EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this
"AGREEMENT"), dated as of November 1, 2002, is among Parentech, Inc., a Delaware
corporation (the "COMPANY"), Premier Classic Art, Inc., a Delaware corporation
("PCA") and Premier Classic Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of PCA ("MERGER SUB"). Certain capitalized and
non-capitalized terms used herein are defined in SECTION 8.13.
RECITALS
WHEREAS, the Boards of Directors of the Company, PCA and
Merger Sub each have, in light of and subject to the terms and conditions set
forth herein, approved this Agreement and the transactions contemplated hereby,
including the Merger, and declared the Merger advisable and fair to, and in the
best interests of, their respective stockholders;
WHEREAS, pursuant to the Merger, among other things, and
subject to the terms and conditions of this Agreement, all of the issued and
outstanding shares of capital stock of the Company shall be converted into and
exchangeable for the right to receive shares of PCA Common Stock, par value
$0.001 per share, (the "PCA COMMON STOCK");
WHEREAS, as an inducement to the Company to enter this
Agreement, all officers, directors and certain stockholders of PCA have, at the
Effective Time, entered into lock-up agreements in the form attached hereto as
EXHIBIT A ("LOCK-UP AGREEMENT") pursuant to which, among other things, such
stockholders agreed to refrain from selling shares of PCA Common Stock during a
specified period of time following consummation of the Merger;
WHEREAS, for federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "CODE"); and
WHEREAS, the Company, PCA and Merger Sub desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger as set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises
and the representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, the Company, PCA and Merger Sub hereby
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. At the Effective Time and upon the terms
and subject to the conditions of this Agreement and in accordance with the
applicable provisions of the Delaware General Corporation Law ("DELAWARE LAW"),
Merger Sub shall be merged with and into the Company (the "MERGER"). Following
the Merger, the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION"), and the separate corporate existence of Merger Sub
shall cease.
Section 1.2 EFFECTIVE TIME. Subject to the provisions of this
Agreement, the Company, PCA and Merger Sub shall cause the Merger to be
consummated by filing an appropriate certificate of merger in the form attached
hereto as EXHIBIT B and other appropriate documents (the "CERTIFICATE OF
MERGER") with the Secretary of State of the State of Delaware in such form as
required by, and executed in accordance with, the relevant provisions of
Delaware Law, on the Closing Date (as defined below) or as soon thereafter as
practicable. The Merger shall become effective upon the filing of the
Certificate of Merger (the "EFFECTIVE TIME").
Section 1.3 CLOSING OF THE MERGER. The closing of the Merger
(the "CLOSING") will take place at a time and on a date to be specified by the
parties (the "CLOSING DATE"), which shall be no later than the third business
day after satisfaction or waiver of the conditions set forth in ARTICLE VI
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), at the
offices of Xxxx Xxxx Xxxx & Freidenrich LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000,
Xxx Xxxxx, XX 00000-0000 or at such other time, date or place as agreed to in
writing by the parties hereto.
Section 1.4 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in this Agreement, the Certificate of Merger and the
applicable provisions of Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all of the properties,
rights, privileges, powers and franchises of the Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
Section 1.5 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION. At
the Effective Time, the Board of Directors and the Officers of the Company
existing prior to the Effective Time shall be the Board of Directors and
Officers of the Surviving Corporation. The officers of the Surviving Corporation
shall hold office in accordance with the certificate of incorporation and bylaws
of the Surviving Corporation until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal.
Section 1.6 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) PCA. The certificate of incorporation and bylaws of PCA
in effect immediately prior to the Effective Time shall remain in full force and
effect after the Effective Time.
(b) SURVIVING CORPORATION. Effective immediately following
the Merger, the Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation. Effective immediately following the
Merger, the Bylaws of the Company, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until amended
in accordance with applicable law.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 CONVERSION OF SHARES.
(a) At the Effective Time, each outstanding share of common
stock of Merger Sub shall, by virtue of the Merger and without any action on the
part of the Company, PCA or Merger Sub, be converted into one fully paid and
non-assessable share of common stock of the Surviving Corporation.
(b) At the Effective Time, each share of the Company's
Series A Preferred Stock and Series B Preferred Stock (collectively, "COMPANY
PREFERRED STOCK"), issued and outstanding immediately prior to the Effective
Time (individually, a "PREFERRED SHARE" and collectively, the "PREFERRED
SHARES") ") (other than Dissenting Shares (as hereinafter defined)) shall, by
virtue of the Merger and without any action on the part of PCA, the Company or
Merger Sub or any holder thereof, be converted into and be exchangeable for the
right to receive one and one-half (1.5) fully paid and non-assessable shares of
PCA Common Stock.
(c) At the Effective Time, each share of Company's common
stock, par value $0.000001 (the "COMPANY COMMON STOCK"), issued and outstanding
immediately prior to the Effective Time (individually, a "COMMON SHARE" and
collectively, the "COMMON SHARES" and together with the Preferred Shares, the
"SHARES") (other than Dissenting Shares (as hereinafter defined)) shall, by
virtue of the Merger and without any action on the part of PCA or the Company or
any holder thereof, be converted into and be exchangeable for the right to
receive one and one-half (1.5) (the "EXCHANGE RATIO") fully paid and
non-assessable shares of PCA Common Stock. All such shares of PCA Common Stock
issued pursuant to SECTIONS 2.1(B) and 2.1(C) are referred to herein as the
"MERGER CONSIDERATION."
(d) If, between the date of this Agreement and the
Effective Time, the outstanding shares of PCA Common Stock shall have been
changed into a different number of shares or a different class by reason of any
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, or any similar event, the calculation of the
number of shares of PCA Common Stock for which the Company Common Stock shall be
exchanged shall be correspondingly adjusted to the extent necessary to reflect
such stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, or such similar event.
Section 2.2 STOCK OPTIONS. At the Effective Time, the
Company Stock Options, whether vested or unvested, will be assumed by PCA
("ASSUMED STOCK OPTIONS"). SECTION 2.2 of the Company Disclosure Schedule (as
defined in Article III) sets forth a true and complete list as of the date
hereof of all holders of outstanding options to purchase shares of Company
Common Stock ("COMPANY STOCK OPTIONS"), including the number of shares of
Company Common Stock subject to each such option, the exercise or vesting
schedule, the exercise price per share and the term of each such option. On the
Closing Date, the Company shall deliver to PCA an updated SECTION 2.2 of the
Company Disclosure Schedule (as defined in Article III) current as of such date.
Each such option so assumed by PCA under this Agreement shall continue to have,
and be subject to, the same terms and conditions set forth in the Company Stock
Option Plan ("COMPANY OPTION PLAN") and any other document governing such option
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immediately prior to the Effective Time, except that (a) such option will be
exercisable for that number of whole shares of PCA Common Stock equal to one and
one-half (1.5) times that number of shares of Company Common Stock that were
issuable upon exercise of such option immediately prior to the Effective Time,
(b) the per share exercise price for the shares of PCA Common Stock issuable
upon exercise of such assumed option will be equal to the exercise price per
share of Company Common Stock at which such option was exercisable immediately
prior to the Effective Time divided by the Exchange Ratio and rounded up to the
nearest whole cent (the "ADJUSTED EXERCISE PRICE") and (c) any restriction on
the exercisability of such Company Stock Option shall continue in full force and
effect, and the term, exercisability, vesting schedule and other provisions of
such Company Stock Option shall remain unchanged. If the foregoing calculation
of the Adjusted Exercise Price results in an Assumed Stock Option being
exercised for a fraction of a share of PCA Common Stock, then the number of
shares of PCA Common Stock subject to that option will be rounded to the nearest
whole number of shares of PCA Common Stock (rounded down, in the case of the
Company Stock Options that are Incentive Stock Options under Section 422 of the
Code). Continuous employment with the Company shall be credited to an optionee
of the Company for purposes of vesting of the Assumed Stock Option. Consistent
with the terms of the Company Option Plan and the documents governing the
outstanding options, the Merger will not terminate any of the outstanding
options under the Company Option Plan or accelerate the exercisability or
vesting of such options or the shares of PCA Common Stock which will be subject
to those options upon PCA's assumption of the options in the Merger. It is the
intention of the parties that the options so assumed by PCA following the
Effective Time will remain incentive stock options as defined in Section 422 of
the Code to the extent such options qualified as incentive stock options prior
to the Effective Time, and the parties hereto shall use their commercially
reasonable efforts to carry out such intention. Within ten (10) business days
after the Effective Time, PCA will issue to each person who, immediately prior
to the Effective Time was a holder of an outstanding option under the Company
Option Plan, a document in form and substance reasonably satisfactory to the
Company evidencing the foregoing assumption of such option by PCA.
Section 2.3 EXCHANGE AGENT. Prior to the Effective Time,
the Company shall appoint an exchange agent hereunder for the purpose of
exchanging Shares for the Merger Consideration (the "EXCHANGE AGENT"). At or
prior to the Effective Time, PCA shall deposit with the Exchange Agent, in trust
for the benefit of holders of Shares, certificates representing the PCA Common
Stock issuable pursuant to SECTION 2.1. in exchange for outstanding Shares.
Section 2.4 EXCHANGE PROCEDURES. As soon as reasonably
practicable after the Effective Time (and in any event within three business
days after the Effective Time), PCA and the Surviving Corporation shall use
their commercially reasonable efforts, and PCA shall provide any assistance
reasonably requested by the Surviving Corporation, to cause the Exchange Agent
to mail to each holder of a certificate or certificates which immediately prior
to the Effective Time represented outstanding Shares (the "CERTIFICATES") (a) a
letter of transmittal which shall specify that delivery shall be effective, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent, and which letter shall be in customary form
and have such other provisions as PCA may reasonably specify; and (b)
instructions for effecting the surrender of such Certificates in exchange for
the Merger Consideration. Upon surrender of a Certificate to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor shares of PCA Common Stock
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representing, in the aggregate, the whole number of shares that such holder has
the right to receive pursuant to SECTION 2.1. (after taking into account all
Shares then held by such holder), and the Shares formerly represented by such
Certificate and the Certificate so surrendered shall forthwith be canceled.
Until surrendered as contemplated by this Article II, each Certificate shall be
deemed at any time after the Effective Date to represent only the right to
receive the Merger Consideration payable upon surrender of the Certificates. In
the event of a transfer of ownership of Shares which is not registered in the
transfer records of the Company, shares of PCA Common Stock, in the aggregate,
the proper number of shares of PCA Common Stock may be issued with respect to
such Shares to such a transferee if the Certificate representing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable Transfer
Taxes have been paid.
Section 2.5 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED
CERTIFICATES. No dividends or other distributions declared or made with respect
to shares of PCA Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of PCA Common Stock that such holder would be entitled to receive upon
surrender of such Certificate until such holder shall surrender such Certificate
in accordance with SECTION 2.4. Subject to the effect of applicable Laws (as
hereinafter defined), following surrender of any such Certificate, there shall
be paid to such holder of shares of PCA Common Stock issuable in exchange
therefor, without interest, the amount of dividends or other distributions with
a record date after the Effective Time but prior to such surrender and a payment
date subsequent to such surrender payable with respect to such shares of PCA
Common Stock.
Section 2.6 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON
STOCK. All shares of PCA Common Stock issued upon conversion of the Shares in
accordance with the terms of ARTICLE I and this ARTICLE II shall be deemed to
have been issued or paid in full satisfaction of all rights pertaining to the
Shares.
Section 2.7 NO FRACTIONAL SHARES OF PCA COMMON STOCK. No
certificates or scrip of shares of PCA Common Stock representing fractional
shares of PCA Common Stock or book-entry credit of the same shall be issued upon
the surrender for exchange of Certificates. All fractional shares of PCA Common
Stock to be issued to holders of Shares will be rounded up to the nearest whole
number of shares of PCA Common Stock.
Section 2.8 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 the Surviving Corporation, the posting by such person of a
bond in such reasonable amount as the Surviving Corporation may direct as
indemnity by such person against any claim that may be made against the
Surviving Corporation with respect to such Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration with respect to the Shares formerly represented
thereby, pursuant to this Agreement.
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Section 2.9 TAX CONSEQUENCES. It is intended by the parties
hereto that the Merger shall constitute a reorganization within the meaning of
Section 368(a) of the Code. Each party hereto shall use its commercially
reasonable efforts to cause the Merger to be so qualified, shall report the
transactions contemplated by this Agreement in a manner consistent with such
reorganization treatment and will not take any position inconsistent therewith
in any Tax Return (as hereinafter defined), refund claim, litigation or
otherwise unless required to do so by law. The Merger shall be treated as a
purchase for accounting purposes.
Section 2.10 STOCK TRANSFER BOOKS. The stock transfer books
of the Company shall be closed immediately upon the Effective Time and there
shall be no further registration of transfers of Shares thereafter on the
records of the Company. On or after the Effective Time, any Certificates
presented to the Exchange Agent or PCA for any reason shall be converted into
the Merger Consideration with respect to the Shares formerly represented
thereby.
Section 2.11 AFFILIATES. Notwithstanding anything to the
contrary herein, no shares of PCA Common Stock shall be delivered to a person
who may be deemed an "affiliate" of the Company for purposes of Rule 145 under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), until such person
has executed and delivered to PCA the written agreement contemplated by SECTION
5.8.
Section 2.12 APPRAISAL RIGHTS. Notwithstanding anything in
this Agreement to the contrary, Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by stockholders who
did not vote in favor of the Merger (the "DISSENTING SHARES"), which
stockholders comply with all of the relevant provisions of Delaware Law (the
"DISSENTING STOCKHOLDERS"), shall not be converted into or be exchangeable for
the right to receive the Merger Consideration, unless and until such holders
shall have failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal under Delaware Law. If any Dissenting Shareholder shall have
failed to perfect or shall have effectively withdrawn or lost such right, such
holder's Shares shall thereupon be converted into and become exchangeable for
the right to receive, as of the Effective Time, the Merger Consideration without
any interest thereon. The Company shall give PCA (a) prompt notice of any
written demands for appraisal of any Shares, attempted withdrawals of such
demands and any other instruments served pursuant to Delaware Law and received
by the Company relating to stockholders' rights of appraisal, and (b) the
opportunity to direct, in its reasonable business judgment, all negotiations and
proceedings with respect to demands for appraisal under Delaware Law. Neither
the Company nor the Surviving Corporation shall, except with the prior written
consent of PCA, voluntarily make any payment with respect to, or settle or offer
to settle, any such demand for payment. If any Dissenting Shareholder shall fail
to perfect or shall have effectively withdrawn or lost the right to dissent, the
Shares held by such Dissenting Shareholder shall thereupon be treated as though
such Shares had been converted into the right to receive the Merger
Consideration pursuant to SECTION 2.1.
Section 2.13 LEGENDS.
(a) The shares represented by the Merger Consideration
issued pursuant to this Section 2 have not been registered under the Securities
Act and shall be characterized as "restricted securities" under the federal
securities laws. Under such laws, the shares represented by the Merger
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Consideration may not be resold without registration under the Securities Act or
in reliance on an exemption therefrom.
Each certificate evidencing shares represented by the
Merger Consideration issued pursuant to this Section 2 shall
bear the following legend (in addition to any legend required under applicable
state securities laws):
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE
IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE CORPORATION RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE CORPORATION STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule delivered by the
Company to PCA and Merger Sub in connection with the execution and delivery of
this Agreement (the "COMPANY DISCLOSURE SCHEDULE"), the Company hereby
represents and warrants to PCA and Merger Sub, and except as set forth in the
disclosure schedules delivered by PCA and Merger Sub to the Company in
connection with the execution and delivery of this Agreement (the "PCA
DISCLOSURE SCHEDULE"), PCA and Merger Sub hereby represent and warrant to the
Company, in each case as set forth in this ARTICLE III, with the party making
such representations and warranties being referred to as the "REPRESENTING
Party" and such Representing Party's Disclosure Schedule as the "REPRESENTING
PARTY'S DISCLOSURE SCHEDULE." Notwithstanding the foregoing, any representation
or warranty which expressly refers to PCA or its Subsidiaries is being made
solely by PCA and Merger Sub and any representation or warranty which expressly
refers to the Company or its Subsidiaries is being made solely by the Company.
As used in this Agreement, "MATERIAL ADVERSE EFFECT" means any change, effect,
event, occurrence, state of facts or developments that (i) materially adversely
affects the assets, liabilities, business, results of operations, condition
(financial or otherwise) or prospects of the Representing Party and its
Subsidiaries, taken as a whole or (ii) adversely affects or delays the ability
of the Representing Party to consummate the transactions contemplated by this
Agreement.
Section 3.1 ORGANIZATION, QUALIFICATION.
(a) The Representing Party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power and authority
required for it to own its properties and assets and to carry on its business as
it is now being conducted. The Representing Party is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership of
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its properties or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to be so qualified or in good
standing would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on the Representing Party or substantially delay
consummation of the transactions contemplated by this Agreement or otherwise
prevent the Representing Party from performing its obligations hereunder.
(b) Each of the Representing Party's Subsidiaries is
listed in SECTION 3.1 of the Representing Party's Disclosure Schedule and is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization. Each of the Representing
Party's Subsidiaries has the corporate power and authority required for it to
own its properties and assets and to carry on its business as it is now being
conducted and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party, taken as a whole. All the outstanding shares of capital
stock of, or other ownership interests in, the Representing Party's Subsidiaries
are duly authorized, validly issued, fully paid and non-assessable and, with
respect to such shares or ownership interests that are owned by the Representing
Party and its Subsidiaries, are owned free and clear of all liens, claims,
mortgages, encumbrances, pledges and security interests of any kind. All the
outstanding shares of capital stock of, or other ownership interests in, the
Representing Party's Subsidiaries are wholly owned by the Representing Party,
directly or indirectly.
Section 3.2 CAPITAL STOCK.
(a) SECTION 3.2(A) of the Representing Party's
Disclosure Schedule sets forth, as of May 31, 2002 with respect to PCA, as of
September 4, 2002 with respect to Merger Sub and as of June 30, 2002 with
respect to the Company: (i) the number of authorized shares of each class or
series of capital stock of the Representing Party; (ii) the number of shares of
each class or series of capital stock of the Representing Party which are issued
and outstanding; (iii) the number of shares of each class or series of capital
stock which are held in the treasury of such Representing Party; (iv) the number
of shares of each class or series of capital stock of the Representing Party
which are reserved for issuance, indicating each specific reservation; and (v)
the number of shares of each class or series of capital stock of such
Representing Party which are subject to employee stock options or other rights
to purchase or receive capital stock granted under such Person's stock option or
other stock based employee or non-employee director benefit plans, indicating
the name of the plan, the date of grant, the number of shares and the exercise
price thereof.
(b) All the outstanding shares of capital stock of the
Representing Party are, and all shares of PCA Common Stock to be issued in the
Merger will be, when issued in accordance with the terms of this Agreement, duly
authorized, validly issued, fully paid and non-assessable and issued in
compliance with all applicable state and federal securities laws. Except for the
transactions contemplated by this Agreement, (i) there are no shares of capital
stock of the Representing Party authorized, or as of the date of this Agreement,
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issued or outstanding, (ii) as of the date of this Agreement there are no
authorized or outstanding options, warrants, calls, preemptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Representing
Party or any of its Subsidiaries, obligating the Representing Party or any of
its Subsidiaries to issue, transfer or sell or cause to be issued, transferred
or sold any shares of capital stock or other equity interest in the Representing
Party or any of its Subsidiaries or securities convertible into or exchangeable
for such shares or equity interests, or obligating the Representing Party or any
of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, (iii)
there are no outstanding contractual obligations of the Representing Party or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Representing Party or any Subsidiary of the Representing
Party or to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary of the Representing Party or other
entity, and (iv) there are no shareholder agreements, voting trusts or other
agreements to which the Representing Party is a party or to which it is bound
relating to the voting of any shares of the capital stock of the Representing
Party.
Section 3.3 CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT;
NO VIOLATION.
(a) The Company has the corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company and, except for obtaining the requisite
approval of the stockholders of the Company (the "COMPANY STOCKHOLDER
APPROVAL"), as contemplated in SECTION 5.1 and the filing of the Certificate of
Merger, no other corporate proceedings on the part of the Company are necessary
to authorize the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company and,
assuming this Agreement constitutes a valid and binding agreement of PCA,
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as may be limited by (i)
bankruptcy laws and other similar laws affecting creditor's rights generally and
(ii) general principles of equity.
(b) Each of PCA and Merger Sub has the corporate power and
authority to enter into this Agreement and to carry out its respective
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Boards of Directors of PCA and Merger Sub, and other than the
obtaining the requisite approval of the stockholders of Merger Sub through
action by written consent (the "MERGER SUB STOCKHOLDER APPROVAL") and the filing
of the Certificate of Merger no other corporate proceedings on the part of PCA
and Merger Sub are necessary to authorize the consummation of the transactions
contemplated hereby. The Boards of Directors of PCA and Merger Sub have taken
all appropriate action so that Section 203 of Delaware Law will not be
applicable to the Company or to PCA for any purpose. This Agreement has been
duly and validly executed and delivered by PCA and Merger Sub and, assuming this
Agreement constitutes a valid and binding agreement of the Company, constitutes
a valid and binding agreement of PCA and Merger Sub, enforceable against PCA and
Merger Sub in accordance with its terms, except as may be limited by (i)
bankruptcy laws and other similar laws affecting creditor's rights generally and
(ii) general principles of equity.
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(c) Except as may be required under, and other applicable
requirements of, the Securities Act, the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "EXCHANGE
ACT"), state securities or blue sky laws, and the rules and regulations of
Nasdaq, and the filing of the Certificate of Merger under Delaware Law, none of
the execution, delivery or performance of this Agreement by the Representing
Party, the consummation by the Representing Party of the transactions
contemplated hereby or compliance by the Representing Party with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation, bylaws or similar organizational
documents of the Representing Party or any of its Subsidiaries, (ii) require any
filing with, or permit, authorization, consent or approval of, any federal,
regional, state or local court, arbitrator, tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency,
whether U.S. or foreign (a "GOVERNMENTAL ENTITY"), (iii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Representing Party or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, or (iv) violate any order, writ, injunction, decree,
judgment, permit, license, ordinance, law, statute, rule or regulation ("LAW")
applicable to the Representing Party, any of its Subsidiaries or any of their
properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv)
such filings, permits, authorizations, consents, approvals, violations, breaches
or defaults which are not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on the Representing Party or prevent or
substantially delay the consummation of the transactions contemplated hereby.
Section 3.4 REPORTS AND FINANCIAL STATEMENTS.
(a) PCA has previously furnished or otherwise made
available (by electronic filing or otherwise) to the Company true and complete
copies of: (i) Annual Reports on Form 10-K filed with the SEC for each of the
fiscal years ended May 31, 2001 and 2002; and (ii) each Quarterly Report on Form
10-Q filed with the SEC for the three fiscal quarters occurring since the Annual
Report on Form 10-K for the fiscal year ended May 31, 2001.
As of their respective dates, such reports, proxy statements and prospectuses
filed with the SEC by PCA (collectively with, and giving effect to, all
amendments, supplements and exhibits thereto, the "SEC REPORTS") (i) complied as
to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of PCA's
Subsidiaries is required to file any forms, reports or other documents with the
SEC. The audited consolidated financial statements and unaudited consolidated
interim financial statements included in the SEC Reports (including any related
notes and schedules) fairly present in all material respects the financial
position of PCA and its consolidated Subsidiaries as of the dates thereof and
the results of operations and cash flows for the periods or as of the dates then
ended (subject, in the case of the unaudited interim financial statements, to
normal recurring adjustments), in each case in accordance with past practice and
GAAP consistently applied during the periods involved (except as otherwise
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disclosed in the notes thereto). Since it first became required to file reports
under the Exchange Act, PCA has timely filed all reports, registration
statements and other filings required to be filed by it with the SEC under the
rules and regulations of the SEC, and the PCA Common Stock is registered under
the Exchange Act.
(b) The Company has delivered to PCA copies of the
audited balance sheets of the Company as of December 31, 2001, together with the
related audited statements of income, stockholders' equity and changes in cash
flow for the calendar year ended December 31, 2001, and the notes thereto (such
audited financial statements being hereinafter referred to as the "FINANCIAL
STATEMENTS"). The Financial Statements, including the notes thereto, (i) were
prepared in accordance with GAAP throughout the periods covered thereby, and
(ii) present fairly in all material respects the financial position, results of
operations and changes in cash flow of the Company and its consolidated
Subsidiaries as of such dates and for the periods then ended.
Section 3.5 NO UNDISCLOSED LIABILITIES. Neither the
Representing Party nor any of its Subsidiaries has any liabilities or
obligations of any nature required to be set forth on a balance sheet of the
Representing Party under GAAP, whether or not accrued, contingent or otherwise,
and there is no existing condition, situation or set of circumstances which
would be expected to result in such a liability or obligation, except (a)
liabilities or obligations with respect to PCA reflected in the SEC Reports and
with respect to the Company reflected in the Financial Statements or (b)
liabilities and obligations which are not, individually or in the aggregate,
reasonably expected to have a Material Adverse Effect on the Representing Party.
Section 3.6 NO DEFAULT; COMPLIANCE WITH APPLICABLE LAWS.
The businesses of the Representing Party and each of its Subsidiaries is not in
conflict with, or in default or violation of, any term, condition or provision
of (i) its respective certificate of incorporation or bylaws or similar
organizational documents, (ii) any Company Material Contracts or PCA Material
Contracts, as applicable, or (iii) any federal, state, local or foreign statute,
Law, concession, grant, franchise, Permit or other governmental authorization or
approval applicable to the Representing Party or any of its Subsidiaries,
excluding from the foregoing clauses (ii) and (iii), defaults or violations
which would not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Representing Party.
Section 3.7 ENVIRONMENTAL MATTERS.
(a) Each of the Representing Party and its Subsidiaries
has obtained all licenses, permits, authorizations, approvals and consents from
Governmental Entities which are required under any applicable Environmental Law
and necessary for it to carry on its business or operations as now conducted
("ENVIRONMENTAL PERMITS"), except for such failures to have Environmental
Permits which, individually or in the aggregate, are not reasonably expected to
have a Material Adverse Effect on the Representing Party. Each of such
Environmental Permits is in full force and effect, and each of the Representing
Party and its Subsidiaries is in compliance with the terms and conditions of all
such Environmental Permits and with all applicable Environmental Laws, except
for such failures to be in full force and effect or to be in compliance which,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect on the Representing Party.
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(b) There are no Environmental Claims pending, or to
the knowledge of the Representing Party, threatened, against the Representing
Party or any of its Subsidiaries, or, to the knowledge of the Representing
Party, any Person whose liability for any such Environmental Claim the
Representing Party or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law for which reserves have not
been established in accordance with GAAP, that, individually or in the
aggregate, would have a Material Adverse Effect on the Representing Party.
(c) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, threatened release or presence of any Hazardous Material, that
would form the basis of any Environmental Claim against the Representing Party
or any of its Subsidiaries, or for which the Representing Party or any of its
Subsidiaries is liable, except for such liabilities which, individually or in
the aggregate, are not reasonably likely to have a Material Adverse Effect on
the Representing Party.
(d) As used in this Agreement: (i) "ENVIRONMENTAL
CLAIM" means any claim, action, lawsuit or proceeding by any Person which seeks
to impose liability (including, without limitation, liability for investigatory
costs, cleanup costs, governmental response costs, natural resources, damages,
property damages, personal injuries or penalties) arising out of, based on or
resulting from (A) the presence, or release or threatened release, of any
Hazardous Materials at any location, whether or not owned or operated by the
Representing Party or any of its Subsidiaries, or (B) circumstances which would
give rise to any violation, or alleged violation, of any Environmental Law; (ii)
"ENVIRONMENTAL LAW" means any law or order of any Governmental Entity relating
to (A) the generation, treatment, storage, disposal, use, handling,
manufacturing, transportation or shipment of, or (B) the environment or to
emissions, discharges, releases or threatened releases of, Hazardous Materials,
into the environment; (iii) "HAZARDOUS MATERIALS" means (A) any petroleum or
petroleum products, radioactive materials or friable asbestos; (B) any chemicals
or other materials or substances which are now defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
or "toxic pollutants" under any Environmental Law; and (C) pesticides.
Section 3.8 LITIGATION. Except as set forth at SECTION 3.8
of the Company's Disclosure Schedule, there is no suit, claim, action,
proceeding or investigation pending or, to the Representing Party's knowledge,
threatened against the Representing Party, its Subsidiaries or any of its assets
or properties which (a) has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Representing
Party or its Subsidiaries, or (b) questions the validity of this Agreement or
any action to be taken by the Representing Party in connection with the
consummation of the transactions contemplated hereby or could otherwise prevent
or materially delay the consummation of the transactions contemplated by this
Agreement. The Representing Party and its Subsidiaries are not subject to any
outstanding order, writ, injunction or decree which has had or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Representing Party and its Subsidiaries. There is no action, suit,
proceeding or investigation pending or, to the Representing Party's knowledge,
threatened against any current or former officer, director, employee,
consultant, contractor or agent of the Representing Party (in his or her
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capacity as such) which gives rise or could reasonably be expected to give rise
to a claim for contribution or indemnification against the Representing Party.
Section 3.9 PERMITS. The Representing Party holds, and has
at all times held, all permits, licenses, variances, exemptions, orders, and
approvals of all Governmental Entities necessary for the lawful conduct of its
business (the "PERMITS"), except for such Permits the absence of which would not
reasonably be expected to have a Material Adverse Effect on the Representing
Party. The Representing Party is in material compliance with the terms of the
Representing Party Permits. No investigation or review by any Governmental
Entity in respect of the Representing Party is pending or, to the Representing
Party's knowledge, threatened, nor has the Representing Party received notice
from any Governmental Entity of its intention to conduct the same.
Section 3.10 EMPLOYEE PLANS.
(a) SECTION 3.10(A) of the Representing Party's
Disclosure Schedule sets forth a true, correct and complete list of:
(i) all "employee benefit plans," as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which the Representing Party has any obligation or liability,
contingent or otherwise (the "BENEFIT PLANS");
(ii) all employees, consultants and independent
contractors of the Representing Party; and
(iii) all employment, consulting, termination,
profit sharing, severance, change of control, individual compensation or
indemnification agreements, and all bonus or other incentive compensation,
deferred compensation, salary continuation, disability, stock award, stock
option, stock purchase, educational assistance, legal assistance, club
membership, employee discount, employee loan, credit union or vacation
agreements, policies or arrangements under which the Representing Party has any
obligation or liability (contingent or otherwise) in respect of any current or
former officer, director, employee, consultant or contractor of the Representing
Party (the "EMPLOYEE ARRANGEMENTS").
Benefit Plans and Employee Arrangements which cover current or former employees,
consultants, contractors, officers, or directors (or their equivalent) of the
Representing Party are separately identified, by the applicable country, on
SECTION 3.10(A) of the Representing Party's Disclosure Schedule.
(b) None of the Benefit Plans or Employee Arrangements
is subject to Title IV of ERISA, constitutes a defined benefit retirement plan
or is a multi-employer plan described in Section 3(37) of ERISA, and the
Representing Party does not have any obligation or liability (contingent or
otherwise) in respect of any such plans. The Company is not a member of a group
of trades or businesses under common control or treated as a single employer
pursuant to Section 414 of the Code.
(c) The Benefit Plans and Employee Arrangements have
been maintained and administered in all material respects in accordance with
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their terms and applicable Laws. In particular, no individual who has performed
services for the Representing Party has been improperly excluded from
participation in any Benefit Plan or Employee Arrangement.
(d) There are no pending or, to the Representing
Party's knowledge, threatened actions, claims, or proceedings against or
relating to any Benefit Plan or Employee Arrangement (other than routine benefit
claims by persons entitled to benefits thereunder), and, to the knowledge of the
Representing Party, there are no facts or circumstances which could form the
basis for any of the foregoing.
(e) The Representing Party does not have any obligation
or liability (contingent or otherwise) to provide post-retirement life insurance
or health benefits coverage for current or former officers, directors,
employees, consultants or contractors of the Representing Party except (i) as
may be required under Part 6 of Title I of ERISA at the sole expense of the
participant or the participant's beneficiary, (ii) a medical expense
reimbursement account plan pursuant to Section 125 of the Code, or (iii) through
the last day of the calendar month in which the participant terminates
employment with the Representing Party.
(f) None of the assets of any Benefit Plan is stock of
the Representing Party or any of its affiliates, or property leased to or
jointly owned by the Representing Party or any of its affiliates.
(g) Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment becoming due to any employee, consultant or contractor
(current, former, or retired) of the Representing Party, (ii) increase any
benefits under any Benefit Plan or Employee Arrangement or (iii) result in the
acceleration of the time of payment of, vesting of, or other rights in respect
of any such benefits (except as which may be required by the partial or full
termination of any Benefit Plan intended to be qualified under Section 401 of
the Code).
Section 3.11 LABOR MATTERS.
(a) The Representing Party is not a party to any labor
or collective bargaining agreement, and no employees of the Representing Party
are represented by any labor organization. Within the preceding three years,
there have been no representation or certification proceedings, or petitions
seeking a representation proceeding, pending or, to the Representing Party's
knowledge, threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority. Within the
preceding three years, to the Representing Party's knowledge, there have been no
organizing activities involving the Representing Party in respect of any group
of employees of the Representing Party.
(b) There are no strikes, work stoppages, slowdowns,
lockouts, material arbitrations or material grievances or other material labor
disputes pending or, to the knowledge of the Representing Party, threatened
against or involving the Representing Party. There are no unfair labor practice
charges, grievances or complaints pending or, to the Representing Party's
knowledge, threatened by or on behalf of any employee or group of employees of
the Representing Party and, to the knowledge of the Representing Party, there
are no facts or circumstances which could form the basis for any of the
foregoing.
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(c) There are no complaints, charges or claims against
the Representing Party pending or, to the Representing Party's knowledge,
threatened to be brought or filed with any Governmental Entity or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment of any individual by the Representing
Party, and, to the knowledge of the Representing Party, there are no facts or
circumstances which could form the basis for any of the foregoing.
(d) The Representing Party is in material compliance
with all Laws relating to the employment of labor, including all such Laws
relating to wages, hours, the Worker Adjustment and Retraining Notification Act,
as amended ("WARN"), collective bargaining, discrimination, civil rights, safety
and health, workers' compensation and the collection and payment of withholding
and/or Social Security Taxes and any similar Tax.
(e) There has been no "mass layoff" or "plant closing"
as defined by WARN in respect of the Representing Party within the six months
prior to the date hereof.
Section 3.12 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Since the end of the period covered by each Party's
audited financial statements provided under this Agreement, (i) the businesses
of the Representing Party and its Subsidiaries have been conducted in all
material respects in the ordinary course and (ii) there has not been:
(a) a material adverse change in the assets,
liabilities, business, results of operations, condition (financial or otherwise)
or prospects of the Representing Party and its Subsidiaries, taken as a whole,
or any event, occurrence or development which has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Representing Party and its Subsidiaries, taken as a whole;
(b) any declaration, setting aside or payment of any
dividend or other distribution in respect of any shares of capital stock of the
Representing Party, or any repurchase, redemption or other acquisition by the
Representing Party of any Representing Party securities;
(c) any incurrence or assumption by the Representing
Party of any indebtedness for borrowed money (or any renewals, replacements, or
extensions that do not increase the aggregate commitments thereunder) except (i)
in the ordinary and usual course of business consistent with past practice or
(ii) in connection with any capital expenditure permitted by SECTION 4.1 or
SECTION 4.2, as applicable, or (iii) any guarantee, endorsement, or other
incurrence or assumption of liability (whether directly, contingently or
otherwise) by the Representing Party for the obligations of any other person;
(d) any creation or assumption by the Representing
Party of any material Lien on any material asset of the Representing Party other
than Permitted Liens;
(e) any making of any loan, advance or capital
contribution to or investment in any person by the Representing Party other than
loans or advances to employees, contractors or consultants of the Representing
Party made in the ordinary and usual course of business consistent with past
practice;
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(f) (i) any contract or agreement entered into by the
Representing Party on or prior to the date hereof relating to any material
acquisition or disposition of any assets or business or (ii) any modification,
amendment, assignment, termination or relinquishment by the Representing Party
of any contract, license or other right (including, any insurance policy naming
it as a beneficiary or a loss payable payee) that does or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Representing Party, other than those contemplated by this Agreement;
(g) any (i) grant of any severance or termination pay
to any director, officer, employee, consultant or contractor of the Representing
Party; (ii) entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer, employee, consultant or contractor of the Representing Party;
(iii) increase in benefits payable under any existing severance or termination
pay policies or employment agreements; or (iv) increase in compensation, bonus
or other benefits payable to directors, officers, employees, consultants or
contractors of the Representing Party other than, in the case of clause (iv)
only, increases prior to the date hereof in compensation, bonus or other
benefits payable to employees, consultants or contractors of the Representing
Party in the ordinary and usual course of business consistent with past practice
or merit increases in salaries of employees, consultants or contractors at
regularly scheduled times in customary amounts consistent with past practices;
(h) any adoption, entering into, amendment, alteration
or termination of (partially or completely) any Benefit Plan or Employee
Arrangement except as contemplated by this Agreement or to the extent required
by applicable Law;
(i) any (i) making or revoking of any material election
relating to Taxes (as hereinafter defined), (ii) settlement or compromise of any
material claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, or (iii) change to any
material methods of reporting income or deductions for federal income tax
purposes;
(j) any capital expenditures in excess of $25,000
individually and in excess of $100,000 in the aggregate;
(k) any lease, license or grant to any Person of any
rights in any of the Representing Party's assets or properties;
(l) any amendment of the certificate of incorporation
or bylaws of the Representing Party;
(m) any sufferance of any material damage, destruction
or loss (whether or not covered by insurance) to any material assets of the
Representing Party; or
(n) any strike, slowdown or demand for recognition by a
labor organization by or with respect to any of the employees of the
Representing Party.
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Section 3.13 TAX MATTERS.
(a) For purposes of this Agreement: (i) "TAXES" means
any and all federal, state, local, foreign or other taxes of any kind (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any taxing authority, including,
without limitation, taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth, and taxes or other charges in the nature
of excise, withholding, ad valorem or value added, and (ii) "TAX RETURN" means
any return, report or similar statement (including the attached schedules)
required to be filed with respect to any Tax, including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax.
(b) All federal, state, local and foreign Tax Returns
required to be filed by or on behalf of the Representing Party, each affiliated,
combined, consolidated or unitary group of which the Representing Party is a
member (an "AFFILIATED GROUP") have been timely filed or requests for extensions
have been timely filed and any such extension has been granted and has not
expired, and all such filed Tax Returns are complete and accurate except to the
extent any failure to file or any inaccuracies in filed Tax Returns would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on the Representing Party. All Taxes due and owing by the
Representing Party or any Representing Party's Affiliated Group, including
estimates and withheld Taxes, have been paid, or adequately reserved in
accordance with GAAP, except to the extent any failure to pay or reserve for
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Representing Party. There is no audit or
examination in process or pending and there has been no notification of any
request for such audit or other examination and there is no deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to any
Taxes due and owing by the Representing Party or any Representing Party's
Affiliated Group which if determined adversely would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party. All assessments for Taxes due and owing by the Representing
Party or any Representing Party's Affiliated Group with respect to completed and
settled examinations or concluded litigation have been paid, except to the
extent that any failures to pay would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on the Representing Party.
(c) The Representing Party has not (i) entered into a
closing agreement or other similar agreement with a taxing authority relating to
Taxes of the Representing Party or any Representing Party's Affiliated Group
with respect to a taxable period for which the statute of limitations is still
open, or (ii) with respect to U.S. federal income Taxes, granted any waiver of
any statute of limitations with respect to, or any extension of a period for the
assessment of, any income Tax, in either case, that is still outstanding. There
are no Liens relating to material Taxes upon the assets of the Representing
Party or any Representing Party's Affiliated Group other than Liens relating to
Taxes not yet due and Liens that would not, individually or in the aggregate,
have a Material Adverse Effect on the Representing Party. Neither the
Representing Party nor any Representing Party's Affiliated Group is a party to
or is bound by any Tax sharing agreement, Tax indemnity obligation or similar
agreement in respect of Taxes (other than with respect to agreements solely
between or among members of
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the consolidated group of which the Representing Party is the common parent and
agreements and obligations that would not, individually or in the aggregate,
have a Material Adverse Effect on the Representing Party).
(d) Neither the Representing Party nor any Representing
Party's Affiliated Group has taken any action or knows of any fact, agreement,
plan or other circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(e) Neither the Representing Party nor any Affiliated
Group has requested or received any private letter ruling from the Internal
Revenue Service or comparable rulings from other taxing authorities.
(f) Neither the Representing Party nor any member of
any Affiliated Group has any employment, severance or termination agreements,
other compensation arrangements, or Benefit Plans currently in effect which
provide for the payment of any amount (whether in cash or property or the
vesting of property) as a result of any of the transactions contemplated by this
Agreement that individually or collectively (either alone or upon the occurrence
of any additional or subsequent event), could give rise to a payment which is
nondeductible by reason of Section 280G of the Code.
(g) Neither the Representing Party nor any member of
any Affiliated Group has filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(4) applied to any disposition of assets
owned by the Representing Party or any Affiliated Group.
(h) Neither the Representing Party nor any member of
any Affiliated Group has been at any time a United States Real Property Holding
Corporation within the meaning of Section 897(c)(2) of the Code.
Section 3.14 ABSENCE OF QUESTIONABLE PAYMENTS. Neither the
Representing Party nor, to the Representing Party's knowledge, any director,
officer, agent, employee, consultant, contractor or other person acting on
behalf of the Representing Party, has used any corporate or other funds for
unlawful contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of the
Foreign Corrupt Practices Act of 1977, as amended, or any other domestic or
foreign Law. Neither the Representing Party nor, to the Representing Party's
knowledge, any director, officer, agent, employee, consultant, contractor or
other person acting on behalf of the Representing Party, has accepted or
received any unlawful contributions, payments, gifts or expenditures.
Section 3.15 TITLE AND RELATED MATTERS. The Representing
Party or one of its Subsidiaries has good and valid title to, or a valid
leasehold or contractual interest in, all of the properties and assets reflected
in the latest balance sheet included, in the case of the Company in the
Financial Statements and, in the case of PCA, in the SEC Reports, or acquired
after the date thereof (except for properties or assets sold or otherwise
disposed of since the date thereof), free and clear of all Liens, statutory
Liens securing payments not yet due or delinquent or the validity of which is
being contested in good faith by appropriate proceedings, and such imperfections
or irregularities in title that do not materially and adversely affect the
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current use of the properties or assets subject thereto or affected thereby,
affect the ability to convey title thereto or otherwise materially impair the
business operations currently conducted at such properties. As of the date
hereof, SECTION 3.15 of the Representing Party's Disclosure Schedule contains a
complete and correct list of all real property owned or leased by the
Representing Party or any of its Subsidiaries, and a complete and correct list
of each title insurance policy insuring title to any of such real properties.
Section 3.16 MATERIAL CONTRACTS.
(a) COMPANY CONTRACTS.
(i) SECTION 3.16 of the Company Disclosure sets
forth a list of all agreements the Company would be required to file as material
contracts under Item 601 of Regulation S-K were the Company subject to the
Exchange Act and the disclosure requirements of Regulation S-K (the "COMPANY
MATERIAL CONTRACTS"). The Company has heretofore made available to PCA true,
correct and complete copies of all Company Material Contracts. The Company is
not a party to nor bound by any severance or other agreement with any employee,
consultant or contractor pursuant to which such person would be entitled to
receive any additional compensation or an accelerated payment of compensation as
a result of the consummation of the transactions contemplated hereby.
(ii) Each of the Company Material Contracts
constitutes the valid and legally binding obligation of the Company, enforceable
in accordance with its terms, and is in full force and effect, except as may be
limited by (A) bankruptcy laws and other similar laws affecting creditors'
rights generally and (B) general principles of equity. The Company is not in
breach or default in any material respects of any provisions of any Company
Material Contract and, to the Company's knowledge, no event has occurred which
with notice or lapse of time would constitute a material breach or default by
the Company or permit termination, modification or acceleration thereunder, and
which with respect to each of the foregoing, could not be timely cured by the
Company. The Company does not have any knowledge of any termination or material
breach of anticipated termination or material breach by the other parties to any
Company Material Contract or commitment to which it is a party or to which any
of its assets are subject.
(iii) No party to any such Company Material
Contract has given notice to the Company of or made a claim against the Company
in respect of any breach or default thereunder.
(iv) No terms and conditions of any Company
Material Contract or other arrangement or understanding between the Company and
any other Person in effect on the date of this Agreement prevent, delay or
materially restrict the Company's ability to deploy any material portion of its
assets or resources as it deems appropriate, and after the Closing shall
prevent, delay or materially restrict the Company's ability to deploy any
material portion of its assets or resources as it deems appropriate.
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(b) PCA CONTRACTS.
(i) The SEC Reports contain true and accurate
copies of all of the agreements required to be filed as material contracts under
Item 601 of Regulation S-K under the Securities Act (the "PCA MATERIAL
CONTRACTS"). PCA is not a party to nor bound by any severance or other agreement
with any employee, consultant or contractor pursuant to which such person would
be entitled to receive any additional compensation or an accelerated payment of
compensation as a result of the consummation of the transactions contemplated
hereby.
(ii) Each of the PCA Material Contracts
constitutes the valid and legally binding obligation of PCA, enforceable in
accordance with its terms, and is in full force and effect, except as may be
limited by (A) bankruptcy laws and other similar laws affecting creditors'
rights generally and (B) general principles of equity. PCA is not in breach or
default in any material respects of any provisions of any PCA Material Contract
and, to PCA's knowledge, no event has occurred which with notice or lapse of
time would constitute a material breach or default by PCA or permit termination,
modification or acceleration thereunder, and which with respect to each of the
foregoing, could not be timely cured by PCA. PCA does not have any knowledge of
any termination or material breach or anticipated termination or material breach
by the other parties to any PCA Material Contract or commitment to which it is a
party or to which any of its assets are subject.
(iii) No party to any such PCA Material Contract
has given notice to PCA of or made a claim against PCA in respect of any breach
or default thereunder.
(iv) No terms and conditions of any PCA Material
Contract or other arrangement or understanding between PCA and any other Person
in effect on the date of this Agreement prevent, delay or materially restrict
PCA's ability to deploy any material portion of its assets or resources as it
deems appropriate, and after the Closing shall prevent, delay or materially
restrict PCA's ability to deploy any material portion of its assets or resources
as it deems appropriate.
Section 3.17 INSURANCE. SECTION 3.17 of the Representing
Party's Disclosure Schedule sets forth a true and complete list and brief
summary description (including information on the premiums payable in connection
therewith and the scope and amount of the coverage provided thereunder) of
directors and officers liability and general liability insurance policies
maintained by the Representing Party. Such policies have been issued by insurers
which, to the Representing Party's knowledge, are reputable and financially
sound and provide coverage for the operations conducted by the Representing
Party of a scope and coverage consistent with customary industry practice. All
such policies are in full force and effect and no notice of cancellation has
been given with respect to any such policy. All premiums due thereon have been
paid in a timely manner. There are no pending claims or, to the knowledge of the
Representing Party, threatened claims, under any of the Representing Party's
insurance policies.
Section 3.18 SUBSIDIES. No grants, subsidies or similar
arrangements exist directly or indirectly between or among the Representing
Party, on the one hand, and any domestic or foreign Governmental Entity or any
other person, on the other hand. The Representing Party has not requested,
sought, applied for or entered into any grant, subsidy or similar arrangement
directly or indirectly from or with any domestic or foreign Governmental Entity
or any other person.
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Section 3.19 INTELLECTUAL PROPERTY.
(a) For purposes of this Agreement, "INTELLECTUAL
PROPERTY" means:
(i) all issued patents, reissued or reexamined
patents, revivals of patents, utility models, certificates of invention,
registrations of patents and extensions thereof, regardless of country or formal
name (collectively, "ISSUED PATENTS");
(ii) all published or unpublished nonprovisional
and provisional patent applications, reexamination proceedings, invention
disclosures and records of invention (collectively "PATENT APPLICATIONS" and,
with the Issued Patents, the "PATENTS");
(iii) all copyrights, copyrightable works,
semiconductor topography and mask work rights, including all rights of
authorship, use, publication, reproduction, distribution, performance
transformation, moral rights and rights of ownership of copyrightable works,
semiconductor topography works and mask works, and all rights to register and
obtain renewals and extensions of registrations, together with all other
interests accruing by reason of international copyright, semiconductor
topography and mask work conventions (collectively, "COPYRIGHTS");
(iv) common law trademarks, registered trademarks,
applications for registration of trademarks, common law service marks,
registered service marks, applications for registration of service marks, trade
names, registered trade names and applications for registrations of trade names
and trade dress (collectively, "TRADEMARKS");
(v) all technology, ideas, inventions, designs,
proprietary information, manufacturing and operating specifications, know-how,
formulae, trade secrets, technical data, computer programs, hardware, software
and processes related to the business of the Representing Party as such business
is currently conducted and as its business is proposed to be conducted;
(vi) all domain names registered by the
Representing Party; and
(vii) all other intangible intellectual property
assets, properties and rights (whether or not appropriate steps have been taken
to protect, under applicable law, such other intangible assets, properties or
rights).
(b) The Representing Party owns and has good and
marketable title to, or possesses legally enforceable rights to use, all
Intellectual Property used or currently proposed to be used in the business of
the Representing Party as currently conducted or as proposed to be conducted by
the Representing Party (the "REPRESENTING PARTY'S INTELLECTUAL PROPERTY"), free
and clear of all liens, claims or encumbrances. The Representing Party's
Intellectual Property constitutes all of the Intellectual Property necessary to
enable the Representing Party to conduct its business as such business is
currently being conducted and as its business is proposed to be conducted. No
current or former officer, director, stockholder, employee, consultant or
independent contractor has asserted any right, claim or interest in or with
respect to any Representing Party Intellectual Property and the Representing
Party is not aware of a basis for any such claim. There is no unauthorized use,
disclosure or misappropriation of any Representing Party Intellectual Property
by any employee or, to the Representing Party's knowledge, former employee of
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the Representing Party or, to the Representing Party's knowledge, by any other
third party. There are no royalties, fees or other payments payable by the
Representing Party to any third person under any written or oral contract or
understanding by reason of the ownership, use, sale or disposition of
Representing Party Intellectual Property.
(c) To the knowledge of the Representing Party, there
is no unauthorized use, disclosure, infringement or misappropriation of any
Representing Party Intellectual Property, including any license, sublicense and
other agreements to which the Representing Party is a party and pursuant to
which the Representing Party is authorized to use any Intellectual Property
owned by any third party, excluding "off the shelf" or other software at a cost
not exceeding $10,000 and widely available through regular commercial
distribution channels on standard terms and conditions ("THIRD PARTY
INTELLECTUAL PROPERTY") by any third party, including any employee or former
employee of the Representing Party. Other than in respect of agreements with the
Representing Party's officers and directors, the Representing Party has not
entered into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in standard sales or agreements to end users arising in the ordinary
course of business. There are no royalties, fees or other payments payable by
the Representing Party to any Person by reason of the ownership, use, sale or
disposition of Intellectual Property.
(d) The Representing Party is not in breach of any
license, sublicense or other agreement relating to the Representing Party
Intellectual Property or Third Party Intellectual Property Rights. Neither the
execution, delivery or performance of this Agreement or any ancillary agreement
contemplated hereby nor the consummation of the Merger or any of the
transactions contemplated by this Agreement will contravene, conflict with or
result in an infringement on the Representing Party Intellectual Property,
including any Third Party Intellectual Property.
(e) All Patents, registered Trademarks, registered
service marks and registered Copyrights held by the Representing Party are valid
and subsisting. All maintenance and annual fees have been fully paid and all
fees paid during prosecution and after issuance of any patent comprising or
relating to such item have been paid in the correct entity status amounts. The
Representing Party is not infringing, misappropriating or making unlawful use
of, or received any notice or other communication (in writing or otherwise) of
any actual, alleged, possible or potential infringement, misappropriation or
unlawful use of any proprietary asset owned or used by any third party. There is
no proceeding pending or, to the Representing Party's knowledge, threatened nor
has any claim or demand been made, which challenges the legality, validity,
enforceability or ownership of any item of the Representing Party Intellectual
Property or Third Party Intellectual Property or alleges a claim of infringement
of any Patents, Trademarks, service marks, Copyrights or violation of any trade
secret or other proprietary right of any third party. The Representing Party has
not brought a proceeding alleging infringement of the Representing Party
Intellectual Property or breach of any license or agreement involving
Intellectual Property against any third party.
(f) All current and former officers and employees of
the Representing Party have executed and delivered to the Representing Party an
agreement (containing no exceptions or exclusions from the scope of its
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coverage) regarding the protection of proprietary information and the assignment
to the Representing Party of any Intellectual Property arising from services
performed for the Representing Party by such persons. All current and former
consultants and independent contractors to the Representing Party involved in
the development, modification, marketing and servicing of the Representing
Party's products, and/or the Representing Party Intellectual Property have
executed and delivered to the Representing Party an agreement (containing no
exceptions or exclusions from the scope of its coverage) regarding the
protection of proprietary information and the assignment to the Representing
Party of any Intellectual Property arising from services performed for the
Representing Party by such persons. To the Representing Party's knowledge, no
employee or independent contractor of the Representing Party is in violation of
any term of any patent disclosure agreement or employment contract or any other
contract or agreement relating to the relationship of any such employee or
independent contractor with the Representing Party.
(g) The Representing Party has taken all commercially
reasonable and customary measures and precautions necessary to protect and
maintain the confidentiality of all the Representing Party Intellectual Property
(except such Representing Party Intellectual Property whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the full
value of all Intellectual Property it owns or uses. All Intellectual Property
not otherwise protected by Patents or Copyrights ("CONFIDENTIAL INFORMATION")
owned by the Representing Party used by or disclosed to a third party has been
pursuant to the terms of a written agreement between the Representing Party and
such third party.
(h) No product liability claims have been communicated
in writing to or, to the Representing Party's knowledge, threatened against the
Representing Party.
(i) The Representing Party is not subject to any
proceeding or outstanding decree, order, judgment, or stipulation restricting in
any manner the use, transfer, or licensing thereof by the Representing Party, or
which may affect the validity, use or enforceability of such Representing Party
Intellectual Property. The Representing Party is not subject to any agreement
which restricts in any material respect the use, transfer, or licensing by the
Representing Party of the Representing Party Intellectual Property or
Representing Party Products.
Section 3.20 MINUTE BOOKS; STOCK RECORD BOOKS. True and
correct copies of the Representing Party's minute books and, in the case of the
Company, stock record books have been made available to the other. The minute
books of the Representing Party contain true and complete originals or copies of
all minutes of meetings of and actions by the stockholders, Board of Directors
and all committees of the Board of Directors of the Representing Party, and
accurately reflect in all material respects all corporate actions of the
Representing Party which are required by law to be passed upon by the Board of
Directors or stockholders of the Representing Party. The stock record books
accurately reflect all transactions in shares of the Company's capital stock.
Section 3.21 BANK ACCOUNTS; POWERS OF ATTORNEY. SECTION
3.21 of the Representing Party's Disclosure Schedule hereto sets forth a
complete and correct list showing: (a) all banks in which the Representing Party
maintains a bank account or safe deposit box (collectively, "BANK ACCOUNTS"),
together with, as to each such Bank Account, the account number, the names of
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all signatories thereof and the authorized powers of each such signatory and,
with respect to each such safe deposit box, the number thereof and the names of
all persons having access thereto; and (b) the names of all persons holding
powers of attorney from the Representing Party, true and correct copies thereof
which have been delivered to the other.
Section 3.22 DISCLOSURE. The representations and warranties
by the Representing Party in this Agreement and the statements contained in the
schedules, certificates and other writings furnished and to be furnished by the
Representing Party to the other party pursuant to this Agreement, when
considered as a whole and giving effect to any supplements or amendments thereof
prior to the time of signing on the date hereof, do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact necessary to make the statements herein, in light of the
circumstances under which they were or shall be made, not misleading, it being
understood that as used in this SECTION 3.22 "material" means material to the
Representing Party and its Subsidiaries, taken as a whole. The Representing
Party has provided to the other copies of all contracts and agreements that can
be reasonably construed as material to the business of the Representing Party.
Section 3.23 BROKERS OR FINDERS.
(a) The Company represents, as to itself, its
Subsidiaries and its affiliates, that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any brokers'
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement; and the Company agrees to
indemnify and hold PCA harmless from and against any and all claims, liabilities
or obligations with respect to any other fees, commissions or expenses asserted
by any person on the basis of any act or statement alleged to have made by such
party or its affiliates.
(b) PCA represents, as to itself, Merger Sub, its
Subsidiaries and its affiliates, that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any brokers'
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement; and PCA agrees to indemnify and
hold the Company harmless from and against any and all claims, liabilities or
obligations with respect to any other fees, commissions or expenses asserted by
any person on the basis of any act or statement alleged to have been made by
such party or its affiliates.
Section 3.24 NO PRIOR ACTIVITIES. Except for obligations
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby, PCA
represents and warrants that Merger Sub has neither incurred any obligation or
liability nor engaged in any business or activity of any type or kind whatsoever
or entered into any agreement or arrangement with any person.
ARTICLE IV
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 4.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, the Company will conduct its operations in the ordinary and
usual course of business consistent with past practice and, to the extent
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consistent therewith, with no less diligence and effort than would be applied in
the absence of this Agreement, use commercially reasonable efforts to preserve
intact its current business organizations, keep available the service of its
current officers and employees, preserve its relationships with customers,
suppliers and others having business dealings with it and preserve the goodwill
of the Company through the Effective Time. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this Agreement or
in SCHEDULE 4.1, prior to the Effective Time, the Company will not, without the
prior written consent of PCA:
(a) amend its certificate of incorporation or bylaws
(or other similar organizational or governing instruments), as each such
document is in effect on the date hereof;
(b) authorize for issuance, issue, sell, deliver or
agree or commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities convertible into or
exchangeable for any stock or any equity equivalents (including, any stock
options or stock appreciation rights), except for: (i) the issuance or sale of
Shares pursuant to outstanding Company Stock Options and (ii) the authorization
for issuance(s) after the Closing of the Merger of (x) up to 8,000,000 shares of
PCA Common Stock at a price of $0.30 per share and (y) warrants exercisable for
up to an additional 4,000,000 shares of PCA Common Stock to certain prospective
financial investors (the "INVESTORS")
(c) (i) split, combine or reclassify any shares of its
capital stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire, directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company (other than the Merger);
(e) (i) incur or assume any long-term or short-term
debt or issue any debt securities; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than customary
loans or advances to employees, consultants or contractors in the ordinary and
usual course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of the Company; or (v) mortgage or pledge any
of its material assets, tangible or intangible, or create or suffer to exist any
Lien thereupon, other than as disclosed in the schedules hereto and Permitted
Liens;
(f) (i) except as may be required by Law or as
contemplated by this Agreement, enter into, adopt or amend or terminate
(partially or completely) any Benefit Plan, Employee Arrangement (including, the
repricing of any stock options or the acceleration or vesting of any stock
options), stock appreciation right, restricted stock, performance unit, stock
equivalent or stock purchase agreement for the benefit or welfare of any
director, officer, employee, consultant or contractor in any manner, (ii) except
as required under existing agreements, increase in any manner the compensation
or fringe benefits of any director, officer, employee, consultant or contractor
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or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including, the granting of stock appreciation rights or
performance units) or grant any completion bonuses or change of control payments
in respect of the Merger or that will be affected thereby; or (iii) hire,
promote or change the classification or status in respect of any employee or
individual; PROVIDED, HOWEVER, that PCA shall not unreasonably withhold or delay
any consent sought to hire, promote or change the classification or status of
any employee or individual.
(g) acquire, sell, lease or dispose of any assets
outside the ordinary and usual course of business consistent with past practice
or any assets which in the aggregate are material to the Company, enter into any
commitment or transaction outside the ordinary and usual course of business
consistent with past practice or grant any exclusive distribution rights, except
for any rights that may be sold or granted in connection with the proposed
transactions with the Investors;
(h) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein;
(i) settle or compromise any pending or threatened
suit, action or claim relating to the transactions contemplated hereby;
(j) take any action (including, any action otherwise
permitted by this Section 4.2) that would prevent or impede the Merger from
qualifying as a "reorganization" under Section 368(a) of the Code;
(k) fail to comply in any material respect with any Law
applicable to the Company or its assets which would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on the Company;
(l) dispose of or permit to lapse any rights to the use
of any patent, trademark, trade name, copyright or other intangible asset that
is material to the Company, or dispose of or disclose to any Person any trade
secret, formula, process or know-how not theretofore a matter of public
knowledge unless, in respect of disclosure, such Person has executed a
confidentiality agreement in form acceptable to the Company;
(m) sell or dispose of any Company Intellectual
Property;
(n) change any of the banking or safe deposit
arrangements described in SECTION 3.21 hereto, except in the ordinary course of
business;
(o) fail to maintain its books, accounts and records in
the usual, regular and ordinary manner on a basis consistent with prior years;
or
(p) take, propose to take, or agree in writing or
otherwise to take, any of the actions described in SECTION 4.1(A) through
SECTION 4.1(O) or any action which would make any of the representations or
warranties of the Company contained in this Agreement untrue, incomplete or
incorrect.
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Section 4.2 CONDUCT OF BUSINESS OF PCA. Except as
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, PCA will conduct its operations in the ordinary and usual course
of business consistent with past practice and, to the extent consistent
therewith, with no less diligence and effort than would be applied in the
absence of this Agreement, use commercially reasonable efforts to preserve
intact its current business organizations, keep available the service of its
current officers and employees, preserve its relationships with customers,
suppliers and others having business dealings with it and preserve the goodwill
of PCA through the Effective Time. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement or in
SCHEDULE 4.2, prior to the Effective Time, PCA will not, without the prior
written consent of Company:
(a) amend its certificate of incorporation or bylaws
(or other similar organizational or governing instruments), as each such
document is in effect on the date hereof;
(b) authorize for issuance, issue, sell, deliver or
agree or commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities convertible into or
exchangeable for any stock or any equity equivalents (including, any stock
options or stock appreciation rights), except for the issuance or sale of PCA
Common Stock pursuant to outstanding PCA Stock Options, and except for the
issuance of PCA Stock Options to purchase up to an aggregate of no shares of PCA
Common Stock to employees, consultants and directors pursuant to PCA's Stock
Option Plans and consistent with past practices;
(c) (i) split, combine or reclassify any shares of its
capital stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire, directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of PCA (other than the Merger);
(e) (i) incur or assume any long-term or short-term
debt or issue any debt securities; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than customary
loans or advances to employees, consultants or contractors in the ordinary and
usual course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of PCA or Merger Sub; or (v) mortgage or pledge
any of its material assets, tangible or intangible, or create or suffer to exist
any Lien thereupon, other than as disclosed in the schedules hereto and
Permitted Liens;
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(f) (i) except as may be required by Law or as
contemplated by this Agreement, enter into, adopt or amend or terminate
(partially or completely) any Benefit Plan, Employee Arrangement (including, the
repricing of any stock options or the acceleration or vesting of any stock
options), stock appreciation right, restricted stock, performance unit, stock
equivalent or stock purchase agreement for the benefit or welfare of any
director, officer, employee, consultant or contractor in any manner, (ii) except
as required under existing agreements, increase in any manner the compensation
or fringe benefits of any director, officer, employee, consultant or contractor
or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including, the granting of stock appreciation rights or
performance units) or grant any completion bonuses or change of control payments
in respect of the Merger or that will be affected thereby; or (iii) hire,
promote or change the classification or status in respect of any employee or
individual; PROVIDED, HOWEVER, that the Company shall not unreasonably withhold
or delay any consent sought to hire, promote or change the classification or
status of any employee or individual.
(g) acquire, sell, lease or dispose of any assets
outside the ordinary and usual course of business consistent with past practice
or any assets which in the aggregate are material to PCA, enter into any
commitment or transaction outside the ordinary and usual course of business
consistent with past practice or grant any exclusive distribution rights;
(h) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein;
(i) settle or compromise any pending or threatened
suit, action or claim relating to the transactions contemplated hereby;
(j) take any action (including, any action otherwise
permitted by this SECTION 4.2) that would prevent or impede the Merger from
qualifying as a "reorganization" under Section 368(a) of the Code;
(k) fail to comply in any material respect with any Law
applicable to PCA or its assets which would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on PCA;
(l) dispose of or permit to lapse any rights to the use
of any patent, trademark, trade name, copyright or other intangible asset that
is material to PCA, or dispose of or disclose to any Person any trade secret,
formula, process or know-how not theretofore a matter of public knowledge
unless, in respect of such disclosure, such Person has executed a
confidentiality agreement in form acceptable to PCA;
(m) sell or dispose of any PCA Intellectual Property;
(n) change any of the banking or safe deposit
arrangements described in SECTION 3.21 hereto, except in the ordinary course of
business;
(o) fail to maintain its books, accounts and records in
the usual, regular and ordinary manner on a basis consistent with prior years;
or
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(p) take, propose to take, or agree in writing or
otherwise to take, any of the actions described in SECTION 4.2(A) through
SECTION 4.2(O) or any action which would make any of the representations or
warranties of PCA contained in this Agreement untrue, incomplete or incorrect.
Section 4.3 CONDUCT OF BUSINESS OF MERGER SUB. Except as
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, Merger Sub will not, without the prior written consent of
Company, take any action unless in furtherance of the Merger.
Section 4.4 ACCESS TO INFORMATION.
(a) Between the date hereof and the Effective Time, the
Company, PCA and Merger Sub will each give the authorized representatives
(including counsel, financial advisors and auditors) of the other reasonable
access to all its employees, consultants, contractors, plants, offices,
warehouses and other facilities and to all its books and records, will permit
the other to make such inspections and investigations as each may require. Each
of the Company, PCA and Merger Sub will cause its officers to furnish the other
with such financial and operating data and other information in respect of its
business, properties and personnel as each may from time to time reasonably
request, provided that no investigation pursuant to this SECTION 4.4(A) shall
affect or be deemed to modify any of the representations or warranties made by
each of the Company, PCA and Merger Sub.
(b) Each of the Company, PCA and Merger Sub will hold
and will cause its authorized representatives to hold in confidence all
documents and information concerning the other furnished in connection with the
transactions contemplated by this Agreement.
Section 4.5 CONTINUATION OF INSURANCE COVERAGE. From the
date hereof to the Closing, each of the Company and PCA shall keep in full force
and effect insurance coverage for its assets and operations comparable in amount
and scope to the coverage now maintained covering its assets and operations.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 COMPANY WRITTEN CONSENT. The Company shall take
all action necessary under all applicable Laws to obtain approval for the
actions contemplated by this agreement through action by written consent of its
stockholders.
Section 5.2 MERGER SUB WRITTEN CONSENT. The Merger Sub
shall take all action necessary under all applicable Laws to obtain approval for
the actions contemplated by this agreement through action by written consent of
its stockholders.
Section 5.3 PCA MANAGEMENT.
(a) PCA BOARD OF DIRECTORS. Prior to the Effective
Time, the PCA Board of Directors in place immediately prior to the Effective
Time will elect those individuals listed on SECTION 5.3(A) of the Company
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Disclosure Schedule to be directors of PCA, with such elections to take effect
at the Effective Time. After electing the individuals listed on SECTION 5.3(A)
of the Company Disclosure Schedule to be PCA directors as set forth in this
SECTION 5.3(A) and after electing the individuals listed on SECTION 5.3(B) of
the Company Disclosure Schedule as PCA officers as set forth in SECTION 5.3(B),
the members of the PCA Board of Directors in place immediately prior to the
Effective Time will resign as members of the PCA Board of Directors, with such
resignations to take effect at the Effective Time.
(b) PCA OFFICERS. Prior to the Effective Time, and
prior to the time that the members of the PCA Board of Directors tender
resignations as set forth in SECTION 5.3(A), the officers of PCA in place
immediately prior to the Effective Time will resign as officers of PCA, with
such resignations to take effect at the Effective Time. The PCA Board of
Directors in place immediately prior to the Effective Time will elect those
individuals listed on SECTION 5.3(B) of the Company Disclosure Schedule to those
positions set forth opposite their names, with such elections to take effect at
the Effective Time. The officers of PCA at the Effective Time shall hold office
in accordance with the certificate of incorporation and bylaws of PCA until
their successors are duly elected or appointed and qualified or until their
earlier death, resignation or removal.
Section 5.4 COMMERCIALLY REASONABLE EFFORTS.
(a) Subject to the terms and conditions of this
Agreement, each party will use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate the Merger and the other
transactions contemplated by this Agreement. Neither the Company, PCA nor Merger
Sub will take, agree to take or knowingly permit to be taken any action or do or
knowingly permit to be done anything in the conduct of the business of the
companies, or otherwise, which would be contrary to or in breach of any of the
terms or provisions of this Agreement.
(b) In furtherance and not in limitation of the
covenants of the parties contained in SECTIONS 5.1 AND 5.2, each of PCA, Merger
Sub and the Company shall use commercially reasonable efforts to resolve such
objections, if any, as may be asserted by a Governmental Entity or other person
in respect of the transactions contemplated hereby, including, without
limitation, under any antitrust or other Law, or by any Dissenting Stockholder
in respect of Dissenting Shares. In connection with the foregoing, if any
administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement, each of PCA, Merger Sub and the
Company shall cooperate in all respects with each other and use its respective
commercially reasonable efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction, or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this SECTION
5.4(B) shall (i) limit a party's right to terminate this Agreement pursuant to
SECTION 7.2 so long as such party has up to then complied in all material
respects with its obligations under this SECTION 5.4(B), or (ii) require PCA to
dispose or hold separate any part of its or the Company's business or operations
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(or a combination of PCA's and the Company's business or operations), or comply
with any other material restriction affecting its business or operations.
(c) The Company and PCA agree that in connection with
any litigation which may be brought against the Company or its directors or PCA
or its directors relating to the transactions contemplated hereby, the party
subject to such litigation will keep the other, and any counsel which the other
may retain at its own expense, informed of the course of such litigation, to the
extent the other is not also a party thereto. The parties agree that they will
consult with each other prior to entering into any settlement or compromise of
any such litigation, and that no such settlement or compromise will be entered
into by either party without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
Section 5.5 PUBLIC ANNOUNCEMENTS. Each of PCA, Merger Sub
and the Company will consult with one another before issuing any press release
or otherwise making any public statements in respect of the transactions
contemplated by this Agreement, including, the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable Law, as determined by PCA, Merger Sub or
the Company, as the case may be, a copy of which shall be sent simultaneously to
the other party upon such release.
Section 5.6 TIMELY FILING OF PCA PERIODIC REPORTS. PCA
shall timely file all required reports with the SEC as required by the Exchange
Act and rules and regulations of the SEC, including, but not limited to, its
Annual Report on Form 10-K.
Section 5.7 EMPLOYEE MATTERS.
(a) PCA will cause the Surviving Corporation to honor
the obligations of the Company under the provisions of all Benefit Plans and
Employee Arrangements set forth in the Company's Disclosure Schedule, subject to
PCA's right to amend or terminate any such Benefit Plan or Employee Arrangement
in accordance with its terms. After the Effective Time, the employees of the
Company will be eligible to participate in the Company's Benefit Plans or, if so
determined by PCA, PCA's applicable Benefit Plans, as such plans may be in
effect from time to time, and, at PCA's sole discretion, will become employees
of PCA. With respect to each such employee of the Company, service with the
Company may be counted for purposes of determining periods of eligibility to
participate or to vest in benefits under any applicable Benefit Plan of PCA. At
PCA's sole discretion, administrative functions, including but not limited to
payroll processing, may be transferred to processors of PCA's choosing.
(b) At the Closing, PCA may cause the Surviving
Corporation to deposit with an escrow agent reasonably acceptable to all parties
hereto and pursuant to the terms of a mutually acceptable escrow agreement, an
amount sufficient to pay any amount due pursuant to retention agreements
disclosed in the PCA Disclosure Schedule.
Section 5.8 AFFILIATE AGREEMENTS. SECTION 5.8 of the
Company Disclosure Schedule sets forth a list of all persons who are, and all
persons who to the Company's knowledge will be at the Closing Date, "affiliates"
of the Company for purposes of Rule 145 under the Securities Act. The Company
will cause such list to be updated promptly through the Closing Date. No later
than 15 days after the date of this Agreement (but in any event prior to the
Effective Time), the Company shall cause its "affiliates" to deliver to PCA an
Affiliate Agreement in substantially the form attached hereto as EXHIBIT C.
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Section 5.9 LOCK-UP AGREEMENTS. SECTION 5.9 of the PCA
Disclosure Schedule sets forth a list of certain of PCA's officers, directors
and stockholders who hold a substantial number of shares of PCA Common Stock
(the "PCA AFFILIATES"). Prior to the Effective Time, PCA shall cause all PCA
Affiliates to deliver to PCA a Lock-up Agreement.
Section 5.10 CANCELLATION OF OUTSTANDING PCA OPTIONS,
WARRANTS AND CONVERSION RIGHTS UNDER OUTSTANDING CONVERTIBLE NOTES. SECTION 5.10
of the PCA Disclosure Schedule sets forth a list of all PCA stock options,
warrants and convertible notes which have conversion rights outstanding as of
August 1, 2002 ("PCA RIGHTS"). Prior to the Effective Time, PCA agrees to enter
into agreements with all holders of PCA Rights to cancel such PCA Rights as of a
date prior to the Effective Time.
Section 5.11 SATISFACTION OF CERTAIN PCA OBLIGATIONS. The
Company shall use all reasonable efforts to enter into agreements with certain
PCA creditors to pay to such creditors certain amounts due them by PCA in
satisfaction of certain PCA obligations and liabilities (the "PCA OBLIGATIONS"),
as set forth in SECTION 5.11 of the Company Disclosure Schedule.
Section 5.12 ANTITAKEOVER STATUTES. If any antitakeover
statute is or may become applicable to the Merger, each of PCA and the Company
shall take such actions as are necessary so that the transactions contemplated
by this Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any antitakeover statute on the Merger.
Section 5.13 THIRD PARTY CONSENTS.
(a) Each of PCA, Merger Sub and the Company shall use
its commercially reasonable efforts to obtain at the earliest practicable date
all consents of third parties (including, but not limited to, such as are listed
on SECTION 3.3 of the Company Disclosure Schedule or PCA Disclosure Schedule, as
applicable) and Governmental Entities necessary to the consummation of the
transactions contemplated hereby (the "THIRD PARTY CONSENTS") and will provide
to the other parties hereto copies of each such Third Party Consent promptly
after it is obtained. Each of PCA, Merger Sub and the Company agrees to
cooperate fully with the other parties hereto in connection with the obtaining
of the Third Party Consents; PROVIDED, HOWEVER, that no party shall be required
to pay any additional sums to secure such Third Party Consents of the other
parties hereto.
(b) In furtherance and not in limitation of the
covenants of the parties contained in SECTION 5.13(A), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement, each of PCA, Merger Sub and the Company shall
cooperate in all respects with each other and use its respective commercially
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reasonable efforts to contest and resist any such action or proceeding and to
have vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order, whether temporary, preliminary or permanent, that is in effect and
that prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement.
(c) If any objections are asserted with respect to the
transactions contemplated hereby or if any suit is instituted by any
Governmental Entity or any private party challenging any of the transactions
contemplated hereby as violative of any regulatory Law, each of PCA, Merger Sub
and the Company shall use its commercially reasonable efforts to resolve any
such objections or challenge as such Governmental Entity or private party may
have to such transactions under such regulatory Law so as to permit consummation
of the transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO
EFFECT THE MERGER. The respective obligations of each party to consummate the
transactions contemplated by this Agreement are subject to the fulfillment at or
prior to the Effective Time of each of the following conditions, any or all of
which may be waived in whole or in part by the party being benefited thereby, to
the extent permitted by applicable Law:
(a) This Agreement shall have been approved and adopted
by the Company's stockholders and by Merger Sub's stockholders.
(b) The Company, PCA and Merger Sub shall have timely
obtained from each Governmental Entity all approvals, waivers and consents, if
any, necessary for consummation of or in connection with the transactions
contemplated hereby, including such approvals, waivers and consents as may be
required under the Securities Act and under blue sky laws, if any, except for
such authorizations, consents or approvals, the failure of which to have been
made or obtained does not and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(c) There shall not be in effect any Law of any
Governmental Entity of competent jurisdiction restraining, enjoining or
otherwise preventing consummation of the transactions contemplated by this
Agreement and no Governmental Entity shall have instituted any proceeding which
continues to be pending seeking any such Law.
Section 6.2 CONDITIONS TO THE OBLIGATIONS OF PCA AND MERGER
SUB. The obligations of PCA and Merger Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following additional conditions, any or all of
which may be waived in whole or part by PCA and Merger Sub to the extent
permitted by applicable Law:
(a) The representations and warranties of the Company
contained herein shall be true (for the purposes of this SECTION 6.2(A), without
regard to any materiality or Material Adverse Effect qualifier contained
therein), except where the failure to be true, individually or in the aggregate,
has not had or is not reasonably expected to have a Material Adverse Effect on
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the Company, in each case on and as of the Closing (except for representations
and warranties made as of a specified date, which shall speak only as of the
specified date);
(b) The Company shall have performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing;
or (c) The Company shall have delivered to PCA a certificate, dated the date of
the Closing, signed by the President of the Company (but without personal
liability thereto), certifying as to the fulfillment of the conditions specified
in SECTION 6.2(A) and SECTION 6.2(B).
(d) The Company shall have entered into any additional
agreements provided for under Article V to which the Company is a party and, to
the extent performance of any such additional agreements is to have occurred
prior to the Effective Time, the Company and the other parties thereto shall
have fully performed their respective obligations under those additional
agreements.
Section 6.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to consummate the transactions contemplated by
this Agreement are subject to the fulfillment at or prior to the Effective Time
of each of the following conditions, any or all of which may be waived in whole
or in part by the Company to the extent permitted by applicable Law:
(a) The representations and warranties of PCA and
Merger Sub contained herein shall be true (for the purposes of this SECTION
6.3(A), without regard to any materiality or Material Adverse Effect qualifier
contained therein), except where the failure to be true, individually or in the
aggregate, has not had or is not reasonably expected to have a Material Adverse
Effect on PCA, in each case on and as of the Closing Date (except for
representations and warranties made as of a specified date, which shall speak
only as of the specified date).
(b) PCA and Merger Sub shall have performed or complied
in all material respects with all agreements and conditions contained herein
required to be performed or complied with by it prior to or at the time of the
Closing.
(c) PCA shall have performed and complied in all
respects with the obligations set forth in SECTION 5.3.
(d) PCA shall have delivered to the Company a
certificate, dated the date of the Closing, signed by an executive officer of
PCA (but without personal liability thereto), certifying as to the fulfillment
of the conditions specified in SECTION 6.3(A) and SECTION 6.3(B).
(e) The Company shall have completed to its
satisfaction, as determined by the Company in its sole discretion, a due
diligence examination of PCA and its assets and business.
(f) Prior to the Closing, there shall not have occurred
any Material Adverse Effect on PCA.
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(g) The Merger Sub and PCA shall have entered into any
additional agreements provided for under Article V to which they are a party
and, to the extent performance of any such additional agreements is to have
occurred prior to the Effective Time, they and the other parties thereto shall
have fully performed their respective obligations under those additional
agreements.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.1 TERMINATION BY MUTUAL AGREEMENT. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time, whether before or after the approval of the Merger by the
Company Stockholder Approval and Merger Sub Stockholder Approval referred to in
SECTION 6.1(A), by mutual written consent of the Company, PCA and Merger Sub by
action of their respective boards of directors.
Section 7.2 TERMINATION BY EITHER PCA OR THE COMPANY. This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time by action of the board of directors of either PCA or the
Company if:
(a) the Merger shall not have been consummated by
October 31, 2002, whether such date is before or after the date of approval of
the Merger by the Company Stockholder Approval and Merger Sub Stockholder
Approval (the "TERMINATION DATE"); PROVIDED, HOWEVER, that if any condition of
Closing set forth in SECTION 6.1 that remains reasonably capable of satisfaction
has not been fulfilled or waived prior to October 31, 2002, the Termination Date
shall be automatically extended to November 30, 2002;
(b) after the Company solicits approval for the actions
contemplated by this agreement through action by written consent of its
stockholders, the Company Stockholder Approval shall not have been obtained;
(c) the Merger Sub Stockholder Approval shall not have
been obtained;
(d) the PCA Affiliates have not entered into a Lock-up
Agreement; or
(e) any Law permanently restraining, enjoining or
otherwise prohibiting consummation of the Merger shall become final and
non-appealable (whether before or after the approval of the Merger by the
Company Stockholder Approval and Merger Sub Stockholder Approval); PROVIDED,
HOWEVER, that the right to terminate this Agreement pursuant to this SECTION 7.2
shall not be available to any party that has breached in any material respect
its obligations under this Agreement in any manner that shall have proximately
contributed to the occurrence of the failure of the Merger to be consummated.
Section 7.3 TERMINATION BY THE COMPANY. This Agreement may
be terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Stockholder Approval and Merger Sub Stockholder Approval referred to in SECTION
6.1(A), by action of the Company board of directors, if:
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(a) (i) any of PCA's representations and warranties
shall have been inaccurate as of the date of this Agreement, such that the
condition set forth in SECTION 6.3 would not be satisfied, or (ii) if (A) any of
PCA's representations and warranties become inaccurate as of a date subsequent
to the date of this Agreement (as if made on such subsequent date), such that
the condition set forth in SECTION 6.3 would not be satisfied and (B) such
inaccuracy has not been cured by PCA within ten (10) business days after its
receipt of written notice thereof and remains uncured at the time notice of
termination is given, or (iii) PCA's representation and warranties with respect
to its capitalization are inaccurate such that there are shares or rights to
obtain shares outstanding in addition to those initially disclosed, or (iv) any
of PCA's covenants contained in this Agreement shall have been breached, such
that the condition set forth in SECTION 6.3 would not be satisfied;
(b) the board of directors of PCA shall have withdrawn
its recommendation of this Agreement or modified the recommendation in a manner
adverse to the Company or shall have resolved to do the foregoing;
(c) the Company's due diligence examination of PCA and
its assets and business reveals information that varies materially or adversely
from the understandings upon which the Company agreed to proceed with the
transactions contemplated by this Agreement, as determined by the Company in its
reasonable discretion;
(d) since the date of this Agreement, PCA shall have
suffered any Material Adverse Effect.
Section 7.4 TERMINATION BY PCA. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Stockholder Approval and Merger Sub Stockholder Approval referred to in SECTION
6.1(A), by action of the Board of Directors of PCA, if:
(a) (i) any of the Company's representations and
warranties shall have been inaccurate as of the date of this Agreement, such
that the condition set forth in SECTION 6.2 would not be satisfied, or (ii) if
(A) any of the Company's representations and warranties become inaccurate as of
a date subsequent to the date of this Agreement (as if made on such subsequent
date), such that the condition set forth in SECTION 6.2 would not be satisfied
and (B) such inaccuracy has not been cured by the Company within ten business
days after its receipt of written notice thereof and remains uncured at the time
notice of termination is given, or (iii) any of the Company's covenants
contained in this Agreement shall have been breached, such that the condition
set forth in SECTION 6.2 would not be satisfied;
(b) the board of directors of the Company shall have
withdrawn its recommendation of this Agreement or modified the recommendation in
a manner adverse to PCA or shall have resolved to do the foregoing; or
(c) if, since the date of this Agreement, there shall
have occurred any Material Adverse Effect on the Company.
Section 7.5 EFFECT OF TERMINATION AND ABANDONMENT. In the
event of termination of this Agreement and the abandonment of the Merger
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pursuant to this ARTICLE VII, this Agreement (other than this SECTION 7.5,
SECTION 4.4(B) and SECTION 8.2(A)) shall become void and of no effect with no
liability on the part of any party hereto (or of any of its directors, officers,
employees, consultants, contractors, agents, legal and financial advisors, or
other representatives); PROVIDED, HOWEVER, that except as otherwise provided
herein, no such termination shall relieve any party hereto of any liability or
damages resulting from any willful breach of this Agreement.
Section 7.6 AMENDMENT. This Agreement may be amended by
action taken by the Company, PCA and Merger Sub at any time before or after
approval of the Merger by the Company Stockholder Approval and Merger Sub
Stockholder Approval but, after any such approvals, no amendment shall be made
which changes the amount or form of the Merger Consideration. This Agreement may
not be amended except by an instrument in writing signed on behalf of the
parties hereto.
Section 7.7 EXTENSION; WAIVER. At any time prior to the
Effective Time, each party hereto may (a) extend the time for the performance of
any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document, certificate or writing delivered pursuant hereto, or
(c) waive compliance by the other party with any of the agreements or conditions
contained herein. Any agreement on the part of either party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party hereto to assert any of
its rights hereunder shall not constitute a waiver of such rights.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time.
Section 8.2 ENTIRE AGREEMENT; ASSIGNMENT.
(a) This Agreement constitutes the entire agreement
between the parties hereto in respect of the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties in respect of the subject matter hereof.
(b) Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by operation of Law
(including, by merger or consolidation) or otherwise. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
Section 8.3 NOTICES. All notices, requests, instructions or
other documents to be given under this Agreement shall be in writing and shall
be deemed given, (a) five business days following sending by registered or
certified mail, postage prepaid, (b) when sent if sent by facsimile; PROVIDED,
HOWEVER, that the facsimile is promptly confirmed by telephone confirmation
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thereof by the intended recipient, (c) when delivered, if delivered personally
to the intended recipient, and (d) one business day following sending by
overnight delivery via a national courier service, and in each case, addressed
to a party at the following address for such party:
if to PCA or Merger Sub, to: Premier Classic Art, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
if to the Company, to: Parentech, Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to: Xxxx Xxxx Xxxx & Freidenrich LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the other in writing in the manner set
forth above.
Section 8.4 GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the Laws of the State of Delaware, without
giving effect to the choice of Law principles thereof.
Section 8.5 DESCRIPTIVE HEADINGS. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
Section 8.6 PARTIES IN INTEREST. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and, nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 8.7 SEVERABILITY. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any person or any circumstance, is invalid or unenforceable, (a) a
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suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section 8.8 SPECIFIC PERFORMANCE. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement, this being in
addition to any other remedy to which they are entitled at Law or in equity.
Section 8.9 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 8.10 FURTHER ASSURANCES. Each party to this
Agreement agrees (a) to furnish upon request to the other party such further
information, (b) to execute and deliver to the other party such other documents
and (c) to do such other acts and things as the other party reasonably requests
for the purpose of carrying out the intent of this Agreement and the documents
and instruments referred to herein.
Section 8.11 INTERPRETATION.
(a) The words "hereof," "herein," "herewith" and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit, and schedule references are to the
articles, sections, paragraphs, exhibits, and schedules of this Agreement unless
otherwise specified. Whenever the words "include," "includes," or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation." All terms defined in this Agreement shall have the defined
meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument, or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument, or statute as from time to time, amended, qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date
hereof," and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to November 1, 2002.
(c) The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
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question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
Section 8.12 DEFINITIONS. As used herein,
(a) "AFFILIATE" has the meaning given to it in Rule
12b-2 of Regulation 12B under the Exchange Act.
(b) "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" has
the meaning provided in Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
(c) "KNOW" or "KNOWLEDGE" means, (i) in respect of PCA,
the knowledge of PCA's executive officers and (ii) in respect of the Company,
the knowledge of the Company's executive officers.
(d) "LIEN" means, in respect of any asset (including,
any security) any mortgage, lien, pledge, charge, security interest, or
encumbrance of any kind in respect of such asset.
(e) "PERMITTED LIEN" means a statutory Lien not yet
delinquent; a purchase money Lien arising in the ordinary course of business
consistent with past practices; a Lien reflected in the financial statements of
the applicable party; or a Lien which does not materially detract from the value
or impair the use of the asset or property in question.
(f) "PERSON" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
(g) "SUBSIDIARY" means, in respect of any party, any
corporation, partnership or other entity or organization, whether incorporated
or unincorporated, of which (i) such other party or any other subsidiary of such
party is a general partner (excluding such partnerships where such party or any
subsidiary of such party does not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions in respect of such corporation
or other organization is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one or
more of its subsidiaries.
(h) "TRANSFER TAXES" means any and all state, local,
foreign or provincial sales, use, real property, stock transfer or similar taxes
(including any interest or penalties with respect thereto, but not including any
shareholder level taxes based upon net income) attributable to the transactions
contemplated herein.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on its behalf as of the date
first above written.
PARENTECH, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
PREMIER CLASSIC ART, INC.
By: /S/ XXXXXXX X. XXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
PREMIER CLASSIC ACQUISITION CORPORATION
By: /S/ XXXXXXX X. XXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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EXHIBITS
Exhibit A - Lock-up Agreement
Exhibit B - Certificate of Merger (see Exhibit 2.2) Exhibit C - Form of
Affiliate Agreement
The contents of Exhibits A and C to the Agreement and Plan of Merger and
Reorganization have been omitted pursuant to Item 601 of Regulation S-K. The
Registrant agrees to furnish supplementally a copy of any omitted exhibit to the
Securities and Exchange Commission upon request. Exhibit B to the Agreement and
Plan of Merger and Reorganization is filed at Exhibit 2.2.
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