Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
DATED AS OF
November 13, 2000
BY AND AMONG
MINNESOTA MINING AND MANUFACTURING COMPANY,
EQUINOX ACQUISITION, INC.
AND
MICROTOUCH SYSTEMS, INC.
TABLE OF CONTENTS
Page
ARTICLE I............................................................................................. 2
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Section 1.1 The Offer.......................................................................... 2
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Section 1.2 Company Actions.................................................................... 4
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Section 1.3 Directors.......................................................................... 5
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Section 1.4 The Merger......................................................................... 6
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Section 1.5 The Closing; Effective Time........................................................ 6
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Section 1.6 Subsequent Actions................................................................. 7
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Section 1.7 Articles of Organization; By-laws; Directors and Officers of the
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Surviving Corporation........................................................... 7
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ARTICLE II............................................................................................ 8
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Section 2.1 Effect on Capital Stock............................................................ 8
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Section 2.2 Exchange of Certificates........................................................... 10
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ARTICLE III........................................................................................... 12
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Section 3.1 Organization and Qualification; Subsidiaries....................................... 12
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Section 3.2 Articles of Organization and By-laws............................................... 12
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Section 3.3 Capitalization..................................................................... 12
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Section 3.4 Power and Authority; Authorization; Valid and Binding.............................. 13
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Section 3.5 No Conflict; Required Filings and Consents......................................... 14
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Section 3.6 SEC Reports; Financial Statements.................................................. 15
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Section 3.7 Absence of Certain Changes......................................................... 16
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Section 3.8 Litigation and Liabilities......................................................... 16
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Section 3.9 No Violation of Law; Permits....................................................... 16
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Section 3.10 Employee Matters; ERISA............................................................ 17
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Section 3.11 Labor Matters...................................................................... 18
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Section 3.12 Environmental Matters.............................................................. 19
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Section 3.13 [Intentionally omitted.]........................................................... 21
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Section 3.14 Brokers............................................................................ 21
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Section 3.15 Tax Matters........................................................................ 21
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Section 3.16 Intellectual Property.............................................................. 22
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Section 3.17 Insurance.......................................................................... 23
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Section 3.18 Contracts and Commitments.......................................................... 23
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Section 3.19 Title to Assets.................................................................... 24
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Section 3.20 State Takeover Statutes............................................................ 24
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Section 3.21 Rights Agreement................................................................... 24
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Section 3.22 Product Warranty................................................................... 25
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Section 3.23 Product Liability.................................................................. 25
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Section 3.24 Opinion Of Financial Advisor....................................................... 25
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ARTICLE IV............................................................................................ 25
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Section 4.1 Existence; Corporate Authority..................................................... 25
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Section 4.2 Authorization, Validity and Effect of Agreements................................... 26
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Section 4.3 No Violation....................................................................... 26
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Section 4.4 Interested Shareholder............................................................. 27
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Section 4.5 Parent Public Reports; Financial Statements........................................ 27
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Section 4.6 Financial Ability to Perform....................................................... 27
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Section 4.7 Brokers............................................................................ 27
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Section 4.8 Opinion Of Financial Advisor....................................................... 27
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Section 4.9 Litigation......................................................................... 28
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ARTICLE V............................................................................................. 28
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Section 5.1 Interim Operations of The Company.................................................. 28
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Section 5.2 Interim Operations of Parent....................................................... 30
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Section 5.3 No Solicitation.................................................................... 30
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ARTICLE VI............................................................................................ 33
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Section 6.1 Preparation of the Proxy Statement; Shareholders Meeting; Offering Circular........ 33
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Section 6.2 Filings; Other Action.............................................................. 34
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Section 6.3 Publicity.......................................................................... 35
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Section 6.4 Further Action..................................................................... 35
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Section 6.5 Expenses........................................................................... 35
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Section 6.6 Notification of Certain Matters.................................................... 35
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Section 6.7 Access to Information.............................................................. 36
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Section 6.8 Insurance; Indemnity............................................................... 36
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Section 6.9 Employee Benefit Plans............................................................. 37
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Section 6.10 Rights Agreement................................................................... 39
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ARTICLE VII........................................................................................... 39
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Section 7.1 Conditions to Obligations of the Parties to Consummate the Merger.................. 39
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Section 7.2 Additional Conditions to Obligations of Parent and Merger Sub...................... 39
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ARTICLE VIII.......................................................................................... 40
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Section 8.1 Termination........................................................................ 40
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Section 8.2 Effect of Termination and Abandonment.............................................. 42
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Section 8.3 Amendment.......................................................................... 43
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ARTICLE IX............................................................................................ 43
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Section 9.1 Non-Survival of Representations, Warranties and Agreements......................... 43
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Section 9.2 Notices............................................................................ 43
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Section 9.3 Certain Definitions; Interpretation................................................ 44
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Section 9.4 Headings........................................................................... 46
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Section 9.5 Severability....................................................................... 46
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Section 9.6 Entire Agreement; No Third-Party Beneficiaries..................................... 46
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Section 9.7 Assignment......................................................................... 46
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Section 9.8 Governing Law...................................................................... 46
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Section 9.9 Counterparts....................................................................... 46
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Section 9.10 Confidential Nature of Information................................................. 46
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Exhibit A - Conditions of the Offer.................................................................. A-1
Exhibit B - List of Shareholders Parties to Shareholders Agreement................................... B-1
Exhibit C - Form of Articles of Organization......................................................... C-1
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INDEX OF DEFINED TERMS
DEFINED TERM SECTION
401(k) Plan 6.11(b)
Acquisition Proposal 5.3(c)
Acquisition Transaction 5.3(c)
Action 6.10(b)
affiliate 9.3(a)(ii)
Agreement preamble
Audited Balance Sheet 3.19
Equinox Acquisition preamble
Board of Directors 9.3(a)(iii)
Business Combination 2.1(c)
Cap 6.10(a)
Certificates 2.2(b)
Closing 1.5
Closing Date 1.5
Code 2.2(e)
Company preamble
Company Benefit Plan 3.10(a)
Company Common Shares recitals
Company Contracts 3.18
Company Disclosure Letter Article III
Company Employee 3.10(b)
Company Employees 3.10(b)
Company ERISA Affiliate 3.10(d)
Company Multiemployer Plan 3.10(a)
Company Options 3.3
Company Pension Plan 3.10(c)
Confidentiality Agreement 1.2(c)
control 9.3(a)(iii)
Effective Time 1.5(b)
Encumbrance 3.16
Environmental Claim 3.12(e)(i)
Environmental Laws 3.12(e)(ii)
Environmental Permits 3.12(b)
ERISA 9.3(a)(iv)
Exchange Act 1.1(a)
Exchange Agent 2.2(a)
Exchange Fund 2.2(a)
GAAP 3.6(b)
Governmental Entity 3.5(b)
Hazardous Materials 3.12(e)(iii)
HSR Act 3.5(b)
Indemnified Party 6.10(b)
Intellectual Property 3.16
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knowledge 9.3(a)(v)
Material Adverse Effect 9.3(a)(i)
MBCL 1.1
Merger recitals
Merger Consideration 2.1(c)
Merger Sub preamble
Merger Sub Articles of Organization 1.4(a)
Net Gain 2.1(e)
Option Agreement recitals
Parent preamble
Parent Common Stock 2.1(b)
Parent Public Reports 4.5
Paying Agent 2.2(b)
PCBs 3.12(iii)
Pension Plan 3.10(c)
Person 9.3(a)(vi)
Proposing Party 5.2(b)
Proxy Statement 6.1
Recommendation 3.4(b)
Release 3.12(e)(iv)
Rights recitals
Rights Agreement recitals
SEC 3.5(b)
SEC Reports 3.6(a)
Securities Act 3.5(a)
Shareholders Agreement recitals
Shareholder Approval 3.4(a)
Shareholder Meeting 6.1(b)
Shareholders recitals
Stock Option Plans 2.1(e)
Subsidiary 9.3(a)(viii)
Superior Transaction 5.2(b)
Surviving Corporation 1.4
Tax 3.15(i)
Tax Return 3.15(i)
Taxable 3.15(i)
Taxes 3.15(i)
Termination Date 8.1(b)
Termination Fee 8.2(b)
Triggering Event 8.2(b)
VIP 6.9(a)
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 13, 2000 (this
"Agreement"), by and among Minnesota Mining and Manufacturing Company ("Parent")
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a Delaware corporation, Equinox Acquisition, Inc. a Massachusetts corporation
and a wholly owned Subsidiary of Parent ("Equinox Acquisition" or "Merger Sub")
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and MicroTouch Systems, Inc. (the "Company"), a Massachusetts corporation.
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W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement (the "Acquisition");
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WHEREAS, in furtherance of the Acquisition, Parent proposes to cause Merger
Sub to make a cash tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all the issued and
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outstanding shares of common stock, par value $0.01 per share, of the Company
(the "Company Common Shares") (and the associated rights ("Rights") issued
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pursuant to the Rights Agreement, dated as of January 19, 1996, between the
Company and The First National Bank of Boston, as Rights Agent (the "Rights
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Agreement")), at a price per share of $21.00, net to the seller in cash without
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interest, on the terms and subject to the conditions set forth in this Agreement
and the Offer;
WHEREAS, also in furtherance of the Acquisition, the respective Boards of
Directors of Parent, Merger Sub and the Company have approved this Agreement and
the merger of Merger Sub with and into the Company (the "Merger"), pursuant to
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which, on the terms and subject to the conditions set forth in this Agreement,
each issued and outstanding Company Common Share not tendered to and purchased
by Merger Sub pursuant to the Offer and not owned by Parent, Merger Sub or the
Company (other than Dissenting Shares (as defined in Section 2.1(d)) will be
converted into the right to receive the highest per share cash consideration
paid pursuant to the Offer in accordance with the Massachusetts Business
Corporation Law (the "MBCL");
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WHEREAS, the Board of Directors of the Company (the "Company Board") has
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resolved to recommend that all holders of Company Common Shares ("Shareholders")
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accept the Offer, tender their Company Common Shares pursuant to the Offer and
approve this Agreement and the Merger, and has determined that the Offer and the
Merger are fair to and in the best interests of the Company and the
Shareholders;
WHEREAS, the respective Boards of Directors of Parent and Merger Sub have
each determined that the Merger upon the terms and subject to the conditions set
forth in this Agreement is advisable, and in the best interests of their
respective corporations and shareholders and have approved the Merger;
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Parent's and Merger Sub's
willingness to enter into this Agreement, Parent and the shareholders of the
Company listed on Exhibit B hereto have executed and delivered a Shareholders
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Agreement (a "Shareholders Agreement"), dated as of this
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date, pursuant to which those shareholders are agreeing to tender their Company
Common Shares into the Offer;
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Parent's and Merger Sub's
willingness to enter into this Agreement, Parent and the Company have executed
and delivered a Stock Option Agreement (an "Option Agreement"), dated as of this
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date, pursuant to which the Company is granting to Parent an option to purchase,
under certain circumstances, up to 1,291,873 Company Common Shares, with an
exercise price of $21.00 per share; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the Merger
and also to prescribe various conditions to the Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, the parties hereby agree as follows (certain capitalized
but undefined terms used herein are defined in Section 9.3):
1. ARTICLE I
Section 1.1 The Offer. (a) Subject to the conditions of this Agreement,
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as promptly as practicable, but in no event later than five business days after
the date of the public announcement of this Agreement, Merger Sub shall, and
Parent shall cause Merger Sub to, commence the Offer within the meaning of the
applicable rules and regulations of the United States Securities and Exchange
Commission (the "SEC"). The obligations of Merger Sub to, and of Parent to cause
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Merger Sub to, accept for payment or pay for any Company Common Shares tendered
pursuant to the Offer are subject to the conditions set forth in Exhibit A
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hereto. The initial expiration date of the Offer shall be January 3, 2001
(determined using Rules 14d-1(g)(3) and 14d-2 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")). Merger Sub expressly
reserves the right to waive any condition to the Offer or to modify the terms of
the Offer, in each case in its sole discretion; provided, however, that without
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the consent of the Company, Merger Sub shall not (i) reduce the number of
Company Common Shares subject to the Offer, (ii) reduce the price per Company
Common Share to be paid pursuant to the Offer or change the form or time of
delivery of consideration, (iii) amend or waive the Minimum Tender Condition (as
defined in Exhibit A hereto) or add to the conditions set forth in Exhibit A
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hereto, (iv) except as provided below in this Section 1.1(a), extend the Offer,
or (v) otherwise amend the terms of the Offer in any manner adverse to the
holders of Company Common Shares. Notwithstanding the foregoing, Merger Sub may,
at any time and from time to time, and, in each case, subject to Section 8.1
hereof, take one or more of the following actions without the consent of the
Company: (A) extend the Offer for one or more periods of time that Merger Sub
reasonably believes are necessary to cause the conditions to the Offer to be
satisfied, if at the scheduled expiration date of the Offer any of the
conditions to Merger Sub's obligation to accept Company Common Shares for
payment is not satisfied or waived, until such time as all such conditions are
satisfied or waived, (B) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof that is
applicable to the Offer or (C) extend the Offer for an aggregate period of not
more
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than 10 business days beyond the latest applicable date that would otherwise be
permitted under clause (A) or (B) of this sentence, if, as of such date, all of
the conditions to Merger Sub's obligation to accept Company Common Shares for
payment (including the Minimum Tender Condition) are satisfied or waived, but
the number of Company Common Shares validly tendered and not withdrawn pursuant
to the Offer equals less than 90% of the outstanding Company Common Shares
(determined on a fully diluted basis for all outstanding stock options,
convertible securities and any other rights to acquire Company Common Stock on
the date of purchase). Without limiting the rights of Merger Sub to extend the
Offer pursuant to the immediately preceding sentence, Parent and Merger Sub
agree that if (I) (x) all of the conditions to the Offer are not satisfied on
any scheduled expiration date of the Offer, (y) such conditions are reasonably
capable of being satisfied within 30 days after the initial expiration date of
the Offer and (z) the Company is in compliance with all of its covenants in this
Agreement, or (II) any rule, regulation, interpretation or position of the SEC
or the staff thereof that is applicable to the Offer requires an extension of
the Offer, then Merger Sub shall extend the Offer for one or more periods of
time that Merger Sub reasonably believes are necessary to cause the conditions
of the Offer to be satisfied, until all such conditions are satisfied or waived;
provided, however, that Merger Sub shall not be required to extend the Offer
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pursuant to this sentence beyond the 30th day after the initial expiration date
of the Offer, unless otherwise required pursuant to (II) above. Subject to
Section 8.1 hereof, Merger Sub may, without the consent of the Company, elect to
provide a subsequent offering period for the Offer in accordance with Rule 14d-
11 under the Exchange Act, following its acceptance of Company Common Shares for
payment pursuant to the Offer. On the terms and subject to the conditions of the
Offer and this Agreement, Merger Sub shall, and Parent shall cause Merger Sub
to, pay for all Company Common Shares validly tendered and not withdrawn
pursuant to the Offer that Merger Sub becomes obligated to purchase pursuant to
the Offer as soon as practicable after the expiration of the Offer.
(b) As soon as practicable on the date of commencement of the Offer,
Merger Sub shall, and Parent shall cause Merger Sub to, file with the SEC a
Tender Offer Statement on Schedule TO with respect to the Offer (such Tender
Offer Statement, together with all amendments and supplements thereto, the
"Schedule TO"), which shall contain an offer to purchase and a related letter of
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transmittal and summary advertisement (such Schedule TO and the documents
contained therein pursuant to which the Offer will be made, in each case
together with all supplements and amendments thereto, the "Offer Documents").
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Parent and Merger Sub (i) agree that, on the date on which the Schedule TO is
filed with the SEC and on each date on which any amendment or supplement to any
Offer Document is filed with the SEC, the Offer Documents shall comply as to
form in all material respects with the Exchange Act and the rules and
regulations promulgated thereunder, and (ii) represent and warrant that, on the
date first published, sent or given to Shareholders, the Offer Documents will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation or warranty is made by Parent or
Merger Sub with respect to information supplied in writing by or on behalf of
the Company or any of its officers or directors specifically for inclusion or
incorporation by reference in any Offer Document. Each of Parent and Merger Sub
(or the Company, in the case of any information supplied by or on behalf of the
Company or any of its officers or directors specifically for inclusion or
incorporation by reference in any Offer Document) agree promptly to correct any
information contained in the Offer Documents if and to the extent that such
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information shall have become false or misleading in any material respect, and
each of Parent and Merger Sub shall take all steps necessary to amend or
supplement the Offer Documents to reflect such correction and to cause the Offer
Documents as so amended or supplemented to be filed with the SEC and
disseminated to the Shareholders, in each case as and to the extent required by
applicable Federal and state securities laws. Parent and Merger Sub shall
provide the Company and its counsel a reasonable opportunity to review and
comment upon the Offer Documents (including, without limitation, any amendment
or supplement thereto) prior to their filing with the SEC or dissemination to
the Shareholders. Parent and Merger Sub shall provide the Company and its
counsel in writing with any written comments (and orally, with any oral
comments) that Parent, Merger Sub or their counsel may receive from the SEC or
its staff with respect to the Offer Documents promptly after the receipt of such
comments and shall provide the Company and its counsel with a reasonable
opportunity to participate in the response of Parent and Merger Sub to any such
comments.
(c) The parties hereto agree to promptly file with the Commonwealth
of Massachusetts any registration statement relating to the Offer required to be
filed pursuant to Chapter 110C of the Massachusetts General Laws. Parent and
Merger Sub shall disseminate to the Shareholders the information contained in
any such registration statement relating to the Offer required to be filed
pursuant to 110C of the Massachusetts General Laws, in each case to the extent
and within the time period required by 110C of the Massachusetts General Laws.
(d) Prior to the expiration of the Offer, Parent shall provide or
cause to be provided to Merger Sub on a timely basis the funds necessary to
purchase all Company Common Shares that Merger Sub becomes obligated to purchase
pursuant to the Offer.
Section 1.2 Company Actions. (a) Subject to Section 5.3, the Company
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hereby approves of and consents to the Offer, the Merger and the other
transactions contemplated by this Agreement. The Company hereby consents to the
inclusion in the Offer Documents of the Recommendation (as defined in Section
3.4(b)), and the Company shall not permit the Recommendation or any component
thereof to be modified in any manner adverse to Parent or Merger Sub or
withdrawn by the Company Board or in any other manner, except as provided in
this Agreement.
(b) On the date on which the Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 under the Exchange Act with respect to the Offer (such Schedule
14D-9, as amended or supplemented from time to time, the "Schedule 14D-9") in
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which the Company makes the recommendations referred to in Section 3.4(b),
subject to any permitted withdrawal or modification thereof in accordance with
this Agreement, and shall mail the Schedule 14D-9 to the Shareholders. The
Company shall include in the Schedule 14D-9 information furnished by Parent in
writing concerning Parent's designees for directors of the Company as required
by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder, and shall use
its reasonable efforts to have the Schedule 14D-9 available for inclusion in the
initial mailing of the Offer Documents to the Shareholders. The Company (i)
agrees that on the date on which the Schedule 14D-9 is filed with the SEC and on
each date on which any amendment or supplement to the Schedule 14D-9 is filed
with the SEC, the Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder,
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and (ii) represents and warrants that, on the date filed with the SEC and on the
date first published, sent or given to Shareholders, the Schedule 14D-9 will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by the Company
with respect to information supplied in writing by Parent or Merger Sub pursuant
to this Agreement specifically for inclusion in the Schedule 14D-9. The Company
(or Parent and Merger Sub, with respect to information supplied by Parent or
Merger Sub pursuant to this Agreement specifically for inclusion in the Schedule
14D-9) shall promptly correct any information contained in the Schedule 14D-9 if
and to the extent that such information shall have become false or misleading in
any material respect, and the Company shall take all steps necessary to amend or
supplement the Schedule 14D-9 to reflect such correction and to cause the
Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Shareholders, in each case as and to the extent required by
applicable Federal securities laws. The Company shall provide Parent, Merger Sub
and their counsel in writing with any written comments (and orally, with any
oral comments) that the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer and the Merger, the Company shall as
promptly as reasonably practicable but, in any event, within two business days
after the date hereof, furnish, or cause its transfer agent to furnish, Merger
Sub promptly with mailing labels containing the names and addresses of all
record holders of Company Common Shares as of a recent date and, as soon as
practicable thereafter, of those persons becoming record holders subsequent to
such date, together with copies of all lists of Shareholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Company Common Shares,
and shall furnish to Merger Sub such information and assistance (including
updated lists of Shareholders, security position listings and computer files) as
Merger Sub or Parent may reasonably request in communicating the Offer to
Shareholders. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer, the Merger and the other
transactions contemplated by this Agreement, Parent and Merger Sub shall hold in
confidence pursuant to the Confidential Disclosure Agreement dated September 27,
2000 between Parent and the Company (the "Confidentiality Agreement") the
information contained in any such labels, listings and files, and shall use the
information referred to in this Section 1.2(c) solely for the purpose of
communicating the Offer and disseminating any other documents necessary to
consummate the Offer, the Merger and the other transactions contemplated by this
Agreement and, if this Agreement shall be terminated, shall promptly deliver to
the Company all copies of such information then in their possession.
Section 1.3 Directors. Promptly upon the satisfaction of the Minimum
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Tender Condition and the acceptance for payment of, and payment by Merger Sub
for, any Company Common Shares pursuant to the Offer, Merger Sub shall, subject
to compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, be entitled to designate such number of directors on the Company
Board as will give Merger Sub representation on the Company Board equal to that
number of directors, rounded down to the next whole number, which is the product
of (a) the total number of directors on the Company Board (giving effect to
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the directors elected pursuant to this sentence) multiplied by (b) a fraction,
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the numerator of which is the number of Company Common Shares so accepted for
payment and paid for by Merger Sub and the denominator of which is the number of
Company Common Shares outstanding at the time of acceptance for payment of
Company Common Shares pursuant to the Offer, and the Company shall, promptly
upon such designation by Merger Sub, cause Merger Sub's designees to be elected
or appointed to the Company Board; provided, however, that during the period
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commencing with the election or appointment of Merger Sub's designees to the
Company Board until the Effective Time or earlier termination of this Agreement,
the Company Board shall have at least two directors who are directors on the
date of this Agreement and who are not officers of the Company or
representatives of any affiliates of the Company (the "Independent Directors");
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and provided further, however, that if during such period the number of
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Independent Directors shall be reduced below two for any reason whatsoever, the
remaining Independent Directors (or Independent Director, if there shall be only
one remaining) shall be entitled to designate persons to fill any such vacancies
who shall be deemed to be Independent Directors for purposes of this Agreement
or, if no Independent Directors then remain, the other directors shall designate
two persons to fill such vacancies who are not officers, affiliates, associates
or shareholders of Parent or Merger Sub, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Subject to applicable law,
the Company shall take all action requested by Parent for the purpose of
effecting any such election or appointment of Merger Sub's designees. In
connection with the foregoing, the Company shall promptly, at the option of
Merger Sub, either increase the size of the Company Board or accept the
resignations (which resignations the Company will obtain on or before the date
of this Agreement, and which resignations shall only be effective as of the time
of, and shall be conditional upon, acceptance for payment of any Company Common
Shares pursuant to the Offer) of such number of its current directors as is
necessary to enable Merger Sub's designees to be elected or appointed to the
Company Board as provided above. Prior to the Effective Time, the Company shall
cause each member of the Company Board, other than Merger Sub's designees, to
execute and deliver a letter effectuating his or her resignation as a director
of the Company Board effective immediately prior to the Effective Time.
Section 1.4 The Merger. (a) Subject to the terms and conditions of this
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Agreement and in accordance with the MBCL, at the Effective Time, Merger Sub
will merge with and into the Company. At the Effective Time, the separate
corporate existence of Merger Sub shall cease and the Company shall be the
surviving corporation in the Merger (the "Surviving Corporation").
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(b) At the Effective Time, the Merger will have the other effects
provided in the applicable provisions of the MBCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers, immunities and franchises of the Company
and Merger Sub will vest in the Surviving Corporation, and all debts,
liabilities, obligations and duties of the Company and Merger Sub will become,
by operation of law, the debts, liabilities, obligations and duties of the
Surviving Corporation. The name of the Surviving Corporation shall be "3M
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MicroTouch Systems, Inc." and the purpose thereof shall be as set forth in
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Section 2 of the Articles of Organization of the Surviving Corporation.
Section 1.5 The Closing; Effective Time. (a) The closing of the
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Merger (the "Closing") shall take place (i) at the offices of Parent, in St.
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Xxxx, at 10:00 A.M. local time, on the second business day following the date on
which the last to be satisfied or waived of the conditions set forth in Article
VII (other than those conditions that by their nature are to be
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satisfied at the Closing, but subject to the satisfaction or, where permitted,
waiver of those conditions) shall be satisfied or waived in accordance with this
Agreement or (ii) at such other place, time and/or date as the Company and
Parent shall agree in writing (the date on which the Closing occurs, the
"Closing Date").
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(b) Prior to the Closing, Parent shall prepare and give the Company
and its counsel an adequate opportunity to review, and on the Closing Date, the
Company and Merger Sub shall cause articles of merger in respect of the Merger
to be properly executed and filed with the Secretary of State of the
Commonwealth of Massachusetts under the relevant provisions of the MBCL and
shall make all other filings or recordings required under the MBCL. The Merger
shall become effective at such time at which the articles of merger shall be
duly filed with the Secretary of State of the Commonwealth of Massachusetts or
at such later time reflected in the articles of merger as shall be agreed by the
Company and Parent (the time that the Merger becomes effective being the
"Effective Time").
--------------
Section 1.6 Subsequent Actions. If, at any time after the Effective
-------------------------------
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to continue, vest, perfect or confirm of record or
otherwise the Surviving Corporation's right, title or interest in, to or under
any of the rights, properties, privileges, franchises or assets of either of its
constituent corporations acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger, or otherwise to carry out the
intent of this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of either of the constituent corporations of the Merger, all such deeds,
bills of sale, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties, privileges,
franchises or assets in the Surviving Corporation or otherwise to carry out the
intent of this Agreement.
Section 1.7 Articles of Organization; By-laws; Directors and
-------------------------------------------------------------
Officers of the Surviving Corporation. Unless otherwise agreed by Parent, Merger
-------------------------------------
Sub and the Company prior to the Closing, at the Effective Time:
(a) The Articles of Organization of the Company (the "Company
-------
Articles of Organization") shall be amended at the Effective Time to read in the
------------------------
form of Exhibit C hereto and, as so amended, such Articles of Organization shall
---------
be the Articles of Organization of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law, subject to the
provisions of Section 6.8(c);
(b) Subject to the provisions of Section 6.8(c), the By-laws of the
Merger Sub as in effect immediately prior to the Effective Time shall be at and
after the Effective Time (until amended as provided by law, the Company Articles
of Organization and the By-laws of the Company, as applicable) the By-laws of
the Surviving Corporation;
(c) The officers of Merger Sub immediately prior to the Effective
Time shall continue to serve in their respective offices of the Surviving
Corporation from and after the
-7-
Effective Time, until their successors are elected or appointed and qualified or
until their resignation or removal; and
(d) The directors of Merger Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation from and after the
Effective Time, until their successors are elected or appointed and qualified or
until their resignation or removal.
ARTICLE II
Section 2.1 Effect on Capital Stock. At the Effective Time, by virtue of
-----------------------
the Merger and without any action on the part of Parent, Merger Sub or any
Shareholder:
(a) Capital Stock of Merger Sub. All of the issued and outstanding
---------------------------
shares of common stock, par value $.01 per share, of Merger Sub (the "Merger Sub
----------
Common Stock") shall be converted into an equal number of fully paid and
------------
nonassessable shares of common stock, $.01 par value per share, of the Surviving
Corporation (the "Surviving Corporation Common Stock"), which will constitute
----------------------------------
all of the issued and outstanding shares of capital stock of the Surviving
Corporation immediately after the Effective Time. From and after the Effective
Time, each outstanding certificate theretofore representing shares of Merger Sub
Common Stock will be deemed for all purposes to evidence ownership and to
represent the same number of shares of Surviving Corporation Common Stock.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
-----------------------------------------------------
Company Common Share that is owned directly by the Company (as treasury stock),
Parent or Merger Sub immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, without payment of any consideration in respect thereof.
(c) Conversion of Company Common Shares. (i) Subject to Sections
-----------------------------------
2.1(b) and 2.1(d), each Company Common Share issued and outstanding immediately
prior to the Effective Time shall be converted into the right to receive in cash
from the Surviving Corporation the highest price per Company Common Share paid
pursuant to the Offer.
(ii) The cash payable upon the conversion of Company Common Shares
pursuant to this Section 2.1(c) is referred to collectively as the "Merger
Consideration." At the Effective Time all such Company Common Shares shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate that immediately prior to the
Effective Time represented any such shares (a "Certificate") shall cease to have
-----------
any rights with respect thereto, except the right to receive the Merger
Consideration.
(d) Dissenters' Rights. (i) Notwithstanding any provision of this
------------------
Section 2.1 to the contrary, any Company Common Shares that are outstanding
immediately prior to the Effective Time and that are held by a Shareholder who
has not voted such Company Common Shares in favor of this Agreement and who has
properly exercised, preserved and perfected dissenters' rights with respect to
such Company Common Shares in accordance with the MBCL, including Sections 86
through 98 thereof (the "Dissenting Provisions") and, as of the Effective Time,
has neither effectively withdrawn nor lost its right to exercise such
dissenters' rights
-8-
("Dissenting Shares"), will not be converted into or represent a right to
-----------------
receive the Merger Consideration pursuant to Section 2.1(c), but the holder
thereof will be entitled to payment of the fair value of such Dissenting Shares
in accordance with the Dissenting Provisions.
(ii) Notwithstanding the provisions of Section 2.1(c), if any
holder of Company Common Shares who demands dissenters' rights with respect to
its Company Common Shares under the MBCL effectively withdraws or loses (through
failure to perfect or otherwise) its dissenters' rights, then as of the
Effective Time or the occurrence of such event, whichever later occurs, such
Shareholder's Company Common Shares will automatically be converted into and
represent only the right to receive the Merger Consideration as provided in
Section 2.1(c), without interest thereon, upon surrender of the certificate or
certificates formerly representing such Company Common Shares.
(iii) The Company will give Parent (x) prompt notice of any
written intent to demand payment of the fair value of any Company Common Shares,
withdrawals of such demands and any other instruments served pursuant to the
MBCL received by the Company and (y) the opportunity to direct all negotiations
and proceedings with respect to dissenters' rights under the MBCL. The Company
may not voluntarily make any payment with respect to any exercise of dissenters'
rights and may not, except with the prior written consent of Parent, settle or
offer to settle any such dissenters' rights.
(e) Termination and Satisfaction of Company Options. As of the
-----------------------------------------------
Effective Time, each Company Option issued under either (i) the Company's 1992
Equity Incentive Plan, (ii) the Company's 1994 Directors Stock Option Plan, or
(iii) the Company's 1998 Employee and Consultant Non-Qualified Stock Option Plan
(collectively the "Stock Option Plans") and outstanding immediately prior to the
Effective Time shall be converted into the right to receive in cash an amount
equal to the "Net Gain" attributable to such Company Option. At the Effective
Time all such Company Options shall no longer be outstanding and shall
automatically be cancelled and terminated and shall cease to exist, and each
holder of a Company Option shall cease to have any rights with respect thereto,
except the right to receive the Net Gain attributable thereto. For purposes of
this Agreement, the term "Net Gain" with respect to a Company Option shall mean
the product of (x) the excess of the Merger Consideration over the exercise
price per Company Common Share of such Company Option, and (y) the number of
Company Common Shares subject to such Company Option. Immediately prior to the
Effective Time, Parent shall provide or cause to be provided to the Company in a
timely manner the funds necessary to pay the aggregate amount of "Net Gains"
attributable to all Company Options that the Company becomes obligated to pay
pursuant to this Section 2.1(e). The Company shall make all payments of "Net
Gains" required by this Section 2.1(e) immediately prior to the Effective Time,
although it shall deduct and withhold from the amounts otherwise payable
pursuant to this Section 2.1(e) such amounts as it is required to deduct and
withhold with respect to the making of such payments under the Internal Revenue
Code of 1986 (the "Code") or any other applicable state, local or federal tax
law or tax laws of foreign jurisdictions. To the extent that amounts are so
withheld by the Company, the withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the Company Option in
respect of which such withholding was made by the Company. The Surviving
Corporation will promptly comply with all tax laws requiring it to forward such
withheld taxes and/or pay its own taxes to the
-9-
responsible Governmental Entity, as well as reporting the amount of income
resulting from the payments made pursuant to this Section 2.1(e).
Section 2.2 Exchange of Certificates.
------------------------
(a) Paying Agent. Prior to the Effective Time, Parent shall
------------
designate, or shall cause to be designated, a bank or trust company reasonably
acceptable to the Company to act as agent for the payment of the Merger
Consideration (the "Paying Agent") upon surrender of Certificates, and, from
------------
time to time after the Effective Time, Parent shall provide, or cause the
Surviving Corporation to provide, to the Paying Agent funds in amounts and at
the times necessary for the payment of the Merger Consideration pursuant to
Section 2.1(c) and any payments that holders of Dissenting Shares become
entitled to under Section 2.1(d) (such cash being hereinafter referred to as the
"Exchange Fund"), upon surrender of Certificates, it being understood that any
and all interest or income earned on funds made available to the Paying Agent
pursuant to this Agreement shall be for the benefit of, and shall be paid to,
Parent. If for any reason the Exchange Fund is inadequate to pay the amounts to
which holders of Company Common Shares and Dissenting Shares shall be entitled
under this Section 2.2(a), Parent shall take all steps necessary to enable or
cause the Surviving Corporation promptly to deposit additional cash with the
Paying Agent sufficient to make all payments required under this Agreement, and
Parent and the Surviving Corporation shall in any event be liable for payment
thereof. The Exchange Fund shall not be used for any purpose except as
expressly provided in this Agreement.
(b) Exchange Procedure. As soon as reasonably practicable after the
------------------
Effective Time, the Surviving Corporation shall cause the Paying Agent to mail
to each holder of record of a certificate or certificates (referred to
hereinafter individually as a "Certificate" and collectively as "Certificates")
that immediately prior to the Effective Time represented outstanding Company
Common Shares whose shares were converted into the right to receive Merger
Consideration pursuant to Section 2.1, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates held by such person shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in customary form and have such
other provisions as Parent may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent, together with such letter of transmittal, duly completed and validly
executed, and such other documents as may reasonably be required by the Paying
Agent, the holder of such Certificate shall be entitled to receive in exchange
therefor the Merger Consideration and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company
Common Shares that is not registered in the stock transfer books of the Company,
the proper amount of cash may be paid in exchange therefor to a person other
than the person in whose name the Certificate so surrendered is registered if
such Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate the Merger Consideration or establish to the
satisfaction of Parent that such tax has been paid or is not applicable. No
interest shall be paid or shall accrue on the cash payable upon surrender of any
Certificate.
-10-
(c) No Further Ownership Rights in Company Common Shares. The Merger
----------------------------------------------------
Consideration paid upon the surrender of a Certificate in accordance with the
terms of this Article II shall be deemed to have been paid in full satisfaction
of all rights pertaining to the Company Common Shares formerly represented by
such Certificate. At the Effective Time the stock transfer books of the Company
shall be closed, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the Company Common Shares
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Paying Agent for transfer or any other reason, they shall be canceled and
exchanged as provided in this Article II.
(d) No Liability. To the fullest extent permitted by applicable law,
------------
none of Parent, Merger Sub, the Company or the Paying Agent shall be liable to
any person in respect of any cash from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to six years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration would otherwise escheat to or became the property of any
Governmental Entity (as defined in Section 3.5(b)), any such Merger
Consideration in respect thereof shall, to the fullest extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interests of any person previously entitled thereto.
(e) Lost, Stolen or Destroyed Certificates. In the event that any
--------------------------------------
Certificate shall have been lost, stolen or destroyed, the Surviving Corporation
or Paying Agent shall pay the Merger Consideration in exchange for such lost,
stolen or destroyed Certificate, upon the making of an affidavit of that fact by
the holder thereof in form and substance reasonably satisfactory to the
Surviving Corporation or Paying Agent, as the case may be; provided, however,
-------- -------
that the Surviving Corporation may, in its discretion and as a condition
precedent to the payment of such Merger Consideration, require the owner of such
lost, stolen or destroyed Certificate to deliver a bond in such sum as the
Surviving Corporation may reasonably direct as indemnity against any claim that
may be made against the Surviving Corporation or the Paying Agent with respect
to such Certificate.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
that remains undistributed to the holders of Company Common Shares for six
months after the Effective Time shall be returned to Parent, upon demand, and
any holder of Company Common Shares shall look as a general creditor only to
Parent for payment of such cash to which such holder may be due subject to
applicable law.
(g) Withholding Rights. Parent shall be entitled to deduct and
------------------
withhold from the consideration otherwise payable pursuant to this Agreement
such amounts as Parent is required to deduct and withhold with respect to the
making of such payment under the Code or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by Parent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Company Common Shares in respect of which such
deduction and withholding was made by Parent.
-11-
(h) Charges and Expenses. The Surviving Corporation shall pay all
--------------------
charges and expenses, including those of the Paying Agent, in connection with
the exchange of cash for Company Common Shares.
ARTICLE III
Except as set forth in the corresponding sections or subsections of
the disclosure letter, dated this date, delivered by the Company to Parent (the
"Company Disclosure Letter"), the Company hereby represents and warrants to
-------------------------
Parent and Merger Sub as follows:
Section 3.1 Organization and Qualification; Subsidiaries. (a) The
---------------------------------------------------------
Company is a corporation duly organized and validly existing under the laws of
The Commonwealth of Massachusetts and with respect to which no articles of
dissolution have been filed. Each of the Subsidiaries of the Company is a
corporation or other business entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and each of the Company and its Subsidiaries has the requisite
corporate or other organizational power and authority to own, operate or lease
its properties and to carry on its business as it is now being conducted, and is
duly qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of its properties owned, operated or
leased or the nature of its activities makes such qualification necessary, in
each case except as would not, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect.
(b) All of the outstanding shares of capital stock and other equity
securities of the Subsidiaries of the Company have been validly issued and are
fully paid and nonassessable, and are owned, directly or indirectly, by the
Company, free and clear of all pledges and security interests, except for a de
minimis number of shares of capital stock of certain Subsidiaries that, due to
the requirements of local law, must be held by the managing director (or other
Person with comparable duties or responsibilities) of the Subsidiary who resides
in the jurisdiction of incorporation. There are no subscriptions, options,
warrants, calls, commitments, agreements, conversion rights or other rights of
any character (contingent or otherwise) entitling any Person to purchase or
otherwise acquire from the Company or any of its Subsidiaries at any time, or
upon the happening of any stated event, any shares of capital stock or other
equity securities of any of the Subsidiaries of the Company. The Company
Disclosure Letter lists the name and jurisdiction of incorporation or
organization of each Subsidiary of the Company.
(c) Except for interests in its Subsidiaries, neither the Company
nor any of its Subsidiaries owns directly or indirectly any capital stock of, or
other equity or voting or similar interest (including a joint venture interest)
in any Person or has any monetary or other obligation or made any commitment to
acquire any such interest or make any such investment.
Section 3.2 Articles of Organization and By-laws. The Company has
-------------------------------------------------
furnished, or otherwise made available, to Parent a complete and correct copy of
the Company's Articles of Organization and its By-laws, each as amended to the
date of this Agreement. Such Articles of Organization and By-laws are in full
force and effect. The Company is not in violation of any of the provisions of
the Articles of Organization or By-laws.
Section 3.3 Capitalization. As of November 10, 2000, the authorized
---------------------------
capital stock of the Company consists of 20,000,000 Company Common Shares, and
500,000 shares of
-12-
preferred stock, $0.01 par value per share (the "Preferred Stock"), of which
100,000 shares are designated as shares of Series A Junior Participating
Preferred Stock, $0.01 par value per share ("Company Preferred Shares"). As of
November 10, 2000, (a) 6,491,823 Company Common Shares were outstanding, (b)
6,491,823 Rights issued pursuant to the Rights Agreement were outstanding, (c)
Company Options to purchase an aggregate of 1,755,486 Company Common Shares were
outstanding, all of which were granted under the 1992 Equity Incentive Plan,
1994 Directors Stock Option Plan and 1998 Employee and Consultant Non-Qualified
Stock Option Plan (collectively, the "Stock Option Plans"), 1,755,486 Company
------------------
Common Shares were reserved for issuance upon the exercise of outstanding
Company Options, 1,206,159 Company Common Shares were reserved for future grants
under the Stock Option Plans and 100,000 Company Preferred Shares were reserved
for issuance under the Rights Agreement, (d) 1,937,776 Company Common Shares
were held by the Company in its treasury, and (e) no shares of capital stock of
the Company were held by the Company's Subsidiaries. Except for the Rights, the
Company has no outstanding bonds, debentures, notes or other obligations
entitling the holders thereof to vote (or which are convertible into or
exercisable for securities having the right to vote) with the shareholders of
the Company on any matter. Since November 10, 2000, the Company (i) has not
issued any Company Common Shares other than upon the exercise of Company
Options, (ii) has granted no Company Options to purchase Company Common Shares
under the Stock Option Plans or otherwise, and (iii) has not split, combined or
reclassified any of its shares of capital stock. All issued and outstanding
Company Common Shares are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except for the Rights, there are no
other shares of capital stock or voting securities of the Company, and no
existing options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock of, or
equity interests in, the Company or any of its Subsidiaries and there are no
stock appreciation rights or limited stock appreciation rights outstanding other
than those attached to such Company Options. There are no outstanding
obligations of the Company or any Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company and there are no
performance awards outstanding under the Stock Option Plans or any other
outstanding stock related awards. After the Effective Time, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
capital stock of the Company, the Parent or the Surviving Corporation pursuant
to any Company Benefit Plan, including the Stock Option Plans. There are no
voting trusts or other agreements or understandings to which the Company or any
of its Subsidiaries is a party with respect to the voting of capital stock of
the Company or any of its Subsidiaries. No Company Common Shares have been
repurchased by the Company or any of its Subsidiaries since May 10, 2000. For
purposes of this Agreement, "Company Options" shall mean subscriptions, options
---------------
(including those granted under the Stock Option Plans), warrants, calls,
commitments, agreements, conversion rights or other rights of any character
(contingent or otherwise) to purchase or otherwise acquire from the Company or
any of its Subsidiaries at any time, or upon the happening of any stated event,
any shares of the capital stock of the Company, whether or not then exercisable
by their terms.
Section 3.4 Power and Authority; Authorization; Valid and Binding.
------------------------------------------------------------------
(a) The Company has the requisite corporate power and authority to execute and
deliver this Agreement and, subject to the approval of the Merger and this
Agreement by an affirmative vote of the holders of not less than a majority of
the outstanding shares of Company Common Shares (the "Shareholder Approval"), to
--------------------
consummate the transactions contemplated hereby. The execution
-13-
and delivery of this Agreement by the Company, the performance by it of its
obligations hereunder and the consummation by the Company of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of the Company (other than the Shareholder Approval). This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery of this Agreement by Parent and Merger
Sub, this Agreement constitutes a legal, valid and binding obligation (subject
to the Shareholder Approval) of the Company enforceable against it in accordance
with the terms hereof, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(b) The Board of Directors, at a meeting duly called and held, or by
unanimous written consent, has adopted resolutions (x) determining that the
terms of this Agreement, the Offer and the Merger are fair to and in the best
interests of the Company and the Shareholders, (y) approving this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, and
(z) resolving to recommend that the Shareholders accept the Offer and tender
their Company Common Shares pursuant to the Offer (the determinations, approvals
and recommendations of the Company Board being hereinafter collectively referred
to as the "Recommendation"). Assuming the accuracy of Parent's and Merger Sub's
--------------
representation in Section 4.4, such resolutions are necessary to render
inapplicable to Parent and Merger Sub and this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, the provisions of
Chapter 110C (assuming the requirement that the terms of the Offer be furnished
to the Shareholders is satisfied), Chapter 110D and Chapter 110F of the MBCL.
Section 3.5 No Conflict; Required Filings and Consents. (a) The
-------------------------------------------------------
execution and delivery of this Agreement by the Company do not, and the
performance by the Company of its obligations hereunder and the consummation by
the Company of the transactions contemplated hereby, will not (i) violate or
conflict with the Articles of Organization or the By-laws of the Company, (ii)
subject to obtaining or making the notices, reports, filings, waivers, consents,
approvals and authorizations referred to in paragraph (b) below, conflict with
or violate any law, regulation, court order, judgment or decree applicable to
the Company or any of its Subsidiaries or by which any of their respective
property is bound or affected, other than the filings required under the
Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act,
--------------
(iii) subject to obtaining or making the notices, reports, filings, waivers,
consents, approvals and authorizations referred to in paragraph (b) below,
require any consent, approval or authorization of, or declaration, filing or
registration with, any Governmental Entity or (iv) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
cancellation, vesting or acceleration of any obligation under, result in the
creation of a lien, claim or encumbrance on any of the properties or assets of
the Company or any of its Subsidiaries pursuant to, result in the loss of any
benefit under (including an increase in the price paid by, or cost to, the
Company or any of its Subsidiaries), require the consent of any other party to,
or result in any obligation on the part of the Company or any of its
Subsidiaries to repurchase (with respect to a bond or a note), any agreement,
contract, instrument, bond, note, indenture, permit, license or franchise to
which the Company or any of its Subsidiaries is a party or by which the Company,
any of its Subsidiaries or any of their respective property is bound or
affected, except, in the case of
-14-
clauses (ii), (iii) and (iv) above, as would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.
(b) Except for applicable requirements under the premerger
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and for applicable requirements under
-------
antitrust laws of any foreign jurisdiction, the filing of articles of merger
with respect to the Merger as required by the MBCL and other filings with states
in which the Company is qualified to do business, filings with the SEC under the
Securities Act, and the Exchange Act, any filings required pursuant to any state
securities or "blue sky" laws, or pursuant to the rules and regulations of the
Nasdaq Stock Market or any other stock exchange on which the Company Common
Shares are listed, neither the Company nor any of its Subsidiaries is required
to submit any notice, report or other filing with any Governmental Entity in
connection with the execution, delivery, performance or consummation of this
Agreement or the Merger. Except as set forth in the immediately preceding
sentence, no waiver, consent, approval or authorization of any governmental or
regulatory authority, court, agency, commission or other governmental entity,
domestic or foreign, or any securities exchange or other self-regulatory body,
domestic or foreign (each a "Governmental Entity"), is required to be obtained
-------------------
by the Company or any of its Subsidiaries in connection with its execution,
delivery, performance or consummation of this Agreement or the transactions
contemplated hereby except for such waivers, consents, approvals or
authorizations that, if not obtained or made, would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.
Section 3.6 SEC Reports; Financial Statements. (a) The Company has
----------------------------------------------
filed all forms, reports and other documents required to be filed by it with the
SEC since January 1, 1998, including any amendments or supplements
(collectively, including any such forms, reports and documents filed after this
date, the "SEC Reports"), and, with respect to the SEC Reports filed by the
-----------
Company after the date hereof and prior to the Closing Date, will deliver or
make available to Parent all of its SEC Reports in the form filed with the SEC.
The SEC Reports (i) were (and any SEC Reports filed after this date will be) in
all material respects in compliance with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations
promulgated thereunder, and (ii) as of their respective filing dates, did not
(and any SEC Reports filed after the date hereof and prior to the Closing Date
will not) contain any untrue statement of a material fact or omit to state a
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.
(b) The consolidated financial statements of the Company, including
all related notes and schedules, contained in the SEC Reports (or incorporated
therein by reference) fairly present (or, with respect to financial statements
contained in the SEC Reports filed after this date, will fairly present) the
consolidated financial position of the Company and its consolidated subsidiaries
as of the respective dates thereof and the consolidated results of operations,
retained earnings and cash flows of the Company and its consolidated
subsidiaries for the respective periods indicated, in each case have been
prepared in accordance with generally accepted accounting principles ("GAAP"),
----
applied on a consistent basis throughout the periods involved (except for
changes in accounting principles disclosed in the notes) and the rules and
regulations of the SEC, except that interim financial statements are subject to
normal year-end
-15-
adjustments which are not and are not expected to be, individually or in the
aggregate, material in amount and do not include certain notes which may be
required by GAAP but which are not required by Form 10-Q of the SEC.
Section 3.7 Absence of Certain Changes. Except as disclosed in the
---------------------------------------
SEC Reports filed prior to this date (which SEC Reports for the period ended
September 30, 2000 will not contain financial statements that are materially
different from those financial statements for such period that were previously
provided to Parent and Merger Sub and included in the Company Disclosure
Letter), (a) since September 30, 2000, the Company and each of its Subsidiaries
has conducted its business in the ordinary and usual course of its business
consistent with past practice and there has not been any change in the financial
condition, business, prospects or results of operations of the Company and its
Subsidiaries, or any development or combination of developments that,
individually or in the aggregate, has had or would be expected to have a
Material Adverse Effect and (b) since September 30, 2000, there has not been any
action by the Company which if taken after the date hereof would constitute a
breach of Section 5.1 hereof.
Section 3.8 Litigation and Liabilities. (a) Except as disclosed in
---------------------------------------
the SEC Reports filed prior to this date, or in the Company Disclosure Letter,
there are no civil, criminal or administrative actions, suits, proceedings
(including condemnation proceedings) or hearings, pending or, to the knowledge
of the Company, threatened against, the Company or any of its Subsidiaries or
any of their respective properties and assets, except for any of the foregoing
which would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries has any
liabilities or obligations, (absolute, accrued, contingent or otherwise), except
(i) liabilities and obligations in the respective amounts reflected or reserved
against in the Company's consolidated balance sheet as of September 30, 2000
included in the SEC Reports, (ii) liabilities and obligations incurred in the
ordinary course of business since September 30, 2000 consistent with past
practice which individually or in the aggregate would not have or reasonably be
expected to have a Material Adverse Effect, (iii) liabilities permitted to be
incurred pursuant to Section 5.1 or (iv) liabilities or obligations relating to
matters disclosed in the Company Disclosure Letter.
Section 3.9 No Violation of Law; Permits. The business of the
-----------------------------------------
Company and each of its Subsidiaries is not in violation of any statutes of law,
ordinances, regulations, judgments, orders or decrees of any Governmental
Entity, any permits, franchises, licenses, authorizations or consents granted by
any Governmental Entity, and the Company and each of its Subsidiaries has
obtained all permits, franchises, licenses, authorizations or consents necessary
for the conduct of its business, except, with respect to each of the matters
herein, as would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is subject to any cease and desist or other order, judgment,
injunction or decree issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, is a party to any commitment
letter or similar undertaking to, is subject to any order or directive by, or
has adopted any board resolutions at the request of, any Governmental Entity
that restricts the conduct of its business (whether the type of business, the
location or otherwise) and which, individually or in the
-16-
aggregate, would have or reasonably be expected to have a Material Adverse
Effect, nor has the Company been advised that any Governmental Entity has
proposed issuing or requesting any of the foregoing.
Section 3.10 Employee Matters; ERISA. (a) Set forth in the Company
-----------------------
Disclosure Letter is a complete list of each Company Benefit Plan. The term
"Company Benefit Plan" shall mean (i) each plan, program, policy, contract or
--------------------
agreement providing for compensation, severance, termination pay, performance
awards, stock or stock-related awards, fringe benefits or other employee
benefits of any kind, including, without limitation, any "employee benefit
plan," within the meaning of Section 3(3) of ERISA but excluding any
"multiemployer plan" within the meaning of Sections 3(37) or 4001(a)(3) of
ERISA, and (ii) each employment, severance, consulting, non-compete,
confidentiality, or similar agreement or contract, in case of each of (i) and
(ii) with respect to which the Company or any Subsidiary of the Company has or
may have any liability (accrued, contingent or otherwise) sponsored or
maintained for its United States employees. As of the date hereof, neither the
Company nor any Subsidiary of the Company or other entity considered to be a
single employer with the Company under Section 4001(a)(15) of ERISA or Section
414 of the Code (a "Company ERISA Affiliate") is a party to any Company
-----------------------
Multiemployer Plan. The term "Company Multiemployer Plan" shall mean any
--------------------------
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA in
respect to which the Company or any Subsidiary of the Company, or any Company
ERISA Affiliate of the Company has or may have any liability (accrued,
contingent or otherwise). No current or future liabilities for plans or
arrangements similar to those described in subsections (i) and (ii) above
sponsored or maintained by either the Company or any Subsidiary and in effect
for employees of the Company's Subsidiaries outside the United States would have
or reasonably be expected to have a Material Adverse Effect.
(b) The Company has provided or made available, or has caused to be
provided or made available, to Parent (i) current, accurate and complete copies
of all documents embodying each Company Benefit Plan, including all amendments,
written interpretations (which interpretation could be regarded as increasing
the liabilities of the Company and its Subsidiaries taken as a whole under the
relevant Company Benefit Plan) and all trust or funding agreements with respect
thereto; (ii) the most recent annual actuarial valuation, if any, prepared for
each Company Benefit Plan; (iii) the most recent annual report (Series 5500 and
all schedules), if any, required under ERISA in connection with each Company
Benefit Plan or related trust; (iv) the most recent determination letter
received from the Internal Revenue Service, if any, for each Company Benefit
Plan and related trust which is intended to satisfy the requirements of Section
401(a) of the Code; (v) if any Company Benefit Plan is funded, the most recent
annual and periodic accounting of such Company Benefit Plan's assets; (vi) the
most recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
Company Benefit Plan; and (vii) all material communications to any one or more
current, former or retired employee, officer, consultant, independent
contractor, agent or director of the Company or any Subsidiary of the Company
(each, a "Company Employee" and collectively, the "Company Employees") relating
---------------- -----------------
to each Company Benefit Plan (which communication could be regarded as
increasing the liabilities of the Company and its Subsidiaries taken as a whole
under the relevant Company Benefit Plan).
-17-
(c) All Company Benefit Plans have been administered in all respects
in accordance with the terms thereof and all applicable laws except for
violations which, individually or in the aggregate, would not have or reasonably
be expected to have a Material Adverse Effect. Each Company Benefit Plan which
is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA ("Pension Plan") and which is intended to be qualified under Section
------------
401(a) of the Code (each, an " Company Pension Plan"), has received a favorable
--------------------
determination letter from the Internal Revenue Service, and the Company is not
aware of any circumstances that would reasonably be expected to result in the
revocation or denial of this qualified status. Except as otherwise set forth in
the Company Disclosure Letter or in the SEC Reports filed prior to this date,
there is no pending or, to the Company's knowledge, threatened, claim,
litigation, proceeding, audit, examination or investigation relating to any
Company Benefit Plans or Company Employees that, individually or in the
aggregate, would have or reasonably be expected to have a Material Adverse
Effect.
(d) No Company Benefit Plan nor any plan sponsored by any Subsidiary
or any Company ERISA Affiliate is subject to Title IV of ERISA.
(e) All contributions, premiums and payments (other than
contributions, premiums or payments that are not material, in the aggregate)
required to be made under the terms of any Company Benefit Plan have been made.
(f) Except as set forth in the Company Disclosure Letter, the
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any Company Benefit Plan, trust
or loan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting (except as may be
required by law), distribution, increase in benefits or obligation to fund
benefits with respect to any Company Employee, or (ii) result in the triggering
or imposition of any restrictions or limitations on the right of the Company,
any Subsidiary of the Company or Parent to amend or terminate any Company
Benefit Plan. Except as set forth in the Company Disclosure Letter, no payment
or benefit which will or may be made by the Company, any Subsidiary of the
Company, Parent or any of their respective affiliates with respect to any
Company Employee will be characterized as an "excess parachute payment," within
the meaning of Section 280G(b)(1) of the Code.
(g) Set forth in the Company Disclosure Letter is a list of all
outstanding and unexercised options granted under the Company's Stock Option
Plans, specifying the name of each optionee, the date on which each option was
granted, the number of shares that may be purchased pursuant to each option, the
exercise price at which such shares may be purchased, the vesting period for
each option, and the expiration date of each option. Immediately prior to the
Closing, there will be no Company Options outstanding.
Section 3.11 Labor Matters. Except as set forth in the SEC Reports filed prior
---------------------------
to this date, and except for those matters that would not, individually or in
the aggregate, have or reasonably be expected to have a Material Adverse Effect,
there is no (i) work stoppage, slowdown, lockout or labor strike against the
Company or any Subsidiary of the Company by Company Employees (or any union that
represents them) pending or, to the knowledge of the Company, threatened, or
(ii)
-18-
alleged unfair labor practice, labor dispute (other than routine grievances),
union organizing activity or labor arbitration proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries relating to their businesses. Neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining agreement or
other contracts with a labor union or labor organization. The Company is in
compliance with all laws regarding employment, employment practices, terms and
conditions of employment and wages and laws, except for such noncompliance
which, either individually or in the aggregate, would not have or reasonably be
expected to have a Material Adverse Effect. Except as set forth in the Company
Disclosure Letter, to the knowledge of the Company, no employee of the Company
or any of its Subsidiaries having total annual compensation of more than $50,000
has given oral (within the two months immediately preceding the date of this
Agreement) or written notice of intent to terminate such employee's employment.
Section 3.12 Environmental Matters. Except (1) as set forth in the SEC Reports
-----------------------------------
filed prior to this date, or in the Company Disclosure Letter; and (2) for those
matters that do not, individually or in the aggregate, have or are reasonably
expected to have a Material Adverse Effect (for purposes of Section 3.12(c)(ii),
3.12(c)(iii) (relating to any real or personal property not owned by the Company
or its Subsidiaries at present or in the past), 3.12(d)(ii) and 3.12(e)
(relating to property not owned by the Company or its Subsidiaries at present or
in the past) only, the dollar thresholds for determining whether a matter or
matters constitute a Material Adverse Effect shall be $1,000,000 individually or
$6,000,000 in the aggregate):
(a) The Company and each of its Subsidiaries is in
compliance with all applicable Environmental Laws, and neither the Company nor
any of its Subsidiaries has received any written communication from any Person
or Governmental Entity that alleges that the Company or any of its Subsidiaries
is not in compliance with applicable Environmental Laws.
(b) The Company and each of its Subsidiaries has obtained
or has applied for all applicable environmental, health and safety permits,
licenses, variances, approvals and authorizations required under Environmental
Laws (collectively, the "Environmental Permits") necessary for the construction
---------------------
of its facilities or the conduct of its operations, and all those Environmental
Permits are in effect or, where applicable, a renewal application has been
timely filed and is pending agency approval, and the Company and its
Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits. All Environmental Permits of the Company and its
Subsidiaries are listed in the Company Disclosure Letter referencing this
Section 3.12(b), and the Company and its Subsidiaries previously has made
available to Parent and Merger Sub true, correct and complete copies of all such
Environmental Permits.
(c) There is no Environmental Claim pending or, to the
knowledge of the Company, threatened (i) against the Company or any of its
Subsidiaries, (ii) against any Person whose liability for any Environmental
Claim has been retained or assumed contractually by the Company or any of its
Subsidiaries, or (iii) against any real or personal property or operations which
the Company or any of its Subsidiaries owns, leases or operates, in whole or in
part.
-19-
(d) There have been no Releases of any Hazardous Material
that the Company reasonably believes form the basis of any Environmental Claim
(i) against the Company or any of its Subsidiaries, or (ii) against any Person
whose liability for any Environmental Claim has been retained or assumed
contractually by the Company or any of its Subsidiaries.
(e) None of the properties owned, leased or operated by
the Company, its Subsidiaries or any predecessor thereof are now, or were in the
past, listed on the National Priorities List of Superfund Sites or any analogous
state list (excluding easements that transgress those Superfund sites).
For purposes of this Agreement:
(i) "Environmental Claim" means any and all
-------------------
administrative, regulatory or judicial actions, suits, demands, demand letters,
directives, claims, liens, investigations, proceedings or notices of
noncompliance or violation by any Person (including any federal, state, local or
foreign governmental authority) alleging potential liability (including, without
limitation, potential responsibility for or liability for enforcement,
investigatory costs, cleanup costs, governmental response costs, removal costs,
remedial costs, natural resources damages, property damages, personal injuries
or penalties) arising out of, based on or resulting from (A) the presence, or
Release or threatened Release into the environment, of any Hazardous Materials
at any location, whether or not owned, operated, leased or managed by the
Company or any of its Subsidiaries; or (B) circumstances forming the basis of
any violation or alleged violation of any Environmental Law; or (C) any and all
claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence or
Release of any Hazardous Materials.
(ii) "Environmental Laws" means all applicable foreign,
------------------
federal, state and local laws, rules, requirements and regulations relating to
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or protection of human health as
it relates to the environment including, without limitation, laws and
regulations relating to Releases of Hazardous Materials, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials or relating to management of
asbestos in buildings.
(iii) "Hazardous Materials" means (A) any petroleum or any
-------------------
by-products or fractions thereof, asbestos or asbestos-containing materials,
urea formaldehyde foam insulation, any form of natural gas, explosives,
polychlorinated biphenyls ("PCBs"), radioactive materials, ionizing radiation,
----
electromagnetic field radiation or microwave transmissions; (B) any chemicals,
materials or substances, whether waste materials, raw materials or finished
products, which are now defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
substances," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "pollutants," "contaminants" or words of similar import under any
Environmental Law; and (C) any other chemical, material or substance, whether
waste materials, raw materials or finished products, regulated under any
Environmental Law.
-20-
(iv) "Release" means any release, spill, emission, leaking,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment (including without limitation ambient air, atmosphere, soil,
surface water, groundwater or property).
Section 3.13 [Intentionally omitted.]
---------------------------------------
Section 3.14 Brokers. Set forth in the Company Disclosure Letter is a list of
----------------------
each broker, finder or investment banker and other Person entitled to any
brokerage, finder's, investment banking or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or any of its Subsidiaries and
the expected amounts of such fees and commissions. The Company has previously
provided to Parent copies of any agreements giving rise to any such fee or
commission.
Section 3.15 Tax Matters. Except (1) as set forth in the SEC Reports filed
-------------------------
prior to this date, and (2) for those matters that do not, individually or in
the aggregate, have or are reasonably likely to have a Material Adverse Effect:
(a) All Tax Returns required to be filed by the Company or its
Subsidiaries on or prior to the Effective Time have been or will be prepared in
good faith and timely filed with the appropriate Governmental Entity on or prior
to the Effective Time and all such Tax Returns are (or, as to Tax Returns not
filed on the date hereof, will be) complete and accurate in all respects.
(b) All Taxes that are required to be paid by the Company or its
Subsidiaries, either (x) have been fully paid on a timely basis (except with
respect to matters contested in good faith as set forth in the Company
Disclosure Letter) or (y) are adequately reflected as a liability on the
Company's or its Subsidiaries' books and records and financial statements and
remitted to the appropriate Governmental Entity. All Taxes required to be
collected or withheld from third parties by the Company or its Subsidiaries have
been collected or withheld.
(c) The Company and its Subsidiaries have made due and sufficient
accruals and reserves for their respective liabilities for Taxes in their
respective books and records and financial statements.
(d) The Company and each of its Subsidiaries have not waived any
statute of limitations, or agreed to any extension of time, with respect to
Taxes or a Tax assessment or deficiency, which waiver or extension is in effect.
(e) As of this date, (A) there are not pending or, threatened in
writing, any audits, examinations, investigations or other proceedings in
respect of Taxes or Tax matters and (B) there are not any unresolved questions
or claims concerning the Company's or any of its Subsidiary's Tax liability that
(i) were raised by any taxing authority in a communication to the Company or any
Subsidiary and (ii) would be individually or in the aggregate, material to the
Company and its Subsidiaries taken as a whole, after taking into account any
reserves for Taxes set forth on the most recent balance sheet contained in the
SEC Reports filed prior to this date.
-21-
(f) The Company has made available to Parent true and correct copies
of the United States federal income and all state income or franchise Tax
Returns filed by the Company and its Subsidiaries for each of its fiscal years
ended on or about December 31, 1997, 1998 and 1999.
(g) The Company has not distributed the stock of a "controlled
corporation" (as defined in section 355(a) of the Code) in a transaction subject
to section 355 of the Code within the past two years or before such time if the
distribution was part of a plan (or series of related transactions) of which the
Merger is also a part.
(h) Neither Company nor any of its Subsidiaries (i) has any liability
under Treasury Regulation Section 1.1502-6 or analogous state, local or foreign
Law for any Taxes, other than for Taxes of Company or its Subsidiaries or (ii)
is a party to a Tax sharing or Tax indemnity contract or any other contract of a
similar nature with any entity other than Company or any of its Subsidiaries
that remains in effect.
As used in this Agreement, (i) the term "Tax" (including, with
---
correlative meaning, the terms "Taxes" and "Taxable") includes all federal,
----- -------
state, local and foreign income, profits, franchise, gross receipts, license,
premium, environmental (including taxes under Section 59A of the Code), capital
stock, severance, stamp, payroll, sales, employment, unemployment, disability,
use, transfer, property, withholding, excise, production, occupation, windfall
profits, customs duties, social security (or similar), registration, value
added, alternative or add-on minimum, estimated, occupancy and other taxes,
duties or governmental assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions, and (ii) the term "Tax
---
Return" includes all returns and reports (including elections, declarations,
------
disclosures, schedules, estimates and information returns) required to be
supplied to a Tax authority relating to Taxes.
Section 3.16 Intellectual Property. Neither the Company nor any of its
-----------------------------------
Subsidiaries currently utilizes, any patented invention, trademark, trade name,
service xxxx, copyright, software, trade secret or know-how (collectively,
"Intellectual Property"), except for those which are owned, possessed or
---------------------
lawfully used by the Company or its Subsidiaries in their business operations,
and neither the Company nor any of its Subsidiaries infringes upon or unlawfully
uses any patented invention, trademark, trade name, service xxxx, copyright, or
trade secret owned or validly claimed by another Person except, in each case, as
would not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect. The Company and its Subsidiaries own, have a
valid license to use or have the right validly to use all patented inventions,
trademarks, tradenames, service marks, copyrights, trade secrets, know how and
software necessary to carry on their respective businesses except the failure of
which to own, validly license or have the right validly to use, individually or
in the aggregate, would not have or reasonably be expected to have a Material
Adverse Effect. All ownership rights, license rights and other rights to use any
patented invention, trademark, trade name, service xxxx, copyright, software
(except for commercial software programs that are generally available to the
public through dealers in commercial software or directly from the manufacturer
which have been licensed to the Company), trade secret or know-how necessary to
carry on the businesses of the Company and its Subsidiaries are transferable
free of any lien, pledge, charge, security interest or other encumbrance (each,
an "Encumbrance"), except the failure of which to be freely
-----------
-22-
transferable would not have or reasonably be expected to have a Material Adverse
Effect. Neither the Company nor its Subsidiaries are aware of any third party
infringement or misappropriation of any patent, trademark, trade name, service
xxxx, copyright, software, trade secret or know-how owned by the Company or its
Subsidiaries.
Section 3.17 Insurance. Except to the extent adequately accrued on the most
-----------------------
recent balance sheet contained in the SEC Reports filed as of this date, neither
the Company nor its Subsidiaries has any obligation (contingent or otherwise) to
pay in connection with any insurance policies any retroactive premiums or
"retro-premiums" that, individually or in the aggregate, would have or
reasonably be expected to have a Material Adverse Effect. The Company and its
Subsidiaries have obtained and maintained in full force and effect insurance
with insurance companies or associations in such amounts, on such terms and
covering such risks, as is customarily carried by reasonably prudent persons
conducting businesses or owning or leasing assets similar to those conducted,
owned or leased by the Company, except where the failure to obtain or maintain
such insurance, individually or in the aggregate, would not have or be
reasonably be expected to have a Material Adverse Effect.
Section 3.18 Contracts and Commitments. Set forth in the Company Disclosure
---------------------------------------
Letter is a complete and accurate list of all of the following contracts
(written or oral), plans, undertakings, commitments or agreements ("Company
-------
Contracts") to which the Company or any of its Subsidiaries is a party or by
---------
which any of them is bound as of the date of this Agreement:
(a) each distribution, supply, inventory purchase, franchise,
license, joint development, sales, agency or advertising contract involving
annual expenditures or liabilities in excess of $200,000 which is not cancelable
(without material penalty, cost or other liability) within one year;
(b) each promissory note, loan, agreement, indenture, evidence of
indebtedness or other instrument providing for the lending of money, whether as
borrower, lender or guarantor, in excess of $100,000;
(c) each contract, lease, agreement, instrument or other arrangement
containing any covenant limiting the freedom of the Company or any of its
subsidiaries to engage in the business of the Company or compete with any
person;
(d) each joint venture or partnership agreement that is material to
the Company and its Subsidiaries taken as a whole; and
(e) any contract that would constitute a "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC).
True and complete copies of the written Company Contracts, as amended
to date, that would be required to be filed as exhibits to the Company's Form
10-K if such Form 10-K were being filed on this date, that have not been filed
prior to the date hereof as exhibits to the SEC Reports have been delivered or
made available to Parent.
Each Company Contract is valid and binding on the Company, and any
Subsidiary of the Company which is a party thereto and, to the knowledge of the
Company, each
-23-
other party thereto and is in full force and effect, and the Company and its
Subsidiaries have performed and complied with all obligations required to be
performed or complied with by them under each Company Contract, except in each
case as would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect.
Section 3.19 Title to Assets. The Company and its Subsidiaries have good and
-----------------------------
marketable title to all of their real and personal properties and assets
reflected in the unaudited consolidated balance sheet of the Company as of
September 30, 2000 (the "Latest Balance Sheet") (other than assets disposed of
--------------------
since September 30, 2000 in the ordinary course of business, and properties and
assets acquired since September 30, 2000), in each case free and clear of all
Encumbrances except for (i) Encumbrances which secure indebtedness reflected in
the SEC Reports; (ii) liens for Taxes accrued but not yet due; (iii) liens
arising as a matter of law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet, provided that
the obligations secured by such liens are not delinquent; and (iv) such
imperfections of title and Encumbrances, if any, as would not have or reasonably
be expected to have a Material Adverse Effect. The Company and its Subsidiaries
own, or have valid leasehold interests in, all properties and assets used in the
conduct of their business. Any real property and other assets held under lease
by the Company or any of its Subsidiaries are held under valid, subsisting and
enforceable leases with such exceptions which, individually or in the aggregate,
would not reasonably be expected to interfere with the use made or proposed to
be made by the Company or any of its Subsidiaries of such property.
Section 3.20 State Takeover Statutes. The Board of Directors of the Company
-------------------------------------
has approved the Offer, the Merger and this Agreement and, assuming the accuracy
of Parent's and Merger Sub's representation in Section 4.4, such approval is
necessary to render inapplicable to the Offer, the Merger, this Agreement and
the transactions contemplated by this Agreement, the provisions of Chapters 110D
and 110F of the Massachusetts General Laws to the extent, if any, such chapters
are applicable to the transactions contemplated by this Agreement. No other
"fair price," "merger moratorium," "control share acquisition" or other anti-
takeover statute or similar statute or regulation (other than Chapter 110C of
the Massachusetts General Laws) applies or purports to apply to the Merger, this
Agreement, the Offer or any of the transactions contemplated hereby or thereby.
Section 3.21 Rights Agreement. To the best of the Company's knowledge, no
------------------------------
"Distribution Date" or "Triggering Event" (as such terms are defined in the
Rights Agreement) has occurred as of this date. This Agreement and the Option
Agreement and the consummation of the transactions contemplated hereunder and
thereunder, including the Offer and the Merger, have been approved by at least
two-thirds (2/3) of the Continuing Directors (as defined in the Rights
Agreement). The Rights Agreement has been amended so that the execution or
delivery of this Agreement, the acquisition or deemed beneficial ownership of
any Company Common Shares by Parent or Merger Sub pursuant to the Shareholders
Agreement or the Option Agreement, or the exchange of the Company Common Shares
for cash in accordance with Article II will not cause (A) the Rights issued
pursuant to the Rights Agreement to become exercisable under the Rights
Agreement, (B) Parent or Merger Sub to be deemed an "Acquiring Person" (as
defined in the Rights Agreement), or (C) a "Stock Acquisition Date" or a
"Triggering Event" (each as defined in the Rights Agreement) to occur upon any
such event. The execution and delivery of this Agreement, the Option Agreement
and the Shareholders Agreement and the consummation of
-24-
the transactions contemplated hereby and thereby will not result in the ability
of any Person to exercise any Rights or cause the Rights to separate from the
Company Common Shares to which they are attached or to be triggered or become
exercisable.
Section 3.22 Product Warranty. Each product manufactured, sold, leased, or
------------------------------
delivered by any of the Company and its Subsidiaries has been in substantial
conformity with all applicable contractual commitments and all express and
implied warranties, and none of the Company and its Subsidiaries has any
liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any liability) for replacement or repair thereof or
other damages in connection therewith other than liabilities that would not have
or reasonably be expected to have a Material Adverse Effect, subject only to the
reserve for product warranty claims as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the Company
and its Subsidiaries. No product manufactured, sold, leased, or delivered by any
of the Company and its Subsidiaries is subject to any guaranty, warranty, or
other indemnity beyond the applicable standard terms and conditions of sale or
lease. The Company has provided the Parent on or prior to the date hereof copies
of the standard terms and conditions of sale or lease of products for each of
the Company and its Subsidiaries (containing applicable guaranty, warranty, and
indemnity provisions).
Section 3.23 Product Liability. None of the Company and its Subsidiaries has
-------------------------------
any liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
any of them giving rise to any liability) arising out of any injury to
individuals or property as a result of the ownership, possession, or use of any
product manufactured, sold, leased, or delivered by any of the Company and its
Subsidiaries, other than liabilities that would not have or reasonably be
expected to have a Material Adverse Effect.
Section 3.24 Opinion Of Financial Advisor.
----------------------------
The Company has received the written opinion of Broadview
International LLC, substantially to the effect that, as of the date hereof, the
consideration to be received in the Offer and the Merger by the Shareholders is
fair to the Shareholders from a financial point of view. A true and complete
copy of such opinion has been delivered to Parent.
ARTICLE IV
Parent and Merger Sub hereby represent and warrant to the Company as of the
date of this Agreement as follows:
Section 4.1 Existence; Corporate Authority. Parent and Merger Sub are
-------------------------------------------
corporations duly incorporated, validly existing and in good standing under the
laws of their jurisdiction of incorporation and have all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as now conducted, except where the failure to have such power and
authority, individually or in the aggregate, would not delay the consummation of
the Offer or the
-25-
Merger or materially adversely affect their ability to consummate the Offer or
the Merger. Merger Sub is directly and wholly owned by Parent and has conducted
no business other than in connection with the transactions contemplated by this
Agreement.
Section 4.2 Authorization, Validity and Effect of Agreements. Each of Parent
-------------------------------------------------------------
and Merger Sub has the necessary corporate power and authority to enter into and
deliver this Agreement and to perform their obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by each of Parent and Merger Sub, the performance by each of them
of their respective obligations hereunder and the consummation by each of Parent
and Merger Sub of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on their respective parts. This
Agreement has been duly executed and delivered by each of Parent and Merger Sub
and, assuming the due authorization, execution and delivery of this Agreement by
the Company, this Agreement constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub enforceable against each of them in accordance
with the terms hereof, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 4.3 No Violation. (a) The execution and delivery of this Agreement by
-------------------------
Parent and Merger Sub does not, and the performance by Parent and Merger Sub of
their obligations hereunder and the consummation by Parent and Merger Sub of the
transactions contemplated hereby, will not (i) violate or conflict with the
Merger Sub's articles of organization, Parent's certificate of incorporation or
the bylaws of Parent or Merger Sub, (ii) subject to obtaining or making the
notices, reports, filings, waivers, consents, approvals or authorizations
referred to in paragraph (b) below, conflict with or violate any law,
regulation, court order, judgment or decree applicable to Parent or any of its
Subsidiaries (including Merger Sub) or by which any of their respective property
is bound or affected, other than the filings required under the Exchange Act and
the Securities Act, except, in the case of clause (ii) above, as would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on their ability to consummate the Offer or the Merger.
(b) Except for applicable requirements, if any, under the premerger
notification requirements of the HSR Act, the filing of articles of merger with
respect to the Merger as required by the MBCL, filings with the SEC under the
Securities Act and the Exchange Act, any filings required pursuant to any state
securities or "blue sky" laws, or pursuant to the rules and regulations of any
stock exchange on which shares of Parent Common Stock are listed, neither Parent
nor any of its Subsidiaries (including Merger Sub) is required to submit any
notice, report or other filing with any Governmental Entity in connection with
the execution, delivery, performance or consummation of the transactions
contemplated by this Agreement, including the Offer and the Merger, except where
the failure to submit such notice, report or other filing would not,
individually or in the aggregate, delay the consummation of the Offer or the
Merger or have or reasonably be expected to have a material adverse effect on
Parent's or Merger Sub's ability to consummate the Merger or otherwise prevent
Parent or Merger Sub from performing its obligations under this Agreement.
Except as set forth in the immediately preceding sentence, no waiver, consent,
approval or authorization of any governmental or regulatory authority, court,
agency, commission or other governmental entity or any securities exchange or
other self-regulatory body, domestic or foreign Governmental Entity is required
to be obtained by Parent or any of its Subsidiaries (including Merger Sub) in
-26-
connection with its execution, delivery, performance or consummation of this
Agreement or the transactions contemplated hereby except for such waivers,
consents, approvals or authorizations that, if not obtained or made, would not,
individually or in the aggregate, delay the consummation of the Offer or the
Merger or have or be expected to have a material adverse effect on Parent's or
Merger Sub's ability to consummate the Offer or the Merger or otherwise prevent
Parent or Merger Sub from performing their obligations under this Agreement.
Section 4.4 Interested Shareholder. As of the date hereof (excluding any
-----------------------------------
beneficial ownership that may be attributed to Parent or Merger Sub by virtue of
any transaction contemplated by this Agreement or by the execution of this
Agreement), (i) neither Parent, Merger Sub nor any of their affiliates is, with
respect to the Company, an "Interested Shareholder", as such term is defined in
Chapter 110F of the MBCL and (ii) neither Parent, Merger Sub nor any of their
affiliates beneficially owns any Company Common Shares.
Section 4.5 Parent Public Reports; Financial Statements. Parent has delivered
--------------------------------------------------------
to the Company true and complete copies of, including all amendments thereto,
its Annual Report for the calendar year ended December 31, 1999, the annual
report on Form 10-K for the year ended December 31, 1999, and the quarterly
reports on Form 10-Q for the quarters ended March 31, 2000 and June 30, 2000
(collectively, the "Parent Public Reports"). The consolidated financial
---------------------
statements of Parent contained in the Parent Public Reports present fairly the
financial position of Parent and its consolidated subsidiaries at the respective
dates of the balance sheet and the results of operations for the periods then
ended, in conformity with generally accepted accounting principles applied on a
consistent basis. The Parent Public Reports do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
Section 4.6 Financial Ability to Perform. Parent and Merger Sub will
----------------------------
have cash funds sufficient as and when needed to pay (a) all cash payments for
Company Common Shares tendered in connection with the Offer and the Merger, (b)
the aggregate amount of Net Gains attributable to all Company Options that the
Company becomes obligated to pay pursuant to Section 2.1(e) of this Agreement,
and (c) all related fees and expenses.
Section 4.7 Brokers. No broker, finder, financial advisor or investment banker
--------------------
and other Person is entitled to any brokerage, finder's, financial advisor's
investment banking or other similar fee or commission in connection with the
Offer, the Merger or the other transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent, other xxxx Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx").
Section 4.8 Opinion Of Financial Advisor.
----------------------------
Parent has received an oral opinion of Xxxxxxx Xxxxx (which opinion
will be confirmed in writing dated the date of this Agreement), substantially to
the effect that, as of such date, the consideration to be paid in the Offer and
the Merger to the Shareholders is fair to Parent from a financial point of view.
-27-
Section 4.9 Litigation. There is no civil, criminal or administrative
----------
action, suit, claim, proceeding, hearing or investigation pending or, to the
knowledge of Parent or its Subsidiaries (including Merger Sub), threatened
against, or otherwise adversely affecting Parent or its Subsidiaries (including
Merger Sub) or any of their respective properties and assets that (a) has or
reasonably would be expected to have a material adverse effect on the ability of
Parent and Merger Sub to consummate the Offer or the Merger or (b) seeks to
materially delay or prevent the consummation of the Offer or the Merger or
otherwise prevent either Parent or Merger Sub from performing their respective
obligations under this Agreement. Neither Parent or its Subsidiaries (including
Merger Sub) nor any property or asset of Parent or its Subsidiaries (including
Merger Sub) is subject to any continuing order of, consent decree, settlement
agreement or similar written agreement with, or continuing investigation by, any
Governmental Entity, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity that would prevent or
materially delay consummation of the Offer of the Merger or otherwise prevent or
materially delay Parent or Merger Sub from performing their respective
obligations under this Agreement or have or reasonably be expected to have a
material adverse effect on the ability of Parent and Merger Sub to consummate
the Offer or the Merger; provided, however that a material adverse effect with
-------- -------
respect to Parent and its Subsidiaries (including Merger Sub), taken as a whole,
will not be deemed to have occurred if the change, circumstance, event, effect
or state of facts results primarily from (i) changes in general business
conditions in the input device industry or (ii) the public announcement by the
Company or pendency of the Merger.
ARTICLE V
Section 5.1 Interim Operations of The Company. The Company covenants and
----------------------------------------------
agrees as to itself and its Subsidiaries that, after the date hereof, until the
earlier to occur of (a) the termination of this Agreement pursuant to Section
8.1 and (b) the Effective Time (unless Parent shall otherwise approve in
writing, or unless as otherwise expressly contemplated by this Agreement or
expressly disclosed in the Company Disclosure Letter):
(i) the business of the Company and its Subsidiaries (other
than the Company's Subsidiary in Australia) taken as a whole shall be conducted
in all material respects in the ordinary and usual course consistent with the
Company's past practice and, to the extent consistent therewith, the Company
shall use, and shall cause its Subsidiaries to use, reasonable commercial
efforts to preserve its business organization intact in all material respects,
keep available the services of its officers and employees as a group (subject to
changes in the ordinary course) and maintain its existing relations and goodwill
in all material respects with customers, suppliers, regulators, distributors,
creditors, lessors, and others having business dealings with it, in each case,
consistent with the Company's past practice;
(ii) the Company shall not issue, deliver, grant or sell any
additional Company Common Shares or any Company Options (other than the
issuance, delivery, grant or sale of Company Common Shares pursuant to the
exercise or conversion of Company Options outstanding as of this date);
(iii) the Company shall not (A) amend its Articles of
Organization or By-laws, amend or take any action under the Rights Agreement
(except as set forth in Section
-28-
6.10), or adopt any other shareholders rights plan or enter into any agreement
with any of its shareholders in their capacity as such; (B) split, combine,
subdivide or reclassify its outstanding shares of capital stock; (C) declare,
set aside or pay any dividend or distribution payable in cash, stock or property
in respect of any of its capital stock, other than dividends and distributions
by a direct or indirect wholly-owned subsidiary of the Company to its parent
corporation; or (D) repurchase, redeem or otherwise acquire or permit any of its
Subsidiaries to purchase, redeem or otherwise acquire, any shares of its capital
stock or any Company Options (it being understood that this provision shall not
prohibit the exercise (cashless or otherwise) of Company Options);
(iv) the Company shall not, and shall not cause or permit any
of its Subsidiaries to, take any action that it knows would cause any of its
representations and warranties in this Agreement to become inaccurate in any
material respect;
(v) except as expressly permitted by this Agreement, and
except as required by applicable law or pursuant to contractual obligations in
effect on this date; the Company shall not, and shall not permit its
Subsidiaries to, (A) enter into, adopt or amend (except for renewals on
substantially identical terms) any agreement or arrangement relating to
severance, (B) enter into, adopt or amend (except for renewals on substantially
identical terms) any employee benefit plan or employment or consulting agreement
(including, without limitation, the Company Benefit Plans referred to in Section
3.10); or (C) grant any stock options or other equity related awards;
(vi) except for borrowings under lines of credit contemplated
by the Company Disclosure Letter and trade debt incurred in the ordinary course
of business consistent with past practice, neither the Company nor any of its
Subsidiaries shall issue, incur or amend the terms of any indebtedness for
borrowed money or guarantee any such indebtedness (other than indebtedness of
the Company or any wholly-owned Subsidiary);
(vii) neither the Company nor any of its Subsidiaries shall
make any capital expenditures in an aggregate amount in excess of the aggregate
amount reflected in the capital expenditure budget, a copy of which is attached
to the Company Disclosure Letter;
(viii) other than in the ordinary course of business consistent
with past practice, neither the Company nor any of its Subsidiaries shall
transfer, lease, license, sell, mortgage, pledge, encumber or otherwise dispose
of any of its or its Subsidiaries' property or assets (including capital stock
of any of its Subsidiaries) material to the Company and its Subsidiaries taken
as a whole, except pursuant to contracts existing as of this date (the terms of
which have been previously disclosed to Parent);
(ix) neither the Company nor any of its Subsidiaries shall
issue, deliver, sell or encumber shares of any class of its capital stock or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares, except any such shares issued pursuant to options and other awards
outstanding on this date under Company Benefit Plans or as otherwise permitted
by this Agreement;
-29-
(x) neither the Company nor any of its Subsidiaries shall
acquire any business, including any facilities, whether by merger,
consolidation, purchase of property or assets or otherwise, except to the extent
provided for in the capital expenditure budget attached to the Company
Disclosure Letter;
(xi) The Company shall not change its accounting policies,
practices or methods in any manner that materially affects the reported
consolidated assets, liabilities or results of operations of the Company, except
as required by GAAP, applicable law or by the rules and regulations of the SEC;
(xii) other than pursuant to this Agreement, the Company shall
not, and shall not permit any of its Subsidiaries to, take any action to cause
Company Common Shares to cease to be listed on the Nasdaq National Market
System;
(xiii) The Company shall not, and shall not permit any of its
Subsidiaries to, enter into any Company Contract described in clauses (c) and
(d) of Section 3.18, or enter into or amend any distribution, supply, inventory
purchase, franchise, license, sales agency or advertising contract outside of
the ordinary course of business consistent with past practice in scope and
amount but in no event for a term (or an extension of a term) beyond the date
that is twelve months after the date of this Agreement;
(xiv) The Company shall not, and shall not cause or permit any
of its Subsidiaries to, change or, other than in the ordinary course of business
consistent with past practice, make any material Tax election, settle any audit
or file any amended Tax Returns, except as required by applicable law;
(xv) The Company shall not take any action that could
reasonably be expected to result in (A) any representation and warranty of the
Company set forth in this Agreement that is qualified as to materiality becoming
untrue, (B) any such representation and warranty that is not so qualified
becoming untrue in any manner that has or is reasonably expected to have a
Material Adverse Effect or (C) any condition to the Offer or the Merger not
being satisfied; or
(xvi) The Company shall not enter into, or permit any of its
Subsidiaries to enter into, any commitments or agreements to do any of the
foregoing.
Section 5.2 Interim Operations of Parent. Parent covenants and agrees as to
-----------------------------------------
itself and its Subsidiaries (including Merger Sub) that, after this date, until
the earlier to occur of (a) the termination of this Agreement pursuant to
Section 8.1 and (b) the Effective Time (unless the Company shall otherwise
approve in writing, or unless as otherwise expressly contemplated by this
Agreement), Parent shall not take any action that could reasonably be expected
to result in (A) any representation and warranty of Parent or Merger Sub set
forth in this Agreement that is qualified as to materiality becoming untrue, (B)
any such representation and warranty that is not so qualified becoming untrue in
any material respect or (C) any condition to the Offer or the Merger not being
satisfied.
Section 5.3 No Solicitation.
----------------------------
-30-
(a) The Company shall immediately cease and terminate any existing
solicitation, initiation, encouragement, activity, discussion or negotiation
with any Persons conducted heretofore by the Company, its Subsidiaries or any of
their respective representatives with respect to any proposed, potential or
contemplated Acquisition Transaction.
(b) From and after this date, without the prior written consent of
Parent, the Company will not, and will not authorize or permit any of its
Subsidiaries to, and shall use its reasonable best efforts to cause any of its
or their respective officers, directors, employees, financial advisors, agents
or other representatives not to, directly or indirectly, solicit, initiate or
encourage (including by way of furnishing information) or take any other action
(other than public disclosure by the Company in the ordinary course of the
Company's business consistent with the Company's past practices) to facilitate
the making of any proposal which constitutes or may reasonably be expected to
lead to an Acquisition Proposal from any Person, engage in any discussion or
negotiations relating thereto or accept any Acquisition Proposal or enter into
any contract or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any of the other transactions contemplated by this
Agreement; provided that, at any time prior to the acceptance for payment of
Company Common Shares pursuant to the Offer, the Company may, subject to
compliance with this Section 5.3(b), furnish information to, and negotiate or
otherwise engage in discussions with, any Person (a "Proposing Party") who (x)
---------------
delivers a bona fide written Acquisition Proposal which was not solicited,
initiated, encouraged or facilitated by the Company, directly or indirectly,
after the date of this Agreement or otherwise resulted from a breach of this
Section 5.3, and (y) enters into an appropriate confidentiality agreement with
the Company (which agreement shall be no less favorable to the Company than the
Confidentiality Agreement and a copy of which will be delivered to Parent
promptly after the execution thereof), if, but only if, the Board of Directors
determines in good faith by a majority vote, (i) after consultation with, and
receipt of advice from, its outside legal counsel, and taking into account,
among other things, all legal, financial, regulatory and other aspects of the
proposal and the party making the proposal, that such proposal would, if
consummated, result in a transaction that is more favorable to its shareholders
(in their capacities as shareholders), from a financial point of view, than the
transactions contemplated by this Agreement, and (ii) after consultation with
the Company's independent financial advisors, that such proposal could
reasonably be expected to be completed (a "Superior Transaction").
(c) The Company shall notify Parent orally and in writing (1) of any
such offers or proposals (including, without limitation, the terms and
conditions of any such offers or proposals), and any amendments or revisions
thereto, (2) whether the Person making such offer or proposal has a class of
equity securities that is publicly traded, and whether such Person is a Fortune
500 company, is listed on the New York Stock Exchange or is traded on The Nasdaq
National Market, and (3) without requiring the Company to divulge information
that reasonably could lead Parent to identify the Person making such offer or
proposal, such other information regarding the financial position of the Person
making such offer or proposal and such other information as Parent reasonably
may request relating to such Person's ability to finance and consummate the
Acquisition Transaction so offered or proposed. The foregoing information shall
be delivered to Parent as promptly as practicable following the receipt by the
Company of such offer or proposal, and the Company shall keep Parent reasonably
informed of the status and material terms of any such offer or proposal. For
purposes of this Agreement, "Acquisition Proposal" shall mean, with respect to
--------------------
the Company, any proposal or offer from any Person (other
-31-
than Parent or any of its Subsidiaries) relating to any (i) direct or indirect
acquisition or purchase of a portion of the business of the Company or any of
its Subsidiaries that generates 20% or more of the consolidated net revenues or
constitutes 20% or more of the assets of the Company and its Subsidiaries, (ii)
direct or indirect acquisition or purchase of 20% or more of any class of equity
securities of the Company or any of its Subsidiaries whose business generates
20% or more of the consolidated net revenues or constitutes 20% or more of the
assets of the Company and its Subsidiaries, (iii) tender offer or exchange offer
that if consummated would result in any Person beneficially owning 20% or more
of the capital stock of the Company, or (iv) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose business generates 20% or
more of the consolidated net revenues or constitutes 20% or more of the assets
of the Company and its Subsidiaries. Each of the transactions referred to in
clauses (i) - (iv) of the definition of Acquisition Proposal, other than any
such transaction to which Parent or any of its Subsidiaries is a party, shall be
deemed to exclude the Company's Subsidiary in Australia and is referred to as an
"Acquisition Transaction". For purposes of this Section 5.1(c), "consolidated
-----------------------
net revenues" shall refer to the aggregate revenues of the Company and its
Subsidiaries for the 12-month period ending on the last day of the period
covered by the most recent Form 10-K report of the Company or, if later, the
most recent Form 10-Q report of the Company filed with the SEC.
(d) If, prior to the acceptance for payment of Company Common Shares
pursuant to the Offer, the Board of Directors determines in good faith by a
majority vote, with respect to any Acquisition Proposal from a Proposing Party
for an Acquisition Transaction received after the date hereof that was not
solicited, initiated, encouraged or facilitated by the Company, directly or
indirectly, as required by, and in accordance with, Section 5.3(b) above, after
the date of this Agreement or did not otherwise result from a breach of this
Section 5.3, that, based upon consultations with the Company's independent
financial advisors and outside legal counsel, the Acquisition Transaction is a
Superior Transaction, then the Company may terminate this Agreement and enter
into an acquisition agreement for the Superior Transaction; provided that, prior
to any such termination, and in order for such termination to be effective, (i)
the Company shall provide Parent three business day's written notice that it
intends to terminate this Agreement pursuant to this Section 5.3(d), identifying
the Superior Transaction and delivering an accurate description of all material
terms of the Superior Transaction to be entered into, and (ii) on the date of
termination (provided that the advice of the Company's independent financial
advisors and outside legal counsel referred to above shall continue in effect
without revocation, revision or modification), the Company shall deliver to
Parent (A) a written notice of termination of this Agreement pursuant to this
Section 5.3(d), (B) wire transfer of immediately available funds in the amount
of the Termination Fee, (C) a written acknowledgment from the Company that the
termination of this Agreement and the entry into the Superior Transaction are a
Triggering Event, and (D) a written acknowledgment from each other party to the
Superior Transaction that it has read the Company's acknowledgment referred to
in clause (C) above and will not contest the matters thus acknowledged by the
Company, including the payment of the Termination Fee.
(e) Nothing in this Section 5.3 shall prevent the Board of Directors
from taking, and disclosing to the Shareholders, a position contemplated by Rule
14d-9 and Rule 14e-2(a) promulgated under the Exchange Act or making any
disclosure required under the MBCL (subject, however, to compliance with the
balance of this sentence where applicable), and the
-32-
Board of Directors may prior to the acceptance for payment of Company Common
Shares pursuant to the Offer, withdraw, modify or change its Recommendation if,
in the good faith judgment of the Board of Directors, after consultation with
outside legal counsel, failure to take such action would be inconsistent with
its obligations under applicable law; provided that in the case of a tender
offer made by any Person other than Parent or Merger Sub, the Board of Directors
shall not recommend that shareholders tender their Company Common Shares in such
tender offer unless (i) such tender offer is determined to be a Superior
Transaction in accordance with the provisions of Section 5.3(d) and (ii) the
Company has provided Parent with not less than three business day's prior
written notice of any such action; provided, further, that in no event shall the
Company or its Board of Directors take, agree, or resolve to take any action
prohibited by Section 5.3(b) or 5.3(d) except as expressly permitted by such
Sections.
(f) Except pursuant to the exercise of its rights in compliance with
this Section 5.3, the Company shall not take any action to make the provisions
of Chapter 110D or Chapter 110F of the MBCL inapplicable to any Acquisition
Transaction in respect of the Company or release any standstill agreements or
other similar restrictions, or amend the Rights Agreement, redeem the Rights or
take any other action which would result in the Rights Agreement becoming
inapplicable to any Person or any Acquisition Transaction prior to the
termination of this Agreement in accordance with its terms.
ARTICLE VI
Section 6.1 Preparation of the Proxy Statement; Shareholders Meeting;
---------------------------------------------------------
Offering Circular.
-----------------
(a) If the approval of this Agreement by the Shareholders is required
by law, the Company and Parent shall, as promptly as practicable following the
expiration of the Offer (provided that the Minimum Tender Condition shall have
been satisfied), prepare and file with the SEC a proxy statement or information
statement relating to the Shareholder Approval (as amended or supplemented from
time to time, the "Proxy Statement") and the Company shall use its commercially
---------------
reasonable efforts to have the Proxy Statement promptly declared effective by
the SEC and to cause the Proxy Statement to be mailed to the Shareholders as
promptly as practicable following the expiration of the Offer in accordance with
the provisions of the MBCL. The Company shall promptly notify Parent upon the
receipt of any comments from the SEC or its staff or any request from the SEC or
its staff for amendments or supplements to the Proxy Statement and shall provide
Parent with copies of all correspondence between the Company and its
representatives, on the one hand, and the SEC and its staff, on the other hand.
Notwithstanding the foregoing, prior to filing or mailing the Proxy Statement
(or any amendment or supplement thereto) or responding to any comments of the
SEC with respect thereto, the Company (i) shall provide Parent a reasonable
opportunity to review and comment on such document or response, (ii) shall
include in such document or response all comments reasonably proposed by Parent
and (iii) shall not file or mail such document or respond to the SEC prior to
receiving Parent's approval, which approval shall not be unreasonably withheld
or delayed.
(b) If the approval of this Agreement by the Shareholders is required
by law, the Company shall, as promptly as practicable following the expiration
of the Offer (provided that the Minimum Tender Condition shall have been
satisfied), establish a record date (which
-33-
will be as promptly as reasonably practicable following the expiration of the
Offer) for, duly call, give notice of, convene and hold a meeting of the
Shareholders (the "Shareholders Meeting") for the purpose of obtaining the
---------------------
Shareholder Approval. Subject to Section 5.3(e), the Company shall, through the
Board of Directors, declare advisable and recommend to its Shareholders that
they approve this Agreement, and shall include such recommendation in the Proxy
Statement. Without limiting the generality of the foregoing, the Company agrees
that its obligations pursuant to the first sentence of this Section 6.1(b) shall
not be affected by (i) the commencement, public proposal, public disclosure or
communication to the Company or any other person of any Acquisition Proposal or
(ii) the withdrawal or modification by the Board of Directors of its approval or
recommendation of the Offer, the Merger or this Agreement.
(c) The Company represents and warrants that the information (other
than information with respect to Parent and Merger Sub which is supplied by
Parent and Merger Sub in writing to the Company specifically for use in the
Proxy Statement) contained in the Proxy Statement will not, at the date of
mailing to the Shareholders or at the date of such Shareholders Meeting, contain
any statement which, at the time and in light of the circumstances under which
it is made, is false or misleading with respect to any material fact required to
be stated therein or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for such Shareholders
Meeting. The Company represents and warrants that the Proxy Statement will
comply as to form in all material respects with the Exchange Act and the rules
and regulations of the SEC thereunder. Parent and Merger Sub represent and
warrant that the information supplied by Parent and Merger Sub in writing to the
Company specifically for use in the Proxy Statement will not, at the date of
mailing to the Shareholders or at the date of the Shareholders Meeting, contain
any statement which, at the time and in light of the circumstances under which
it is made, is false or misleading with respect to any material fact required to
be stated therein or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Shareholders
Meeting.
(d) Notwithstanding Section 6.1(a), (b) or (c), in the event that
Parent, Merger Sub or any other Subsidiary of Parent acquires, directly or
indirectly, at least 90% of the outstanding Company Common Shares pursuant to
the Offer or otherwise, the parties hereto will take all necessary and
appropriate action to cause the Merger to become effective in accordance with
Section 82 of the MBCL without a meeting of the Shareholders as soon as
practicable after the acceptance for payment and purchase of the Company Common
Shares by Parent pursuant to the Offer.
Section 6.2 Filings; Other Action. Subject to the terms and conditions
-------------------------------------
herein provided, the Company, Parent and Merger Sub shall: (a) make promptly
their respective filings, and any other submissions, under the HSR Act with
respect to the Merger and the other transactions contemplated hereby, (b) use
their reasonable best efforts to cooperate with one another in (i) determining
which other filings are required to be made prior to the expiration of the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, Governmental
Entities or other third parties in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby and
(ii) timely making all such filings and timely seek all such consents,
approvals, permits, authorizations and waivers, and (c) use their reasonable
best efforts to take, or cause to be taken, all other actions and do, or cause
to be done, all other things necessary,
-34-
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement; provided, however, that such reasonable best
efforts shall not include (i) the sale or divestiture of any assets of Parent
(or its affiliates) or (ii) the licensing of any Intellectual Property of Parent
or its affiliates or Intellectual Property to be acquired under this Agreement.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purpose of this Agreement, the proper officers and
directors of Parent or the Surviving Corporation shall take all such necessary
action.
Section 6.3 Publicity. The initial press release relating to this Agreement
-------------------------
shall be issued jointly by the Company, Parent and Merger Sub. Thereafter,
subject to their respective legal obligations, the Company, Parent and Merger
Sub shall consult with each other, and use reasonable efforts to agree upon the
text of any press release, before issuing any such press release or otherwise
making public statements with respect to the transactions contemplated hereby
and in making any filings with any Governmental Entity or with any national
securities exchange with respect thereto.
Section 6.4 Further Action. Each of the parties shall, subject to the
------------------------------
fulfillment at or before the Effective Time of each of the conditions of
performance set forth in this Agreement or the waiver thereof, use its
reasonable best efforts to perform those further acts and execute those
documents as may be reasonably required to effect the transactions contemplated
hereby. Each of the parties agrees to use its reasonable best efforts to obtain
in a timely manner all necessary waivers, consents, approvals and opinions and
to effect all necessary registrations and filings, and to use its reasonable
best efforts to take, or cause to be taken, all other actions and to do, or
cause to be done, all other things necessary, proper or advisable to consummate
and make effective as promptly as practicable the Offer and the Merger. In
furtherance of the foregoing, the Company shall use its reasonable best efforts
to procure the execution of agreements between the Surviving Corporation and
employees of the Company identified by Parent on terms satisfactory to Parent
and such employees.
Section 6.5 Expenses. Whether or not the Offer or the Merger is consummated,
------------------------
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including the Offer and the Merger) shall be
paid by the party incurring those expenses except as expressly provided in this
Agreement. All reasonable fees and expenses of the Company's financial advisor
and legal counsel shall be paid by the Surviving Corporation upon the
consummation of the Merger.
Section 6.6 Notification of Certain Matters. Each party shall give prompt
-----------------------------------------------
notice to the other parties of the following:
(a) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence is reasonably expected to cause any of the conditions precedent
set forth in Article VII not to be satisfied; and
(b) any facts relating to that party which would make it necessary or
advisable to amend the Schedule TO or the Proxy Statement in order to make the
statements therein not untrue or misleading or to comply with applicable law;
provided, however, that the delivery of
-------- -------
-35-
any notice pursuant to this Section 6.6 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
(c) From time to time after the date of this Agreement and prior to
the acceptance for payment of Company Common Shares pursuant to the Offer, the
Company will promptly supplement or amend the Company Disclosure Letter with
respect to any matter hereafter arising which, if existing or occurring at or
prior to the date of this Agreement, would have been required to be set forth or
described in the Company Disclosure Letter which is necessary to correct any
information in the Company Disclosure Letter or in any representation and
warranty of the Company that has been rendered inaccurate thereby. For purposes
of determining the accuracy of the representations and warranties of the Company
contained in Article III in order to determine the fulfillment of the conditions
set forth in paragraph (d) of Exhibit A, the Company Disclosure Letter delivered
---------
by the Company shall be deemed to include only that information contained
therein on the date of this Agreement and shall be deemed to exclude any
information contained in any subsequent supplement or amendment thereto.
Section 6.7 Access to Information. From the date of this Agreement until the
-------------------------------------
Closing, upon reasonable notice, the Company shall, and shall cause its
Subsidiaries to, (i) give Parent and its authorized representatives full access
to all books, records (except personnel files), personnel, offices and other
facilities and properties of the Company and its Subsidiaries and their
accountants and accountants' work papers, (ii) permit Parent to make such copies
and inspections thereof as Parent may reasonably request and (iii) furnish
Parent with such financial and operating data and other information with respect
to the business and properties of the Company and its Subsidiaries as Parent may
from time to time reasonably request; provided that no investigation or
information furnished pursuant to this Section 6.7 shall affect any
representation or warranty made herein by the Company or the conditions to the
obligations of Parent and Merger Sub to consummate the transactions contemplated
by this Agreement. Parent will endeavor to describe information requests with as
much specificity as is practicable. Each of Parent and the Company shall
designate a representative to coordinate information and other requests pursuant
to this Section 6.7. All access shall be subject to the condition that such
examinations shall be conducted during normal business hours and in a manner
designed to minimize to the extent practicable disruption to the normal business
operations of the Company.
Section 6.8 Insurance; Indemnity. (a) Parent will maintain in effect with a
------------------------------------
carrier reasonably acceptable to the Company for not less than six years after
the Effective Time, the Company's current directors and officers insurance
policies, if such insurance is obtainable (or policies of at least the same
coverage containing terms and conditions no less advantageous to the current and
all former directors and officers of the Company) with respect to acts or
failures to act prior to the Effective Time, including acts relating to the
transactions contemplated by this Agreement; provided, however, that in order to
maintain or procure such coverage, Parent shall not be required to maintain or
obtain policies providing such coverage except to the extent such coverage can
be provided at an annual cost of no greater than two times the most recent
annual premium paid by the Company prior to the date hereof (the "Cap"); and
---
provided, further, that if equivalent coverage cannot be obtained, or can be
obtained only by paying an annual premium in excess of the Cap, Parent shall
only be required to obtain as much coverage as can be obtained by paying an
annual premium equal to the Cap.
-36-
(b) From and after the Effective Time, Parent shall indemnify and hold
harmless to the fullest extent permitted under applicable law, each Person who
is, or has been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer or director of the Company or any of its Subsidiaries
(each, an "Indemnified Party") against all losses, claims, damages, liabilities,
-----------------
costs or expenses (including attorneys' fees), judgments, fines, penalties and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation arising out of or pertaining to acts or omissions,
or alleged acts or omissions, by them in their capacities as such, which acts or
omissions occurred prior to the Effective Time, whether asserted or claimed
prior to, at or after the Effective Time. In the event of any such claim,
action, suit, proceeding or investigation (an "Action"), the Parent shall
------
control the defense of such Action with counsel selected by the Parent, which
counsel shall be reasonably acceptable to the Indemnified Party; provided,
however, that the Indemnified Party shall be permitted to participate in the
defense of such Action through counsel selected by the Indemnified Party, which
counsel shall be reasonably acceptable to the Parent, at the Indemnified Party's
expense. Notwithstanding the foregoing, if there is any conflict between the
Parent and any Indemnified Parties or there are additional defenses available to
any Indemnified Parties, the Indemnified Parties shall be permitted to
participate in the defense of such Action with counsel selected by the
Indemnified Parties, which counsel shall be reasonably acceptable to the Parent,
and Parent shall cause Parent to pay the reasonable fees and expenses of such
counsel, as accrued and in advance of the final disposition of such Action to
the fullest extent permitted by applicable law; provided, however, that the
Parent shall not be obligated to pay the reasonable fees and expenses of more
than one counsel for all Indemnified Parties in any single Action except to the
extent that, in the opinion of counsel for the Indemnified Parties, two or more
of such Indemnified Parties have conflicting interests in the outcome of such
Action. The Parent shall not be liable for any settlement effected without its
written consent, which consent shall not unreasonably be withheld.
(c) The Surviving Corporation shall keep in effect all provisions in
its articles of organization and by-laws that provide for exculpation of
director and officer liability and indemnification (and advancement of expenses
related thereto) of the past and present officers and directors of the Company
to the fullest extent permitted by the MBCL and such provisions shall not be
amended except as either required by applicable law or to make changes permitted
by law that would enhance the rights of past or present officers and directors
to indemnification or advancement of expenses.
(d) If the Surviving Corporation or any of its respective successors
or assigns (i) shall consolidate with or merge into any other corporation or
other entity and shall not be the continuing or surviving corporation or entity
of the consolidation or merger or (ii) shall transfer all or substantially all
of its properties and assets to any individual, corporation or other entity,
then and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation shall assume all of the
obligations set forth in this Section 6.8.
(e) The provisions of this Section 6.8 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
Section 6.9 Employee Benefit Plans. The Company agrees to promptly take all
--------------------------------------
actions necessary to cause the following to occur on or prior to the Closing
Date:
-37-
(a) Merger of 401(k) Plan. As the plan sponsor, the Company will (on
---------------------
or before the Closing Date, except with respect to 6.9(a)(viii) herein, which
shall occur as soon as administratively practicable following the Closing Date)
(i) adopt all amendments to the Company's 401(k) plan (the "401(k) Plan")
necessary to make such Plan comply with the applicable legal requirements as
changed by the laws described in Rev. Proc. 99-23 issued by the Internal Revenue
Service, (ii) make its matching contributions (in amounts consistent with its
practice of making such contributions in prior years) to the accounts of
participants in such 401(k) Plan for the plan year ending December 31, 2000,
(iii) comply with the 401(k) Plan's provisions with respect to participant loans
by placing in default and treating as deemed distributions the amount of any
loans outstanding to former employees of the Company which have not been repaid
in full (other than the former employees affected by the sale of the Company's
Factura business), (iv) obtain the resignations of Xxxxxxxx Clear, Xxxxx
Xxxxxxxx and Xxxx Xxxxx Xxxx as trustees of the trust forming part of such
401(k) Plan, effective as of the Closing Date, (v) appoint L. Xxxxxx Xxxxxxxx as
successor trustee of the trust forming part of such 401(k) Plan, effective as of
the Closing Date, (vi) approve the merger of such 401(k) Plan with the Minnesota
Mining and Manufacturing Company Voluntary Investment Plan and Employee Stock
Ownership Plan (the "VIP") effective as soon as administratively practicable,
but in any event at a time agreed upon by Parent and the Surviving Corporation,
which may occur following the Closing Date, (vii) direct the trustees of the
401(k) Plan to prepare for the transfer of the assets and records of such Plan
to the trustee of the VIP as soon as reasonably possible following the Closing
Date, and (viii) prior to the merger of the 401(k) Plan into the VIP, which may
occur following the Closing Date, cause the 401(k) Plan to return sufficient
contributions and earnings thereon to the Company's highly compensated employees
so that the 401(k) Plan complies with the anti-discrimination provisions of
Section 401(k) of the Code for the plan year ending December 31, 2000.
(b) Termination of Stock Option Plans. As the plan sponsor, the
---------------------------------
Company will (i) not issue options to purchase Company Common Shares under any
of the Stock Option Plans after the date of this Agreement, (ii) cause all of
the Company Options issued under the Stock Option Plans and outstanding as of
the date of this Agreement to become fully vested and immediately exercisable
upon the satisfaction of the Minimum Tender Condition, (iii) exercise its
authority under the Stock Option Plans to cause each Company Option still
outstanding at the Effective Time of the Merger to be converted into the right
to receive in cash an amount equal to the Net Gain attributable to such Company
Option, and (iv) cause all of the Stock Option Plans and all of the Company
Options outstanding under such Plans to be terminated effective as of the
Closing Date, subject to the right of the holders of Company Options to receive
the Net Gains attributable to their Company Options as described in Section
2.1(e) hereof.
(c) Employment Agreements. The Company will assist Parent in (i)
---------------------
identifying those key employees of the Company and its subsidiaries whose
continued employment following the Closing Date should be covered by individual
employment agreements, and (ii) designing the provisions of such agreements;
provided, however, that the Surviving Corporation shall have the final authority
-------- -------
to decide which of the Company's employees will be offered such employment
agreements. The Company will use reasonable commercial efforts to convince such
key employees to enter into such individual employment agreements on or prior to
the Closing Date.
-38-
(d) Retention Incentives. The Company will assist Parent in (i)
--------------------
identifying those key employees of the Company and its subsidiaries who should
be eligible for retention bonuses/compensation as an incentive for them to
continue their employment following the Closing Date, and (ii) designing the
terms and conditions of such retention bonuses/compensation; provided, however,
-------- -------
that the Surviving Corporation shall have the final authority to decide both the
employees eligible for such retention bonuses/compensation as well as the terms
and conditions of such bonuses/compensation.
(e) Termination of Stock Purchase Plan. As the plan sponsor, the
----------------------------------
Company will (i) exercise its authority under the 1995 Employee Stock Purchase
Plan to treat the Closing Date of the Merger as an Offering Termination Date for
purposes of such Plan, (ii) cause each Option in effect under the 1995 Employee
Stock Purchase Plan as of such Offering Termination Date to be exercised as of
the Closing Date, and (iii) cause the 1995 Employee Stock Purchase Plan and all
of the Options outstanding under such Plan to be terminated effective as of the
Closing Date, subject to the right of the Option holders to receive the Merger
Consideration for the Company Common Shares they become entitled to receive upon
the exercise of their Options.
(f) Participation in 401(k) Plan. The Surviving Corporation shall
----------------------------
permit its employees to continue their participation in the 401(k) Plan (if they
have not become eligible to participate in the VIP) until such time as the
401(k) Plan is merged into the VIP.
(g) No Action. Parent shall not take any action following the
---------
Effective Time that would cause a breach of the Company's agreements made in
this Section 6.9.
Section 6.10 Rights Agreement. The Board of Directors of the Company shall take
------------------------------
all action requested by Parent in order to render the Rights inapplicable to the
Offer, the Merger and the other transactions contemplated hereby.
ARTICLE VII
Section 7.1 Conditions to Obligations of the Parties to Consummate the Merger.
------------------------------------------------------------------------------
The respective obligation of each party to consummate the Merger shall be
subject to the satisfaction of each of the following conditions:
(a) Shareholder Approval. The Shareholder Approval shall have been
--------------------
obtained, if required by applicable law.
(b) Legality. No order, decree or injunction (collectively, "Legal
-------- -----
Restraints") shall have been entered or issued by any Governmental Entity which
----------
is in effect and has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger. Each party agrees that, in the event
that any such order, decree or injunction shall be entered or issued, it shall
use its reasonable best efforts (using the standard described in Section 6.2(c)
of this Agreement) to cause any such order, decree or injunction to be lifted or
vacated.
(c) Antitrust. The waiting period (and any extension thereof) under
---------
the HSR Act applicable to the Merger shall have expired or been terminated and
any other approval or
-39-
waiting period required prior to the Effective Time under any other applicable
competition, merger control, antitrust or similar law or regulation of any
Governmental Entity shall have been obtained or terminated or shall have
expired, other than those the failure of which to have been obtained or
terminated or to have expired would not (x) reasonably be expected to have a
Material Adverse Effect (it being understood for purposes of this clause (x)
that no party may rely on the failure of this condition to be satisfied if such
failure was caused by such party's failure to comply with the terms of Section
6.2) or (y) result in the commission of a criminal offense.
(d) Purchase of Company Common Shares in the Offer. Merger Sub shall
----------------------------------------------
have previously accepted for payment and paid for the Company Common Shares
pursuant to the Offer.
Section 7.2 Additional Conditions to Obligations of Parent and Merger Sub. The
--------------------------------------------------------------------------
obligations of Parent and Merger Sub to consummate the Merger shall also be
subject to the satisfaction or waiver of each of the following conditions:
(a) The Company shall have performed in all material respects its
covenants contained in Section 1.3 of this Agreement required to be performed on
or prior to the Closing Date.
(b) The Shareholders Agreement shall be in full force and effect.
(c) The Option Agreement shall be in full force and effect.
(d) The Company shall have performed in all material respects its
covenants contained in Section 6.9 of this Agreement that are required to be
performed on or prior to the Closing Date.
ARTICLE VIII
Section 8.1 Termination. This Agreement may be terminated, and the
------------------------
Offer and the Merger contemplated hereby may be abandoned, at any time before
the Effective Time (except as otherwise provided), whether before or after the
Shareholder Approval has been obtained, as follows:
(a) by mutual written consent of each of the Company and Parent;
(b) by any party, if Merger Sub shall not have accepted for payment
any Company Common Shares pursuant to the Offer satisfying the Minimum Tender
Condition prior to February 28, 2001 (the "Termination Date"); provided,
---------------- --------
however, that the right to terminate this Agreement under this Section 8.1(b)
-------
shall not be available to any party whose breach of this Agreement has been a
principal reason the Offer has not been consummated by such date; and provided
--------
further, that either party, by written notice to the other party, may extend the
-------
aforementioned February 28, 2001 date to a date not later than April 30, 2001 if
all conditions of the Offer other than those conditions set forth in subsection
(f) of Exhibit A to this Agreement have been satisfied on or before February 28,
2001;
-40-
(c) by any party, if a Governmental Entity shall have issued an order,
decree or injunction or taken any other action permanently enjoining,
restraining or otherwise prohibiting the acceptance for payment of, or payment
for the company Common Shares pursuant to the Offer or the Merger and such
order, decree or injunction shall have become final and nonappealable (but only
if such party shall have used its reasonable best efforts to cause such order,
decree or injunction to be lifted or vacated);
(d) by Parent, (i) if the Company shall have breached or failed to
perform any of its representations, warranties, covenants or agreements
contained in this Agreement, which breach individually or in the aggregate with
other such breaches, would give rise to the failure of a condition set forth in
paragraph (d) or (e) of Exhibit A hereto and has not been or is incapable of
---------
being cured by the Company within 20 business days after its receipt of written
notice thereof from Parent, or (ii) if any suit, action or proceeding described
in paragraph (a) of Exhibit A hereto shall have prevailed and become final and
---------
nonappealable;
(e) by the Company, if either Parent or Merger Sub shall have
breached or failed to perform in any material respect any of its
representations, warranties, covenants or agreements contained in this Agreement
except for such failures that, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Parent's or Merger
Sub's ability to consummate the transactions contemplated hereby, including the
Offer and the Merger, which breach or failure to perform has not been or is
incapable of being cured by Parent within 20 business days after its receipt of
written notice thereof from the Company;
(f) by Parent, if the condition set forth in Section 7.1(a) has not
been satisfied, unless Company Common Shares satisfying the Minimum Tender
Condition have been tendered to Merger Sub;
(g) by Parent, if (i) the Board of Directors shall or shall resolve to
(A) either not recommend that the Shareholders accept the Offer or, if
applicable, give the Shareholder Approval, (B) withdraw its Recommendation, (C)
modify its Recommendation in a manner adverse to Parent or Merger Sub, (D)
approve, recommend or fail to take a position that is adverse to any proposed
Acquisition Transaction (other than the Offer or the Merger) involving the
Company or any of its Subsidiaries, or (E) take any action which would
constitute a breach of Section 5.3(f), (ii) the Board of Directors shall have
refused to affirm to Parent its Recommendation to the Shareholders that they
accept the Offer and give the Shareholder Approval as promptly as practicable
(but in any case within five days) after receipt of any reasonable written
request for such affirmation from Parent, or (iii) a person shall have acquired
more than 20% of the outstanding Company Common Shares; or
(h) by the Company pursuant to, but only in compliance with, Section
5.3.
-41-
Section 8.2 Effect of Termination and Abandonment. (a) In the event
--------------------------------------------------
of termination of this Agreement pursuant to this Article VIII, this Agreement
shall become void (other than this Section 8.2) with no liability on the part of
either party (or of any of its representatives);
(b) Upon the happening of a Triggering Event, the Company shall pay
to Parent (or to any Subsidiary of Parent designated in writing by Parent to the
Company) the amount of $9,000,000 (the "Termination Fee"). "Triggering Event"
--------------- ----------------
means any one of the following:
(i) a termination of this Agreement by Parent pursuant to
Section 8.1(g)(i) or (ii);
(ii) a termination of this Agreement by Parent pursuant to
Section 8.1(d)(i) or 8.1(f) if any Acquisition Proposal is publicly
proposed or announced on or after the date hereof and such Acquisition
Proposal has not been publicly rejected by the Board of Directors; or
(iii) a termination of this Agreement by the Company pursuant to
Section 8.1(h); or
(iv) if, within twelve months after a termination of this
Agreement, any Acquisition Transaction is entered into, agreed to or consummated
by the Company with a Person (other than Parent or Merger Sub) who made, or who
is affiliated with any Person (other than Parent or Merger Sub) who made, (A) an
Acquisition Proposal or (B) a statement of intent to pursue an Acquisition
Transaction, either of which was publicly proposed or announced prior to a
termination of this Agreement.
Payment of the Termination Fee shall be made by wire transfer of immediately
available funds (1) on the second business day after such termination in the
case of clauses (i) and (ii) of the definition of Triggering Event, (2) on or
prior to the date of such termination, in the case of clause (iii) of the
definition of Triggering Event, or (3) on the earlier of (x) the date a contract
is entered into with respect to an Acquisition Transaction or (y) the date an
Acquisition Transaction is consummated, in the case of clause (iv) of the
definition of Triggering Event. In no event shall more than one Termination Fee
be payable by each party under this Agreement. Notwithstanding any other
provision of this Agreement to the contrary, upon receipt of the Termination Fee
by Parent (or its designee), Parent and Merger Sub shall have no other or
further claim or demand of any kind or nature whatsoever against the Company or
any of its affiliates except for any claims or rights Parent may have under the
Shareholders Agreement or the Option Agreement.
(c) If the Company terminates this Agreement pursuant to Section
8.1(e), Parent shall pay to the Company as liquidated damages the sum of
$9,000,000; and, notwithstanding any other provision of this Agreement to the
contrary, upon receipt of such sum the Company shall have no other or further
claim or demand of any kind or nature whatsoever against Parent, Merger Sub or
any of their affiliates.
-42-
(d) The parties acknowledge that the agreements contained in this
Section 8.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, neither party would enter into
this Agreement. Accordingly, if either party fails to pay promptly amounts when
due pursuant to this Section 8.2, and, in order to obtain such payment, the
other party commences a suit which results in a judgment against the non-paying
party for such amount (or any portion thereof), the non-paying party shall pay
the costs and expenses (including reasonable attorneys fees) of the other party
in connection with such suit, together with interest on such amount in respect
of the period from the date such amount became due until paid at the prime rate
of The Chase Manhattan Bank in effect from time to time during such period.
Section 8.3 Amendment. This Agreement may be amended by the parties
----------------------
hereto at any time, whether before or after the Shareholder Approval has been
obtained; provided that, after the purchase of Company Common Shares pursuant to
the Offer, no amendment shall be made which decreases the Merger Consideration
and, after the Shareholder Approval, if required, has been obtained, there shall
be made no amendment that by law requires further approval by the Shareholders
of the parties without the further approval of such Shareholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto. Following the election or appointment of Merger Sub's
designees pursuant to Section 1.3 and prior to the Effective Time, the
affirmative vote of a majority of the Independent Directors then in office shall
be required by the Company to (i) amend or terminate this Agreement by the
Company, (ii) exercise or waive any of the Company's rights or remedies under
this Agreement or (iii) extend the time for performance of Parent and Merger
Sub's respective obligations under this Agreement.
ARTICLE IX
Section 9.1 Non-Survival of Representations, Warranties and
------------------------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
----------
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.1, as the case may be, except that (a) the agreements set
forth in Sections 1.3, 6.8 and 6.9 shall survive the Effective Time, and (b) the
agreements set forth in Sections 6.5, 8.2 and this Article IX shall survive
termination indefinitely.
Section 9.2 Notices. All notices and other communications given or
--------------------
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date of receipt and shall be delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by telecopy, to the applicable
party at the following addresses or telecopy numbers (or at such other address
or telecopy number for a party as shall be specified by like notice):
-43-
(a) if to the Company:
MicroTouch Systems, Inc.
000 Xxxxxxx Xxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Clear
Telecopy No.: (000) 000-0000
with a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to Parent or Merger Sub:
Minnesota Mining and Manufacturing Company
Office of the General Counsel
Building 220-14W-07
St. Xxxx, MN 55144
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Minnesota Mining and Manufacturing Company
Xxxxxx xx xxx Xxxxxxx Xxxxxxx
Xxxxxxxx 000-00X-00
Xx. Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
with a further copy to:
Xxxxxx & Xxxxxxx LLP
Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Section 9.3 Certain Definitions; Interpretation. (a) For purposes of
------------------------------------------------
this Agreement, the following terms shall have the following meanings:
-44-
(i) "Material Adverse Effect" means any change, circumstance,
-----------------------
event, effect or state of facts (x) that has or can reasonably be expected to
have a material adverse effect on the business, operations, results of ongoing
operations, assets or conditions (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, having a value of not less than $600,000
individually or $3,000,000 in the aggregate (except as modified in Section
3.12), or the ability of the Company and its Subsidiaries to conduct their
business after the closing consistent in all material respects with the manner
conducted in the past, or (y) that will prevent or materially impair the
Company's ability to consummate the Merger; provided, however, that a Material
-------- -------
Adverse Effect will not be deemed to have occurred if the change, circumstance,
event, effect or state of facts results primarily from (i) changes in general
business conditions in the input device industry or (ii) the public announcement
by the Company or pendency of the Merger.
(ii) "affiliate" of a Person means a Person that directly or
---------
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person.
(iii) "Board of Directors" means the Board of Directors of the
------------------
Company and includes any committee thereof.
(iv) "control" (including the terms "controlled by" and "under
-------
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of stock, as trustee or executor, by contract or
credit arrangement or otherwise.
(v) "ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended and the rules and regulations promulgated thereunder.
(vi) "knowledge" of the Company with respect to any matter means
---------
actual knowledge of any of the Company's senior executive officers after
reasonable investigation and due diligence. Such Persons and their respective
areas of responsibility are set forth on Section 9.3 of the Company Disclosure
Letter.
(vii) "Person" means an individual, corporation, partnership, limited
------
liability company, association, trust, unincorporated organization, entity or
group (as defined in the Exchange Act).
(viii) "Subsidiary" of a Person means any corporation or other legal
----------
entity of which that Person (either alone or through or together with any other
Subsidiary or Subsidiaries) is the general partner or managing entity or of
which at least a majority of the stock (or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or others performing similar functions of such corporation or other legal
entity) is directly or indirectly owned or controlled by that Person (either
alone or through or together with any other Subsidiary or Subsidiaries).
(b) When a reference is made in this Agreement to Articles, Sections,
Company Disclosure Letter or Exhibits, this reference is to an Article or a
Section of, or an Exhibit to, this Agreement, unless otherwise indicated. The
table of contents and headings
-45-
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
understood to be followed by the words "without limitation."
Section 9.4 Headings. 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.
Section 9.5 Severability. If any term or other provision of this
-------------------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the maximum extent
possible.
Section 9.6 Entire Agreement; No Third-Party Beneficiaries. This
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Agreement, the Company Disclosure Letter and the Confidentiality Agreement
constitute the entire agreement and supersede any and all other prior agreements
and undertakings, both written and oral, among the parties hereto, or any of
them, with respect to the subject matter hereof and, except for Section 6.8
(Insurance; Indemnity), does not, and is not intended to, confer upon any Person
other than the parties hereto any rights or remedies hereunder.
Section 9.7 Assignment. This Agreement shall not be assigned by any
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party by operation of law or otherwise without the express written consent of
each of the other parties.
Section 9.8 Governing Law. This Agreement shall be governed by and
--------------------------
construed in accordance with, the laws of the Commonwealth of Massachusetts
without regard to the conflicts of laws provisions thereof. Each of the parties
hereto hereby irrevocably and unconditionally waives any right it may have to
trial by jury in connection with any litigation arising out of or relating to
this Agreement, the Offer, the Merger or any of the other transactions
contemplated hereby or thereby.
Section 9.9 Counterparts. This Agreement may be executed in one or
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more counterparts, and by the different parties in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
Section 9.10 Confidential Nature of Information. Between the date of
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this Agreement and the Effective Time the parties hereto will hold and will
cause their respective officers, directors, employees, representatives,
consultants and advisors to hold in strict confidence in accordance with the
terms of the Confidentiality Agreement, all documents and information furnished
to such party by or on behalf of the other party in connection with the
transactions contemplated by this Agreement. If the transactions contemplated by
this
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Agreement are not consummated, such confidence shall be maintained in accordance
with such Confidentiality Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal as of the date first written above by their respective
officers thereunto duly authorized.
MINNESOTA MINING AND
MANUFACTURING COMPANY
By: /s/ Xxxxxx X. Xxxxx
__________________________________
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Transportation, Graphics and
Safety Markets
By: /s/ Xxxxx X. Xxxxxx
__________________________________
Name: Xxxxx X. Xxxxxx
Title: Assistant General Counsel;
Assistant Secretary
EQUINOX ACQUISITION, INC.
By: /s/ Xxxxxx X. Xxxxx
__________________________________
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Transportation, Graphics and
Safety Markets
By: /s/ X.X. Xxxxxxx
__________________________________
Name: X.X. Xxxxxxx
Title: Treasurer
MICROTOUCH SYSTEMS, INC.
By: /s/ X. Xxxxxxxxxx Xxxxx
__________________________________
Name: X. Xxxxxxxxxx Xxxxx
Title: President and Chief Executive
Officer
By: /s/ Xxxxxxxx X. Clear
__________________________________
Name: Xxxxxxxx X. Clear
Title: Vice President - Finance &
Administration, Chief Financial
Officer and Treasurer
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EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Merger Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Merger Sub's obligation to pay for or return tendered Company
Common Shares promptly after the termination or withdrawal of the Offer), to pay
for any Company Common Shares tendered pursuant to the Offer and may postpone
the acceptance for payment or payment for any Company Common Shares tendered,
and, when permitted by the Agreement, amend or terminate the Offer unless (i)
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of Company Common Shares, together with Company Common
Shares owned by Parent or Merger Sub, which would represent at least a majority
of the outstanding Company Common Stock (determined on a fully diluted basis for
all outstanding stock options, convertible securities and any other rights to
acquire Company Common Stock on the date of purchase) (the "Minimum Tender
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Condition"), and (ii) any requisite waiting period under the HSR Act (and any
---------
extension thereof) applicable to the purchase of Company Common Shares pursuant
to the Offer or to the Merger and any other requisite waiting periods under any
other applicable material competition, merger, control, antitrust or similar law
or regulation shall have been terminated or shall have expired. Furthermore,
notwithstanding any other term of the Offer or this Agreement, Merger Sub shall
not be required to accept for payment or, subject as aforesaid, to pay for any
Company Common Shares not theretofore accepted for payment or paid for, and,
subject to this Agreement, may terminate or amend the Offer, immediately prior
to the applicable expiration of the Offer, if any of the following conditions
exists:
(a) there shall be pending or formally threatened any suit, action or
proceeding by any Governmental Entity (i) challenging the acquisition by Parent
or Merger Sub of any Company Common Shares, seeking to restrain or prohibit
consummation of the Offer or the Merger, or seeking to place limitations on the
ownership of Company Common Shares (or shares of common stock of the Surviving
Corporation) by Parent or Merger Sub, (ii) seeking to prohibit or limit the
ownership or operation by the Company or Parent and their respective
Subsidiaries of any material portion of the business or assets of the Company or
Parent and their respective Subsidiaries taken as a whole, or to compel the
Company or Parent and their respective Subsidiaries to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
and their respective Subsidiaries taken as a whole, as a result of the Offer,
the Merger or any of the other transactions contemplated by this Agreement,
(iii) seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect the business or operations of the Company or
Parent and
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Subsidiaries taken as a whole, or (iv) which otherwise is reasonably expected to
have a Material Adverse Effect;
(b) any Legal Restraint that has the effect of preventing the
purchase of Company Common Shares pursuant to the Offer or the Merger shall be
in effect;
(c) except as set forth in the Company Disclosure Letter or in the
SEC Reports, since September 30, 2000, there shall have been any state of facts,
change, development, effect, event, condition or occurrence that, individually
or in the aggregate, constitutes or would reasonably be expected to have, a
Material Adverse Effect;
(d) the representation and warranty of the Company contained in
Section 3.3 of this Agreement shall not be true and correct in all material
respects, or the other representations and warranties of the Company contained
in this Agreement shall not be true and correct, except for such failures to be
true and correct that (without giving effect, with respect to those
representations and warranties that are not true and correct, to any limitation
as to "materiality" or Material Adverse Effect set forth therein), individually
and in the aggregate, would not reasonably be expected to have a Material
Adverse Effect;
(e) the Company shall have failed to perform in any respect any
obligation required to be performed by it under this Agreement at or prior to
the Termination Date, which failure would reasonably be expected to have a
Material Adverse Effect;
(f) Parent shall not have obtained all consents, approvals,
authorizations, qualifications and orders of all Governmental Entities legally
required in connection with this Agreement and the transactions contemplated by
this Agreement, other than any such consents, approvals, authorizations,
qualifications and orders, the failure of which to obtain, individually and in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect; provided, however, that the failure to obtain such consents, approvals,
authorizations, qualifications or orders is not the result of a breach by Parent
or Merger Sub of any of their covenants and other obligations set forth in this
Agreement;
(g) this Agreement shall have been terminated in accordance with its
terms;
(h) the Company Board shall have (A) withdrawn or modified or
changed, in any manner adverse to Parent or Merger Sub, the Recommendation, (B)
accepted, approved or recommended any Acquisition Proposal, or (C) resolved or
publicly disclosed any intention to do any of the foregoing; or
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(i) there shall have occurred (i) any general suspension of trading
in or on the Nasdaq National Market (other than a shortening of trading hours or
any coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index), (ii) a decline of at least 30%
(determined for any particular day as of the close of business for such day) in
either the Dow Xxxxx Average of Industrial Stocks or the Standard & Poor's 500
Index from the date hereof, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iv) the
imposition of any limitation (whether or not mandatory) by any government or
Governmental Entity, on the extension of credit by banks or other lending
institutions, (v) a commencement of a war or armed hostilities or any other
national or international calamity directly involving the United States or (vi)
in the case of any of the foregoing existing on the date hereof, a material
acceleration or worsening thereof;
which, in the sole discretion of Merger Sub or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Merger Sub and Parent
and may be asserted by Merger Sub or Parent regardless of the circumstances
giving rise to such condition or may be waived by Merger Sub and Parent in whole
or in part at any time and from time to time in their sole discretion. The
failure by Parent, Merger Sub or any other affiliate of Parent at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
The terms in this Exhibit A that are defined in the attached Merger
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Agreement have the meanings set forth therein.
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