EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AVX CORPORATION,
ADMIRAL XXXX ACQUISITION SUB, INC.
AND
AMERICAN TECHNICAL CERAMICS CORP.
Dated as of June 15, 2007
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TABLE OF CONTENTS
ARTICLE I THE MERGER...................................................... 2
1.1. The Merger....................................................... 2
1.2. Effective Time................................................... 2
1.3. Effect of the Merger............................................. 2
1.4. Certificate of Incorporation and By-Laws of the Surviving
Corporation .................................................. 2
1.5. Directors and Officers........................................... 2
1.6. Conversion of Capital Stock; Stock Options....................... 2
1.7. Closing.......................................................... 4
1.8. Dissenting Shares................................................ 4
1.9. Taking of Necessary Action; Further Action....................... 5
ARTICLE II CLOSING PAYMENTS; PAYMENTS OF MERGER CONSIDERATION............. 5
2.1. Closing Payments................................................. 5
2.2. Exchange of Certificates and Option Agreements.................. 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................. 7
3.1. Organization, Good Standing and Qualification of the Company..... 7
3.2. Subsidiaries..................................................... 8
3.3. Authorization; Binding Obligations............................... 9
3.4. Capitalization................................................... 9
3.5. Consents and Approvals........................................... 10
3.6. No Violation..................................................... 11
3.7. SEC Filings...................................................... 11
3.8. Licenses and Permits............................................. 12
3.9. Required Vote.................................................... 13
3.10. Title to Properties and Assets................................... 13
3.11. Real Property.................................................... 13
3.12. Environmental Matters............................................ 14
3.13. Financial Statements; Undisclosed Liabilities.................... 15
3.14. Absence of Certain Events........................................ 16
3.15. Legal Proceedings; Orders........................................ 17
3.16. Compliance with Laws............................................. 17
3.17. Employment and Labor Matters..................................... 17
3.18. Employee Benefit Plans........................................... 8
3.19. Taxes............................................................ 20
3.20. Contracts........................................................ 21
3.21. Transactions With Related Parties................................ 22
3.22. Insurance........................................................ 23
3.23. Certain Business Practices....................................... 23
3.24. Intellectual Property............................................ 23
3.25. No Brokers....................................................... 24
3.26. Fairness Opinion................................................. 24
3.27. Computer Systems................................................. 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB... 24
4.1. Organization, Good Standing and Qualification.................... 25
4.2. Authorization; Binding Obligations............................... 25
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4.3. Capitalization of Acquisition Sub................................ 25
4.4. Legal Proceedings................................................ 26
4.5. Consents and Approvals........................................... 26
4.6. No Violation..................................................... 26
4.7. Financial Capability............................................. 26
4.8. Access to Information............................................ 26
4.9. Ownership of Common Stock........................................ 27
4.10. No Brokers....................................................... 27
ARTICLE V COVENANTS....................................................... 27
5.1. Conduct of Business by the Company and its Subsidiaries Pending
Closing ...................................................... 27
5.2. Proxy Statement; Stockholders' Meeting........................... 29
5.3. Cooperation; HSR Act Filings; Other Approvals, Filings and
Consents; Further Assurances.................................. 30
5.4. Access to Information............................................ 33
5.5. Notice of Certain Events......................................... 33
5.6. Public Announcements............................................. 33
5.7. No Solicitation of Other Proposals............................... 34
5.8. Directors' and Officers' Insurance............................... 35
5.9. Employee Benefits................................................ 35
5.10. Updates to Disclosure Schedule for Post-Signing Events........... 36
ARTICLE VI CONDITIONS PRECEDENT TO MERGER................................. 36
6.1. Conditions to Obligation of Each Party to Effect the Merger...... 36
6.2. Additional Conditions to Obligations of Parent and Acquisition
Sub .......................................................... 37
6.3. Additional Conditions to Obligations of the Company.............. 38
ARTICLE VII TERMINATION, AMENDMENT, WAIVER AND EXPENSES................... 39
7.1. Termination...................................................... 39
7.2. Effect of Termination............................................ 41
7.3. Expenses......................................................... 41
ARTICLE VIII MISCELLANEOUS................................................ 41
8.1. Entire Agreement; Amendments..................................... 41
8.2. Assignment....................................................... 42
8.3. Counterparts..................................................... 42
8.4. Governing Law; Venue; Waiver of Jury Trial....................... 42
8.5. Specific Performance............................................. 42
8.6. Interpretation................................................... 43
8.7. Severability..................................................... 43
8.8. Notices.......................................................... 43
8.9. Representation by Counsel........................................ 44
8.10. Construction..................................................... 44
8.11. Waivers.......................................................... 44
8.12. Disclaimer of Additional Representations and Warranties.......... 45
8.13. No Third Party Beneficiaries..................................... 45
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of June 15, 2007,
by and among AVX CORPORATION, a Delaware corporation ("Parent"), ADMIRAL XXXX,
INC., a Delaware Corporation and wholly-owned subsidiary of Parent ("Acquisition
Sub"), and AMERICAN TECHNICAL CERAMICS CORP., a Delaware corporation (the
"Company").
WHEREAS, Parent seeks to acquire the Company upon the terms and subject to
the conditions set forth herein;
WHEREAS, the Boards of Directors of Parent, Acquisition Sub and the Company
have each approved, and declared it to be advisable and in the best interests of
their respective stockholders, for Parent to acquire the Company upon the terms
and subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Boards of Directors of
Parent, Acquisition Sub and the Company have each approved and declared
advisable this Agreement and the merger (the "Merger") of Acquisition Sub with
and into the Company, in accordance with the General Corporation Law of the
State of Delaware (the "DGCL"), upon the terms, and subject to the conditions,
set forth herein, which Merger will result in, among other things, the Company
becoming a wholly-owned subsidiary of Parent;
WHEREAS, the Company Board of Directors has determined to recommend to the
stockholders of the Company the adoption of this Agreement;
WHEREAS, Parent, as the sole stockholder of Acquisition Sub, has adopted
this Agreement;
WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to Parent's willingness to enter into this Agreement,
Xxxxxx Xxxxxxx and certain of his Affiliates are entering into a voting
agreement with Parent in substantially the form of Exhibit A attached hereto
(the "Voting Agreement"), whereby Xx. Xxxxxxx and such Affiliates will vote in
favor of the Merger unless the Company Board of Directors receives a Superior
Proposal and withdraws or modifies the Company Recommendation in accordance with
Section 5.7 hereof; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have
the meanings set forth in the Schedule of Defined Terms attached hereto as
Schedule I;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms, and subject to the conditions, set forth
in this Agreement, and in accordance with the DGCL, Acquisition Sub shall be
merged with and into the Company at the Effective Time. From and after the
Effective Time, the separate corporate existence of Acquisition Sub shall cease
and the Company, as the surviving corporation in the Merger, shall continue its
existence under the laws of the State of Delaware as a wholly-owned subsidiary
of Parent. The Company, as the surviving corporation after the Merger, is
hereinafter sometimes referred to as the "Surviving Corporation."
1.2. Effective Time. On the Closing Date, subject to the terms and
conditions set forth in this Agreement, the parties shall cause the Merger to be
consummated by filing with the Secretary of State of the State of Delaware a
certificate of merger (the "Certificate of Merger") in substantially the form of
Exhibit B attached hereto and executed in accordance with the relevant
provisions of the DGCL (the date and time of such filing, or such later date and
time as may be specified in the Certificate of Merger by mutual agreement of
Parent and the Company, being the "Effective Time").
1.3. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and in the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all of the assets, properties, rights, privileges,
immunities, powers and franchises of the Company and Acquisition Sub shall vest
in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Acquisition Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
1.4. Certificate of Incorporation and By-Laws of the Surviving Corporation.
At the Effective Time and without further action on the part of the parties
hereto, (a) the Certificate of Incorporation of the Surviving Corporation shall
be amended to read in its entirety as set forth in Exhibit C attached hereto,
and (b) the By-Laws of Acquisition Sub shall be the By-Laws of the Surviving
Corporation (the form of which is attached hereto as Exhibit D), in each case,
until thereafter amended as provided by the DGCL.
1.5. Directors and Officers. From and after the Effective Time, (a) the
directors of Acquisition Sub immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation, and (b) the officers of
Acquisition Sub immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case, to hold office in
accordance with the Certificate of Incorporation and the By-Laws of the
Surviving Corporation until their respective successors are duly elected or
appointed and qualified or until their earlier death, or their resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-Laws or the terms of any contract pursuant to which they
may be serving as such.
1.6. Conversion of Capital Stock; Stock Options. At the Effective Time, by
virtue of the Merger and without any action on the part of Parent, Acquisition
Sub or the Company or their respective stockholders:
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(a) Acquisition Sub Capital Stock. Each share of common stock, par
value $0.01 per share, of Acquisition Sub issued and outstanding immediately
prior to the Effective Time shall be converted into one validly issued, fully
paid and non-assessable share of common stock, par value $0.01 per share, of the
Surviving Corporation;
(b) Treasury Shares. Each share of capital stock of the Company held
in the treasury of the Company (the "Treasury Shares") shall be cancelled and
retired, and no payment shall be made in respect thereof;
(c) Excluded Shares. Each share of capital stock of the Company held
by Parent or Acquisition Sub or any of their respective Affiliates (the
"Excluded Shares") shall be cancelled and retired, and no payment shall be made
in respect thereof; and
(d) Conversion of Common Stock and Options.
(i) Each share of common stock, par value $0.01 per share, of the
Company (the "Common Stock") issued and outstanding immediately prior to the
Effective Time, but excluding Dissenting Shares, Treasury Shares and the
Excluded Shares:
(A) shall be converted into the right to receive an amount
equal to $24.75 in cash (the "Per Share Merger Consideration"), less any
required tax withholding, payable to the holder thereof, without interest in
accordance with the provisions of Section 2.2 below; and
(B) shall no longer be outstanding and shall automatically
be cancelled and shall cease to exist, and, subject to Section 1.8 below, each
holder of such Common Stock (a "Stockholder") shall cease to have any rights
with respect thereto, except the right to receive the payment contemplated by
Section 1.6(d)(i)(A) above in accordance with the provisions of Section 2.2
below.
(ii) Each unexercised option (whether vested or unvested)
outstanding at the Effective Time and which is (or may become) exercisable for
shares of Common Stock (an "Option") immediately prior to the Effective Time:
(A) shall be converted into the right to receive an amount
in cash (without interest) equal to (x) the product of (1) the total number of
shares of Common Stock issuable upon full exercise of such Option immediately
prior to the Effective Time (whether or not vested or exercisable), multiplied
by (2) the amount by which the Per Share Merger Consideration exceeds the
exercise price per share of Common Stock payable upon exercise of such Option
immediately prior to the Effective Time, less (y) any required tax withholding
in accordance with the provisions of Section 2.2 below; provided, that, each
holder of an Option (an "Optionholder") is given notice of such conversion as
required under the Company Stock Option Plan; and, provided, further, that any
Option that has an exercise price per share of Common Stock that is equal to or
greater than the Per Share Merger Consideration shall be terminated without any
payment in respect thereof; and
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(B) shall automatically be terminated and be of no further
force and effect, and each Optionholder shall cease to have any rights with
respect thereto, except the right to receive the payment contemplated by Section
1.6(d)(ii)(A) above in accordance with the provisions of Section 2.2 below.
(iii) The term "Merger Consideration" means the consideration
payable to Stockholders (other than holders of Dissenting Shares, Treasury
Shares and Excluded Shares) and Optionholders pursuant to Section 1.6(d)(i) and
(ii) above and may refer to the aggregate consideration payable to all
Stockholders (other than holders of Dissenting Shares, Treasury, Shares and
Excluded Shares) and Optionholders or to any part thereof, as the context may
require.
(e) Stock Splits; Etc. If, between the date of this Agreement and the
Effective Time, the outstanding shares of Common Stock shall have 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 Per Share Merger Consideration
shall be correspondingly adjusted to the extent appropriate to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares or similar event.
1.7. Closing. Subject to the terms and conditions hereof, the closing of
the Merger and the transactions contemplated by this Agreement (the "Closing")
will take place at 10:00 a.m., local time, on the third Business Day following
the date on which the last of the conditions set forth in Article VI have been
satisfied or waived (other than any such conditions that by their terms cannot
be satisfied until the Closing Date, which conditions shall be required to be so
satisfied or waived on the Closing Date) and, in any event, subject to extension
as set forth in Section 7.1(b), no later than the Outside Date, unless another
time or date is agreed to in writing by the Company and Parent (the date upon
which the Closing occurs being the "Closing Date"). The Closing shall be held at
the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Chrysler
Center, 666 Third Avenue, New York, New York, or remotely via the exchange of
executed documents and other closing deliverables.
1.8. Dissenting Shares. Shares of Common Stock that are held by a
Stockholder who (a) has not voted such shares in favor of the Merger, (b) shall
have delivered a timely written demand for appraisal of such shares in the
manner provided for in Section 262 of the DGCL, and (c) shall not have
effectively withdrawn or lost such right to appraisal as of the Effective Time
(such shares, the "Dissenting Shares"), shall be entitled to such rights (but
only such rights) as are granted by Section 262 of the DGCL. Each holder of
Dissenting Shares who becomes entitled to payment for such Dissenting Shares
pursuant to Section 262 of the DGCL shall, subject to the terms of this
Agreement, receive payment therefor from the Surviving Corporation in accordance
with the DGCL; provided, however, that (i) if any such holder of Dissenting
Shares shall have failed to establish such holder's entitlement to appraisal
rights as provided in Section 262 of the DGCL, (ii) if any holder of Dissenting
Shares shall have effectively withdrawn its demand for appraisal of such
Dissenting Shares or lost its right to appraisal and payment for its Dissenting
Shares under Section 262 of the DGCL, or (iii) if no holder of Dissenting Shares
has filed a petition demanding a determination of the value of all Dissenting
Shares within the time provided for the filing of such petition in Section 262
of the DGCL, then
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(A) such holder shall forfeit the right to appraisal of such Dissenting Shares
and cease to be deemed a holder of Dissenting Shares, and (B) each such
Dissenting Share shall be deemed to have been converted into, as of the
Effective Time, the right to receive the Per Share Merger Consideration, less
any required tax withholding, without any interest thereon, upon surrender, in
the manner provided in Article II below, of the Certificate that formerly
evidenced such share or, in the event that such Certificate is lost, stolen,
mutilated or destroyed, a properly completed and executed Affidavit of Loss. The
Company shall give Parent (x) prompt notice of any demands for appraisal
received by the Company, withdrawals of such demands, and any other instruments
served pursuant to the DGCL and received by the Company, and (y) the opportunity
to lead all negotiations and proceedings with respect to demands for appraisal
under the DGCL (it being understood that the Company shall be entitled to
participate therein). The Company shall not make any payment with respect to, or
settle or offer to settle, any such demand, except with the prior written
consent of Parent or as may otherwise be required by applicable Law.
1.9. Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Acquisition Sub, the officers and directors of
the Surviving Corporation are fully authorized, in the name of the Company and
Acquisition Sub respectively, to take all such lawful and necessary action.
ARTICLE II
CLOSING PAYMENTS; PAYMENTS OF MERGER CONSIDERATION
2.1. Closing Payments. On the Closing Date, the Company will pay (or cause
to be paid) the Closing Date Company Transaction Expenses.
2.2. Exchange of Certificates and Option Agreements.
(a) Exchange Agent. Effective as of the Closing Date, Parent, the
Company and the Surviving Corporation will appoint a bank or trust company to
act as exchange agent (the "Exchange Agent") for the payment of the Merger
Consideration.
(b) Exchange Fund. Prior to the Effective Time, Parent will deposit
with the Exchange Agent, by wire transfer of immediately available funds to an
account designated by the Exchange Agent (the "Exchange Account"), $231,000,000,
such amount being the aggregate amount estimated to pay the Merger Consideration
due to all Stockholders and Optionholders in respect of all shares of Common
Stock (other than the Dissenting Shares, Treasury Shares and the Excluded
Shares) and Options outstanding immediately prior to the Effective Time. The
aggregate amounts deposited with the Exchange Agent prior to the Effective Time
and, to the extent applicable, from time to time thereafter in accordance with
this Agreement, plus any interest earned thereon, less the aggregate amounts
disbursed by the Exchange Agent shall be referred to as the "Exchange Fund." If
at any time after the Effective Time, the Exchange Fund is insufficient to pay
the amounts due in respect of any shares of Common Stock or Options, Parent
shall immediately deposit (or cause to be deposited) with the Exchange Agent, by
wire transfer of immediately available funds to the Exchange Account, an amount
at least equal to
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such deficiency. The Exchange Fund shall not be used for any purpose other than
the payment of the Merger Consideration to Stockholders and Optionholders. Any
portion of the Exchange Fund that remains undistributed to Stockholders and
Optionholders for 18 months after the Effective Time shall be delivered by the
Exchange Agent to Parent and any Stockholder or Optionholder who has not
theretofore exchanged a Certificate or Option Agreement (or Affidavit of Loss)
for Merger Consideration in accordance with this Section 2.2 shall thereafter
only look to Parent for payment of Merger Consideration. The Exchange Agent
shall invest the Exchange Fund as directed by Parent; provided, that, such
investment shall be in (i) securities issued, or directly and fully guaranteed
or insured, by the United States of America government or any agency or
instrumentality thereof, (ii) commercial paper obligations rated A-1 or P-1 or
better by Xxxxx'x Investor Services, Inc. or Standard & Poor's Corporation,
respectively, or (iii) certificates of deposit and bankers' acceptances and
overnight bank deposits with any commercial bank, depository institution or
trust company incorporated or doing business under the laws of the United States
of America, any state thereof or the District of Columbia. Any interest and
other income resulting from such investments after payment in full of the Merger
Consideration to Stockholders and Optionholders in accordance with this Article
II shall be paid to Parent. Any portion of the Exchange Fund or any other amount
otherwise payable as Merger Consideration remaining unclaimed by Stockholders or
Optionholders as of a date that is immediately prior to such time as such
amounts would otherwise escheat to or become property of any Governmental
Authority shall, to the extent permitted by Applicable Law, become the property
of Parent free and clear of any claims or interest of any Person previously
entitled thereto.
(c) Letter of Transmittal. As soon as reasonably practicable after the
Effective Time (but in any event within three Business Days after the Effective
Time), Parent and the Surviving Corporation will cause the Exchange Agent to
send to each Stockholder and Optionholder a letter of transmittal in
substantially the form of Exhibit E attached hereto (a "Letter of Transmittal"),
which shall, among other things, provide instructions for (i) effecting the
surrender of stock certificates representing Common Stock ("Certificates"), or
option agreements and other documents evidencing Options (collectively, "Option
Agreements"), and (ii) effecting the delivery of an affidavit of loss,
substantially in the form of Exhibit F attached hereto (an "Affidavit of Loss"),
in lieu of any lost, stolen, mutilated or destroyed Certificate or Option
Agreement, in each case, in exchange for Merger Consideration.
(d) Surrender of Certificates and Option Agreements. Upon surrender to
the Exchange Agent of a Certificate or Option Agreement (or, in lieu thereof, an
executed and completed Affidavit of Loss), together with a duly executed and
completed Letter of Transmittal and such other documents as may reasonably be
required by the Exchange Agent, (i) the Stockholder or Optionholder, as the case
may be, shall be entitled to receive in exchange therefore, a check in the
amount (after giving effect to any required tax withholding) of the Merger
Consideration that such Stockholder or Optionholder is entitled to receive under
Section 1.6 above, and (ii) the surrendered Certificate or Option Agreement, if
any, shall immediately be canceled. No interest will be paid or accrued with
respect to any Merger Consideration deliverable upon due surrender of any
Certificate or Option Agreement (or delivery of an Affidavit of Loss). In the
event of a transfer of ownership of Common Stock or an Option that is not
registered in the transfer records of the Company, payment may be made to a
transferee if, and only if, the Certificate or Option Agreement representing
such Common Stock or Option is
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presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer together with evidence that any applicable
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.2, each Certificate (other than the Certificates representing Dissenting
Shares) and Option Agreement shall be deemed at any time after the Effective
Time for all purposes to represent only the right to receive upon such surrender
the Merger Consideration which the holder thereof has the right to receive in
respect of such Certificate or Option Agreement, as applicable, pursuant to this
Article II. Certificates representing Dissenting Shares shall be deemed at any
time after the Effective Time for all purposes to represent only the right to
receive the fair value of such Dissenting Shares pursuant to the DGCL.
(e) No Further Ownership Rights. All Merger Consideration paid in
exchange of shares of Common Stock or Options shall be deemed to have been paid
in full satisfaction of all rights pertaining to such shares of Common Stock or
Options. After the Effective Time, there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the shares
of the Common Stock or Options that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, the Certificates or Option
Agreements are presented to the Surviving Corporation for any reason, they shall
be canceled and exchanged as provided in this Section 2.2, subject to applicable
Law in the case of Certificates representing Dissenting Shares. From and after
the Effective Time, Stockholders shall cease to have any rights as stockholders
of the Company, except as provided by Law.
(f) No Liability. None of Parent, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any Stockholder or
Optionholder for any amount properly paid to a Governmental Authority pursuant
to any applicable abandoned property, escheat or similar Law.
(g) Withholding Rights. Parent, the Surviving Corporation and the
Exchange Agent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable to any Stockholder or Optionholder such amounts
as may be required to be deducted and withheld with respect to the making of
such payment under the Code or under any provision of any state, county, local
or foreign tax Law. To the extent that amounts are so withheld by Parent, the
Surviving Corporation or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
Stockholder or Optionholder, as applicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed by the Company in the disclosure schedule, dated as of
the date of this Agreement and delivered by the Company to Parent together with
this Agreement (the "Disclosure Schedule"), the Company hereby represents and
warrants to Parent and Acquisition Sub as follows:
3.1. Organization, Good Standing and Qualification of the Company. The
Company is a corporation validly existing and in good standing under the DGCL,
and is qualified or
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licensed as a foreign corporation to do business, and is in good standing, in
the jurisdictions listed in Section 3.1 to the Disclosure Schedule, which
jurisdictions are the jurisdictions where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for those jurisdictions where the
failure to be so qualified, licensed or in good standing would not have a
Company Material Adverse Effect. The Company has the corporate power and
authority, and is in possession of all Approvals necessary, to own, lease and
operate its properties and to carry on its business as it is now being
conducted, other than those, the failure of which to possess would not have a
Company Material Adverse Effect. The Company has previously provided or made
available to Parent and Acquisition Sub copies of (a) its certificate of
incorporation and all amendments thereto or restatements thereof, (b) its
by-laws as currently in effect, and (c) copies of the certificate or articles of
incorporation and by-laws or other organizational documents, as applicable and
as currently in effect, of each Subsidiary. Such certificates of incorporation,
by-laws or equivalent organizational documents are in full force and effect.
3.2. Subsidiaries.
(a) Section 3.2(a) of the Disclosure Schedule, sets forth a list of
each corporation, partnership, joint venture, limited liability company, trust
or other legal entity in which the Company is a general partner or owns,
directly or indirectly, at least 5% of the stock or other equity, partnership,
membership or similar interests in such entity (each of such entities, a
"Subsidiary"), together with the percentage of each Subsidiary's outstanding
capital stock or other equity or similar interest owned by the Company or
another direct or indirect Subsidiary of the Company. Except as set forth in
Section 3.2(a) of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries owns any equity, partnership, membership or similar interest in, or
any interest convertible into or exchangeable or exercisable for, directly or
indirectly, any equity, partnership, membership or similar interest in, any
Person, or is under any obligation to form or participate in, provide funds to,
or make any loan, capital contribution or other investment in, any Person.
Except as set forth in Section 3.2(a) of the Disclosure Schedule, all of the
outstanding capital stock or other ownership interests of each Subsidiary is
owned by the Company, directly or indirectly, free and clear of any Liens or any
other limitation or restriction other than restrictions on transfer of
securities imposed by applicable state and federal securities Laws and Permitted
Liens.
(b) Each Subsidiary is an entity, incorporated or organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation or organization as set forth in Section 3.2(b) of the Disclosure
Schedule and has all the requisite corporate or other organizational power and
authority, and is in possession of all Approvals necessary, to own, lease and
operate its properties and to carry on its business as it is now being
conducted, other than those, the failure of which to possess would not have a
Company Material Adverse Effect. Each Subsidiary is qualified or licensed as a
foreign entity to do business, and is in good standing, in the jurisdictions
listed in Section 3.2(b) of the Disclosure Schedule which are the jurisdictions
where the character of the properties owned, leased or operated by it or the
nature of its activities makes such qualification or licensing necessary, except
for those jurisdictions where the failure to be so qualified, licensed or in
good standing would not have a Company Material Adverse Effect.
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3.3. Authorization; Binding Obligations.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement, each Related Agreement to which it is a
party and each other instrument or document required to be executed and
delivered by it pursuant to this Agreement or any such Related Agreement, and to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Subject to Stockholder Approval,
the execution and delivery by the Company of this Agreement and each Related
Agreement to which it is a party, the performance of its obligations hereunder
and thereunder, and the consummation by the Company of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
corporate action on the part of the Company and, other than the receipt of the
Stockholder Approval, no other corporate proceedings on the part of the Company
or any Subsidiary are necessary to authorize this Agreement or any Related
Agreement to which it is a party or to consummate the transactions so
contemplated hereby and thereby.
(b) This Agreement has been, and each of the Related Agreements to
which the Company is a party, when executed and delivered by the Company will
be, duly and validly executed and delivered by the Company and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each Related Agreement to which the Company is a
party, when executed and delivered, will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
3.4. Capitalization.
(a) The authorized capital of the Company consists solely of shares of
Common Stock. As of June 13, 2007, (i) 9,013,603 shares of Common Stock are
issued and outstanding; (ii) 414,140 shares of Common Stock are held in the
treasury of the Company; (iii) 527,365 shares of Common Stock are reserved for
future issuance pursuant to outstanding Options; and (iv) 71,200 shares of
Common Stock are reserved for future issuance pursuant to Options not currently
outstanding but eligible to be granted under the 2000 Stock Plan. All
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and non-assessable. No shares of Common Stock are held by any
Subsidiary of the Company.
(b) As of the date hereof, except as set forth above in Section 3.4(a)
or in Section 3.4(c) of the Disclosure Schedule, no shares of voting or
non-voting capital stock, other equity interests or other securities of the
Company are issued, reserved for issuance or outstanding. Section 3.4(b) of the
Disclosure Schedule lists all Options outstanding as of June 13, 2007, including
with respect to each such Option (i) the record holder thereof, (ii) the
exercise price thereof, and (iii) the number of shares of Common Stock that
remain subject to such Option. All outstanding Options were granted under a
Company Stock Option Plan. The Company has made available to Parent copies of
(A) its standard form of option agreement, (B)
9
any option agreement which deviates in any material respect from the standard
form of option agreement, and (C) the Company Stock Option Plans.
(c) Section 3.4(c) of the Disclosure Schedule sets forth, as of the
date hereof, the number of authorized and outstanding shares of voting or
non-voting capital stock or other security or equity interest, and ownership
thereof, of each Subsidiary and, except as set forth in Section 3.4(d) of the
Disclosure Schedule, no shares of voting or non-voting capital stock, other
equity interests or other securities of any Subsidiary are outstanding and
neither the Company nor any of its Subsidiaries has issued or agreed to issue
any Voting Debt or any stock appreciation rights, phantom stock or other equity
equivalent or equity-based award or right. All of the outstanding shares of
capital stock or other securities or equity interests of each Subsidiary are
duly authorized and validly issued, and, with respect to Subsidiaries that are
corporations, fully paid and nonassessable.
(d) Except for the Options and as described in Section 3.4(d) of the
Disclosure Schedule, as of the date hereof, there are no outstanding securities,
options (whether vested or unvested), warrants, calls, rights, commitments or
agreements to which the Company or any Subsidiary is a party or by which any of
them is bound obligating the Company or any Subsidiary to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other securities of the Company or of any Subsidiary. Except as
described in Section 3.4(d) of the Disclosure Schedule, there are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any shares of capital stock (or options to acquire any such shares) or
other securities or equity interests of the Company or any Subsidiary.
(e) All outstanding Options have been duly authorized and validly
issued. All Options shall, by their terms and the terms of the Company Stock
Option Plan pursuant to which they were granted, be automatically cancelled in
accordance with their terms as of the Effective Time without any payment
therefor other than as provided in Section 1.6(d) above. Except for the Option
Agreements and except as set forth in Section 3.4(e) of the Disclosure Schedule,
there are no voting trusts, proxies or other agreements to which the Company or
any Subsidiary or, to the Company's Knowledge, any of the stockholders of the
Company, is a party or by which any of them is bound with respect to the
issuance, holding, acquisition, voting or disposition of any shares of capital
stock or other securities or equity interests of the Company or any Subsidiary.
(f) None of the shares of Common Stock or Options were issued or have
been transferred in violation of, or are subject to, any preemptive rights or
rights of first offer.
(g) There are no obligations, contingent or otherwise, of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any of its
securities. There are no declared or accrued unpaid dividends with respect to
any of the Company's securities.
3.5. Consents and Approvals. Except as set forth in Section 3.5 of the
Disclosure Schedule, the execution and delivery by the Company of this Agreement
and each Related Agreement to which it is a party do not, and the performance by
the Company or any of its Subsidiaries or their respective obligations under
this Agreement and each Related Agreement to which it or any of them is a party
shall not, require the Company or any Subsidiary to obtain any
10
Approval of any Person or Approval of, or give notification to or observe any
waiting period imposed by, or make any filing with or notification to, any
Governmental Authority, except for (a) Stockholder Approval, (b) any request
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), from the United States Federal Trade Commission or the United States
Department of Justice or any other Governmental Authority for additional
information, documents or other materials relating to the pre-merger
notification requirements of the HSR Act, (c) the filing of the Certificate of
Merger in accordance with the DGCL, (d) compliance with applicable requirements
of Sections 13 and 14(a) of the Exchange Act and rules of the SEC promulgated
thereunder, (e) filings required to be made with the American Stock Exchange,
and (f) such other Approvals as are not material to the operation of the
business of the Surviving Corporation or any of its Subsidiaries from and after
the Effective Time.
3.6. No Violation. Except as set forth in Section 3.6 of the Disclosure
Schedule, the execution and delivery by the Company of this Agreement and each
Related Agreement to which it is a party do not, and the performance by the
Company of its obligations under this Agreement and each Related Agreement to
which it is a party, will not (a) conflict with or violate the Certificate of
Incorporation or By-Laws or other equivalent organizational or governing
documents of the Company or any Subsidiary, (b) conflict with or violate any Law
or Order to which the Company or any of the Subsidiaries is subject or by which
any of their respective properties are bound, or (c) conflict with, result in
any breach or violation of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien on any of the properties or assets of the Company or any
Subsidiary pursuant to, any Company Contract or Approval to which the Company or
any Subsidiary is a party or by which the Company or any of the Subsidiaries or
its or any of their respective properties is bound or subject, which conflict,
violation, breach or default, in the case of subsections (b) and (c) hereof,
would have a Company Material Adverse Effect.
3.7. SEC Filings.
(a) All required reports, prospectuses, forms, schedules, proxy
statements or registration statements filed by the Company with the SEC since
July 1, 2004 are collectively referred to herein as the "Company SEC Reports".
Since July 1, 2004, the Company has filed on a timely basis all reports,
prospectuses, forms, schedules, proxy statements or registration statements
required to be so filed by the Company with the SEC. No Subsidiary of the
Company is required to file any report, prospectus, form, schedule, proxy
statement or registration statement with the SEC or any national securities
exchange or quotation service.
(b) All Company SEC Reports, as of their respective filing dates (with
respect to filings made under the Exchange Act) or as of the respective dates
upon which such filings became effective (with respect to filings made under the
Securities Act), complied as to form in all material respects with the
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder. The Company has made available to Parent
all correspondence between the Company and the SEC from July 1, 2004 through the
date of this Agreement.
11
(c) Except as set forth in Section 3.7(c) of the Disclosure Schedule,
none of the Company SEC Reports, as of their respective filing dates (with
respect to filings made under the Exchange Act) or as of the respective dates
upon which such filing became effective (with respect to filings made under the
Securities Act), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Company is in compliance in all material respects with (i) the
provisions of SOX with which it is required to comply, and (ii) the applicable
listing and corporate governance rules and regulations of the American Stock
Exchange.
(e) Each of the principal executive officer of the Company and the
principal financial officer of the Company (or each former principal executive
officer of the Company and each former principal financial officer of the
Company, as applicable) has made all certifications required by Rule 13a-14 or
15d-14 under the Exchange Act or Sections 302 and 906 of SOX and the rules and
regulations of the SEC promulgated thereunder with respect to the Company SEC
Reports. For purposes of this Section 3.7(e), "principal executive officer" and
"principal financial officer" shall have the meanings given to such terms in
SOX.
(f) Neither the Company nor any of its Subsidiaries is a party to, or
has any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar contract or arrangement (including any contract or
arrangement relating to any transaction or relationship between or among the
Company and any of its Subsidiaries, on the one hand, and any unconsolidated
Affiliate, including any structured finance, special purpose or limited purpose
entity or Person, on the other hand or any "off-balance sheet arrangements" (as
defined in Item 303(a) of Regulation S-K promulgated by the SEC)), where the
result, purpose or intended effect of such contract or arrangement is to avoid
disclosure of any material transaction involving, or material liabilities of,
the Company or any of its Subsidiaries in the Company's or such Subsidiary's
published financial statements or other of the Company SEC Reports.
(g) There are no significant deficiencies or material weaknesses in
the design or operation of the Company's internal controls which could
materially adversely affect the Company's ability to record, process, summarize
and report financial data. To the Company's Knowledge, there is no fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company's internal controls.
(h) The Company has furnished to Parent a copy of any amendments or
modifications, which have not yet been filed with the SEC but which are required
to be filed, to agreements, documents or other instruments that previously had
been filed by the Company with the SEC pursuant to the Securities Act or the
Exchange Act.
3.8. Licenses and Permits. Except for matters governed by Environmental
Laws which are addressed in Section 3.12 below, Section 3.8 of the Disclosure
Schedule contains a list of all licenses, permits, consents, approvals,
authorizations, registrations, qualifications and certifications of any
Governmental Authority necessary for the business operations of the Company and
each Subsidiary as currently conducted the failure of which to obtain or
maintain
12
would have a Company Material Adverse Effect (collectively, the "Company
Licenses"). Each Company License is valid and in full force and effect and the
Company and each Subsidiary is, in all material respects, in compliance with
each such Company License. To the Company's Knowledge, there is no default under
any Company License. Section 3.8 of the Disclosure Schedule specifies the holder
of each Company License. Except as set forth in Section 3.8 of the Disclosure
Schedule, there is no Action pending or overtly threatened that could result in
the termination, revocation, limitation, suspension, restriction or impairment
of any Company License or the imposition of any fine, penalty or other sanctions
for violation of any legal or regulatory requirements relating to any Company
License.
3.9. Required Vote. The Company Board of Directors, by the unanimous vote
of all of the directors participating at a meeting duly called and held (which
directors constitute a majority of the directors then in office), has (a)
approved and declared advisable this Agreement and approved each Related
Agreement to which the Company is a party, (b) determined that the transactions
contemplated hereby and thereby are advisable, fair to and in the best interests
of the Stockholders, (c) resolved to recommend adoption of this Agreement, and
the approval of the Merger, the Related Agreements to which the Company is a
party and the other transactions contemplated hereby and thereby to the
Stockholders, and (d) directed that this Agreement be submitted to the
Stockholders for their adoption. The affirmative vote of a majority of all
outstanding shares of Common Stock (such holders, the "Requisite Holders"), at a
special meeting of the Stockholders, are the only votes of the holders of any
class or series of capital stock of the Company necessary to adopt this
Agreement, and to approve the Merger, the Related Agreements to which the
Company is a party and the other transactions contemplated hereby and thereby
("Stockholder Approval").
3.10. Title to Properties and Assets.
(a) Except as set forth in Section 3.10(a) of the Disclosure Schedule,
the Company and each Subsidiary is the legal and equitable owner of all right,
title and interest in, and has good and valid title to, all of its owned
properties and assets (collectively, the "Company Assets"), free and clear of
all Liens, other than Permitted Liens. The assets owned or leased by the Company
and its Subsidiaries constitute all of the assets necessary for and used by the
Company and its Subsidiaries to carry on their respective businesses as
currently conducted.
(b) With respect to personal properties and assets that are leased,
the Company or one of its Subsidiaries has a valid leasehold interest in such
properties and assets and all such leases are in full force and effect and, to
the Company's Knowledge, constitute valid and binding obligations of the other
party(ies) thereto. Neither the Company nor any of its Subsidiaries nor, to the
Company's Knowledge, any other party thereto is in violation of any of the terms
of such lease, the violation of which would constitute a Company Material
Adverse Effect.
3.11. Real Property.
(a) Section 3.11(a) of the Disclosure Schedule identifies all real
property owned by the Company or any of the Subsidiaries ("Owned Real
Property"). The Company or a Subsidiary has good and marketable fee simple title
with respect to each parcel of Owned Real
13
Property, free and clear of all Liens except for Permitted Liens. Except as set
forth in Section 3.11(a) of the Disclosure Schedule, there are no outstanding
contracts for the purchase and sale of, or any option or right of first offer or
right of first refusal to purchase, any Owned Real Property or any portion
thereof or interest therein and no outstanding contracts for the Company or a
Subsidiary to purchase any real property. As of the date hereof, there are no
pending or overtly threatened condemnation or eminent domain proceedings
affecting the Owned Real Property or any portion thereof. The Company has made
available to Parent all Real Property Reports. With respect to each such Real
Property Report, there has been no change since the date thereof relating to the
subject matter thereof that would constitute a Company Material Adverse Effect,
except for any such change as may be reflected in another later dated Real
Property Report.
(b) Section 3.11(b) of the Disclosure Schedule identifies all real
property leased by the Company or any of the Subsidiaries ("Leased Real
Property"). Copies of all of the leases, subleases, licenses or other contracts
pursuant to which the Company or any Subsidiary leases Leased Real Property
(collectively, "Real Property Leases") have been made available to Parent. With
respect to each of the Real Property Leases, the Company or its Subsidiary, as
applicable, has a valid leasehold interest to the leasehold estate in the Leased
Real Property granted to the Company or such Subsidiary, as applicable, pursuant
to each pertinent Real Property Lease.
(c) Except as disclosed in Section 3.11(c) of the Disclosure Schedule,
there are no leases, subleases, licenses, concessions, or other agreements,
written or oral, granting to any party or parties other than the Company or a
Subsidiary the right of use or occupancy of any portion of the Owned Real
Property or Leased Real Property (collectively, "Real Property"), and there are
no parties (other than Company or any Subsidiary) in possession of any Real
Property.
3.12. Environmental Matters.
(a) Except as disclosed in the environmental reports and other written
materials (the "Environmental Reports") listed in Section 3.12(a) of the
Disclosure Schedule, no Environmental Claim has been issued or filed, no penalty
has been assessed and no Action is pending or overtly threatened by any
Governmental Authority or any Third Party, which Environmental Claim, penalty,
or Action would have a Company Material Adverse Effect, with respect to: (i) any
alleged violation of, noncompliance by the Company or any Subsidiary with, or
Liability of the Company or any Subsidiary under, any Environmental Law or Order
by which the Company or any Subsidiary or any of their respective assets are
bound, (ii) any alleged failure by the Company or any Subsidiary to have or
comply with any Environmental Permits, or (iii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transportation,
abatement, release, exposure to removal, remediation, possession or handling by
the Company or any Subsidiary, or presence on, under or above, or discharge
from, the Real Property of Hazardous Substances in violation of any
Environmental Law or Order. Except as disclosed in the Environmental Reports,
the Company has not to the Company's Knowledge, (A) been notified that it is
potentially liable, (B) received any requests for information or other
correspondence concerning any site or facility, or (C) received any notice that
it is considered potentially liable, under the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq.
14
(b) Except as disclosed in the Environmental Reports, the Company,
each Subsidiary and the Real Property are and, except for instances of
non-compliance which have been cured, to the Company, each Subsidiary and, to
the Company's Knowledge, the Real Property, have been, in compliance in all
material respects with all applicable Environmental Laws, which compliance
includes the possession by or the taking of appropriate steps to obtain by the
Company and each Subsidiary of all Environmental Permits and other Approvals
required under applicable Environmental Laws, and compliance in all material
respects with the terms and conditions thereof.
(c) Except as disclosed in the Environmental Reports, there are no
above-ground and, to the Company's Knowledge, no underground storage tanks,
oil/water separators, sumps and septic systems located on the Real Property.
(d) The Company has provided to Parent copies of all material
environmental reports, audits, assessments and investigations relating to the
Real Property and the operations of the Company and its Subsidiaries, to the
extent the foregoing are in the possession of the Company or any Subsidiary.
3.13. Financial Statements; Undisclosed Liabilities.
(a) The audited consolidated balance sheet of the Company and the
Subsidiaries as at June 30, 2006, and the related audited consolidated
statements of income, cash flow and stockholders' equity for the fiscal year
then ended, certified by the Company's independent public accountants and
accompanied by a copy of such auditor's report (the "Year-End Financial
Statements"), and the unaudited consolidated balance sheet of the Company and
the Subsidiaries as of March 31, 2007 ("Interim Balance Sheet") and the related
unaudited consolidated statements of income, cash flow and stockholders' equity
for the nine months then ended (the "Interim Financial Statements" and, together
with the Year-End Financial Statements, the "Financial Statements"), in each
case, as included in the Company SEC Reports, fairly present in all material
respects the financial condition of the Company and its Subsidiaries as of the
dates indicated, and the results of operations and cash flows of the Company and
its Subsidiaries for the respective periods indicated, in accordance with U.S.
generally accepted accounting principles ("GAAP"), applied on a consistent basis
throughout the periods indicated (unless otherwise required by GAAP) except that
the Interim Financial Statements are subject to customary inter-period and
year-end adjustments and do not contain all footnotes required by GAAP.
(b) Except as set forth in the financial statements (including the
footnotes thereto) included in the Company's Form 10-K for the year ended June
30, 2006 and in the Company's Form 10-Qs for the quarters ended September 30,
2006, December 31, 2006 and March 31, 2007 or as otherwise disclosed in the
Company SEC Reports, the Company and its Subsidiaries have no accrued,
contingent or other Liabilities of any nature, either matured or unmatured and
whether due or to become due of a type required to be reflected in financial
statements prepared in accordance with GAAP, other than (i) liabilities or
obligations incurred in the ordinary course of business since the date of the
most recent balance sheet of the Company included in the Company SEC Reports
filed prior to the date of this Agreement, (ii) liabilities or obligations which
are not, individually or in the aggregate, material in amount, (iii) Company
15
Transaction Expenses, (iv) liabilities not yet due under Contracts to which the
Company or any Subsidiary is a party or by which any of their respective assets
or properties are bound or subject, and (v) liabilities identified in Section
3.13(b) of the Disclosure Schedule.
3.14. Absence of Certain Events. Except as disclosed in the Company SEC
Reports filed prior to the date hereof or as set forth in Section 3.14 of the
Disclosure Schedule, since March 31, 2007, the Company and the Subsidiaries have
conducted their respective businesses in the ordinary course and consistent with
past practice. Since March 31, 2007, except as set forth in Section 3.14 of the
Disclosure Schedule, there has not been:
(a) Any sale, assignment, license or other disposition, of any
material portion of the assets or properties of the Company and the Subsidiaries
taken as a whole, except in the ordinary course of business;
(b) Any Lien imposed or created on any of the assets or properties of
the Company or any Subsidiary, other than Permitted Liens;
(c) Any damage, destruction or loss of any of the material assets or
properties of the Company and the Subsidiaries taken as a whole by fire or other
casualty, whether or not covered by insurance;
(d) Any termination, modification or amendment of any material
Contract to which the Company or any Subsidiary was or is a party, except for
terminations, modifications or amendments made in the ordinary course of
business;
(e) Any change in any of the accounting principles adopted by the
Company or any Subsidiary or any change in the Company's or any Subsidiary's
accounting policies, procedures, practices or methods with respect to applying
such principles, other than as required by GAAP or by applicable Law;
(f) Any termination of any officer or other key personnel of the
Company or any Subsidiary;
(g) Any cancellation or forfeiture of any material debts or claims of
the Company or any Subsidiary or any waiver of any rights of material value to
the Company or any Subsidiary;
(h) Any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business;
(i) Any loan, advance or capital contribution made by the Company or
any Subsidiary to, or investment in, any person other than (i) loans or advances
to employees in connection with business-related travel and entertainment, in
each case made in the ordinary course of business, (ii) loans, advances or
capital contributions or investments by the Company to or in any Subsidiary, by
any Subsidiary to or in the Company, or by any Subsidiary to or in any other
Subsidiary, and (iii) liabilities set forth on Section 3.13(b) of the Disclosure
Schedule; or
16
(j) Any agreement, understanding, authorization or proposal for the
Company or any Subsidiary to take any of the actions specified in this Section
3.14.
3.15. Legal Proceedings; Orders. Except for matters governed by
Environmental Laws which are addressed in Section 3.12 and except as set forth
in Section 3.15 of the Disclosure Schedule, (a) there is no Action pending or,
overtly threatened by or against the Company or any Subsidiary or relating to
the Company, any Subsidiary or their respective business or properties (i)
which, if determined adversely to the Company, could reasonably be expected to
have a Company Material Adverse Effect, or (ii) that challenges or seeks to
prevent, enjoin or otherwise delay the Merger, and (b) no officer or director of
the Company or any Subsidiary is a defendant in any Action in connection with
his or her status as such. Neither the Company nor any Subsidiary, nor any
material property or asset of the Company or any Subsidiary, is subject to any
outstanding Order. There is no unsatisfied judgment, penalty or award against or
affecting the Company or any of its Subsidiaries or any of their respective
properties or assets.
3.16. Compliance with Laws. Except for matters governed by Environmental
Laws which are addressed in Section 3.12 and the Actions addressed in Section
3.15, the Company and each of its Subsidiaries is in compliance with all Laws
applicable to them or any of their respective assets or properties the failure
with which to be in compliance would have a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received any written notice
to the effect that it is not in compliance with any Laws and there is no Action
pending or overtly threatened by any Governmental Authority with respect to any
alleged violation by the Company or any of its Subsidiaries of any applicable
Law.
3.17. Employment and Labor Matters.
(a) Except as set forth in Section 3.17(a) of the Disclosure Schedule,
(i) there are no employment, consulting, independent contractor, severance pay,
continuation pay, termination or indemnification Contracts between the Company
or any Subsidiary and any current or former stockholder, officer, director,
employee, consultant or independent contractor, and (ii) there are no
obligations to pay bonuses, change of control payments or other forms of
compensation arising, vesting (whether fully or partially) or payable (whether
or not at the Closing), to directors, officers, employees, consultants or agents
of the Company as a result of the consummation of the transactions contemplated
by this Agreement (but excluding bonus compensation payable in the ordinary
course of business consistent with past practice that is not contingent on the
consummation of such transactions).
(b) Neither the Company nor any Subsidiary is a party to any
collective bargaining Contracts or any other Contracts with any labor unions or
other representatives of any employees of the Company or any Subsidiary, and no
such Contract is being negotiated, nor are any union organizing efforts underway
or overtly threatened. Since June 30, 2002, there has not been any labor strike,
dispute, claim, charge, lawsuit, proceeding, labor slowdown or stoppage and none
of such actions are pending or overtly threatened against or involving the
Company or any Subsidiary or with respect to any employees of the Company or any
Subsidiary.
17
(c) Within the past three years, neither the Company nor any of its
Subsidiaries has implemented any plant closing or layoff of employees that could
implicate the WARN Act.
3.18. Employee Benefit Plans.
(a) Section 3.18(a) of the Disclosure Schedule sets forth a list of
each Company Plan that provides benefits in respect of any employee or former
employee of the Company or any Subsidiary. Each Company Plan has been funded and
administered in all material respects in accordance with its terms and
applicable Law, including ERISA and the Code. For purposes of this Agreement,
the term "Company Plan" shall include each "employee benefit plan," as such term
is defined in Section 3(3) of ERISA, and each other material benefit plan,
arrangement, agreement, policy or understanding sponsored, maintained or
contributed to by the Company or any Subsidiary or under which the Company or
any Subsidiary has any current or, to the Company's Knowledge, future liability.
Except as set forth in Section 3.18(a) of the Disclosure Schedule, no Company
Plan has been established or maintained for employees living outside of the
United States. The Company has made available to Parent copies of all material
documents pursuant to which each Company Plan is administered.
(b) Except as set forth in Section 3.18(b) of the Disclosure Schedule,
no Contract identified in Section 3.17(a) of the Disclosure Schedule will, as a
result of the transactions contemplated hereby, either require any payment by
the Company (or the Surviving Corporation) or Parent or any of their respective
subsidiaries (including the Subsidiaries) or any consent or waiver from any
stockholder, officer, director, employee, consultant or independent contractor,
or result in any change in the nature of any rights of any stockholder, officer,
director, employee, consultant or independent contractor, including, but not
limited to, any accelerated payments, deemed satisfaction of goals or
conditions, new or increased benefits or additional or accelerated vesting.
(c) Except as set forth in Section 3.18(c) of the Disclosure Schedule,
no individual will as a direct or indirect result of the transactions
contemplated hereby, accrue or receive additional benefits, service or
accelerated rights to payments under any Company Plan, including the right to
receive any parachute payment (as defined in Section 280G of the Code) or become
entitled to severance, termination allowance or similar payments that could
result in the payment of any such benefits or payments, and no such benefits,
rights or payments have accrued as of any other transaction or event that
remains unsatisfied as of the date of this Agreement. Except pursuant to
Contracts identified in Section 3.17(a) or as set forth in Section 3.18(c) of
the Disclosure Schedule, the Company has not been and will not be required to
"gross up" or otherwise compensate any individuals because of the imposition of
any excise tax upon payment to such individual.
(d) Neither the Company nor any ERISA Affiliate maintains or
contributes or, in the last seven years has ever maintained or contributed to,
or otherwise participates or, in the last seven years participated in, a
"defined benefit plan" within the meaning of Section 3(35) of ERISA or Section
414(j) of the Code, or a plan that is subject to the requirements of Section 412
of the Code or Title IV of ERISA, or is or, in the last seven years was, a party
to a
18
"multiemployer plan" within the meaning of Section 3(37), 4001(a)(3), 4063 or
4064 of ERISA or Section 414(f) of the Code. For purposes of this Agreement, the
term "ERISA Affiliate" shall include any organization that is or has ever been
treated as a single employer with the Company or any Subsidiary under Sections
414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA. No liability
under Title IV or ERISA has been incurred by the Company or any ERISA Affiliate
that has not been satisfied in full, and no condition exists that would give
rise to any such liability thereunder. Except as set forth in Section 3.18(d) of
the Disclosure Schedule, the Company does not maintain a Company Plan providing
retiree, medical or life benefits (as defined in Section 3(1) of ERISA) to
employees or former employees after retirement or other separation from service
other than as required by COBRA.
(e) No Actions, suits or claims (other than routine claims for
benefits in the ordinary course) are pending or overtly threatened with respect
to any Company Plan. Except as set forth under ERISA, the Code or the terms of
the relevant Company Plan, there are no material restrictions on the rights of
the Company to amend or terminate any Company Plan without incurring any
liability thereunder.
(f) To the Company's Knowledge, no "party in interest" (as defined in
Section 3(14) of ERISA) or "disqualified person" (as defined in Section
4975(e)(2) of the Code) with respect to any Company Plan has engaged in any
nonexempt "prohibited transaction" (as described in Section 4975(c) of the Code
or Section 406 of ERISA). No tax under Code Sections 4980B or 5000 has been
incurred with respect to any Company Plan and no circumstances exist that could
give rise to such tax.
(g) Except as set forth in Section 3.18(g) of the Disclosure Schedule,
all of the Company Plans that are intended to be qualified under Section 401(a)
of the Code have been administered in all material respects in accordance with
their terms and are in compliance in all material respects with the currently
applicable provisions of ERISA and the Code, have received favorable
determination letters from the Internal Revenue Service to the effect that such
Company Plans are qualified, or are entitled to rely on opinion letters issued
to a prototype sponsor, and no such letter has been revoked and revocation is
not threatened. All contributions to each Company Plan have been made in
material compliance with all applicable Law, and the terms of such Company Plan.
(h) All of the Company's nonqualified deferred compensation plans
subject to Code Section 409A have been operated and administered in good faith
compliance with Code Section 409A from the period beginning January 1, 2005
through the date of this Agreement. Except as reflected in Section 3.17(a) of
the Disclosure Schedule, since October 3, 2004, none of the Company's
nonqualified deferred compensation plans has been materially modified (as
defined in Code Section 409A).
19
3.19. Taxes.
(a) Except as set forth in Section 3.19(a) of the Disclosure Schedule,
all federal, state, local and foreign Tax Returns required to be filed (taking
into account extensions) by or on behalf of the Company and each Subsidiary have
been timely filed and have been prepared in good faith in accordance with
applicable Law in all material respects. All Taxes shown on such Tax Returns to
be due and payable by or with respect to the Company and each Subsidiary have
been timely paid, or such amounts, together with Taxes accruing but not subject
to Tax Returns required to be filed are reserved for (other than a reserve for
deferred Taxes established to reflect timing differences between book and Tax
treatment) in accordance with GAAP on the Financial Statements. Subject to the
results of any audit listed on Schedule 3.19(a) of the Disclosure Schedule, to
the Company's Knowledge, no Taxes other than those shown on such Tax Returns or
so reserved for on the Financial Statements are due and payable by or with
respect to the Company or any Subsidiary. No deficiencies for any Taxes have
been proposed, asserted or assessed against the Company or any Subsidiary that
are not reserved for on the Interim Financial Statements.
(b) Except as set forth in Section 3.19(b) of the Disclosure Schedule,
there are no pending or, based on written notice, threatened, audits in respect
of Taxes of the Company or any Subsidiary.
(c) Except as set forth in Section 3.19(c) of the Disclosure Schedule,
neither the Company nor any Subsidiary has granted any waiver of any federal,
state, local or foreign statute of limitations with respect to, or any extension
of a period for the assessment of, any Tax which has not since expired. No
extension or waiver of time within which to file any Tax Return of, or
applicable to, the Company or any Subsidiary has been granted or requested which
has not since expired.
(d) Except for such matters as are referred to in Sections 3.19(a) or
(b) above or disclosed in Sections 3.19(a) or 3.19(b) of the Disclosure
Schedule, the Company and each Subsidiary has complied in all material respects
with all applicable Laws relating to the payment and withholding of Taxes and
have, within the time and in the manner required by Law, withheld from employee
wages and paid over to the proper Governmental Authorities all amounts required
to be so withheld and paid over under all applicable Laws.
(e) The Company and each U.S. Subsidiary is a member of the same
affiliated group (within the meaning of Section 1504(a)(i) of the Code) for
which the Company files a consolidated U.S. federal income Tax Return as the
common parent, and neither the Company nor any U.S. Subsidiary has been included
in any other consolidated U.S. federal income Tax Return, or consolidated,
combined, affiliated or unitary group for non-Federal Tax purposes other than
one of which the Company is or was the common parent, for any taxable period for
which the statute of limitation has not expired.
(f) Neither the Company nor any Subsidiary is a party to any agreement
or arrangement that would result, separately or in the aggregate, in the actual
or deemed payment by the Company or ay Subsidiary that could be disallowed as a
deduction under Section 280G or Section 162(m) of the Code.
20
(g) Neither the Company nor any Subsidiary is a party to any tax
sharing or allocation agreement, nor has any of them given any indemnity against
Taxes imposed on any other Person, that has not expired by its terms or
otherwise have been terminated and for which no amount is claimed to be owed.
(h) The Company has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(i) No election has been filed under Section 1295(b) of the Code to
treat the Company or any Subsidiary as a "qualified elected fund" and on no Tax
Return has the Company or any Subsidiary been required to be designated as a
"passive foreign investment company" under Section 1296 of the Code.
(j) Except as set forth in Section 3.19(j) of the Disclosure Schedule,
neither the Company nor any Subsidiary has been required to be designated as a
"controlled foreign corporation" within the meaning of Section 957 of the Code.
(k) Neither the Company nor any Subsidiary made any entity
classification election pursuant to Treasury Regulation Section 301.7701-3 on
IRS Form 8832.
(l) Neither the Company nor any of its Subsidiaries will be required
to include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of (i) any change in method of accounting for a taxable period
ending on or prior to the Closing Date, (ii) any "closing agreement" as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local of foreign Tax law) execute on or prior to the Closing Date,
(iii) any intercompany transaction or any excess loss account described in the
Treasure Regulations under Section 1502 of Code (or any corresponding or similar
provision of state, local or foreign Tax law), (iv) any installment sale or open
transaction disposition made on or prior to the Closing Date, or (v) any prepaid
amounts received on or prior to the Closing Date.
(m) Neither the Company nor any of its Subsidiaries (i) is a party to
any "reportable transaction" within the meaning of Section 1.6011-4 of the
Treasury Regulations, or (ii) during the five-year period ending on the date
hereof, was a distributing corporation or a controlled corporation in a
transaction intended to be governed by Section 355 or Section 361 of the Code.
(n) Except as set forth in Section 3.19(n) of the Disclosure Schedule,
the Company has not issued or assumed (i) any obligations described in Section
279(a) of the Code, (ii) any applicable high yield discount obligations, as
defined in Section 163(i) of the Code, or (iii) any registration-required
obligations, within the meaning of Section 163(f)(2) of the Code, that are not
in registered form.
3.20. Contracts.
(a) Except as disclosed in the Company SEC Reports filed prior to the
date hereof or as set forth in Section 3.20(a) of the Disclosure Schedule,
neither the Company nor any
21
Subsidiary is a party to or is otherwise bound or by (i) any "material contract"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC); (ii)
any Contract that relates to any Indebtedness in excess of $500,000; (iii) any
Contract pursuant to which the Company or any Subsidiary purchases products or
services which involves (A) annual payments by the Company or any Subsidiary of
$500,000 or more, or (B) aggregate payments by the Company and its Subsidiaries
under such Contract of more than $500,000 over the remaining term of such
Contract; (iv) any Contract pursuant to which the Company or any Subsidiary
sells any product or service to a Third Party which involves annual payments to
the Company or any Subsidiary of $500,000 or more (excluding purchase orders for
products or services sold by the Company or any Subsidiary in the ordinary
course of business); (v) any license of, or other Contract for the payment of
royalties with respect to, Intellectual Property (excluding off-the-shelf
software programs licensed by the Company pursuant to "shrink wrap" licenses);
(vi) any Contract with any Affiliate of the Company or any Subsidiary; (vii) any
Real Property Lease; (viii) any lease of personal property which is material to
the business of the Company or any Subsidiary; (ix) any contract that purports
to limit the right of the Company or any Subsidiary to (A) engage or compete in
any line of business, or (B) compete with any person or operate in any location;
(x) any acquisition Contract pursuant to which the Company or any of its
Subsidiaries has "earn-out" or other contingent payment obligations that would
be reasonably likely to result in aggregate payments in excess of $500,000; or
(xi) any employment agreements or consulting or severance agreements, in each
case, that involve an aggregate future or potential liability in excess of
$150,000 (collectively, the "Company Contracts"). The Company has made available
to Parent true and complete copies of all Company Contracts.
(b) Neither the Company nor any Subsidiary is in default under the
terms of any Company Contract which default could result in a Company Material
Adverse Effect. To the Company's Knowledge, no other party to any Company
Contract is, or is alleged to be, in default under the terms thereof.
(c) The Company Contracts are in full force and effect and are valid
and binding obligations of the Company or one of the Subsidiaries and, to the
Company's Knowledge, the other parties thereto, except that enforcement thereof
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditor's rights in effect from time to time and general
principles of equity. Neither the Company nor any Subsidiary has received any
written notice from any other party to a Company Contract of the termination or
threatened termination thereof, or of any claim, dispute or controversy with
respect thereto.
3.21. Transactions With Related Parties.
(a) Except as set forth in Section 3.21(a) of the Disclosure Schedule,
no Related Party is currently (i) a party to any transaction with the Company or
any Subsidiary (including, but not limited to, any Contract providing for the
employment of, furnishing of goods or services by, rental of real or personal
property from, use or disclosure of Intellectual Property to, borrowing money
from or lending money to, or otherwise requiring payments to, any such Person,
but excluding payments for normal salary and bonuses and reimbursement of
expenses), (ii) to the Company's Knowledge, the direct or indirect owner of a
material interest in any Person which is a competitor, supplier or customer of
the Company or any Subsidiary, or (iii) the
22
direct or indirect owner of any property or assets used in the business of the
Company or any Subsidiary.
(b) Except as set forth in Section 3.21(b) of the Disclosure Schedule,
no Related Party has any outstanding Indebtedness payable to the Company or any
Subsidiary and neither the Company nor any Subsidiary has guaranteed any
obligation or Indebtedness of any such Related Party to a third party.
3.22. Insurance. Section 3.22 of the Disclosure Schedule lists, by type,
carrier, policy number and expiration date, of all insurance coverage carried by
the Company and the Subsidiaries. All such policies are, as of the date hereof,
in full force and effect and all premiums which are due and payable with respect
thereto through the date hereof are currently paid. Except as set forth in
Section 3.22 of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries has received written notice of cancellation or non-renewal of any
such policy or binder. Except for claims made under the Company's Self-Insured
Medical/Dental Employee Benefit Plan, no claim is currently under any such
policy involving an amount in excess of $50,000. Such policies are sufficient
for compliance with all Laws and Contracts to which the Company or any of its
Subsidiaries is a party or by which it is bound, there is no overtly threatened
termination of, or material premium increase with respect to, any policy and
none of such polices provides for retroactive premium adjustments. To the
Company's Knowledge, neither the Company nor any of its Subsidiaries is in
material breach or default (including any such breach or default with respect to
any payment of premiums or the giving of notice), and no event has occurred
which, with notice or lapse of time, would constitute a breach or default, or
permit termination or modification under the policy.
3.23. Certain Business Practices. None of the Company, any Subsidiary or,
to the Company's Knowledge, any director or officer or employee of the Company
or any Subsidiary (on behalf of the Company or any Subsidiary), has used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to political activity, made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or made any payments in the nature of criminal bribery.
3.24. Intellectual Property.
(a) Section 3.24(a) of the Disclosure Schedule sets forth a list of
all registrations or applications for registration in respect of Intellectual
Property owned by the Company or any Subsidiary.
(b) To the Company's Knowledge, except as set forth in Section 3.24(b)
of the Disclosure Schedule, there has been no infringement by the Company or any
Subsidiary with respect to any Intellectual Property rights of others and, to
the Company's Knowledge, the conduct of the Company's and the Subsidiaries'
businesses as currently conducted does not infringe upon any Intellectual
Property rights of any third party. To the Company's Knowledge, the Company and
the Subsidiaries own or possess adequate licenses or other rights to use all
Intellectual Property necessary to conduct their respective businesses as
currently conducted. None of the Intellectual Property listed in Section 3.24(b)
of the Disclosure Schedule is involved
23
in any interference or opposition proceeding, and the Company has received no
written notice that any such proceeding will hereafter be commenced, except as
set forth in Section 3.24(b) of the Disclosure Schedule. To the Company's
Knowledge, no third party is misappropriating, infringing or violating any
Intellectual Property owned by the Company or any Subsidiary and, except as set
forth in Section 3.24(b) of the Disclosure Schedule, no such claims have been
brought against any third party by the Company or any Subsidiary. Execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby will not impair the validity, enforceability, ownership or any right of
the Company (including the Surviving Corporation) or any Subsidiary to use any
Intellectual Property. Notwithstanding anything contained herein to the
contrary, the Company makes no representation with respect to the Intellectual
Property occasionally licensed from customers or third party software vendors,
in the ordinary course of business, in connection with assisting customers in
the design of products incorporation the Company's products.
3.25. No Brokers. Except as set forth in Section 3.25 of the Disclosure
Schedule, neither the Company nor any Subsidiary has employed or incurred any
Liability to any broker, finder, investment banker or other agent in connection
with the transactions contemplated by this Agreement.
3.26. Fairness Opinion. The Company Board of Directors has received a
written Fairness Opinion, dated as of the date of this Agreement, to the effect
that, subject to the assumptions, qualifications and limitations contained
therein, the Per Share Merger Consideration to be received by the Stockholders,
is fair to the Stockholders, from a financial point of view. The Company has
delivered to Parent a copy of such opinion.
3.27. Computer Systems. For purposes of this Agreement, "Computer Systems"
means the software, hardware, network and telecommunications equipment and
Internet-related information technology that are material to the Company and its
Subsidiaries in connection with the operation of their business as currently
conducted. The Company or one of its Subsidiaries is the owner of or is validly
licensed to use or, in the case of outsourced services, is entitled to receive
the benefits of use of, the Computer Systems, and will continue to be the owner
of or, subject to obtaining any Approval listed in Section 3.5 of the Disclosure
Schedule, to be so validly licensed or entitled to receive the benefits of use
immediately following the Closing Date. There have been no downtimes, security
breaches, virus attacks, hacking incidents, junk e-mail attacks, or system
crashes of the Computer Systems in the 12 months prior to the date of this
Agreement that have had, or would reasonably be expected to have, a Company
Material Adverse Effect. The Computer Systems have sufficient capacity to meet
the needs of the business of the Company and its Subsidiaries as that business
is currently conducted (and at the levels it is currently conducted).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB
Parent and Acquisition Sub hereby jointly and severally represent and
warrant to the Company as follows:
24
4.1. Organization, Good Standing and Qualification. Each of Parent and
Acquisition Sub is a corporation organized, validly existing and in good
standing under the Laws of the State of Delaware and has all requisite corporate
power and authority to own and operate its properties and to carry on its
business as now conducted.
4.2. Authorization; Binding Obligations.
(a) Each of Parent and Acquisition Sub has all necessary corporate
power and authority to execute and deliver this Agreement and each Related
Agreement to which it is a party, and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by Parent and Acquisition Sub of this Agreement and
each Related Agreement to which it is a party, the performance of its
obligations hereunder and thereunder, and the consummation by Parent and
Acquisition Sub of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all corporate action on the part of Parent and
Acquisition Sub and no other corporate proceedings on the part of Parent or
Acquisition Sub are necessary to authorize this Agreement or any Related
Agreement to which it is a party or to consummate the transactions so
contemplated hereby and thereby.
(b) This Agreement has been, and each of the Related Agreements to
which Parent or Acquisition Sub is a party, when executed and delivered by
Parent or Acquisition Sub (and assuming the due authorization, execution and
delivery by the other parties hereto and thereto), will be, duly and validly
executed and delivered by such party, and this Agreement constitutes, and each
Related Agreement to which Parent or Acquisition Sub is a party, when executed
and delivered, will constitute, a legal, valid and binding obligation of Parent
and/or Acquisition Sub enforceable against such party in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
4.3. Capitalization of Acquisition Sub. The authorized capital stock of
Acquisition Sub consists of 1,000,000 shares of common stock, par value $0.01
per share, 1,000 shares of which are duly authorized, validly issued and
outstanding, fully paid, non-assessable and owned by Parent free and clear of
all Liens. No class of capital stock of Acquisition Sub is subject to preemptive
(or similar) rights. Acquisition Sub was formed solely for the purpose of
engaging in a business combination transaction with the Company and has engaged
in no other business activities and has conducted its operations solely as
contemplated hereby. Except as described in the first sentence of this Section
4.3, Acquisition Sub has not issued any capital stock or any options, warrants
or other rights to acquire capital stock (or securities convertible into or
exercisable or exchangeable for capital stock). There are no options, warrants
or other rights to acquire capital stock or other equity or voting interests in
Acquisition Sub or securities convertible into or exercisable or exchangeable
for capital stock or other equity or voting interests in Acquisition Sub. No
Person has any right to acquire any interest in the business or assets of
Acquisition Sub (including any right of first refusal or similar right).
25
4.4. Legal Proceedings. There are no Actions pending or overtly threatened
by or against Parent or Acquisition Sub which could materially adversely affect
such party's ability to perform its obligations under this Agreement or the
consummation of the transactions contemplated by this Agreement.
4.5. Consents and Approvals. The execution and delivery by each of Parent
and Acquisition Sub of this Agreement, the Related Agreements to which it is a
party or any other instrument or document required by this Agreement to be
executed and delivered by Parent or Acquisition Sub do not, and the performance
of this Agreement, the Related Agreements to which it is a party and any other
instrument or document required by this Agreement to be executed and delivered
by Parent or Acquisition Sub shall not, require Parent, Acquisition Sub or any
of their respective subsidiaries to obtain any Approval of any Person or
Approval of, observe any waiting period imposed by, or make any filing with or
notification to, any Governmental Authority, except (a) for any request under
the HSR Act from the United States Federal Trade Commission or the United States
Department of Justice or any other Governmental Authority for additional
information, documents or other materials relating to the pre-merger
notification requirements of the HSR Act, (b) for the filing of the Certificate
of Merger in accordance with the DGCL, (c) as set forth in Schedule 4.5 hereto,
and (d) such other Approvals, filings or authorizations as are not material.
4.6. No Violation. The execution and delivery by Parent and Acquisition Sub
of this Agreement and each Related Agreement to which Parent or Acquisition Sub
is a party do not, and the performance by Parent and Acquisition Sub of its
obligations under this Agreement and each Related Agreement to which Parent or
Acquisition is a party, will not (a) conflict with or violate the Certificate of
Incorporation or By-Laws, as amended to date, of Parent or Acquisition Sub, (b)
conflict with or violate any Law or Order to which Parent or Acquisition Sub is
subject or by which any of their respective properties are bound, or (c)
conflict with or result in any breach or violation of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
by Parent or Acquisition Sub under any material Contract to which Parent or
Acquisition Sub is a party or by which Parent or Acquisition Sub or any of their
respective assets or properties are bound or subject, which conflict, violation,
breach or default would, in the case of subsections (b) and (c) hereof, have a
material adverse effect on the ability of Parent or Acquisition Sub to
consummate the transactions contemplated by this Agreement.
4.7. Financial Capability. Each of Parent and Acquisition Sub have
available to it sufficient funds to consummate the Merger in accordance with the
terms of this Agreement, to pay the amounts contemplated by Section 2.2 above
and to pay its Transaction Expenses and all other fees, expenses and obligations
in connection herewith.
4.8. Access to Information. Parent (a) has been furnished with and has had
access to all such information regarding the Company, its Subsidiaries and their
respective businesses, assets, properties and liabilities as Parent considers
relevant in connection with its determination to enter into this Agreement, each
Related Agreement and the transactions contemplated hereby and thereby, and (b)
has had all questions which have been asked by Parent or any of its
representatives satisfactorily answered by a representative of the Company.
26
4.9. Ownership of Common Stock. Neither Parent nor Acquisition Sub
beneficially owns, directly or indirectly, any shares of Common Stock or is a
party to any agreement, arrangement or understanding (other than this Agreement)
for the purpose of acquiring, holding, voting or disposing of any shares of
Common Stock.
4.10. No Brokers. Neither Parent nor Acquisition Sub has employed or
incurred any Liability to any broker, finder, investment banker or other agent
in connection with the transactions contemplated by this Agreement other than
UBS Investment Bank or one of its Affiliates.
ARTICLE V
COVENANTS
5.1. Conduct of Business by the Company and its Subsidiaries Pending
Closing. Except as set forth in Schedule 5.1 hereto or as required by Laws
applicable to the Company, the Subsidiaries and/or their respective assets and
properties, the Company covenants and agrees that, between the date hereof and
the Effective Time, unless Parent shall consent in writing (i) the Company shall
conduct its business and shall cause the businesses of each Subsidiary to be
conducted in the ordinary course of business, and (ii) the Company shall, and
shall cause each Subsidiary to, maintain its corporate existence, use its
reasonable best efforts to preserve intact the business organization and assets
of the Company and each Subsidiary, to keep available the services of the
present officers, employees, consultants and independent contractors of the
Company and each Subsidiary, to maintain in effect the Company Contracts
(subject to the expiration of any Company Contract pursuant to its terms) and to
preserve the present relationships of the Company and each Subsidiary with
suppliers, customers, licensees and other Persons with which the Company or any
Subsidiary has business relations. By way of amplification and not limitation,
between the date hereof and the Effective Time, except as set forth in Schedule
5.1 hereof, neither the Company nor any Subsidiary shall do, or agree to do, any
of the following without the prior written consent of Parent:
(a) Amend or otherwise change the Certificate of Incorporation or
By-Laws or equivalent organizational document of the Company or any Subsidiary
or alter through merger, liquidation, reorganization, restructuring or in any
other fashion the corporate structure of the Company or any Subsidiary;
(b) Issue, sell, transfer, pledge, dispose of or encumber, or subject
to a Lien, or authorize the issuance, sale, transfer, pledge, disposition or
encumbrance of, any shares of capital stock or other equity of any class, or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of capital stock, or any other ownership interest of the Company or
any Subsidiary (except for the issuance of shares of Common Stock upon the
exercise of options outstanding on the date hereof); or sell, transfer, pledge,
dispose of or encumber, or authorize the sale, transfer, pledge, disposition or
encumbrance of any assets of the Company or any Subsidiary (other than the sale
of inventory in the ordinary course of business or the sale or disposition of
assets no longer used or useful in the business of the Company or any
Subsidiary); or redeem, purchase or otherwise acquire, directly or indirectly,
any of the capital stock of any class, or any options, warrants, convertible
securities or other rights of any
27
kind to acquire any shares of capital stock, or any other ownership interest, of
the Company or any Subsidiary;
(c) Declare, set aside or pay any dividend or other distribution
(whether in cash, stock or other securities or property or any combination
thereof) in respect of any of its capital stock or other equity interests
(except that Subsidiaries may declare and pay pro rata dividends to their
respective equity holders);
(d) Split, combine or reclassify any of its capital stock or other
securities or issue or authorize or propose the issuance of any other stock
options or securities in respect of, in lieu of or in substitution for shares of
its capital stock or amend the terms of, repurchase, redeem or otherwise
acquire, or permit any Subsidiary to repurchase, redeem or otherwise acquire,
any of its securities or any securities of any other Subsidiary, or propose to
do any of the foregoing;
(e) Adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
(other than the Merger);
(f) Form any Subsidiary or acquire (by merger, consolidation,
acquisition of stock or other securities or assets or otherwise) any equity or
other interest, or make any other investment in, any other Person or acquire any
material amount of assets or property other than in the ordinary course of
business, or enter into any joint venture, strategic alliance, exclusive
dealing, non-competition or similar contract or arrangement with any other
Person;
(g) Sell, transfer, lease, license, sublicense, mortgage, pledge,
encumber, grant or otherwise dispose of any interest in Intellectual Property
except in the ordinary course of business consistent with past practice, or
amend or modify in any material way any existing Contract with respect to any
Intellectual Property;
(h) Incur any Indebtedness or issue any debt securities or assume,
guaranty or endorse or otherwise as an accommodation become responsible for, the
obligations of any Person, or make any loans, advances or enter into any
financial commitments to or with any Person, other than to Subsidiaries of the
Company;
(i) Hire or terminate any key employee, consultant or independent
contractor, except terminations in the ordinary course of business due to poor
performance or for cause, or increase the compensation payable or to become
payable to, or the benefits provided to, its directors, officers or employees,
except for increases in the ordinary course of business consistent with past
practice in salaries or wages of employees of the Company or any of its
Subsidiaries who are not directors or officers of the Company or any of its
Subsidiaries not to exceed 6%; grant any severance or termination payment to, or
pay, loan or advance any amount to, or enter into any new bonus or incentive
agreement or arrangement with, any director, officer or employee of the Company
or any of its Subsidiaries, or establish, adopt, enter into or amend any Company
Plan or any employee benefit plan;
(j) Change any accounting policies or procedures (including procedures
with respect to reserves, revenue recognition, payments of accounts payable and
collection of accounts receivable) unless required by any applicable accounting
principles or GAAP, or accelerate the collection of or discount any accounts
receivable, delay the payment of accounts
28
payable or defer expenses or reduce inventories, except in the ordinary course
of business consistent with past practice;
(k) Create, incur, suffer to exist or assume any Lien (other than
Liens existing on the date hereof and Permitted Liens) on any assets or
properties of the Company or any Subsidiary;
(l) Amend, modify or consent to the termination of any Company
Contract, or amend, waive, modify or consent to the termination of the Company's
or any of its Subsidiaries' rights thereunder, or enter into any Contract
between any Affiliate of the Company or any of its Subsidiaries;
(m) Enter into any Contract involving aggregate payments or a value in
excess of $100,000, other than in the ordinary course of business or for Company
Transaction Expenses;
(n) Settle or compromise any federal, state, local or foreign income
Tax Liability or agree to an extension of a statute of limitations;
(o) Pay, discharge, satisfy, settle or commence any Action or waive,
assign or release any material rights or claims;
(p) Make or change any election, change any annual accounting period,
adopt or change any method of accounting or file any amended Return, in each
case, with respect to Taxes; or
(q) Authorize, recommend, propose or announce an intention to do any
of the foregoing, or agree or enter into any Contract to do any of the
foregoing.
5.2. Proxy Statement; Stockholders' Meeting.
(a) Within 30 days after the date hereof, or as soon as reasonably
practicable following the execution of this Agreement, the Company shall prepare
and file with the SEC the Proxy Statement in compliance with Section 14(a) of
the Exchange Act and the rules and regulations of the SEC promulgated
thereunder. The Company will cause the Proxy Statement to be mailed to the
Stockholders as promptly as reasonably practicable after the SEC has completed
its review thereof. Each of Parent and Acquisition Sub shall furnish to the
Company all information concerning itself and its respective subsidiaries and
its participation in the Merger as may be reasonably requested in connection
with the Merger and the preparation, filing and distribution of the Proxy
Statement. Prior to filing or mailing the Proxy Statement, the Company shall
provide Parent with a reasonable opportunity to review and comment on any drafts
of the Proxy Statement and related correspondence and filings and shall give due
consideration to any comments received from Parent's counsel.
(b) The Proxy Statement shall include the Company Recommendation,
except as otherwise provided in Section 5.7 of this Agreement.
(c) The Company will notify Parent and Acquisition Sub promptly
following receipt of any comments from the SEC and of any request by the SEC for
amendments or
29
supplements to the Proxy Statement and, will supply Parent and Acquisition Sub
as promptly as practicable with copies of all correspondence with the SEC with
respect to the Proxy Statement. The Parent and Acquisition Sub will cooperate
with the Company in preparing and filing with the SEC any necessary amendment or
supplement to the Proxy Statement.
(d) If, at any time after the mailing of the definitive Proxy
Statement and prior to obtaining Stockholder Approval, any event should occur as
a result of which the Proxy Statement (as previously amended or supplemented)
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading, or
that otherwise should be described in an amendment or supplement to the Proxy
Statement, the Company and Parent shall promptly notify each other of the
occurrence of such event and then promptly prepare, file and clear with the SEC
such amendment or supplement and the Company shall, as may be required by the
SEC, mail to the Stockholders each such amendment or supplement.
(e) The Company shall establish a record date for and shall cause a
meeting of its stockholders to be duly called and held as soon as reasonably
practicable after the SEC has completed its review of the Proxy Statement for
the purpose of voting on the approval of the Merger and the adoption of this
Agreement (such meeting, the "Company Stockholders' Meeting"). In connection
with the Company Stockholders' Meeting, the Company's Board of Directors will,
subject to Section 5.7, recommend the approval of the Merger and the adoption of
this Agreement (the "Company Recommendation"), and (ii) include such Company
Recommendation in the Proxy Statement. The Company may adjourn or postpone (i)
such Company Stockholders' Meeting to the extent necessary to ensure that any
necessary information is provided to the Company's stockholders in advance of a
vote on the Merger and this Agreement; or (ii) the time for which such Company
Stockholders' Meeting is originally scheduled if there are insufficient shares
represented, either in person or by proxy, to constitute a quorum necessary to
conduct the business of such Company Stockholders' Meeting.
5.3. Cooperation; HSR Act Filings; Other Approvals, Filings and Consents;
Further Assurances.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each party hereto shall use reasonable best efforts to take, or cause
to be taken, all actions, and do, or cause to be done, and to assist and
cooperate with the other party or parties in doing, all things necessary, proper
or advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated hereby, and by
the Related Agreements and to satisfy or cause to be satisfied all of the
conditions precedent that are set forth in Article VI, as applicable to each of
them. Each party hereto, at the reasonable request of another party hereto,
shall execute and deliver such other instruments and do and perform such other
acts and things as may be necessary or desirable for effecting completely the
consummation of this Agreement and the transactions contemplated hereby.
(b) Each of Parent (on behalf of itself and its Affiliates, including
Kyocera Corporation) and the Company (i) agrees that it shall, as promptly as
practicable and in any event within 15 calendar days of the date hereof, make
the filings required of such party or any of its
30
subsidiaries (including the Subsidiaries) under the HSR Act with respect to the
transactions contemplated by this Agreement, (ii) agrees to use its reasonable
best efforts to negotiate with the United States Federal Trade Commission, the
United States Department of Justice and/or any other Governmental Authority in
respect of such filings to prevent the issuance of any requests for additional
information, documents or other materials under the HSR Act; provided, that, (A)
if such a request is about to be issued notwithstanding the parties' efforts,
the parties shall discuss the withdrawal and refiling of the filings to avoid
the issuance of such a request and to enable the parties to continue to attempt
to resolve the issues raised by the United States Federal Trade Commission, the
United States Department of Justice and/or any other Governmental Authority in
connection with the filings without the need to respond to any such request, and
each of the parties shall have the option of withdrawal and refiling, and (B) if
any such requests are nonetheless issued, to seek modification of same and/or
comply at the earliest practicable date with respect thereto, as modified, and
(iii) shall act in good faith and reasonably cooperate with the other party in
connection with any such filing and in connection with resolving any
investigation or other inquiry of any such agency or other Governmental
Authority under any Antitrust Laws with respect to any such filing or any such
transaction. To the extent not prohibited by Law, each party to this Agreement
shall use reasonable best efforts to furnish to each other all information
required for any application or other filing to be made pursuant to any Law in
connection with the transactions contemplated by this Agreement. Each of the
Company and Parent shall give the other reasonable prior notice of any
communication with, and any proposed understanding, undertaking or agreement
with, any Governmental Authority regarding any such filings or any such
transaction. The Company (on behalf of itself and the Subsidiaries), Parent (on
behalf of itself and its Affiliates, including Kyocera Corporation) and
Acquisition Sub shall (x) give the other parties hereto prior notice of each
meeting and substantive conversation with the United States Federal Trade
Commission, the United States Department of Justice and/or any other
Governmental Authority with respect to such filings, investigation or other
inquiry, (y) discuss with the other parties hereto the subject matter to be
discussed at such meeting or during such conversation and the recommended course
of action, and (z) to the extent reasonably practicable or appropriate, allow
the other parties to participate in such meeting or conversation.
(c) Each of Parent (on behalf of itself and its Affiliates, including
Kyocera Corporation) and the Company shall use reasonable best efforts to
resolve such objections, if any, as may be asserted by any Governmental
Authority with respect to the transactions contemplated by this Agreement, under
the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the
Federal Trade Commission Act, as amended, and any other Laws or Orders that are
designed to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade (collectively, "Antitrust Laws"). In
connection therewith, if any Action is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement as
inconsistent with or in violation of any Antitrust Law, each of Parent (on
behalf of itself and its Affiliates, including Kyocera Corporation) and the
Company shall cooperate and use reasonable best efforts to contest and resist
such Action, and to have vacated, lifted, reversed or overturned any Order
whether temporary, preliminary or permanent, that is in effect and that
prohibits, prevents, delays or restricts consummation of the transactions
contemplated by this Agreement or the Related Agreements, including by pursuing
all available avenues of administrative and judicial appeal and all available
legislative action, unless Parent and the Company determine that litigation is
not in their mutual best interests. Each of Parent
31
(on behalf of itself and its Affiliates, including Kyocera Corporation) and the
Company shall use reasonable best efforts to take such action as may be required
to cause the expiration of the notice periods under the HSR Act or other
Antitrust Laws with respect to the transactions contemplated by this Agreement
and the Related Agreements as promptly as possible after the execution of this
Agreement. Parent agrees that is shall be responsible for compliance with the
provisions of Sections 5.3(b) and (c) of this Agreement by its Affiliates,
including Kyocera Corporation.
(d) Each of Parent and the Company shall, as promptly as practicable,
use reasonable best efforts to obtain all other necessary Approvals from
Governmental Authorities and make all other necessary registrations and filings
under applicable Law required in connection with the authorization, execution
and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby, including the Merger.
Parent and the Company shall act in good faith and reasonably cooperate with the
other in connection therewith and in connection with resolving any investigation
or other inquiry with respect thereto. To the extent not prohibited by Law, each
party to this Agreement shall use reasonable best efforts to furnish to each
other all information required for any application or other filing to be made
pursuant to any Law (other than Antitrust Laws) in connection with the
transactions contemplated by this Agreement and the Related Agreements. Each of
the Company and Parent shall give the other reasonable prior notice of any
communication with, and any proposed understanding, undertaking or agreement
with, any Governmental Authority regarding any such Approval. The Company (on
behalf of itself and the Subsidiaries), Parent and Acquisition Sub shall (i)
give the other parties hereto prior notice of each meeting and substantive
conversation with any Governmental Authority with respect to any such Approval,
investigation or other inquiry, (ii) discuss with the other parties hereto the
subject matter to be discussed at such meeting or during such conversation and
the recommended course of action, and (iii) to the extent reasonably practicable
or appropriate, allow the other parties to participate in such meeting or
conversation.
(e) The Company shall use its reasonable best efforts to obtain all
Approvals from third parties that are set forth in Section 3.5 of the Disclosure
Schedule and identified with an asterisk ("Company Third Party Consents").
Parent and Acquisition Sub shall use their reasonable best efforts to obtain all
Approvals from third parties that are set forth in Section 4.5 of the Disclosure
Schedule and identified with an asterisk ("Parent/Acquisition Sub Third Party
Consents"). Notwithstanding anything to the contrary in this Agreement, Parent
will not be required, in order to obtain any Approvals or consents under or in
respect of this Agreement, to agree to any condition (i) that seeks to prohibit
or limit the ownership or operation by the Company or Parent or any of their
Affiliates of a material portion of the business or assets of the Company,
Parent or any of their Affiliates, or to compel the Company, Parent or any of
their Affiliates to dispose of or hold separate any material portion of their
business or assets as a result of the Merger or any other transaction
contemplated hereunder, (ii) seeks to impose limitations on the ability of
Parent to acquire, hold or exercise full rights of ownership of any Common
Stock, including the right to vote the Common Stock purchased by it on all
matters properly presented to the stockholders of the Company, (iii) seeks to
prohibit Parent or any of its subsidiaries from effectively controlling in any
material respect the business or operations of Parent, the Company and their
Affiliates, or (iv) otherwise would reasonably be expected to have a Company
Material Adverse Effect.
32
5.4. Access to Information. Prior to the Effective Time and upon reasonable
notice, the Company shall (and shall cause each of its Subsidiaries to) afford
to the officers, employees, accountants, counsel and other representatives of
Parent, reasonable access during normal working hours to all of its properties,
finances, operating condition, books, Contracts and records and the Company
shall (and shall cause each of its Subsidiaries to) furnish promptly to Parent
all information concerning its business, properties, books, Contracts, records
and personnel as Parent may reasonably request. The Company shall make available
to the officers, employees, accountants, counsel and other representatives of
Parent upon the reasonable request of Parent and during normal working hours all
officers, accountants, counsel and other representatives or agents of the
Company or its Subsidiaries for discussion of the Company's or its Subsidiaries'
businesses, properties or personnel as Parent may reasonably request. All
requests to meet with any officer or employee of the Company shall be made to
Xxxxxxxx Xxxxx, Vice President - Administration of the Company. The Company
shall use reasonable best efforts to make available to the officers, employees,
accountants, counsel and other representatives of Parent upon the reasonable
request of Parent such customers, suppliers or other Persons with whom the
Company or any of its Subsidiaries maintains a business or commercial
relationship; provided, that either Xxxxxxxx Xxxxx or Xxxxxx Xxxx (or such other
Person designated by Xxxxxxxx Xxxxx or Xxxxxx Xxxx) must be present at any
meeting, or participating in any telephone conversation, between any officer,
employee, accountant, counsel or representative of Parent and any such Person.
All information obtained by Parent pursuant to this Section 5.4 shall constitute
"Confidential Information" pursuant to the terms of the confidentiality
agreement, dated February 27, 2007, between Parent and the Company (the
"Confidentiality Agreement") and Acquisition Sub agrees to be bound to the terms
and conditions of the Confidentiality Agreement as if a party thereto.
5.5. Notice of Certain Events. Each party hereto shall promptly notify the
other parties hereto of any event, condition, fact, circumstance, occurrence,
transaction or other item of which such party becomes aware after the date
hereof and prior to the Closing that would constitute a material violation or
breach of this Agreement (or a material breach of any representation or warranty
contained herein) or, if the same were to continue to exist as of the Closing
Date, would result in any of the conditions set forth in Article VI hereof.
5.6. Public Announcements. Prior to the Effective Time, Parent and the
Company shall consult with and obtain the approval of (which approval shall not
be unreasonably withheld) the other party before issuing any press release or
other public announcement with respect to the Merger or this Agreement, and no
party hereto shall issue or cause to be issued any such press release prior to
such consultation and approval, except to the extent required by applicable Law
or the rules of any applicable securities exchange, in which case the party
proposing to issue such press release or make such public announcement shall use
its reasonable best efforts to consult in good faith with the other party before
issuing any such press release or making any such public announcement to attempt
to agree upon mutually satisfactory text. Upon the Closing, Parent and the
Company shall issue a mutually agreed upon press release announcing the
transactions contemplated hereby.
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5.7. No Solicitation of Other Proposals.
(a) No Solicitation. On the date of this Agreement, the Company shall
(i) immediately cease, and cause the Subsidiaries and the Company
Representatives immediately to cease, all existing activities, discussion and
negotiations with any third parties with respect to any Acquisition Proposal,
and (ii) promptly notify each Company Representative of its obligations under
this Section 5.7. From the date hereof until the earlier of the Effective Time
or the termination of this Agreement in accordance with its terms, the Company
shall not, nor shall it permit any Subsidiary to, nor shall it authorize or
permit any of its officers, directors, employees, representatives or agents
(including, any investment banking, legal or accounting firm retained by any of
them) (collectively, the "Company Representatives"), directly or indirectly to,
(A) initiate, solicit, participate in any discussions or negotiations regarding,
provide any non-public information with respect to, or intentionally encourage
or seek any inquiries or communications relating to the making of any
Acquisition Proposal; (B) enter into any letter of intent, memorandum, agreement
in principle, merger agreement, acquisition agreement, option agreement or other
agreement constituting or related to an Acquisition Proposal (other than a
confidentiality Agreement referral to in and as permitted by this Section 5.7),
or (C) release any Third Party from, or waive compliance with any standstill or
confidentiality provisions of any agreement to which it is a party; provided,
that, nothing contained in this Section 5.7 shall prohibit the Company's Board
of Directors or officers from furnishing information to or entering into
discussions or negotiations with, any person or entity that makes an unsolicited
bona fide proposal related to an Acquisition Proposal, if (x) the Company Board
of Directors determines in good faith that such action is required for the
Company Board of Directors to comply with its fiduciary duties to Stockholders
under applicable Law, and (y) the Company has obtained from such person a
confidentiality agreement not in conflict with the rights of Parent under
Section 5.7(b) hereof and otherwise on terms the Company determines in good
faith to be no less favorable to the Company than those contained in the
Confidentiality Agreement.
(b) Superior Proposals. The Company Board of Directors shall furnish
to Parent all information provided to any third party pursuant to this Section
5.7 to the extent that such information has not been previously provided to
Parent. Notwithstanding the foregoing, if the Company Board of Directors
receives an Acquisition Proposal which it determines in good faith to be
superior to the Merger (after consultation with its financial advisors and legal
counsel), taking into account the Person making the Acquisition Proposal and the
likelihood and timing of consummation (including financial, legal, regulatory
and other aspects of the Acquisition Proposal deemed relevant by the Company
Board of Directors in good faith) (such other Acquisition Proposal, a "Superior
Proposal"), the Company Board of Directors may withdraw or modify the Company
Recommendation, approve or recommend the Superior Proposal, enter into an
agreement with respect to such Superior Proposal (either of which shall be
deemed, for purposes of Section 7.2 hereof, a withdrawal of the Company
Recommendation) or terminate this Agreement in accordance with Section 7.1(f);
provided, that, at least three Business Days prior to taking any such action,
the Company gives written notice thereof to Parent, setting forth in reasonable
detail, the material terms and conditions of such Superior Proposal, and Parent
shall not have, within such three Business Day period, proposed an improved
transaction to the Company's Board of Directors which the Company's Board of
Directors determines in good faith (after consultation with its financial
advisors and legal counsel) to be at least as favorable to the Stockholders as
the Superior Proposal) (it being
34
understood and agreed that any amendment to the financial terms or any other
material term of such Superior Proposal shall require new written notice to
Parent and an additional two Business Day period to enable Parent to consider
proposing an improved transaction). As soon as reasonably practicable after the
date hereof, the Company shall request that third parties promptly return or
destroy all confidential information relating to the Company or any of its
Subsidiaries furnished to any such third parties by Xxxxxx Xxxxxx Partners or
obtained by such third parties during the process established by Xxxxxx Xxxxxx
Partners.
5.8. Directors' and Officers' Insurance. From and after the Effective Time,
Parent shall, and shall cause the Surviving Corporation to, pursuant to the
provisions of their respective Certificates of Incorporation and By-Laws,
indemnify and hold harmless the present and former officers and directors of the
Company in respect of acts or omissions occurring while such persons were
officers and directors of the Company to at least the same extent as is provided
under the Certificate of Incorporation and By-Laws of the Surviving Corporation
as attached to this Agreement as Exhibit A and Exhibit B, respectively. Neither
Parent nor the Surviving Corporation will amend, repeal or modify such
provisions in any manner that would adversely affect the rights thereunder of
such persons; provided, that such indemnification shall be subject to any
limitation imposed from time to time under applicable Law. In addition, as of
the Effective Time, Parent shall have taken such action necessary to provide
directors' and officers' liability insurance for any current or former officers
or directors of the Company or any of its Subsidiaries under Parent's directors'
and officers' liability insurance policy with respect to any actions or
omissions by such directors or officers occurring prior to the Effective Time,
and shall maintain coverage for such officers and directors under Parent's then
existing directors' and officers' liability insurance policy for a period of six
years from the Closing Date on terms with respect to coverage and amount no less
favorable in the aggregate than those of the Company's existing policy in effect
on the date hereof; provided that, (a) Parent may substitute therefore policies
of at least the same coverage containing terms and conditions that are not less
advantageous than the existing policies (including with respect to the period
covered), and (b) in satisfying the obligation under this Section 5.8, neither
Parent nor the Surviving Corporation shall be obligated to pay annual premiums
in excess of 200% of the annual premium paid by the Company for directors' and
officers' liability insurance as of the date hereof. Notwithstanding anything
contained in Section 5.1 or elsewhere in this Agreement to the contrary, the
Company may obtain and fully pay for a "tail" directors' and officers' liability
insurance policy covering those individuals who at the time of the execution of
this Agreement are covered by the Company's existing directors' and officers'
liability insurance policy with a claims period of at least six years following
the Effective Time.
5.9. Employee Benefits. Immediately following the Effective Time, the
Company and the Subsidiaries (as operated by Parent) shall continue to employ or
retain, as applicable, each of the employees who remains an employee of the
Company or any Subsidiary as of the Closing Date. Such continued employment
shall be on substantially the same terms and conditions immediately following
the Effective Time as enjoyed by such employee prior to the Effective Time.
Parent shall either (a) continue to maintain the Company Plans and cause such
employees to be covered thereunder to the same extent covered prior to the
Effective Time, or (b) cause each such employee to be covered by the benefit
plans and arrangements provided to similarly-situated employees of Parent
("Parent Plans"); provided, that such plans and arrangements shall be at least
as favorable, taken as a whole, to such employees as the Company Plans. For
35
purposes of determining eligibility and vesting (but not benefit accrual) under
such Parent Plans, Parent shall credit each such employee with his or her years
of service with the Company, the Subsidiaries and any predecessor entities, to
the same extent as such employee was entitled to credit for such service under
any similar Company Plans prior to such employee's commencement of participation
in the Parent Plans. Further, if and to the extent such employees participate in
Parent Plans, Parent shall use its reasonable best efforts to (i) credit such
employees for any co-payments, deductibles and out-of-pocket expenses paid under
applicable Company Plans prior to such employees' participation in such Parent
Plans, and (ii) cause to be waived under applicable Parent Plans all
pre-existing condition exclusions and limitations applicable to such employees
and their eligible dependents under the Company Plans. To the extent that Parent
is a "successor employer" as such term is defined in Section 54.4980B-9 of the
Treasury Regulations, Parent shall satisfy and be fully responsible for any and
all obligations under COBRA with respect to such employees, former employees and
their respective spouses and dependents who participate in Company Plans that
are group health plans (within the meaning of Section 5000(b)(1) of the Code)
and who are "M&A Qualified Beneficiaries" (as such term is defined in Section
54.4980B-9 of the Treasury Regulations) with such coverage provided through a
Parent Plan (if the corresponding Company Plan is terminated). Parent shall
satisfy and be fully responsible for any and all COBRA obligations that arise
with respect to any M&A Qualified Beneficiary (as such terms is determined in
Section 54.4980B-9) entitled to elect continuation coverage pursuant to COBRA as
a result of a "qualifying event" that occurred on or prior to the Closing Date.
The parties agree that the foregoing provisions of this Section 5.9 (i) are set
forth solely for the purpose of defining the obligations between Parent and the
Company and shall not be construed as creating any employment contract or other
agreement with any employee or other person, and (ii) do not constitute a
Company Plan or Parent Plan amendment.
5.10. Updates to Disclosure Schedule for Post-Signing Events. At any time,
and from time to time on or prior to the Closing Date, the Company may
supplement or amend the Disclosure Schedule to reflect any fact necessary to
make the representations true and correct (any such supplement or amendment, a
"Disclosure Update"). For purposes of determining whether the condition set
forth in Section 6.2(a) has been satisfied, (a) with respect to a fact or
circumstance set forth on the Disclosure Update, which fact or circumstance (i)
exists as of the date of this Agreement or (ii) arises after the date of this
Agreement and constitutes a Company Material Adverse Effect, the Disclosure
Schedule will not be deemed amended by the Disclosure Update, and (b) with
respect to a fact or circumstance set forth on the Disclosure Update, which fact
or circumstance arises after the date of this Agreement and which does not
constitute a Company Material Adverse Effect, the Disclosure Schedule will be
deemed updated by the Disclosure Update.
ARTICLE VI
CONDITIONS PRECEDENT TO MERGER
6.1. Conditions to Obligation of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Closing of the following conditions:
36
(a) Governmental Approvals. All applicable waiting periods or
approvals under the HSR Act or any other Antitrust Laws shall have expired or
been terminated or received. All other Approvals of, or declarations or filings,
with any Governmental Authority necessary for the consummation of the Merger, if
any, shall have been obtained or made.
(b) Stockholder Approval. The Stockholder Approval shall have been
obtained.
6.2. Additional Conditions to Obligations of Parent and Acquisition Sub.
The obligations of Parent and Acquisition Sub to effect the Merger shall be
subject to the satisfaction at or prior to the Closing of the following
additional conditions:
(a) Representations and Warranties. After giving effect to any
Disclosure Update in accordance with Section 5.10, if applicable, each of the
representations and warranties set forth in Article III that is qualified by
"materiality," "Company Material Adverse Effect" or a similar qualifier shall be
true and correct in all respects, and each of such representations and
warranties that is not so qualified shall be true and correct in all material
respects, in each case, on the date of this Agreement and on and as of the
Closing Date as though made on and as of the Closing Date (except for
representations and warranties made as of a specified date, the accuracy of
which will be determined only as of the specified date).
(b) Agreements and Covenants. The Company shall have performed or
complied, in all material respects, with each obligation, agreement and covenant
to be performed or complied with by it under this Agreement at or prior to the
Effective Time.
(c) Compliance Certificate. The Company shall have delivered to Parent
a certificate of the President or Chief Executive Officer of the Company, dated
as of the Closing Date, certifying that the conditions set forth in Sections
6.2(a) and (b) have been satisfied.
(d) Consents. Each of the Company Third Party Consents shall have been
received in form and substance reasonably satisfactory to Parent.
(e) Good Standing Certificates. The Company shall have delivered to
Parent with respect to the Company and each Subsidiary, a certificate of good
standing from the Secretary of State of its jurisdiction of incorporation or
organization and the Secretary of State of each jurisdiction in which it is
qualified or licensed to do business each dated a reasonable date prior to the
Closing Date.
(f) Resignation. Except with regard to those individuals and positions
identified on Schedule 6.2(f) hereto, Parent shall have received resignations,
effective as of the Closing Date, from all the members of the Boards of
Directors of the Company and each Subsidiary, and from all the officers of the
Company and each Subsidiary from their respective offices.
(g) Certificate. The Company shall deliver to Parent a certificate
signed by a senior executive officer of the Company certifying as to: (i) an
attached copy of the resolutions of the Company Board of Directors and an
attached copy of the resolutions of the Requisite Holders, in each case
authorizing and approving the execution, delivery and performance of, and
37
the consummation of the transactions contemplated by, this Agreement and the
other Related Agreements, and stating that the resolutions thereby certified
have not been amended, modified, revoked or rescinded; (ii) the incumbency,
authority and specimen signature of each officer of the Company executing this
Agreement and the Related Agreements; and (iii) an attached copy of the
Company's and each Subsidiary's Certificate of Incorporation and Bylaws or other
organizational documents, (as in effect from the time the resolutions described
above were adopted until the Closing).
(h) Exchange Agreement. The Company and the Exchange Agent shall have
executed and delivered the Exchange Agreement in the form attached hereto as
Exhibit G (the "Exchange Agreement"), the same shall be in full force and effect
and the actions required to be taken thereunder by the Company and the Exchange
Agent prior to the Effective Time shall have been performed.
(i) No Injunctions or Restraints; Illegality.
(i) There shall not be any Law enacted, entered, enforced or
otherwise in effect and deemed applicable to the Merger, which makes the
consummation of the Merger on the terms, and conferring upon the Parent and the
Surviving Corporation all of their respective rights and benefits, contemplated
herein, illegal.
(ii) No temporary restraining order, preliminary or permanent
injunction or other Order (whether temporary, preliminary or permanent) issued
by any Court of competent jurisdiction or other legal restraint or prohibition
shall be in effect which prevents the consummation of the Merger on the terms,
and conferring upon the Parent and the Surviving Corporation all of their
respective rights and benefits, contemplated herein.
(iii) There shall not be pending any Action by any Person that
seeks to prevent the consummation of the Merger on the terms, and conferring
upon the Parent and the Surviving Corporation all of their respective rights and
benefits, contemplated herein, or seeking the award of damages payable by or any
other remedy against Parent or the Surviving Corporation if the Merger is
consummated.
(j) Maximum Dissenting Shares. Not more than 10% of the outstanding
shares of Common Stock outstanding immediately prior to the Effective Time shall
be Dissenting Shares.
(k) No Company Material Adverse Effect. There shall not have occurred
since the date of this Agreement any Company Material Adverse Effect which shall
not have been cured.
6.3. Additional Conditions to Obligations of the Company. The obligations
of the Company to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following additional conditions:
(a) Representations and Warranties. Each of the representations and
warranties set forth in Article IV that is qualified by "materiality" or a
similar qualifier shall be true and correct in all respects, and each of such
representations and warranties that is not so
38
qualified shall be true and correct in all material respects, in each case, on
the date of this Agreement and on and as of the Closing Date as though made on
and as of the Closing Date (except for representations and warranties made as of
a specified date, the accuracy of which will be determined only as of the
specified date).
(b) Agreements and Covenants. Each of Parent and Acquisition Sub shall
have performed or complied, in all material respects, with each obligation,
agreement and covenant to be performed or complied with by it under this
Agreement at or prior to the Effective Time.
(c) Compliance Certificate. Parent shall have delivered to the Company
a certificate of the President or Chief Executive Officer of Parent, dated as of
the Closing Date, certifying that the conditions set forth in Sections 6.3(a)
and (b) have been satisfied.
(d) Consents. Each of the Parent/Acquisition Sub Third Party Consents
shall have been received in form and substance reasonably satisfactory to the
Company.
(e) Exchange Agreement. The Parent and the Exchange Agent shall have
executed and delivered the Exchange Agreement, the same shall be in full force
and effect and the actions required to be taken thereunder by Parent and the
Exchange Agent prior to the Effective Time shall have been performed.
(f) No Injunctions or Restraints; Illegality.
(i) There shall not be any Law enacted, entered, enforced or
otherwise in effect and deemed applicable to the Merger, which makes the
consummation of the Merger on the terms, and conferring upon the Stockholders
and the Optionholders all of their respective rights and benefits, contemplated
herein, illegal.
(ii) No temporary restraining order, preliminary or permanent
injunction or other Order (whether temporary, preliminary or permanent) issued
by any Court of competent jurisdiction or other legal restraint or prohibition
shall be in effect which prevents the consummation of the Merger on the terms,
and conferring upon the Stockholders and the Optionholders all of their
respective rights and benefits, contemplated herein.
(iii) There shall not be pending any Action by any Person, nor
shall any threat of any such Action have been made by any Person in writing and
not withdrawn, in either case that seeks to prevent the consummation of the
Merger on the terms, and conferring upon the Stockholders and the Optionholders
all of their respective rights and benefits, contemplated herein.
ARTICLE VII
TERMINATION, AMENDMENT, WAIVER AND EXPENSES
7.1. Termination. This Agreement may be terminated (in the case of clauses
(b) - (g) below, by written notice of the terminating party to the other parties
hereto) and the Merger
39
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding Stockholder Approval:
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent and the Company;
(b) By either Parent or the Company if the Merger shall not have been
consummated on or before February 28, 2008; provided, however, that if the
Merger shall not have been consummated solely due to (i) any Approval from any
Governmental Authority not having been received, or (ii) Stockholder Approval
not having been received, then such date shall be extended by up to an
additional 30 days (such date, as extended, if applicable, the "Outside Date");
provided, further, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose failure to fulfill in all
material respects any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger to have been consummated on or before
such date; and, provided, further, that the Outside Date shall be extended, and
neither Parent, on the one hand, nor the Company, on the other hand, may
terminate this Agreement under this Section 7.1(b) until the expiration of the
10-day cure period set forth in Section 7.1(d)(ii)(B) or Section 7.1(e)(ii)(B),
as the case may be;
(c) By either Parent or the Company, if a Court or Governmental
Authority shall have issued an Order or taken any other action, in each case,
which has become final and non-appealable and which restrains, enjoins or
otherwise prohibits the Merger;
(d) By Parent, if neither Parent nor Acquisition Sub is in material
breach of any of its obligations under this Agreement, and if the Company shall
have breached any of its representations or warranties or failed to perform any
of its covenants or other agreements contained in this Agreement, which breach
or failure to perform would render unsatisfied any condition contained in
Section 6.1 or 6.2 and (i) is incapable of being cured, or (ii) if capable of
being cured is not cured prior to the later of (A) the Business Day prior to the
Outside Date, or (B) the date that is 10 days from the date that the Company is
notified of such breach;
(e) By the Company, if it is not in material breach of any of its
obligations under this Agreement, and if Parent or Acquisition Sub shall have
breached in any material respect any of its representations or warranties or
failed to perform in any material respect any of its covenants or other
agreements contained in this Agreement, which breach or failure to perform would
render unsatisfied any condition contained in Section 6.1 or 6.3 and (i) is
incapable of being cured, or (ii) if capable of being cured is not cured prior
to the later of (A) the Business Day prior to the Outside Date, or (B) the date
that is 10 days from the date that Parent is notified of such breach;
(f) By the Company if it has received a Superior Proposal, has given
Parent the written notice contemplated by Section 5.7 above, and Parent shall
not have, within the three Business Day period provided therein (as the same may
be extended as provided therein), proposed an improved transaction to the
Company's Board of Directors which the Company Board of Directors determines in
good faith (after consultation with its financial advisors and legal counsel) to
be at least as favorable to the Stockholders as the Superior Proposal; or
40
(g) By Parent, if the Company Board of Directors withdraws or modifies
the Company Recommendation in a manner adverse to Parent.
7.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement (other than this Section 7.2
and Sections 5.6, 7.3, 8.1, 8.4, 8.5 8.6, 8.8, 8.9, 8.10 and 8.11 which shall
survive such termination) will forthwith become void; provided, that if this
Agreement is terminated as a result of any material breach of any
representations, warranties, obligations, covenants or other agreements by
either party under this Agreement, the non-breaching party shall be entitled to
pursue a claim for damages arising therefrom in a court of competent
jurisdiction); and provided, further that, (a)(i) if this Agreement is
terminated by the Company pursuant to Section 7.1(f) or by Parent pursuant to
Section 7.1(g), or (ii) if this Agreement is terminated by either party pursuant
to Section 7.1(b) and within six months of such termination pursuant to Section
7.1(b) the Company enters into an agreement with a Third Party with respect to
an Acquisition Proposal, then, in the case of either (i) or (ii), the Company
shall pay to Parent, within two days of such event, a fee equal to $5,000,000,
and (b) the parties shall, in all events, remain bound by and continue to be
subject to the Confidentiality Agreement and Section 5.4.
7.3. Expenses.
(a) Except as otherwise specified in Section 7.3(b) or (c) below, all
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, legal,
accounting and investment banking fees ("Transaction Expenses"), shall be paid
by the party incurring such Transaction Expenses, whether or not the Merger is
consummated.
(b) All Transaction Expenses which are incurred by the Company and the
Subsidiaries through the Closing Date and which remain unpaid as of the Closing
Date, to the extent known on the Closing Date (collectively, "Closing Date
Company Transaction Expenses") shall be paid on the Closing Date as contemplated
by Section 2.1.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, (i) all sales, transfer and similar Taxes (but excluding any Taxes
resulting from income received or required to be recognized by any of the
recipients of Merger Consideration), if any, incurred by, the Company or the
Surviving Corporation as a result of the consummation of the transactions
contemplated hereby, (ii) all filing fees payable to any Governmental Authority
pursuant to the HSR Act or other Antitrust Law in connection with the
transactions contemplated hereby, and (iii) all fees and expenses of the
Exchange Agent with respect to the Exchange Fund, shall be borne by the Parent.
ARTICLE VIII
MISCELLANEOUS
8.1. Entire Agreement; Amendments. This Agreement, together with its
schedules and exhibits, the Confidentiality Agreement, the Related Agreements
and all other ancillary agreements, documents and instruments to be delivered in
connection herewith contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior
41
agreements, either oral or written. Each party to this Agreement acknowledges
that no representations, inducements, promises or agreements, orally or
otherwise, have been made by any other party, or by anyone acting on behalf of
any party, that are not embodied herein, and that no other agreement, statement,
or promise not contained in this Agreement shall be valid or binding. This
Agreement may be amended only by an instrument in writing signed by duly
authorized representatives of Parent, Acquisition Sub and the Company.
8.2. Assignment. No party hereto shall assign or otherwise transfer this
Agreement or any of its rights hereunder, or delegate any of its obligations
hereunder, without the prior written consent of the other parties hereto;
provided, that, Parent and Acquisition Sub may assign this Agreement to any
Affiliate of Parent without the prior consent of the Company provided Parent
shall continue to remain directly and primarily liable for the performance of
all of its obligations under this Agreement pursuant to documentation reasonably
satisfactory to the Company. Subject to the foregoing, this Agreement and the
rights and obligations set forth herein shall inure to the benefit of, and be
binding upon the parties hereto, and each of their respective successors, heirs,
legal representatives and permitted assigns.
8.3. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of all parties,
but all of which counterparts when taken together will constitute one and the
same agreement. Facsimile signatures and pdf copies of signature pages, shall
constitute original signatures for all purposes of this Agreement. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.
8.4. Governing Law; Venue; Waiver of Jury Trial. This Agreement shall be
governed by the Laws of the State of Delaware without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause application of the Laws of
any jurisdiction other than the State of Delaware. Each of the parties to this
Agreement irrevocably submits to the exclusive jurisdiction of the state courts
of Delaware and to the jurisdiction of the United States District Court for the
State of Delaware, for the purpose of any Action arising out of or relating to
this Agreement. Each of the parties to this Agreement consents to service of
process by delivery pursuant to Section 8.8 hereof and agrees that a final
judgment in such jurisdiction in any Action shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law. Each of the parties hereto waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
Related Agreement or any transaction contemplated hereby or thereby.
8.5. Specific Performance. The rights and remedies of the parties hereto
shall be cumulative. The transactions contemplated by this Agreement are unique
transactions and any failure on the part of any party to complete the
transactions contemplated by this Agreement on the terms of this Agreement will
not be fully compensable in damages and the breach or threatened breach of the
provisions of this Agreement would cause the other parties hereto irreparable
harm. Accordingly, in addition to and not in limitation of any other remedies
available to the parties hereto for a breach or threatened breach of this
Agreement, the parties shall be entitled to seek specific performance of this
Agreement and seek an injunction restraining any such party from such breach or
threatened breach.
42
8.6. Interpretation. The Schedule of Defined Terms and the exhibits
attached hereto are an integral part of this Agreement. Such schedule and
exhibits attached to this Agreement are incorporated herein by this reference
and all references herein to this "Agreement" shall mean this Agreement together
with such schedule and exhibits. When a reference is made in this Agreement to
Sections, subsections, schedules or exhibits, such reference shall be to a
Section, subsection, schedule or exhibit to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The table of contents and the headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. As used herein, all
pronouns shall include the masculine, feminine, neuter, singular and plural
thereof whenever the context and facts require such construction. Any
information disclosed in any section of the Disclosure Schedule shall be deemed
to be included in every other section of the Disclosure Schedule to the extent
applicable. Certain sections of the Disclosure Schedule contain disclosures
which include more information than is required by the Sections of the Agreement
to which such sections relate and such additional disclosure shall not be deemed
to mean that such information is required by such related Sections of the
Agreement (the fact that a Section of this Agreement calls for a listing of
material agreements does not necessarily mean that such agreement listed on the
related Section of the Disclosure Schedule is material). Headings have been
inserted on the sections of the Disclosure Schedule for convenience of reference
only and shall to no extent have the effect of amending or changing the express
description of the sections of the Disclosure Schedule as set forth in this
Agreement.
8.7. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or public
policy, in any jurisdiction, such term or provision shall be ineffective to the
extent of such invalidity or unenforceability, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such term or provision in any other
jurisdiction.
8.8. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by nationally-recognized overnight courier or by registered or certified
mail, postage prepaid, return receipt requested, or by facsimile or electronic
mail (provided that any notice or communication sent by facsimile or electronic
mail shall also be confirmed by another method permitted by this Section 8.8)
addressed as follows:
If to Parent or
Acquisition Sub: AVX Corporation
000 00xx Xxxxxx, Xxxxx
Xxxxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx, Vice President for
Business and Legal Affairs
Facsimile: (000) 000-0000
Email: xxxxxxxx@xxxxxxxxx.xxx
43
With copies to: Xxxxxx & Bird LLP
Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
Email: xxxx.xxxx@xxxxxx.xxx
If to the Company: American Technical Ceramics Corp.
Xxx Xxxxxx Xxxx
Xxxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Vice President - Administration
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxx.xxx
With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxx@xxxxx.xxx
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such notices
or communications shall be deemed to be received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of nationally-recognized
overnight courier, on the next Business Day after the date when sent, (c) in the
case of mailing, on the third Business Day following the date on which the piece
of mail containing such communication was posted, and (d) in the case of
facsimile transmission or electronic mail, on the Business Day sent if sent
during the normal business hours of the recipient and otherwise on the next
Business Day.
8.9. Representation by Counsel. Each party hereto acknowledges that it has
been advised by legal and any other counsel retained by such party in its sole
discretion. Each party acknowledges that such party has had a full opportunity
to review this Agreement and all related exhibits, schedules and ancillary
agreements and to negotiate any and all such documents in its sole discretion,
without any undue influence by any other party hereto or any third party.
8.10. Construction. The parties have participated jointly in the
negotiations and drafting of this Agreement and in the event of any ambiguity or
question of intent or interpretation, no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.
8.11. Waivers. At any time prior to the Effective Time, any party hereto
may extend the time for the performance of any of the obligations or other acts
required by the other party
44
hereunder, waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document delivered pursuant hereto and
waive compliance by the other party with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby. No
waiver by any party, whether express or implied, of its rights under any
provision of this Agreement shall constitute a waiver of the party's rights
under such provisions at any other time or a waiver of the party's rights under
any other provision of this Agreement. No failure by any party to take any
action against any breach of this Agreement or default by another party shall
constitute a waiver of the former party's right to enforce any provision of this
Agreement or to take action against such breach or default or any subsequent
breach or default by the other party.
8.12. Disclaimer of Additional Representations and Warranties. Except as
set forth in this Agreement, any Related Agreement or in any other agreement,
exhibit, schedule, certificate, instrument or other writing delivered in
connection with this Agreement, no party hereto makes any additional
representation or warranty to any other party hereto. None of the
representations, warranties, covenants or other agreements of the Company,
Parent or Acquisition Sub contained in this Agreement, any Related Agreement or
in any other agreement, exhibit, schedule, certificate, instrument or other
writing delivered in connection with this Agreement shall survive the Effective
Time, except for those covenants, agreements and other provisions that by their
terms apply or are to be performed, in whole or in part, after the Effective
Time.
8.13. No Third Party Beneficiaries. No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder; except that the present and former officers and directors of
the Company are intended third party beneficiaries of the provisions of Section
5.8 and shall have the right to enforce the same in their own names.
[Remainder of Page Intentionally Left Blank]
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NOW, THEREFORE, the parties hereto have executed this Agreement and Plan of
Merger by their duly authorized representatives as of the date first written
above.
PARENT:
AVX CORPORATION
By:
------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
and President
ACQUISITION SUB:
ADMIRAL XXXX ACQUISITION SUB, INC.
By:
------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
and President
COMPANY:
AMERICAN TECHNICAL CERAMICS CORP.
By:
------------------------------------
Xxxxxx Xxxxxxx, Chairman, Chief Executive
Officer and President
