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Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
Among
JDS UNIPHASE CORPORATION,
K2 ACQUISITION, INC.
and
SDL, INC.
Dated as of July 9, 2000
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AGREEMENT AND PLAN OF MERGER dated as of July 9, 2000 (this
"Agreement") among JDS UNIPHASE CORPORATION, a Delaware corporation ("Parent"),
K2 ACQUISITION, INC., a Delaware corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), and SDL, INC., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub and the Company deem it advisable and in the best interests of each
corporation and its respective stockholders to combine their respective
businesses;
WHEREAS, in furtherance of such combination, the respective
Boards of Directors of Parent, Merger Sub and the Company have each adopted
resolutions approving this Agreement and declaring its advisability and
approving the merger (the "Merger") of Merger Sub with and into the Company in
accordance with the Delaware General Corporation Law, as amended (the "DGCL"),
upon the terms and subject to the conditions set forth herein; and
WHEREAS, for United States federal income tax purposes, the
Merger is intended to qualify as a reorganization under the provisions of
section 368(a) of the United States Internal Revenue Code of 1986, as amended
(the "Code");
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger. Upon the terms of this Agreement and
subject to the conditions set forth in Article VII, and in accordance with the
DGCL, at the Effective Time (as defined below), Merger Sub shall be merged with
and into the Company. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
Section 1.02 Closing; Effective Time. (a) The closing of the
Merger (the "Closing") shall take place (i) at 10:00 a.m. (Los Angeles time) at
the offices of Sullivan & Cromwell, 1888 Century Park East, Los Angeles,
California as soon as practicable, but in any event within three business days
after the day on which the last to be fulfilled or waived of the conditions set
forth in Article VII (other than those conditions that by their nature are to be
fulfilled at the Closing, but subject to the fulfillment or waiver of such
conditions) shall be fulfilled or waived in accordance with this Agreement or
(ii) at such other place and time or on such other date as Parent and the
Company may agree in writing (the "Closing Date").
(b) At the Closing, the Company and Merger Sub shall cause a
certificate of merger (the "Certificate of Merger") to be executed and filed
with the Secretary of State of the State of Delaware and make all other filings
or recordings required by applicable Law (as
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defined in Section 3.05(a)) in connection with the Merger. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware or at such later time as is
specified in the Certificate of Merger in accordance with the DGCL (the
"Effective Time").
Section 1.03 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in this Agreement, the Certificate of
Merger and the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 1.04 Certificate of Incorporation; By-Laws. (a) At the
Effective Time, the Restated Certificate of Incorporation, as amended (the
"Company Certificate of Incorporation"), of the Company shall be amended to be
identical to that of Merger Sub, as in effect immediately prior to the Effective
Time, except that Article I shall state that the name of the Surviving
Corporation is "SDL, Inc." The Company Certificate of Incorporation, as so
amended, shall be the Certificate of Incorporation of the Surviving Corporation,
until thereafter amended subject to Section 6.05(e), in accordance with the
terms thereof and of the DGCL.
(b) At the Effective Time, the By-Laws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended, subject to Section 6.05(a), in
accordance with the terms thereof, and of the Certificate of Incorporation of
the Surviving Corporation and of the DGCL.
Section 1.05 Directors and Officers. The directors of Merger
Sub immediately prior to the Effective Time shall be elected as the directors of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be elected
as the officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01 Conversion of Securities. (a) At the Effective
Time, by virtue of the Merger and without any action on the part of Parent,
Merger Sub, the Company or the holders of any of the following securities:
(i) each share of common stock, par value $0.001 per share, of
the Company and all rights in respect thereof ("Company Common Stock";
shares of Company Common Stock being referred to herein collectively as
the "Company Common Shares") issued and outstanding immediately prior
to the Effective Time (other than any shares of Company Common Stock to
be canceled pursuant to Section 2.01(a)(ii)) shall be canceled and
automatically converted, subject to Section 2.02(e), into the right to
receive
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3.8 (the "Exchange Ratio") shares of common stock, $0.001 par value per
share, of Parent ("Parent Common Stock"; shares of Parent Common Stock
being referred to herein collectively as the "Parent Common Shares")
(which, together with any cash in lieu of fractional shares of Company
Common Stock as specified in Section 2.02(e), shall be referred to
herein as the "Merger Consideration");
(ii) each Company Common Share owned by Parent or any direct
or indirect wholly owned subsidiary of Parent or held in treasury by
the Company or any Subsidiary of the Company immediately prior to the
Effective Time shall be canceled and extinguished without any
conversion thereof and no payment or distribution shall be made with
respect thereto; and
(iii) each share of common stock, $0.001 par value per share,
of Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, $0.001 par value
per share, of the Surviving Corporation.
(b) If at any time during the period between the date of this
Agreement and the Effective Time, the Company changes the number of Company
Common Shares, or Parent changes the number of Parent Common Shares, issued and
outstanding as a result of a stock split, reverse stock split, stock dividend,
recapitalization, redenomination of share capital or other similar transactions,
the Exchange Ratio and any other items dependent thereon shall be appropriately
adjusted.
Section 2.02 Exchange of Certificates. (a) Exchange Agent. At
or prior to the Effective Time, Parent shall deposit, or shall cause to be
deposited, with Parent's transfer agent for Parent Common Stock or such other
bank or trust company that may be designated by Parent and is reasonably
satisfactory to the Company (the "Exchange Agent"), for the benefit of the
holders of Company Common Shares, for exchange in accordance with this Article
II through the Exchange Agent, certificates representing Parent Common Shares
issuable pursuant to Section 2.01 and cash as required to make payments in lieu
of any fractional shares pursuant to Section 2.02(e) (such cash and certificates
for Parent Common Shares, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund"). The
Exchange Agent shall, pursuant to irrevocable instructions, deliver the Parent
Common Shares contemplated to be issued pursuant to Section 2.01, out of the
Exchange Fund. Except as contemplated by Section 2.02(f) hereof, the Exchange
Fund shall not be used for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time (but in any event within five business days after the Effective
Time), Parent shall cause the Exchange Agent to mail to each holder of record of
a certificate or certificates which immediately prior to the Effective Time
represented outstanding Company Common Shares (the "Certificates") (i) a letter
of transmittal (which shall be in customary form and shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Exchange Agent) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for certificates representing Parent Common Shares and cash in lieu of any
fractional shares. Upon surrender to the Exchange
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Agent of a Certificate for cancellation, together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, and such other documents as may be reasonably required pursuant to such
instructions, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole Parent Common
Shares that such holder has the right to receive in respect of the Company
Common Shares formerly represented by such Certificate (after taking into
account all Company Common Shares then held by such holder), cash in lieu of any
fractional Parent Common Shares to which such holder is entitled pursuant to
Section 2.02(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.02(c), and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company Common
Shares that is not registered in the transfer records of the Company, a
certificate representing the proper number of Parent Common Shares, cash in lieu
of any fractional Parent Common Shares to which such holder is entitled pursuant
to Section 2.02(e) and any dividends or other distributions to which such holder
is entitled pursuant to Section 2.02(c), may be issued to a transferee if the
Certificate representing such Company Common Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence satisfactory to the Surviving Corporation that any
applicable share transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.02, each Certificate shall be deemed at all times
after the Effective Time to represent only the right to receive upon such
surrender the certificate representing Parent Common Shares, cash in lieu of any
fractional Parent Common Shares to which such holder is entitled pursuant to
Section 2.02(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.02(c).
(c) Distributions with Respect to Unexchanged Parent Common
Shares. No dividends or other distributions declared or made after the Effective
Time with respect to the Parent Common Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the Parent Common Shares represented thereby, and no cash payment in
lieu of any fractional shares shall be paid to any such holder pursuant to
Section 2.02(e), until the holder of such Certificate shall surrender such
Certificate as provided in Section 2.02(b). Subject to the effect of escheat,
tax or other applicable Laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole Parent Common
Shares issued in exchange therefor, without interest, (i) promptly (but in any
event within five business days after such surrender), the amount of any cash
payable with respect to a fractional Parent Common Share to which such holder is
entitled pursuant to Section 2.02(e) and the amount of dividends or other
distributions with a record date after the Effective Time and theretofore
payable with respect to such whole Parent Common Shares, and (ii) at the
appropriate payment date, the amount of dividends or other distributions, with a
record date after the Effective Time but prior to surrender and a payment date
occurring after surrender, payable with respect to such whole Parent Common
Shares.
(d) No Further Rights in Company Common Stock. All Parent
Common Shares issued upon conversion of the Company Common Shares in accordance
with the terms hereof (including any cash paid pursuant to Section 2.02(c) or
(e)) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such Company Common Shares.
(e) No Fractional Shares. No certificates or scrip
representing fractional Parent Common Shares shall be issued upon the surrender
for exchange of Certificates, no dividend or
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distribution with respect to Parent Common Shares shall be payable on or with
respect to any fractional share and such fractional share interests will not
entitle the owner thereof to any rights of a stockholder of Parent; instead,
Parent shall pay to the Exchange Agent an amount in cash sufficient for the
Exchange Agent to pay each holder of Company Common Stock an amount in cash
equal to the product obtained by multiplying (x) the fractional share interest
to which such holder would otherwise be entitled (after taking into account all
shares of Company Common Stock held at the Effective Time by such holder) by (y)
the average closing prices for a Parent Common Share on the Nasdaq National
Market ("NASDAQ") for the five trading days immediately preceding the Effective
Time.
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Company Common Shares for
twelve months after the Effective Time shall be delivered to Parent, upon
demand, and any holders of Company Common Shares who have not theretofore
complied with this Article II shall thereafter look only to Parent for the
Parent Common Shares, any cash in lieu of fractional Parent Common Shares to
which they are entitled pursuant to Section 2.02(e) and any dividends or other
distributions with respect to the Parent Common Shares to which they are
entitled pursuant to Section 2.02(c). Any portion of the Exchange Fund remaining
unclaimed by holders of Company Common Shares as of a date which is immediately
prior to such time as such amounts would otherwise escheat to or become property
of any government entity shall, to the extent permitted by applicable Law,
become the property of Parent free and clear of any claims or interest of any
person previously entitled thereto.
(g) No Liability. Neither Parent nor the Surviving Corporation
shall be liable to any holder of Company Common Shares for any such Company
Common Shares (or dividends or distributions with respect thereto) or cash
delivered to a public official pursuant to any abandoned property, escheat or
similar Law.
(h) Withholding Rights. Each of the Surviving Corporation,
Parent and the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Company Common Shares such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign tax Law. To the extent that amounts are so withheld by the
Surviving Corporation, Parent or the Exchange Agent, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Company Common Shares in respect of which such
deduction and withholding was made by the Surviving Corporation, Parent or the
Exchange Agent, as the case may be.
(i) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate, the Parent Common Shares, any cash in lieu of fractional Parent
Common Shares to which the holders thereof are entitled pursuant to Section
2.02(e) and any dividends or other distributions to which the holders thereof
are entitled pursuant to Section 2.02(c).
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Section 2.03 Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers of Company Common Shares thereafter on the
records of the Company. From and after the Effective Time, the holders of
Certificates representing Company Common Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Company
Common Shares, except as otherwise provided in this Agreement or by Law. On or
after the Effective Time, any Certificates presented to the Exchange Agent or
Parent for any reason shall be converted into Parent Common Shares pursuant to
the terms set forth in this Article II, any cash in lieu of fractional Parent
Common Shares to which the holders thereof are entitled pursuant to Section
2.02(e) and any dividends or other distributions to which the holders thereof
are entitled pursuant to Section 2.02(c).
Section 2.04 Company Stock Options. (a) All options (the
"Company Stock Options") outstanding, whether or not exercisable and whether or
not vested, at the Effective Time under the Company's 1992 Stock Option Plan or
the Company's 1995 Stock Option Plan or under the prior plans of the Company's
subsidiary SDL Queensgate Ltd. (collectively, the "Company Stock Option Plans"),
shall remain outstanding following the Effective Time. At the Effective Time,
the Company Stock Options shall, by virtue of the Merger and without any further
action on the part of the Company or the holder thereof, be assumed by Parent in
such manner that Parent (i) is a corporation "assuming a stock option in a
transaction to which section 424(a) applies" within the meaning of section 424
of the Code and the regulations thereunder or (ii) to the extent that section
424 of the Code does not apply to any such Company Stock Options, would be such
a corporation were section 424 of the Code applicable to such Company Stock
Options. From and after the Effective Time, all references to the Company in the
Company Stock Option Plans and the applicable stock option agreements issued
thereunder shall be deemed to refer to Parent, which shall have assumed the
Company Stock Option Plans as of the Effective Time by virtue of this Agreement
and without any further action. Each Company Stock Option assumed by Parent
(each, a "Substitute Option") shall be exercisable upon the same terms and
conditions as under the Company Stock Option Plans, the applicable option
agreement issued thereunder and any applicable agreement it is subject to,
except that (A) each such Substitute Option shall be exercisable for, and
represent the right to acquire, that whole number of Parent Common Shares
(rounded to the nearest whole share or, in the case of Company Stock Options
intended to qualify as incentive stock options under Section 422 of the Code
("ISOs"), rounding down to the nearest whole share) equal to the number of
Company Common Shares subject to such Company Stock Option multiplied by the
Exchange Ratio; and (B) the option price per Parent Common Share shall be an
amount equal to the option price per Company Common Shares subject to such
Company Stock Option in effect immediately prior to the Effective Time divided
by the Exchange Ratio (the option price per share, as so determined, being
rounded to the nearest full cent or, in the case of ISOs, rounded up to the
nearest full cent). Such Substitute Option shall otherwise be subject to the
same terms and conditions as such Company Stock Option as in effect as of the
Effective Time pursuant to the applicable Company Stock Option Plan.
(b) As soon as practicable after the Effective Time, Parent
shall deliver to each holder of an outstanding Company Stock Option an
appropriate notice setting forth such holder's rights pursuant thereto, and such
Company Stock Option shall continue in effect on the same terms and conditions
(including any antidilution provisions, and subject to the adjustments
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required by this Section 2.04 after giving effect to the Merger). Parent shall
comply with the terms of all such Company Stock Options and ensure, to the
extent required by, and subject to the provisions of, the Company Stock Option
Plans, that Company Stock Options which qualified as ISOs prior to the Effective
Time continue to qualify as ISOs after the Effective Time. Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of Parent
Common Shares for delivery upon exercise of Substitute Options pursuant to the
terms set forth in this Section 2.04. As soon as practicable (but in any event,
within five business days) after the Effective Time, the Parent Common Shares
subject to Company Stock Options will be covered by an effective registration
statement on Form S-8 (or any successor form) or another appropriate form, and
Parent shall use its reasonable efforts to maintain the effectiveness of such
registration statement or registration statements for as long as Substitute
Options remain outstanding. In addition, Parent shall use all reasonable efforts
to cause the Parent Common Shares subject to Company Stock Options to be
authorized for quotation on NASDAQ and such exchanges as Parent shall determine.
(c) Prior to the Effective Time, the Board of Directors of
Parent and the Company, or an appropriate committee of non-employee directors
thereof, shall adopt a resolution consistent with the interpretative guidance of
the Securities and Exchange Commission so that the acquisition of Substitute
Options pursuant to this Agreement shall be an exempt transaction for purposes
of Section 16 of the Securities Exchange Act of 1934 by any officer or director
of the Company who may become a covered person of Parent for purposes of Section
16.
Section 2.05 Restricted Stock. At the Effective Time, any
unvested shares of restricted stock, whether granted pursuant to the Company
Stock Option Plans or otherwise, shall be converted into restricted stock of
Parent pursuant to Section 2.01, and shall continue to be subject to the same
restrictions and terms and conditions as under the Company Stock Option Plans
and the applicable agreements issued thereunder and the Company Severance Plan
or Severance Agreement between any holder of restricted stock and the Company.
The Company will take whatever action is necessary to be taken by the Company to
effect the foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub
that:
Section 3.01 Organization and Qualification; Subsidiaries. (a)
Each of the Company and each significant subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X promulgated by the United States Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"Exchange Act")) of the Company (collectively, the "Company Significant
Subsidiaries") is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and has all requisite power and authority to own,
lease and operate its properties and to carry on its
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business as it is now being conducted, except where the failure to be so
organized, existing, in good standing or to have such power, authority or
governmental approvals has not had, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect (as defined
below). Each of the Company and the Company Significant Subsidiaries is duly
qualified or licensed as a foreign corporation or organization to do business,
and is in good standing, in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its business makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed and in good standing that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(b) Except as updated by Section 3.01(b) of the disclosure
schedule delivered by the Company to the Parent concurrently with the execution
of the Agreement (the "Company Disclosure Schedule"), Exhibit 21.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999
("Company 10-K"), is a list of all the subsidiaries of the Company that as of
the date of this Agreement are Significant Subsidiaries.
Section 3.02 Company Certificate of Incorporation and By-Laws.
The Company has heretofore made available to Parent a complete and correct copy
of the Company Certificate of Incorporation and the Amended and Restated By-Laws
of the Company (the "Company By-Laws"). The Company Certificate of Incorporation
and the Company By-Laws are in full force and effect. The Company is not in
violation of any of the provisions of the Company Certificate of Incorporation
or the Company By-Laws.
Section 3.03 Capitalization. The authorized capital stock of
the Company consists of (a) 281,000,000 shares of Company Common Stock and (b)
1,000,000 shares of preferred stock, $0.001 par value, of the Company (the
"Company Preferred Stock"). As of June 30, 2000, (a) 86,356,814 shares of
Company Common Stock and (b) no shares of Company Preferred Stock were issued
and outstanding. All of the issued and outstanding Company Common Shares are
validly issued, fully paid and nonassessable. No Company Common Shares, and no
shares of Company Preferred Stock, are held in the treasury of the Company or by
any subsidiary of the Company (collectively, the "Company Subsidiaries") and
13,708,412 shares of Company Common Stock have been duly reserved for future
issuance pursuant to the Company Stock Option Plans. There are no issued or
outstanding bonds, debentures, notes, convertible notes or other indebtedness of
the Company having the right to vote on any matters on which stockholders of the
Company may vote. Except for the Company Stock Options granted pursuant to the
Company Stock Option Plans and except for the rights issued pursuant to the
First Amended and Restated Rights Agreement dated February 11, 1999 between the
Company and ChaseMellon Shareholder Services, L.L.C. (the "Company Rights
Agreement"), there are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
stock of the Company or any Company Subsidiary, or conditionally or absolutely
obligating the Company or any Company Subsidiary, to issue or sell any shares of
stock of, or other equity interests in, the Company or any Company Subsidiary.
Section 3.03 of the Company Disclosure Schedule sets forth, except as set forth
in such Section 3.03 of the Company Disclosure Schedule, the total number of
outstanding Company Stock Options, the weighted average exercise price thereof,
the relevant vesting times and exercise periods as of June 30, 2000. All shares
of Company Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to
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which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding obligations (whether conditional or
absolute) of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares or other equity interests of Company Common Stock
or any shares or other equity interests of any Company Subsidiary. Each
outstanding share of stock or other equity interest of each Company Significant
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
each such share or other equity interest owned by the Company or another Company
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company's or
such other Company Subsidiary's voting rights, charges and other encumbrances of
any nature whatsoever, except where failure to own such shares free and clear
has not had, and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 3.04 Authority Relative to This Agreement. The Company
has all necessary corporate power and authority to execute and deliver this
Agreement, and, subject to obtaining the approval of the Company's stockholders
described in the next sentence, to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated by this Agreement.
The execution and delivery of this Agreement by the Company and the consummation
by the Company of the Merger and the other transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the Merger and the other
transactions contemplated by this Agreement (other than, with respect to the
Merger, the adoption of this Agreement by the affirmative vote of a majority of
the voting power of the then outstanding Company Common Shares entitled to vote
on the matter (the "Company Stockholders' Vote"), and the filing of the
Certificate of Merger with the Secretary of State of Delaware as required by the
DGCL). This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Merger Sub, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 3.05 No Conflict; Required Filings and Consents. (a)
The execution, delivery and performance of this Agreement by the Company will
not (i) conflict with or violate the Company Certificate of Incorporation or the
Company By-Laws or any equivalent organizational documents of any Company
Subsidiary, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 3.05(b) have been obtained and all filings and
obligations described in Section 3.05(b) have been made, conflict with or
violate any federal, national, state, provincial, municipal or local law,
statute, ordinance, rule, regulation, order, injunction, judgment or decree,
whether of the U.S., or another jurisdiction ("Law"), applicable to the Company
or any Company Subsidiary or by which any property or asset of the Company or
any Company Subsidiary is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of the Company or any Company
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement,
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lease, license, permit, franchise or other instrument or obligation, except,
with respect to clauses (ii) and (iii) for any such conflicts, violations,
breaches, defaults or other occurrences that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, or otherwise prevent or materially delay the consummation of the
transactions contemplated by this Agreement.
(b) The execution, delivery and performance of this Agreement
by the Company will not require any consent, approval, authorization or permit
of, or filing with or notification to, any federal, national, state, provincial,
municipal or local government, any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing, importing
or any other governmental or quasi-governmental authority, whether of the U.S.,
or another jurisdiction (a "Governmental Entity"), except (i) for the applicable
requirements of (A) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and comparable filings, if any, in foreign
jurisdictions, (B) state securities or "blue sky" laws (the "Blue Sky Laws"),
the Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act") or the Exchange Act, (C) the DGCL
with respect to the filing of the Delaware Certificate of Merger, and (D) the
rules and regulations of NASDAQ (the foregoing clauses (i)(A) through (D) being
referred to collectively as the "Required Applicable Regulations") and (ii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications has not had, and could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, or otherwise prevent or materially delay the consummation of the
transactions contemplated by this Agreement.
Section 3.06 Permits; Compliance. (a) To the knowledge of the
Company, each of the Company and the Company Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any Governmental
Entity necessary for the Company or any Company Subsidiary to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "Company Permits"), except where the failure to have, or the suspension or
cancellation of, any of the Company Permits has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and, to the knowledge of the Company, no suspension or
cancellation of any of the Company Permits is pending or threatened, except
where the failure to have, or the suspension or cancellation of, any of the
Company Permits could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(b) To the knowledge of the Company, neither the Company nor
any Company Subsidiary is in conflict with, or in default or violation of, (i)
any Law applicable to the Company or any Company Subsidiary or by which any
property or asset of the Company or any Company Subsidiary is bound or affected,
(ii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which the Company or any Company Subsidiary
or any property or asset of the Company or any Company Subsidiary is bound or
affected or (iii) any Company Permits, except in each case for any such
conflicts, defaults or
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violations that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 3.07 SEC Filings; Financial Statements. (a) The
Company has filed all forms, reports and documents required to be filed by it
with the SEC since December 31, 1997 (collectively, including all exhibits
thereto and any registration statement filed since such date, the "Company SEC
Reports"). As of the respective dates they were filed, (i) the Company SEC
Reports complied in all material respects with the requirements of the
Securities Act, or the Exchange Act, as the case may be, and (ii) none of the
Company SEC Reports contained, nor will any forms, reports and documents filed
after the date of this Agreement and prior to the Effective Time contain, any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. No
Company Subsidiary is required to file any form, report or other document with
the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Company SEC Reports and in any
form, report or document filed after the date of this Agreement and prior to the
Effective Time was, or will be, as the case may be, prepared in accordance with
the United States generally accepted accounting principles ("U.S. GAAP") applied
on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q under the Exchange Act) and each presented or will
present fairly, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company and the consolidated Company
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments which were
not and are not expected, individually or in the aggregate, to have a Material
Adverse Effect). The balance sheet of the Company contained in the Company SEC
Reports as of December 31, 1999 is hereinafter referred to as the "Company
Balance Sheet".
Section 3.08 Undisclosed Liabilities. Except for those
liabilities that are fully reflected or reserved against on the Company Balance
Sheet (or in the notes thereto) or as set forth in Section 3.08 of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has
outstanding any liability of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether due or to become due), except for (a)
liabilities and obligations under contracts and agreements (other than those
liabilities and obligations under contracts and agreements required to be
reflected or reserved against on the Company Balance Sheet), (b) liabilities and
obligations not required to be reflected or reserved against on the Company
Balance Sheet under U.S. GAAP, consistently applied, and (c) liabilities and
obligations which have been incurred since the date of the Company Balance Sheet
in the ordinary course of business, in each of case (b) and (c) which have not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 3.09 Absence of Certain Changes or Events. From the
date of the Company Balance Sheet, except as set forth in Section 3.09 of the
Company Disclosure Schedule, (a) each of the Company and the Company
Subsidiaries has conducted its business only in the ordinary course and (b)
since such date, there has not been any circumstance, event,
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occurrence, change or effect that has had, and could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Section 3.10 Absence of Litigation. Except as specifically
disclosed in the Company SEC Reports filed prior to the date of this Agreement,
there is no litigation, suit, claim, action or proceeding (an "Action") pending
or, to the knowledge of the Company, threatened against the Company or any
Company Subsidiary, or any property or asset of the Company or any Company
Subsidiary, before any court, arbitrator or Governmental Entity, domestic or
foreign, except for such Actions which have not had, and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.11 Employee Benefit Matters. (a) Plans and Material
Documents. Section 3.11(a) of the Company Disclosure Schedule lists, with
respect to employees in the United States of the Company and, to the knowledge
of the Company, the Company Subsidiaries, all employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) and all bonus, stock option, stock purchase, restricted
stock, long term incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans, programs
or arrangements, and all employment, change in control, and severance
agreements, to which the Company or any Company Subsidiary is a party, with
respect to which the Company or any Company Subsidiary has any obligation or
which are maintained, contributed to or sponsored by the Company or any Company
Subsidiary for the benefit of any current or former employee, officer or
director of the Company or any Company Subsidiary, (collectively, the "Company
Benefit Plans"), other than plans, programs, arrangements or agreements that are
not material. Copies or summaries of each material Company Benefit Plan have
been made available to Parent. Except as set forth in Section 3.11(a) of the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary has
any written commitment to create, adopt or amend any material employee benefit
plan, program, arrangement or agreement, other than any immaterial modification
or any modification or change required by applicable Law.
(b) Absence of Certain Types of Plans. None of the Company
Benefit Plans is a multiemployer plan (within the meaning of Section 3(37) or
4001(a)(3) of ERISA) (a "Multiemployer Plan") or a single employer pension plan
(within the meaning of Section 4001(a)(15) of ERISA) for which the Company or
any Company Subsidiary could incur liability under Section 4063 or 4064 of ERISA
(a "Multiple Employer Plan").
(c) Compliance. Each Company Benefit Plan is now in all
respects in compliance with its terms and with the requirements of all
applicable laws and regulations, including, without limitation, ERISA and the
Code, except where any non-compliance would not reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect. To the
knowledge of the Company, no action, claim or proceeding is pending or
threatened with respect to any Company Benefit Plan, other than claims for
benefits in the ordinary course and other than such actions, claims or
proceedings that could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(d) Qualification of Certain Plans. Each Company Benefit Plan
that is intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from
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the Internal Revenue Service (the "IRS") that the Company Benefit Plan is so
qualified and, to the knowledge of the Company, no fact or event has occurred
since the date of such determination letter or letters from the IRS to adversely
affect the qualified status of any such Company Benefit Plan or the exempt
status of any such trust.
(e) Absence of Certain Liabilities. Neither the Company nor
any Company Subsidiary has incurred any material liability to the Pension
Benefit Guaranty Corporation (the "PBGC") under Title IV of ERISA (other than
liability for premiums to the PBGC arising in the ordinary course), and, to the
knowledge of the Company, no fact or event exists that could reasonably be
expected to result in any material liability to the PBGC under Title IV of
ERISA.
(f) Plan Contributions and Funding. All contributions,
premiums or payments required to be made with respect to any Company Benefit
Plan have been made on or before their due dates, and all contributions to the
Company Benefit Plans intended to be qualified pursuant to Section 401(a) of the
Code have been or will be fully deductible, except where failure to do so would
not have a Material Adverse Effect.
(g) Severance Payments and Accelerated Vesting. Except as
disclosed in Section 3.11(g) of the Company Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will not, either
alone or in combination with another event, (i) entitle any current or former
employee, officer or director of the Company or any Company Subsidiary to
severance in an amount material to the Company and its Subsidiaries, taken as a
whole, or any other material payment from the Company or any Company Subsidiary,
except as expressly provided in this Agreement, (ii) materially increase the
amount of base compensation due any such employee, officer or director or (iii)
accelerate benefits under any Company Stock Option Plan or accelerate vesting of
unvested shares of restricted stock, whether granted pursuant to the Company
Stock Option Plans or otherwise.
(h) Non-U.S. Benefit Plans. To the knowledge of the Company,
with respect to material employee benefit plans mandated by a government other
than the United States or subject to laws other than United States law
(collectively, the "Non-U.S. Benefit Plans") and except as set forth in Section
3.11(h) of the Company Disclosure Schedule and except as would not, individually
or in the aggregate, have a Material Adverse Effect: (i) each Non-U.S. Benefit
Plan and the manner in which it has been administered satisfies all applicable
Laws and regulations; (ii) each Non-U.S. Benefit Plan required to be registered
has been registered; (iii) as of the date of this Agreement, all contributions
to each Non-U.S. Benefit Plan required have been made by the Company or a
Company Subsidiary or, if applicable, accrued in accordance with
country-specific accounting practices; and (iv) each Non-U.S. Benefit Plan that
is funded is either fully funded or fully insured, based upon generally accepted
local accounting and actuarial practice and procedure, to an extent sufficient
to provide for the accrued benefit obligations, as of the date hereof, of all
employees and former employees participating in such Non-U.S. Benefit Plans.
Section 3.12 Material Contracts. (a) Subsections (i) through
(iv) of Section 3.12(a) of the Company Disclosure Schedule contain a list of the
following types of contracts, agreements and arrangements (including all
amendments thereto) to which the Company or a Company Subsidiary is a party,
other than those contracts, agreements and arrangements listed as
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exhibits in the Company's Form 10-K for the fiscal year ended December 31, 1999
(such contracts, agreements and arrangements as are required to be set forth in
Section 3.12(a) of the Company Disclosure Schedule, together with all Company
Benefit Plans and all contracts, agreements and arrangements listed or required
to be listed as exhibits in the Company's Form 10-K for the fiscal year ended
December 31, 1999, being the "Company Material Contracts"):
(i) each contract and agreement which (A) is likely to involve
consideration of more than $25,000,000 in the aggregate, during the
fiscal years ending December 31, 2000 or December 31, 2001 or (B) is
likely to involve consideration of more than $25,000,000 in the
aggregate, over the remaining term of such contract, and which, in
either case, cannot be canceled by the Company or any Company
Subsidiary without penalty or further payment and without more than 60
days' notice;
(ii) all joint venture or joint development agreements which
involve consideration of more than $5,000,000 or which are otherwise
material to the Company and the Company Subsidiaries, taken as a whole;
(iii) all employment agreements which involve salary and bonus
(excluding the value of any stock options) in excess of $250,000
annually;
(iv) all contracts with consultants which involve
consideration of more than $5,000,000;
(v) all contracts and agreements evidencing indebtedness of
more than $5,000,000 to unaffiliated third parties; and
(vi) all contracts and agreements that limit the ability of
the Company or any Company Subsidiary to compete in any line of
business or with any person or entity or in any geographic area or
during any period of time, in each case, (A) with respect to any
business currently conducted by the Company or any Company Subsidiary
and (B) other than distributor agreements entered into in the ordinary
course of business.
(b) Each Company Material Contract is a legal, valid and
binding agreement in full force and effect in accordance with its terms and
neither the Company nor any Company Subsidiary is in default in any material
respect, or has received notice that is in default in any material respect,
under any Company Material Contract and no other party is in default in any
material respect under any Company Material Contract, except where the failure
of any such Company Material Contract to be legal, valid and binding or in full
force and effect and for such defaults as have not had and could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 3.13 Environmental Matters. Except as set forth in
Section 3.13 of the Company Disclosure Schedule or as to the extent that it has
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect: (a) the Company and the Company
Subsidiaries are not in violation of any Environmental Law applicable to them;
(b) none of the properties currently or formerly owned, leased or operated by
the Company and the Company Subsidiaries (including, without limitation, soils
and surfaces and ground waters) are contaminated with any Hazardous Substance;
(c) the Company and the
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Company Subsidiaries are not liable for any off-site contamination by Hazardous
Substances; (d) the Company and the Company Subsidiaries are not liable for any
violation under any Environmental Law (including, without limitation, pending or
threatened liens); (e) the Company and the Company Subsidiaries have all
material permits, licenses and other authorizations required under any
Environmental Law ("Environmental Permits"); and (f) neither the execution of
this Agreement nor the consummation of the transactions contemplated herein will
require any investigation, remediation or other action with respect to Hazardous
Substances, or any notice to or consent of Governmental Entities or third
parties, pursuant to any applicable Environmental Law or Environmental Permit.
During the two years preceding the date of this Agreement, none of the Company
or the Company Subsidiaries has received notice of a violation of any
Environmental Law (whether with respect to properties presently or previously
owned or used) except as to the extent that it has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 3.14 Title to Properties; Absence of Liens and
Encumbrances. Each of the Company and the Company Significant Subsidiaries has
good and valid title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of its material tangible properties and assets,
real, personal and mixed, used or held for use in its business, free and clear
of any liens, pledges, charges, claims, security interests or other encumbrances
of any sort ("Liens") except (i) as reflected in the financial statements
contained in the Company SEC Reports and (ii) for such Liens, if any, which have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 3.15 Intellectual Property. (a) Except as set forth in
Section 3.15 of the Company Disclosure Schedule, the Company and the Company
Significant Subsidiaries own, or possess adequate, valid, binding licenses or
other valid and binding rights to use, all Intellectual Property used or held
for use in the business of the Company and the Company Significant Subsidiaries
and necessary for the conduct of the business of the Company and the Company
Significant Subsidiaries in all material respects as currently conducted.
(b) Neither the Company nor any of the Company Subsidiaries
has received any written notice that, and to the knowledge of the Company no
claim has been made or asserted that, any process currently used or product
currently sold, imported or offered for sale by the Company and the Company
Subsidiaries infringes on or otherwise violates the Intellectual Property rights
of any person, and such uses, sales, importations and offers to sell are and
have been in accordance with all applicable licenses, in each case, other than
as to the extent that it has not had, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(c) To the knowledge of the Company, no Intellectual Property
material to the business of the Company and the Company Subsidiaries owned or
licensed by the Company or the Company Subsidiaries is being used or enforced in
a manner that would result in the abandonment, cancellation or unenforceability
of such Intellectual Property.
(d) (i) There has been no misappropriation or infringement of
any trade secrets, know-how or other Intellectual Property of the Company or any
Company Subsidiary by any person, (ii) no employee, independent contractor or
agent of the Company or any Company
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Subsidiary has misappropriated any material trade secrets of any other person in
the course of such performance as an employee, independent contractor or agent
and (iii) no employee, independent contractor or agent of Company or any Company
Subsidiary is in material default or breach of any term of any employment
agreement, non-disclosure agreement, assignment of invention agreement or
similar agreement or contract relating in any way to the protection, ownership,
development, use or transfer of Intellectual Property, in each case, other than
as to the extent that it has not had, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Section 3.16 Taxes. (a) Except as set forth in Section 3.16 of
the Company Disclosure Schedule, (i) the Company and each of the Company
Subsidiaries have timely filed or will timely file all material U.S. federal,
state, local and Non-U.S. returns and reports required to be filed by any of
them with any taxing authority with respect to Taxes for any period ending on or
before the Effective Time, taking into account any extension of time to file
granted to or obtained on behalf of the Company and the Company Subsidiaries and
all such returns and reports are accurate and complete in all material respects,
(ii) all Taxes that are shown as due on the Company's Tax returns prior to the
Effective Time have been paid or will be paid or have been shown as accrued
liabilities on the financial statements of the Company in accordance with U.S.
GAAP, (iii) no outstanding or pending deficiency for any material amount of Tax
has been proposed, asserted or assessed by a taxing authority against the
Company or any of the Company Subsidiaries, (iv) the Company and each of the
Company Subsidiaries have provided adequate reserves in their financial
statements in accordance with U.S. GAAP for any Taxes that have not been paid,
whether or not shown as being due on any Tax returns and (v) neither the Company
nor any of the Company Subsidiaries has a material amount of income reportable
for a taxable period ending after the Effective Time that is attributable to an
activity or a transaction occurring in or a change in accounting method made for
a period ending on or prior to the Effective Time, including, without
limitation, any adjustment pursuant to Section 481 of the Code.
(b) Except as set forth in Section 3.16 of the Company
Disclosure Schedule, there are not outstanding agreements or waivers extending
the statutory period of limitation for assessment or collection of Tax
applicable to any material Tax returns required to be filed with respect to the
Company or any Company Subsidiary. The Company has made available to Parent
correct and complete copies of all material federal and state income and
franchise Tax returns of the Company and the Company Subsidiaries for 1997 and
thereafter and IRS Revenue Agent Reports and similar state reports issued for
such returns, and statements of material Tax deficiencies assessed against or
agreed to by the Company and any Company Subsidiary since January 1, 1997. The
U.S. federal consolidated income Tax return for the Company Subsidiaries has
been examined by the IRS for all taxable years through the year ended December
31, 1994.
(c) Except as set forth in Section 3.16 of the Company
Disclosure Schedule, neither the Company nor any of the Company Subsidiaries is
a party to or is bound by any tax sharing agreement, tax allocation agreement,
tax indemnity obligation or similar written or unwritten agreement,
understanding or practice with respect to Taxes (including any advance pricing
agreement, closing agreement or other agreement relating to Taxes with any
taxing authority), except for customary arrangements relating to property taxes
and sales taxes in leases and other agreements entered into in the ordinary
course of business.
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(d) Except as set forth in Section 3.16 of the Company
Disclosure Schedule, (i) neither the Company nor any of the Company Subsidiaries
has ever been a member of an affiliated group filing a consolidated federal
income Tax return, other than the group of which it currently is a member, and
(ii) neither the Company nor any of the Company Subsidiaries is liable for the
taxes of any other person as a successor or transferee, or pursuant to any
provision of federal, state, local or Non-U.S. law.
(e) Except as set forth in Section 3.16 of the Company
Disclosure Schedule, neither the Company nor any of the Company Subsidiaries is
a party to any contract, agreement, plan or arrangement covering any employee or
former employee of the Company or any of the Company Subsidiaries that,
individually or collectively, could reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G or
162(m) of the Code. Except as set forth in Section 3.16 of the Company
Disclosure Schedule, there is no contract, agreement, plan or arrangement to
which Company or any of the Company Subsidiaries is a party or by which it is
bound to compensate any individual for excise taxes paid pursuant to Section
4999 of the Code.
(f) As used in this Agreement, "Taxes" shall mean any and all
taxes, fees, levies, duties, tariffs, imports and other charges of any kind
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any government or taxing
authority, including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth; taxes or other charges in
the nature of excise, withholding, ad valorem, stamp, transfer, value added or
gains taxes; license, registration and documentation fees; and customers'
duties, tariffs and similar charges.
Section 3.17 Board Approval; Vote Required. (a) On or prior to
the date of this Agreement, the Board of Directors of the Company, by
resolutions duly adopted by unanimous vote of those voting at a meeting duly
called and held and not subsequently rescinded or modified in any way, has duly
(i) determined that this Agreement and the Merger are fair to and in the best
interests of the Company and its stockholders, (ii) approved this Agreement and
the Merger, and determined that the execution, delivery and performance of the
Merger Agreement is advisable and (iii) recommended that the stockholders of the
Company adopt this Agreement (the "Company Recommendation") and directed that
this Agreement and the transactions contemplated hereby be submitted for
consideration by the Company's stockholders at the Company Stockholders'
Meeting, as defined in Section 6.01(a).
(b) The only vote of the holders of any class or series of
stock of the Company necessary to approve the Merger, this Agreement and the
other transactions contemplated by this Agreement is the Company Stockholders'
Vote.
Section 3.18 Insurance. The Company and the Company
Significant Subsidiaries maintain insurance coverage with reputable insurers in
such amounts and covering such risks as are in accordance with normal industry
practice for companies engaged in businesses similar to that of the Company and
the Company Significant Subsidiaries.
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Section 3.19 State Takeover Statutes; Stockholder Rights Plan.
No "fair price", "moratorium", "control share acquisition" or other similar
anti-takeover statute or regulation is applicable, by reason of the Company's
being a party to the Merger, this Agreement or the transactions contemplated
hereby. Except for the Company Rights Agreement, neither the Company nor any of
the Company Subsidiaries is a party to any "stockholder rights" plan or any
similar anti-takeover plan or device.
(a) Prior to the time this Agreement was executed, the Board
of Directors of the Company has taken all action necessary, if any, to exempt
under or make not subject to Section 203 of the DGCL and to ensure no
stockholder of the Company will have any rights under the Company Rights
Agreement as a result of, (i) the execution of this Agreement, (ii) the Merger
and (iii) the other transactions contemplated hereby.
Section 3.20 Labor Matters. The Company and each Company
Subsidiary is in compliance with all applicable laws and regulations governing
labor and employment, except where the failure to be in such compliance would
not reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect. Except as set forth in Section 3.20 of the Company Disclosure
Schedule, neither the Company nor any of the Company Subsidiaries is a party to
or bound by any collective bargaining agreement, and there are no labor unions
representing any employees of the Company or any of the Company Subsidiaries.
Except as set forth in Section 3.20 of the Company Disclosure Schedule, there
are no labor disputes currently subject to any grievance procedure, arbitration
or litigation with respect to any employee of the Company or any Company
Subsidiary, except for such disputes that have not had, and could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 3.21 Opinion of Financial Advisor. The Company has
received the written opinion of Thomas Weisel Partners LLC ("Thomas Weisel")
dated the date of this Agreement to the effect that, as of the date of this
Agreement, the Exchange Ratio is fair to the Company's stockholders from a
financial point of view, a copy of which opinion will be delivered to Parent
promptly after the date of this Agreement.
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Section 3.22 Brokers. No broker, finder or investment banker
(other than Thomas Weisel) is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company has heretofore made available to Parent a complete and
correct copy of all agreements between the Company and Thomas Weisel pursuant to
which such firm would be entitled to any payment relating to the Merger or any
other transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company that:
Section 4.01 Organization and Qualification; Subsidiaries. (a)
Each of Parent and each significant subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X promulgated by the SEC under the Exchange Act) of
Parent (collectively, the "Parent Significant Subsidiaries") is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing, in good standing or to have such power, authority or
governmental approvals has not had, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Each of the
Parent and the Parent Significant Subsidiaries is duly qualified or licensed as
a foreign corporation or organization to do business, and is in good standing,
in each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that have not had, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(b) Except as updated by Section 4.01(b) of the disclosure
schedule delivered by the Parent to the Company concurrently with the execution
of the Agreement (the "Parent Disclosure Schedule", Exhibit 21.1 to the Parent's
Annual Report on Form 10-K for the fiscal year ended June 30, 1999, is a list of
all the subsidiaries of the Parent that as of the date of this Agreement are
Significant Subsidiaries.
Section 4.02 Certificate of Incorporation and By-Laws. Parent
has heretofore made available to the Company a complete and correct copy of the
Certificate of Incorporation and By-Laws, each as amended to date, of Parent and
the Certificate of Incorporation and By-Laws of Merger Sub, each as amended to
date. Such respective organizational documents are in full force and effect and
neither Parent nor Merger Sub is in violation of any of the provisions of its
respective organizational documents.
Section 4.03 Capitalization. (a) The authorized capital stock
of Parent consists of (i) 3,000,000,000 Parent Common Shares and (ii) 1,000,000
preferred shares of Parent, $0.001 value per share, issuable in series (the
"Parent Preferred Stock"). As of June 30,
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2000, (i) 1,053,811,083 Parent Common Shares (including exchangeable shares
("Exchangeable Shares") of Parent's subsidiary, JDS Uniphase Canada Ltd) and
(ii) 100,000 shares of Parent Series A Preferred Stock and one share of Parent
Series B Preferred Stock were issued and outstanding. All of the issued and
outstanding shares of Parent Common Stock and Exchangeable Shares and all of the
issued and outstanding shares of Parent Preferred Stock are validly issued,
fully paid and nonassessable. 116,505,582 shares of Parent Common Stock
(including Exchangeable Shares) and no shares of Parent Preferred Stock are held
in the treasury of Parent or by any subsidiary of Parent (collectively, the
"Parent Subsidiaries") and 4,799,869 Parent Common Shares have been duly
reserved for future issuance pursuant to Parent's 1993 Flexible Stock Incentive
Plan. There are no issued or outstanding bonds, debentures, notes, convertible
notes or other indebtedness of Parent having the right to vote on any matters on
which stockholders of Parent may vote. Except as set forth on Section 4.03 of
the Parent Disclosure Schedule, and except for (i) the 140,172,550 options (the
"Parent Stock Options") granted pursuant to Parent's stock option plans, (ii)
shares issuable pursuant to this Agreement and (iii) the shares of Parent Common
Stock reserved for issuance upon conversion of the outstanding shares of Parent
Preferred Stock, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
stock of Parent or any Parent Subsidiary, or conditionally or absolutely
obligating Parent or any Parent Subsidiary to issue or sell any shares of stock
of, or other equity interests in, Parent or any Parent Subsidiary. All Parent
Common Shares subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There are
no outstanding obligations (whether conditional or absolute) of Parent or any
Parent Subsidiary to repurchase, redeem or otherwise acquire any shares or other
equity interest of Parent or any shares or other equity interests of any Parent
Subsidiary. Each outstanding share of stock or other equity interest of each
Parent Subsidiary is duly authorized, validly issued, fully paid and
nonassessable, and each such share or other equity interest owned by Parent or
another Parent Subsidiary is free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
Parent's or such other Parent Subsidiary's voting rights, charges and other
encumbrances of any nature whatsoever, except where failure to own such shares
free and clear has not had, and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) The authorized stock of Merger Sub consists of 1,000
shares of common stock, no par value, all of which are duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive rights in
respect thereof, and all of which are owned by Parent. The Parent Common Shares
to be issued pursuant to the Merger in accordance with Section 2.01 (i) will be
duly authorized, validly issued, fully paid and nonassessable and not subject to
preemptive or similar rights created by statute, the Certificate of
Incorporation or By-Laws of Parent or any agreement to which the Parent is a
party or is bound and (ii) will, when issued, be registered under the Securities
Act and the Exchange Act and registered or exempt from registration under
applicable Blue Sky Laws.
Section 4.04 Authority Relative to This Agreement. Each of
Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement, and, subject to obtaining the approval of Parent's
stockholders described in the next sentence, and to perform its obligations
hereunder and to consummate the Merger and the other
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transactions contemplated by this Agreement. The execution and delivery of this
Agreement by each of Parent and Merger Sub and the consummation by each of
Parent and Merger Sub of the Merger and the other transactions contemplated by
this Agreement have been duly and validly authorized by all necessary corporate
action, and no other corporate proceedings on the part of Parent or Merger Sub
are necessary to authorize this Agreement or to consummate the Merger and the
other transactions contemplated by this Agreement (other than, with respect to
the Merger, the approval of the issuance of Parent Common Stock pursuant to the
terms of the Merger by the affirmative vote of a majority of the holders casting
votes (provided that the total vote cast represents more than fifty percent in
interest of all capital stock of Parent entitled to vote) (the "Parent
Stockholders' Vote") and the filing of the Certificate of Merger with the
Secretary of State of Delaware as required by the DGCL). This Agreement has been
duly and validly executed and delivered by each of Parent and Merger Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent and Merger
Sub, enforceable against each of Parent and Merger Sub in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
Section 4.05 No Conflict; Required Filings and Consents. (a)
The execution, delivery and performance of this Agreement by each of Parent and
Merger Sub will not (i) conflict with or violate the Certificate of
Incorporation or By-Laws of Parent, the Certificate of Incorporation or By-Laws
of Merger Sub or any equivalent organizational documents of any Parent
Significant Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 4.05(b) have been obtained
and all filings and obligations described in Section 4.05(b) have been made,
conflict with or violate any Law applicable to Parent or any Parent Subsidiary
or by which any property or asset of Parent or any Parent Subsidiary is bound or
affected or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of Parent or any Parent Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and (iii) for any
such conflicts, violations, breaches, defaults or other occurrences that have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, or otherwise prevent or materially delay
the consummation of the transactions contemplated by this Agreement.
(b) The execution, delivery and performance of this Agreement
by each of Parent and Merger Sub will not require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except (i) for the Required Applicable Regulations and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications has not had, and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
or otherwise prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
Section 4.06 Permits; Compliance. (a) To the knowledge of
Parent, each of Parent and the Parent Subsidiaries is in possession of all
franchises, grants, authorizations,
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licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for Parent or any
Parent Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Parent Permits"), except where the
failure to have, or the suspension or cancellation of, any of the Parent Permits
has not had, and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and, to the knowledge of Parent, no
suspension or cancellation of any of the Parent Permits is pending or
threatened, except where the failure to have, or the suspension or cancellation
of, any of the Parent Permits could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) To the knowledge of Parent, neither Parent nor any Parent
Subsidiary is in conflict with, or in default or violation of, (i) any Law
applicable to Parent or any Parent Subsidiary or by which any property or asset
of Parent or any Parent Subsidiary is bound or affected, (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or any Parent Subsidiary is a
party or by which Parent or any Parent Subsidiary or any property or asset of
Parent or any Parent Subsidiary is bound or affected or (iii) any Parent
Permits, except in each case for any such conflicts, defaults or violations that
have not had, and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 4.07 SEC Filings; Financial Statements. (a) Parent has
filed all forms, reports and documents required to be filed by it with the SEC
since June 30, 1997 (collectively, including all exhibits thereto and any
registration statement filed since such date, the "Parent SEC Reports"). As of
the respective dates they were filed, (i) the Parent SEC Reports complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and (ii) none of the Parent SEC Reports contained, nor
will any forms, reports and documents filed after the date of this Agreement and
prior to the Effective Time contain, any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No Parent Subsidiary is required to
file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Parent SEC Reports and in any
form, report or document filed after the date of this Agreement and prior to the
Effective Time was, or will be, as the case may be, prepared in accordance with
U.S. GAAP applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q under the Exchange Act) and each presented
or will present fairly, in all material respects, the consolidated financial
position, results of operations and cash flows of Parent and the consolidated
Parent Subsidiaries as at the respective dates thereof and for the respective
periods indicated therein, except as otherwise noted therein (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to have a
Material Adverse Effect). The balance sheet of Parent contained in the Parent
SEC Reports as of June 30, 1999 is hereinafter referred to as the "Parent
Balance Sheet".
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Section 4.08 Undisclosed Liabilities. Except for those
liabilities that are fully reflected or reserved against on the Parent Balance
Sheet (or in the notes thereto) or as set forth in Section 4.08 of the Parent
Disclosure Schedule, neither Parent nor any Parent Subsidiary has outstanding
any liability of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due), except for (a) liabilities and
obligations under contracts and agreements (other than those liabilities and
obligations under contracts and agreements required to be reflected or reserved
against on the Parent Balance Sheet), (b) liabilities and obligations not
required to be reflected or reserved against on the Parent Balance Sheet under
U.S. GAAP, consistently applied, and (c) liabilities and obligations which have
been incurred since the date of the Parent Balance Sheet in the ordinary course
of business, in each of case (b) and (c) which have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 4.09 Absence of Certain Changes or Events. From the
date of the Parent Balance Sheet, except as set forth in Section 4.09 of the
Parent Disclosure Schedule, (a) each of Parent and the Parent Subsidiaries has
conducted its business only in the ordinary course and, (b) since such date,
there has not been any circumstance, event, occurrence, change or effect that
has had, and could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.10 Absence of Litigation. Except as specifically
disclosed in the Parent SEC Reports filed prior to the date of this Agreement,
there is no Action pending or, to the knowledge of Parent, threatened against
Parent or any Parent Subsidiary, or any property or asset of Parent or any
Parent Subsidiary, before any court, arbitrator or Governmental Entity, domestic
or foreign, except for such Actions which have not had, and could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 4.11 Employee Benefit Matters. (a) Plans and Material
Documents. Section 4.11(a) of the Parent Disclosure Schedule lists, with respect
to employees in the United States of Parent and, to the knowledge of Parent,
Parent Subsidiaries, all employee benefit plans (as defined in Section 3(3) of
ERISA) and all bonus, stock option, stock purchase, restricted stock, long term
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, change in control, and severance agreements,
to which Parent or any Parent Subsidiary is a party, with respect to which
Parent or any Parent Subsidiary has any obligation or which are maintained,
contributed to or sponsored by Parent or any Parent Subsidiary for the benefit
of any current or former employee, officer or director of Parent or any Parent
Subsidiary (collectively, the "Parent Benefit Plans"), other than plans,
programs, arrangements or agreements that are not material. Copies or summaries
of each material Parent Benefit Plan have been made available to the Company.
Except as set forth in Section 4.11(a) of the Parent Disclosure Schedule,
neither Parent nor any Parent Subsidiary has any written commitment to create,
adopt or amend any material employee benefit plan, program, arrangement or
agreement, other than any immaterial modification or any modification or change
required by applicable Law.
(b) Absence of Certain Types of Plans. None of the Parent
Benefit Plans is a Multiemployer Plan or a Multiple Employer Plan.
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(c) Compliance. Each Parent Benefit Plan is now in all
respects in compliance with its terms and with the requirements of all
applicable laws and regulations, including, without limitation, ERISA and the
Code, except where any non-compliance would not reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect. To the
knowledge of Parent, no action, claim or proceeding is pending or threatened
with respect to any Parent Benefit Plan, other than claims for benefits in the
ordinary course and other than such actions, claims or proceedings that could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(d) Qualification of Certain Plans. Each Parent Benefit Plan
that is intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the IRS that the Parent Benefit Plan is so
qualified and, to the knowledge of Parent, no fact or event has occurred since
the date of such determination letter or letters from the IRS to adversely
affect the qualified status of any such Parent Benefit Plan or the exempt status
of any such trust.
(e) Absence of Certain Liabilities. Neither Parent nor any
Parent Subsidiary has incurred any material liability to the PBGC under Title IV
of ERISA (other than liability for premiums to the PBGC arising in the ordinary
course), and, to the knowledge of Parent, no fact or event exists that could
reasonably be expected to result in any material liability to the PBGC under
Title IV of ERISA.
(f) Plan Contributions and Funding. All contributions,
premiums or payments required to be made with respect to any Parent Benefit Plan
have been made on or before their due dates, and all contributions to the Parent
Benefit Plans intended to be qualified pursuant to Section 401(a) of the Code
have been or will be fully deductible, except where failure to do so would not
have a Material Adverse Effect.
(g) Severance Payments and Accelerated Vesting. Except as
disclosed in Section 4.11(g) of the Parent Disclosure Schedule, the consummation
of the transactions contemplated by this Agreement will not, either alone or in
combination with another event, (i) entitle any current or former employee,
officer or director of Parent or any Parent Subsidiary to severance in an amount
material to the Company and its Subsidiaries, taken as a whole, or any other
material payment from Parent or any Parent Subsidiary, except as expressly
provided in this Agreement, (ii) materially increase the amount of base
compensation due any such employee, officer or director or (iii) accelerate
benefits under any Parent Stock Option Plan or accelerate vesting of unvested
shares of restricted stock, whether granted pursuant to any Parent Stock Option
Plan or otherwise.
(h) Non-U.S. Benefit Plans. To the knowledge of Parent with
respect to material employee benefit plans mandated by a government other than
the United States or subject to laws other than United States law (collectively,
the "Non-U.S. Benefit Plans") and except as set forth in Section 4.11(h) of the
Parent Disclosure Schedule and except as would not, individually or in the
aggregate, have a Material Adverse Effect: (i) each Non-U.S. Benefit Plan and
the manner in which it has been administered satisfies all applicable Laws and
regulations; (ii) each Non-U.S. Benefit Plan required to be registered has been
registered; (iii) as of the date of this Agreement, all contributions to each
Non-U.S. Benefit Plan required have been made by Parent or a Parent Subsidiary
or, if applicable, accrued in accordance with country-specific accounting
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practices; and (iv) each Non-U.S. Benefit Plan that is funded is either fully
funded or fully insured, based upon generally accepted local accounting and
actuarial practice and procedure, to an extent sufficient to provide for the
accrued benefit obligations, as of the date hereof, of all employees and former
employees participating in such Non-U.S. Benefit Plan.
Section 4.12 Material Contracts. (a) Subsections (i) through
(iv) of Section 4.12(a) of the Parent Disclosure Schedule contain a list of the
following types of contracts, agreements and arrangements (including all
amendments thereto) to which Parent or a Parent Subsidiary is a party, other
than those contracts, agreements and arrangements listed as exhibits in the
Parent's Form 10-K for the fiscal year ended June 30, 1999 (such contracts,
agreements and arrangements as are required to be set forth in Section 4.12(a)
of the Parent Disclosure Schedule, together with all Parent Benefit Plans and
all contracts, agreements and arrangements listed or required to be listed as
exhibits in the Parent's Form 10-K for the fiscal year ended June 30, 1999,
being the "Parent Material Contracts"):
(i) each contract and agreement which (A) is likely to involve
consideration of more than $25,000,000 in the aggregate, during the
fiscal year ending June 30, 2001 or (B) is likely to involve
consideration of more than $50,000,000 in the aggregate, over the
remaining term of such contract, and which, in either case, cannot be
canceled by Parent or any Parent Subsidiary without penalty or further
payment and without more than 60 days' notice;
(ii) all contracts with consultants which involve
consideration of more than $25,000,000;
(iii) all contracts and agreements evidencing indebtedness of
more than $25,000,000 to unaffiliated third parties; and
(iv) all contracts and agreements that limit the ability of
Parent or any Parent Subsidiary to compete in any line of business or
with any person or entity or in any geographic area or during any
period of time, in each case, (A) with respect to any business
currently conducted by Parent or any Parent Subsidiary and (B) other
than distributor agreements entered into in the ordinary course of
business.
(b) Each Parent Material Contract is a legal, valid and
binding agreement in full force and effect in accordance with its terms and
neither Parent nor any Parent Subsidiary is in default in any material respect,
or has received notice that is in default in any material respect, under any
Parent Material Contract and no other party is in default in any material
respect under any Parent Material Contract, except where the failure of any such
Parent Material Contract to be legal, valid and binding or in full force and
effect and for such defaults as have not had and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.13 Environmental Matters. Except as to the extent
that it has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect: (a) Parent and the Parent
Subsidiaries are not in violation of any Environmental Law applicable to them;
(b) none of the properties currently or formerly owned, leased or operated by
Parent and the Parent Subsidiaries (including, without limitation, soils and
surfaces
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and ground waters) are contaminated with any Hazardous Substance; (c) Parent and
the Parent Subsidiaries are not liable for any off-site contamination by
Hazardous Substances; (d) Parent and the Parent Subsidiaries are not liable for
any violation under any Environmental Law (including, without limitation,
pending or threatened liens); (e) Parent and the Parent Subsidiaries have all
Environmental Permits; and (f) neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will require any
investigation, remediation or other action with respect to Hazardous Substances,
or any notice to or consent of Governmental Entities or third parties, pursuant
to any applicable Environmental Law or Environmental Permit. During the two
years preceding the date of this Agreement, none of Parent or the Parent
Subsidiaries has received notice of a violation of any Environmental Law
(whether with respect to properties presently or previously owned or used)
except as to the extent that it has not had, and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.14 Title to Properties; Absence of Liens and
Encumbrances. Each of Parent and the Parent Significant Subsidiaries has good
and valid title to, or, in the case of leased properties and assets, valid
leasehold interests in, all of its material tangible properties and assets,
real, personal and mixed, used or held for use in its business, free and clear
of Liens except (i) as reflected in the financial statements contained in the
Parent SEC Reports and (ii) for such Liens, if any, which have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 4.15 Intellectual Property. (a) Parent and the Parent
Significant Subsidiaries own, or possess adequate, valid, binding licenses or
other valid and binding rights to use, all Intellectual Property used or held
for use in the business of Parent and the Parent Significant Subsidiaries and
necessary for the conduct of the business of Parent and the Parent Significant
Subsidiaries in all material respects as currently conducted.
(b) Neither Parent nor any of the Parent Subsidiaries has
received any written notice that, and to Parent's knowledge no claim has been
made or asserted that, any process currently used or product currently sold,
imported or offered for sale by Parent and the Parent Subsidiaries infringes on
or otherwise violates the Intellectual Property rights of any person, and such
uses, sales, importations and offers to sell are and have been in accordance
with all applicable licenses, in each case, other than as to the extent that it
has not had, and could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(c) To the knowledge of Parent, no Intellectual Property
material to the business of Parent and the Parent Subsidiaries owned or licensed
by Parent or the Parent Subsidiaries is being used or enforced in a manner that
would result in the abandonment, cancellation or unenforceability of such
Intellectual Property.
(d) (i) There has been no misappropriation or infringement of
any trade secrets, know-how or other Intellectual Property of Parent or any
Parent Subsidiary by any person, (ii) no employee, independent contractor or
agent of Parent or any Parent Subsidiary has misappropriated any material trade
secrets of any other person in the course of such performance as an employee,
independent contractor or agent and (iii) no employee, independent contractor or
agent of Parent or any Parent Subsidiary is in material default or breach of any
term of any
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employment agreement, non-disclosure agreement, assignment of invention
agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of Intellectual Property, in
each case, other than as to the extent that it has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 4.16 Taxes. (a) Except as set forth in Section 4.16(a)
of the Parent Disclosure Schedule, (i) Parent and each of the Parent
Subsidiaries have timely filed or will timely file all material U.S. federal,
state, local and non-U.S. returns and reports required to be filed by any of
them with any taxing authority with respect to Taxes for any period ending on or
before the Effective Time, taking into account any extension of time to file
granted to or obtained on behalf of Parent and the Parent Subsidiaries and all
such returns and reports are accurate and complete in all material respects,
(ii) all Taxes that are shown as due on Parent's Tax returns prior to the
Effective Time have been paid or will be paid or have been shown as accrued
liabilities on the financial statements of Parent in accordance with U.S. GAAP,
(iii) no outstanding or pending deficiency for any material amount of Tax has
been proposed, asserted or assessed by a taxing authority against Parent or any
of the Parent Subsidiaries, (iv) Parent and each of the Parent Subsidiaries have
provided adequate reserves in their financial statements in accordance with U.S.
GAAP for any Taxes that have not been paid, whether or not shown as being due on
any Tax returns and (v) neither Parent nor any of the Parent Subsidiaries has a
material amount of income reportable for a taxable period ending after the
Effective Time that is attributable to an activity or a transaction occurring in
or a change in accounting method made for a period ending on or prior to the
Effective Time, including without limitation, any adjustment pursuant to Section
481 of the Code.
(b) Except as set forth in Section 4.16(b) of the Parent
Disclosure Schedule, there are not outstanding agreements or waivers extending
the statutory period of limitation for assessment or collection of Tax
applicable to any material Tax returns required to be filed with respect to
Parent or any Parent Subsidiary. Parent has made available to the Company
correct and complete copies of all material federal and state income and
franchise Tax returns of the Parent and the Parent Subsidiaries for 1995 and
thereafter and IRS Revenue Agent Reports and similar state reports issued for
such returns, and statements of material Tax deficiencies assessed against or
agreed to by Parent and any Parent Subsidiary since January 1, 1995. The
currently open U.S. federal consolidated income Tax returns for Parent and the
U.S. Parent Subsidiaries have not been examined by the IRS for all taxable years
through the year ended June 30, 1999.
(c) Except as set forth in Section 4.16 of the Parent
Disclosure Schedule, neither Parent nor any of the Parent Subsidiaries is a
party to or is bound by any tax sharing agreement, tax allocation agreement, tax
indemnity obligation or similar written or unwritten agreement, understanding or
practice with respect to Taxes (including any advance pricing agreement, closing
agreement or other agreement relating to Taxes with any taxing authority),
except for customary arrangements relating to property taxes and sales taxes in
leases and other agreements entered into in the ordinary course of business.
(d) Except as set forth in Section 4.16 of the Parent
Disclosure Schedule, (i) neither Parent nor any of the Parent Subsidiaries has
ever been a member of an affiliated group filing a
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consolidated federal income Tax return, other than the group of which it
currently is a member, and (ii) neither Parent nor any of the Parent
Subsidiaries is liable for the taxes of any other person as a successor or
transferee, or pursuant to any provision of federal, state, local or Non-U.S.
law.
(e) Except as set forth in Section 4.16 of the Parent
Disclosure Schedule, neither Parent nor any of the Parent Subsidiaries is a
party to any contract, agreement, plan or arrangement covering any employee or
former employee of Parent or any of the Parent Subsidiaries that, individually
or collectively, could reasonably be expected to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G or 162(m) of the
Code. Except as set forth in Section 4.16 of the Parent Disclosure Schedule,
there is no contract, agreement, plan or arrangement to which Parent or any of
the Parent Subsidiaries is a party or by which it is bound to compensate any
individual for excise taxes paid pursuant to Section 4999 of the Code.
Section 4.17 Board Approval; Vote Required. (a) On or prior to
the date of this Agreement, the Board of Directors of Parent, by resolutions
duly adopted by unanimous vote of those voting at a meeting duly called and held
and not subsequently rescinded or modified in any way, has duly (i) determined
that this Agreement and the Merger are fair to and in the best interests of
Parent and its stockholders, (ii) approved this Agreement and the Merger, and
determined that the execution, delivery and performance of the Merger Agreement
is advisable and (iii) recommended that the stockholders of Parent approve the
issuance of Parent Common Stock pursuant to this Agreement (the "Company
Recommendation") and directed that the issuance of such shares be submitted for
consideration by Parent's stockholders at the Parent Stockholders' Meeting, as
defined in Section 6.01(a).
(b) The only vote of the holders of any class or series of
stock of Parent necessary in connection with the transactions contemplated by
this Agreement is the Parent Stockholders' Vote.
Section 4.18 Operations of Merger Sub. Merger Sub is a direct,
wholly owned subsidiary of Parent, was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement, has engaged in no other
business activities and has conducted its operations only as contemplated by
this Agreement.
Section 4.19 Insurance. Parent and the Parent Significant
Subsidiaries maintain insurance coverage with reputable insurers in such amounts
and covering such risks as are in accordance with normal industry practice for
companies engaged in businesses similar to that of Parent and the Parent
Significant Subsidiaries.
Section 4.20 Labor Matters. Parent and each Parent Subsidiary
is in compliance with all applicable laws and regulations governing labor and
employment, except where the failure to be in such compliance would not
reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect. Except as set forth in Section 4.20 of the Parent Disclosure
Schedule, neither Parent nor any of the Parent Subsidiaries is a party to or
bound by any collective bargaining agreement, and there are no labor unions
representing any employees of Parent or any of the Parent Subsidiaries. Except
as set forth in Section 4.20 of the Parent
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Disclosure Schedule, there are no labor disputes currently subject to any
grievance procedure, arbitration or litigation with respect to any employee of
Parent or any Parent Subsidiary, except for such disputes that have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 4.21 Opinion of Financial Advisor. The Board of
Directors of Parent has received the opinions of CIBC World Markets Corp. and
Banc of America Securities LLC dated the date of this Agreement to the effect
that, as of the date of this Agreement, the Exchange Ratio is fair to the Parent
from a financial point of view, a copy of the written versions of which will be
delivered to the Company solely for information purposes promptly after the
receipt thereof by the Company.
Section 4.22 Brokers. No broker, finder or investment banker
(other than CIBC World Markets Corp. and Banc of America Securities LLC) is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger or the other transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent. Parent has heretofore made
available to the Company a complete and correct copy of all agreements between
Parent and CIBC World Markets Corp. and Banc of America Securities LLC pursuant
to which either such firm would be entitled to any payment relating to the
Merger or any other transactions.
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
Section 5.01 Conduct of Business by the Company Pending the
Merger. The Company agrees that, between the date of this Agreement and the
Effective Time, the businesses of the Company and the Company Subsidiaries shall
be conducted only in, and the Company and the Company Subsidiaries shall not
take any action except in, the ordinary course of business and the Company shall
use its commercially reasonable efforts to preserve substantially intact its
business organization, and, to the extent reasonably determined desirable by
management of the Company, to keep available the services of the current
officers and employees of the Company and the Company Subsidiaries and to
preserve the current relationships of the Company and the Company Subsidiaries
with customers, suppliers, licensors, licensees and other persons with which the
Company or any Company Subsidiary has significant business relations. By way of
amplification of the foregoing and not limitation, except (i) as contemplated by
this Agreement, (ii) for transfers of cash among the Company and the Company
Subsidiaries pursuant to the Company's ordinary course cash management policies
or (iii) subject to Sections 6.08 and 6.10, as set forth in Section 5.01 of the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary
shall, between the date of this Agreement and the Effective Time, directly or
indirectly, do any of the following without the prior written consent of Parent
(which consent shall not be unreasonably withheld):
(a) amend or change its certificate of incorporation or
by-laws or equivalent organizational documents;
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(b) issue, sell or otherwise dispose of (whether to a third
party or to a related party) (i) any shares of its stock of any class, or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of such stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company or any Company Subsidiary
(except for (w) the issuance of shares of Company Common Stock pursuant to
Company Stock Options outstanding on the date of this Agreement, (x) the
issuance of Company Stock Options to purchase up to that number of shares of
Company Common Stock currently authorized for issuance under the Company Stock
Option Plans in effect on the date of this Agreement and the shares of Company
Common Stock issuable pursuant to such Company Stock Options, (y) the issuance
of Company Stock Options in connection with transactions permitted under
paragraph (f) below and the shares of Company Common Stock issuable pursuant to
such Company Stock Options or (z) the issuance of shares of Company Common Stock
in connection with transactions permitted under paragraph (f) below) or (ii) any
business unit of the Company or any Company Subsidiary or any material portion
of the assets of the Company or any Company Subsidiary);
(c) except with respect to trademarks in the ordinary course
of business and consistent with past practice, disclose any confidential
Intellectual Property of the Company or any Company Subsidiary unless such
Intellectual Property is subject to a confidentiality agreement protecting
against any further disclosure;
(d) authorize, declare or set aside any dividend payment or
other distribution, payable in cash, stock, property or otherwise, with respect
to any of its stock;
(e) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its stock;
(f) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or any division thereof or
any assets, other than acquisitions of assets in the ordinary course of business
consistent with past practice and that are not in connection with the
acquisition of all, or substantially all of a business, and other than any
acquisitions involving consideration with a fair market value not in excess of
$2 billion individually or $4 billion in the aggregate;
(g) incur any additional indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse the obligations of any
person, or make any loans or advances, except for (i) loans or advances for
employees of the Company in the ordinary course of business, (ii) letters of
credit obtained by the Company or any Company Subsidiary in the ordinary course
of business, (iii) trade payables incurred in the ordinary course of business,
(iv) indebtedness assumed in connection with transactions permitted under
paragraph (f) above, (v) intercompany indebtedness, (vi) indebtedness under the
Company's or any Company Subsidiary's existing credit facilities incurred in the
ordinary course of business and (vii) other indebtedness with a maturity of not
more than one year in a principal amount not, in the aggregate, in excess of
$5,000,000;
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(h) except as disclosed in Schedule 5.01(h) of the Company
Disclosure Schedule waive any stock repurchase or acceleration rights, amend or
change the terms of any options or restricted stock, or reprice options granted
under any Company Stock Option Plan or authorize cash payments in exchange for
any options granted under any such plans;
(i) except as disclosed in Section 5.01(i) of the Company
Disclosure Schedule or except in the ordinary course of business consistent with
past practice, increase the compensation payable or to become payable to its
officers or employees or grant any rights to severance or termination pay to, or
enter into any employment or severance agreement with, any director, officer or
other employee of the Company or any Company Subsidiary (except, in the case of
employees who are not officers or directors, as consistent with existing
policies of the Company or past practices), or establish, adopt, enter into or
amend, any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee;
(j) make any material change, other than as required by U.S.
GAAP or by the SEC, to its accounting principles or procedures;
(k) agree in writing or otherwise to take any of the actions
described in clauses (a) through (j) above; or
(l) take any action that would cause any of the Company's
representations and warranties set forth in Article III to be untrue in any
material respect, as of any date, as if such representations and warranties were
made as of such date.
Section 5.02 Conduct of Business by Parent Pending the Merger.
Parent agrees that, except as contemplated by any other provision of this
Agreement, Parent shall not, between the date of this Agreement and the
Effective Time, directly or indirectly, do any of the following without the
prior written consent of the Company:
(a) authorize, declare or set aside any dividend payments or
other distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, other than any regular quarterly dividends declared
and paid in accordance with past practice;
(b) make any material change, other than as required by U.S.
GAAP or by the SEC, to its accounting principles or procedures;
(c) take any actions inconsistent with the covenants of Parent
set forth in Section 6.15;
(d) except as set forth in Section 5.02(d) of the Parent
Disclosure Schedule, acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or any division thereof or
any assets, other than acquisitions of assets in the ordinary course of
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business consistent with past practice and that are not in connection with the
acquisition of all, or substantially all of a business, and other than any
acquisitions involving consideration with a fair market value not in excess of
$4 billion individually or $8 billion in the aggregate; or
(e) issue, sell or otherwise dispose of (whether to a third
party or to a related party) any shares of its stock of any class, or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of such stock, or any other ownership interest (including, without
limitation, any phantom interest), of Parent or any Parent Subsidiary (except
for (v) the issuance of shares of Parent Common Stock pursuant to Parent Stock
Options outstanding on the date of this Agreement, (w) the issuance of Parent
Stock Options to purchase up to that number of Parent Common Shares currently
authorized for issuance under the Parent Stock Option Plans in effect on the
date of this Agreement and the shares of Parent Common Stock issuable pursuant
to such Parent Stock Options, (x) the issuance of Parent Stock Options in
connection with transactions permitted under paragraph (d) above and the shares
of Parent Common Stock issuable pursuant to such Parent Stock Options, (y) the
issuance of shares of Parent Common Stock in connection with transactions
permitted under paragraph (d) above or (z) the issuance of shares of Parent
Common Stock with cash proceeds (net of underwriters' commissions) of up to one
billion dollars ($1,000,000,000) in the aggregate);
(f) agree in writing or otherwise to take any actions
described in clauses (a) through (e) above; or
(g) take any action that would cause any of the Parent's
representations and warranties set forth in Article IV to be untrue in any
material respect, as of any date, as if such representations and warranties were
made as of such date.
Section 5.03 Notification of Certain Matters. Parent shall
give prompt notice to the Company, and the Company shall give prompt notice to
Parent, of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause (A) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect or (B) any covenant, condition or agreement contained in this Agreement
not to be complied with or satisfied in any material respect and (ii) any
failure of Parent or the Company, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.03 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 Registration Statement; Joint Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement, (i) Parent
and the Company shall prepare and file with the SEC a joint proxy statement
(together with any amendments thereof or supplements thereto, the "Proxy
Statement") relating to the meetings of the Company's
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stockholders (the "Company Stockholders' Meeting") and Parent's stockholders
(the "Parent Stockholders' Meeting" and, together with the Company Stockholders'
Meeting, the "Stockholders' Meetings") to be held to consider adoption of this
Agreement and the issuance of Parent Common Shares pursuant to the terms of the
Merger, as the case may be, and (ii) Parent shall prepare and file with the SEC
a registration statement on Form S-4 (together with all amendments thereto, the
"Registration Statement") in which the Proxy Statement shall be included as a
prospectus, in connection with the registration under the Securities Act of the
Parent Common Shares to be issued to the stockholders of the Company pursuant to
the Merger. Each of Parent and the Company shall use its reasonable best efforts
to cause the Registration Statement to become effective as promptly as
practicable, and prior to the effective date of the Registration Statement,
Parent shall take all or any action required under any applicable federal or
state securities laws in connection with the issuance of Parent Common Shares
pursuant to the Merger. The Company shall furnish all information concerning the
Company as Parent may reasonably request in connection with such actions and the
preparation of the Registration Statement. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall mail the
Proxy Statement to its stockholders and Parent shall mail the Proxy Statement to
its stockholders.
(b) Subject to paragraph (c) of this Section 6.01, the Proxy
Statement shall include the Company Recommendation and the Parent
Recommendation.
(c) Nothing in this Agreement shall prevent the Company's
Board of Directors from withholding, withdrawing, amending or modifying the
Company Recommendation if the Board of Directors of the Company determines in
good faith (after consultation with independent legal counsel) that such action
is required in order for the directors to comply with their respective fiduciary
duties to the Company's stockholders under applicable Law; provided, however,
that Section 6.04 shall govern the withholding, withdrawing, amending or
modifying of the Company Recommendation in the circumstances described therein.
(d) Subject to the obligations of Parent and the Company under
applicable Law, no amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Parent or the Company without the
approval of the other party (such approval not to be unreasonably withheld or
delayed). Parent will advise the Company promptly after it receives notice
thereof, of the time at which the Registration Statement has become effective or
any supplement or amendment has been filed, of the issuance of any stop order,
of the suspension of the qualification of the Parent Common Shares issuable in
connection with the Merger for offering or sale in any jurisdiction, or of any
request by the SEC for amendment of the Registration Statement or comments
thereon and responses thereto or requests by the SEC for additional information
and each of Parent and the Company, as applicable, will advise the other,
promptly after it receives notice thereof, of any request by the SEC for
amendment of the Proxy Statement or comments thereon and responses thereto or
requests by the SEC for additional information.
(e) The information supplied by Parent for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company or the stockholders of Parent, (iii) the time of
each of
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the Stockholders' Meetings and (iv) the Effective Time, contain any untrue
statement of a material fact or fail to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If, at any time
prior to the Effective Time, any event or circumstance relating to Parent or any
Parent Subsidiary, or their respective officers or directors, that should be set
forth in an amendment or a supplement to the Registration Statement or Proxy
Statement is discovered by Parent, Parent shall promptly inform the Company
thereof. All documents that Parent is responsible for filing with the SEC in
connection with the Merger or the other transactions contemplated by this
Agreement will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
(f) The information supplied by the Company for inclusion in
the Registration Statement and the Proxy Statement shall not, at (i) the time
the Registration Statement is declared effective, (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the stockholders of the Company or the stockholders of Parent, (iii) the time of
each of the Stockholders' Meetings and (iv) the Effective Time, contain any
untrue statement of a material fact or fail to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. If, at
any time prior to the Effective Time, any event or circumstance relating to the
Company or any Company Subsidiary, or their respective officers or directors,
that should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement is discovered by the Company, the Company shall
promptly inform Parent. All documents that the Company is responsible for filing
with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
Section 6.02 Stockholders' Meetings. Notwithstanding anything
in Section 6.01(c) to the contrary, the Company will take, in accordance with
applicable Law and the Company Certificate of Incorporation and the Company
By-Laws, all action necessary to convene the Company Stockholders' Meeting, and
Parent will take, in accordance with applicable Law and the Certificate of
Incorporation and By-Laws of Parent, all action necessary to convene the Parent
Stockholders' Meeting, in each case as promptly as practicable for the purpose
of voting upon the adoption of this Agreement and the issuance of Parent Common
Shares pursuant to the terms of the Merger, as the case may be, and Parent and
the Company shall use their reasonable best efforts to hold the Stockholders'
Meetings on the same day and as soon as practicable after the date on which the
Registration Statement becomes effective, it being understood that for purposes
of determining what is "as promptly as practicable" for the purposes of this
sentence the parties shall take into account the status of regulatory approvals
and related waiting periods. Except with respect to the Company in the event
that the Board of Directors of the Company shall have withheld or withdrawn its
stockholder recommendation or modified or amended its stockholder recommendation
in a manner adverse to the other party pursuant to Section 6.01(c), each party
shall (a) use its commercial best efforts to solicit from its stockholders
proxies in favor of the adoption of this Agreement and the issuance of Parent
Common Shares pursuant to the terms of the Merger, as the case may be, and (b)
shall take all
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other action necessary or advisable to secure the vote or consent of
stockholders, required by the rules of NASDAQ to obtain such approvals.
Section 6.03 Access to Information; Confidentiality. Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which the Company or any Company Subsidiary, on the one hand, or
Parent or any Parent Subsidiary, on the other hand, is a party or pursuant to
applicable Law, from the date of this Agreement to the Effective Time, each
party shall (and shall cause such party's subsidiaries to): (i) provide to the
other party (and its officers, directors, employees, accountants, investment
bankers, consultants, legal counsel, agents and other representatives,
collectively, "Representatives") access at reasonable times during normal
business hours upon prior notice to the officers, employees, agents, properties,
offices and other facilities of the Company or Parent, as the case may be, and
the Company Significant Subsidiaries or Parent Significant Subsidiaries, as the
case may be, and to the books and records thereof; and (ii) furnish promptly
such information concerning the business, properties, contracts, assets,
liabilities, personnel and other aspects of the other party and its subsidiaries
as the other party or its Representatives may reasonably request; provided,
however, that the parties shall use commercially reasonable efforts to limit
such access as provided in clauses (i) and (ii) in such a way as to minimize
disruption to the operations of the business of the Company and the Company
Subsidiaries, on the one hand, and Parent and the Parent Subsidiaries, on the
other hand. Each party shall, and shall cause its respective Representatives to,
keep such information confidential in accordance with the terms of the
Confidentiality Agreement dated July 6, 2000, between Parent and the Company
(the "Confidentiality Agreement").
Section 6.04 No Solicitation of Transactions. (a) The Company
shall not, directly or indirectly, through any Representative or otherwise,
initiate, solicit or encourage (including by way of furnishing information), or
take any other action to facilitate, any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Competing
Transaction (as defined below), or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of the Representatives or any
Company Subsidiary, to take any such action, provided, however, that prior to
the adoption of this Agreement by the stockholders of the Company, and, provided
further, that the Company is otherwise in full compliance with this Section
6.04, nothing contained in this Section 6.04 shall prohibit the Board of
Directors of the Company from (i) furnishing information to, or entering into
and engaging in discussions or negotiations with, any person that makes a bona
fide unsolicited written proposal for a Competing Transaction that the Board of
Directors of the Company determines in good faith, after consultation with the
Company's financial advisors and independent legal counsel, can be reasonably
expected to result in a Company Superior Proposal (as defined below), (ii)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to a
tender or exchange offer or making any disclosure required under applicable Law
or (iii) failing to make or withdrawing or modifying its recommendation referred
to in Section 6.01 following the making of a Company Superior Proposal or
recommending such a Company Superior Proposal to the stockholders of the Company
if, solely in the case of clause (i) above and this clause (iii), the Board of
Directors of the Company, after consultation with independent legal counsel,
determines in good faith that such action is required in order for the directors
to comply with their respective fiduciary duties
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under applicable Law. The Company and the Company Subsidiaries will immediately
cease any and all existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Competing Transaction. In
addition to the foregoing, the Company shall (i) provide Parent with at least
forty-eight (48) hours prior written notice (or such lesser prior written notice
as provided to the members of the Company's Board of Directors but in no event
less than eight hours) of any meeting of the Company's Board of Directors at
which the Company's Board of Directors is reasonably expected to consider a
Company Superior Proposal and (ii) provide Parent with at least two (2) business
days prior written notice (or such lesser prior notice as provided to the
members of the Company's Board of Directors but in no event less than eight (8)
hours) of a meeting of the Company's Board of Directors at which the Company's
Board of Directors is reasonably expected to recommend a Company Superior
Proposal to its stockholders.
(b) For purposes of this Agreement, "Competing Transaction"
shall mean any of the following involving the Company (other than the Merger and
the other transactions contemplated in this Agreement): (i) any merger,
consolidation, share exchange, business combination, issuance or purchase of
securities or other similar transaction , (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of the assets of the Company in
a single transaction or series of related transactions; (iii) any tender offer
or exchange offer for the Company's securities or the filing of a registration
statement under the Securities Act in connection with any such exchange offer;
in the case of clause (i), (ii) or (iii) above, which transaction would result
in a third party (or its shareholders) or affiliates acquiring, individually or
in the aggregate, more than 15% of the voting securities of the Company then
outstanding or more than 15% of the assets of the Company and its subsidiaries,
taken as a whole; (iv) any solicitation in opposition to adoption by the
Company's stockholders of this Agreement; or (v) any public announcement of an
agreement, proposal, plan or intention to do any of the foregoing, either during
the effectiveness of this Agreement or at any time thereafter.
(c) For purposes of this Agreement, a "Company Superior
Proposal" means any proposal made by a third party which would result in such
party (or in the case of a parent-to-parent merger, its stockholders) acquiring,
directly or indirectly, including pursuant to a tender offer, exchange offer,
merger, consolidation, share exchange, business combination, share purchase,
asset purchase, recapitalization, liquidation, dissolution, joint venture or
similar transaction, more than 50% of the voting power of the voting securities
of the Company then outstanding or all or substantially all the assets of the
Company and its subsidiaries, taken as a whole, for consideration which the
Board of Directors of the Company determines in its reasonable good faith
judgment to be more favorable to the Company's stockholders than the Merger.
(d) In addition to the obligations of the Company set forth in
paragraph (a) of this Section 6.04, the Company as promptly as reasonably
practicable shall advise Parent orally and in writing of any request received by
the Company for non-public information which the Company reasonably believes
would lead to a Competing Transaction or of any Competing Transaction, or any
inquiry received by the Company with respect to or which the Company reasonably
should believe would lead to any Competing Transaction, the material terms and
conditions of such request, Competing Transaction or inquiry, and the identity
of the person or group making any such request, Competing Transaction or
inquiry. The Company will promptly
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update Parent as to any material changes with respect to such request, Competing
Transaction or inquiry.
Section 6.05 Directors' and Officers' Indemnification and
Insurance. (a) The By-Laws of the Surviving Corporation shall contain the
respective provisions that are set forth, as of the date of this Agreement, in
Article IX of the By-Laws of the Company, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect adversely the rights thereunder of individuals
who at or at any time prior to the Effective Time were directors, officers,
employees, fiduciaries or agents of the Company.
(b) After the Effective Time, Parent and the Surviving
Corporation shall, to the extent set forth under Article IX of the Company
By-laws, indemnify and hold harmless, each current and former director or
officer of the Company and each Subsidiary of the Company and each such person
who served at the request of the Company or any Subsidiary of the Company as a
director, officer, trustee, partner, fiduciary, employee or agent of another
corporation, partnership, joint venture, trust, pension or other employee
benefit plan or enterprise (collectively, the "Indemnified Parties") against all
costs and expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, liabilities and settlement amounts paid in connection
with any claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), whether civil, administrative, criminal or
investigative, arising out of or pertaining to any action or omission in their
capacities as officers or directors, in each case occurring before the Effective
Time (including the transactions contemplated by this Agreement. Without
limiting the foregoing, in the event of any such claim, action, suit, proceeding
or investigation, (i) the Company or Parent and the Surviving Corporation, as
the case may be, shall pay the reasonable fees and expenses of one counsel
selected by any Indemnified Party, which counsel shall be reasonably
satisfactory to the Company or to Parent and the Surviving Corporation, as the
case may be, promptly after statements therefor are received (unless the
Surviving Corporation shall elect to defend such action) and (ii) the Company
and Parent and the Surviving Corporation shall reasonably cooperate in the
defense of any such matter; provided, however, that none of the Company, Parent
or the Surviving Corporation shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld or
delayed). In the event that any claim or claims for indemnification are asserted
or made within such six-year period, all rights to indemnification in respect of
any such claim or claims shall continue until the disposition of any and all
such claims.
(c) For a period of six years after the Effective Time, Parent
shall cause to be maintained in effect the current directors and officers
liability insurance policies maintained by the Company (provided that coverage
limits in the aggregate for the entire six year period are not less than the
current annual limits, and provided further that Parent may substitute policies
reasonably satisfactory to the Indemnified Parties of at least the same coverage
with other terms and conditions that are no less advantageous to the Indemnified
Parties) with respect to claims arising from facts or events that occurred prior
to the Effective Time; provided, however, that in no event shall parent be
required to expend, pursuant to this Section 6.05(c), more than an amount per
year equal to 200% of current annual premiums paid by the Company for such
insurance; provided further, however, that if the premiums for such coverage
exceed such
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amount, Parent or the Surviving Corporation shall purchase a policy with the
greatest coverage available for such 200% of the current annual premiums spent
by the Company for its fiscal year ending December 31, 1999.
(d) In the event Parent or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
in such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each case, proper
provision shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, honor the indemnification obligations
set forth in this Section 6.05.
Section 6.06 Obligations of Merger Sub. Parent shall take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and subject to the
conditions set forth in this Agreement.
Section 6.07 Affiliates. The Company represents to Parent that
no later than 30 days after the date of this Agreement, the Company shall
deliver to Parent a list of names and addresses of those persons who were, in
the Company's reasonable judgment, on such date, affiliates (within the meaning
of Rule 145 of the rules and regulations promulgated under the Securities Act
(each such person being an "Affiliate")) of the Company. The Company shall
provide Parent with such information and documents as Parent shall reasonably
request for purposes of reviewing such list. The Company shall use its
commercially reasonable efforts to deliver or cause to be delivered to Parent,
no later than at least 30 days prior to the Effective Time, an affiliate letter
in the form attached hereto as Exhibit 6.07, executed by each of the Affiliates
of the Company identified in the foregoing list and any person who shall, to the
knowledge of the Company, have become an Affiliate of the Company subsequent to
the delivery of such list.
Section 6.08 Further Action; Consents; Filings. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
its commercially reasonable efforts to (i) take, or cause to be taken, all
appropriate action and do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
Merger and the other transactions contemplated by this Agreement, (ii) obtain
from Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Parent or the
Company or any of their subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement, the Merger and the other transactions contemplated by
this Agreement that are required under (A) the Exchange Act and the Securities
Act and the rules and regulations thereunder and any other applicable federal or
state securities laws, (B) the HSR Act, and any other antitrust regulations and
(C) any other applicable Law. The parties hereto shall cooperate with each other
in connection with the making of all such filings, including by providing copies
of all such documents to the nonfiling party and its advisors prior to filing
and, if requested, by accepting all reasonable additions, deletions or changes
suggested in connection therewith. Without limiting the generality of the
foregoing, each party shall take or omit to take such action
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as the other party shall reasonably request to cause the parties to obtain any
material governmental approvals and/or the expiration of applicable waiting
periods, including, without limitation, holding separate and agreeing to sell or
otherwise dispose of, assets, categories of assets or businesses of Parent or
any of the Parent Subsidiaries (and to enter into agreements with the relevant
governmental antitrust entity giving effect thereto), provided that the
foregoing shall not obligate either party to take or to omit to take any action
(including, without limitation, the expenditure of funds or any such holding
separate and agreeing to sell or otherwise dispose of assets, categories of
assets or businesses) that is to be effective prior to the Closing or that would
or could reasonably be expected to have, in the good faith opinion of such
party, a Material Adverse Effect on Parent and the Parent Subsidiaries
(including the Company), taken as a whole, after the Closing.
(b) Parent and the Company shall file as soon as practicable
after the date of this Agreement notifications under the HSR Act and shall
respond as promptly as practicable to all inquiries or requests that may be made
pursuant to the HSR Act for additional information or documentation and shall
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity in connection with
antitrust matters. The parties shall cooperate with each other in connection
with the making of all such filings or responses, including providing copies of
all such documents to the other party and its advisors prior to filing or
responding.
Section 6.09 Plan of Reorganization. (a) This Agreement is
intended to constitute a "plan of reorganization" within the meaning of section
1.368-2(g) of the income tax regulations promulgated under the Code. From and
after the date of this Agreement and until the Effective Time, each party hereto
shall use its commercially reasonable efforts to cause the Merger to qualify,
and will not knowingly take any action which could reasonably be expected to
prevent the Merger from qualifying as a reorganization under the provisions of
section 368(a) of the Code. Following the Effective Time, none of the Surviving
Corporation, Parent or any of their affiliates shall knowingly take any action,
cause any action to be taken, fail to take any action or cause any action to
fail to be taken, which action or failure to act could cause the Merger to fail
to qualify as a reorganization under section 368(a) of the Code.
(b) As of the date of this Agreement, the Company does not
know of any reason (i) for which it would not be able to deliver to Morrison &
Foerster LLP and Sullivan & Cromwell, at the date of the legal opinions referred
to below, certificates substantially in compliance with IRS published advance
ruling guidelines, with customary exceptions and modifications thereto, to
enable such firms to deliver the legal opinions for the Registration Statement
and as contemplated by Sections 7.02(f) and 7.03(c), and the Company hereby
agrees to deliver such certificates effective as of the date of such opinions so
long as the statements therein are true as of such time or (ii) for which
Morrison & Foerster LLP and Sullivan & Cromwell would not be able to deliver the
opinions required by Sections 7.02(f) and 7.03(c).
(c) As of the date of this Agreement, Parent does not know of
any reason (i) for which it would not be able to deliver to Sullivan & Cromwell
and Morrison & Foerster LLP, at the date of the legal opinions referred to
below, certificates substantially in compliance with published IRS advance
ruling guidelines, with customary exceptions and modifications thereto, to
enable such firms to deliver the legal opinions for the Registration Statement
and as
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contemplated by Sections 7.02(f) and 7.03(c), and Parent hereby agrees to
deliver such certificates effective as of the date of such opinions so long as
the statements therein are true as of such time or (ii) for which Morrison &
Foerster LLP and Sullivan & Cromwell would not be able to deliver the opinions
required by Sections 7.02(f) and 7.03(c).
Section 6.10 Public Announcements. The initial press release
relating to this Agreement shall be a joint press release the text of which has
been agreed to by each of Parent and the Company. Thereafter, unless otherwise
required by applicable Law or the requirements of NASDAQ, each of Parent and the
Company shall reasonably approve each other's press releases or any public
statements with respect to this Agreement, the Merger or any of the other
transactions contemplated by this Agreement.
Section 6.11 Letters of Accountants. (a) Parent shall use its
commercially reasonable efforts to cause to be delivered to the Company
"comfort" letters of Ernst & Young LLP, Parent's independent accountants, dated
and delivered the date on which the Registration Statement shall become
effective and as of the Effective Time, and addressed to the Company, in form
and substance reasonably satisfactory to the Company and reasonably customary in
scope and substance for letters delivered by independent public accountants in
connection with transactions such as those contemplated by this Agreement.
(b) The Company shall use its commercially reasonable efforts
to cause to be delivered to Parent "comfort" letters of Ernst & Young, LLP, the
Company's independent auditors, dated and delivered the date on which the
Registration Statement shall become effective and as of the Effective Time, and
addressed to Parent, in form and substance reasonably satisfactory to Parent and
reasonably customary in scope and substance for letters delivered by independent
public accountants in connection with transactions such as those contemplated by
this Agreement.
Section 6.12 NASDAQ. Parent shall promptly prepare and submit
to NASDAQ a supplemental notice with respect to the Parent Common Shares to be
issued in the Merger and pursuant to Substitute Options, and shall use its
reasonable efforts to obtain, prior to the Effective Time, approval for the
quotation of such Parent Common Shares.
Section 6.13 Further Assurances. Subject to the terms and
conditions hereof, each party hereto, at the reasonable request of another party
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of this Agreement and the transactions contemplated hereby.
Section 6.14 Certain Employee Benefits Matters. For a period
of three years following the Effective Time and effective upon the Merger,
Parent shall, or shall cause the Surviving Corporation to, provide medical,
401(k), life and disability benefits, cash compensation and other benefits,
including employee benefit plans, programs, contracts or arrangements providing
for stock options, stock purchase rights, restricted stock or other stock-based
compensation, to employees of the Surviving Corporation and its subsidiaries
that, in the aggregate, are no less favorable to the medical, 401(k), life and
disability benefits, cash compensation and other benefits that were provided to
such Surviving Corporation employees
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under the employee benefit plans, programs, contracts and arrangements of the
Company and each of its subsidiaries as in effect immediately prior to the
Effective Time and that have been disclosed or made available to Parent. Parent
covenants and agrees that it shall cause the Surviving Corporation to satisfy
all severance obligations arising in connection with the transactions
contemplated by the Merger and this Agreement pursuant to any Company Benefit
Plan and any similar plan covering employees of the Company's Subsidiaries and
employees of the Company and the Company's Subsidiaries not in the United
States.
Section 6.15 Board Appointment. Parent agrees to cause Donald
Scifres to be elected or appointed to the Parent Board of Directors as
Co-Chairman of the Parent Board of Directors as of the Effective Time.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.01 Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or waiver (where permissible) of the following
conditions:
(a) Registration Statement Effective. The Registration
Statement shall have been declared effective by the SEC under the Securities Act
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceeding for that purpose shall have
been initiated by the SEC.
(b) Stockholder Approvals. This Agreement and the issuance of
shares of Parent Common Stock pursuant to the terms of the Merger, as the case
may be, contemplated hereby shall have been approved and adopted by the
requisite affirmative vote of (i) the stockholders of the Company in accordance
with the DGCL and the Company Certificate of Incorporation and (ii) the
stockholders of Parent in accordance with the rules of NASDAQ, the DGCL and
Parent's Certificate of Incorporation;
(c) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, judgment, decree, injunction, executive order or award
(an "Order") that is then in effect or pending and has, or would have, the
effect of making the Merger illegal or otherwise prohibiting consummation of the
Merger.
(d) Antitrust Waiting Periods; Approvals. Any waiting period
(and any extension thereof) and/or approvals applicable to the consummation of
the Merger under the HSR Act or any foreign antitrust or combination Law and/or
material filings, consents, approvals and authorizations legally required to be
obtained to consummate the Merger shall have expired, been terminated or
obtained, as applicable.
(e) NASDAQ. The Parent Common Shares to be issued in the
Merger shall have been authorized for quotation on NASDAQ.
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Section 7.02 Conditions to the Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to consummate the Merger
are subject to the satisfaction or waiver (where permissible) of the following
additional conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this Agreement shall
be true and correct as of the Effective Time, as though made at and as of the
Effective Time, except that those representations and warranties that address
matters only as of a particular date shall remain true and correct as of such
date, except to the extent that the failure of the representations and
warranties to be so true and correct could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, and Parent
shall have received a certificate of the Chief Executive Officer or Chief
Financial Officer of the Company to that effect.
(b) Agreements and Covenants. The Company shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Parent shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of the Company to that effect.
(c) Tax Opinions. Parent shall have received the opinion of
Morrison & Foerster LLP, counsel to Parent, based upon customary assumptions set
forth or referred to in such opinion, to the effect that the Merger will be
treated for federal income tax purposes as a reorganization qualifying under the
provisions of section 368(a) of the Code and that each of Parent, Merger Sub and
the Company will be a party to the reorganization within the meaning of section
368(b) of the Code, which opinion shall not have been withdrawn or modified in
any material respect. In rendering such opinion, Morrison & Foerster LLP may
rely upon and require such certificates of the Company, Parent and Merger Sub
and/or their officers or principal stockholders as are customary for such
opinions. Each such certificate shall be dated on or before the date of such
opinion and shall not have been withdrawn or modified in any material respect as
of the Effective Time.
Section 7.03 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Parent and Merger Sub contained in
this Agreement shall be true and correct as of the Effective Time, as
though made on and as of the Effective Time, except that those
representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date, except
to be extent that the failure of the representations and warranties to
be so true and correct could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect and the Company
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shall have received a certificate of the Chief Executive Officer or
Chief Financial Officer of Parent to that effect.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with
by it on or prior to the Effective Time and the Company shall have
received a certificate of the Chief Executive Officer or Chief
Financial Officer of Parent to that effect.
(c) Tax Opinion. The Company shall have received the opinion
of Sullivan & Cromwell, counsel to the Company, based upon customary
assumptions set forth or referred to in such opinion, to the effect
that the Merger will be treated for federal income tax purposes as a
reorganization qualifying under the provisions of section 368(a) of the
Code and that each of Parent, Merger Sub and the Company will be a
party to the reorganization within the meaning of section 368(b) of the
Code, which opinion shall not have been withdrawn or modified in any
material respect. In rendering such opinion, Sullivan & Cromwell may
rely upon and require such certificates of the Company, Parent and
Merger Sub and/or their officers or principal stockholders as are
customary for such opinions. Each such certificate shall be dated on or
before the date of such opinion and shall not have been withdrawn or
modified in any material respect as of the Effective Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01 Termination. This Agreement may be terminated and
the Merger and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated by
this Agreement, as follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of Parent and the Company;
(b) by either Parent or the Company, if the Effective Time
shall not have occurred on or before January 31, 2001; provided,
however, that, in the event the failure of the Merger to occur on or
before January 31, 2001 is the result of the failure of any of the
conditions set forth in Article VII to be satisfied or waived prior to
January 31, 2001, the Company may extend such date to March 31, 2001;
provided further that the provisions of this Section 8.01(b) shall not
be available to any party whose failure to fulfill its obligations
hereunder shall have been the cause of, or shall have resulted in, the
failure of the Merger to be consummated by the applicable date;
(c) by either Parent or the Company, if there shall be any
Order of a Governmental Authority which is final and nonappealable
preventing the consummation of the Merger; provided that the provisions
of this Section 8.01(c) shall not be available
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to any party whose failure to fulfill its obligations hereunder shall
have been the cause of, or shall have resulted in, such Order;
(d) by Parent if (i) the Board of Directors of the Company
withholds, withdraws, modifies or changes the Company Recommendation in
a manner adverse to Parent or shall have resolved to do so, (ii) the
Company shall have failed to include in the Proxy Statement the Company
Recommendation, (iii) the Company's Board of Directors fails to
reaffirm its recommendation to its stockholders, in favor of the
adoption of this Agreement within five business days after Parent
requests in writing that such recommendation be reaffirmed, (iv) the
Company shall have breached its obligations under Section 6.04 or (v) a
tender offer or exchange offer for 15% or more of the outstanding
shares of stock of the Company has commenced, and the Board of
Directors of the Company has not recommended rejection of such tender
offer or exchange offer by its stockholders within ten (10) business
days of the commencement thereof;
(e) by either Parent or the Company if this Agreement shall
fail to receive the requisite vote for adoption at the Company
Stockholders' Meeting, provided that the right to terminate this
Agreement under this Section 8.01(e) shall not be available to the
Company where the failure to obtain such requisite vote shall have been
caused by or related to the Company's breach of this Agreement;
(f) by either Parent or the Company if the approval of the
issuance of Parent Common Shares pursuant to the terms of the Merger
shall fail to receive the requisite vote at the Parent Stockholders'
Meeting; provided that the right to terminate this Agreement under this
Section 8.01(f) shall not be available to Parent where the failure to
obtain such requisite vote shall have been caused by or related to
Parent's breach of this Agreement;
(g) by Parent upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall
have become untrue, in either case such that the conditions set forth
either in Section 7.02(a) or (b) would not be satisfied; provided,
however, that if such breach is curable within thirty (30) days by the
Company through the exercise of its best efforts and as long as the
Company so cures such breach, Parent may not terminate this Agreement
under this Section 8.01(g);
(h) by the Company upon a breach of any representation,
warranty, covenant or agreement on the part of Parent and Merger Sub
set forth in this Agreement, or if any representation or warranty of
Parent and Merger Sub shall have become untrue, in either case such
that the conditions set forth either in Section 7.03(a) or (b) would
not be satisfied; provided, however, that if such breach is curable
within thirty (30) days by Parent and Merger Sub through the exercise
of their respective best efforts and as long as Parent and Merger Sub
so cure such breach, the Company may not terminate this Agreement under
this Section 8.01(h); or
(i) by the Company, if the Company is not in material breach
of its obligations under Section 6.04 hereof and the Board of Directors
of the Company authorizes the
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Company to enter into a binding written agreement concerning a
transaction that constitutes a Company Superior Proposal.
Section 8.02 Effect of Termination. Except as provided in
Section 9.01, in the event of termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void, there shall be no liability
under this Agreement on the part of Parent, Merger Sub or the Company or any of
their respective officers or directors, and all rights and obligations of each
party hereto shall cease, subject to the remedies of the parties set forth in
Section 8.05; provided, however, that nothing herein shall relieve any party
from liability for the willful breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
Section 8.03 Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after the approval of the Merger and this Agreement by the stockholders of the
Company, no amendment may be made that would reduce the amount or change the
type of consideration into which each Company Common Share shall be converted
upon consummation of the Merger. This Agreement may not be amended, except by an
instrument in writing signed by the parties hereto.
Section 8.04 Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
Section 8.05 Expenses. (a) Subject to paragraphs (e) and (f)
of this Section 8.05, all Expenses (as defined below) incurred in connection
with this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring such expenses, whether or not the Merger or any
other transaction is consummated. "Expenses" as used in this Agreement shall
include all reasonable out-of-pocket expenses (including, without limitation,
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Registration Statement and the Proxy
Statement, the solicitation of stockholder approvals, the filing of any required
notices under the HSR Act or other similar regulations and all other matters
related to the closing of the Merger and the other transactions contemplated by
this Agreement.
(b) The Company agrees that (i) if an Acquisition Proposal
shall have been made to the Company or its stockholders or any Person shall have
publicly announced an intention to make an Acquisition Proposal with respect to
the Company and thereafter this Agreement is terminated by Parent pursuant to
Section 8.01(d) or (ii) this Agreement is terminated by the Company pursuant to
Section 8.01(i), then the Company shall pay to Parent an amount equal to one
billion dollars ($1,000,000,000); provided, however, that no amount shall be
payable to Parent pursuant to clause (i) or (ii) of this paragraph (b) unless
and until (y) any Person (other
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than Parent) (together with any affiliates of such Person, an "Acquiring Party")
has acquired, directly or indirectly, by purchase, merger, consolidation, sale,
assignment, lease, transfer or otherwise, in one transaction or any related
series of transactions within twelve (12) months of such termination, a majority
of the voting power of the outstanding securities of the Company or all or
substantially all of the assets of the Company or (z) there has been consummated
a merger, consolidation or similar business combination between the Company and
an Acquiring Person.
(c) Parent agrees that the payment provided for in Section
8.05(b) shall be the sole and exclusive remedy of Parent upon a termination of
this Agreement pursuant to Section 8.01(d) where such fee has been paid and
pursuant to Section 8.01(i), and such remedies shall be limited to the sum
stipulated in Section 8.05(b), regardless of the circumstances giving rise to
such termination; provided, however, that nothing herein shall relieve the
Company from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
(d) Any payment required to be made pursuant to Section
8.05(b) shall be made to Parent by wire transfer of immediately available funds
to an account designated by Parent in writing.
(e) Upon the termination of this Agreement by Parent or the
Company pursuant to Section 8.01(e) or by Parent pursuant to Section 8.01(d), on
the first business day following such termination, the Company shall pay Parent
an amount equal to ten million dollars ($10,000,000) (the "Expenses"), which the
parties agree represents the reasonable estimate of the out-of-pocket expenses
that Parent will incur in connection with the transactions contemplated by this
Agreement and which amount shall represent the entire amount that Parent is
entitled to receive with respect to such expenses, including, but not limited
to, fees and expense of Parent's counsel, accountants and financial advisors
upon the termination by Parent or the Company in such circumstances.
(f) Upon the termination of this Agreement by Parent or the
Company pursuant to Section 8.01(f), on the first business day following such
termination, Parent shall pay the Company an amount equal to the Expenses, which
the parties agree represents the reasonable estimate of the out-of-pocket
expenses that the Company will incur in connection with the transactions
contemplated by this Agreement and which amount shall represent the entire
amount that the Company is entitled to receive with respect to such expenses,
including, but not limited to, fees and expenses of the Company's counsel,
accountants and financial advisors upon the termination by Parent or the Company
pursuant to Section 8.01(f).
(g) "Acquisition Proposal" means an offer or proposal with
respect to a Competing Transaction.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Non Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
in any certificate
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delivered pursuant hereto shall terminate at the Effective Time or upon the
termination of this Agreement pursuant to Section 8.01, as the case may be,
except that the agreements set forth in Articles I, II and IX and Sections 6.05
and 6.09 shall survive the Effective Time and those set forth in Sections 6.03
(with respect to confidentiality), 8.02 and 8.05 and this Article IX shall
survive termination.
Section 9.02 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 9.02):
if to Parent or Merger Sub:
JDS Uniphase Corporation
210 Baypointe Parkway
San Jose, California 95134
Facsimile No.: (408) 954-0540
Attention: Michael Phillips
with a copy to:
Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105
Facsimile No.: (415) 268-6590
Attention: John Campbell, Esq.
.
if to the Company:
SDL, Inc.
80 Rose Orchard Way
San Jose, California 95134
Facsimile No.: (408) 943-1258
Attention: Donald Scifres
with a copy to:
Sullivan & Cromwell
1888 Century Park East
Los Angeles, CA 90067
Facsimile No.: (310) 712-8800
Attention: Alison S. Ressler, Esq.
Section 9.03 Certain Definitions. For purposes of this
Agreement, the term:
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(a) "affiliate" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such specified person;
(b) "business day" means any day on which both the principal
offices of the SEC in Washington, D.C. are open to accept filings, or,
in the case of determining a date when any payment is due, any day
(other than a Saturday or a Sunday) on which banks are not required or
authorized to close in California;
(c) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise;
(d) "Environmental Laws" means any federal, state, local or
foreign laws and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to (A) releases or threatened
releases of Hazardous Substances or materials containing Hazardous
Substances; (B) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing
Hazardous Substances; or (C) otherwise relating to pollution or
protection of the environment, health, safety or natural resources;
(e) "Hazardous Substances" means (i) those substances defined
in or regulated under the following federal statutes and their state
counterparts and all regulations thereunder: the Hazardous Materials
Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy
Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the
Clean Air Act; (ii) petroleum and petroleum products, including crude
oil and any fractions thereof; (iii) natural gas, synthetic gas, and
any mixtures thereof; (iv) polychlorinated biphenyls, asbestos and
radon; (v) any other contaminant; and (vi) any substance, material or
waste regulated by any federal, state, local or foreign Governmental
Entity pursuant to any Environmental Law;
(f) "Intellectual Property" means all trademarks, trademark
rights, trade name, trade name rights, trade dress and other
indications of origin, brand names, certification rights, service
marks, applications for trademarks and for service marks, proprietary
know-how and other proprietary rights and information; inventions and
discoveries, whether patentable or not, in any jurisdiction; patents,
patent rights and trade secrets; writings and other works, whether
copyrightable or not, in any jurisdiction; and any similar intellectual
property or proprietary rights;
(g) "knowledge" means, with respect to the Company, the actual
knowledge of any executive officer (determined in accordance with Rule
16a-1(f) under the Exchange Act) of the Company and with respect to
Parent or Merger Sub, the actual knowledge of
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any executive officer (determined in accordance with Rule 16a-1(f)
under the Exchange Act) of Parent or Merger Sub, as the case may be;
(h) "Material Adverse Effect" means any circumstance, event,
occurrence, change or effect that materially and adversely affects the
business, operations, condition (financial or otherwise), assets
(tangible or intangible) or results of operations of the Company and
the Company Subsidiaries taken as a whole, or the Parent and the Parent
Subsidiaries taken as a whole, as the case may be (other than any
adverse effects due to or resulting from the public announcement of the
transactions contemplated hereby, the pendency of this Agreement or the
consummation of the transactions contemplated hereby (including,
without limitation, loss of customers, orders, suppliers or employees
resulting therefrom) or general market or industry conditions
(including, without limitation, any change in trading prices, in and of
itself and without the occurrence of any other Material Adverse Effect,
of either Parent's or the Company's outstanding publicly traded
equities));
(i) "person" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person
(including, without limitation, a "person" as defined in section
13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a
government; and
(j) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which
such person (either alone or through or together with any other
subsidiary) owns, directly or indirectly, more than 50% of the stock or
other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity.
Section 9.04 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
Law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect as long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
fullest extent possible.
Section 9.05 Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective
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successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
Section 9.06 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
Section 9.07 Governing Law. Except to the extent that Delaware
law is mandatorily applicable this Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed in that state and without regard to any
applicable conflicts of law principles.
Section 9.08 Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 9.09 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 9.10 Entire Agreement. This Agreement (including the
Exhibits, the Company Disclosure Schedule and the Parent Disclosure Schedule)
and the Confidentiality Agreement constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
JDS UNIPHASE CORPORATION
BY: /s/ JOZEF STRAUS
------------------------------------
Name: Jozef Straus
Title: Co-Chairman of the Board
and Chief Executive Officer
K2 ACQUISITION, INC.
By: /s/ CHRISTOPHER DEWEES
------------------------------------
Name: Christopher Dewees
Title: President
SDL, INC.
By: /s/ DONALD R. SCIFRES
------------------------------------
Name: Donald R. Scifres
Title: Chairman of the Board
and Chief Executive Officer
51
53
EXHIBIT 6.07
FORM OF AFFILIATE LETTER FOR
AFFILIATES OF THE COMPANY
[ ] [ ], 2000
JDS UNIPHASE CORPORATION
210 Baypointe Parkway
San Jose, California 95134
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of SDL, Inc., a Delaware corporation (the
"Company"), as the term "affiliate" is defined for purposes of paragraphs (c)
and (d) of Rule 145 of the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). Pursuant to the terms of the
Agreement and Plan of Merger dated as of July 9, 2000 (the "Merger Agreement")
among JDS Uniphase Corporation, a Delaware corporation ("Parent"), K2
Acquisition, Inc., a Delaware corporation ("Merger Sub"), and the Company,
Merger Sub will be merged with and into the Company (the "Merger"). Capitalized
terms used in this letter agreement without definition shall have the meanings
assigned to them in the Merger Agreement.
As a result of the Merger, I may receive common shares, par
value $0.001 per share, of Parent (the "Parent Shares"). I would receive such
Parent Shares in exchange for shares owned by me of common stock, par value
$0.001 per share, of the Company (the "Company Shares").
1. I represent, warrant and covenant to Parent that in the event that I
receive any Parent Shares as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the Parent Shares in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement
and discussed, to the extent I felt necessary, with my counsel or
counsel for the Company the requirements of such documents and other
applicable limitations upon my ability to sell, transfer or otherwise
dispose of the Parent Shares.
C. I have been advised that the issuance to me of the Parent
Shares pursuant to the Merger has been registered with the Commission
under the Act on a Registration Statement on Form S-4. However, I have
also been advised that, because at the time the Merger is submitted for
a vote of the stockholders of the Company, (a) I may be deemed to be an
affiliate of the Company and (b) the distribution by me of the Parent
Shares has not been registered under the Act, I may not sell, transfer
or otherwise dispose of the Parent Shares issued to me in the Merger
unless (i) such sale, transfer or other disposition
54
is made in conformity with the volume and other limitations of Rule 145
promulgated by the Commission under the Act, (ii) such sale, transfer
or other disposition has been registered under the Act or (iii) in the
opinion of counsel reasonably acceptable to Parent, such sale, transfer
or other disposition is otherwise exempt from registration under the
Act.
D. I understand that Parent is under no obligation to register
the sale, transfer or other disposition of the Parent Shares by me or
on my behalf under the Act or, except as provided in paragraph 2(A)
below, to take any other action necessary in order to make compliance
with an exemption from such registration available.
E. I understand that there will be placed on the certificates
for the Parent Shares issued to me, or any substitutions therefor, a
legend stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY
BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF A LETTER AGREEMENT DATED
[ ] [ ], 2000 BETWEEN THE REGISTERED HOLDER HEREOF AND BUYER, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF BUYER.
F. I understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a
registration statement, Parent reserves the right to put the following
legend on the certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND WERE
ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE ACT APPLIES. THE SHARES HAVE BEEN
ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE ACT AND MAY
NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
G. Execution of this letter should not be considered an
admission on my part that I am an "affiliate" of the Company as
described in the first paragraph of this letter, or as a waiver of any
rights that I may have to object to any claim that I am such an
affiliate on or after the date of this letter.
2. By Parent's acceptance of this letter, Parent hereby agrees with me
as follows:
A. For so long as and to the extent necessary to permit me to
sell the Parent Shares pursuant to Rule 145 and, to the extent
applicable, Rule 144 under the Act, Parent shall (a) use its reasonable
efforts to (i) file, on a timely basis, all reports and data
55
required to be filed with the Commission by it pursuant to Section 13
of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and (ii) furnish to me upon request a written statement as to whether
or not Parent has complied with such reporting requirements during the
12 months preceding any proposed sale of the Parent Shares by me
pursuant to Rule 145, and (b) otherwise use its reasonable efforts to
permit such sales pursuant to Rule 145 and Rule 144. Parent hereby
represents to me that it has filed all reports required to be filed
with the Commission under Section 13 of the 1934 Act during the
preceding 12 months.
B. It is understood and agreed that certificates with the
legends set forth in paragraphs 1(E) and 1(F) above will be substituted
by delivery of certificates without such legends if (i) one year shall
have elapsed from the date the undersigned acquired the Parent Shares
received in the Merger and the provisions of Rule 145(d)(2) are then
available to the undersigned, (ii) two years shall have elapsed from
the date the undersigned acquired the Parent Shares received in the
Merger and the provisions of Rule 145(d)(3) are then applicable to the
undersigned, or (iii) Parent has received either an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to Parent,
or a "no action" letter obtained by the undersigned from the staff of
the Commission, to the effect that the restrictions imposed by Rule 145
under the Act no longer apply to the undersigned.
Very truly yours,
Name:
Agreed and accepted this [__] day
of [ ] [ ], 2000, by
JDS Uniphase Corporation
By:
Name:
Title:
56
TABLE OF CONTENTS
ARTICLE I THE MERGER
SECTION 1.01 The Merger....................................................2
Section 1.02 Closing; Effective Time.......................................2
Section 1.03 Effect of the Merger..........................................2
Section 1.04 Certificate of Incorporation; By-Laws.........................2
Section 1.05 Directors and Officers........................................2
ARTICLE II CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01 Conversion of Securities......................................2
Section 2.02 Exchange of Certificates......................................3
Section 2.03 Stock Transfer Books..........................................6
Section 2.04 Company Stock Options.........................................6
Section 2.05 Restricted Stock..............................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01 Organization and Qualification; Subsidiaries..................7
Section 3.02 Company Certificate of Incorporation and By-Laws..............8
Section 3.03 Capitalization................................................8
Section 3.04 Authority Relative to This Agreement..........................9
Section 3.05 No Conflict; Required Filings and Consents....................9
Section 3.06 Permits; Compliance..........................................10
Section 3.07 SEC Filings; Financial Statements............................11
Section 3.08 Undisclosed Liabilities......................................11
Section 3.09 Absence of Certain Changes or Events.........................11
Section 3.10 Absence of Litigation........................................12
Section 3.11 Employee Benefit Matters.....................................12
Section 3.12 Material Contracts...........................................13
Section 3.13 Environmental Matters........................................14
Section 3.14 Title to Properties; Absence of Liens and Encumbrances.......15
Section 3.15 Intellectual Property........................................15
Section 3.16 Taxes........................................................16
Section 3.17 Board Approval; Vote Required................................17
Section 3.18 Insurance....................................................17
Section 3.19 State Takeover Statutes; Stockholder Rights Plan.............18
Section 3.20 Labor Matters................................................18
Section 3.21 Opinion of Financial Advisor.................................18
Section 3.22 Brokers......................................................19
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57
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.01 Organization and Qualification; Subsidiaries.................19
Section 4.02 Certificate of Incorporation and By-Laws.....................19
Section 4.03 Capitalization...............................................19
Section 4.04 Authority Relative to This Agreement.........................20
Section 4.05 No Conflict; Required Filings and Consents...................21
Section 4.06 Permits; Compliance..........................................21
Section 4.07 SEC Filings; Financial Statements............................22
Section 4.08 Undisclosed Liabilities......................................23
Section 4.09 Absence of Certain Changes or Events.........................23
Section 4.10 Absence of Litigation........................................23
Section 4.11 Employee Benefit Matters.....................................23
Section 4.12 Material Contracts...........................................25
Section 4.13 Environmental Matters........................................25
Section 4.14 Title to Properties; Absence of Liens and Encumbrances.......26
Section 4.15 Intellectual Property........................................26
Section 4.16 Taxes........................................................27
Section 4.17 Board Approval; Vote Required................................28
Section 4.18 Operations of Merger Sub.....................................28
Section 4.19 Insurance....................................................28
Section 4.20 Labor Matters................................................28
Section 4.21 Opinion of Financial Advisor.................................29
Section 4.22 Brokers......................................................29
ARTICLE V CONDUCT OF BUSINESSES PENDING THE MERGER
Section 5.01 Conduct of Business by the Company Pending the Merger........29
Section 5.02 Conduct of Business by Parent Pending the Merger.............31
Section 5.03 Notification of Certain Matters..............................32
ARTICLE VI ADDITIONAL AGREEMENTS
Section 6.01 Registration Statement; Joint Proxy Statement................32
Section 6.02 Stockholders' Meetings.......................................34
Section 6.03 Access to Information; Confidentiality.......................35
Section 6.04 No Solicitation of Transactions..............................35
Section 6.05 Directors' and Officers' Indemnification and Insurance.......37
Section 6.06 Obligations of Merger Sub....................................38
Section 6.07 Affiliates...................................................38
Section 6.08 Further Action; Consents; Filings............................38
Section 6.09 Plan of Reorganization.......................................39
Section 6.10 Public Announcements.........................................40
Section 6.11 Letters of Accountants.......................................40
Section 6.12 NASDAQ.......................................................40
ii
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Section 6.13 Further Assurances...........................................40
Section 6.14 Certain Employee Benefits Matters............................40
Section 6.15 Board Appointment............................................41
ARTICLE VII CONDITIONS TO THE MERGER
Section 7.01 Conditions to the Obligations of Each Party..................41
Section 7.02 Conditions to the Obligations of Parent and Merger Sub.......42
Section 7.03 Conditions to the Obligations of the Company.................42
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
Section 8.01 Termination..................................................43
Section 8.02 Effect of Termination........................................45
Section 8.03 Amendment....................................................45
Section 8.04 Waiver.......................................................45
Section 8.05 Expenses.....................................................45
ARTICLE IX GENERAL PROVISIONS
Section 9.01 Non Survival of Representations, Warranties and Agreements...46
Section 9.02 Notices......................................................47
Section 9.03 Certain Definitions..........................................47
Section 9.04 Severability.................................................49
Section 9.05 Assignment; Binding Effect; Benefit..........................49
Section 9.06 Specific Performance.........................................50
Section 9.07 Governing Law................................................50
Section 9.08 Headings.....................................................50
Section 9.09 Counterparts.................................................50
Section 9.10 Entire Agreement.............................................50
EXHIBITS
Exhibit 6.07 Form of Affiliate Letter
iii