securities;
47
(xiii) Extraordinary Transactions. Adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Parent or any of the Parent
Subsidiaries (other than the Merger);
(xiv) Payment of Indebtedness. Pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of liabilities reflected or reserved against in the balance sheet
included in the Parent 10-Q or incurred in the ordinary course of business;
(xv) WARN Act. Effectuate a "plant closing" or "mass layoff,"
as those terms are defined in the Worker Adjustment and Retraining Notification
Act of 1988 or effectuate any similar action under any foreign law;
(xvi) New Agreements/Amendments. Enter into, terminate or
materially modify, or permit a Parent Subsidiary to enter into, terminate or
materially modify, any Parent Agreement other than a contract or agreement that
is a Parent Agreement solely because it is described in Item 601(b)(10)(iii) of
Regulation S-K;
(xvii) Intellectual Property Rights. Fail to pay any fee, take
any action or make any filing reasonably necessary to maintain material
Proprietary Rights of Parent other than licenses of software to customers in the
ordinary course of business consistent with past practice;
(xviii) Changes to Takeover Defenses. Amend, modify or waive
any of Parent's existing takeover defenses or take any action to render any
state takeover statutes inapplicable to any transaction other than the
transactions contemplated by this Agreement;
(xix) Obligations. Obligate itself to do any of the foregoing.
(c) Control of Parent's Business. Nothing contained in this
Agreement shall give Company, directly or indirectly, the right to control or
direct Parent's operations prior to the Effective Time. Prior to the Effective
Time, Parent shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
4.3 Corporate Examinations and Investigations. Prior to the Effective
Time, Parent shall be entitled, through its employees and representatives, to
have such access to the assets, properties, business and operations of Company
as is reasonably necessary or appropriate in connection with Parent's
investigation of Company with respect to the transactions contemplated hereby
and with respect to the potential merger of the Surviving Corporation with and
into Parent, and Company shall be entitled, through its employees and
representatives, to have such access to the assets, properties, business and
operations of Parent as is reasonably necessary or appropriate in connection
with Company's investigation of Parent with respect to the transactions
contemplated hereby. Any such investigation and examination shall be conducted
at reasonable times during business hours upon reasonable advance notice and
under reasonable circumstances so as to minimize any disruption to or impairment
of Company's or Parent's business, as applicable, and Company and Parent shall
cooperate fully therein. No investigation by Parent or Company shall diminish or
obviate any of the representations, warranties, covenants
48
or agreements of Company or Parent, respectively, contained in this Agreement.
In order that Parent may have full opportunity to make such investigation,
Company shall furnish the representatives of Parent during such period with all
such information and copies of such documents concerning the affairs of Company
as such representatives may reasonably request and cause its officers,
employees, consultants, agents, accountants and attorneys to cooperate fully
with such representatives in connection with such investigation. In order that
Company may have full opportunity to make such investigation, Parent shall
furnish the representatives of Company during such period with all such
information and copies of such documents concerning the affairs of Parent as
such representatives may reasonably request and cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with such
representatives in connection with such investigation. The information and
documents so provided shall be subject to the terms of the confidentiality
agreement, dated as of April 22, 2005, between Parent and Company (as amended,
the "Confidentiality Agreement").
4.4 Expenses. Except as set forth in Section 8.2, Company and Parent
shall each bear their respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the transactions
contemplated hereby, including without limitation, all fees and expenses of
agents, representatives, counsel and accountants, and except that each of Parent
and Company shall bear and pay one-half of (a) the costs and expenses incurred
in connection with the filing, printing and mailing of the Registration
Statement and the Joint Proxy Statement/Prospectus (as defined in Section
4.7(a)) and (b) the fee payable in connection with the filing of a Notification
and Report form under the HSR Act by Company and Parent and any fee payable in
connection with any competition or merger control filing in another
jurisdiction.
4.5 Authorization from Others. Prior to the Closing Date, the parties
shall use reasonable commercial efforts to obtain all authorizations, consents
and permits of others, necessary or desirable to permit the consummation of the
Merger on the terms contemplated by this Agreement. Promptly following the
execution and delivery of this Agreement, Company and Parent shall provide all
notices contemplated under Company Agreement or Parent Agreements, as
applicable, and shall notify the other party when each applicable notice period
has expired.
4.6 Further Assurances. Each of the parties shall execute such
documents, further instruments of transfer and assignment and other papers and
take such further actions as may be reasonably required or desirable to carry
out the provisions hereof and the transactions contemplated hereby, including
delivering customary representation letters contemplated by Sections 6.4 and
7.4. Each party shall use its respective reasonable best efforts to take other
such actions to ensure that, to the extent within its control or capable of
influence by it, the transactions contemplated by this Agreement shall be fully
carried out in a timely fashion, including preparing and filing any documents
required to be prepared and filed under the Exchange Act. Without limiting the
generality of the foregoing, Company agrees to duly execute and deliver, and to
use its commercially reasonable efforts to cause any individual or entity listed
as a co-owner of, or who otherwise has any power of attorney or other rights
with respect to, any of the Proprietary Rights, to duly execute and deliver such
further instruments and do and cause to be done such further actions and things,
including, without limitation, the execution of such additional assignments,
agreements, documents and instruments, that Parent may at any time and from time
to time reasonably request to more effectively transfer ownership,
49
control and/or administration of such Proprietary Rights to the Surviving
Corporation. Nothing in this Agreement shall require Parent or Sub to, or to
agree or consent to, (a) sell, hold separate, license or otherwise dispose of
any material asset of Parent or the Surviving Corporation or (b) conduct their
business in a specified manner, in either case whether as a condition to
obtaining any approval from a governmental entity or any other person or for any
other reason.
4.7 Preparation of Disclosure Documents; Stockholders Meetings.
(a) As soon as practical following the date of this Agreement,
Company and Parent shall prepare the registration statement on Form S-4 to be
filed with the SEC in connection with the issuance of shares of Parent Common
Stock in the Merger (the "Registration Statement") and the joint proxy
statement/prospectus included in the Registration Statement (the "Joint Proxy
Statement/Prospectus"). Company shall, in cooperation with Parent, file the
Joint Proxy Statement/Prospectus with the SEC as its preliminary proxy statement
and Parent shall, in cooperation with Company, prepare and file with the SEC the
Registration Statement, in which the Joint Proxy Statement/Prospectus will be
included. Each of Company and Parent shall use reasonable commercial efforts to
have the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing and to keep the Registration Statement
effective as long as is necessary to consummate the Merger. Company and Parent
shall each mail the Joint Proxy Statement/Prospectus to its stockholders as
promptly as practicable after the Registration Statement is declared effective
under the Securities Act and, if necessary, after the Joint Proxy
Statement/Prospectus shall have been so mailed, promptly circulate supplemental
or amended proxy material, and, if required in connection therewith, resolicit
proxies.
(b) (i) Company shall, as soon as practicable following the date
the Registration Statement is declared effective, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Company Stockholders
Meeting") for the purpose of obtaining the required stockholder votes with
respect to this Agreement (the "Company Stockholder Approval"), (ii) the Company
Board of Directors, except as otherwise permitted pursuant to Section 4.11,
shall give its unqualified recommendation that Company's stockholders adopt this
Agreement and (iii) unless the Company Board of Directors has made a Company
Adverse Recommendation Change (as defined in Section 4.11(c)) in compliance with
this Agreement, Company shall take all lawful action to solicit proxies for such
adoption. No withdrawal, modification, change or qualification in the
recommendation of the Company Board of Directors (or any committee of the
Company Board of Directors) shall change the approval of the Company Board of
Directors for purposes of causing any state takeover statute or other state law
to be inapplicable to the transactions contemplated hereby, or change the
obligation of Company to convene and hold the Company Stockholders Meeting or to
present the Merger Agreement for adoption at the Company Stockholders Meeting.
Nothing contained in this Section 4.11(b) shall be deemed to limit Company's
right to terminate this Agreement pursuant to and in accordance with Section
8.1(i).
(c) (i) Parent shall, as soon as practicable following the date
the Registration Statement is declared effective, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Parent Stockholders
Meeting") for the purpose of obtaining the required stockholder votes with
respect to the issuance of shares of Parent Common Stock pursuant to this
Agreement (the "Parent Stockholder Approval"), (ii) the Parent Board of
Directors, except as otherwise permitted in this Section 4.7(c), shall give its
unqualified recommendation that
50
Parent's stockholders approve the issuance of shares of Parent Common Stock
pursuant to the terms and conditions of this Agreement and (iii) unless the
Parent Board of Directors has withdrawn, modified, changed or qualified its
recommendation that Parent's stockholders approve the issuance of shares of
Parent Common Stock pursuant to the terms and conditions of this Agreement,
Parent shall take all lawful action to solicit proxies for such approval.
Notwithstanding the foregoing, at any time prior to the receipt of the Parent
Stockholder Approval, if the Parent Board of Directors, in the exercise of its
fiduciary duties, determines in good faith by a majority vote, after
consultation with its outside counsel, that it cannot provide an unqualified
recommendation or must withdraw, modify, change or qualify its recommendation
that Parent's stockholders approve the issuance of shares of Parent Common Stock
pursuant to this Agreement (a "Parent Adverse Recommendation Change") in order
to comply with its fiduciary duties to the stockholders of Parent under
applicable Law (provided that the Parent Board of Directors may not base this
determination primarily on changes in the stock price of Company or Parent after
the date of this Agreement, although it may base this determination on the facts
or occurrences giving rise or contributing to such changes), the Parent Board of
Directors may make a Parent Adverse Recommendation Change after providing
Company with at least 24 hours prior notice of its determination and a
reasonably detailed description of the reasons therefor. No Parent Adverse
Recommendation Change shall change any approval of the Parent Board of Directors
for purposes of causing any state takeover statute or other state law to be
inapplicable to the transactions contemplated hereby, or change the obligation
of Parent to convene and hold the Parent Stockholders Meeting or to to propose
that its stockholders authorize the issuance of shares of Parent Common Stock at
the Parent Stockholders Meeting.
(d) Each of Company and Parent shall use their respective
reasonable best efforts to hold the Company Stockholders Meeting and the Parent
Stockholders Meeting on the same day and at the same time.
(e) Except as required by law, no amendment or supplement to the
Joint Proxy Statement/Prospectus or the Registration Statement shall be made by
Parent or Company without the approval of the other party (which shall not be
unreasonably withheld, conditioned or delayed). Each party shall advise the
other party, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, of the issuance of any stop order by the SEC, or of any request by
the SEC for amendment of the Joint Proxy Statement/Prospectus or the
Registration Statement or comments thereon and responses thereto or requests by
the SEC for additional information.
(f) Company shall ensure that none of the information supplied or
to be supplied by Company for inclusion or incorporation by reference in the
Registration Statement or in any Regulation M-A Filing will, at the time the
Registration Statement is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the Securities Act or at
the time of the Regulation M-A Filing, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. Company shall ensure
that none of the information supplied or to be supplied by Company for inclusion
or incorporation by reference in the Joint Proxy Statement/Prospectus, on the
date it is first mailed to holders of Company Common Stock or on the date it is
first mailed to holders of Parent Common Stock, will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or
51
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(g) Parent shall ensure that none of the information supplied or
to be supplied by Parent for inclusion or incorporation by reference in the
Registration Statement will, at the time the Registration Statement is filed
with the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act or at the time of the Regulation M-A
Filing, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. Parent shall ensure that none of the information
supplied or to be supplied by Parent for inclusion or incorporation by reference
in the Joint Proxy Statement/Prospectus, on the date it is first mailed to
holders of Parent Common Stock or on the date it is first mailed to holders of
Parent Common Stock, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
4.8 Public Announcements. Company shall consult with Parent, and Parent
shall consult with Company, and each shall get the approval of the other (which
shall not be unreasonably withheld, conditioned or delayed), before issuing any
press release or otherwise making any public statement with respect to the
Merger or this Agreement and shall not issue any such press release or make any
such public statement prior to such consultation and approval, except as may be
required by law. Notwithstanding the foregoing, without prior consultation, each
party (a) may communicate with stockholders, financial analysts and media
representatives in a manner consistent with its past practice and (b) may
disseminate material substantially similar to material included in a press
release or other document previously approved for external use by the other
party. Each party agrees to promptly make available to the other party copies of
any public written communications made without prior consultation.
4.9 Affiliate Letters. Company shall identify to Parent all persons who
Company believes may be "affiliates" of Company within the meaning of Rule 145
under the Securities Act. Company shall use reasonable commercial efforts to
provide Parent with such information as Parent shall reasonably request for
purposes of making its own determination of persons who may be deemed to be
affiliates of Company. Company shall use reasonable commercial efforts to
deliver to Parent a letter from each of such affiliates identified by Company
and Parent in substantially the form attached hereto as Exhibit A (the
"Affiliate Letters") as soon as practicable after the date hereof but in no
event later than the day preceding the filing of the Registration Statement.
4.10 Nasdaq Listings. Prior to the Closing Date, if required under the
rules of The Nasdaq Stock Market, Parent (i) shall file with The Nasdaq Stock
Market a Notification for Listing of Additional Shares covering the shares of
Parent Common Stock that Parent reasonably expects, at the time of such filing,
to be issued in the Merger and (ii) shall take such actions as are necessary so
the shares of Parent Common Stock to be issued in connection with the Merger are
listed on the Nasdaq National Market as of the Effective Time, subject to
official notice of issuance. Prior to the Closing Date, Company shall take such
actions as are necessary so that trading of Company Common Stock on the Nasdaq
National Market ceases at the close of regular trading on the trading day on
which the Effective Time is expected to occur or if the Effective Time is not
expected to occur on a trading day, the immediately preceding trading day.
52
4.11 No Solicitation.
(a) Each of Company and its Representatives (as defined below) has
ceased and caused to be terminated all existing discussions, negotiations and
communications with any persons or entities with respect to any offer or
proposal or potential offer or proposal relating to any transaction or proposed
transaction or series of related transactions, other than the transactions
contemplated hereby, involving: (A) any acquisition or purchase from Company of
more than a twenty percent (20%) interest in the total outstanding voting
securities of Company or any tender offer or exchange offer that if consummated
would result in the acquisition or purchase of twenty percent (20%) or more of
the total outstanding voting securities of Company, whether by purchase of
stock, consolidation, business combination merger or other similar transaction
involving the Company, (B) any sale, lease, exchange, transfer, license,
acquisition or disposition of assets of Company (including, without limitation,
stock or assets of Company or any Company Subsidiary by merger, consolidation,
recapitalization, spin-off, stock purchase, asset purchase or otherwise) for
consideration equal to twenty percent (20%) or more of the aggregate fair market
value of all of the outstanding shares of Company Common Stock on the date prior
to the date hereof, whether by purchase of assets, consolidation, business
combination merger or other similar transaction involving Company; or (C) any
recapitalization, restructuring, liquidation or dissolution of Company (each of
clauses (A)-(C), a "Company Acquisition Proposal"). Except as provided in
Section 4.11(b), 4.11(c) or 8.1(i), from the date of this Agreement until the
earlier of termination of this Agreement or the Effective Time, Company shall
not and shall not authorize or permit its officers, directors, employees,
investment bankers, attorneys, accountants or other agents (collectively,
"Representatives") to directly or indirectly (i) initiate, solicit or knowingly
encourage, or take any action to knowingly facilitate the making of, any offer
or proposal which constitutes or is reasonably likely to lead to any Company
Acquisition Proposal, (ii) enter into any agreement with respect to any Company
Acquisition Proposal, or (iii) engage in negotiations or discussions with, or
provide any information or data to, any person (other than Parent or any of its
affiliates or representatives) relating to any Company Acquisition Proposal or
grant any waiver or release under any standstill or other agreement.
Notwithstanding the foregoing, nothing contained in this Section 4.11 or in
Section 4.8 or any other provision hereof shall prohibit Company or the Company
Board of Directors from (x) taking and disclosing to Company's stockholders its
position with respect to any tender or exchange offer by a third party pursuant
to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or (y) making such
disclosure to Company's stockholders as in the good faith judgment of the
Company Board of Directors, after receipt of advice from outside legal counsel,
is necessary to comply with applicable Law.
(b) Notwithstanding the foregoing, prior to the date of the
Company Stockholders Meeting, Company may (i) furnish information concerning its
business, properties or assets to any person pursuant to a confidentiality
agreement with terms no less favorable to Company than those contained in the
Confidentiality Agreement and (ii) negotiate and participate in discussions and
negotiations with such person concerning a Company Acquisition Proposal if the
Company Board of Directors determines in good faith by resolution duly adopted,
after consultation with outside legal counsel and a financial advisor of
nationally recognized reputation, that such Company Acquisition Proposal
constitutes or would reasonably be expected to lead to a Company Superior
Proposal (as defined below), but only if such Company Acquisition Proposal did
not result from a breach of Section 4.11(a). For purposes of this
53
Agreement, a "Company Superior Proposal" means any bona fide written proposal
made by a third party (i) involving the purchase or acquisition, directly or
indirectly of, all the shares of Company Common Stock or all or substantially
all of the assets of Company and (ii) which is otherwise on terms which the
Company Board of Directors determines in good faith, by resolution duly adopted
(A) would result in a transaction that, if consummated, is more favorable to
holders of Company Common Stock, from a financial point of view, than the
transactions contemplated by this Agreement (after consultation with a financial
advisor of nationally recognized reputation), taking into account all the terms
and conditions of such proposal and this Agreement (including any proposal by
Parent to amend the terms of this Agreement) that the Company Board of Directors
deems relevant and (B) is reasonably capable of being completed on the terms
proposed, taking into account all financial, regulatory, legal and other aspects
of such proposal. Company shall promptly (and in any case within 24 hours) (i)
notify Parent of any Company Superior Proposal, which notice shall include a
copy of such Company Superior Proposal, (ii) notify Parent upon receipt of any
inquiries, proposals or offers received by, any request for information from, or
any discussions or negotiations sought to be initiated or continued with,
Company or its Representatives concerning a Company Acquisition Proposal or that
could reasonably be expected to lead to a Company Acquisition Proposal and
disclose the identity of the other party and the material terms of such inquiry,
offer, proposal or request and, in the case of written materials, provide copies
of such materials and (iii) provide Parent with copies of all written materials
provided by Company to such party. Company will keep Parent informed on a
reasonably prompt basis (and, in any case, within 24 hours of any significant
development) of the status and details (including amendments and proposed
amendments) of any such Company Superior Proposal or other inquiry, offer,
proposal or request. Company shall promptly, following a determination by the
Company Board of Directors that a Company Acquisition Proposal is a Company
Superior Proposal, notify Parent of such determination.
(c) Neither the Company Board of Directors nor any committee
thereof may (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent or Sub, the approval or recommendation by the Company
Board of Directors or any such committee of this Agreement or the Merger, (ii)
approve or recommend or propose to approve or recommend any Company Acquisition
Proposal or (iii) except as set forth in Section 8.1(i), enter into any
agreement with respect to any Company Acquisition Proposal. Notwithstanding the
foregoing, at any time prior to the receipt of the Company Stockholder Approval,
(x) if the Company Board of Directors has not received a Company Superior
Proposal, but the Company Board of Directors, in the exercise of its fiduciary
duties, determines in good faith by a majority vote, after consultation with its
outside counsel, that an action set forth in clause (i) or (ii) above (a
"Company Adverse Recommendation Change") is necessary in order to comply with
its fiduciary duties to the stockholders of Company under applicable Law
(provided that the Company Board of Directors may not base this determination
primarily on changes in the stock price of Company or Parent after the date of
this Agreement, although it may base this determination on the facts or
occurrences giving rise or contributing to such changes), the Company Board of
Directors may make a Company Adverse Recommendation Change after providing
Parent with at least 24 hours prior notice of its determination and a reasonably
detailed description of the reasons therefor, and (y) if the Company has
received a Company Superior Proposal, the Company Board of Directors may make a
Company Adverse Recommendation Change after (A) the Company has provided written
notice to the Parent that the Company Board of Directors has received a Company
Superior Proposal (which notice shall include a copy of
54
such Company Superior Proposal and identify the Person making such Company
Superior Proposal) and advising Parent that the Company intends to withdraw or
modify its recommendation of this Agreement or the Merger or recommend a Company
Superior Proposal (specifying which course of action the Company intends to
take), (B) at least three business days have elapsed since the delivery of the
written notice described in (A) above, (C) the Company Board of Directors has
considered any revised proposal made by Parent during such three-business day
period, and (D) if Parent has made a revised proposal, the Company Board of
Directors has again made a determination to make a Company Adverse
Recommendation Change despite Parent's revised proposal. Any Company Adverse
Recommendation Change shall not change the approval of the Company Board of
Directors for purposes of causing any state takeover statute or other state Law
to be inapplicable to the transactions contemplated by this Agreement, including
the Merger.
4.12 Regulatory Filings. As soon as is reasonably practicable, Company
and Parent each shall file with the United States Federal Trade Commission (the
"FTC") and the Antitrust Division of the United States Department of Justice
(the "DOJ") any Notification and Report Forms relating to the Merger required by
the HSR Act, as well as comparable pre-merger notification forms required by the
merger notification and control laws and regulations of any other applicable
jurisdiction, as agreed to by the parties. Company and Parent each shall
promptly (a) supply the other with any information which may be reasonably
required in order to make such filings and (b) supply any additional information
which may be requested by the FTC, the DOJ or the competition or merger control
authorities of any other jurisdiction and which the parties reasonably deem
appropriate.
4.13 Notification of Certain Matters. Between the date hereof and the
Closing Date, Company shall give prompt notice to Parent, and Parent shall give
prompt notice to Company, of (a) the occurrence or non-occurrence of any event
or circumstance the occurrence or non-occurrence of which would be reasonably
likely to result in the failure of the condition to closing set forth in Section
6.1 or 7.1, as applicable, to fail to be satisfied, and (b) any failure of
Company or Parent, as the case may be, to materially comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
4.14 Registration of Certain Shares. Promptly, but in no event later than
thirty (30) days after the Effective Time, Parent shall file registration
statements with the SEC with respect to the initial issuance of the shares of
Parent Common Stock subject to Company Stock Options. Parent shall use
reasonable commercial efforts to have such registration statements declared
effective promptly after filing (to the extent such registration statements are
not automatically effective upon filing).
4.15 Employee Matters.
(a) During the one-year period following the Closing Date (the
"Continuation Period"), except (i) as otherwise provided in any written
employment agreement with an employee of Company or a Company Subsidiary
(including any written employment agreement entered into with Parent in
connection with the signing of this Agreement or the transactions contemplated
by this Agreement) or (ii) with a resolution of a majority of the Parent Board
of Directors, which majority must include at least two of the three voting
directors appointed to the Parent Board of Directors pursuant to Section 4.16,
Parent shall, or shall cause the Surviving
55
Corporation or its subsidiaries, to maintain each of the Company Plans sponsored
by the Company or any of the Company Subsidiaries immediately prior to the date
of this Agreement (to the extent still in place at the Effective Time) with
respect to employees of the Company or the Company's Subsidiaries who continue
employment with the Surviving Corporation or any of its Subsidiaries or the
Parent ("Continuing Employees"), and their respective spouses, dependants, and
beneficiaries, with the same level of coverage, benefits, rights, and features
as provided or enjoyed immediately before the date of this Agreement, other than
any changes required by applicable Law.
(b) After the Continuation Period, Parent shall, or shall cause
the Surviving Corporation to, provide that the Continuing Employees are covered
under benefits plans, programs, policies and arrangements (including severance
benefits, vacation pay and equity compensation) applicable to similarly situated
employees of Parent. Years of service with Company and Company Subsidiaries
prior to the Effective Time shall be treated as service with the Surviving
Corporation or Parent, as applicable, for eligibility and vesting purposes and
for purposes of vacation and severance pay accruals, except to the extent such
treatment will result in a duplication of benefits. In connection with any
transition of benefits offered to Continuing Employees, Parent shall take
commercially reasonable steps to cause to be waived all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Continuing Employees
under any medical or dental benefit plans that such employees are eligible to
participate in after such transition of benefits under comparable plans offered
to the Continuing Employees, other than limitations, exclusions or waiting
periods that are already in effect with respect to such employees and that have
not been satisfied as of such time under any medical or dental plan maintained
for such employees immediately prior to such time.
(c) Nothing in this Agreement shall be construed to create a right
in any Continuing Employee to employment with Parent, the Surviving Corporation,
or any of their respective subsidiaries. Except as otherwise provided in this
Section 4.15, nothing in this Agreement shall require Parent, the Surviving
Corporation, or their respective subsidiaries to provide any particular type or
level of compensation or employee benefits, nor shall anything limit the right
of Parent, the Surviving Corporation, or their respective subsidiaries to amend,
suspend, or terminate any employee benefit plan at any time.
4.16 Board Membership and Officers.
(a) Parent shall take all actions necessary so that at the
Effective Time (i) three members of the Company Board of Directors as
constituted on the date of this Agreement designated by the Company and
reasonably acceptable to the Parent shall be appointed to the Parent Board of
Directors, in each case to serve from and after the Closing Date until a
successor is duly elected and qualified and (ii) one member of the Company Board
of Directors as constituted on the date of this Agreement designated by the
Company and reasonably acceptable to the Parent shall be appointed as a
non-voting director emeritus to the Parent Board of Directors, with
notification, participation and any other rights of a regular director (other
than voting rights), to serve for at least one year from and after the Closing
Date; provided, in each case, if any of such individuals (other than the
individual appointed to serve as director emeritus) are unwilling or unable to
serve as a director, then Company shall designate another individual or
individuals, as the case may be, who are reasonably acceptable to the Parent
from among the
56
other members of the Company Board of Directors as constituted on the date of
this Agreement, to serve as a director of the Parent following the Effective
Time.
(b) Parent shall take all actions necessary so that at the
Effective Time the employees of the Company set forth in Section 4.16 of the
Company Disclosure Schedule shall be appointed to the positions designated in
Section 4.16 of the Company Disclosure. Parent shall negotiate in good faith to
enter into employment agreements with such employees. If Parent is unable to
reach agreement with such employees prior to the Closing Date, Parent
acknowledges that the employment arrangements between Company and such employees
existing as of the date hereof shall remain in full force and effect after the
Effective Time.
4.17 Indemnification.
(a) Subject to the occurrence of the Effective Time, until the
sixth anniversary of the date on which the Effective Time occurs, Parent agrees
that all rights to indemnification, exculpation and expense advancement now
existing in favor of each present and former director or officer (including any
director or officer who serves or served in a fiduciary capacity of any Company
Plan) of Company and the Company Subsidiaries as provided in their respective
charters or By-laws in effect as of the date hereof shall survive and remain in
full force and effect with respect to actions or failures to act occurring prior
to the Effective Time.
(b) For a period of at least six years after the Effective Time,
Parent shall maintain in effect either (i) the policies of directors' and
officers' liability insurance maintained by Company on the date of this
Agreement (provided that Parent may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are no less
advantageous in any material respect to the insured parties thereunder) with
respect to claims arising from facts or events that occurred at or before the
Effective Time (including consummation of the Merger); provided that if the
aggregate annual premiums for such insurance during such period shall exceed
200% of the per annum rate of premium paid by Company on the date of this
Agreement, then Parent shall provide a policy with the best coverage as shall
then be available at 200% of such rate, or (ii) a run-off (i.e., "tail") policy
or endorsement with respect to such policies of directors' and officers'
liability insurance covering claims asserted within six years after the
Effective Time arising from facts or events that occurred at or before the
Effective Time (including consummation of the Merger); and such policies or
endorsements shall name as insureds thereunder all people entitled to coverage
under the Company's policies of directors' and officers' liability insurance on
the date of this Agreement; provided that if the aggregate annual premiums for
such insurance during such period shall exceed 300% of the per annum rate of
premium paid by Company on the date of this Agreement, then Parent shall provide
a tail policy with the best coverage as shall then be available at 300% of such
rate.
(c) The provisions of this Section 4.17 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
4.18 Section 16 Approval. Prior to the Effective Time, the Parent Board
of Directors or an appropriate committee of non-employee directors thereof,
shall adopt a resolution consistent with the interpretive guidance of the SEC
with respect to the acquisition by any officer or director of Company who will,
at the Effective Time, become an officer or director of Parent
57
for purposes of Section 16 of the Exchange Act and the rules and regulations
thereunder of Parent Common Stock or options to acquire Parent Common Stock
pursuant to this Agreement and the Merger to cause any such acquisitions to be
exempt under Rule 16b-3 promulgated under the Exchange Act.
4.19 Participation in Certain Actions and Proceedings. Until this
Agreement is terminated in accordance with Section 8.1, Parent shall have the
right to participate in (but not control) the defense of any action, suit or
proceeding instituted against Company (or any of its directors or officers)
before any court or governmental or regulatory body or threatened by any
governmental or regulatory body or any third party, including a Company
stockholder, to restrain, modify or prevent the consummation of the transactions
contemplated by this Agreement, or to seek damages or a discovery order in
connection with such transactions.
4.20 Tax-Free Reorganization. Neither Company nor Parent shall knowingly
take, cause or permit to be taken any action, whether before or after the
Effective Time, that would cause the Merger (or such merger together with the
contemplated subsequent merger of the Surviving Corporation with and into
Parent) to fail to qualify as a "reorganization" within the meaning of Section
368(a) of the Code.
4.21 No Acquisition of Common Stock. From the date of this Agreement
until the earlier to occur of the Effective Time or the termination of this
Agreement, (i) Company shall not (and shall cause the Company Subsidiaries not
to) acquire, directly or indirectly, any beneficial interest in shares of Parent
Common Stock and (ii) Parent shall not (and shall cause the Parent Subsidiaries
not to) acquire, directly or indirectly, any beneficial interest in shares of
Company Common Stock.
4.22 FIRPTA Certificate. At the Closing, Company shall provide to Parent
a certificate meeting the requirements of Treasury Regulation Section
1.1445-2(c)(3). Company shall provide proper notice to the U.S. Internal Revenue
Service of the issuance of such certificate pursuant to Treasury Regulation
Section 1.897-2(h)(2).
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF EACH PARTY TO CONSUMMATE THE MERGER
The respective obligations of each party to consummate the Merger shall be
subject to the satisfaction or waiver by consent of the other party, at or
before the Effective Time, of each of the following conditions:
5.1 Stockholder Approval. Company shall have obtained the vote of
holders of Company Common Stock required to adopt this Agreement in accordance
with the provisions of the DGCL and the Certificate of Incorporation and By-laws
of Company, and Parent shall have obtained the vote of holders of Parent Common
Stock required to issue the shares of Parent Common Stock required to be issued
pursuant to the terms and conditions of this Agreement in accordance with the
provisions of the DGCL and the Certificate of Incorporation and By-laws of
Parent and the rules and regulations of the Nasdaq National Market.
58
5.2 Registration Statement. The Registration Statement shall have been
declared effective; no stop order suspending the effectiveness of the
Registration Statement shall have been issued, and not withdrawn, by the SEC and
no proceedings for that purpose shall be underway at the SEC; and no similar
proceeding in respect of the Proxy Statement shall be underway at the SEC or, to
the knowledge of Parent or Company, threatened by the SEC.
5.3 Absence of Order. No temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other governmental
entity of competent jurisdiction shall be in effect and have the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger.
Parent and Company each agrees to use reasonable commercial efforts to have any
such order or injunction lifted or stayed.
5.4 Regulatory Approvals. All approvals from governmental entities
required by Company, Parent or Sub to consummate the Merger shall have been
obtained, except for approvals the failure of which to be obtained would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect or a Parent Material Adverse Effect; provided, however,
that the conditions of this Section 5.4 shall not apply to any party whose
failure to fulfill its obligations under this Agreement shall have been the
cause of, or shall have resulted in, such failure to obtain such approval.
5.5 Pending Litigation. There shall not be threatened in writing or
pending any suit, action or proceeding by any governmental entity against
Parent, Company, Sub, any Company Subsidiary, any Parent Subsidiary or any of
their respective directors, officers or members challenging this Agreement or
the transactions contemplated hereby, seeking to delay, restrain or prohibit the
Merger, or seeking to obtain material damages from any such party, seeking to
prohibit or impose material limitations on the ownership or operation of all or
a portion of the operations or assets of Company and the Company Subsidiaries
(or Parent's direct equity ownership of the Surviving Corporation or indirect
equity ownership, following the Effective Time, of the Company Subsidiaries) or
to compel Parent or a subsidiary of Parent to dispose of or hold separate any
material portion of their business or assets or the business or assets of
Company and the Company Subsidiaries (or any equity interest in such entities).
5.6 HSR Act. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act and applicable foreign competition or merger
control Laws in any country where either Parent or Company have significant
operations shall have been terminated or shall have expired, and approvals under
all foreign competition or merger control laws where either Parent or Company
have significant operations that are reasonably determined by Parent or Company
to be to be applicable to the Merger shall have been obtained.
5.7 Nasdaq. Parent Common Stock shall continue to be quoted on the
Nasdaq National Market and the shares of Parent Common Stock to be issued in the
Merger shall have been approved for listing or quotation on the Nasdaq National
Market, subject to official notice of issuance.
59
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
PARENT AND SUB TO CONSUMMATE THE MERGER
The obligations of Parent and Sub to consummate the Merger are subject to
the fulfillment of the following conditions, any one or more of which may be
waived in writing by Parent:
6.1 Representations, Warranties and Covenants. The representations and
warranties of Company in Article II of this Agreement, other than those set
forth in Section 2.3(d) of this Agreement, shall be true and correct both as of
the date of this Agreement and immediately before the Effective Time (except
representations or warranties that by their terms speak only as of an earlier
date, which shall be true and correct as of such earlier date), except to the
extent all inaccuracies in all such representations or warranties would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, provided, however, that solely for purposes of this
Section 6.1, each representation or warranty in Article II that is qualified by
materiality or Company Material Adverse Effect shall be read as if such
qualifiers were not present. The representations and warranties in Section
2.3(d) of this Agreement shall be true and correct other than de minimus
variations as of the date of this Agreement and immediately before the Effective
Time. Company shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with by it on or prior to the Closing Date. Parent shall have received
a certificate signed on behalf of Company by the chief executive officer and
chief financial officer of Company to the foregoing effect.
6.2 Corporate Certificates. Company shall have delivered a copy of the
Certificate of Incorporation of Company, as in effect on the Closing Date,
certified by the Delaware Secretary of State and a certificate, as of the most
recent practicable date, of the Delaware Secretary of State as to Company's good
standing.
6.3 Secretary's Certificate. Company shall have delivered a certificate of
the Secretary of Company, dated as of the Closing Date, certifying as to (a) the
incumbency of officers of Company executing this Agreement and all documents
executed and delivered in connection herewith, (b) a copy of the By-Laws of
Company, as in effect from the date this Agreement was approved by the Company
Board of Directors until the Closing Date, (c) a copy of the resolutions of the
Company Board of Directors authorizing and approving the applicable matters
contemplated hereunder and (d) a copy of the resolutions of the stockholders of
Company adopting this Agreement.
6.4 Tax Opinion. Parent shall have received the opinion of its counsel to
the effect that the Merger (or the Merger together with the subsequent merger of
the Surviving Corporation with and into Parent) will constitute a reorganization
under Section 368(a) of the Code. In rendering such opinion, counsel shall be
entitled to rely on customary representation letters of Parent, Company and
others, in form and substance reasonably satisfactory to such counsel.
ARTICLE VII
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CONDITIONS PRECEDENT TO THE OBLIGATION OF
COMPANY TO CONSUMMATE THE MERGER
The obligation of Company to consummate the Merger is subject to the
fulfillment of the following conditions, any one or more of which may be waived
by it in writing:
7.1 Representations, Warranties and Covenants. The representations and
warranties of Parent and Sub in Article III of this Agreement, other than those
set forth in Section 3.3(d) of this Agreement, shall be true and correct both as
of the date of this Agreement and immediately before the Effective Time (except
representations or warranties that by their terms speak only as of an earlier
date, which shall be true and correct as of such earlier date), except to the
extent all inaccuracies in all such representations and warranties would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect, provided, however, that solely for purposes of this
Section 7.1, each representation or warranty in Article III that is qualified by
materiality or Parent Material Adverse Effect shall be read as if such
qualifiers were not present. The representations and warranties in Section
3.3(d) of this Agreement shall be true and correct other than de minimus
variations as of the date of this Agreement and immediately before the Effective
Time. Parent shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by it on or prior to the Closing Date. Company shall have received a
certificate signed on behalf of Parent by the chief executive officer and chief
financial officer of Parent to the foregoing effect.
7.2 Corporate Certificates. Parent shall have delivered a copy of the
Certificate of Incorporation of Parent, as in effect on the Closing Date,
certified by the Delaware Secretary of State and a certificate, as of the most
recent practicable date, of the Delaware Secretary of State as to Parent's good
standing.
7.3 Secretary's Certificate. Parent shall have delivered a certificate of
the Secretary of Parent, dated as of the Closing Date, certifying as to (a) the
incumbency of officers of Parent executing this Agreement and all documents
executed and delivered in connection herewith, (b) a copy of the By-Laws of
Parent, as in effect from the date this Agreement was approved by the Company
Board of Directors until the Closing Date, (c) a copy of the resolutions of the
Parent Board of Directors authorizing and approving the applicable matters
contemplated hereunder and (d) a copy of the resolutions of the stockholders of
Parent giving Parent Stockholder Approval.
7.4 Tax Opinion. Company shall have received the opinion of its counsel to
the effect that the Merger (or the Merger together with the subsequent merger of
the Surviving Corporation with and into Parent) will constitute a reorganization
under Section 368(a) of the Code. In rendering such opinion, counsel shall be
entitled to rely on customary representation letters of Parent, Company and Sub
and others, in form and substance reasonably satisfactory to such counsel.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether prior to or after the stockholders of Company adopt this
Agreement:
61
(a) By mutual written consent of Parent and Company authorized by
the Parent Board of Directors and the Company Board of Directors; or
(b) By either Parent or Company if the Merger has not been
consummated by February 15, 2006 (the "Termination Date"); provided, however,
that the right to terminate this Agreement pursuant to this Section 8.1(b) shall
not be available to any party whose action or failure to fulfill any obligation
under this Agreement has been the principal cause of, or resulted in, the
failure of the Merger to be consummated by such date; or
(c) By either Parent or Company if a court of competent jurisdiction
or other governmental entity shall have issued an order, decree or ruling or
taken any other action, and such order, decree or ruling or other action shall
have become final and nonappealable, or there shall exist any statute, rule or
regulation, in each case restraining, enjoining or otherwise prohibiting
(collectively, "Restraints") the consummation of any of the transactions
contemplated hereby; provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 8.1(c) has used all reasonable efforts to
prevent the entry of and to remove such Restraints; or
(d) By Parent if there has been a breach of, or inaccuracy in, any
representation, warranty, covenant or agreement of Company set forth in this
Agreement, which breach or inaccuracy has resulted or is reasonably likely to
result in any condition set forth in Article VI not being satisfied (and such
breach or inaccuracy has not been cured or such condition has not been satisfied
within thirty (30) days after the receipt of notice thereof or such breach or
inaccuracy is not reasonably capable of being cured or such condition is not
reasonably capable of being satisfied within such period); or
(e) By Company if there has been a breach of, or inaccuracy in, any
representation, warranty, covenant or agreement of Parent or Sub set forth in
this Agreement, which breach or inaccuracy has resulted or is reasonably likely
to result in any condition set forth in Article VII not being satisfied (and
such breach or inaccuracy has not been cured or such condition has not been
satisfied within thirty (30) days after the receipt of notice thereof or such
breach or inaccuracy is not reasonably capable of being cured or such condition
is not reasonably capable of being satisfied within such period); or
(f) By Parent, if (i) the Company Board of Directors shall have (A)
withdrawn, modified or changed its approval or recommendation of this Agreement
or the Merger, or publicly announced its intention to do so, or failed to
recommend this Agreement or the Merger, (B) approved or recommended to Company's
stockholders any proposal other than by Parent or Sub in respect of any Company
Acquisition Proposal, or entered into or publicly announced its intention to
enter into any agreement or agreement in principle in respect of any Company
Acquisition Proposal, (C) resolved or publicly proposed to any of the foregoing
or (D) failed to recommend against, or taken a neutral position with respect to,
a tender or exchange offer related to a Company Acquisition Proposal in any
position taken pursuant to Rules 14d-9 and 14e-2 under the Exchange Act or (ii)
Company shall have violated or breached in any material respect its obligations
under Section 4.11; or
(g) By Company, if (i) the Parent Board of Directors shall have (A)
withdrawn, modified or changed its approval or recommendation that Parent
stockholders
62
approve the issuance of shares of Parent Common Stock pursuant to this
Agreement, or publicly announced its intention to do so, or failed to recommend
that Parent stockholders approve the issuance of shares of Parent Common Stock
pursuant to this Agreement or (B) resolved or publicly proposed to any of the
foregoing; or
(h) By either Parent or Company, if upon a vote at a duly held
meeting to obtain Company Stockholder Approval, Company Stockholder Approval is
not obtained or if upon a vote at a duly held meeting to obtain Parent
Stockholder Approval, Parent Stockholder Approval is not obtained.
(i) By the Company if, at any time prior to receipt of the Company
Stockholder Approval, (i) the Company Board of Directors has received a Company
Superior Proposal, (ii) in light of such Company Superior Proposal, the Company
Board of Directors has determined, in good faith by resolution duly adopted
after consultation with outside counsel, that it is necessary for the Company
Board of Directors to withdraw, amend or modify its approval or recommendation
of this Agreement or the Merger in order to comply with its fiduciary duties to
the stockholders of the Company under applicable Law, (iii) the Company has
provided written notice of the determination described in clause (ii) above to
the Parent, which notice has attached to it a copy of the definitive agreement
or agreements containing all of the terms and conditions of such Company
Superior Proposal, (iv) at least three business days following receipt by the
Parent of the notice referred to in clause (iii) above, and after taking into
account any revised proposal made by the Parent following receipt of the notice
referred to in clause (iii) above, such Company Superior Proposal remains a
Company Superior Proposal and the Company Board of Directors has again made the
determination referred to in clause (ii) above (it being understood and agreed
that any change to the financial or other material terms of such Company
Superior Proposal shall require a new notice to the Parent under clause (iii)
above and a new three-business-day period under this clause (iv)), (v) the
Company has not breached Section 4.11 in any material respect, (vi) concurrent
with such termination, the Company Board of Directors approves, and the Company
enters into, a definitive agreement providing for the implementation of a
Company Superior Proposal and (vii) the Company, at or prior to any termination
pursuant to this Section 8.1(i) pays to Parent the Termination Fee.
8.2 Effect of Termination.
(a) Any termination of this Agreement under Section 8.1 hereof will
be effective immediately upon the delivery of a valid written notice of the
terminating party to the other parties hereto and, if then due, payment of the
Termination Fee and the Transaction Expenses. In the event of termination of
this Agreement as provided in Section 8.1 hereof, this Agreement shall forthwith
become null and void and be of no further force or effect, and there shall be no
liability on the part of Parent, Sub or Company (or any of their respective
directors, officers, employees, stockholders, agents or representatives), except
as set forth in the last sentence of Section 4.3, Article VIII and Article IX,
each of which shall remain in full force and effect and survive any termination
of this Agreement; provided, however, that nothing herein shall relieve any
party from liability for fraud or the willful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
(b) If Parent shall have terminated this Agreement pursuant to
Section 8.1(f), Company shall pay Parent upon demand a termination fee of
$11,350,000 (the "Termination
63
Fee") and reimburse Parent upon demand for documented out-of-pocket fees and
expenses incurred or paid by or on behalf of Company in connection with this
Agreement or the consummation of any of the transactions contemplated by this
Agreement in an amount that will not exceed $1,500,000 (the "Parent Expenses").
If Company terminates this Agreement pursuant to Section 8.1(i), Company shall
pay the Termination Fee to Parent as a condition to termination. If (i) this
Agreement is terminated (A) pursuant to Section 8.1(b) without the Company
Stockholder Meeting having occurred, (B) pursuant to Section 8.1(d) due to an
intentional breach or failure to perform by Company or (C) pursuant to Section
8.1(h) due to a failure to obtain the Company Stockholder Approval, (ii) prior
to the time of termination and after the date of this Agreement a Company
Acquisition Proposal has been publicly announced or otherwise communicated to
Company's Board of Directors and (iii) within twelve (12) months after the date
on which this Agreement is terminated Company enters into a definitive agreement
with respect to a Company Acquisition Proposal or a Company Acquisition Proposal
is consummated, Company shall pay to Parent the Termination Fee within two
business days of the earlier of the execution of such definitive agreement or
upon consummation of such Company Acquisition Proposal and reimburse Parent for
the Parent Expenses upon demand. All amounts due hereunder shall be payable by
wire transfer in immediately available funds to such account as Parent may
designate in writing to Company. If Company fails to promptly make any payment
required under this Section 8.2(b) and Parent commences a suit to collect such
payment, Company shall indemnify Parent for its fees and expenses (including
attorneys fees and expenses) incurred in connection with such suit and shall pay
interest on the amount of the payment at the prime rate of Bank of America (or
its successors or assigns) in effect on the date the payment was payable
pursuant to this Section 8.2(b). Solely for purposes of this Section 8.2(b),
references to "20%" in the definition of "Company Acquisition Proposal" shall be
deemed to be "50%", but in the case of subsection (A) of that definition, the
calculation of the percentage interest acquired shall be deemed to include any
Company Common Stock or other voting securities held by such acquiring person
prior to such acquisition.
(c) If Company shall have terminated this Agreement pursuant to
Section 8.1(g), Parent shall pay Company upon demand the Termination Fee and
shall reimburse Company upon demand for documented out-of-pocket fees and
expenses incurred or paid by or on behalf of Company in connection with this
Agreement or the consummation of any of the transactions contemplated by this
Agreement in an amount that will not exceed $1,500,000. All amounts due
hereunder shall be payable by wire transfer in immediately available funds to
such account as Company may designate in writing to Parent. If Parent fails to
promptly make any payment required under this Section 8.2(c) and Company
commences a suit to collect such payment, Parent shall indemnify Company for its
fees and expenses (including attorneys fees and expenses) incurred in connection
with such suit and shall pay interest on the amount of the payment at the prime
rate of Bank of America (or its successors or assigns) in effect on the date the
payment was payable pursuant to this Section 8.2(c).
(d) Each of Company and Parent (for itself and its affiliates)
hereby agrees, that upon any termination of this Agreement under circumstances
where it is entitled to a Termination Fee and expense reimbursement under this
Section 8.2 and such Termination Fee and expense reimbursement are paid in full
to such party, such party and its affiliates shall be precluded from any other
remedy against such other party, at law or in equity or otherwise, and neither
such party nor any of its affiliates shall seek (and such party shall cause its
affiliates not
64
to seek) to obtain any recovery, judgment, or damages of any kind, including
consequential, indirect, or punitive damages, against the other party or any of
their respective directors, officers, employees, partners, managers, members, or
stockholders in connection with this Agreement or the transactions contemplated
hereby.
8.3 Amendment. This Agreement may be amended at any time before or after
the Company Stockholder Approval or Parent Stockholder Approval by an instrument
signed by each of the parties hereto; provided, however, that (a) after the
Company Stockholder Approval, without the further approval of the stockholders
of Company, no amendment may be made that (i) alters or changes the amount or
kind of consideration to be received as provided in Section 1.6, (ii) alters or
changes any term of the Certificate of Incorporation of the Surviving
Corporation or (iii) alters or changes any of the terms and conditions of this
Agreement if such alteration or change would adversely affect the stockholders
of Company and (b) after Parent Stockholder Approval, without the further
approval of the stockholders of Parent, no amendment may be made that increases
the number of shares of Parent Common Stock that must be issued pursuant to the
terms and conditions of this Agreement.
8.4 Waiver. At any time prior to the Effective Time, either party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other party hereto or (b) waive compliance with any of the
agreements of the other party or any conditions to its own obligations, in each
case only to the extent such obligations, agreements and conditions are intended
for its benefit; provided that any such extension or waiver shall be binding
upon a party only if such extension or waiver is set forth in a writing executed
by such party. No waiver by any party of any breach or violation or, default
under or inaccuracy in any representation, warranty or covenant hereunder,
whether intentional or not, will be deemed to extend to any prior or subsequent
breach, violation, default of, or inaccuracy in, any such representation,
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence. No delay or omission on the part of
any party in exercising any right, power or remedy under this Agreement will
operate as a waiver thereof.
ARTICLE IX
MISCELLANEOUS
9.1 No Survival. None of the representations and warranties contained
herein shall survive the Effective Time.
9.2 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given when delivered in person
or by facsimile transmission (with receipt confirmed by telephone or by
automatic transmission report), one business day after being sent for next
business day delivery (fees prepaid, via reputable nationwide overnight courier
service) or two business days after being sent by registered or certified mail
(postage prepaid, return receipt requested), in each case to the intended
recipient as follows:
(a) if to Parent or Sub, to:
65
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx and Xxxxx X. Xxxxxx
Telephone: (000) 000-0000 / (000) 000-0000
Facsimile: (000) 000-0000
(b) if to Company, to:
Helix Technology Corporation
Nine Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Dodge, LLP
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may by notice given in accordance with this Section 9.2 to the other
parties designate another address or person for receipt of notices hereunder.
9.3 Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the Merger and related transactions, and supersedes
all prior agreements, written or oral, between the parties with respect thereto,
other than the Confidentiality Agreement, which shall survive execution of this
Agreement and any termination of this Agreement (other than any "standstill"
provision which shall expire concurrently with the termination of this
Agreement); provided, that if the terms of the Confidentiality Agreement
conflict with the terms of this Agreement, the terms of this Agreement shall
control.
9.4 Governing Law. This Agreement and any related disputes shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to its conflict of law provisions.
66
9.5 Binding Effect; No Assignment; No Third-Party Beneficiaries.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns. This
Agreement is not assignable without the prior written consent of the other
parties hereto.
(b) Other than Section 4.17, nothing in this Agreement, express or
implied, is intended to or shall confer upon any person other than Parent, Sub
and Company and their respective successors and permitted assigns any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
9.6 Section Headings. The headings of Sections in this Agreement are
provided for convenience only and shall not affect its construction or
interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement.
9.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile transmission.
9.8 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree shall remain in
full force and effect to the extent not held invalid or unenforceable. The
parties further agree to replace such invalid or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business and other purposes of such invalid or
unenforceable provision.
9.9 Submission to Jurisdiction; Waiver. Each of Company, Parent and Sub
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof
brought by the other party hereto or its successors or assigns may be brought
and determined in the courts of The Commonwealth of Massachusetts, the State of
Delaware and the Federal courts of the United States located in The Commonwealth
of Massachusetts or the State of Delaware and each of Company, Parent and Sub
hereby irrevocably submits with regard to any action or proceeding for itself
and in respect to its property, generally and unconditionally, to the
nonexclusive jurisdiction of the aforesaid courts. Each of Company, Parent and
Sub hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any action or proceeding with respect to
this Agreement, (a) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure to
lawfully serve process, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (c) to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper and (iii) this
Agreement, or Subject matter hereof, may not be enforced in or by such courts.
Any party may make service of process on another party by sending or delivering
a copy of the process to the party to be served at the address and in the manner
provided for giving of notices in Section 9.2.
67
9.10 Enforcement. The parties recognize and agree that if for any reason
any of the provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached, immediate and irreparable harm
or injury would be caused for which money damages would not be an adequate
remedy. Accordingly, each party agrees that in addition to other remedies the
other party shall be entitled to an injunction restraining any violation or
threatened violation of the provisions of this Agreement without posting a bond
or other undertaking. In the event that any action shall be brought in equity to
enforce the provisions of the Agreement, neither party shall allege, and each
party hereby waives the defense, that there is an adequate remedy at law.
9.11 Rules of Construction. All words used in this Agreement shall be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms. As used herein, the phrase "transactions contemplated by this
Agreement" or "matters contemplated hereby" or similar phrasing does not include
any merger of the Surviving Corporation with Parent after the Effective Time.
Exhibit A, the Company Disclosure Schedule and the Parent Disclosure Schedule
form an integral part of this Agreement, and references to "this Agreement"
shall include Exhibit A, the Company Disclosure Schedule and the Parent
Disclosure Schedule. The parties hereto agree that they have been represented by
counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any law, regulation, holding or ruling of construction
providing that ambiguities in an agreement or other document shall be construed
against the party drafting such agreement or document.
9.12 Waiver of Jury Trial. EACH OF PARENT, COMPANY AND SUB HEREBY
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENT OR ACTION RELATED HERETO OR
THERETO.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement and Plan of
Merger under seal as of the date first stated above.
XXXXXX AUTOMATION, INC.
By /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
MT. HOOD CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President
HELIX TECHNOLOGY CORPORATION
By /s/ Xxxxx Xxxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
EXHIBIT A
[FORM OF AFFILIATE LETTER]
___________, 2005
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed to
be an "affiliate" of Helix Technology Corporation ("Company"), a Delaware
corporation, as the term "affiliate" is used in Rule 145 of the rules and
regulations of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the terms
of the Agreement and Plan of Merger (the "Merger Agreement") dated as of
July 11, 2005 among Xxxxxx Automation, Inc. Corporation ("Parent"), a Delaware
corporation, Mt. Hood Corporation ("Sub"), Delaware corporation that is a
wholly-owned subsidiary of Parent, and Company, Company will be merged with Sub
(the "Merger").
In connection with the Merger, I may become entitled to receive shares of
Xxxxxx Automation, Inc. common stock, $0.01 par value per share (the "Parent
Shares"), in exchange for the shares owned by me of common stock, $1.00 par
value per share, of Company (the "Company Shares").
I represent, warrant and covenant to Parent that in the event I receive
any Parent Shares as a result of the Merger:
(a) I will not make any sale, transfer or other disposition of Parent
Shares in violation of the Securities Act or the rules and regulations
thereunder.
(b) I have carefully read this letter and the Merger Agreement and
discussed the requirements of such documents and other applicable limitations
upon my ability to sell, transfer or otherwise dispose of Parent Shares, to the
extent I felt necessary, with my counsel or counsel for Company.
(c) I have been advised that the issuance of Parent Shares to me
pursuant to the Merger has been or will be registered with the SEC under the
Securities Act on a Registration Statement on Form S-4; however, because I may
be deemed to be an affiliate of Company and the distribution of Parent Shares by
me or on my behalf has not been registered under the Securities Act,
dispositions of Parent Shares by me or on my behalf may be restricted under the
Securities Act and the rules and regulations thereunder. I will not sell,
transfer, hedge, encumber or otherwise dispose of Parent Shares issued to me in
the Merger unless the disposition (i) is made in conformity with the volume and
other limitations of Rule 145 under the Securities Act (or a successor
provision), (ii) is made pursuant to an effective registration statement under
the
D-1
Securities Act or (iii) is, in the opinion of counsel reasonably acceptable to
Parent or as described in a "no-action" or interpretive letter from the staff of
the SEC, exempt from registration under the Securities Act.
(d) I understand that Parent is under no obligation to register under
the Securities Act (or otherwise) the disposition of Parent Shares by me or on
my behalf or to take any other action necessary in order to make compliance with
an exemption from such registration available.
(e) I also understand that there will be placed on the certificates for
Parent Shares issued to me, or any substitutions therefor, a legend stating in
substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, APPLIES. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF
AN AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND XXXXXX
AUTOMATION, INC.
(f) I also understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145 under the Securities Act (and
satisfactory evidence of such conformity is provided to Parent), or pursuant to
an effective registration statement, Parent reserves the right to put the
following legend on the certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND WERE ACQUIRED FROM
A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES.
THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR
FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OF 1933, AS AMENDED.
I understand and agree that the legends set forth in paragraphs (e) and
(f) above will be removed by delivery of substitute certificates without such
legends if I deliver to Parent a copy of a "no action" or interpretive letter
from the staff of the SEC, or an opinion of counsel reasonably satisfactory to
Parent in form and substance satisfactory to Parent, to the effect that
disposition of the shares by the holder thereof is not restricted under the
Securities Act.
D-2
Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of Company as described in the first paragraph of this
letter, or as a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter.
Very truly yours,
________________________________________
Name (print):
Address:
Accepted:
XXXXXX AUTOMATION, INC.
By:____________________________
Name (print):
Title:
Dated:__________________________
[SIGNATURE PAGE TO AFFILIATE LETTER]