EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated March 8, 1998 by and among ADE
Corporation, a Massachusetts corporation (hereinafter called "ADE") (when used
herein, the term "ADE" will include ADE Corporation and its subsidiaries, unless
the context requires otherwise), Theta Acquisition Corp., an Arizona corporation
(hereinafter called "Subsidiary"), Phase Shift Technology, Inc., an Arizona
corporation (hereinafter called "PST"), Xxxxx Xxxxxxxxxxx and Xxxxx Xxxxxx (each
hereinafter called a "Stockholder" and together called the "Stockholders").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of ADE, Subsidiary and PST and
the stockholders of Subsidiary and PST have approved the Plan of Merger attached
hereto as Exhibit 1.1 (the "Plan of Merger"), pursuant to which Subsidiary, a
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wholly-owned subsidiary of ADE, will be merged into PST in accordance with the
applicable statutes of the State of Arizona (the merger of Subsidiary with and
into PST being hereinafter called the "Merger"), upon the terms and conditions
herein and therein set forth;
NOW, THEREFORE, in order to consummate the transactions described herein
and in the Plan of Merger and in consideration of the mutual covenants,
agreements, representations, and warranties herein contained, the parties hereto
agree as follows:
ARTICLE I. MERGER OF SUBSIDIARY INTO PST
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1.1. Plan of Merger. Upon the terms and subject to the conditions set
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forth in this Agreement and in accordance with the applicable provisions of the
laws of the State of Arizona, Subsidiary will be merged with and into PST on the
Effective Date (as hereinafter defined) in accordance with the Plan of Merger.
1.2. Effective Date of Merger. The Merger will be effective upon the filing
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with the Arizona Corporation Commission of Articles of Merger in the Form of
Exhibit 1.2 hereto (the "Articles of Merger") or on such other date and time as
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is provided in the Plan of Merger (the date and time of the effectiveness of the
Merger being hereinafter referred to as the "Effective Date").
1.3. Effect of Merger. On the Effective Date, the separate existence of
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Subsidiary will cease, and PST will continue its corporate existence and be the
corporation surviving the Merger. Upon the Effective Date, the shares of capital
stock of Subsidiary then issued and outstanding will be converted into a like
number of shares of PST Common Stock (as defined below) and such numbers of
shares of PST Common Stock will constitute all of the issued and outstanding
stock of the corporation surviving the Merger. As more fully provided in the
Plan of Merger, all PST Common Stock issued and outstanding immediately prior to
the Effective Date will be
converted into, and the Stockholders, as holders of all of the shares of PST
Common Stock issued and outstanding immediately prior to the Effective Date will
be entitled to the right to receive in exchange for such shares an aggregate of
Two Million (2,000,000) shares of ADE Common Stock (as defined below), Two
Hundred Thousand (200,000) of which shares will be placed in escrow and held in
accordance with an escrow agreement substantially in the form of Exhibit 1.3
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hereto (the "Escrow Agreement") in such amounts, as to each Stockholder, as are
provided in Section 8.2(j) hereof.
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF PST AND THE STOCKHOLDERS
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PST and each of the Stockholders hereby represent and warrant, jointly and
severally, as follows, except as stated otherwise with reference to a specific
representation or warranty in the disclosure schedule attached (or to be
attached) hereto as Schedule 2 (the "Disclosure Schedule"):
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2.1. Organization and Authority. PST is a corporation duly organized,
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validly existing, and in good standing under the laws of the State of Arizona
with full corporate power and authority to own its assets and to conduct its
business in the manner and in the places in which it is now being conducted.
Section 2.1 of the Disclosure Schedule sets forth all jurisdictions in which PST
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is qualified to do business as a foreign corporation, which are the only
jurisdictions in which the character of the properties owned or leased by PST
and the nature of the business conducted by it require such qualification. True
and complete copies of the Articles of Incorporation and By-Laws, together with
all amendments thereto, of PST have been delivered to ADE.
2.2. Authorization; Binding Agreement. PST has full corporate power and
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authority to enter into this Agreement and to carry out its obligations
hereunder, including without limitation the consummation of the Merger. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including the consummation of the Merger, have
been duly and validly authorized by PST's Board of Directors and its
stockholders. No other corporate acts or proceedings on the part of PST are
necessary to authorize this Agreement and the consummation of the transactions
contemplated hereby, including the Merger. When duly executed and delivered by
the parties hereto and thereto, this Agreement and the Acquisition Documents
will constitute valid and binding obligations of PST and the Stockholders, as
the case may be, in accordance with the respective terms and conditions of this
Agreement and the Acquisition Documents.
2.3. Capitalization. The authorized capital stock of PST consists of Ten
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Million (10,000,000) shares of Class A Common Stock (voting) no par value ("PST
Common Stock"), One Million (1,000,000) of which shares are issued and
outstanding and owned beneficially and of record by the Stockholders in the
amounts listed in Section 2.3 of the Disclosure Schedule. The issued and
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outstanding shares of PST Common Stock were validly issued and are fully paid
and nonassessable. There are no outstanding options, warrants, subscription,
redemption or other rights or commitments regarding the sale, purchase or
issuance of any shares of PST Common Stock or other securities of PST.
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2.4. No Conflicts. Neither the execution and delivery by PST and the
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Stockholders of this Agreement, nor the consummation of the transactions
contemplated hereby, including the Merger, nor compliance by PST and the
Stockholders with any of the provisions hereof, will in a materially adverse
manner violate, conflict with, result in a breach of any provision of, or
constitute a default (or an event which, with the giving of notice or the
passage of time or otherwise, would constitute such a default) under, or entitle
any party (with the passage of time or otherwise) to terminate, accelerate or
give notice of a default under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the assets of PST, under (i) any of
the provisions of the Articles of Incorporation or By-Laws of PST; (ii) any
note, bond, mortgage, indenture, deed of trust, license, contract, undertaking,
agreement, lease or other instrument or obligation to which PST is a party, or
by which PST or any of its assets may be bound or affected; or (iii) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to PST
or any of its assets (assuming government approval of the HSR pre-merger
notification to be filed pursuant to Section 4.4 hereof).
2.5. Subsidiaries and Investments. Except as set forth in Section 2.5 of
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the Disclosure Schedule, there is no corporation or other legal entity in which
PST has any direct or indirect ownership interest.
2.6. Taxes. All Tax returns of every kind, whether federal, state, local or
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foreign relating to PST's business that are due to have been filed in accordance
with any applicable law have been duly filed. All Taxes shown to be due on such
returns have been paid in full, and PST has no liability for taxes other than as
shown on such returns. Adequate provision has been made in the Financial
Statements for the payment of all accrued and unpaid Taxes, whether or not yet
due, for all annual, quarterly and month ended periods prior to the date of
Closing. Except as set forth in Section 2.6 of the Disclosure Schedule PST is
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not a party to any action or proceeding by any governmental authority for the
assessment or collection of Taxes or the audit of any Tax returns. PST has
delivered to ADE true copies of all of its Tax returns for each of its last
three fiscal years.
2.7. Financial Statements. PST has delivered to ADE unaudited balance
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sheets and unaudited statements of net income and cash flow as at and for each
of its last three fiscal years and also an unaudited balance sheet and
statements of net income and cash flow as at and for the interim period from the
end of the last fiscal year through December 31, 1997 (the "Balance Sheet Date")
(the foregoing balance sheets and statements of net income and cash flow being
referred to collectively as the "Financial Statements"). The Financial
Statements are in accordance with all books, records and accounts of PST, are
true and complete, were prepared on a tax basis and present fairly the financial
position and results of operations of PST as at the dates and for the periods
indicated.
2.8. Assets and Property.
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(a) General. Except for (i) those items of employee-owned property on
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PST's premises and (ii) those properties and assets listed in Section 2.8(a) of
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the Disclosure Schedule, PST has good and marketable title to, or full legal
right to possess under valid and subsisting leases, licenses or agreements, all
of the properties and assets used by it, located on its premises,
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or reflected on its books, and on the Financial Statements as at the Balance
Sheet Date (or acquired after the date thereof), free and clear of all liens,
encumbrances, restrictions and adverse claims, except for properties and assets
disposed of in the usual and ordinary course of business since the Balance Sheet
Date.
(b) Real Property Owned. Section 2.8(b) of the Disclosure Schedule
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lists and describes briefly all real property that PST owns or has contracted to
purchase ("prospectively owned real property"). With respect to each such parcel
of owned or prospectively owned real property:
(i) the identified owner has good and marketable title to the parcel of real
property, free and clear of any lien, encumbrance, claim, easement, covenant, or
other restriction, except for installments of special assessments not yet
delinquent and recorded easements, covenants, and other restrictions which do
not impair the current use, occupancy, or value, or the marketability of title,
of the property subject thereto;
(ii) there are no pending or threatened condemnation proceedings, lawsuits,
or administrative actions relating to the property or other matters affecting
adversely the current use, occupancy, or value thereof;
(iii) the legal description for the parcel contained in the deed thereof
describes such parcel fully and adequately, the buildings and improvements are
located within the boundary lines of the described parcels of land, are not in
violation of applicable setback requirements, zoning laws, and ordinances (and
none of the properties or buildings or improvements thereon are subject to
"permitted non-conforming use" or "permitted non-conforming structure"
classifications), and do not encroach on any easement which may burden the land,
and the land does not serve any adjoining property for any purpose inconsistent
with the use of the land, and the property is not located within any flood plain
or subject to any similar type restriction for which any permits or licenses
necessary to the use thereof have not been obtained;
(iv) there are no leases, subleases, licenses, concessions, or other
agreements, written or oral, granting to any party or parties the right of use
or occupancy of any portion of the parcel of real property;
(v) there are no outstanding options or rights of first refusal to purchase
the parcel of real property, or any portion thereof or interest therein;
(vi) there are no parties (other than PST or, in the case of prospectively
owned real property, the seller thereof) in possession of the parcel of real
property, other than tenants under any leases disclosed in Section 2.8 (c) of
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the Disclosure Schedule who are in possession of space to which they are
entitled;
(vii) all facilities located on the parcel of real property are supplied
with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are adequate in accordance with all
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applicable laws, ordinances, rules, and regulations and are provided via public
roads or via permanent, irrevocable, appurtenant easements benefiting the parcel
of real property; and
(viii) each parcel of real property abuts on and has direct vehicular access
to a public road, or has access to a public road via a permanent, irrevocable,
appurtenant easement benefiting the parcel of real property, and access to the
property is provided by paved public right-of-way with adequate curb cuts
available.
(c) Real Property Leased. Section 2.8(c) of the Disclosure Schedule
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lists and describes briefly all real property leased or subleased to PST. PST
has delivered to ADE correct and complete copies of the leases and subleases
listed in Section 2.8(c) of the Disclosure Schedule. With respect to each lease
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and sublease listed in Section 2.8(c) of the Disclosure Schedule:
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(i) the lease or sublease is legal, valid, binding, enforceable, and in full
force and effect;
(ii) the lease or sublease will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby;
(iii) no party to the lease or sublease is in breach or default, and no
event has occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or acceleration
thereunder;
(iv) no party to the lease or sublease has repudiated any provision thereof;
(v) there are no disputes, oral agreements, or forbearance programs in
effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and warranties set
forth in subsections (1) through (5) above are true and correct with respect to
the underlying lease;
(vii) PST has not assigned, transferred, conveyed, mortgaged, deeded in
trust, or encumbered any interest in the leasehold or subleasehold;
(viii) to the best of PST's knowledge, all facilities leased or subleased
thereunder have received all approvals of governmental authorities (including
licenses and permits) required in connection with the operation thereof and have
been operated and maintained in accordance with applicable laws, rules, and
regulations;
(ix) all facilities leased or subleased thereunder are supplied with
utilities and other services necessary for the operation of said facilities; and
(x) to the best of PST's knowledge, the owner of the facility leased or
subleased has good and marketable title to the parcel of real property, free and
clear of any lien, encumbrance, claim, easement, covenant, or other restriction,
except for installments of special easements not yet
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delinquent and recorded easements, covenants, and other restrictions which do
not impair the current use, occupancy, or value, or the marketability of title,
of the property subject thereto.
(d) Equipment and Tangible Fixed Assets. PST owns or leases all
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buildings, equipment, and other tangible fixed assets necessary for the conduct
of its business as presently conducted. Except as set forth in Section 2.8(d) of
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the Disclosure Schedule, each such tangible fixed asset is free from defects,
has been maintained in all material respects in good operating condition and
repair (subject to normal wear and tear), and is suitable for the purposes for
which it presently is used. Section 2.8(d) of the Disclosure Schedule contains
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PST's depreciation ledger of all machinery, equipment, fixtures, motor vehicles,
and other tangible personal property owned by PST. All such property is
reflected in the Financial Statements as of the Balance Sheet Date, except such
property as has been sold or otherwise disposed of or taken out of service
because of obsolescence or breakage in the ordinary course of business since the
Balance Sheet Date. PST has good and marketable title to all such property, free
and clear of all liens, encumbrances, restrictions and adverse claims, except
those shown or reflected in the Financial Statements as of the Balance Sheet
Date or in said Section 2.8(d) of the Disclosure Schedule and except liens for
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Taxes not yet due. Section 2.8(d) of the Disclosure Schedule also sets forth a
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complete list of all leases, licenses or other agreements under which PST holds
or operates any equipment or other tangible fixed assets and a brief description
of such assets. Each of such leases, licenses or agreements is in full force and
effect and enforceable in accordance with its terms, and there is not under any
of such leases, licenses or agreements any existing default of PST (or event or
condition which with notice or lapse of time, or both, would constitute a
default) with respect to any term thereof.
(e) Intellectual Property.
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(i) PST owns or has the right to use pursuant to license, sublicense,
agreement, or permission all Intellectual Property used or necessary for the
operation of the business of PST as presently conducted. Each item of
Intellectual Property owned or used by PST immediately prior to the Closing
hereunder will be owned or available for use by PST on identical terms and
conditions immediately subsequent to the Closing hereunder.
(ii) To the best of its knowledge, PST has not in any material respect
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties. None of the
present directors and officers (and employees with responsibility for
Intellectual Property matters) of PST have ever received any charge, complaint,
claim, demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that PST must license or
refrain from using any Intellectual Property rights of any third party). To the
knowledge of any of the directors and officers (and employees with
responsibility for Intellectual Property matters) of PST and the Stockholders,
no third party has interfered with, infringed upon, misappropriated (nor is it
likely that any such party will interfere with, infringe upon or
misappropriate), or otherwise come into conflict with any Intellectual Property
rights of PST.
(iii) Section 2.8(e)(iii) of the Disclosure Schedule identifies each patent
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or registration which has been issued to PST with respect to any of its
Intellectual Property, identifies each
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pending patent application or application for registration which PST has made
with respect to any of its Intellectual Property, and identifies each license,
agreement, or other permission which PST has granted to any third party with
respect to any of its Intellectual Property (together with any exceptions). PST
has delivered to ADE correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions (as amended
to date) and has made available to ADE correct and complete copies of all other
written documentation evidencing ownership and prosecution (if applicable) of
each such item. Section 2.8(e)(iii) of the Disclosure Schedule also identifies
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each trade name or unregistered trademark used by PST in connection with its
business. With respect to each item of Intellectual Property required to be
identified in Section 2.8(e)(iii) of the Disclosure Schedule:
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(1) PST believes that it possesses the entire right, title, and interest
in and to the item, free and clear of any lien, encumbrance, claim,
license, or other restriction;
(2) the item is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(3) no action, suit, proceeding, hearing, investigation disclosed to PST,
charge, complaint, claim, or demand is pending or is threatened which
challenges the legality, validity, enforceability, use, or ownership
of the item; and
(4) PST has not agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with
respect to the item.
(iv) Section 2.8(e)(iv) of the Disclosure Schedule identifies and
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describes each item of Intellectual Property that any third party owns and that
PST uses pursuant to license, sublicense, agreement, or permission. PST has
delivered to ADE correct and complete copies of all such licenses, sublicenses,
agreements, and permissions (as amended to date). With respect to each item of
Intellectual Property required to be identified in Section 2.8(e)(iv) of the
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Disclosure Schedule, to the best of PST's knowledge (except in the case of
Section 2.8(e)(iv)(9)):
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(1) the license, sublicense, agreement, or permission covering the item is
legal, valid, binding, enforceable, and in full force and effect;
(2) the license, sublicense, agreement, or permission will continue to be
legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby;
(3) no party to the license, sublicense, agreement, or permission is in
breach or default, and no event has occurred which with notice or lapse
of time would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(4) no party to the license, sublicense, agreement, or permission has
repudiated any provision thereof;
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(5) with respect to each sublicense, the representations and warranties set
forth in subsections (1) through (4) above are true and correct with
respect to the underlying license;
(6) the underlying item of Intellectual Property is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;
(7) no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or is threatened which challenges the
legality, validity, or enforceability of the underlying item of
Intellectual Property; and
(8) the PST software programs and technical documentation contain no other
programming or materials in which any third party may claim superior,
joint or common ownership, including any right or license; and
(9) Except as set forth in Section 2.8(e)(iii) of the Disclosure Schedule,
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PST has not granted any sublicense or similar right with respect to the
license, sublicense, agreement, or permission.
(v) PST will not interfere with, infringe upon, misappropriate, or
otherwise knowingly come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of its business as
presently conducted.
(vi) Section 2.8(e)(vi) of the Disclosure Schedule sets forth the form
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and placement of the proprietary legends and copyright notices displayed in or
on all PST software programs and other products.
(vii) To the best of its knowledge, PST has promulgated and used all
commercially reasonable efforts to enforce the trade secret protection
procedures described in Section 2.8(e)(vii) of the Disclosure Schedule. Insofar
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as PST knows, there has been no material violation of such procedures by any
person or entity. The source code and system documentation relating to all PST
software programs (1) have at all times been maintained in confidence and (2)
have been disclosed by PST only to employees and consultants having "a need to
know" the contents thereof in connection with the performance of their duties to
PST.
(viii) Except as set forth in Section 2.8(e)(viii) of the Disclosure
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Schedule, all personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception and
development of PST software programs, technical documentation, or other
Intellectual Property on behalf of PST either (1) have been party to a "work-
for-hire" arrangement or agreement with PST, which by its terms is effective to
vest in PST full, effective, exclusive, and original ownership of all tangible
and intangible property thereby arising, or (2) have executed appropriate
instruments of assignment in favor of PST as assignee that have conveyed to PST
full, effective, and exclusive ownership of all tangible and intangible property
thereby arising.
(ix) Except as set forth in Section 2.8(e)(ix) of the Disclosure
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Schedule, the technical documentation for PST's software includes the source
code, system documentation, statements of
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principles of operation, and schematics for all software programs, as well as
any pertinent commentary or explanation that may be necessary to render such
materials understandable and usable by a trained computer programmer. The
technical documentation also includes any program (including compilers),
"workbenches," tools, and higher level (or "proprietary") language used for the
development, maintenance, and implementation of the relevant software program.
(x) Except as set forth in Sections 2.8(e)(iii) and 2.8(e)(x) of the
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Disclosure Schedule PST has not granted, transferred, or assigned any right or
interest in the PST software programs, the technical documentation, or any other
Intellectual Property to any person or entity. Except as set forth in Section
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2.8(e)(x) of the Disclosure Schedule there are no contracts, agreements,
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licenses, or other commitments and arrangements in effect with respect to the
marketing, distribution, licensing, or promotion of the PST software programs or
any other Intellectual Property by any independent salesperson, distributor,
sublicensor, or other remarketer or sales organization.
(f) Accounts Receivable. All of the accounts and notes receivable of
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PST reflected in the Financial Statements have been collected or are current and
collectible at the aggregate recorded amounts thereof less an allowance for
doubtful accounts equal to the amount specified in Section 2.8(f) of the
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Disclosure Schedule (the "Accounts Receivable Reserve").
(g) Inventory. The inventory of PST consists of raw materials and
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supplies, manufactured and purchased parts, goods in process, and finished goods
(including without limitation software and related documentation), all of which
is merchantable and fit for the purpose for which it was procured or
manufactured, and none of which is slow-moving, obsolete, damaged, or defective,
subject only to a reserve for inventory writedown equal to the amount specified
in Section 2.8(g) of the Disclosure Schedule (the "Inventory Reserve").
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2.9. Transactions with Affiliates. Section 2.9 of the Disclosure Schedule is
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a complete list of all executory agreements, contracts or commitments of PST
involving any Affiliate of PST. Except as set forth in Section 2.9 of the
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Disclosure Schedule, PST has not (i) made purchases or sales of products or
services from or to any Affiliate, (ii) transferred any assets to any Affiliate,
(iii) entered into, amended or canceled any transaction, contract, agreement or
commitment involving any Affiliate, or (iv) used any property, asset, facility,
service or personnel which are held, owned, provided or employed by any
Affiliate. All transactions between PST and any Affiliate have been entered into
at arm's length, on terms no less favorable to PST than could be obtained from a
third party which is not an affiliate of PST.
2.10. Undisclosed Liabilities. PST does not have any liability, and neither
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PST nor either of the Stockholders has knowledge of any fact or circumstance
that might result in a Liability that is not reflected in the Financial
Statements as at the Balance Sheet Date or in the Disclosure Schedule.
2.11. Product Warranty. Each product manufactured, sold, leased, licensed or
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delivered by PST has been in conformity with all applicable contractual
commitments and all express and implied warranties, and PST has no Liability
(and neither PST nor either of the Stockholders has knowledge of any fact or
circumstance that might result in a Liability) for replacement or repair thereof
or other damages in connection therewith, subject only to a reserve for product
warranty
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claims equal to the amount specified in Section 2.11 of the Disclosure Schedule
(the "Product Warranty Claims Reserve"). Except as set forth in Section 2.11 of
the Disclosure Schedule, no product manufactured, sold, leased, licensed or
delivered by PST is subject to any guaranty, warranty, or other indemnity beyond
the applicable standard terms and conditions of sale or lease. Section 2.11 of
the Disclosure Schedule includes copies of the standard terms and conditions of
sale or lease for PST (containing applicable guaranty, warranty, and indemnity
provisions).
2.12. Product Liability. PST has no Liability (and neither PST nor either of
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the Stockholders has knowledge of any fact or circumstance that might result in
a 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,
licensed or delivered by PST prior to the Effective Date.
2.13. Absence of Certain Changes. Except as set forth in Section 2.13 of the
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Disclosure Schedule, PST has not since the Balance Sheet Date: (a) suffered any
adverse change in its financial condition, assets, liabilities, customers,
vendors, or business or become aware of any event or condition that might result
in any such adverse change; (b) permitted or suffered any lien, encumbrance, or
restriction to be placed on any of its assets; (c) entered into any agreement
guaranteeing the obligations of any third person or agreeing to indemnify any
third person; (d) incurred any liability or obligation except current
liabilities incurred in the usual and ordinary course of business, or issued any
notes or other corporate debt securities; (e) sold or otherwise disposed of, or
entered into any agreement or other arrangement for the sale or other
disposition of, any item of its assets in excess of One Thousand Dollars
($1,000.00) other than in the usual and ordinary course of its business; (f)
suffered any damage to, or destruction or casualty loss of any of its assets,
whether or not covered by insurance; (g) declared or set aside or paid any
dividend, made any other distribution in respect of its capital stock, redeemed,
purchased, or otherwise acquired any of its capital stock, or issued any stock
or other securities or options or other rights to acquire the same; (h) made any
change in the compensation payable to any director, officer, employee, or
consultant other than normal increases or bonuses in accordance with its usual
compensation practices; (i) entered into any transaction other than in the usual
and ordinary course of business; (j) been a party to any other event, condition,
agreement or state of facts of any character which has had or could have a
material adverse effect on the results of operations, business, financial
condition, or assets or prospects of PST; (k) become a party to any joint
venture or other similar agreement or arrangement that involves any sharing of
profits of PST's business or the assets of PST or is similar to or competitive
with ADE's business; or (l) entered into any agreement or made any commitment
with respect to any of the foregoing.
2.14. Material Agreements. Except as described in Section 2.14 of the
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Disclosure Schedule, PST is not a party to or bound by any agreement or
commitment involving an expenditure of more than Fifty Thousand Dollars
($50,000.00) or requiring performance by any party thereto more than three (3)
months after the Closing Date, including without limitation any of the
following: any (a) contract for employment of any officer or employee at a
salary in excess of $50,000 per year, which is not terminable without liability
on not more than thirty days' notice; (b) Employee Benefit Plan; (c) contract
with any labor organization; (d) lease, license, franchise, distributorship,
dealer, manufacturer's representative, or sales agency
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agreement; (e) contract for future purchase of materials, supplies, services,
machinery, or equipment continuing for a period of more than ninety days or
involving more than Fifty Thousand Dollars $(50,000.00) in each instance; (f)
guarantee, subordination, or other similar arrangement or undertaking by which
PST is contingently liable upon the indebtedness or obligation of any other
person; (g) contract or commitment for capital expenditures in excess of Fifty
Thousand Dollars ($50,000.00); (h) power of attorney for any person, firm or
corporation for any purpose whatsoever; (i) contract, commitment or business
arrangement with any current or former principal stockholders, directors or
officers of PST (or any spouse or relative of the foregoing) or any person
having an interest in any party with which PST does business; (j) note,
mortgage, indenture, deed of trust, credit or loan agreement, or similar
instrument under which PST is indebted for borrowed money or the price of
purchased assets; (k) contract or commitment involving the ownership, license,
acquisition, design, development, distribution, marketing, use or maintenance of
computer program code, related technical or user documentation and databases, in
each case relating to or arising out of PST's business. PST has performed all
material obligations required to be performed by it to date under all such
contracts, commitments and agreements described in the Disclosure Schedule and
is not in material default under any of such contracts, commitments or
agreements, and all parties with whom it has contractual arrangements are in
substantial compliance therewith.
2.15. Insurance. Section 2.15 of the Disclosure Schedule sets forth a list
--------- ------------
and brief description of all policies or binders of fire, errors and omissions,
liability, product liability, xxxxxxx'x compensation, vehicular and other
insurance held by or on behalf of PST. All premiums payable under such policies
and binders have been paid when due and such policies and binders are valid and
enforceable in accordance with their terms, are in full force and effect, and
are adequate and customary for the type and scope of PST's assets and business.
2.16. Books and Records. The books of account, ledgers, order books, records
-----------------
and documents of PST fully and accurately reflect in all material respects all
information relating to the financial and operational affairs of PST, including
without limitation, the nature, status and location of PST's assets and
liabilities and the transactions giving rise thereto, and all revenues,
expenses, cash flows and expenditures, all as required to be reflected on the
Financial Statements or incurred subsequent to the Balance Sheet Date.
2.17. Employee Benefit Plans and Employee Matters.
--------------------------------------------
(a) Section 2.17 of the Disclosure Schedule sets forth a list of all
------------
Employee Benefit Plans maintained by PST. All Employee Benefit Plans and PST's
administration with respect to such Employee Benefit Plans are in compliance in
all material respects with the provisions of all applicable law, including ERISA
and the Code. Neither PST nor any of its directors, officers, employees or any
other "fiduciary," as such term is defined in Section 3(21) of ERISA, has any
liability for failure to comply with applicable law, including ERISA and the
Code for any action or failure to act in connection with the Employee Benefit
Plans. There are no actions, suits or claims pending or, to the knowledge of
PST, investigations or threatened actions, suits, claims or investigations with
respect to any Employee Benefit Plan which could have an adverse effect on
11
the financial condition of PST or any such Employee Benefit Plan. PST has
appropriately filed or distributed to participants all required reports and
distributions, including but not limited to Forms 5500, for all Plans. PST has
complied in all material respects with the requirements of Section 162(k) of the
Code.
(b) Except as set forth in Section 2.17 of the Disclosure Schedule,
------------
PST does not currently maintain, contribute to or have any liability under any
(i) Pension Plan (including any arrangement which is a multiemployer pension
plan (as defined in Section 3(37) of ERISA)), (ii) Welfare Plan or material
fringe benefit plan or program or (iii) funded or unfunded medical, health or
life insurance plan or arrangement for present or future retirees or terminated
employees which is an employee welfare benefit plan as defined in Section 3(1)
of ERISA, except to the extent required under Title X of COBRA or any other
applicable federal or state law or regulation. Except as set forth in Section
-------
2.17 of the Disclosure Schedule, PST is not a party to any agreement,
----
understanding, plan, policy or procedure or any arrangement providing
compensation or fringe benefits to any employee. Except as fully described in
Section 2.17 of the Disclosure Schedule, there are no negotiations, demands or
------------
proposals which are pending or which have been made which concern matters now
covered, or that would be covered, by the type of agreements listed or described
in Section 2.17 of the Disclosure Schedule or this paragraph.
------------
(c) Except as disclosed in Section 2.17 of the Disclosure Schedule,
------------
each Pension Plan maintained by PST meets the requirements of a "qualified plan"
under Section 401(a) of the Code, and has received a currently effective
favorable determination letter from the Internal Revenue Service.
(d) Full payment has been made of all contributions and other payments
which PST is required to make with respect to said Employee Benefit Plans, and
all contributions or other payments with respect to the current plan year for
the period ending on or after the Closing Date have been made or accrued in
accordance with the terms of such Employee Benefit Plans. There exist no
accumulated funding deficiencies (as defined in Section 412 of the Code) with
respect to any Employee Benefit Plans maintained by PST. There exists no waiver
of minimum funding standards within the meaning of Section 412 of the Code with
respect to any Employee Benefit Plan nor has PST applied for such a waiver and
each Pension Plan is fully funded on a termination basis.
(e) With respect to the Employee Benefit Plans, there have been no
prohibited transactions as defined in Section 406 of ERISA or Section 4975 of
the Code. PST has not taken any action which would result in any withdrawal
liability to any "multiemployer plan" as defined in Section 3(37) of ERISA.
There has been no "reportable event" as defined in Section 4043(d) of ERISA with
respect to any Employee Benefit Plan.
(f) Copies of all documents listed in Section 2.17 of the Disclosure
-------------
Schedule have been delivered to ADE and are true and complete in all material
respects and include all amendments and supplements thereto and modifications
thereof. With respect to each Employee Benefit Plan, PST has furnished ADE true
and complete copies of (i) the last Form 5500 Annual Report, (ii) all Employee
Benefit Plan documents and all related summary plan descriptions, trust
12
agreements, insurance contracts or other funding agreements which implement the
Employee Benefit Plans, (iii) the most recent determination letter, (iv) the
latest actuarial valuations and (v) the latest financial statements. In the
case of any agreement, plan or arrangement which is not in written form, ADE has
been supplied with an accurate description of such agreement, plan or
arrangement as in effect on the date hereof.
(g) There is neither now pending nor threatened and during the last
two years there has not occurred or been threatened (i) any labor dispute,
strike or work stoppage or (ii) any charge or complaint against PST by the
National Labor Relations Board or any representative thereof.
(h) Except as disclosed in Section 2.17 of the Disclosure Schedule, to
-------------
the knowledge of PST, no key employee of PST has indicated that he may terminate
his employment with PST (regardless of whether such indication was formal or
informal).
(i) For purposes of paragraphs (a) through (h) of this section, "PST"
means all members of any controlled group of corporations, members of any group
that is under common control, and members of any affiliated service group (as
defined in Section 414 of the Code) that include PST.
2.18. Litigation. Except as described in Section 2.18(a) of the Disclosure
----------- ---------------
Schedule, no Litigation is pending, or, to PST's or either of the Stockholders'
knowledge, threatened, against PST, or any of its present directors, officers,
or employees (or, to PST's or either of the Stockholders' knowledge, against any
of its former directors, officers or employees or any party to any contract),
affecting, involving, or relating to PST's business or any of the assets of PST.
Except as described in Section 2.18(b) of the Disclosure Schedule, no Litigation
--------------
has been brought within the last three years against PST affecting, involving,
or relating to PST's business or any of the assets of PST.
2.19. Court Orders, Decrees, and Laws.
-------------------------------
(a) Compliance With Laws. There is no outstanding or threatened
---------------------
order, writ, injunction, or decree of any court, governmental agency, or
arbitration tribunal against PST or against any of its present or former
officers, directors or employees and affecting, involving, or relating to PST's
business or the assets of PST. PST is not in violation of any applicable
federal, state, or local law, regulation, ordinance, zoning requirement,
governmental restriction, order, judgment, or decree, and PST has received no
notices of any allegation of any such violation. The foregoing shall be deemed
to include, without limitation, laws and regulations relating to the federal
patent, copyright, and trademark laws, state trade secret and unfair competition
laws, equal opportunity, wage and hour, immigrant hiring and other employment
laws, antitrust and trade regulation laws, and environmental laws.
2.20. Environmental Laws. Except as disclosed in Section 2.20 of the
------------------
Disclosure Schedule, no solid, hazardous or toxic wastes, substances or
materials, as those terms are used in the Clean Air Act, Resource Conservation
and Recovery Act of 1976, as amended, the Hazardous Materials Transportation Act
or the Comprehensive Environmental Response,
13
Compensation and Liability Act of 1980 (CERCLA), as amended by the Superfund
Amendments and Reauthorization Act of 1986 (XXXX), or in any other federal,
state or local law or ordinance governing hazardous, toxic or solid wastes,
materials or substances, as the same are in effect as of the Closing Date, and
no asbestos, polychlorinated biphenyls, urea formaldehyde foam, explosives or
radioactive materials (all of the above being collectively referred to herein as
"Hazardous Substances") have been or are unlawfully stored, treated, disposed
of, managed, generated, manufactured, produced, released, emitted or discharged
on, in or under any properties owned or leased by PST so as to (i) require,
under any applicable law or treaty, a governmental approval, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
(an "Approval"), unless such Approval has been obtained and remains in full
force and effect or (ii) to the knowledge of PST, render any properties owned or
leased by PST in material noncompliance with or in violation of any applicable
law, regulation, or permit or subject to any obligation, order or requirements
for remediation.
No governmental or private action, suit or proceeding concerning or
arising out of the use, storage, treatment, discharge, disposal, handling,
manufacturing, processing, treatment, transportation, release or threat of
release of any Hazardous Substance by or on behalf of PST or at, under or in
connection with PST's business or any properties owned or leased by PST as a
result of PST's acts or omissions, or to enforce or impose liability under
environmental pollution laws, common law or laws relating to the protection of
worker and work place health and safety, including, without limitation, CERCLA,
XXXX, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Hazardous Materials Transportation Act, the Occupational Safety and
Health Act, the Consumer Product Safety Act, the Clean Water Act, the Clean Air
Act and the National Environmental Policy Act, as each of the foregoing are in
effect as of the Closing Date, and any similar federal, state or local laws,
rules or regulations promulgated thereunder prior to the Closing Date (all of
the above collectively referred to herein as "Environmental Laws") which may be
applicable to any properties owned or leased by PST or PST's business, has been
instituted, initiated or, to the knowledge of PST, threatened against or with
respect to PST or the business as a result of PST's acts or omissions, and no
lien has been created, imposed or, to the knowledge of PST, threatened to be
created or imposed upon any properties owned or leased by PST or any of PST's
assets under Environmental Laws as a result of PST's acts or omissions.
2.21. Bank Accounts. Section 2.21 of the Disclosure Schedule contains a
------------- ------------
complete list of the names and locations of all banks in which PST has accounts,
as well as a description and the account number of each such account.
2.22. Third Party Consents and Government Authorizations. Except as set
--------------------------------------------------
forth in Section 2.22 of the Disclosure Schedule or as otherwise described in
------------
this Agreement, no filing with or authorization, consent or approval of any
third party or of any court, government, or governmental agency or
instrumentality is required for PST and the Stockholders to execute and deliver
this Agreement or to consummate the transactions contemplated hereby including
the Merger.
14
2.23. Employee Matters; Labor Contracts.
(a) Section 2.23 of the Disclosure Schedule contains a complete list of
------------
the names and addresses of all employees of PST as of the date hereof and their
respective titles or job descriptions, years of service, compensation and
incentive and benefit plan participation.
(b) PST is in compliance in all respects with all Federal, State and
local laws relating to labor relations; no labor strike or other labor
controversy or trouble is pending or, to the knowledge of PST, threatened with
respect to PST or the employees of PST; and there are no grievance or
arbitration proceedings arising out of or under collective bargaining agreements
with respect to PST. There are no claims pending or threatened against PST by
employees or former employees of PST. Relations between PST and its employees
are good, and PST never has experienced any work stoppage or other labor
difficulty.
(c) PST is not a party to or bound by any labor or collective bargaining
agreement and no representation question exists respecting the employees of PST.
2.24. Securities Act Exemption. Each Stockholder acknowledges that the ADE
------------------------
Common Stock that will be received by him pursuant to this Agreement will be
delivered without registration of the same under the Securities Act, pursuant to
an exemption from registration available under the Securities Act, and may not
be resold by him unless (i) a registration statement is in effect under the
Securities Act with respect to such securities or (ii) an exemption from such
registration is available under the Securities Act. Each Stockholder represents
that he is an "accredited investor" within the meaning of that term as it is
defined in Rule 501 under the Securities Act. Each Stockholder represents that
he is purchasing the ADE Common Stock hereunder for his own account for
investment and not with a view to the resale or distribution thereof and
acknowledges that he has received and read the ADE Disclosure Documents (defined
below).
2.25. Major Vendors and Customers. Section 2.25 of the Disclosure Schedule
--------------------------- ------------
lists each licensor, developer, remarketer, distributor, and supplier of
property or services to, and each licensee, end-user, or customer of, PST, to
whom PST paid or billed in the aggregate Fifty Thousand Dollars ($50,000.00) or
more during the most recent fiscal year, together with, in each case, the amount
paid or billed during such period.
2.26. Truth at Closing. All of the representations and warranties of PST and
----------------
the Stockholders contained in this Article II shall be true and correct on and
as of the Closing Date as though made on the Closing Date except for changes in
the Financial Statements resulting from the conduct of business in the usual and
ordinary course by PST after the date of this Agreement.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF ADE AND SUBSIDIARY
------------ ----------------------------------------------------
ADE and Subsidiary jointly and severally represent and warrant as follows:
3.1. Organization and Authority. ADE is a corporation duly organized,
--------------------------
validly existing, and in good standing under the laws of the Commonwealth of
Massachusetts, with full
15
corporate power and authority to own its property and assets and to conduct its
business in the manner and places in which it is now conducted.
3.2. Authorization; Binding Agreement. ADE and Subsidiary have full
--------------------------------
corporate power and authority to enter into this Agreement and to carry out
their obligations hereunder, including the consummation of the Merger. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including the consummation of the Merger, have
been duly and validly authorized by ADE's and Subsidiary's respective Boards of
Directors and Subsidiary's sole stockholder. No other corporate acts or
proceedings on the part of ADE or Subsidiary are necessary to authorize this
Agreement and the consummation of the transactions contemplated hereby,
including the Merger. When duly executed and delivered by the parties hereto and
thereto, this Agreement and the Acquisition Documents will constitute the valid
and binding obligations of ADE and Subsidiary, as the case may be, in each case
enforceable against ADE and Subsidiary in accordance with the terms and
conditions of such agreements.
3.3. Capitalization. The authorized capital stock of ADE consists of (a)
--------------
Twenty-five Million (25,000,000) shares of Common Stock, $.01 par value ("ADE
Common Stock"), of which, as of January 31, 1998, Eleven Million One Hundred Six
Thousand Four Hundred One (11,106,401) shares were issued and outstanding and
Seven Hundred Ten Thousand Five Hundred Thirty-Four (710,534) shares were
reserved for issuance upon exercise of outstanding options or options available
for granting under ADE's stock option plans and its employee stock purchase
plan; and (b) One Million (1,000,000) shares of Preferred Stock, $1.00 par
value, of which, as of January 31, 1998, no shares were issued and outstanding.
3.4. No Conflicts. Neither the execution and delivery by ADE and Subsidiary
------------
of this Agreement, nor the consummation of the Merger and the other transactions
contemplated hereby, nor compliance by ADE and Subsidiary with any of the
provisions hereof, will violate, conflict with, result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice or the passage of time or otherwise, would constitute such a default)
under, or entitle any party (with the passage of time or otherwise) to
terminate, accelerate or give notice of a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets of ADE, under (i) any of the provisions of the Articles of Organization
or By-Laws of ADE, (ii) any note, bond, mortgage, indenture, deed of trust,
license, contract, undertaking, agreement, lease or other instrument or
obligation to which ADE is a party, or by which ADE or any of its assets may be
bound or affected, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to ADE or any of its assets.
3.5. Current Public Information; Material Facts. ADE has furnished to PST
------------------------------------------
and the Stockholders with copies of the following documents pertaining to ADE:
(a) An Annual Report on Form 10-K for the fiscal year ended April 30, 1997; (b)
An Annual Report to Stockholders (the "Annual Report") for the fiscal year ended
April 30, 1997; (c) Quarterly Reports on Form 10-Q for the quarters ended July
31, 1997 and October 31, 1997; (d) A proxy statement for the 1997 Annual
Meeting; (e) Press Releases in respect of ADE's sales and earnings for the
quarters ended July 31, 1997, October 31, 1997, and January 31, 1998 and other
matters; (f) Registration Statement on Form S-3 filed with the Securities and
Exchange Commission on July 9, 1997 ; and
16
(g) Prospectus dated August 6, 1997 covering the sale of 2,470,000 shares of ADE
Common Stock (collectively, the "ADE Disclosure Documents"). Exhibits required
to be filed with the Securities and Exchange Commission as part of any of the
ADE Disclosure Documents have not been included in the materials furnished to
PST and the Stockholders.
3.6. Absence of Certain Changes. Since the date of the consolidated balance
--------------------------
sheet of ADE included in ADE's Quarterly Report on Form 10-Q for the quarter
ended October 31, 1997, there has not been any material adverse change in the
financial condition, assets, liabilities, or business of ADE, other than changes
occurring in the ordinary course of business which have not had a material
adverse effect on the financial condition, assets, liabilities or business of
ADE.
3.7. Validity of Stock to be Issued in Merger. The shares of ADE Common
----------------------------------------
Stock to be issued upon consummation of the Merger will, when issued as provided
therein, be duly authorized, validly issued, fully paid and nonassessable.
3.8. Organization of Subsidiary. Subsidiary is a corporation duly organized,
--------------------------
validly existing, and in good standing under the laws of the State of Arizona,
with full corporate power and authority to carry out the transactions
contemplated by this Agreement. All of the outstanding capital stock of
Subsidiary has been duly authorized and validly issued and is fully paid and
nonassessable. All of the outstanding capital stock of Subsidiary is now owned
by ADE and will be owned by it as of the Effective Date, and no third party has
any right to or interest in any issued or unissued capital stock of Subsidiary.
3.9. Consents. Except for the expiration of the waiting period imposed by
--------
HSR all consents, approvals, or authorizations required to be obtained by ADE or
Subsidiary in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, have been obtained.
ARTICLE IV. COVENANTS OF PST AND THE STOCKHOLDERS PENDING MERGER
----------- ----------------------------------------------------
4.1. Conduct of Business. PST covenants and agrees that between the date of
-------------------
this Agreement and the Closing, except as otherwise consented to by ADE in
writing, PST shall: (a) conduct its business only in the usual and ordinary
course using customary policies and procedures and maintain its assets and
properties in substantially the same manner as heretofore; (b) refrain from
making any purchases or sales of any assets and from mortgaging, pledging,
subjecting to lien, or otherwise encumbering any of its assets other than in the
ordinary course of business; (c) refrain from incurring any obligations or
liabilities (absolute or contingent) other than those that are usual and normal
in the ordinary course of its business; (d) refrain from making any change in
its Articles of Incorporation, Bylaws, or authorized or issued capital stock;
(e) refrain from declaring, setting aside, or paying any dividend, making any
other distribution in respect of its capital stock, or making any direct or
indirect redemption, purchase, or other acquisition of its capital stock; (f)
refrain from making any change in the compensation payable or to become payable
to any of its officers, employees, or consultants or making any bonus payment to
or arrangement with any of them; (g) refrain from taking any action which might
affect adversely ADE's ability to account for the Merger as a pooling of
interests for accounting purposes or which would materially affect the value of
PST to ADE; (h) use its best efforts to
17
prevent any change with respect to its management and supervisory personnel or
banking arrangements; (i) use its best efforts to keep intact its business
organization, to keep available the services of its present officers and
employees, and to preserve the goodwill of all suppliers, customers, and others
having business relations with it; (j) promptly advise ADE in writing of any
matter arising or discovered after the date of this Agreement which, if existing
or known at the date hereof, would be required to be set forth or described
herein; and (k) use all reasonable efforts in good faith to cause all closing
conditions specified in Article VI to be met and all transactions contemplated
herein to be consummated.
4.2. Insurance. PST will at all times have in effect and maintain all
---------
insurance now in force or like policies on or with respect to its assets and its
business.
4.3. Access to Books and Records. Between the date of this Agreement and the
---------------------------
Effective Date, upon reasonable notice and at reasonable times, PST will give
full access to ADE and its agents, accountants, and attorneys to all the
properties and assets, books, records and accounts, and other information,
documentary or otherwise, concerning the affairs and business of PST.
4.4. Approvals. PST and the Stockholders will use all reasonable efforts to
---------
obtain any necessary governmental approvals of the transactions contemplated
hereby, including the preparation and filing with the Federal Trade Commission
and the Anti-Trust Division of the U.S. Attorney General's Office of a pre-
merger notification as required by HSR.
ARTICLE V. COVENANTS OF ADE AND SUBSIDIARY PENDING MERGER
---------- ----------------------------------------------
5.1. Approvals. ADE covenants and agrees that between the date of this
---------
Agreement and the Closing ADE will use, and will cause Subsidiary to use, all
reasonable efforts to obtain any necessary governmental approvals of the
transactions contemplated by this Agreement, including the preparation and
filing with the Federal Trade Commission and the Anti-Trust Division of the U.S.
Attorney General's Office of a notification of the Merger as required by HSR.
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF ADE AND SUBSIDIARY
----------- -----------------------------------------------
The obligation of ADE and Subsidiary to consummate this transaction as
contemplated in Article VIII is subject to the fulfillment to ADE's reasonable
satisfaction at or before the Closing of the following conditions:
6.1. Performance by PST. PST shall have duly performed all of the acts and
------------------
undertakings to be performed by it at or before the date of the Closing.
6.2. Representations and Warranties. The representations and warranties of
------------------------------
PST contained in this Agreement shall be true and correct in all material
respects on and as of the date of the Closing with the same effect as though
such representations and warranties had been made
18
on and as of such date, except for changes contemplated by this Agreement, and
PST shall have delivered a certificate of its chief executive officer to that
effect to ADE at the Closing.
6.3. Opinion of Counsel. PST shall have furnished to ADE an opinion of its
------------------
counsel, Xxxxxx, Xxxxxxxx & Xxxx, dated the date of the Closing, substantially
in the form of Exhibit 6.3 hereto.
6.4. No Governmental Proceedings. Except as set forth herein or in the
---------------------------
Disclosure Schedule, there shall not have been any action or proceeding
instituted before any court or governmental agency to restrain or prohibit, or
obtain substantial damages in respect of, this Agreement or the consummation of
the transactions contemplated hereby, nor shall any governmental agency have
notified any party to this Agreement that consummation of such transactions
would constitute a violation of any law and that it intends to commence
proceedings to restrain the consummation of such transaction or to force
divestiture, which, in either case, in the opinion of ADE, would make it
inadvisable to consummate such transaction. Any waiting periods imposed by HSR
either shall have expired or been terminated early.
6.5. Employment Agreements. Each of Xxxxx Xxxxxxxxxxx and Xxxxx Xxxxxx shall
---------------------
have executed and delivered an employment agreement with the Subsidiary,
substantially in the form of Exhibit 6.5(a) hereto, in the case of Mr.
--------------
Xxxxxxxxxxx, and Exhibit 6.5(b) hereto, in the case of Xx. Xxxxxx (collectively,
--------------
the "Employment Agreements").
6.6. Noncompetition Agreements. Messrs. Xxxxxxxxxxx and Xxxxxx shall have
-------------------------
executed and delivered noncompetition agreements (the "Noncompetition
Agreements") substantially in the form of Exhibit 6.6(a) and Exhibit 6.6(b)
hereto.
6.7. Employee Agreements. Each of the employees of PST shall have entered
-------------------
into employee agreements (the "Employee Agreements"), effective as of the
Effective Date, substantially in the form of Exhibit 6.7 hereto.
-----------
6.8. Registration Rights Agreement. Xxxxx Xxxxxxxxxxx and Xxxxx Xxxxxx shall
-----------------------------
have executed and delivered a Registration Rights Agreement in the form of
Exhibit 6.8 hereto.
-----------
6.9. Pooling of Interests. ADE's and PST's independent accountants shall
--------------------
have confirmed to ADE in writing that the Merger will be accounted for as a
pooling of interests.
6.10. Satisfaction of Counsel. All Acquisition Documents (whose form is not
-----------------------
specified herein) and all actions and proceedings necessary to consummate this
transaction shall be in such form and shall have been completed to the
reasonable satisfaction of ADE and its counsel.
6.11 Schedules and Exhibits. All Exhibits and Schedules referred to in this
----------------------
Agreement which have not been completed and delivered to ADE as of the date of
execution of this Agreement shall have been completed, delivered to ADE, and
attached hereto no later than four (4) weeks thereafter. Each such Exhibit or
Schedule will be deemed to be a part hereof upon being so attached hereto.
19
6.12 Establishment of Reserves. The Accounts Receivable Reserve, the
-------------------------
Inventory Reserve, and the Product Warranty Claims Reserve shall have been
deemed acceptable by ADE and its counsel.
6.13 Completion of Due Diligence. PST and the Stockholders
---------------------------
acknowledge and agree that ADE is in the process of receiving from PST and the
Stockholders certain materials and information (the "Due Diligence Materials")
requested by ADE relating to the books, records, and properties of PST, and that
ADE has not yet received all of the Due Diligence Materials or had the
opportunity to review fully such of the Due Diligence Materials as have been
received to date. Neither such due diligence investigation, nor any disclosure
(whether pursuant to the Due Diligence Materials, by Schedule or Exhibit to this
Agreement, or otherwise), shall have revealed any fact or circumstance which XXX
xxxxx unsatisfactory, in its sole judgment made in good faith.
ARTICLE VII. CONDITIONS TO OBLIGATIONS OF PST AND THE STOCKHOLDERS
------------ -----------------------------------------------------
The obligation of PST and the Stockholders to consummate this Agreement and
the transactions contemplated in Article VIII is subject to the fulfillment to
PST's reasonable satisfaction at or before the Closing of the following
conditions:
7.1. Performance by ADE and Subsidiary. ADE and Subsidiary shall each have
---------------------------------
duly performed all of the acts and undertakings to be performed by it at or
before the date of the Closing.
7.2. Representations and Warranties. The representations and warranties of
------------------------------
ADE and Subsidiary contained in this Agreement shall be true in all material
respects on and as of the date of the Closing with the same effect as though
such representations and warranties had been made on and as of such date, except
for changes contemplated by this Agreement, and ADE and Subsidiary shall each
have delivered an officer's certificate to that effect to PST at the Closing.
7.3. Employment Agreements. Subsidiary shall have executed and delivered the
---------------------
Employment Agreements.
7.4. Noncompetition Agreements. ADE shall have executed and delivered the
-------------------------
Noncompetition Agreements.
7.5. Registration Rights Agreement. The Registration Rights Agreement
-----------------------------
referenced in Section 6.8 shall have been executed and delivered by ADE.
7.6. Tax-Free Reorganization. PST's tax counsel shall have confirmed that
-----------------------
the Merger will be a tax-free reorganization under the Internal Revenue Code of
1986, as amended.
7.7. Opinion of Counsel. ADE shall have furnished to PST and the
------------------
Stockholders an opinion of its counsel, Warner & Xxxxxxxxx LLP, dated the date
of the Closing, substantially in the form of Exhibit 7.7 hereto.
-----------
20
7.8. Satisfaction of Counsel. All Acquisition Documents (whose form is not
-----------------------
specified herein) and all actions and proceedings necessary to consummate this
transaction shall be in such form and shall have been completed to the
reasonable satisfaction of PST and its counsel.
ARTICLE VIII. CLOSING
------------- -------
8.1. Closing Date. The Closing will take place on May 1, 1998 (the "Closing
------------
Date") at the offices of Warner & Xxxxxxxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, or at such other time and place as the parties may agree in
writing. Notwithstanding the foregoing, at ADE's election, the date of the
Closing may be postponed for such period of time as reasonably may be required
to comply with any request by the Federal Trade Commission or Anti-Trust
Division for additional information under HSR or to allow for the expiration of
any waiting period resulting therefrom.
8.2. Actions at Closing. At the Closing:
------------------
(a) Copies of Consents. PST shall deliver to ADE copies of all required
------------------
third-party and government consents.
(b) Certificates. Each party shall deliver the certificates required
------------
under Sections 6.2 and 7.2, respectively, as to the accuracy of the
representations and warranties contained herein, the compliance with the
covenants and agreements contained herein, and the satisfaction of the
conditions to Closing contained herein.
(c) Employment Agreements. The Stockholders and Subsidiary shall
---------------------
deliver the Employment Agreements required by Section 6.5 hereof.
(d) Noncompetition Agreements. The Stockholders and ADE shall deliver
-------------------------
the Noncompetition Agreements required by Section 6.6 hereof.
(e) Employee Agreements. PST shall deliver the Employee Agreements
-------------------
required by Section 6.7 hereof.
(f) Registration Rights Agreement. The Stockholders and ADE shall
-----------------------------
deliver the Registration Rights Agreement required by Section 6.8 hereof.
(g) Opinion of PST Counsel. PST shall cause its counsel to deliver to
----------------------
ADE the legal opinion required by Section 6.3.
(h) Opinion of ADE's Counsel. ADE shall cause its counsel to deliver to
------------------------
PST the legal opinion required by Section 7.7.
(i) Execution of Articles of Merger. PST and Subsidiary each shall
-------------------------------
execute and deliver Articles of Merger as provided in the Plan of Merger and
shall jointly cause such Articles to be filed forthwith with the appropriate
governmental authorities in the State of Arizona;
21
(j) Issuance of Stock. ADE shall deliver to Xxxxx Xxxxxxxxxxx a
-----------------
certificate evidencing One Million Two Hundred Thousand Six Hundred (1,200,600)
shares of ADE Common Stock, and shall deliver to the Escrow Agent, for the
account of Xxxxx Xxxxxxxxxxx, a certificate evidencing One Hundred Thirty-three
Thousand Four Hundred (133,400) shares of ADE Common Stock to be held as
provided in the Escrow Agreement. ADE shall deliver to Xxxxx Xxxxxx a
certificate evidencing Five Hundred Ninety-nine Thousand Four Hundred (599,400)
shares of ADE Common Stock, and shall deliver to the Escrow Agent, for the
account of Xxxxx Xxxxxx, a certificate evidencing Sixty Six Thousand Six Hundred
(66,600) shares of ADE Common Stock to be held as provided in the Escrow
Agreement. The Stockholders shall deliver to ADE certificates for One Million
(1,000,000) shares of PST Common Stock representing one hundred percent (100%)
of PST Common Stock outstanding immediately prior to the Effective Date.
ARTICLE IX. TERMINATION PRIOR TO CLOSING
----------- ----------------------------
9.1. Termination of Agreement. This Agreement may be terminated at any time
------------------------
prior to the Closing:
(a) Mutual Consent. By the mutual written consent of ADE and PST;
--------------
(b) Deadline. By either ADE or PST, upon written notice given to the
--------
other parties, without further liability other than the obligations of
confidentiality set forth in Section 13.6, if the Closing shall not have
occurred on or before April 30, 1998; or
(c) Material Breach. By either ADE or PST, upon written notice to the
---------------
other parties, without further liability, other than the obligations of
confidentiality set forth in Section 13.6, if (1) the other party shall fail to
perform in any material respect any of its obligations contained herein required
to be performed by it on or prior to the Closing Date or (2) if any of such
other party's representations and warranties made herein is or becomes untrue in
any material respect, provided such failure or breach is not cured within ten
(10) days after such other party has been notified in writing of the nature and
existence of such failure or breach and of the notifying party's intent to
terminate this Agreement as a consequence thereof.
(d) Reserves. By ADE, if, in its sole judgment made in good faith, it
--------
deems the Accounts Receivable Reserve, Inventory Reserve, or Product Warranty
Claims Reserve unsatisfactory.
(e) Due Diligence. By ADE, if, in its sole judgment made in good faith,
-------------
its due diligence investigation of PST or any disclosure (whether by Schedule or
Exhibit to this Agreement or otherwise) by PST, its representatives, or the
Stockholders in connection with the affairs or business of PST, shall have
revealed any fact or circumstance which XXX xxxxx unsatisfactory.
9.2. Termination of Obligations. Termination of this Agreement pursuant to
--------------------------
this Article IX shall terminate all obligations of the parties hereunder, except
for the obligations set forth in Section 13.6.
22
ARTICLE X. REPRESENTATIONS AND WARRANTIES; CERTAIN POST-CLOSING OBLIGATIONS
---------- ----------------------------------------------------------------
10.1. Survival of Representation and Warranties. All representations,
-----------------------------------------
warranties, agreements, covenants, and obligations herein or in any of the
Acquisition Documents delivered by any party to another party hereunder shall be
deemed to have been relied upon by the other party, and shall survive the
Closing and shall not merge in the performance of any obligation by any party
hereto. Neither any due diligence investigation of PST by, nor any information
(other than that set forth in the appropriate Schedule to this Agreement)
furnished to ADE or any of its representatives shall relieve PST or the
Stockholders of any liability hereunder in respect of a breach by it of its
representations and warranties.
10.2 Grant of Stock Options. As soon as is practicable after the
----------------------
Closing Date, ADE shall grant options to purchase an aggregate of seventy
thousand (70,000) shares of ADE Stock, pursuant to ADE's standard employee stock
option plan, to certain key management employees of PST whom the President of
PST shall specify, in such amounts as he shall designate; provided that such
grants are consistent with ADE's practice for similarly situated employees.
ARTICLE XI. INDEMNIFICATION
----------- ---------------
11.1. Agreement of the Stockholders to Indemnify ADE. Subject to the terms
----------------------------------------------
and conditions of this Article, the Stockholders agree to indemnify, defend, and
hold harmless the ADE Indemnitees, and each of them, from, against, for, and in
respect of any and all Losses asserted against, or paid, suffered or incurred by
the ADE Indemnitees and resulting from, based upon, or arising out of:
(a) the inaccuracy of any representation or warranty of PST or the
Stockholders contained in this Agreement or in any Acquisition Document
furnished by PST or the Stockholders at the time such representation or warranty
was made or deemed to be made;
(b) a breach of or failure to perform any covenant or agreement of PST
or the Stockholders made in this Agreement or in any Acquisition Document; or
(c) any failure of PST or any administrator or trustee prior to the
Closing Date to comply with any law, including, without limitation, ERISA,
applicable to any employee benefit, welfare, incentive, retirement or other plan
established or maintained by PST for its employees or to conform to the
requirements of any such plan.
11.2. Agreement of ADE to Indemnify the Stockholders. Subject to the terms
----------------------------------------------
and conditions of this Article, ADE agrees to indemnify, defend, and hold
harmless the Stockholder Indemnitees, and each of them, from, against, for, and
in respect of any and all Losses asserted against, or paid, suffered or incurred
by, the Stockholder Indemnitees and resulting from, based upon, or arising out
of
(a) the inaccuracy of any representation or warranty of ADE contained
in this Agreement or in any Acquisition Document, furnished by ADE; or
23
(b) a breach of or failure to perform any covenant or agreement of ADE
made in this Agreement or in any Acquisition Document.
11.3. Procedures for Indemnification.
------------------------------
(a) An Indemnification Claim shall be made by an Indemnitee by delivery
of a written notice to the Indemnitor requesting indemnification and specifying
in reasonable detail the basis on which indemnification is sought and the amount
of asserted Losses and, in the case of a Third Party Claim, containing (by
attachment or otherwise) such other information as such Indemnitee shall have
concerning such Third Party Claim.
(b) If the Indemnification Claim involves a Third Party Claim the
procedures set forth in Section 11.4 hereof shall be observed by the Indemnitee
and the Indemnitor.
(c) If the Indemnification Claim involves a matter other than a Third
Party Claim, the Indemnitor shall have thirty (30) days to object to such
Indemnification Claim by delivery of a written notice of such objection
specifying in reasonable detail the basis for such objection. Failure to so
object in a timely manner shall constitute a final and binding acceptance of the
Indemnification Claim by the Indemnitor, and the Indemnification Claim shall be
paid in accordance with subsection (d) hereof as a Finally Determined Claim (as
that term is defined below). If an objection is timely interposed by the
Indemnitor, then the Indemnitor and the Indemnitee shall negotiate in good faith
for a period of sixty (60) business days from the date the Indemnitee receives
such objection prior to commencing any formal legal action, suit or proceeding
with respect to such Indemnification Claim.
(d) Upon final determination of the amount of an Indemnification Claim,
whether by agreement between the Indemnitor and the Indemnitee or by an
arbitration award or other adjudication, including the taking of all relevant
appeals (a "Final Determination"), the Indemnitor shall pay the amount of such
Indemnification Claim (a "Finally Determined Claim") within ten (10) days of the
Final Determination. The escrow fund then held by the Escrow Agent is available
for the discharge of the obligations of the Stockholders as Indemnitor hereunder
in accordance with the provisions of the Escrow Agreement, and such funds shall
be so applied until they are exhausted or the escrow fund is otherwise disposed
of as provided by the Escrow Agreement.
11.4. Third Party Claims. The obligations and liabilities of the parties
------------------
hereunder with respect to a Third Party Claim shall be subject to the following
terms and conditions:
(a) The Indemnitee shall give the Indemnitor written notice of a Third
Party Claim promptly after receipt by the Indemnitee of notice thereof, and the
Indemnitor may undertake and have control of the defense, compromise and
settlement thereof with counsel of its own choosing reasonably acceptable to the
Indemnitee. The failure of the Indemnitee to notify promptly the Indemnitor of
such claim shall not relieve the Indemnitor of any liability that it may have
with respect to such claim except to the extent the Indemnitor demonstrates that
the defense of such claim is prejudiced materially by such failure. The
assumption of the defense, compromise and settlement of any such Third Party
Claim by the Indemnitor shall be an
24
acknowledgment of the obligation of the Indemnitor to indemnify the Indemnitee
with respect to such claim hereunder, unless the Indemnitor gives written notice
to the Indemnitee within fifteen (15) days after receipt of the Indemnitee's
notice that it disputes its liability to Indemnitee with respect to such Third
Party Claim notwithstanding its assumption of the defense thereof. If the
Indemnitee desires to participate in, but not control, any such defense,
compromise and settlement, it may do so at its sole cost and expense.
(b) If the Indemnitor fails or refuses to undertake or to continue the
defense of such Third Party Claim within fifteen (15) days after written notice
has been given to the Indemnitor by the Indemnitee, the Indemnitee shall have
the right to control the defense, compromise and settlement of such Third Party
Claim with counsel of its own choosing reasonably acceptable to Indemnitor, and
the costs and expense of the Indemnitee in connection therewith shall be
included as part of the indemnification claims of the Indemnitee hereunder. If
the Indemnitee shall elect to exercise such right, the Indemnitor shall have the
right to participate in, but not control, the defense, compromise and settlement
of such Third Party Claim at its sole cost and expense.
(c) No settlement of a Third Party Claim as to which notice has been
given to Indemnitor by Indemnitee pursuant to Section 11.5(a) shall be made
without the written consent of the Indemnitor which will not be withheld
unreasonably. Consent shall be presumed in the case of settlements of Twenty
Thousand Dollars ($20,000) or less where the Indemnitor has not responded within
fifteen (15) business days of notice of a proposed settlement. If the Indemnitor
assumes the defense of such a Third Party Claim, no compromise or settlement
thereof may be effected by the Indemnitor without the Indemnitee's consent
(which will not be unreasonably withheld by the Indemnitee) unless (i) there is
no finding or admission of any violation of law or any violation of the rights
of any person and no effect on any other claim that may be made against the
Indemnitee (ii) the sole relief provided is monetary damages that are paid in
full by the Indemnitor and (iii) the compromise or settlement includes, as a
term thereof, the giving by the claimant or the plaintiff to the Indemnitee of
an unconditional release, in form and substance reasonably satisfactory to the
Indemnitee, from all liability in respect of such Third Party Claim.
(d) In connection with the defense, compromise or settlement of any
Third Party Claim, the parties to this Agreement shall execute such powers of
attorney as may reasonably be necessary or appropriate to permit participation
of counsel selected by any party hereto and, as may reasonably be related to any
such claim or action, shall provide access to the counsel, accountants and other
representatives of each party during normal business hours to all properties,
personnel, books, tax records, contracts, commitments and all other business
records of such other party and will furnish to such other party copies of all
such documents as may reasonably be requested (certified, if requested) provided
that all requests for information and exercise of rights of access hereunder
shall be conducted through a representative designated by the party upon whom
such request is made and in a manner that will not impact adversely and
unreasonably the normal conduct of such party's business.
25
11.5 Limitations on Indemnification Obligations.
------------------------------------------
(a) The Stockholders shall have no obligation to make payments under
Section 11.1 hereof until the aggregate amount of all Losses thereunder exceeds
------------
$500,000 and then only for all such Losses in excess of such amount; and
(b) The maximum liability of the Stockholders pursuant to this Article
-------
XI shall not exceed the product of 200,000 shares of ADE Common Stock multiplied
--
by the average of the closing bid prices of one share of ADE Common Stock on the
Nasdaq National Market System on the twenty (20) trading days immediately
preceding the Closing Date; provided, however, that the limitations set forth in
this Section 11.5 shall not apply to the Stockholders to the extent of Losses
------------
arising from fraud on the part of the Stockholders.
ARTICLE XII. DEFINITIONS.
------------ -----------
The following terms, as used herein, shall have the following meanings:
"Acquisition Documents" shall mean the Schedules and Exhibits hereto
(including the Disclosure Schedule as hereinafter defined) and all other
instruments and agreements executed and delivered at or in connection with the
Closing.
"ADE Indemnitees" shall mean ADE and with respect to Third Party
Claims only, its agents, representatives, officers, directors, employees,
shareholders, controlling persons and Affiliates.
"Affiliate" shall mean any Person who, directly indirectly or through
one or more intermediaries, controls or is controlled by, or is under common
control with another Person.
"Closing" shall mean the closing of the transaction contemplated by
this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Employee Benefit Plan" shall mean any pension, retirement, profit-
sharing, deferred compensation, stock, stock purchase, stock option, bonus or
other incentive plan, any other employee program, arrangement, agreement or
understanding, any medical, vision, dental or other health plan, any life
insurance plan, severance plan or any other employee benefit plan, including,
without limitation, any "employee benefit plan" as defined in Section 3(3) of
ERISA or any Pension Plan or Welfare Plan, to which PST or any entity under
"common control" with PST (within the meaning of Section 414 of the Code)
contributes or is a party or is bound and under which current or former
employees of PST or any entity under common control with PST are eligible to
participate or derive a benefit.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"HSR" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act.
26
"Indemnification Claim" shall mean a claim for indemnification under
Article XI of this Agreement.
"Indemnitee" shall mean the party or parties seeking indemnification
under Article XI of this Agreement.
"Indemnitor" shall mean the party or parties against whom
indemnification is sought under Article XI of this Agreement.
"Intellectual Property" shall mean shall mean (a) all inventions
(whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations, continuations-in-
part, revisions, extensions, and reexaminations thereof, (b) all trademarks,
service marks, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including computer program code, data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Liability" shall mean any liability or obligation, whether direct or
indirect, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, due or to become due.
"Litigation" shall mean any claim, action, suit, proceeding, disclosed
inquiry, hearing, arbitration, administrative proceeding or disclosed
investigation.
"Losses" shall mean any and all demands, claims, actions or causes of
action, assessments, losses, damages (including special and consequential
damages incurred by Third Party Claims claimants), liabilities, and out of
pocket costs and expenses, including without limitation, interest, penalties,
cost of external investigations (i.e., not including cost of employees of
Indemnitee) and defense, and reasonable attorneys' and other professional fees
and expenses.
"Pension Plan" shall mean an "employee pension benefit plan" as
defined in Section 3(2) of ERISA.
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or governmental entity (or any department, agency, or political
subdivision thereof).
"Securities Act" shall mean the Securities Act of 1933, as amended.
27
"Stockholder Indemnitees" shall mean the Stockholders.
"Tax" shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security(or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or additional thereto, whether disputed or not.
"Third Party Claim" shall mean any claim, suit or proceeding that is
instituted against an Indemnitee by a person or entity other than an Indemnitor
and which, if prosecuted successfully, would result in a Loss for which such
Indemnitee is entitled to indemnification under Article XI of this Agreement.
"Welfare Plan" shall mean an "employee welfare benefit plan" as
defined in Section 3(1) of ERISA.
ARTICLE XIII. MISCELLANEOUS
------------- -------------
13.1. Fees and Expenses. ADE and PST each shall bear its own expenses in
-----------------
connection with the negotiation and the consummation of this Agreement;
provided, however, that if this Agreement is terminated by either party by
reason of the other party's failure in an arbitrary and willful manner to
perform or satisfy one or more of its obligations or the conditions to closing
hereunder, the party which shall have failed to perform such obligation(s) or to
satisfy such condition(s) shall reimburse the other party for, in addition to
any other damages incurred by such other party, all reasonable out-of-pocket
legal, accounting, consulting and government fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby. All
costs, including filing fees for any filings required by HSR to be made by PST
or the Stockholders (individually or as "ultimate parent entity" as that term is
defined by the HSR coverage rules, 16 CFR (S)801.1(a)(3)) in connection with the
Merger shall be paid by PST.
13.2. Brokers. Each of the parties represents that it has had no dealings in
-------
connection with this transaction with any finder or broker that will result in
any claims against any of the parties. The Stockholders and ADE each agree to
indemnify the other against and hold the other harmless from any and all
liabilities (including without limitation cost of counsel) to any other persons
claiming brokerage commissions or finder's fees on account of services purported
to have been rendered on behalf of the indemnifying party (and/or PST in the
case of the Stockholders) in connection with this Agreement or the transactions
contemplated hereby.
13.3. Law Governing. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Massachusetts without regard to
the doctrine of conflicts of laws.
28
13.4. Notices. All notices, requests, demands and other communications
-------
hereunder shall be deemed to have been duly given if delivered or mailed postage
prepaid:
if to PST: Phase Shift Technology, Inc.
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: President
with a copy to: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxxxxx & Xxxx
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
if to Stockholders: Xxxxx Xxxxxxxxxxx, Stockholders Representative
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
if to ADE or Subsidiary: ADE Corporation
00 Xxxxxx Xxx
Xxxxxxxx, XX 00000-0000
Attn: President
with a copy to: Warner & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. XxXxxx, Xx.
or to such other address as either party may by notice to the other designate.
13.5. Entire Agreement. This Agreement, the Exhibits delivered pursuant
----------------
hereto, and any documents referred to or delivered pursuant to this Agreement or
any of the transactions contemplated hereby constitute the entire agreement
between the parties with respect to the transactions contemplated herein and
supersede all prior agreements and undertakings of the parties with respect
thereto. Each of the Exhibits delivered pursuant to the terms of this Agreement
is in writing and has been initialed by an officer of the delivering party.
13.6. Confidentiality.
---------------
(a) Generally. If the Merger and the transactions contemplated by this
----------
Agreement are not consummated, then each of the parties to this Agreement agrees
to keep confidential and shall not use for its own benefit any of the
information obtained from any other party and shall promptly return to each such
other party all schedules, documents or other written information (without
retaining copies thereof) previously obtained from each such other party. In the
event of any conflict between this Section 13.6 and any separate confidentiality
agreement, the provisions of the latter shall govern.
29
(b) Confidentiality Obligation of ADE. Until Closing (and, if this
----------------------------------
Agreement is terminated for any reason, forever thereafter), ADE shall, and
shall use all commercially reasonable efforts to cause its personnel and agents
to, hold in strict confidence, not disclose to any person without the prior
written consent of PST, and not use in any manner except in connection with the
transactions contemplated hereby, any confidential business or technical
information obtained from PST in connection with the transactions contemplated
hereby. This obligation shall cease to apply to ADE with respect to information
concerning PST's business or assets upon the occurrence of Closing. In the event
that this Agreement terminates for any reason, ADE shall return to PST or
destroy all materials in its possession containing any such confidential
information, including all copies, extracts, adaptations, and transcriptions
thereof.
(c) Confidentiality Obligation of PST and the Stockholders. PST and
------------------------------------------------------
the Stockholders shall, and PST shall use all commercially reasonable efforts to
cause its personnel and agents to, hold in strict confidence, not disclose to
any person without the prior written consent of ADE, and not use in any manner
except in connection with the transactions contemplated hereby, any confidential
business or technical information obtained from ADE in connection with the
transactions contemplated hereby. In the event that this Agreement terminates
for any reason, PST and the Stockholders shall return to ADE or destroy all
materials in its or their possession containing any such confidential
information, including all copies, extracts, adaptations, and transcriptions
thereof.
(d) Permitted Disclosures. Notwithstanding Sections 12.6(a), (b) and
---------------------
(c), either party may disclose confidential information (1) where necessary to
any regulatory authorities or governmental agencies pursuant to legal process or
(2) if required by court order or decree, provided that in so doing such party
shall give notice to the other party of the impending disclosure and afford the
other party with such opportunity to protect its interest in the confidentiality
of such information as is reasonable in the circumstances.
(e) Scope of Confidential Information. For purposes of this Agreement,
---------------------------------
information shall not be deemed confidential (1) if such information is
available in full from public sources; (2) if such information is received from
a third party not under an obligation to keep such information confidential; or
(3) if the recipient can conclusively demonstrate that such information was
independently developed by the recipient.
[SIGNATURE PAGE FOLLOWS]
30
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
under their respective seals by their respective officers hereunto duly
authorized, as of the day and year first above written.
ADE: ADE CORPORATION
By:
---------------------------------
Name:
Title:
SUBSIDIARY: THETA ACQUISITION CORP.
By:
---------------------------------
Name:
Title:
PST: PHASE SHIFT TECHNOLOGY, INC.
By:
---------------------------------
Name:
Title:
STOCKHOLDERS:
---------------------------------
Xxxxx Xxxxxxxxxxx
[Home Address]
---------------------------------
Xxxxx Xxxxxx
[Home Address]
PLAN OF MERGER
Plan of Merger under which Theta Acquisition Corp., an Arizona corporation
(hereinafter referred to as "Subsidiary") is to be merged with and into Phase
Shift Technology, Inc., an Arizona corporation (hereinafter referred to as
"PST") (which two corporations are sometimes hereinafter referred to as the
"Constituent Corporations"), joined in by ADE Corporation, a Massachusetts
corporation and sole shareholder of Subsidiary (hereinafter referred to as
"ADE").
The terms and conditions of the merger of Subsidiary with and into PST
(hereinafter referred to as the "Merger"), the mode of carrying it into effect,
and the consideration to be paid or delivered in exchange for shares of PST, all
as contemplated in the Agreement and Plan of Merger dated March 8, 1998 (the
"Merger Agreement") among the above-named parties and the stockholders of PST,
shall be as follows:
First: On the Effective Date (as defined in Article Eighth), Subsidiary
-----
shall be merged with and into PST, which shall be the "Surviving Corporation,"
and the separate corporate existence of Subsidiary shall cease. The name of the
Surviving Corporation shall be Phase Shift Technology, Inc. Except as herein
otherwise specifically set forth, the identity, existence, purposes, powers,
franchises, rights and immunities of the Surviving Corporation shall continue
unaffected and unimpaired by the Merger.
Second: The purpose or purposes of the Surviving Corporation and the total
------
number of shares of Class A Common Stock (Voting), no par value per share ("PST
Common Stock"), it is authorized to issue shall all be as set forth in the
Articles of Incorporation of PST, which Articles of Incorporation shall continue
in full force and effect as the Articles of Incorporation of the
Surviving Corporation until altered or amended as provided therein or in
accordance with the laws of the State of Arizona.
Third: The By-Laws of PST in effect immediately prior to the Effective
-----
Date shall continue to be the By-Laws of the Surviving Corporation until
altered, amended, or repealed in the manner provided by law, the Articles of
Incorporation, or said By-Laws.
Fourth: On the Effective Date, the Board of Directors of the Surviving
-------
Corporation shall consist of Xxxxxx X. Xxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxxxxx,
Xxxxxxx Xxx and Xxxx X. Xxxxxxx, who shall hold office until the next annual
meeting of the Surviving Corporation and thereafter until their successors are
elected and qualified, subject to the By-Laws of the Surviving Corporation.
Fifth: The officers of PST immediately prior to the Effective Date of the
-----
Merger shall hold the same office with the Surviving Corporation until the Board
of Directors of the Surviving Corporation shall otherwise determine.
Sixth: On the Effective Date:
-----
1. Each share of common stock, $.01 par value per share, of Subsidiary
then outstanding shall be converted into and shall thereafter represent one
share of PST Common Stock (the "Parent Shares").
2. The shares of PST Common Stock which are outstanding immediately prior
to the Effective Date shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive in
exchange therefor such number of shares of the common stock of ADE, $.01 par
value per share ("ADE Common Stock"), as are specified in the Merger Agreement
provided, however, that no certificate or scrip representing fractional shares
of ADE Common Stock shall be issued and holders of such fractional share
interests shall be
- 2 -
paid therefor in cash. All PST Common Stock held as treasury shares and existing
immediately prior to the Effective Date shall automatically be retired and
extinguished and no cash or other consideration shall be paid or delivered for
such shares. On the Effective Date , the holders of certificates representing
PST Common Stock then outstanding (other than holders of the Parent Shares)
shall cease to have any rights with respect to such stock, and their sole rights
shall be the right to receive the shares of ADE Common Stock to which they are
entitled under the Merger Agreement.
Seventh: On the Effective Date, all the property, assets, rights,
---------
privileges, powers, franchises and immunities of a public or private nature of
each of the Constituent Corporations shall be transferred to and vested in the
Surviving Corporation without further act or deed; and all property, assets,
rights, privileges, powers, franchises, and immunities and all and every other
interest thereafter shall be as effectual the property and province of the
Surviving Corporation as they were of the respective Constituent Corporations
and the title to any real estate vested by deed or otherwise in either of the
Constituent Corporations shall not revert or be in any way impaired by reason of
the Merger; provided, however, that all rights of creditors and all liens upon
any property of either of said Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities, obligations, and duties of the
respective Constituent Corporations shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if said debts,
liabilities, obligations and duties had been incurred or contracted by it. If
at any time the Surviving Corporation shall consider or be advised that any
further assignments, assurance in law, or other acts or instruments are
necessary or desirable to vest, perfect, or confirm in the Surviving Corporation
the title to any property or rights of the Constituent Corporations, the
Constituent Corporations and their officers and directors shall and will do all
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such acts and things as may be necessary or proper to vest, perfect, or confirm
title to such property or rights in the Surviving Corporation and otherwise to
carry out the purposes of the Merger Agreement and this Plan of Merger.
Eighth: The Merger shall become effective upon, and the term "Effective
--------
Date" as used in this Plan shall mean, the close of business on the day when the
Articles of Merger are filed and effective in the offices of the Secretary of
State of the State of Arizona.
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AGREEMENT AND PLAN OF MERGER
LIST OF OMITTED SCHEDULES AND EXHIBITS
Following is a list of Schedules and Exhibits to the Agreement and Plan of
Merger omitted from this Report pursuant to Item 601(b)(2) of Regulation S-X
(all Schedule and Exhibit numbers relate to the Agreement and Plan of Merger):
Exhibit 1.2 Articles of Merger
Exhibit 1.3 Escrow Agreement
Schedule 2 PST Disclosure Schedule
Exhibit 6.3 Opinion of Xxxxxx, Xxxxxxxx & Xxxx
Exhibit 6.5(a) Xxxxxxxxxxx Employment Agreement
Exhibit 6.5(b) Xxxxxx Employment Agreement
Exhibit 6.6(a) Xxxxxxxxxxx Noncompetition Agreement
Exhibit 6.6(b) Xxxxxx Noncompetition Agreement
Exhibit 6.7 Form of PST Employee Agreement
Exhibit 7.7 Opinion of Warner & Xxxxxxxxx
The Registrant shall furnish supplementally a copy of any of the above Schedules
or Exhibits to the Commission upon request.
