AGREEMENT AND PLAN OF MERGER Dated as of October 6, 2009 among VIASYSTEMS GROUP, INC., MAPLE ACQUISITION CORP. and MERIX CORPORATION
Table of Contents
EXHIBIT 2.1
AGREEMENT
AND PLAN OF MERGER
Dated as
of October 6, 2009
among
VIASYSTEMS
GROUP, INC.,
MAPLE
ACQUISITION CORP.
and
MERIX
CORPORATION
TABLE OF CONTENTS
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THE MERGER
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3
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The
Merger
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3
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Closing
|
3
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|
Effective
Time
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3
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Effects
of the Merger
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3
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Articles
of Incorporation and Bylaws of the Surviving Corporation
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3
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Directors
and Officers of the Surviving Corporation
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3
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EFFECT
OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES; COMPANY STOCK OPTIONS; OTHER EQUITY AWARDS;
ADJUSTMENTS; ASSOCIATED RIGHTS
|
4
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Effect
on Capital Stock
|
4
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|
Exchange
of Certificates
|
5
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|
Company
Stock Options; Other Equity Awards
|
8
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|
Adjustments
|
8
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|
Associated
Rights
|
9
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|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
|
9
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Organization,
Standing and Corporate Power
|
9
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Capitalization
|
10
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|
Authority;
Noncontravention; Voting Requirements
|
12
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|
Governmental
Approvals
|
13
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|
Company
SEC Documents; Undisclosed Liabilities
|
13
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|
Absence
of Certain Changes or Events
|
15
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|
Legal
Proceedings
|
15
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|||
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Compliance
with Laws; Company Permits
|
16
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|
Information
Supplied
|
16
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|||
|
Tax
Matters
|
17
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|||
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Employee
Benefits and Labor Matters
|
18
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|
Environmental
Matters
|
20
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Contracts
|
21
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|
Title to
Properties
|
23
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|||
|
Intellectual
Property
|
23
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|||
|
Insurance,
Claims and Warranties
|
27
|
|||
|
Opinion
of Financial Advisor
|
28
|
|||
|
Brokers
and Other Advisors
|
28
|
|||
|
State
Takeover Statutes
|
28
|
|||
|
Rights
Plan
|
28
|
|||
|
Interested
Party Transactions
|
28
|
|||
|
Reorganization
Treatment
|
28
|
|||
|
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
|
29
|
|||
|
Organization,
Standing and Corporate Power
|
29
|
|||
|
Capitalization
|
29
|
|||
|
Authority;
Noncontravention; Voting Requirements
|
31
|
|||
|
Governmental
Approvals
|
32
|
|||
|
Viasystems
SEC Documents; Financial Statements; Undisclosed
Liabilities
|
32
|
|||
|
Absence
of Certain Changes or Events
|
35
|
|||
|
Legal
Proceedings
|
35
|
|||
|
Compliance
With Laws; Parent Permits
|
35
|
|||
|
Information
Supplied
|
35
|
|||
|
Tax
Matters
|
36
|
|||
|
Employee
Benefits and Labor Matters
|
37
|
|||
|
Environmental
Matters
|
38
|
|||
|
Contracts
|
39
|
|||
|
Title
to Properties
|
40
|
|||
|
Intellectual
Property
|
41
|
|||
|
Insurance,
Claims and Warranties
|
43
|
|||
|
Brokers
and Other Advisors
|
44
|
|||
|
Ownership
and Operations of Merger Sub
|
44
|
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|
State
Takeover Statutes
|
44
|
|||
|
Reorganization
Treatment
|
44
|
|||
|
Interested
Party Transactions
|
44
|
|||
|
Financing
|
45
|
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|
ADDITIONAL
COVENANTS AND AGREEMENTS
|
45
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|
Preparation
of the Registration Form S-4 and the Proxy Statement; Stockholder
Meetings; Recapitalization
|
45
|
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|
Conduct
of Business
|
46
|
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|
No
Solicitation by the Company; Etc
|
53
|
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|
Reasonable
Best Efforts
|
55
|
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|
Public
Announcements
|
57
|
|||
|
Access
to Information; Confidentiality; Financing Cooperation
|
57
|
|||
|
Notification
of Certain Matters
|
58
|
|||
|
Indemnification
and Insurance
|
58
|
|||
|
Securityholder
Litigation
|
59
|
|||
|
Fees
and Expenses
|
59
|
|||
|
Company
Rights Plan
|
60
|
|||
|
Representations
Relating to Reorganization Treatment
|
60
|
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|
Rule
16b-3
|
60
|
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|
Stock
Exchange Listing
|
60
|
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|
Employee
Benefits and Compensation
|
60
|
|||
|
Employee
Stock Purchase Plan
|
60
|
|||
|
Board
Representation
|
61
|
|||
|
Financing
Arrangements
|
61
|
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|
Exchange
Agreement
|
62
|
|||
|
Company
2009 Equity Incentive Plan
|
62
|
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|
CONDITIONS
PRECEDENT
|
62
|
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|
Conditions
to Each Party’s Obligation to Effect the Merger
|
62
|
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|
Conditions
to Obligations of Parent and Merger Sub
|
63
|
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|
Conditions
to Obligation of the Company
|
63
|
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|
Frustration
of Closing Conditions
|
64
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|
TERMINATION
|
64
|
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|
Termination
|
64
|
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|
Effect
of Termination
|
66
|
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|
Termination
Fee
|
66
|
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|
MISCELLANEOUS
|
68
|
|||
|
No
Survival, Etc
|
68
|
|||
|
Amendment
or Supplement
|
68
|
|||
|
Extension
of Time, Waiver, Etc
|
69
|
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|
Assignment
|
69
|
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|
Counterparts
|
69
|
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|
Entire
Agreement; No Third-Party Beneficiaries
|
69
|
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|
Governing
Law; Jurisdiction; Waiver of Jury Trial
|
69
|
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|
Specific
Enforcement
|
70
|
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|
Notices
|
70
|
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|
Severability
|
71
|
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|
Definitions
|
71
|
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|
Interpretation
|
75
|
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INDEX
OF EXHIBITS
Exhibit Description
Exhibit
A-1 Form
of Articles of Incorporation of the Company
Exhibit
A-2 Form
of Bylaws of the Company
Exhibit
B-1 Form
of Third Amended and Restated Certificate of Incorporation of
Parent
Exhibit
B-2 Form
of Second Amended and Restated Bylaws of Parent
Exhibit
C Form
of Stockholder Agreement
AGREEMENT
AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER, dated as of October 6, 2009 (this “Agreement”), is among Viasystems Group, Inc., a
Delaware corporation (“Parent”), Maple Acquisition Corp., an Oregon corporation
and a direct, wholly owned Subsidiary of Parent (“Merger
Sub”), and Merix Corporation, an Oregon corporation (the “Company”). Certain terms used in this
Agreement are used as defined in Section 8.11.
WHEREAS,
the respective boards of directors of the Company and Merger Sub have approved
this Agreement and the merger of Merger Sub with and into the Company (the
“Merger”), on the terms and subject to the conditions
provided for in this Agreement, and declared the Merger advisable and fair to,
and in the best interests of, their respective stockholders;
WHEREAS,
Parent, as sole stockholder of Merger Sub, has adopted this Agreement and
approved the transactions contemplated hereby, including the
Merger;
WHEREAS,
simultaneously with the execution and delivery of this Agreement and as a
condition and inducement to the willingness of Parent and Merger Sub to enter
into this Agreement, (i) Parent, Merger Sub and certain holders of the
Company’s 4% Senior Subordinated Notes Due 2013 (“Company
Convertible Securities”) holding collectively $68,590,000 of the
principal amount of the Company Convertible Securities are entering into a note
exchange agreement of even date herewith (the “Note Exchange Agreement”), pursuant to
which, among other things, such holders have agreed to exchange their Company
Convertible Securities for the cash and shares of Parent Common Stock specified
therein concurrently with the Closing (the “Exchange”) and (ii) Parent, ▇▇▇▇▇ Muse, GSC
and TCW are entering into a recapitalization agreement of even date herewith
providing for implementation of the Recapitalization of Parent and the
consummation of certain related actions immediately prior to the Closing
(the “Recapitalization
Agreement”);
WHEREAS,
prior to the Closing, Parent shall effect the Recapitalization as described in
Section 5.1(c);
and
WHEREAS,
for Federal income tax purposes, it is intended that the Merger shall qualify as
a “reorganization” within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder (the “Code”), and that this Agreement constitutes a plan of
reorganization.
NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, Parent, Merger Sub and the Company hereby agree as follows:
The
Merger
SECTION 1.1. The
Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Oregon Business Corporation Act
(the “OBCA”), at the Effective Time, Merger Sub shall be merged
with and into the Company, and the separate corporate existence of Merger Sub
shall thereupon cease, and the Company shall be the surviving corporation in the
Merger (the “Surviving Corporation”).
SECTION 1.2. Closing. The
closing of the Merger (the “Closing”) shall take place at 10:00 a.m. (Dallas time)
on a date to be specified by the parties (the “Closing
Date”), which date shall be no later than the second (2nd) Business
Day after satisfaction or waiver of the conditions set forth in Article VI
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those conditions at such
time), at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, unless another time, date or place is agreed to
in writing by the parties hereto.
SECTION 1.3. Effective
Time. Subject to the provisions of this Agreement, as soon as
practicable on the Closing Date the parties shall file with the Secretary of
State of the State of Oregon the articles of merger (the “Articles of Merger”), executed in accordance
with the relevant provisions of the OBCA. The Merger shall become
effective upon the filing and the acceptance of the Articles of Merger or at
such later time as is agreed to by the parties hereto and specified in the
Articles of Merger (the time at which the Merger becomes effective is herein
referred to as the “Effective Time”).
SECTION 1.4. Effects of the
Merger. The Merger shall have the effects set forth in the
OBCA. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, 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 1.5. Articles of Incorporation
and Bylaws of the Surviving Corporation.
(a) The
articles of incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be amended in the Merger to be in the form of Exhibit A-1
hereto and, as so amended, such articles of incorporation shall be the articles
of incorporation of the Surviving Corporation until thereafter amended as
provided therein or by applicable Law.
(b) At or
prior to the Effective Time, the Company shall cause its bylaws to be amended,
as of the Effective Time, to read in their entirety as set forth in Exhibit A-2
hereto and, as so amended, such bylaws shall be the bylaws of the Surviving
Corporation until thereafter amended as provided therein or by applicable
Law.
SECTION 1.6. Directors and Officers of
the Surviving Corporation.
(a) Each of
the parties hereto shall take all necessary action to cause the directors of
Merger Sub immediately prior to the Effective Time to be the directors of the
Surviving Corporation immediately following the Effective Time, until their
respective successors are duly elected or appointed and qualified or their
earlier death, resignation or removal in accordance with the articles of
incorporation and bylaws of the Surviving Corporation.
(b) The
officers of Merger Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation until their respective successors are duly
appointed and qualified or their earlier death, resignation or removal in
accordance with the articles of incorporation and bylaws of the Surviving
Corporation.
Effect of the Merger on the
Capital Stock of the
Constituent Corporations;
Exchange of Certificates; Company Stock Options;
Other Equity Awards;
Adjustments; Associated Rights
SECTION 2.1. Effect on Capital
Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any shares of common stock, no
par value, of the Company (“Company
Common Stock”) or any shares of capital stock of Merger
Sub:
(a) Capital Stock of Merger
Sub. Each issued and outstanding share of capital stock of
Merger Sub shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock, no par value, of the Surviving Corporation
and shall constitute the only outstanding shares of capital stock of the
Surviving Corporation. From and after the Effective Time, all
certificates representing the common stock of Merger Sub shall be deemed for all
purposes to represent the number of shares of common stock of the Surviving
Corporation into which they were converted in accordance with the immediately
preceding sentence.
(b) Cancellation of Treasury
Stock and Parent-Owned Stock. Any shares of Company Common
Stock that are owned by the Company as treasury stock, and any shares of Company
Common Stock owned by Parent or Merger Sub, shall be automatically canceled and
shall cease to exist and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Company Common
Stock. Subject to Section 2.2(e),
each issued and outstanding share of Company Common Stock (other than shares to
be canceled in accordance with Section 2.1(b))
shall be converted into the right to receive the number of validly issued, fully
paid and nonassessable shares of common stock, par value $.01 per share, of
Parent (“Parent Common Stock”) that is equal to the
Exchange Ratio (the “Merger Consideration”).
As of the Effective Time, all such
shares of Company Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of a
certificate (or evidence of shares in book-entry form) which immediately prior
to the Effective Time represented any such shares of Company Common Stock (each,
a “Certificate”) shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration, any
dividends or other distributions to which such holder is entitled pursuant to
Section 2.2(c)
and cash in lieu of any fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e),
in each case to be issued or paid in consideration therefor upon surrender of
such Certificate in accordance with Section 2.2(b),
without interest.
SECTION 2.2. Exchange of
Certificates.
(a) Exchange
Agent. On or promptly following the Closing Date, Parent shall
deposit with Computershare or such bank or trust company as may be designated by
Parent (the “Exchange Agent”), for exchange in accordance with
this Article II,
through the Exchange Agent, certificates (or evidence of shares in book-entry
form) representing the shares of Parent Common Stock issuable pursuant to Section 2.1 in
exchange for outstanding shares of Company Common Stock (such shares of Parent
Common Stock, together with any dividends or other distributions with respect
thereto with a record date after the Effective Time and any cash payments in
lieu of any fractional shares of Parent Common Stock, being hereinafter referred
to as the “Exchange Fund”).
(b) Exchange
Procedures. Promptly after the Effective Time, Parent shall
cause the Exchange Agent to mail to each holder of record of a Certificate whose
shares of Company Common Stock were converted pursuant to Section 2.1(c)
into the right to receive the Merger Consideration, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which shall be in such form and shall have such other
provisions (including customary provisions with respect to delivery of an
“agent’s message” with respect to shares held in book-entry form) as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing the Merger
Consideration, any dividends or other distributions to which holders of
Certificates are entitled pursuant to Section 2.2(c)
and cash in lieu of any fractional shares of Parent Common Stock to which such
holders are entitled pursuant to Section 2.2(e). Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions (and such other customary documents as may reasonably be
required by the Exchange Agent), the holder of such Certificate shall be
entitled to receive in exchange therefor (A) a certificate (or evidence of
shares in book-entry form) representing that number of whole shares of Parent
Common Stock that such holder has the right to receive pursuant to the
provisions of this Article II after
taking into account all the shares of Company Common Stock then held by such
holder under all such Certificates so surrendered, (B) any dividends or
other distributions to which such holder is entitled pursuant to Section 2.2(c)
and (C) cash in lieu of any fractional shares of Parent Common Stock to
which such holder is entitled pursuant to Section 2.2(e),
and the Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of ownership of shares of Company Common Stock that is
not registered in the transfer records of the Company, a certificate (or
evidence of shares in book-entry form) representing the proper number of shares
of Parent Common Stock may be issued to a Person other than the Person in whose
name the Certificate so surrendered is registered, if, upon presentation to the
Exchange Agent, such Certificate shall be properly endorsed or shall otherwise
be in proper form for transfer and the Person requesting such issuance shall
have paid any transfer and other taxes required by reason of the issuance of
shares of Parent Common Stock to a Person other than the registered holder of
such Certificate or shall have established to the reasonable satisfaction of the
Surviving Corporation that such tax either has been paid or is not
applicable. Until surrendered as contemplated by this Section 2.2(b),
each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration, any dividends or
other distributions to which the holder of such Certificate is entitled pursuant
to Section 2.2(c)
and cash in lieu of any fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e),
in each case, without interest.
(c) Distributions with Respect
to Unexchanged Shares. No dividends or other distributions
with respect to Parent Common Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Common Stock that the holder thereof has the right to receive
upon the surrender thereof, and no cash payment in lieu of any fractional shares
of Parent Common Stock shall be paid to any such holder pursuant to Section 2.2(e),
in each case until the holder of such Certificate shall surrender such
Certificate in accordance with this Article II. Following
surrender of any Certificate in accordance with this Article II,
there shall be paid to the record holder thereof, without interest, (i) promptly
following the time of such surrender, the amount of cash payable in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.2(e)
and the amount of dividends or other distributions, payable with respect to that
number of whole shares of Parent Common Stock issuable in exchange for such
Certificate pursuant to this Article II, with
a record date after the Effective Time and paid with respect to Parent Common
Stock prior to such surrender, 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 such surrender and a payment date subsequent to such
surrender payable with respect to such whole shares of Parent Common
Stock.
(d) Transfer Books; No Further
Ownership Rights in Company Stock. All shares of Parent Common
Stock issued upon the surrender for exchange of Certificates in accordance with
the terms of this Article II
(including any dividends or other distributions paid pursuant to Section 2.2(c)
and cash paid in lieu of any fractional shares pursuant to Section 2.2(e))
shall be deemed to have been issued (and paid) in full satisfaction of all
rights pertaining to the shares of Company Common Stock previously represented
by such Certificates, and at the close of business on the day on which the
Effective Time occurs, the stock transfer books of the Company shall be closed
and thereafter there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Company Common
Stock that were outstanding immediately prior to the Effective
Time. From and after the Effective Time, the holders of Certificates
that evidenced ownership of shares of Company Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares, except as otherwise provided for herein or by applicable
law. Subject to the last sentence of Section 2.2(g),
if, at any time after the Effective Time, Certificates are presented to the
Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this Article II.
(e) No Fractional
Shares. No certificates or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividends or other distributions of Parent shall relate to such
fractional share interests and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a stockholder of
Parent. In lieu of such fractional share interests, Parent shall pay
to each holder of a Certificate (upon surrender thereof as provided in this
Article II) an
amount in cash equal to the product obtained by multiplying (i) the fractional
share interest to which such holder (after taking into account all shares of
Company Common Stock held at the Effective Time by such holder) would otherwise
be entitled by (ii) the Fractional Share Amount.
(f) Lost, Stolen or Destroyed
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
Parent, the posting by such Person of a bond, in such reasonable amount as
Parent 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 Merger Consideration, any
dividends or other distributions to which the holder of such Certificate would
be entitled pursuant to Section 2.2(c)
and cash in lieu of any fractional shares of Parent Common Stock to which such
holder would be entitled pursuant to Section 2.2(e),
in each case pursuant to this Agreement.
(g) Termination of
Fund. Any portion of the Exchange Fund that remains
undistributed to the holders of the Certificates for 360 days after the
Effective Time shall be delivered to Parent, upon demand, and any holders of
Certificates who have not theretofore complied with this Article II shall
thereafter look only to the Parent for payment of their claim for the Merger
Consideration, any dividends or other distributions with respect to shares of
Parent Common Stock and cash in lieu of any fractional shares of Parent Common
Stock in accordance with this Article II. If
any Certificate shall not have been surrendered immediately prior to such date
on which any Merger Consideration (and all dividends or other distributions
payable pursuant to Section 2.2(c)
and all cash payable in lieu of fractional shares pursuant to Section 2.2(e))
would otherwise escheat to or become property of any Governmental Authority, any
such Merger Consideration (and all dividends or other distributions payable
pursuant to Section 2.2(c)
and all cash payable in lieu of fractional shares pursuant to Section 2.2(e))
shall become, to the extent permitted by applicable Law, the property of Parent,
free and clear of all claims or interest of any Person previously entitled
thereto.
(h) No
Liability. Notwithstanding any provision of this Agreement to
the contrary, none of the parties hereto, the Surviving Corporation or the
Exchange Agent shall be liable to any Person in respect of any shares of Parent
Common Stock (or dividends or other distributions with respect thereto) or cash
in lieu of any fractional shares of Parent Common Stock or cash from the
Exchange Fund, in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law.
(i) Investment of Exchange
Fund. The Exchange Agent shall invest any cash included in the
Exchange Fund, as directed by Parent. Any interest and other income
resulting from such investments shall be the property of, and shall be paid to,
Parent.
(j) Withholding
Taxes. Parent and the Exchange Agent shall be entitled to
deduct and withhold from the consideration otherwise payable to a holder of
shares of Company Common Stock pursuant to this Agreement such amounts as may be
required to be deducted and withheld with respect to the making of such payment
under the Code, or under any provision of state, local or foreign
Law. To the extent amounts are so withheld, Parent and the Exchange
Agent shall be treated as though they withheld, from the type of consideration
from which withholding is required, an appropriate amount otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock in
order to provide for such withholding obligation, and such withheld amounts
shall be treated for the purposes of this Agreement as having been paid to such
former holder of the shares of Company Common Stock. If withholding
is required from shares of Parent Common Stock, Parent and the Exchange Agent
shall be treated as having sold such consideration for an amount of cash equal
to the fair market value of such consideration at the time of such deemed sale
and paid such cash proceeds to the appropriate taxing authority.
SECTION 2.3. Company Stock Options; Other
Equity Awards.
(a) During
the thirty (30) day period prior to the Closing, each holder of outstanding
options to purchase shares of Company Common Stock granted under the Company
Stock Plans (“Company Stock Options”), whether or not then
vested or exercisable by its terms, shall have the opportunity to exercise his
or her Company Stock Options upon payment of the exercise price in accordance
with the terms of the applicable Company Stock Plan, or, at the option of the
Company, on a net “cashless exercise” basis upon delivery to the Company of an
exercise agreement in a form mutually acceptable to Parent and the Company;
provided, however, that in
accordance with the consent (the “Director Consents”) signed by each director of
the Company on or prior the date hereof, the Company Stock Options identified in
Section 2.3(a)
of the Company Disclosure Schedule shall not be exercisable. Except
for vested Company Stock Options being exercised in accordance with the terms of
the applicable Company Stock Plan, such Company Stock Option exercises shall be
deemed effective as of, and conditioned upon, the occurrence of the
Closing. All written communications distributed generally to
employees by or on behalf of the Company regarding such exercises will be
mutually acceptable to Parent and the Company. Each outstanding
Company Stock Option which is not exercised prior to the Closing in accordance
with this Section 2.3
shall be cancelled upon the occurrence of the Closing and no consideration shall
be paid therefor.
(b) Each
restricted stock unit or share of restricted stock granted under the Company
Stock Plans that is outstanding immediately prior to the Closing shall
automatically vest and be settled in Company Common Stock effective as of, and
conditioned upon, the occurrence of the Closing and converted in accordance with
Section 2.1(c);
provided, however, that in
accordance with the Director Consents signed by each director of the Company on
or prior the date hereof, the restricted stock awards identified in Section 2.3(a)
of the Company Disclosure Schedule shall not automatically vest.
(c) Effective
on the Closing each of the Company Stock Plans shall be terminated in accordance
with their respective terms.
(d) In
connection with the termination of the Company Stock Plans, following the
Effective Time, no holder of Company Stock Options or any participant in or
beneficiary of the Company Stock Plans, will have any right to acquire or
receive any equity securities of the Surviving Corporation or any Subsidiary
thereof or any consideration other than as contemplated pursuant to this Section 2.3.
SECTION 2.4. Adjustments. Notwithstanding
any provision of this Article II to
the contrary (but without in any way limiting the covenants in Section 5.2(a)
hereof), if between the date of this Agreement and the Effective Time the
outstanding shares of Company Common Stock or Parent Common Stock shall have
been changed into a different number of shares or a different class by reason of
the occurrence or record date of any stock dividend, subdivision,
reclassification, recapitalization, split, combination, exchange of shares or
similar transaction, the Exchange Ratio shall be appropriately adjusted to
reflect such stock dividend, subdivision, reclassification, recapitalization,
split, combination, exchange of shares or similar transaction; provided, however, that the
Exchange Ratio shall not be adjusted as a result of the
Recapitalization.
SECTION 2.5. Associated
Rights. References in this Agreement to Company Common Stock
shall include, unless the context requires otherwise, the Company Rights issued
pursuant to the Company Rights Agreement.
Representations and
Warranties of the Company
The
Company represents and warrants to Parent and Merger Sub that except as set
forth in the disclosure schedule (with specific reference to the Section or
subsection of this Agreement to which the information stated in such disclosure
schedule relates) delivered by the Company to Parent simultaneously with the
execution of this Agreement (the “Company Disclosure Schedule”):
SECTION 3.1. Organization, Standing and
Corporate Power.
(a) Each of
the Company and its Subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which it is incorporated or organized and has all requisite
corporate power and authority necessary to own or lease all of its properties
and assets and to carry on its business as it is now being conducted and as
currently proposed by its management to be conducted. Each of the
Company and its Subsidiaries is duly licensed or qualified to do business and is
in good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary, except where
the failure to be so licensed, qualified or in good standing, individually or in
the aggregate, has not had and would not reasonably be expected to have a
Material Adverse Effect (as defined below) on the Company (“Company Material Adverse Effect”). For
purposes of this Agreement, “Material Adverse Effect” means, with
respect to any Person, a material adverse effect on the condition (financial or
otherwise), business, assets, liabilities or results of operations of such
Person and its Subsidiaries, taken as a whole; provided, however, that none of
the following shall be deemed by itself or by themselves, either alone or in
combination, to constitute a Material Adverse Effect on such Person: (i) any
change in the market price or trading volume of the securities of such Person
(it being understood and agreed that the facts and circumstances giving rise to
such change that are not otherwise excluded from the definition of Material
Adverse Effect may be taken into account in determining whether there has been a
Material Adverse Effect); (ii) with respect to any Person, any adverse effect
resulting from or arising out of the execution, delivery, announcement or
performance of its obligations under this Agreement or the announcement,
pendency or anticipated consummation of the Merger; (iii) any change arising out
of conditions affecting the economy or the capital markets or the industry of
such Person in general which does not affect such Person in a disproportionate
manner relative to other participants in the economy, capital markets or such
industry, respectively; (iv) (A) any loss of or adverse impact on relationship
with employees, customers, suppliers or distributors, (B) any delays in or
cancellations of orders for the products or services of such Person and (C) any
reduction in revenues, in each case to the extent attributable to the
announcement or pendency of the Merger; (v) failure to meet revenue or earnings
projections, in and of itself, for any period ending (or for which earnings are
released) on or after the date hereof (it being understood and agreed that the
facts and circumstances giving rise to such change that are not otherwise
excluded from the definition of Material Adverse Effect may be taken into
account in determining whether there has been a Material Adverse Effect); (vi)
any change resulting from changes in (A) applicable Law or (B) GAAP or formal
pronouncements by standards bodies related thereto; (vii) acts of war or
terrorism; (viii) earthquakes, hurricanes, tornadoes or other natural disasters;
or (ix) stockholder class action or derivative litigation arising from
allegations of breach of fiduciary duty relating to this Agreement or false or
misleading public disclosure (or omission) in connection with this
Agreement.
(b) Section 3.1(b)
of the Company Disclosure Schedule lists all Subsidiaries of the Company
together with the jurisdiction of organization of each such
Subsidiary. All the outstanding shares of capital stock of, or other
equity interests in, each Subsidiary of the Company have been duly authorized
and validly issued and are fully paid and nonassessable and are owned directly
or indirectly by the Company free and clear of all liens, pledges, charges,
mortgages, encumbrances, adverse rights or claims and security interests of any
kind or nature whatsoever (including any restriction on the right to vote or
transfer the same, except for such transfer restrictions of general
applicability as may be provided under the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder (the “Securities Act”), and the “blue sky” laws of the
various States of the United States) (collectively, “Liens”). The Company does not own, directly or
indirectly, any capital stock, voting securities or equity interests in any
Person.
(c) The
Company has delivered to Parent correct and complete copies of its articles of
incorporation and bylaws, in each case as amended to the date of this Agreement
(the “Company Charter Documents”). The
Company Charter Documents and the articles of incorporation and bylaws (or
comparable organizational documents) of each of its Subsidiaries
(the “Company Subsidiary Documents”) are in full force
and effect and neither the Company nor any of its Subsidiaries is in violation
of any of their respective provisions. The Company has made available
to Parent and its representatives correct and complete copies of the minutes
(or, in the case of minutes that have not yet been finalized, drafts thereof) of
all meetings of stockholders, the board of directors and each committee of the
board of directors of the Company held since January 1, 2005.
SECTION 3.2. Capitalization.
(a) The
authorized capital stock of the Company consists of 50,000,000 shares of Company
Common Stock and 10,000,000 shares of preferred stock, no par value (“Company
Preferred Stock”), 500,000 shares of which have been designated as
the “Series A Preferred Stock,” all of which have been reserved for issuance
upon exercise of the Company Rights issuance pursuant to the Company Rights
Agreement. At the close of business on October 5, 2009, (i)
21,628,104 shares of Company Common Stock were issued and outstanding, (ii) no
shares of Company Common Stock were held by the Company in its treasury, (iii)
8,325,000 shares of Company Common Stock were reserved for issuance under the
Company Stock Plans (of which 4,153,957 shares of Company Common Stock were
subject to outstanding Company Stock Options granted under the Company Stock
Plans and 252,262 shares of Company Common Stock were subject to unvested
restricted stock awards), (iv) no shares of Company Preferred Stock were issued
or outstanding, (v) 71 shares of Company Common Stock were available for
purchase pursuant to the Company Stock Plans and the 2007 Employee Stock
Purchase Plan (the “Employee Stock Purchase Plan”) and (vi)
4,608,296 shares of Company Common Stock were reserved for issuance upon
conversion of the Company Convertible Securities. All outstanding
shares of Company Common Stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights. Included
in Section 3.2(a)
of the Company Disclosure Schedule is a correct and complete list, as of October
5, 2009, of all outstanding options or other rights to purchase or receive
shares of Company Common Stock granted under the Company Stock Plans or
otherwise, and, for each such option or other right, the number of shares of
Company Common Stock subject thereto, the terms of vesting, the grant and
expiration dates and exercise price thereof and the name of the holder
thereof. All Company Stock Options have an exercise price equal to no
less than the fair market value of the underlying shares of Company Common Stock
on the date of grant. Since January 1, 2009, the Company has not
issued any shares of its capital stock, voting securities or equity interests,
or any securities convertible into or exchangeable or exercisable for any shares
of its capital stock, voting securities or equity interests, other than pursuant
to the Company Stock Options, restricted stock awards granted under the Company
Stock Plans, shares of Company Common Stock issued pursuant to the Employee
Stock Purchase Plan and the Company Convertible Securities, in each case,
referred to above in this Section 3.2(a). Except
(A) as set forth above in this Section 3.2(a)
or (B) as otherwise expressly permitted by Section 5.2(a),
as of the date of this Agreement there are not, and as of the Effective Time
there will not be, any shares of capital stock, voting securities or equity
interests of the Company issued and outstanding or any subscriptions, options,
warrants, calls, convertible or exchangeable securities, rights, commitments or
agreements of any character providing for the issuance of any shares of capital
stock, voting securities or equity interests of the Company, including any
representing the right to purchase or otherwise receive any Company Common
Stock. No share of Company Common Stock is owned by any Subsidiary of
the Company.
(b) None of
the Company’s Subsidiaries has issued or is bound by any outstanding
subscriptions, options, warrants, calls, convertible or exchangeable securities,
rights, commitments or agreements of any character providing for the issuance or
disposition of any shares of capital stock, voting securities or equity
interests of any Subsidiary of the Company. There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire any shares of
capital stock, voting securities or equity interests) of the Company or any of
its Subsidiaries.
SECTION 3.3. Authority; Noncontravention;
Voting Requirements.
(a) The
Company has all necessary corporate power and authority to execute and deliver
this Agreement and, subject to obtaining the Company Stockholder Approval, to
perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by the Company
of this Agreement, and the consummation by it of the Transactions, have been
duly authorized and approved by its board of directors, and except for obtaining
the Company Stockholder Approval for the adoption of this Agreement, no other
corporate action on the part of the Company is necessary to authorize the
execution, delivery and performance by the Company of this Agreement and the
consummation by it of the Transactions. This Agreement has been duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general application affecting or relating to the
enforcement of creditors’ rights generally and (ii) is subject to general
principles of equity, whether considered in a proceeding at law or in equity
(the “Bankruptcy and Equity
Exception”).
(b) The
Company’s board of directors, at a meeting duly called and held, has unanimously
(i) determined that this Agreement and the Transactions are in the best
interests of the Company in accordance with Oregon Revised Statutes §60.357(5),
(ii) approved, adopted and declared advisable this Agreement and the
Transactions, including the Merger, and (ii) resolved (subject to Section 5.3) to
recommend that stockholders of the Company adopt this Agreement.
(c) None of
the execution and delivery of this Agreement by the Company, the consummation by
the Company of the Transactions, or compliance by the Company with any of the
terms or provisions hereof, will (i) conflict with or violate any provision
of the Company Charter Documents or any of the Company Subsidiary Documents or
(ii) assuming that the authorizations, consents and approvals referred to
in Section 3.4 and
the Company Stockholder Approval are obtained and the filings referred to in
Section 3.4 are
made, (A) violate any Law, judgment, writ or injunction of any Governmental
Authority applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, or (B) violate, conflict with, result in
the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any Lien upon any of
the respective properties or assets of, the Company or any of its Subsidiaries
under, any of the terms, conditions or provisions of any loan or credit
agreement, debenture, note, bond, mortgage, indenture, deed of trust, license,
lease, contract or other agreement, instrument or obligation (each, a “Contract”) or Company Permit to which the Company or
any of its Subsidiaries is a party, or by which they or any of their respective
properties or assets may be bound or affected except, in the case of clause (B),
for such violations, conflicts, losses, defaults, terminations, cancellations,
accelerations or Liens as, individually or in the aggregate, would not
reasonably be expected to be material to the Company and its Subsidiaries, taken
as a whole.
(d) The
affirmative vote (in person or by proxy) of the holders of a majority of the
outstanding shares of Company Common Stock at the Company Stockholders Meeting
or any adjournment or postponement thereof in favor of the adoption of this
Agreement (the “Company Stockholder Approval”) is the only vote
or approval of the holders of any class or series of capital stock of the
Company or any of its Subsidiaries that is necessary to adopt this Agreement and
approve the Transactions.
SECTION 3.4. Governmental
Approvals. Except for (a) the filing with the SEC of a proxy
statement relating to the Company Stockholders Meeting (as amended or
supplemented from time to time, the “Proxy
Statement”), and other filings required under, and compliance with
other applicable requirements of, the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the “Exchange
Act”), and the rules of Nasdaq, (b) the filing of the Articles of
Merger with the Secretary of State of the State of Oregon pursuant to the OBCA,
(c) filings required under, and compliance with other applicable requirements
of, the HSR Act and (d) filings required under, and compliance with other
applicable requirements of, non-U.S. Laws intended to prohibit, restrict or
regulate actions or transactions having the purpose or effect of monopolization,
restraint of trade, harm to competition or effectuating foreign investment
(collectively, “Foreign Antitrust Laws”), no consents or
approvals of, or filings, declarations or registrations with, any Governmental
Authority are necessary for the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
Transactions, other than such other consents, approvals, filings, declarations
or registrations that, if not obtained, made or given, would not, individually
or in the aggregate, reasonably be expected to impair in any material respect
the ability of the Company to perform its obligations hereunder, or prevent or
materially impede, interfere with, hinder or delay the consummation of the
Transactions. Section 3.4 of
the Company Disclosure Schedule lists all material consents or approvals of, or
filings, declarations or registrations with, any Governmental Authority under
Foreign Antitrust Laws that are necessary for the consummation by the Company of
the Transactions.
SECTION 3.5. Company SEC Documents;
Undisclosed Liabilities.
(a) The
Company has filed and furnished all required reports, schedules, forms,
certifications, prospectuses, and registration, proxy and other statements with
the SEC since January 1, 2006 (collectively and together with all documents
filed on a voluntary basis on Form 8-K, and in each case including all exhibits
and schedules thereto and documents incorporated by reference therein,
the “Company SEC Documents”). None of the
Company’s Subsidiaries is required to file periodic reports with the SEC
pursuant to the Exchange Act. As of their respective effective dates
(in the case of Company SEC Documents that are registration statements filed
pursuant to the requirements of the Securities Act) and as of their respective
SEC filing dates (in the case of all other Company SEC Documents), the Company
SEC Documents complied in all material respects with the requirements of the
Exchange Act, the Securities Act and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
(the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), as the case may be,
applicable to such Company SEC Documents, and none of the Company SEC Documents
as of such respective dates contained any untrue statement of a material fact or
omitted to state a 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. As of the date of this Agreement,
there are no outstanding or unresolved comments received from the SEC staff with
respect to the Company SEC Documents. To the Knowledge of the Company, none of the Company SEC Documents
is the subject of ongoing SEC review or investigation.
(b) The
consolidated financial statements of the Company included in the Company SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of
unaudited quarterly statements, as indicated in the notes thereto) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments, none of which has been or will
be, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole).
(c) The
Company has established and maintains internal control over financial reporting
and disclosure controls and procedures (as such terms are defined in Rule 13a-15
and Rule 15d-15 under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to the Company,
including its consolidated Subsidiaries, required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is accumulated
and communicated to the Company’s principal executive officer and its principal
financial officer to allow timely decisions regarding required disclosure; and
such disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms. The Company’s
principal executive officer and its principal financial officer have disclosed,
based on their most recent evaluation, to the Company’s auditors and the audit
committee of the board of directors of the Company (i) all significant
deficiencies in the design or operation of internal controls that could
adversely affect the Company’s ability to record, process, summarize and report
financial data and have identified for the Company’s auditors any material
weaknesses in internal controls and (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company’s internal controls. The principal executive officer and the
principal financial officer of the Company have made all certifications required
by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, the Exchange Act and any related rules and
regulations promulgated by the SEC with respect to the Company SEC Documents,
and the statements contained in such certifications are complete and
correct. To the Knowledge of the Company, there are no facts or
circumstances that would prevent its chief executive officer and chief financial
officer from giving the certifications and attestations required pursuant to the
rules and regulations adopted pursuant to Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act, without qualification, when next due.
(d) The
Company is in compliance in all material respects with the provisions of
Section 13(b) of the Exchange Act. Neither the Company nor any
of its Subsidiaries nor, to the Knowledge of the Company, any director, officer,
agent, employee or other Person acting on behalf of the Company or any of its
Subsidiaries, has, in any material respect, (i) used any corporate or other
funds for unlawful contributions, payments, gifts, or entertainment, or made any
unlawful expenditures relating to political activity to government officials or
others or established or maintained any unlawful or unrecorded funds in
violation of Section 30A of the Exchange Act or (ii) accepted or received
any unlawful contributions, payments, gifts or expenditures.
(e) Neither
the Company nor any of its Subsidiaries has any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise, whether known or
unknown) whether or not required, if known, to be reflected or reserved against
on a consolidated balance sheet of the Company prepared in accordance with GAAP
or the notes thereto, except liabilities (i) as and to the extent reflected or
reserved against on the audited balance sheet of the Company and its
Subsidiaries as of May 31, 2009 (the “Company
Balance Sheet Date”) (including the notes thereto) included in the
Company SEC Documents filed by the Company and publicly available prior to the
date of this Agreement (the “Filed Company SEC Documents”) or (ii) incurred
after the Company Balance Sheet Date in the ordinary course of business
consistent with past practice that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Company Material Adverse
Effect.
(f) Neither
the Company nor any of its Subsidiaries is a party to, or has any commitment to
become a party to, any joint venture, off-balance sheet partnership or any
similar Contract (including any Contract or arrangement relating to any
transaction or relationship between or among the Company and any of its
Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any
structured finance, special purpose or limited purpose entity or Person, on the
other hand, or any “off-balance sheet arrangements” (as defined in
Item 303(a) of Regulation S-K under the Exchange Act)), where the result,
purpose or effect of such Contract is to avoid disclosure of any material
transaction involving, or material liabilities of, the Company or any of its
Subsidiaries in the Company’s or such Subsidiary’s published financial
statements or any Company SEC Documents.
SECTION 3.6. Absence of Certain Changes
or Events. Since the Company Balance Sheet Date there have not
been any events, changes, occurrences or state of facts that, individually or in
the aggregate, have had or would reasonably be expected to have a Company
Material Adverse Effect. Except as disclosed in the Filed Company SEC
Documents, since the Company Balance Sheet Date (a) the Company and its
Subsidiaries have carried on and operated their respective businesses in all
material respects in the ordinary course of business consistent with past
practice and (b) neither the Company nor any of its Subsidiaries has taken any
action described in Section 5.2(a) hereof
that if taken after the date hereof and prior to the Effective Time without the
prior written consent of Parent would violate such provision. Without
limiting the foregoing, except as disclosed in the Filed Company SEC Documents,
since the Company Balance Sheet Date there has not occurred any damage,
destruction or loss (whether or not covered by insurance) of any material asset
of the Company or any of its Subsidiaries which materially affects the use
thereof.
SECTION 3.7. Legal
Proceedings. Except as disclosed in the Filed Company SEC
Documents, there is no pending or, to the Knowledge of the Company, threatened,
material legal, administrative, arbitral or other proceeding, claim, suit or
action against, or governmental or regulatory investigation of, the Company or
any of its Subsidiaries, nor is there any injunction, order, judgment, ruling or
decree imposed (or, to the Knowledge of the Company, threatened to be imposed)
upon the Company, any of its Subsidiaries or the assets of the Company or any of
its Subsidiaries, by or before any Governmental Authority.
SECTION 3.8. Compliance with Laws;
Company Permits. The Company and its Subsidiaries are in
compliance in all material respects with all laws, statutes, ordinances, codes,
rules, regulations, decrees and orders of Governmental Authorities
(collectively, “Laws”) applicable to the Company or any of its
Subsidiaries, any of their properties or other assets or any of their businesses
or operations. The Company and each of its Subsidiaries hold all
material licenses, franchises, permits, certificates, approvals and
authorizations from Governmental Authorities, or required by Governmental
Authorities to be obtained, in each case necessary for the lawful conduct of
their respective businesses (collectively, “Company Permits”). The Company and its
Subsidiaries are in compliance in all material respects with the terms of all
Company Permits. Since January 1, 2007, neither the Company nor
any of its Subsidiaries has received written notice to the effect that a
Governmental Authority (a) claimed or alleged that the Company or any of
its Subsidiaries was not in compliance with all Laws applicable to the Company
or any of its Subsidiaries, any of their properties or other assets or any of
their businesses or operations or (b) was considering the amendment,
termination, revocation or cancellation of any Company Permit. The
consummation of the Merger, in and of itself, will not cause the revocation or
cancellation of any Company Permit.
SECTION 3.9. Information
Supplied. Subject to the accuracy of the representations and
warranties of Parent and Merger Sub set forth in Section 4.9,
none of the information supplied (or to be supplied) in writing by or on behalf
of the Company specifically for inclusion or incorporation by reference in (a)
the registration statement on Form S-4 to be filed with the SEC by Parent in
connection with the issuance of shares of Parent Common Stock in the Merger as
described in Section
5.1(a) (as amended or supplemented from time to time, the “Registration Form S-4”) will, at the time
the Registration Form S-4 or any amendments or supplements thereto, are filed
with the SEC or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not
misleading, (b) the Proxy Statement will, on the date it is first mailed to
stockholders of the Company, and at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading and (c) any registration statement to be filed with the SEC by Parent
in connection with the terms of the Note Exchange Agreement will, at the time
such registration statement, or any amendments or supplements thereto, are filed
with the SEC or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all
material respects with the applicable requirements of the Exchange
Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to information supplied by or on behalf
of Parent or Merger Sub for inclusion or incorporation by reference in any of
the foregoing documents.
SECTION 3.10. Tax
Matters.
(a) Each of
the Company and its Subsidiaries has timely filed, or has caused to be timely
filed on its behalf (taking into account any extension of time within which to
file), all federal Tax Returns and all material state, local and foreign Tax
Returns required to be filed by it, and all such filed Tax Returns are correct
and complete in all material respects. All Taxes shown to be due on
such Tax Returns, or otherwise required to be paid by the Company or any of its
Subsidiaries, have been timely paid.
(b) The most
recent financial statements contained in the Filed Company SEC Documents reflect
an adequate reserve for all Taxes payable by the Company and its Subsidiaries
for all taxable periods and portion thereof through the date of such financial
statements. No deficiency with respect to Taxes has been proposed,
asserted or assessed (in any of the cases in writing) against the Company or any
of its Subsidiaries.
(c) The
Federal income Tax Returns of the Company and each of its Subsidiaries have been
examined by and settled with the Internal Revenue Service (the “IRS”)
(or the applicable statute of limitations has expired) for all years through May
31, 2005. All assessments for Taxes due with respect to such
completed and settled examinations or any concluded litigation have been fully
paid.
(d) Neither
the Company nor any of its Subsidiaries has constituted either a “distributing
corporation” or a “controlled corporation” (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
tax-free treatment under Section 355 of the Code occurring after
1996.
(e) No audit
or other administrative or court proceeding is pending with any Governmental
Authority with respect to Taxes of the Company or any of its Subsidiaries and no
written notice thereof has been received.
(f) Neither
the Company nor any of its Subsidiaries is a party to any contract, agreement,
plan or other arrangement that, individually or collectively, as a result of the
transactions contemplated herein, would give rise to the payment of any amount
which (i) would not be deductible by reason of Section 162(m), (ii) would
result in the payment of an “excess parachute payment” under Section 280G
of the Code or (iii) would be subject to withholding under Section 4999 of
the Code.
(g) The
Company has made available to Parent correct and complete copies of (i) all
material income and franchise Tax Returns of the Company and its Subsidiaries
for the preceding three taxable years and (ii) any audit report issued
within the last three years (or otherwise with respect to any audit or
proceeding in progress) relating to income and franchise Taxes of the Company or
any of its Subsidiaries.
(h) The
Company is not and has not been a “United States real property holding
corporation” within the meaning of Section 897 of the Code during the
five-year period ending on the Closing Date.
(i) For
purposes of this Agreement: (i) “Taxes” means (A) all federal, state, local or foreign
taxes, charges, fees, imposts, levies or other assessments, including all net
income, gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, (B) all interest, penalties, fines, additions to tax
or additional amounts imposed by any Governmental Authority in connection with
any item described in clause (A), and (C) any liability in respect of any
items described in clauses (A) and/or (B) payable by reason of contract,
assumption, transferee liability, successor liability, operation of Law,
Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor
thereof of any analogous or similar provision under Law) or otherwise, and (ii)
“Tax Returns” means any return, report, claim for
refund, estimate, information return or statement or other similar document
relating to or required to be filed with any Governmental Authority with respect
to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
SECTION 3.11. Employee Benefits and Labor
Matters.
(a) Section 3.11(a)
of the Company Disclosure Schedule sets forth a correct and complete list of all
“employee benefit plans” (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)), all other employee benefit plans, policies,
agreements, arrangements, payroll practices, including employment, consulting or
other compensation agreements, or bonus or other incentive compensation, stock
purchase, equity or equity-based compensation, deferred compensation, change in
control, severance, sick leave, vacation, loans, salary continuation, health,
life insurance and educational assistance plan, policies, agreements or
arrangements with respect to which the Company or any of its Subsidiaries has
any material obligation or liability, contingent or otherwise, for current or
former employees, consultants or directors of the Company or any of its
Subsidiaries (collectively, the “Company
Plans”). Neither the Company nor any of its affiliates and
any trade or business (whether or not incorporated) which is or has ever been
under common control, or which is or has ever been treated as a single employer
with any of them under Section 414(b), (c), (m) or (o) of the Code (“ERISA
Affiliate”) has at any time contributed or has been obligated to
contribute to any pension plan subject to Title IV of ERISA or
Section 412 of the Code, including any “multiemployer plan” as defined in
Section 3(37) of ERISA (a “Multiemployer Plan” ). Neither the
Company nor any ERISA Affiliate has, has had, or could reasonably be expected to
have any liability, contingent or otherwise, to the Pension Benefit Guaranty
Corporation (“PBGC” ).
(b) Correct
and complete copies of the following documents with respect to each of the
Company Plans (other than a Multiemployer Plan) have been delivered to Parent by
the Company to the extent applicable: (i) any plans and related trust
documents, insurance contracts or other funding arrangements, and all amendments
thereto; (ii) the most recent Forms 5500 and all schedules thereto, (iii) the
most recent actuarial report, if any; (iv) the most recent IRS determination
letter; (v) the most recent summary plan descriptions; and (vi) written
summaries of all non-written Company Plans.
(c) The
Company Plans have been maintained in accordance with their terms and with all
applicable provisions of ERISA, the Code and other Laws, except as would not
have a Company Material Adverse Effect. The Company Plans intended to
qualify under Section 401 of the Code have received a favorable
determination or opinion letter from the IRS as to their qualified status (and
any trusts intended to be exempt from federal income taxation under the Code are
so exempt). Nothing has occurred with respect to the operation of the
Company Plans that could reasonably be expected to cause the loss of such
qualification or exemption, or the imposition of any liability, penalty or tax
under ERISA or the Code, except as would not have a Company Material Adverse
Effect.
(d) There are
no pending actions, claims or lawsuits arising from or relating to the Company
Plans, (other than routine benefit claims), nor does the Company have any
Knowledge of facts that could form the basis for any such material claim or
lawsuit.
(e) None of
the Company Plans provide for post-employment life or health coverage for any
participant or any beneficiary of a participant, except as may be required under
Part 6 of the Subtitle B of Title I of ERISA and at the expense of the
participant or the participant’s beneficiary.
(f) Neither
the execution and delivery of this Agreement nor the consummation of the
Transactions will (i) result in any payment becoming due to any employee,
(ii) increase any benefits otherwise payable under any Company Plan,
(iii) result in the acceleration of the time of payment, funding or vesting
of any such benefits under any such plan or (iv) require any contributions
or payments to fund any obligations under any Company Plan.
(g) The
Company is in compliance with Section 409A of the Code and the rules and
regulations promulgated thereunder, except as would not have a Company Material
Adverse Effect. All Company Options have been granted with an
exercise price of no less than fair market value on the applicable date of
grant, except as would not have a Company Material Adverse Effect.
(h) Any
individual who performs services for the Company or any of its Subsidiaries
(other than through a contract with an organization other than such individual)
and who is not treated as an employee of the Company or any of its Subsidiaries
for federal income tax purposes by the Company is not an employee for such
purposes, except as would not have a Company Material Adverse
Effect.
(i) None of
the employees of the Company or its Subsidiaries is represented in his or her
capacity as an employee of the Company or any of its Subsidiaries by any labor
organization. Neither the Company nor any of its Subsidiaries has
recognized any labor organization, nor has any labor organization been elected
as the collective bargaining agent of any employees, nor has the Company or any
of its Subsidiaries entered into any collective bargaining agreement or union
contract recognizing any labor organization as the bargaining agent of any
employees. There is no union organization activity involving any of
the employees of the Company or any of its Subsidiaries pending or, to the
Knowledge of the Company, threatened, nor has there ever been union
representation involving any of the employees of the Company or any of its
Subsidiaries. There is no picketing pending or, to the Knowledge of
the Company, threatened, and there are no strikes, slowdowns, work stoppages,
other job actions, lockouts, arbitrations, grievances or other labor disputes
involving any of the employees of the Company or any of its Subsidiaries pending
or, to the Knowledge of the Company, threatened. There are no
material complaints, charges or claims against the Company or any of its
Subsidiaries pending or, to the Knowledge of the Company, threatened that could
reasonably be expected to be brought or filed with any Governmental Authority or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment or failure to employ by the
Company or any of its Subsidiaries, of any individual. The Company
and its Subsidiaries are in compliance with all Laws relating to the employment
of labor, including all such Laws relating to wages, hours, the Worker
Adjustment and Retraining Notification Act and any similar state or local “mass
layoff” or “plant closing” law (“WARN”), collective bargaining, discrimination, civil
rights, safety and health, workers’ compensation and the collection and payment
of withholding and/or social security taxes and any similar tax, except as would
not have a Company Material Adverse Effect. There has been no “mass
layoff” or “plant closing” (as defined by WARN) with respect to the Company or
any of its Subsidiaries since November 1, 2008.
(j) Except
for the amounts and vesting schedule of each equity award and the Company Stock
Plan under which such award was granted, the documentation relating to equity
awards granted on August 7, 2009 and set forth in Section 3.11(j)(1) of
the Company Disclosure Schedule is the same form as the documentation provided
to each executive officer and director of the Company who received equity awards
on August 7, 2009, and the documentation relating to equity awards granted on
August 7, 2009 and set forth in Section 3.11(j)(2) of
the Company Disclosure Schedule is in the same form as the documentation
provided to each non-executive employee of the Company who received such equity
awards on August 7, 2009.
SECTION 3.12. Environmental
Matters.
(a) Except
for those matters that have not resulted and would not reasonably be expected to
have a Company Material Adverse Effect, (A) each of the Company and its
Subsidiaries is, and has been, in compliance with all applicable Environmental
Laws, (B) there is no suit, claim, action or proceeding relating to or
arising under Environmental Laws that is pending or, to the Knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any real property currently or, to the Knowledge of the Company, formerly
owned, operated or leased by the Company or any of its Subsidiaries, (C) to
the Knowledge of the Company, there are no pending or threatened investigations
of the Company or any of its Subsidiaries or any property currently or formerly
owned, operated or leased by the Company or any of its Subsidiaries which would
reasonably be expected to result in the Company and its Subsidiaries incurring
Environmental Liabilities, (D) to the Knowledge of the Company, no facts,
circumstances or conditions exist with respect to the Company or any of its
Subsidiaries or any property currently (or, to the Knowledge of the Company,
formerly) owned, operated or leased by the Company or any of its Subsidiaries or
any property to or at which the Company or any of its Subsidiaries transported
or arranged for the disposal or treatment of Hazardous Materials that would
reasonably be expected to result in the Company and its Subsidiaries incurring
Environmental Liabilities, and (E) to the Knowledge of the Company, the
Company has made available to Parent copies of all environmental reports,
assessments, reviews and investigations and all written information pertaining
to known or anticipated Environmental Liabilities relating to the Company or its
Subsidiaries.
(b) For
purposes of this Agreement:
(i) “Environmental Laws” means all Laws relating in any
way to the protection of the environment or natural resources or the presence,
management or Release of, or exposure to, Hazardous Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 5101
et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean
Air Act (42 U.S.C. § 7401 et seq.), the Safe
Drinking Water Act (42 U.S.C. § 300f et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), and the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.), each of
their state and local counterparts or equivalents, each of their foreign and
international equivalents, and any transfer of ownership notification or
approval statute (including the Industrial Site Recovery Act (N.J.
Stat. ▇▇▇. § 13:1K-6 et seq.), as each has
been amended and the regulations promulgated pursuant thereto.
(ii) “Environmental Liabilities” means, with respect to any
Person, all liabilities, obligations, responsibilities, remedial actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of
counsel, experts and consultants and costs of investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of any
claim or demand by any other Person or in response to any violation of
Environmental Law, whether known or unknown, accrued or contingent, whether
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute, to the extent based upon, related to, or arising under or
pursuant to any Environmental Law, environmental permit, order or agreement with
any Governmental Authority or other Person, which relates to any environmental
condition, violation of Environmental Law or a Release or threatened Release of
Hazardous Materials.
(iii) “Hazardous Materials” means any material,
substance or waste that is regulated, classified, or otherwise characterized
under or pursuant to any Environmental Law as “hazardous”, “toxic”, a
“pollutant”, a “contaminant”, “radioactive” or words of similar meaning or
effect, including petroleum and its by-products, asbestos, polychlorinated
biphenyls, radon, mold, urea formaldehyde insulation, chlorofluorocarbons and
all other ozone-depleting substances.
(iv) “Release” means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing of or migrating into or through the environment or any natural or
man-made structure.
SECTION 3.13. Contracts.
(a) Set forth
in Section 3.13(a)
of the Company Disclosure Schedule is a list of (i) each Contract that
would be required to be filed as an exhibit to a Registration Statement on Form
S-1 under the Securities Act or an Annual Report on Form 10-K under the Exchange
Act if such registration statement or report was filed by the Company with the
SEC on the date hereof, and (ii) each of the following to which the Company
or any of its Subsidiaries is a party: (A) Contract that
purports to limit, curtail or restrict the ability of the Company or any of its
existing or future Subsidiaries or Affiliates to compete in any geographic area
or line of business or restrict the Persons to whom the Company or any of its
existing or future Subsidiaries or Affiliates may sell products or deliver
services, (B) partnership or joint venture agreement, (C) Contract for
the acquisition, sale or lease of material properties or assets (by merger,
purchase or sale of stock or assets or otherwise) entered into since
January 1, 2006, (D) Contract with any (x) Governmental Authority
or (y) director or officer of the Company or any of its Subsidiaries or any
Affiliate of the Company, (E) loan or credit agreement, mortgage,
indenture, note or other Contract or instrument evidencing indebtedness for
borrowed money by the Company or any of its Subsidiaries or any Contract or
instrument pursuant to which indebtedness for borrowed money may be incurred or
is guaranteed by the Company or any of its Subsidiaries, (F) financial
derivatives master agreement or confirmation, or futures account opening
agreements and/or brokerage statements, evidencing financial hedging or similar
trading activities, (G) voting agreement or registration rights agreement,
(H) mortgage, pledge, security agreement, deed of trust or other Contract
granting a Lien on any material property or assets of the Company or any of its
Subsidiaries, (I) customer, client or supply Contract that involves total
consideration in excess of $1,000,000 (other than purchase orders issued (or
received) for the purchase or sale of goods in the ordinary course of business
consistent with past practice), (J) Contract (other than customer, client
or supply Contracts) that involve consideration (whether or not measured in
cash) of greater than $1,000,000, (K) collective bargaining agreement,
(L) “standstill” or similar agreement, (M) Contract that restricts or
otherwise limits the payment of dividends or other distributions on equity
securities, (N) to the extent material to the business or financial
condition of the Company and its Subsidiaries, taken as a whole, (1) lease
or rental Contract, (2) product design or development Contract,
(3) consulting Contract, (4) indemnification Contract,
(5) license or royalty Contract, (6) merchandising, sales
representative or distribution Contract or (7) Contract granting a right of
first refusal or first negotiation, and (O) commitment or agreement to
enter into any of the foregoing (the Contracts and other documents required to
be listed on Section 3.13(a)
of the Company Disclosure Schedule, together with any and all other Contracts of
such type entered into in accordance with Section 5.2(a),
each a “Company Material Contract”). The
Company has heretofore made available to Parent correct and complete copies of
each Company Material Contract in existence as of the date hereof, together with
any and all amendments and supplements thereto and material “side letters” and
similar documentation relating thereto.
(b) Each of
the Company Material Contracts is valid, binding and in full force and effect
and is enforceable in accordance with its terms by the Company and its
Subsidiaries party thereto, subject to the Bankruptcy and Equity
Exception. No approval, consent or waiver of any Person is needed in
order that any Company Material Contract continue in full force and effect
following the consummation of the Transactions. Neither the Company
nor any of its Subsidiaries is in default under any Company Material Contract or
other Contract to which the Company or any of its Subsidiaries is a party
(collectively, the “Company Contracts”), nor does any condition
exist that, with notice or lapse of time or both, would constitute a default
thereunder by the Company and its Subsidiaries party thereto, except for such
defaults as, individually or in the aggregate, have not had and would not
reasonably be expected to be material to the Company. To the
Knowledge of the Company, no other party to any Company Contract is in default
thereunder, nor does any condition exist that with notice or lapse of time or
both would constitute a default by any such other party thereunder, except for
such defaults as, individually or in the aggregate, have not had and would not
reasonably be expected to be material to the Company. Neither the
Company nor any of its Subsidiaries has received any notice of termination or
cancellation under any Company Material Contract, received any notice of breach
or default in any material respect under any Company Material Contract which
breach has not been cured, or granted to any third party any rights, adverse or
otherwise, that would constitute a breach of any Company Material
Contract.
SECTION 3.14. Title to
Properties. Each of the Company and its Subsidiaries (a) has
good and valid title (or such lesser interest that is the maximum permitted by
applicable Law) to all properties and other assets which are reflected on the
most recent consolidated balance sheet of the Company included in the Filed
Company SEC Documents as being owned by the Company or one of its Subsidiaries
(or acquired after the date thereof) and which are, individually or in the
aggregate, material to the Company’s business or financial condition on a
consolidated basis (except properties sold or otherwise disposed of since the
date thereof in the ordinary course of business consistent with past practice
and not in violation of this Agreement), free and clear of all Liens except (i)
statutory liens securing payments not yet due, (ii) security interests,
mortgages and pledges that are disclosed in the Filed Company SEC Documents that
secure indebtedness that is reflected in the most recent consolidated financial
statements of the Company included in the Filed Company SEC Documents and (iii)
such other imperfections or irregularities of title or other Liens that,
individually or in the aggregate, do not and would not reasonably be expected to
materially affect the use of the properties or assets subject thereto or
otherwise materially impair business operations as presently conducted or as
currently proposed by the Company’s management to be conducted, and (b) is the
lessee or sublessee of all leasehold estates and leasehold interests reflected
in the Filed Company SEC Documents (or acquired after the date thereof) which
are, individually or in the aggregate, material to the Company’s business or
financial condition on a consolidated basis (other than any such leaseholds
whose scheduled terms have expired subsequent to the date of such Filed Company
SEC Documents). Each of the Company and its Subsidiaries enjoys
peaceful and undisturbed possession under all such leases in all material
respects.
SECTION 3.15. Intellectual
Property.
(a) For
purposes of this Agreement:
(i) “Company Intellectual Property” means all
Intellectual Property Rights used in or necessary for the conduct of the
business of the Company or any of its Subsidiaries, or owned or held for use by
the Company or any of its Subsidiaries.
(ii) “Company Registered Intellectual Property”
means all issued Patents, pending Patent applications, registered Marks, pending
applications for registration of Marks, registered Copyrights and pending
applications for registration of Copyrights owned, filed or applied for by the
Company or any of its Subsidiaries.
(iii) “Company
Technology” means all Technology used in or necessary for the conduct
of the business of the Company or any of its Subsidiaries, or owned or held for
use by the Company or any of its Subsidiaries.
(iv) “Intellectual Property Rights” means all of the
rights arising from or in respect of the following, whether protected, created
or arising under the Laws of the United States or any foreign jurisdiction or
under any international convention: (A) patents, patent applications and
any reissues, reexaminations, divisionals, provisionals, continuations,
continuations-in-part, substitutions and extensions thereof (collectively,
“Patents”); (B) trademarks, service marks, trade
names (whether registered or unregistered), service names, industrial designs,
brand names, brand marks, trade dress rights, Internet domain names, Internet
key words, identifying symbols, logos, emblems, signs and insignia, and
including all goodwill associated with the foregoing (collectively, “Marks”); (C) copyrights (whether registered or
unregistered and including copyrights in Software), works of authorship, moral
rights, mask works and mask sets (collectively, “Copyrights”); (D) confidential and proprietary
information, and non-public processes, designs (including circuit designs and
layouts), specifications, technology, semiconductor device structures (including
gate structures, transistor structures, memory cells or circuitry, vias and
interconnects, isolation structures and protection devices), circuit block
libraries, databases, know-how, techniques, formulas, inventions, concepts,
trade secrets, discoveries, research and development, ideas and technical data
and information, in each case excluding any rights in respect of any of the
foregoing that comprise or are protected by Patents (collectively, “Trade
Secrets”); and (E) all applications, registrations, renewals,
extensions and permits related to any of the foregoing clauses (A) through
(D).
(v) “Software” means all (A) computer programs,
including any and all software implementations of algorithms, models and
methodologies whether in source code, object code or other form,
(B) databases and compilations, including any and all data and collections
of data, (C) descriptions, flow-charts and other work product used to
design, plan, organize and develop any of the foregoing and
(D) documentation, including user manuals and training materials related to
any of the foregoing.
(vi) “Technology” means, collectively, all designs
(including circuit designs and layouts), semiconductor device structures
(including gate structures, transistor structures, memory cells or circuitry,
vias and interconnects, isolation structures and protection devices), circuit
block libraries, formulas, algorithms, procedures, techniques, ideas, know-how,
Software, databases and data collections, Internet websites and web content,
tools, inventions (whether patentable or unpatentable and whether or not reduced
to practice), invention disclosures, developments, creations, improvements,
works of authorship, other similar materials and all recordings, graphs,
drawings, reports, analyses, other writings and any other embodiment of the
above, in any form or media, whether or not specifically listed
herein.
(b) Section 3.15(b)
of the Company Disclosure Schedule sets forth an accurate and complete list of
all Company Registered Intellectual Property and all material unregistered Marks
used by the Company or any of its Subsidiaries. Section 3.15(b)
of the Company Disclosure Schedule lists, for each item of Company Registered
Intellectual Property, the owner of such item of Company Registered Intellectual
Property, the registration or application date and number (as applicable) of
such item of Company Registered Intellectual Property and the jurisdiction in
which such item of Company Registered Intellectual Property has been issued or
registered or in which any application for issuance and registration has been
filed. All necessary registration, maintenance, renewal and other
relevant filing fees in connection with any of the Company Registered
Intellectual Property have been timely paid, and all necessary documents,
certificates and other relevant filings in connection with any of the Company
Registered Intellectual Property have been timely made, with the relevant
Governmental Authorities and Internet domain name registrars in the United
States or foreign jurisdictions, as the case may be, for the purpose of
maintaining the Company Registered Intellectual Property and all issuances,
registrations and applications therefor.
(c) The
Company and/or one of its Subsidiaries is the sole and exclusive owner of all
Company Registered Intellectual Property, free and clear of all
Liens. The Company and/or one of its Subsidiaries is the sole and
exclusive owner of, or has valid and continuing rights to use, sell, license and
otherwise exploit, all of the other Company Intellectual Property and Company
Technology as the same is used, sold, licensed and otherwise exploited by the
Company or any of its Subsidiaries in their respective businesses as currently
conducted, free and clear of all Liens. The Company Intellectual
Property and Company Technology owned by or licensed to the Company or any of
its Subsidiaries includes all of the material Intellectual Property Rights and
Technology necessary and sufficient to enable the Company and its Subsidiaries
to conduct their respective businesses in the manner in which such businesses
are currently being conducted. The Company Registered Intellectual
Property (other than any applications included in the Company Registered
Intellectual Property) is valid and enforceable.
(d) To the
Knowledge of the Company, none of the following infringe, constitute or result
from an unauthorized use or misappropriation of or violate any Intellectual
Property Rights of any other Person, except as would not have a material effect
on the Company: (i) any Company Intellectual Property; (ii) any
Company Technology; and (iii) the development, manufacturing, licensing,
marketing, importation, exportation, offer for sale, sale, use, practice or
other exploitation of any Company Intellectual Property, Company Technology,
products or services by the Company or any of its Subsidiaries; or (iv) the
present business practices, methods or operations of the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is a
party to or the subject of any pending or, to the Knowledge of the Company,
threatened suit, action, investigation or proceeding which involves a claim
(A) against the Company or any of its Subsidiaries of infringement,
unauthorized use, misappropriation or violation of any Intellectual Property
Rights of any Person, or challenging the ownership, use, validity or
enforceability of any Company Intellectual Property or Company Technology or
(B) contesting the right of the Company or any of its Subsidiaries to use,
sell, exercise, license, transfer or dispose of any Company Intellectual
Property or Company Technology, or any products, processes or materials covered
thereby in any manner. Neither the Company nor any of its
Subsidiaries has received written notice of any such threatened
claim.
(e) To the
Knowledge of the Company and except as would not have a material effect on the
Company, no Person (including employees and former employees of the Company or
any of its Subsidiaries) is infringing, violating, misappropriating or otherwise
misusing any Company Intellectual Property owned by or exclusively licensed to
the Company or any of its Subsidiaries. Neither the Company nor any
of its Subsidiaries has made any claim of infringement, violation,
misappropriation or misuse of any Company Intellectual Property owned by or
exclusively licensed to the Company or any of its Subsidiaries against any
Person (including employees and former employees of the Company or any of its
Subsidiaries).
(f) No Trade
Secret or other non-public, proprietary information material to the businesses
of the Company or any of its Subsidiaries as presently conducted has been
authorized to be disclosed or, to the Knowledge of the Company, has been
actually disclosed by the Company or any of its Subsidiaries to any employee or
any third Person other than pursuant to a confidentiality or non-disclosure
agreement restricting the disclosure and use thereof. Each of the
Company and its Subsidiaries has taken commercially reasonable measures to
protect and preserve the confidentiality of all such Trade Secrets and other
non-public, proprietary information (and any confidential information of any
other Person to whom the Company or any of its Subsidiaries has a
confidentiality obligation). Each employee, consultant and
independent contractor of the Company or any of its Subsidiaries involved in the
creation or development of any Intellectual Property Rights, Technology,
products or services of the Company or any of its Subsidiaries has entered into
a written non-disclosure and invention assignment agreement with the Company or
such Subsidiary, as applicable, in a form made available to Parent prior to the
date hereof.
(g) No
government funding and no facilities of a university, college, other educational
institution or research center were used in the development of any Intellectual
Property Rights or Technology owned by the Company or any of its Subsidiaries
where, as a result of such funding or the use of such facilities, the government
or any university, college, other educational institution or research center has
any rights in such Intellectual Property Rights or Technology. To the
Knowledge of the Company, no current or former employee, consultant or
independent contractor of the Company or any of its Subsidiaries who contributed
to the creation or development of any Intellectual Property Rights or Technology
owned by the Company or any of its Subsidiaries has performed services for the
government or a university, college, other educational institution or research
center during a period of time during which such employee, consultant or
independent contractor was also performing services for the Company or any of
its Subsidiaries.
(h) The
Company and its Subsidiaries own, lease or license all hardware, computer
equipment and other information technology systems (collectively, “Company Computer Systems”) that are necessary for
the operation of the Company’s and its Subsidiaries’ businesses. The
Company Computer Systems are adequate for the operation of the Company’s and its
Subsidiaries’ businesses as currently conducted. During the three (3)
year period prior to the date hereof, (i) no error or fault has occurred in
or to any of the Company Computer Systems that has resulted in a material
interruption to the operations of the Company or any of its Subsidiaries and
(ii) to the Knowledge of the Company, there has been no unauthorized access
to or use of any of the Company Computer Systems.
(i) Each of
the Company and its Subsidiaries has established privacy compliance policies and
is in compliance with, and has been in compliance with for the three (3) year
period prior to the date hereof, its respective privacy policies and any
applicable Laws relating to personal identifiable information.
(j) The
consummation of the transactions contemplated hereby will not encumber or
extinguish any Company Intellectual Property or Company Technology or result in
the loss or impairment of the right of Parent to own or use any Company
Intellectual Property or Company Technology. Neither this Agreement
nor any transaction contemplated by this Agreement will result in the grant by
the Company or any of its Subsidiaries to any Person of any ownership interest,
license, right or protection from any legal proceeding with respect to any
Company Intellectual Property or Company Technology or in Parent being bound by
or subject to any non-compete or other restriction, pursuant to any Contract to
which the Company or any of its Subsidiaries is a party or by which any assets
or properties of the Company or any of its Subsidiaries is bound.
SECTION 3.16. Insurance, Claims and
Warranties.
(a) Section 3.16(a)
of the Company Disclosure Schedule sets forth a correct and complete list of all
insurance policies (including information on the premiums payable in connection
therewith and the scope and amount of the coverage provided thereunder)
maintained by the Company or any of its Subsidiaries (the “Company Policies”). The Company
Policies (i) have been issued by insurers which, to the Knowledge of the
Company, are reputable and financially sound, (ii) provide coverage for the
operations conducted by the Company and its Subsidiaries of a scope and coverage
consistent with customary practice in the industries in which the Company and
its Subsidiaries operate and (iii) are in full force and
effect. Neither the Company nor any of its Subsidiaries is in
material breach or default, and neither the Company nor any of its Subsidiaries
have taken any action or failed to take any action which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination
or modification, of any of the Company Policies. No notice of
cancellation or termination has been received by the Company with respect to any
of the Company Policies. The consummation of the Transactions will
not, in and of itself, cause the revocation, cancellation or termination of any
Company Policy.
(b) Section 3.16(b)
of the Company Disclosure Schedule sets forth, as of the date of this Agreement,
a correct and complete list and summary description of all claims, duties,
responsibilities, liabilities or obligations arising since January 1, 2007 from,
or alleged to arise from, any injury to any Person (including current and former
employees) or property as a result of the manufacture, sale, ownership,
possession or use of any product of the Company or any of its
Subsidiaries. All such existing claims are or will be fully covered
by product liability insurance. No circumstances exist affecting the
safety of the products of the Company or any of its Subsidiaries that,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect.
(c) Section 3.16(c)
of the Company Disclosure Schedule contains a correct and complete statement of
all warranties, warranty policies, service agreements and maintenance agreements
of the Company and any of its Subsidiaries in effect as of the date of this
Agreement that provide for warranty coverage for a period in excess of twelve
(12) months. All products of each of the Company and its Subsidiaries
manufactured, processed, assembled, distributed, shipped or sold and any
services rendered in the conduct of the business of the Company or any of its
Subsidiaries have been in conformity with all applicable contractual commitments
and all express or implied warranties, except where the failure to be in
conformity, individually or in the aggregate, has not had and would
not reasonably be expected to have a Company Material Adverse
Effect. All warranties of each of the Company and its Subsidiaries
are in conformity with the labeling and other requirements of applicable Laws,
except where any failure to be in conformity, individually or in the aggregate,
has not had and would not reasonably be expected to have a Company Material
Adverse Effect.
SECTION 3.17. Opinion of Financial
Advisor. The board of directors of the Company has received
the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners, financial advisor to the Company, dated
the date of this Agreement, to the effect that, as of such date, and subject to
the various assumptions and qualifications set forth therein,
the consideration to be received by the holders of shares of Company
Common Stock is fair from a financial point of view to the holders of
shares of Company Common Stock (the “Fairness Opinion”). A correct and
complete copy of the Fairness Opinion has been delivered to
Parent. The Company has been authorized by ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners to
permit the inclusion of the Fairness Opinion and/or references thereto in the
Proxy Statement.
SECTION 3.18. Brokers and Other
Advisors. Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners, the fees and
expenses of which will be paid by the Company, no broker, investment banker,
financial advisor or other Person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission, or the reimbursement of
expenses, in connection with the Transactions based upon arrangements made by or
on behalf of the Company or any of its Subsidiaries.
SECTION 3.19. State Takeover
Statutes. No “fair price”, “moratorium”, “control share
acquisition” or other similar antitakeover statute or regulation enacted under
state or federal laws in the United States applicable to the Company is
applicable to the Merger or the other Transactions.
SECTION 3.20. Rights
Plan. The Company has taken all actions necessary to
(a) render the Company Rights Agreement, inapplicable to this Agreement,
the Note Exchange Agreement and the Transactions, (b) ensure that
(i) none of Parent, Merger Sub or any other Subsidiary of Parent is an
Acquiring Person (as defined in the Company Rights Agreement) pursuant to the
Company Rights Agreement and (ii) a Distribution Date or a Shares
Acquisition Date (as such terms are defined in the Company Rights Agreement)
does not occur, in the case of clauses (i) and (ii), solely by reason of the
announcement of, or approval, execution and delivery of, this Agreement, the
Note Exchange Agreement or the consummation of the Transactions, and
(c) provide that the Final Expiration Date (as defined in the Company
Rights Agreement) shall occur immediately prior to the Effective
Time.
SECTION 3.21. Interested Party
Transactions. Since January 1, 2006, there have been no
transactions, agreements, arrangements or understanding between the Company or
any of its Subsidiaries on the one hand, and the Affiliates of the Company on
the other hand (other than the Company’s Subsidiaries), that would be required
to be disclosed under Item 404 under Regulation S-K under the Exchange Act and
that has not been so disclosed.
SECTION 3.22. Reorganization
Treatment. The Company agrees to report the Merger, together
with the Exchange, as a “reorganization” within the meaning of
Section 368(a) of the Code and not to take any action inconsistent with
reorganization treatment other than such actions that are required pursuant to
this Agreement.
Representations and
Warranties of Parent and Merger Sub
Parent
and Merger Sub jointly and severally represent and warrant to the Company that
except as set forth in the disclosure schedule (with specific reference to the
Section or subsection of this Agreement to which the information stated in such
disclosure schedule relates) delivered by Parent to the Company simultaneously
with the execution of this Agreement (the “Parent Disclosure
Schedule”):
SECTION 4.1. Organization, Standing and
Corporate Power.
(a) Each of
Parent and its Subsidiaries is a corporation or other entity duly organized,
validly existing and in good standing under the Laws of the jurisdiction in
which it is incorporated or organized and has all requisite corporate power and
authority necessary to own or lease all of its properties and assets and to
carry on its business as it is now being conducted and as currently proposed by
its management to be conducted. Each of Parent and its Subsidiaries
is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing, individually or in the aggregate, has
not had and would not reasonably be expected to have a Material Adverse Effect
on Parent (“Parent Material Adverse
Effect”).
(b) Section 4.1(b)
of the Parent Disclosure Schedule lists all Subsidiaries of Parent together with
the jurisdiction of organization of each such Subsidiary. All the
outstanding shares of capital stock of, or other equity interests in, each
Subsidiary of Parent have been duly authorized and validly issued and are fully
paid and nonassessable and are owned directly or indirectly by Parent free and
clear of all Liens. Parent does not own, directly or indirectly, any
capital stock, voting securities or equity interests in any Person.
(c) Parent
has delivered to Parent correct and complete copies of its certificate of
incorporation and bylaws, in each case as amended to the date of this Agreement
(the “Parent Charter
Documents”). The Parent Charter Documents and the
certificates of incorporation and bylaws (or comparable organizational
documents) of each of its Subsidiaries (the “Parent Subsidiary Documents”) are in
full force and effect and neither Parent nor any of its Subsidiaries is in
violation of any of their respective provisions. Parent has made
available to the Company and its representatives correct and complete copies of
the minutes (or, in the case of minutes that have not yet been finalized, drafts
thereof) of all meetings of stockholders, the board of directors and each
committee of the board of directors of Parent held since January 1,
2005.
SECTION 4.2. Capitalization.
(a) As of the
date hereof, the authorized capital stock of Parent consists of 100,000,000
shares of Parent Common Stock, and 25,000,000 shares of preferred stock, par
value $.01 per share, 1,500,000 shares of which have been designated as the
“Class A Junior Preferred Stock” (“Parent Class A Preferred Stock”) and
4,500,000 shares of which have been designated as the “Class B Senior
Convertible Preferred Stock” (“Parent Class B Preferred Stock”,
together with the Parent Class A Preferred Stock, the “Parent Preferred Stock”). At the
close of business on October 5, 2009, (i) 28,874,509 shares of Parent
Common Stock were issued and outstanding, (ii) 903,233 shares of Parent
Class A Preferred Stock were issued and outstanding, (iii) 4,255,546 shares
of Parent Class B Preferred Stock were issued and outstanding, (iv) no
shares of Parent Common Stock were held by Parent in its treasury,
(v) 2,777,778 shares of Parent Common Stock were reserved for issuance
under the Parent Stock Plans (of which 2,520,600 shares of Parent Common Stock
were subject to outstanding Parent Stock Options
granted under the Parent Stock Plans), and (vii) 1,378,226 shares of Parent
Common Stock were reserved for issuance and issuable upon or otherwise
deliverable in connection with the exercise of the outstanding warrants to
purchase shares of Parent Common Stock (“Parent Common Stock
Warrants”). All outstanding shares of Parent Common Stock
and Parent Preferred Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights. Included in
Section 4.2(a)(i)
of the Parent Disclosure Schedule is a correct and complete list, as of October
5, 2009, of all outstanding options or other rights to purchase or receive
shares of Parent Common Stock granted under the Parent Stock Plans or otherwise,
and, for each such option or other right, the number of shares of Parent Common
Stock subject thereto, the terms of vesting, the grant and expiration dates and
exercise price thereof and the name of the holder thereof. Included
in Section 4.2(a)(ii)
of the Parent Disclosure Schedule is a correct and complete list, as of October
5, 2009, of all Parent Common Stock Warrants, and, for each such warrant, the
number of shares of Parent Common Stock subject thereto, the grant and
expiration dates and exercise price thereof and the name of the holder
thereof. All options representing the right to acquire shares of
Parent Common Stock (“Parent Stock
Options”) and Parent Common Stock Warrants have an exercise price equal
to no less than the fair market value of the underlying shares of Parent Common
Stock on the date of grant. Since January 1, 2009, Parent has not
issued any shares of its capital stock, voting securities or equity interests,
or any securities convertible into or exchangeable or exercisable for any shares
of its capital stock, voting securities or equity interests, other than pursuant
to the outstanding Parent Stock Options and the Parent Common Stock Warrants, in
each case, referred to above in this Section 4.2(a). Except
(A) as set forth above in this Section 4.2(a)
or (B) as otherwise expressly permitted by Section 5.2(b)
hereof, including the Recapitalization, as of the date of this Agreement there
are not, and as of the Effective Time there will not be, any shares of capital
stock, voting securities or equity interests of Parent issued and outstanding or
any subscriptions, options, warrants, calls, convertible or exchangeable
securities, rights, commitments or agreements of any character providing for the
issuance of any shares of capital stock, voting securities or equity interests
of Parent, including any representing the right to purchase or otherwise receive
any Parent Common Stock. No share of Parent Common Stock is owned by
any Subsidiary of Parent.
(b) As of the
Closing Date, immediately prior to the Closing and after giving effect to the
Recapitalization, the authorized capital stock of Parent will consist of
100,000,000 shares of Parent Common Stock and 25,000,000 shares of Parent
Preferred Stock. As of the Closing Date, immediately prior to the
Closing and prior to the closing of the Exchange and after giving effect to the
Recapitalization and assuming that none of the Parent Stock Options or Parent
Common Stock Warrants are exercised after the date hereof and assuming that no
fractional shares were cashed out pursuant to the Recapitalization Agreement,
(i) 16,101,749 shares of Parent Common Stock will be issued and outstanding
and (ii) no shares of Parent Preferred Stock will be issued and
outstanding. As of the Closing Date, all outstanding shares of Parent
Common Stock will have been duly authorized and validly issued and will be fully
paid and nonassessable. As of the Closing Date, immediately after the
Closing and assuming that no fractional shares were cashed out in the Exchange
or conversion of Company Common Stock pursuant to Section 2.1(c), 1,398,251
shares of Parent Common Stock issued and outstanding will be held by holders of
the Company Convertible Securities and 2,500,000 shares of Parent Common Stock
issued and outstanding will be held by holders of Company Common Stock who held
such Company Common Stock immediately prior to the Closing.
(c) None of
Parent’s Subsidiaries has issued or is bound by any outstanding subscriptions,
options, warrants, calls, convertible or exchangeable securities, rights,
commitments or agreements of any character providing for the issuance or
disposition of any shares of capital stock, voting securities or equity
interests of any Subsidiary of Parent. There are no outstanding
obligations of Parent or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire any shares of
capital stock, voting securities or equity interests) of Parent or any of its
Subsidiaries.
SECTION 4.3. Authority; Noncontravention;
Voting Requirements.
(a) Each of
Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement and to perform their respective obligations hereunder
and to consummate the Transactions. The execution, delivery and
performance by Parent and Merger Sub of this Agreement, and the consummation by
Parent and Merger Sub of the Transactions, have been duly authorized and
approved by their respective boards of directors and stockholders and no other
action on the part of Parent and Merger Sub or any stockholder of Parent is
necessary to authorize the execution, delivery and performance by Parent and
Merger Sub of this Agreement and the consummation by them of the
Transactions. This Agreement has been duly executed and delivered by
Parent and Merger Sub and, assuming due authorization, execution and delivery
hereof by the Company, constitutes a legal, valid and binding obligation of each
of Parent and Merger Sub, enforceable against each of them in accordance with
its terms, subject to the Bankruptcy and Equity Exception.
(b) None of
the execution and delivery of this Agreement by Parent and Merger Sub, the
consummation by Parent or Merger Sub of the Transactions, or compliance by
Parent or Merger Sub with any of the terms or provisions hereof, will
(i) conflict with or violate any provision of the Parent Charter Documents
or any of the Parent Subsidiary Documents or (ii) assuming that the
authorizations, consents and approvals referred to in Section 3.4 are
obtained and the filings referred to in Section 4.4 are
made, (A) violate any Law, judgment, writ or injunction of any Governmental
Authority applicable to Parent or any of its Subsidiaries or any of their
respective properties or assets, or (B) violate, conflict with, result in
the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any Lien upon any of
the respective properties or assets of, Parent or Merger Sub or any of their
respective Subsidiaries under, any of the terms, conditions or provisions of any
Contract or Parent Permit to which Parent, Merger Sub or any of their respective
Subsidiaries is a party, or by which they or any of their respective properties
or assets may be bound or affected except, in the case of clause (B), for such
violations, conflicts, losses, defaults, terminations, cancellations,
accelerations or Liens as, individually or in the aggregate, would not
reasonably be expected to be material to Parent and its Subsidiaries, taken as a
whole.
SECTION 4.4. Governmental
Approvals. Except for (a) the filing with the SEC of the
Registration Form S-4 and other filings required under, and compliance with
other applicable requirements of, the Exchange Act, and the rules of Nasdaq,
(b) the filing of the Articles of Merger with the Secretary of State of the
State of Oregon pursuant to the OBCA, (c) the filing of the amendment to
the certificate of incorporation of Parent with the Secretary of State of the
State of Delaware), (d) filings required under, and compliance with other
applicable requirements of, the HSR Act and (e) filings required under, and
compliance with other applicable requirements of, the Foreign Antitrust Laws, no
consents or approvals of, or filings, declarations or registrations with, any
Governmental Authority are necessary for the execution, delivery and performance
of this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the Transactions, other than such other consents, approvals,
filings, declarations or registrations that, if not obtained, made or given,
would not, individually or in the aggregate, reasonably be expected to impair in
any material respect the ability of the Parent or Merger Sub to perform its
obligations hereunder, or prevent or materially impede, interfere with, hinder
or delay the consummation of the Transactions. Section 4.4 of
the Parent Disclosure Schedule lists all material consents or approvals of, or
filings, declarations or registrations with, any Governmental Authority under
Foreign Antitrust Laws that are necessary for the consummation by Parent and
Merger Sub of the Transactions.
SECTION 4.5. Viasystems SEC Documents;
Financial Statements; Undisclosed Liabilities.
(a) Viasystems,
Inc., a direct, wholly owned Subsidiary of Parent (“Viasystems”), has filed and furnished all required
reports, schedules, forms, certifications, prospectuses, and registration, and
other statements with the SEC since January 1, 2006 (collectively and
together with all documents filed on a voluntary basis on Form 8-K, and in each
case including all exhibits and schedules thereto and documents incorporated by
reference therein, the “Viasystems SEC
Documents”). Other than Viasystems, as required pursuant
to the Viasystems Indenture, neither Parent nor any of its Subsidiaries is
required to file periodic reports with the SEC pursuant to the Exchange
Act. As of their respective effective dates (in the case of
Viasystems SEC Documents that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective SEC filing dates
(in the case of all other Viasystems SEC Documents), the Viasystems SEC
Documents complied in all material respects with the requirements of the
Exchange Act, the Securities Act and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, as the case may be,
applicable to such Viasystems SEC Documents, and none of the Viasystems SEC
Documents as of such respective dates contained any untrue statement of a
material fact or omitted to state a 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. As of the
date of this Agreement, there are no outstanding or unresolved comments received
from the SEC staff with respect to the Viasystems SEC Documents. To
the Knowledge of Parent, none of the Viasystems SEC Documents is the subject of
ongoing SEC review or investigation.
(b) Parent
has delivered copies of the audited consolidated balance sheets of Parent and
its Subsidiaries as of December 31, 2007 and December 31, 2008, together with
the related audited statements of income and of cash flows of Parent and its
Subsidiaries for the years ended December 31, 2006, December 31, 2007 and
December 31, 2008 (such audited financial statements, including the notes and
schedules thereto being hereinafter referred to collectively as the “Financial Statements”). The Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the consolidated financial
position of Parent and its consolidated Subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended. The consolidated financial statements of Viasystems included
in the Viasystems SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited quarterly statements, as indicated in the
notes thereto) applied on a consistent basis during the period involved (except
as may be indicated in the notes thereto) and fairly present in all material
respect the consolidated financial position of Viasystems and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited quarterly statements, to normal year-end audit adjustments, none of
which has been or will be, individually or in the aggregate, material to
Viasystems and its Subsidiaries, taken as a whole).
(c) Viasystems
has established and maintains internal control over financial reporting and
disclosure controls and procedures (as such terms are defined in Rule 13a-15 and
Rule 15d-15 under the Exchange Act); such disclosure controls and procedures are
designed to ensure that material information relating to Viasystems, including
its consolidated Subsidiaries, required to be disclosed by Viasystems in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to Viasystems’ principal executive officer and its principal
financial officer to allow timely decisions regarding required disclosure; and
such disclosure controls and procedures are effective to ensure that information
required to be disclosed by Viasystems in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms. Viasystems’
principal executive officer and its principal financial officer have disclosed,
based on their most recent evaluation, to Viasystems’ auditors and the audit
committee of the board of directors of Viasystems (i) all significant
deficiencies in the design or operation of internal controls that could
adversely affect Viasystems’ ability to record, process, summarize and report
financial data and have identified for Viasystems’ auditors any material
weaknesses in internal controls and (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in
Viasystems’ internal controls. The principal executive officer and
the principal financial officer of Viasystems have made all certifications
required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, the Exchange Act and any related rules and
regulations promulgated by the SEC with respect to the Viasystems SEC Documents,
and the statements contained in such certifications are complete and
correct. To the Knowledge of Parent, there are no facts or
circumstances that would prevent Viasystem’s chief executive officer and chief
financial officer from giving the certifications and attestations required
pursuant to the rules and regulations adopted pursuant to Section 404 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, without qualification, when next due.
(d) Viasystems
is in compliance in all material respects with the provisions of
Section 13(b) of the Exchange Act. Neither Parent nor any of its
Subsidiaries nor, to the Knowledge of Parent, any director, officer, agent,
employee or other Person acting on behalf of Parent or any of its Subsidiaries,
has, in any material respect, (i) used any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures.
(e) Neither
Parent nor any of its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise, whether known or
unknown) whether or not required, if known, to be reflected or reserved against
on a consolidated balance sheet of Parent prepared in accordance with GAAP or
the notes thereto, except liabilities (i) as and to the extent reflected or
reserved against on the audited balance sheet of Parent and its Subsidiaries as
of December 31, 2008 (the “Parent Balance Sheet Date”) (including the
notes and schedules thereto) or (ii) incurred after the Parent Balance Sheet
Date in the ordinary course of business consistent with past practice that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
(f) Neither
Parent nor any of its Subsidiaries is a party to, or has any commitment to
become a party to, any joint venture, off-balance sheet partnership or any
similar Contract (including any Contract or arrangement relating to any
transaction or relationship between or among Parent and any of its Subsidiaries,
on the one hand, and any unconsolidated Affiliate, including any structured
finance, special purpose or limited purpose entity or Person, on the other hand,
or any “off-balance sheet arrangements” (as defined in Item 303(a) of
Regulation S-K under the Exchange Act)), where the result, purpose or effect of
such Contract is to avoid disclosure of any material transaction involving, or
material liabilities of, Parent or any of its Subsidiaries in Parent’s or such
Subsidiary’s financial statements or any Viasystems SEC Documents.
SECTION 4.6. Absence of Certain Changes
or Events. Since the Parent Balance Sheet Date there have not
been any events, changes, occurrences or state of facts that, individually or in
the aggregate, have had or would reasonably be expected to have a Parent
Material Adverse Effect. Except as disclosed in the Viasystems SEC
Documents filed by Viasystems and publicly available prior to the date of this
Agreement (the “Filed Viasystems SEC Documents”), since the
Parent Balance Sheet Date (a) Parent and its Subsidiaries have carried on and
operated their respective businesses in all material respects in the ordinary
course of business consistent with past practice and (b) neither Parent nor any
of its Subsidiaries has taken any action described in Section 5.2(b) hereof
that if taken after the date hereof and prior to the Effective Time without the
prior written consent of the Company would violate such
provision. Without limiting the foregoing, except as disclosed in the
Filed Viasystems SEC Documents, since the Parent Balance Sheet Date there has
not occurred any damage, destruction or loss (whether or not covered by
insurance) of any material asset of Parent or any of its Subsidiaries which
materially affects the use thereof.
SECTION 4.7. Legal
Proceedings. Except as disclosed in the Filed Viasystems SEC
Documents, there is no pending or, to the Knowledge of Parent, threatened,
material legal, administrative, arbitral or other proceeding, claim, suit or
action against, or governmental or regulatory investigation of, Parent or any of
its Subsidiaries, nor is there any injunction, order, judgment, ruling or decree
imposed (or, to the Knowledge of Parent, threatened to be imposed) upon Parent,
any of its Subsidiaries or the assets of Parent or any of its Subsidiaries, by
or before any Governmental Authority.
SECTION
4.8. Compliance With Laws; Parent
Permits. Parent and its Subsidiaries are in compliance in all
material respects with all Laws applicable to Parent or any of its Subsidiaries,
any of their properties or other assets or any of their businesses or
operations. Parent and each of its Subsidiaries hold all material
licenses, franchises, permits, certificates, approvals and authorizations from
Governmental Authorities, or required by Governmental Authorities to be
obtained, in each case necessary for the lawful conduct of their respective
businesses (collectively, “Parent
Permits”). Parent and its Subsidiaries are in compliance
in all material respects with the terms of all Parent Permits. Since
January 1, 2007, neither Parent nor any of its Subsidiaries has received
written notice to the effect that a Governmental Authority (a) claimed or
alleged that parent or any of its Subsidiaries was not in compliance with all
Laws applicable to Parent or any of its Subsidiaries, any of their properties or
other assets or any of their businesses or operations or (b) was considering the
amendment, termination, revocation or cancellation of any Parent
Permit. The consummation of the Merger, in and of itself, will not
cause the revocation or cancellation of any Parent Permit.
SECTION 4.9. Information
Supplied. Subject to the accuracy of the representations and
warranties of the Company set forth in Section 3.9,
none of the information supplied (or to be supplied) in writing by or on behalf
of Parent or Merger Sub specifically for inclusion or incorporation by reference
in (a) the Registration Form S-4 will, at the time the Registration Form S-4, or
any amendments or supplements thereto, are filed with the SEC or at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading, (b) the Proxy Statement
will, on the date it is first mailed to stockholders of the Company, and at the
time of the Company Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading and (c) any registration
statement to be filed with the SEC by Parent in connection with the terms of the
Note Exchange Agreement will, at the time such registration statement, or any
amendments or supplements thereto, are filed with the SEC or at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading. The
Registration Form S-4 and any registration statement to be filed with the SEC by
Parent in connection with the terms of the Note Exchange Agreement will comply
as to form in all material respects with the applicable requirements of the
Exchange Act. Notwithstanding the foregoing, Parent and Merger Sub
makes no representation or warranty with respect to information supplied by or
on behalf of the Company for inclusion or incorporation by reference in any of
the foregoing documents.
SECTION 4.10. Tax
Matters.
(a) Each of
Parent and its Subsidiaries has timely filed, or has caused to be timely filed
on its behalf (taking into account any extension of time within which to file),
all federal Tax Returns and all material state, local and foreign Tax Returns
required to be filed by it, and all such filed Tax Returns are correct and
complete in all material respects. All Taxes shown to be due on such
Tax Returns, or otherwise required to be paid by Parent or any of its
Subsidiaries, have been timely paid.
(b) The most
recent financial statements contained in the Filed Viasystems SEC Documents
reflect an adequate reserve for all Taxes payable by Parent and its Subsidiaries
for all taxable periods and portion thereof through the date of such financial
statements. No deficiency with respect to Taxes has been proposed,
asserted or assessed (in any of the cases in writing) against Parent or any of
its Subsidiaries.
(c) The
Federal income Tax Returns of Parent and each of its Subsidiaries have been
examined by and settled with the IRS (or the applicable statute of limitations
has expired) for all years through 2005. All assessments for Taxes
due with respect to such completed and settled examinations or any concluded
litigation have been fully paid.
(d) No audit
or other administrative or court proceedings are pending with any Governmental
Authority with respect to Taxes of Parent or any of its Subsidiaries and no
written notice thereof has been received.
(e) Parent
has made available to the Company correct and complete copies of (i) all
material income and franchise Tax Returns of Parent and its Subsidiaries for the
preceding three taxable years and (ii) any audit report issued within the last
three years (or otherwise with respect to any audit or proceeding in progress)
relating to income and franchise Taxes of Parent or any of its
Subsidiaries.
SECTION 4.11. Employee Benefits and Labor
Matters.
(a) Section 4.11(a)(i)
of the Parent Disclosure Schedule sets forth a correct and complete list of all
“employee benefit plans” (as defined in Section 3(3) of ERISA), and all
other employee benefit plans, policies, agreements, arrangements, or payroll
practices, including employment, consulting or other compensation agreements, or
bonus or other incentive compensation, stock purchase, equity or equity-based
compensation, deferred compensation, change in control, severance, sick leave,
vacation, loans, salary continuation, health, life insurance and educational
assistance plan, policies, agreements or arrangements with respect to which
Parent or any of its Subsidiaries has any material obligation or liability,
contingent or otherwise, for current or former employees, consultants or
directors of Parent or any of its Subsidiaries (collectively, the “Parent
Plans”). Neither Parent nor any of its ERISA Affiliates
has at any time contributed or been obligated to contribute to any pension plan
subject to Title IV of ERISA or Section 412 of the Code, including any
Multiemployer Plan. Neither Parent nor any ERISA Affiliate has, has
had, or could reasonably be expected to have any liability, contingent or
otherwise, to the PBGC.
(b) Correct
and complete copies of the following documents with respect to each of the
Parent Plans (other than a Multiemployer Plan) have been delivered to the
Company by Parent to the extent applicable: (i) any plans and
related trust documents, insurance contracts or other funding arrangements, and
all amendments thereto; (ii) the most recent Forms 5500 and all schedules
thereto, (iii) the most recent actuarial report, if any; (iv) the most
recent IRS determination letter; (v) the most recent summary plan
descriptions; and (vi) written summaries of all non-written Parent
Plans.
(c) The
Parent Plans have been maintained in accordance with their terms and with all
applicable provisions of ERISA, the Code and other Laws, except as would not
have a Parent Material Adverse Effect. The Parent Plans intended to
qualify under Section 401 of the Code have received a favorable
determination or opinion letter from the IRS as to their qualified status (and
any trusts intended to be exempt from federal income taxation under the Code are
so exempt). Nothing has occurred with respect to the operation of the
Parent Plans that could reasonably be expected to cause the loss of such
qualification or exemption, or the imposition of any liability, penalty or tax
under ERISA or the Code, except as would not have a Parent Material Adverse
Effect.
(d) There are
no pending actions, claims or lawsuits arising from or relating to the Parent
Plans (other than routine benefit claims), nor does Parent have any Knowledge of
facts that could form the basis for any such material claim or
lawsuit.
(e) None of
the Parent Plans provide for post-employment life or health coverage for any
participant or any beneficiary of a participant, except as may be required under
Part 6 of the Subtitle B of Title I of ERISA and at the expense of the
participant or the participant’s beneficiary.
(f) Neither
the execution and delivery of this Agreement nor the consummation of the
Transactions will (i) result in any payment becoming due to any employee,
(ii) increase any benefits otherwise payable under any Parent Plan,
(iii) result in the acceleration of the time of payment, funding or vesting
of any such benefits under any such plan, or (iv) require any contributions
or payments to fund any obligations under any Parent Plan.
(g) Parent
and its Subsidiaries are in compliance with Section 409A of the Code and the
rules and regulations promulgated thereunder, except as would not have a Parent
Material Adverse Effect. All Parent Options have been granted with an
exercise price of no less than fair market value on the applicable date of
grant, except as would not have a Parent Material Adverse Effect.
(h) Any
individual who performs services for Parent or any of its Subsidiaries (other
than through a contract with an organization other than such individual) and who
is not treated as an employee of Parent or any of its Subsidiaries for federal
income tax purposes by Parent is not an employee for such purposes, except as
would not have a Parent Material Adverse Effect.
(i) None of
the employees of Parent or its Subsidiaries is represented in his or her
capacity as an employee of Parent or any of its Subsidiaries by any labor
organization. Neither Parent nor any of its Subsidiaries has
recognized any labor organization, nor has any labor organization been elected
as the collective bargaining agent of any employees, nor has Parent or any of
its Subsidiaries entered into any collective bargaining agreement or union
contract recognizing any labor organization as the bargaining agent of any
employees. There is no union organization activity involving any of
the employees of Parent or any of its Subsidiaries pending or, to the Knowledge
of Parent, threatened, nor has there ever been union representation involving
any of the employees of Parent or any of its Subsidiaries. There is
no picketing pending or, to the Knowledge of Parent, threatened, and there are
no strikes, slowdowns, work stoppages, other job actions, lockouts,
arbitrations, grievances or other labor disputes involving any of the employees
of Parent or any of its Subsidiaries pending or, to the Knowledge of Parent,
threatened. There are no material complaints, charges or claims
against Parent or any of its Subsidiaries pending or, to the Knowledge of
Parent, threatened that could reasonably be expected to be brought or filed with
any Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment or
failure to employ by Parent or any of its Subsidiaries, of any
individual. Parent and its Subsidiaries are in compliance with all
Laws relating to the employment of labor, including all such Laws relating to
wages, hours, or WARN, collective bargaining, discrimination, civil rights,
safety and health, workers’ compensation and the collection and payment of
withholding and/or social security taxes and any similar tax, except as would
not have a Parent Material Adverse Effect. Except as disclosed in the
Filed Viasystems SEC Documents, there has been no “mass layoff” or “plant
closing” (as defined by WARN) with respect to Parent or any of its Subsidiaries
since November 1, 2008.
SECTION 4.12. Environmental
Matters. Except for those matters that have not resulted and
would not reasonably be expected to have a Parent Material Adverse Effect,
(A) each of the Company and its Subsidiaries is, and has been, in
compliance with all applicable Environmental Laws, (B) there is no suit,
claim, action or proceeding relating to or arising under Environmental Laws that
is pending or, to the Knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries or any real property currently or, to the
Knowledge of the Company, formerly owned, operated or leased by the Company or
any of its Subsidiaries, (C) to the Knowledge of the Company, there are no
pending or threatened investigations of the Company or any of its Subsidiaries
or any property currently or formerly owned, operated or leased by the Company
or any of its Subsidiaries which would reasonably be expected to result in the
Company and its Subsidiaries incurring Environmental Liabilities, (D) to
the Knowledge of the Company, no facts, circumstances or conditions exist with
respect to the Company or any of its Subsidiaries or any property currently (or,
to the Knowledge of the Company, formerly) owned, operated or leased by the
Company or any of its Subsidiaries or any property to or at which the Company or
any of its Subsidiaries transported or arranged for the disposal or treatment of
Hazardous Materials that would reasonably be expected to result in the Company
and its Subsidiaries incurring Environmental Liabilities, and (E) to the
Knowledge of the Company, the Company has made available to Parent copies of all
environmental reports, assessments, reviews and investigations and all written
information pertaining to known or anticipated Environmental Liabilities
relating to the Company or its Subsidiaries.
SECTION 4.13. Contracts.
(a) Set forth
in Section 4.13(a)
of the Parent Disclosure Schedule is a list of (i) each Contract that would
be required to be filed as an exhibit to a Registration Statement on Form S-1
under the Securities Act or an Annual Report on Form 10-K under the Exchange Act
if such registration statement or report was filed by Parent with the SEC on the
date hereof, and (ii) each of the following to which Parent or any of its
Subsidiaries is a party: (A) Contract that purports to limit,
curtail or restrict the ability of Parent or any of its existing or future
Subsidiaries or Affiliates to compete in any geographic area or line of business
or restrict the Persons to whom Parent or any of its existing or future
Subsidiaries or Affiliates may sell products or deliver services,
(B) partnership or joint venture agreement, (C) Contract for the
acquisition, sale or lease of material properties or assets (by merger, purchase
or sale of stock or assets or otherwise) entered into since January 1,
2006, (D) Contract with any (x) Governmental Authority or
(y) director or officer of Parent or any of its Subsidiaries or any
Affiliate of Parent, (E) loan or credit agreement, mortgage, indenture,
note or other Contract or instrument evidencing indebtedness for borrowed money
by Parent or any of its Subsidiaries or any Contract or instrument pursuant to
which indebtedness for borrowed money may be incurred or is guaranteed by Parent
or any of its Subsidiaries, (F) financial derivatives master agreement or
confirmation, or futures account opening agreements and/or brokerage statements,
evidencing financial hedging or similar trading activities, (G) voting
agreement or registration rights agreement, (H) mortgage, pledge, security
agreement, deed of trust or other Contract granting a Lien on any material
property or assets of Parent or any of its Subsidiaries, (I) customer,
client or supply Contract that involves total consideration in excess of
$1,000,000 (other than purchase orders issued (or received) for the purchase or
sale of goods in the ordinary course of business consistent with past practice),
(J) Contract (other than customer, client or supply Contracts) that involve
consideration (whether or not measured in cash) of greater than $1,000,000,
(K) collective bargaining agreement, (L) “standstill” or similar
agreement, (M) Contract that restricts or otherwise limits the payment of
dividends or other distributions on equity securities, (N) to the extent
material to the business or financial condition of Parent and its Subsidiaries,
taken as a whole, (1) lease or rental Contract, (2) product design or
development Contract, (3) consulting Contract, (4) indemnification
Contract, (5) license or royalty Contract, (6) merchandising, sales
representative or distribution Contract or (7) Contract granting a right of
first refusal or first negotiation, and (O) commitment or agreement to
enter into any of the foregoing (the Contracts and other documents required to
be listed on Section 4.13(a)
of the Parent Disclosure Schedule, together with any and all other Contracts of
such type entered into in accordance with Section 5.2(b),
each a “Parent Material
Contract”). Parent has heretofore made available to the
Company correct and complete copies of each Parent Material Contract in
existence as of the date hereof, together with any and all amendments and
supplements thereto and material “side letters” and similar documentation
relating thereto.
(b) Each of
the Parent Material Contracts is valid, binding and in full force and effect and
is enforceable in accordance with its terms by Parent and its Subsidiaries party
thereto, subject to the Bankruptcy and Equity Exception. No approval,
consent or waiver of any Person is needed in order that any Parent Material
Contract continue in full force and effect following the consummation of the
Transactions. Neither Parent nor any of its Subsidiaries is in
default under any Parent Material Contract or other Contract to which Parent or
any of its Subsidiaries is a party (collectively, the “Parent Contracts”), nor does any condition exist
that, with notice or lapse of time or both, would constitute a default
thereunder by Parent and its Subsidiaries party thereto, except for such
defaults as, individually or in the aggregate, have not had and would not
reasonably be expected to be material to Parent. To the Knowledge of
Parent, no other party to any Parent Contract is in default thereunder, nor does
any condition exist that with notice or lapse of time or both would constitute a
default by any such other party thereunder, except for such defaults as,
individually or in the aggregate, have not had and would not reasonably be
expected to be material to Parent. Neither Parent nor any of its
Subsidiaries has received any notice of termination or cancellation under any
Parent Material Contract, received any notice of breach or default in any
material respect under any Parent Material Contract which breach has not been
cured, or granted to any third party any rights, adverse or otherwise, that
would constitute a breach of any Parent Material Contract.
SECTION 4.14. Title to
Properties. Each of Parent and its Subsidiaries (a) has
good and valid title (or such lesser interest that is the maximum permitted by
applicable Law) to all properties and other assets which are reflected on the
most recent consolidated balance sheet of Parent included in the Filed
Viasystems SEC Documents as being owned by Parent or one of its Subsidiaries (or
acquired after the date thereof) and which are, individually or in the
aggregate, material to Parent’s business or financial condition on a
consolidated basis (except properties sold or otherwise disposed of since the
date thereof in the ordinary course of business consistent with past practice
and not in violation of this Agreement), free and clear of all Liens except
(i) statutory liens securing payments not yet due, (ii) security
interests, mortgages and pledges that are disclosed in the Filed Viasystems SEC
Documents that secure indebtedness that is reflected in the most recent
consolidated financial statements of Viasystems included in the Filed Viasystems
SEC Documents and (iii) such other imperfections or irregularities of title
or other Liens that, individually or in the aggregate, do not and would not
reasonably be expected to materially affect the use of the properties or assets
subject thereto or otherwise materially impair business operations as presently
conducted or as currently proposed by Parent’s management to be conducted, and
(b) is the lessee or sublessee of all leasehold estates and leasehold
interests reflected in the Filed Viasystems SEC Documents (or acquired after the
date thereof) which are, individually or in the aggregate, material to the
Parent’s business or financial condition on a consolidated basis (other than any
such leaseholds whose scheduled terms have expired subsequent to the date of
such Filed Viasystems SEC Documents). Each of Parent and its
Subsidiaries enjoys peaceful and undisturbed possession under all such leases in
all material respects. Except for the properties and assets which are
reflected on the most recent consolidated balance sheet of Viasystems included
in the Filed Viasystems SEC Documents, Parent does not own any other material
properties or assets.
SECTION 4.15. Intellectual
Property.
(a) For
purposes of this Agreement:
(i) “Parent Intellectual Property” means all
Intellectual Property Rights used in or necessary for the conduct of the
business of Parent or any of its Subsidiaries, or owned or held for use by
Parent or any of its Subsidiaries.
(ii) “Parent Registered Intellectual
Property” means all issued Patents, pending Patent applications,
registered Marks, pending applications for registration of Marks, registered
Copyrights and pending applications for registration of Copyrights owned, filed
or applied for by Parent or any of its Subsidiaries.
(iii) “Parent Technology” means all Technology used in
or necessary for the conduct of the business of Parent or any of its
Subsidiaries, or owned or held for use by Parent or any of its
Subsidiaries.
(b) Section 4.15(b)
of the Parent Disclosure Schedule sets forth an accurate and complete list of
all Parent Registered Intellectual Property and all material unregistered Marks
used by Parent or any of its Subsidiaries. Section 4.15(b)
of the Parent Disclosure Schedule lists, for each item of Parent Registered
Intellectual Property, the owner of such item of Parent Registered Intellectual
Property, the registration or application date and number (as applicable) of
such item of Parent Registered Intellectual Property and the jurisdiction in
which such item of Parent Registered Intellectual Property has been issued or
registered or in which any application for issuance and registration has been
filed. All necessary registration, maintenance, renewal and other
relevant filing fees in connection with any of the Parent Registered
Intellectual Property have been timely paid, and all necessary documents,
certificates and other relevant filings in connection with any of the Parent
Registered Intellectual Property have been timely made, with the relevant
Governmental Authorities and Internet domain name registrars in the United
States or foreign jurisdictions, as the case may be, for the purpose of
maintaining the Parent Registered Intellectual Property and all issuances,
registrations and applications therefor.
(c) Parent
and/or one of its Subsidiaries is the sole and exclusive owner of all Parent
Registered Intellectual Property, free and clear of all Liens. Parent
and/or one of its Subsidiaries is the sole and exclusive owner of, or has valid
and continuing rights to use, sell, license and otherwise exploit, all of the
other Parent Intellectual Property and Parent Technology as the same is used,
sold, licensed and otherwise exploited by Parent or any of its Subsidiaries in
their respective businesses as currently conducted, free and clear of
Liens. The Parent Intellectual Property and Parent Technology owned
by or licensed to Parent or any of its Subsidiaries includes all of the material
Intellectual Property Rights and Technology necessary and sufficient to enable
Parent and its Subsidiaries to conduct their respective businesses in the manner
in which such businesses are currently being conducted. The Parent
Registered Intellectual Property (other than any applications included in the
Parent Registered Intellectual Property) is valid and enforceable.
(d) To the
Knowledge of Parent, none of the following infringe, constitute or result from
an unauthorized use or misappropriation of or violate any Intellectual Property
Rights of any other Person, except as would not have a material effect on
Parent: (i) any Parent Intellectual property; (ii) any Parent
Technology; and (iii) the development, manufacturing, licensing, marketing,
importation, exportation, offer for sale, sale, use, practice or other
exploitation of any Parent Intellectual Property, Parent Technology, products or
services by Parent or any of its Subsidiaries; or (iv) the present business
practices, methods or operations of Parent or any of its
Subsidiaries. Neither Parent nor any of its Subsidiaries is a party
to or the subject of any pending or, to the Knowledge of Parent, threatened
suit, action, investigation or proceeding which involves a claim
(A) against Parent or any of its Subsidiaries of infringement, unauthorized
use, misappropriation or violation of any Intellectual Property Rights of any
Person, or challenging the ownership, use, validity or enforceability of any
Parent Intellectual Property or Parent Technology or (B) contesting the
right of Parent or any of its Subsidiaries to use, sell, exercise, license,
transfer or dispose of any Parent Intellectual Property or Parent Technology, or
any products, processes or materials covered thereby in any
manner. Neither Parent nor any of its Subsidiaries has received
written notice of any such threatened claim.
(e) To the
Knowledge of Parent and except as would not have a material effect on Parent, no
Person (including employees and former employees of Parent or any of its
Subsidiaries) is infringing, violating, misappropriating or otherwise misusing
any Parent Intellectual Property owned by or exclusively licensed to Parent or
any of its Subsidiaries. Neither Parent nor any of its Subsidiaries
has made any claim of infringement, violation, misappropriation or misuse of any
Parent Intellectual Property owned by or exclusively licensed to Parent or any
of its Subsidiaries against any Person (including employees and former employees
of Parent or any of its Subsidiaries).
(f) No Trade
Secret or other non-public, proprietary information material to the businesses
of Parent or any of its Subsidiaries as presently conducted has been authorized
to be disclosed or, to the Knowledge of Parent, has been actually disclosed by
Parent or any of its Subsidiaries to any employee or any third Person other than
pursuant to a confidentiality or non-disclosure agreement restricting the
disclosure and use thereof. Each of Parent and its Subsidiaries has
taken commercially reasonable measures to protect and preserve the
confidentiality of all such Trade Secrets and other non-public, proprietary
information (and any confidential information of any other Person to whom Parent
or any of its Subsidiaries has a confidentiality obligation). Each
employee, consultant and independent contractor of Parent or any of its
Subsidiaries involved in the creation or development of any Intellectual
Property Rights, Technology, products or services of Parent or any of its
Subsidiaries has entered into a written non-disclosure and invention assignment
agreement with Parent or such Subsidiary, as applicable, in a form made
available to the Company prior to the date hereof.
(g) No
government funding and no facilities of a university, college, other educational
institution or research center were used in the development of any Intellectual
Property Rights or Technology owned by Parent or any of its Subsidiaries where,
as a result of such funding or the use of such facilities, the government or any
university, college, other educational institution or research center has any
rights in such Intellectual Property Rights or Technology. To the
Knowledge of Parent, no current or former employee, consultant or independent
contractor of Parent or any of its Subsidiaries who contributed to the creation
or development of any Intellectual Property Rights or Technology owned by Parent
or any of its Subsidiaries has performed services for the government or a
university, college, other educational institution or research center during a
period of time during which such employee, consultant or independent contractor
was also performing services for Parent or any of its Subsidiaries.
(h) Parent
and its Subsidiaries own, lease or license all hardware, computer equipment and
other information technology systems (collectively, “Parent Computer Systems”) that are
necessary for the operation of Parent’s and its Subsidiaries’
businesses. The Parent Computer Systems are adequate for the
operation of Parent’s and its Subsidiaries’ businesses as currently
conducted. During the three (3) year period prior to the date hereof,
(i) no error or fault has occurred in or to any of the Parent Computer
Systems that has resulted in a material interruption to the operations of Parent
or any of its Subsidiaries and (ii) to the Knowledge of Parent, there has
been no unauthorized access to or use of any of the Parent Computer
Systems.
(i) Each of
Parent and its Subsidiaries has established privacy compliance policies and is
in compliance with, and has been in compliance with for the three (3) year
period prior to the date hereof, its respective privacy policies and any
applicable Laws relating to personal identifiable information.
(j) The
consummation of the transactions contemplated hereby will not encumber or
extinguish any Parent Intellectual Property or Parent Technology or result in
the loss or impairment of the right of Parent to own or use any Parent
Intellectual Property or Parent Technology. Neither this Agreement
nor any transaction contemplated by this Agreement will result in the grant by
Parent or any of its Subsidiaries to any Person of any ownership interest,
license, right or protection from any legal proceeding with respect to any
Parent Intellectual Property or Parent Technology or in the Company being bound
by or subject to any non-compete or other restriction, pursuant to any Contract
to which Parent or any of its Subsidiaries is a party or by which any assets or
properties of Parent or any of its Subsidiaries is bound.
SECTION 4.16. Insurance, Claims and
Warranties.
(a) Section 4.16(a)
of the Parent Disclosure Schedule sets forth a correct and complete list of all
insurance policies (including information on the premiums payable in connection
therewith and the scope and amount of the coverage provided thereunder)
maintained by Parent or any of its Subsidiaries (the “Parent Policies”). The Parent Policies
(i) have been issued by insurers which, to the Knowledge of Parent, are
reputable and financially sound, (ii) provide coverage for the operations
conducted by Parent and its Subsidiaries of a scope and coverage consistent with
customary practice in the industries in which Parent and its Subsidiaries
operate and (iii) are in full force and effect. Neither Parent
nor any of its Subsidiaries is in material breach or default, and neither Parent
nor any of its Subsidiaries have taken any action or failed to take any action
which, with notice or the lapse of time, would constitute such a breach or
default, or permit termination or modification, of any of the Parent
Policies. No notice of cancellation or termination has been received
by Parent with respect to any of the Parent Policies. The
consummation of the Transactions will not, in and of itself, cause the
revocation, cancellation or termination of any Parent Policy.
(b) Section 4.16(b)
of the Parent Disclosure Schedule sets forth, as of the date of this Agreement,
a correct and complete list and summary description of all claims, duties,
responsibilities, liabilities or obligations arising since January 1, 2007 from,
or alleged to arise from, any injury to any Person (including current and former
employees) or property as a result of the manufacture, sale, ownership,
possession or use of any product of Parent or any of its
Subsidiaries. All such existing claims are or will be fully covered
by product liability insurance. No circumstances exist affecting the
safety of the products of Parent or any of its Subsidiaries that, individually
or in the aggregate, would reasonably be expected to have a Parent Material
Adverse Effect.
(c) Section 4.16(c)
of the Parent Disclosure Schedule contains a correct and complete statement of
all warranties, warranty policies, service agreements and maintenance agreements
of Parent and any of its Subsidiaries in effect as of the date of this Agreement
that provide for warranty coverage for a period in excess of twelve (12)
months. All products of each of Parent and its Subsidiaries
manufactured, processed, assembled, distributed, shipped or sold and any
services rendered in the conduct of the business of Parent or any of its
Subsidiaries have been in conformity with all applicable contractual commitments
and all express or implied warranties, except where the failure to be in
conformity, individually or in the aggregate, has not had and would not
reasonably be expected to have a Parent Material Adverse Effect. All
warranties of each of Parent and its Subsidiaries are in conformity with the
labeling and other requirements of applicable Laws, except where any failure to
be in conformity, individually or in the aggregate, has not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
SECTION 4.17. Brokers and Other
Advisors. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., the fees and
expenses of which will be paid by Parent, no broker, investment banker,
financial advisor or other Person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission, or the reimbursement of
expenses, in connection with the Transactions based upon arrangements made by or
on behalf of Parent or Merger Sub or any of their respective
Subsidiaries.
SECTION 4.18. Ownership and Operations of
Merger Sub. Parent owns beneficially and of record all of the
outstanding capital stock of Merger Sub. Merger Sub was formed solely
for the purpose of engaging in the Transactions, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
SECTION 4.19. State Takeover
Statutes. No “fair price”, “moratorium”, “control share
acquisition” or other similar antitakeover statute or regulation enacted under
state or federal laws in the United States applicable to Parent or Merger Sub is
applicable to the Merger or the other Transactions.
SECTION 4.20. Reorganization
Treatment. Parent and Merger Sub agree to report the Merger,
together with the Exchange, as a “reorganization” within the meaning of
Section 368(a) of the Code and not to take any action inconsistent with
reorganization treatment other than such actions that are required pursuant to
this Agreement.
SECTION 4.21. Interested Party
Transactions. Since January 1, 2006, there have been no
transactions, agreements, arrangements or understanding between Parent or any of
its Subsidiaries on the one hand, and the Affiliates of Parent on the other hand
(other than Parent's Subsidiaries), that would have been required to be
disclosed under Item 404 under Regulation S-K under the Exchange Act if Parent
had been subject to Exchange Act and that has not been so disclosed to the
Company.
SECTION 4.22. Financing. Parent
has provided to the Company a true and correct copy of a commitment letter,
dated July 10, 2009, executed and delivered by Wachovia Bank National
Association (such commitment letter or letters, together with any amendments or
supplements thereto or replacements thereof obtained by Parent from time to
time, the “Commitment Letter”) with respect to all debt
financing required for consummation of the transactions contemplated hereby
(the “Financing”). The amount of the Financing
provides sufficient funds for Parent and Merger Sub to consummate the
transactions contemplated by this Agreement and to pay any expenses incurred by
Parent and Merger Sub in connection with the transactions contemplated by this
Agreement.
Additional Covenants and
Agreements
SECTION 5.1. Preparation of the
Registration Form S-4 and the Proxy Statement; Stockholder Meetings;
Recapitalization.
(a) As soon
as practicable following the date of this Agreement, the Company and Parent
shall prepare and the Company shall file with the SEC the Proxy Statement and
the Company and Parent shall prepare and Parent shall file with the SEC the
Registration Form S-4, in which the Proxy Statement will be included as a
prospectus. The Registration Form S-4 and Proxy Statement shall be in
a form and substance reasonably satisfactory to Parent and the
Company. Each of the Company and Parent shall use its reasonable best
efforts to have the Registration Form S-4 declared effective under the
Securities Act as promptly as practicable after such filing and keep the
Registration Form S-4 effective for so long as necessary to consummate the
Merger. The Company shall use its reasonable best efforts to cause
the Proxy Statement to be mailed to the stockholders of the Company as promptly
as practicable after the Registration Form S-4 is declared effective under the
Securities Act. Parent shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or filing a general consent to service of process) required to be
taken under any applicable state securities Laws in connection with the issuance
of shares of Parent Common Stock in the Merger, and the Company shall furnish
all information concerning the Company and the holders of shares of Company
Common Stock as may be reasonably requested by Parent in connection with any
such action. No filing of, or amendment or supplement to, the
Registration Form S-4 will be made by Parent, and no filing of, or amendment or
supplement to, the Proxy Statement will be made by the Company, in each case,
without providing the other party a reasonable opportunity to review and comment
thereon. If at any time prior to the Effective Time any information
relating to the Company or Parent, or any of their respective Affiliates,
directors or officers, should be discovered by the Company or Parent which
should be set forth in an amendment or supplement to either the Registration
Form S-4 or the Proxy Statement, so that either such document would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other parties hereto and an appropriate amendment or
supplement describing such information shall be promptly filed with the SEC and,
to the extent required by Law, disseminated to the stockholders of the
Company. The parties shall notify each other promptly of the receipt
of any comments from the SEC or the staff of the SEC and of any request by the
SEC or the staff of the SEC for amendments or supplements to the Proxy Statement
or the Registration Form S-4 or for additional information and shall supply each
other with copies of (i) all correspondence between it or any of its
Representatives, on the one hand, and the SEC or the staff of the SEC, on the
other hand, with respect to the Proxy Statement, the Registration Form S-4 or
the Merger and (ii) all orders of the SEC relating to the Registration Form
S-4.
(b) The
Company shall, as soon as practicable following the date of this Agreement,
establish a record date for, duly call, give notice of, convene and hold a
special meeting of its stockholders (the “Company Stockholders Meeting”) solely for the
purpose of obtaining the Company Stockholder Approval. Subject to
Section 5.3(c)
hereof, the Company shall, through its board of directors, recommend to its
stockholders adoption of this Agreement (the “Company Board Recommendation”). The
Proxy Statement shall include a copy of the Fairness Opinion and (subject to
Section 5.3(c)
hereof) the Company Board Recommendation. Notwithstanding anything to
the contrary contained in this Agreement, the Company may adjourn or postpone
the Company Stockholders’ Meeting to the extent necessary to ensure that any
necessary supplement or amendment to the Proxy Statement is provided to the
Company Stockholders in advance of the vote to be held at the Company
Stockholders’ Meeting or, if as of the time for which the Company Stockholders’
Meeting is originally scheduled (as set forth in the Proxy Statement) there are
insufficient shares of Company Common Stock represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of the Company
Stockholders’ Meeting.
(c) Prior to
the Closing, Parent shall effect a recapitalization implementing the
capitalization of Parent set forth in Section 4.2(b)
(the “Recapitalization”), as more fully set forth in
the Recapitalization Agreement. In accordance with the
Recapitalization Agreement, immediately prior to the Closing, Parent shall (i)
amend its certificate of incorporation and file such amendment with the
Secretary of State of the State of Delaware substantially in the form attached
hereto as Exhibit B-1,
(ii) amend its bylaws substantially in the form attached hereto as Exhibit B-2,
(iii) terminate the Stockholders Agreement, dated January 31, 2003, between
Parent and the other parties thereto, as amended by that certain First Amendment
and Consent, dated as of October 2003, (iv) enter into the Stockholder Agreement
between Parent and a limited liability company holding the interests of ▇▇▇▇▇
Muse, GSC and TCW substantially in the form as set forth in Exhibit C, and
(v) terminate the Monitoring and Oversight Agreement, dated as of January
31, 2003, among Parent, ▇▇▇▇▇, Muse & Co. Partners L.P., an affiliate of
▇▇▇▇▇ Muse, and the other parties thereto.
SECTION 5.2. Conduct of
Business.
(a) Except as
expressly permitted by this Agreement or as required by applicable Law and
except as set forth in the Company Disclosure Schedule, during the period from
the date of this Agreement until the Effective Time, the Company shall, and
shall cause each of its Subsidiaries to, (w) conduct its business in the
ordinary course consistent with past practice, (x) comply in all material
respects with all applicable Laws and the requirements of all Company Material
Contracts, (y) use commercially reasonable efforts to maintain and preserve
intact its business organization and the goodwill of those having business
relationships with it and retain the services of its present officers and key
employees, in each case, to the end that its goodwill and ongoing business shall
be unimpaired at the Effective Time, and (z) keep in full force and effect
all material insurance policies maintained by the Company and its Subsidiaries,
other than changes to such policies made in the ordinary course of
business. Without limiting the generality of the foregoing, except as
expressly permitted by this Agreement or as required by applicable Law or with
the prior written consent of Parent, during the period from the date of this
Agreement to the Effective Time, the Company shall not, and shall not permit any
of its Subsidiaries to:
(i) (A)
issue, sell, grant, dispose of, pledge or otherwise encumber any shares of its
capital stock, voting securities or equity interests, or any securities or
rights convertible into, exchangeable or exercisable for, or evidencing the
right to subscribe for any shares of its capital stock, voting securities or
equity interests, or any rights, warrants, options, calls, commitments or any
other agreements of any character to purchase or acquire any shares of its
capital stock, voting securities or equity interests or any securities or rights
convertible into, exchangeable or exercisable for, or evidencing the right to
subscribe for, any shares of its capital stock, voting securities or equity
interests, provided that the
Company may issue shares of Company Common Stock upon (x) the exercise of
options and settlement of awards granted under the Company Stock Plans,
(y) the conversion of the Company Convertible Securities, in each case,
that are outstanding on the date of this Agreement and in accordance with the
terms thereof, and (z) pursuant to the Company’s Employee Stock Purchase
Plan; (B) redeem, purchase or otherwise acquire any of its outstanding
shares of capital stock, voting securities or equity interests, or any rights,
warrants, options, calls, commitments or any other agreements of any character
to acquire any shares of its capital stock, voting securities or equity
interests (other than pursuant to the option exercise and tax withholding
provisions of awards under the Company Stock Plans); (C) declare, set aside
for payment or pay any dividend on, or make any other distribution in respect
of, any shares of its capital stock or otherwise make any payments to its
stockholders in their capacity as such (other than dividends by a direct or
indirect wholly owned Subsidiary of the Company to its parent); (D) split,
combine, subdivide or reclassify any shares of its capital stock; or
(E) amend (including by reducing an exercise price or extending a term) or
waive any of its rights under, or accelerate the vesting under, any provision of
the Company Stock Plans or any agreement evidencing any outstanding stock option
or other right to acquire capital stock of the Company or any restricted stock
purchase agreement or any similar or related contract;
(ii) incur or
assume any indebtedness for borrowed money or guarantee any indebtedness (or
enter into a “keep well” or similar agreement) or issue or sell any debt
securities or options, warrants, calls or other rights to acquire any debt
securities of the Company or any of its Subsidiaries, other than
(A) incurrence by the Company or its Subsidiaries of additional
indebtedness (net of cash and investments) of not more than $16,000,000 in the
aggregate, provided that cash realized from sales permitted under Section 5.2(a)(iii)
shall not be included for this purpose, and (B) borrowings from the Company
by a direct or indirect wholly owned Subsidiary of the Company in the ordinary
course of business consistent with past practice;
(iii) sell,
transfer, lease, mortgage, encumber or otherwise dispose of or subject to any
Lien (including pursuant to a sale-leaseback transaction or an asset
securitization transaction) any of its properties or assets (including
securities of Subsidiaries) to any Person, except (A) sales of inventory in
the ordinary course of business consistent with past practice, (B) pursuant
to Contracts in force at the date of this Agreement and listed on Section 5.2(b)(iii)
of the Company Disclosure Schedule, correct and complete copies of which have
been made available to Parent, (C) the sale or other disposition of the
Company’s Hong Kong facilities, but only if the aggregate cash proceeds from
such sale or disposition exceed $8,000,000; (D) the sale or disposition of
assets held for sale relating to the Forest Grove facility, but only if the
aggregate cash proceeds from such sale or disposition exceed $4,000,000;
(E) the sublease of the property leased by the Company under the Net Lease
Agreement, dated as of August 22, 2000, between the Company and Opus Northwest,
L.L.C., but only if the annual payments received from such sublease exceed
$540,000; and (F) dispositions of obsolete or worthless assets or
miscellaneous assets with a net book value of not more than $250,000 in the
aggregate;
(iv) make any
capital expenditure or expenditures which (A) involves the purchase of real
property or (B) is in excess of $2,000,000 in the aggregate per fiscal
quarter, and in any event not to exceed $5,000,000 in the aggregate during
calendar 2009;
(v) directly
or indirectly acquire, by merging or consolidating with, by purchasing all of or
a substantial equity interest in or all or substantially all of the assets of,
or by any other manner, any Person or division or business of any
Person;
(vi) make any
investment (by contribution to capital, property transfers, purchase of
securities or otherwise) in, or loan or advance (other than travel and other
advances to its employees in the ordinary course of business consistent with
past practice) to, any Person other than a direct or indirect wholly owned
Subsidiary of the Company in the ordinary course of business;
(vii) (A) enter
into, terminate or amend any Company Material Contract, or, other than in the
ordinary course of business consistent with past practice, any other Contract
that is material to the Company and its Subsidiaries taken as a whole,
(B) enter into or extend the term or scope of any Contract that purports to
restrict the Company, or any existing or future Subsidiary or Affiliate of the
Company, from engaging in any line of business or in any geographic area,
(C) amend or modify the engagement letter with ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners
relating to the Transactions, (D) enter into any Contract that would be
breached by, or require the consent of any third party in order to continue in
full force following, consummation of the Transactions, or (E) release any
Person from, or modify or waive any provision of, any confidentiality,
standstill or similar agreement;
(viii) increase
in any manner the compensation of any of its directors, officers or employees or
enter into, establish, amend or terminate, or increase any benefits under any
employment, consulting, retention, change in control, collective bargaining,
bonus or other incentive compensation, profit sharing, health or other welfare,
stock option or other equity (or equity-based), pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan, policy,
agreement, trust, fund or arrangement with, for or in respect of, any
stockholder, director, officer, other employee, consultant or Affiliate, other
than (A) as required pursuant to applicable law or the terms of a Company
Stock Plan (correct and complete copies of which have been made available to
Parent), (B) increases in salaries, wages and benefits of employees (other
than officers) made in the ordinary course of business and in amounts and in a
manner consistent with past practice or (C) any changes arising from
collective bargaining arrangements in the PRC;
(ix) make or
change any material election concerning Taxes or Tax Returns, file any amended
Tax Return, enter into any closing agreement with respect to Taxes, settle any
material Tax claim or assessment or surrender any right to claim a refund of
Taxes or obtain any Tax ruling, in each case other than in the ordinary course
of business;
(x) make any
changes in financial or tax accounting methods, principles or practices (or
change an annual accounting period), except insofar as may be required by a
change in GAAP or applicable Law, excluding changes to remediate delayed
reporting by the Company’s Asia operations;
(xi) amend the
Company Charter Documents or the Company Subsidiary Documents;
(xii) adopt a
plan or agreement of complete or partial liquidation, dissolution,
restructuring, recapitalization, merger, consolidation or other reorganization,
other than transactions exclusively between wholly owned Subsidiaries of the
Company (excluding, however, Merix Holding (Singapore) Pte Ltd);
(xiii) pay,
discharge, settle or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction in accordance with their terms
(or less than as required under their terms) of liabilities, claims or
obligations reflected or reserved against in the most recent consolidated
financial statements (or the notes thereto) of the Company included in the Filed
Company SEC Documents or incurred since the date of such financial statements in
the ordinary course of business consistent with past practice;
(xiv) issue any
broadly distributed communication of a general nature to employees (including
general communications relating to benefits and compensation) or customers
without the prior approval of Parent, except for communications in the ordinary
course of business that do not relate to the Transactions;
(xv) settle or
compromise any litigation, proceeding or investigation; or
(xvi) agree, in
writing or otherwise, to take any of the foregoing actions, or take any action
or agree, in writing or otherwise, to take any action which would (A) cause
any of the representations or warranties of the Company set forth in this
Agreement (1) that are qualified as to materiality or Material Adverse
Effect to be untrue or (2) that are not so qualified to be untrue in any
material respect or (B) in any material respect impede or delay the ability
of the parties to satisfy any of the conditions to the Merger set forth in this
Agreement.
(b) Except as
expressly permitted by this Agreement or as required by applicable Law and
except as set forth in the Parent Disclosure Schedule, during the period from
the date of this Agreement until the Effective Time, Parent shall, and shall
cause each of its Subsidiaries to, (w) conduct its business in the ordinary
course consistent with past practice, (x) comply in all material respects
with all applicable Laws and the requirements of all Parent Material Contracts,
(y) use commercially reasonable efforts to maintain and preserve intact its
business organization and the goodwill of those having business relationships
with it and retain the services of its present officers and key employees, in
each case, to the end that its goodwill and ongoing business shall be unimpaired
at the Effective Time, and (z) keep in full force and effect all material
insurance policies maintained by Parent and its Subsidiaries, other than changes
to such policies made in the ordinary course of business. Without
limiting the generality of the foregoing, except as expressly permitted by this
Agreement or as required by applicable Law or with the prior written consent of
the Company, during the period from the date of this Agreement to the Effective
Time, Parent shall not, and shall not permit any of its Subsidiaries
to:
(i) other
than related to the Recapitalization, (A) issue, sell, grant, dispose of,
pledge or otherwise encumber any shares of its capital stock, voting securities
or equity interests, or any securities or rights convertible into, exchangeable
or exercisable for, or evidencing the right to subscribe for any shares of its
capital stock, voting securities or equity interests, or any rights, warrants,
options, calls, commitments or any other agreements of any character to purchase
or acquire any shares of its capital stock, voting securities or equity
interests or any securities or rights convertible into, exchangeable or
exercisable for, or evidencing the right to subscribe for, any shares of its
capital stock, voting securities or equity interests, provided that Parent
may issue shares of Parent Common Stock upon (x) the exercise of options
and settlement of awards granted under the Parent Stock Plans and (y) the
exercise of any Parent Common Stock Warrants; (B) redeem, purchase or
otherwise acquire any of its outstanding shares of capital stock, voting
securities or equity interests, or any rights, warrants, options, calls,
commitments or any other agreements of any character to acquire any shares of
its capital stock, voting securities or equity interests (other than pursuant to
the option exercise and tax withholding provisions of awards under the Parent
Stock Plans); (C) declare, set aside for payment or pay any dividend on, or
make any other distribution in respect of, any shares of its capital stock or
otherwise make any payments to its stockholders in their capacity as such (other
than dividends by a direct or indirect wholly owned Subsidiary of Parent to its
parent); (D) split, combine, subdivide or reclassify any shares of its
capital stock; or (E) amend (including by reducing an exercise price or
extending a term) or waive any of its rights under, or accelerate the vesting
under, any provision of the Parent Stock Plans or any agreement evidencing any
outstanding stock option or other right to acquire capital stock of Parent or
any restricted stock purchase agreement or any similar or related
contract;
(ii) incur or
assume any indebtedness for borrowed money or guarantee any indebtedness (or
enter into a “keep well” or similar agreement) or issue or sell any debt
securities or options, warrants, calls or other rights to acquire any debt
securities of Parent or any of its Subsidiaries, other than (A) incurrence
by Parent or its Subsidiaries of additional indebtedness (net of cash and
investments) of not more than $50,000,000 in the aggregate, provided that cash
realized from sales permitted under Section 5.2(b)(iii)
shall not be included for this purpose, and (B) borrowings from the Parent
by a direct or indirect wholly owned Subsidiary of the Parent in the ordinary
course of business consistent with past practice;
(iii) sell,
transfer, lease, mortgage, encumber or otherwise dispose of or subject to any
Lien (including pursuant to a sale-leaseback transaction or an asset
securitization transaction) any of its properties or assets (including
securities of Subsidiaries) to any Person, except (A) sales of inventory in
the ordinary course of business consistent with past practice, (B) pursuant
to Contracts in force at the date of this Agreement and listed on Section 5.2(a)(iii)
of the Parent Disclosure Schedule, correct and complete copies of which have
been made available to the Company, (C) the sale or disposition of assets
held or formerly held for sale relating to the Milwaukee facility, but only if
the aggregate cash proceeds from such sales or dispositions from and after
January 1, 2009 exceed $2,000,000, or (D) dispositions of obsolete or
worthless assets or miscellaneous assets with a net book value of not more than
$500,000 in the aggregate (excluding asset sales related to the Milwaukee
facility);
(iv) make any
capital expenditure or expenditures which (A) involves the purchase of real
property or (B) is in excess of $20,000,000 in the aggregate per fiscal
quarter, and in any event not to exceed $40,000,000 in the aggregate during
calendar 2009;
(v) directly
or indirectly acquire, by merging or consolidating with, by purchasing all of or
a substantial equity interest in or all or substantially all of the assets of,
or by any other manner, any Person or division or business of any
Person;
(vi) make any
investment (by contribution to capital, property transfers, purchase of
securities or otherwise) in, or loan or advance (other than travel and other
advances to its employees in the ordinary course of business consistent with
past practice) to, any Person other than a direct or indirect wholly owned
Subsidiary of Parent in the ordinary course of business;
(vii) (A) enter
into, terminate or amend any Parent Material Contract or, other than in the
ordinary course of business consistent with past practices, any other Contract
that is material to Parent and its Subsidiaries taken as a whole, (B) enter
into or extend the term or scope of any Contract that purports to restrict
Parent, or any existing or future Subsidiary or Affiliate of Parent, from
engaging in any line of business or in any geographic area, (C) amend or
modify the engagement letter with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. relating to the
Transactions, (D) enter into any Contract that would be breached by, or
require the consent of any third party in order to continue in full force
following, consummation of the Transactions, or (E) release any Person
from, or modify or waive any provision of, any confidentiality, standstill or
similar agreement;
(viii) increase
in any manner the compensation of any of its directors, officers or employees or
enter into, establish, amend or terminate, or increase any benefits under any
employment, consulting, retention, change in control, collective bargaining,
bonus or other incentive compensation, profit sharing, health or other welfare,
stock option or other equity (or equity-based), pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan, policy,
agreement, trust, fund or arrangement with, for or in respect of, any
stockholder, director, officer, other employee, consultant or Affiliate, other
than (A) as required pursuant to applicable law or the terms of a Parent
Stock Plan (correct and complete copies of which have been made available to the
Company), (B) increases in salaries, wages and benefits of employees (other
than officers) made in the ordinary course of business and in amounts and in a
manner consistent with past practice or (C) any changes arising from
collective bargaining arrangements in the PRC;
(ix) make or
change any material election concerning Taxes or Tax Returns, file any amended
Tax Return, enter into any closing agreement with respect to Taxes, settle any
material Tax claim or assessment or surrender any right to claim a refund of
Taxes or obtain any Tax ruling, in each case other than in the ordinary course
of business;
(x) make any
changes in financial or tax accounting methods, principles or practices (or
change an annual accounting period), except insofar as may be required by a
change in GAAP or applicable Law;
(xi) amend the
Parent Charter Documents or the Parent Subsidiary Documents, other than pursuant
to the Recapitalization;
(xii) adopt a
plan or agreement of complete or partial liquidation, dissolution,
restructuring, recapitalization, merger, consolidation or other reorganization,
other than (A) the Recapitalization and (B) transactions exclusively
between wholly owned Subsidiaries of Parent;
(xiii) pay,
discharge, settle or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction in accordance with their terms
(or less than as required under their terms) of liabilities, claims or
obligations reflected or reserved against in the most recent consolidated
financial statements (or the notes thereto) of Parent or of Viasystems included
in the Filed Viasystems SEC Documents or incurred since the date of such
financial statements in the ordinary course of business consistent with past
practice;
(xiv) issue any
broadly distributed communication of a general nature to employees (including
general communications relating to benefits and compensation) or customers
without the prior approval of the Company, except for communications in the
ordinary course of business that do not relate to the Transactions;
(xv) except
for the pending litigation regarding the Richmond, Virginia property formerly
owned by Parent, settle or compromise any litigation, proceeding or
investigation; or
(xvi) agree, in
writing or otherwise, to take any of the foregoing actions, or take any action
or agree, in writing or otherwise, to take any action which would (A) cause
any of the representations or warranties of Parent and Merger Sub set forth in
this Agreement (1) that are qualified as to materiality or Material Adverse
Effect to be untrue or (2) that are not so qualified to be untrue in any
material respect or (B) in any material respect impede or delay the ability
of the parties to satisfy any of the conditions to the Merger set forth in this
Agreement.
SECTION 5.3. No Solicitation by the
Company; Etc.
(a) The
Company shall, and shall cause its Subsidiaries and the Company’s and its
Subsidiaries’ respective directors, officers, employees, investment bankers,
financial advisors, attorneys, accountants, agents and other representatives
(collectively, “Representatives”) to, immediately cease and
cause to be terminated any discussions or negotiations with any Person conducted
heretofore with respect to a Takeover Proposal, and use best efforts to obtain
the return from all such Persons or cause the destruction of all copies of
confidential information previously provided to such parties by the Company, its
Subsidiaries or Representatives. The Company shall not, and shall
cause its Subsidiaries and Representatives not to, directly or indirectly
(i) solicit, initiate, cause, facilitate or knowingly encourage (including
by way of furnishing information) any inquiries or proposals that constitute, or
may reasonably be expected to lead to, any Takeover Proposal,
(ii) participate in any discussions or negotiations with any third party
regarding any Takeover Proposal or (iii) enter into any agreement related
to any Takeover Proposal; provided, however, that if
after the date hereof the board of directors of the Company receives an
unsolicited, bona fide written Takeover Proposal made after the date hereof,
(x) the board of directors of the Company may (including through its
Representatives) contact such Person and its advisors for the purpose of
clarifying such Takeover Proposal and any material terms thereof and the
conditions to and likelihood of consummation, so as to determine whether such
proposal is, or is reasonably likely to lead to, a Superior Proposal and
(y) if such board reasonably determines in good faith that such Takeover
Proposal constitutes or is reasonably likely to lead to a Superior Proposal and
with respect to which such board of directors determines in good faith, after
considering applicable provisions of state law and after consulting with outside
counsel, that the taking of such action is necessary in order for such board of
directors to comply with its fiduciary duties to the Company’s stockholders
under Oregon law, then the Company may, at any time prior to obtaining the
Company Stockholder Approval (but in no event after obtaining the Company
Stockholder Approval) and after providing Parent not less than 24 hours written
notice of its intention to take such actions (A) furnish information with
respect to the Company and its Subsidiaries to the Person making such Takeover
Proposal, but only after such Person enters into a customary confidentiality
agreement with the Company (which confidentiality agreement must be no less
favorable to the Company than the Confidentiality Agreement), provided that
(1) such confidentiality agreement may not include any provision calling
for an exclusive right to negotiate with the Company and may not restrict the
Company from complying with this Section 5.3, and
(2) the Company advises Parent of all such non-public information delivered
to such Person concurrently with its delivery to such Person and concurrently
with its delivery to such Person the Company delivers to Parent all such
information not previously provided to Parent, (B) participate in
discussions and negotiations with such Person regarding such Takeover Proposal
and (C) following receipt of a Takeover Proposal that constitutes a
Superior Proposal, terminate this Agreement pursuant to, and subject to
compliance with, Section 7.1(d)(ii). Without limiting the foregoing,
it is understood that any violation of the foregoing restrictions by the
Company’s Subsidiaries or Representatives shall be deemed to be a breach of this
Section 5.3 by
the Company. The Company shall provide Parent with a correct and
complete copy of any confidentiality agreement entered into pursuant to this
paragraph within 24 hours of the execution thereof.
(b) In
addition to the other obligations of the Company set forth in this Section 5.3, the
Company shall promptly advise Parent, orally and in writing, and in no event
later than 24 hours after receipt, if any proposal, offer, inquiry or other
contact is received by, any information is requested from, or any discussions or
negotiations are sought to be initiated or continued with, the Company in
respect of any Takeover Proposal, and shall, in any such notice to Parent,
indicate the identity of the Person making such proposal, offer, inquiry or
other contact and the terms and conditions of any proposals or offers or the
nature of any inquiries or contacts (and shall include with such notice copies
of any written materials received from or on behalf of such Person relating to
such proposal, offer, inquiry or request), and thereafter shall promptly keep
Parent fully informed of all material developments affecting the status and
terms of any such proposals, offers, inquiries or requests (and the Company
shall provide Parent with copies of any additional written materials received
that relate to such proposals, offers, inquiries or requests) and of the status
of any such discussions or negotiations.
(c) Except as
expressly permitted by this Section 5.3(c),
neither the board of directors of the Company nor any committee thereof shall
(i)(A) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Parent, the Company Board Recommendation or the approval or
declaration of advisability by such board of directors of this Agreement and the
Transactions (including the Merger) or (B) approve or recommend, or propose
publicly to approve or recommend, any Takeover Proposal (any action described in
this clause (i) being referred to as a “Company Adverse Recommendation Change”) or
(ii) approve or recommend, or propose publicly to approve or recommend, or
cause or authorize the Company or any of its Subsidiaries to enter into, any
letter of intent, agreement in principle, memorandum of understanding, merger,
acquisition, purchase or joint venture agreement or other agreement related to
any Takeover Proposal (other than a confidentiality agreement in accordance with
Section 5.3(a)). Notwithstanding
the foregoing, the board of directors of the Company may withdraw or modify the
Company Board Recommendation, or recommend a Takeover Proposal, if such board of
directors determines in good faith, after reviewing applicable provisions of
state law and after consulting with outside counsel, that the failure to make
such withdrawal, modification or recommendation would constitute a breach by the
board of directors of the Company of its fiduciary duties to the Company’s
stockholders under Oregon law.
(d) For purposes of this
Agreement:
“Takeover Proposal” means any inquiry, proposal
or offer from any Person or “group” (as defined in Section 13(d) of the
Exchange Act), other than Parent and its Subsidiaries, relating to any
(A) direct or indirect acquisition (whether in a single transaction or a
series of related transactions) of assets of the Company and its Subsidiaries
(including securities of Subsidiaries) equal to 15% or more of the Company’s
consolidated assets or to which 15% or more of the Company’s revenues or
earnings on a consolidated basis are attributable, (B) direct or indirect
acquisition (whether in a single transaction or a series of related
transactions) of beneficial ownership (within the meaning of Section 13
under the Exchange Act) of 15% or more of any class of equity securities of the
Company, (C) tender offer or exchange offer that if consummated would
result in any Person or “group” (as defined in Section 13(d) of the
Exchange Act) beneficially owning 15% or more of any class of equity securities
of the Company or (D) merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries; in each case, other than the
Transactions.
“Superior Proposal” means a bona fide written
offer, obtained after the date hereof and not in breach of this Agreement or any
standstill agreement, to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, 50% or more of the equity securities of
the Company or 50% of more of the assets of the Company and its Subsidiaries on
a consolidated basis, made by a third party, and which is otherwise on terms and
conditions which the board of directors of the Company determines in its good
faith and reasonable judgment (after consultation with outside counsel and a
financial advisor of national reputation) to be more favorable to the Company’s
stockholders from a financial point of view than the Merger and the other
Transactions, taking into account at the time of determination the ability of
the Person making such proposal to consummate the transactions contemplated by
such proposal (based upon, among other things, the availability of financing and
the expectation of obtaining required approvals).
(e) Nothing
in this Section 5.3
shall prohibit the board of directors of the Company from taking and disclosing
to the Company’s stockholders a position contemplated by Rule 14e-2(a), Rule
14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act if
such board of directors determines in good faith, after consultation with
outside counsel, that failure to so disclose such position would constitute a
violation of applicable Law.
SECTION 5.4. Reasonable Best
Efforts.
(a) Subject
to the terms and conditions of this Agreement (including Section 5.4(d)),
each of the parties hereto shall cooperate with the other parties and use (and
shall cause their respective Subsidiaries to use) their respective reasonable
best efforts to promptly (i) take, or cause to be taken, all actions, and
do, or cause to be done, all things, necessary, proper or advisable to cause the
conditions to Closing to be satisfied as promptly as practicable and to
consummate and make effective, in the most expeditious manner practicable, the
Transactions, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents
(including any required or recommended filings under applicable Antitrust Laws),
and (ii) obtain all approvals, consents, registrations, permits,
authorizations and other confirmations from any Governmental Authority or third
party necessary, proper or advisable to consummate the
Transactions. For purposes hereof, “Antitrust Laws” means the ▇▇▇▇▇▇▇ Act, as amended,
the ▇▇▇▇▇▇▇ Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, all applicable Foreign Antitrust Laws and all other applicable Laws
issued by a Governmental Authority that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition through merger or
acquisition.
(b) In
furtherance and not in limitation of the foregoing, (i) each party hereto
agrees to make an appropriate filing of a Notification and Report Form pursuant
to the HSR Act with respect to the Transactions as promptly as practicable and
in any event within 10 Business Days of the date hereof, if such filing is
required, and to supply as promptly as practicable any additional information
and documentary material that may be requested pursuant to the HSR Act and use
its reasonable best efforts to take, or cause to be taken, all other actions
consistent with this Section 5.4
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable; and (ii) the Company
shall use its reasonable best efforts to (x) take all action necessary to
ensure that no state takeover statute or similar Law is or becomes applicable to
any of the Transactions and (y) if any state takeover statute or similar
Law becomes applicable to any of the Transactions, take all action necessary to
ensure that the Transactions may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise minimize the effect of
such Law on the Transactions.
(c) Each of
the parties hereto shall use its reasonable best efforts to (i) cooperate
in all respects with each other in connection with any filing or submission with
a Governmental Authority in connection with the Transactions and in connection
with any investigation or other inquiry by or before a Governmental Authority
relating to the Transactions, including any proceeding initiated by a private
party, and (ii) keep the other party informed in all material respects and
on a reasonably timely basis of any material communication received by such
party from, or given by such party to, the Federal Trade Commission, the
Antitrust Division of the Department of Justice, or any other Governmental
Authority and of any material communication received or given in connection with
any proceeding by a private party, in each case regarding any of the
Transactions. Subject to applicable Laws relating to the exchange of
information, each of the parties hereto shall have the right to review in
advance, and to the extent practicable each will consult the other on, all the
information relating to the other parties and their respective Subsidiaries, as
the case may be, that appears in any filing made with, or written materials
submitted to, any third party and/or any Governmental Authority in connection
with the Transactions.
(d) In
furtherance and not in limitation of the covenants of the parties contained in
this Section 5.4,
each of the parties hereto shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted by a Governmental Authority or other
Person with respect to the Transactions. Notwithstanding the
foregoing or any other provision of this Agreement, the Company shall not,
without Parent’s prior written consent, and Parent and Merger Sub shall not
without the Company’s prior written consent, commit to any divestiture
transaction or agree to any restriction on its business, and nothing in this
Section 5.4
shall (i) limit any applicable rights a party may have to terminate this
Agreement pursuant to Section 7.1 so
long as such party has up to then complied in all material respects with its
obligations under this Section 5.4,
(ii) require Parent or the Company to offer, accept or agree to
(A) dispose or hold separate any part of its businesses, operations, assets
or product lines (or a combination of Parent’s and the Company’s respective
businesses, operations, assets or product lines), (B) not compete in any
geographic area or line of business, and/or (C) restrict the manner in
which, or whether, Parent, Merger Sub, the Company, the Surviving Corporation or
any of their Affiliates may carry on business in any part of the world or
(iii) require any party to this Agreement to contest or otherwise resist
any administrative or judicial action or proceeding, including any proceeding by
a private party, challenging any of the Transactions as violative of any
Antitrust Law.
SECTION 5.5. Public
Announcements. The initial press release with respect to the
execution of this Agreement shall be a joint press release to be reasonably
agreed upon by Parent and the Company. Thereafter, neither the
Company nor Parent shall issue or cause the publication of any press release or
other public announcement (to the extent not previously issued or made in
accordance with this Agreement) with respect to the Merger, this Agreement or
the other Transactions without the prior consent of the other party (which
consent shall not be unreasonably withheld or delayed), except as may be
required by Law or by any applicable listing agreement with Nasdaq as determined
in the good faith judgment of the party proposing to make such release (in which
case such party shall not issue or cause the publication of such press release
or other public announcement without prior consultation with the other
party).
SECTION 5.6. Access to Information;
Confidentiality; Financing Cooperation.
(a) Subject
to applicable Laws relating to the exchange of information, the Company and
Parent shall, and shall cause each of their respective Subsidiaries to, afford
to each other and each other’s respective Representatives reasonable access
during normal business hours to all of such party’s and its Subsidiaries’
properties, commitments, books, Contracts, records and correspondence (in each
case, whether in physical or electronic form), officers, employees, accountants,
counsel, financial advisors and other Representatives and each party shall
furnish promptly to the other party (i) a copy of each report, schedule and
other document filed or submitted by it pursuant to the requirements of Federal
or state securities Laws and a copy of any communication (including “comment
letters”) received by such party from the SEC concerning compliance with
securities Laws and (ii) all other information concerning its and its
Subsidiaries’ business, properties and personnel as the other party may
reasonably request. Unless otherwise required by Law, the parties
will hold any information obtained pursuant to this Section 5.6 in
confidence in accordance with the Confidentiality Agreement, dated as of
November 8, 2008, between Parent and the Company (as it may be amended from
time to time, the “Confidentiality Agreement”).
(b) No
investigation, or information received, pursuant to this Section 5.6 will
modify any of the representations and warranties of the parties
hereto.
(c) The
Company shall, and shall cause its Subsidiaries and its and their respective
Representatives to, provide on a timely basis all such assistance and
cooperation as Parent and/or Viasystems may reasonably request in connection
with the arrangement of the Financing (provided, that such
requested assistance and cooperation does not unreasonably interfere with the
ongoing operations of the Company and its Subsidiaries), including
(i) making senior management of the Company reasonably available for
customary lender meetings and “roadshow” presentations and cooperating with
prospective lenders in performing their due diligence, (ii) cooperating in
the preparation of any offering memorandum or similar document,
(iii) furnishing Parent and/or Viasystems and its financing sources with
financial and other pertinent information regarding the Company and its
Subsidiaries as may be reasonably requested by Parent and/or Viasystems,
including financial statements and financial data, and (iv) providing and
executing documents as may be reasonably requested by Parent and/or
Viasystems.
SECTION 5.7. Notification of Certain
Matters. The Company shall give prompt notice to Parent, and
Parent shall give prompt notice to the Company, of (i) any notice or other
communication received by such party from any Governmental Authority in
connection with the Transactions or from any Person alleging that the consent of
such Person is or may be required in connection with the Transactions, if the
subject matter of such communication or the failure of such party to obtain such
consent could be material to the Company, the Surviving Corporation or Parent,
(ii) any actions, suits, claims, investigations or proceedings commenced
or, to such party’s knowledge, threatened against, relating to or involving or
otherwise affecting such party or any of its Subsidiaries which relate to the
Transactions, (iii) the discovery of any fact or circumstance that, or the
occurrence or non-occurrence of any event the occurrence or non-occurrence of
which, would cause any representation or warranty made by such party contained
in this Agreement (A) that is qualified as to materiality or Material
Adverse Effect to be untrue and (B) that is not so qualified to be untrue
in any material respect, and (iv) any material failure of such party to
comply with or satisfy any covenant or agreement to be complied with or
satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.7
shall not (x) cure any breach of, or non-compliance with, any other
provision of this Agreement or (y) limit the remedies available to the
party receiving such notice.
SECTION 5.8. Indemnification and
Insurance.
(a) From and
after the Effective Time, the Surviving Corporation shall indemnify the
individuals who at or prior to the Effective Time were directors or officers of
the Company (collectively, the “Indemnitees”) with respect to all acts or omissions
by them in their capacities as such at any time prior to the Effective Time, to
the fullest extent (i) required by the Company Charter Documents as in
effect on the date of this Agreement and under existing indemnification
agreements and (ii) permitted under applicable Law.
(b) Prior to
the Effective Time, the Company shall purchase a “run-on” directors’ and
officers’ liability insurance policy for a period of six (6) years after the
Effective Time, for the benefit of those persons who are covered by the
Company’s directors’ and officers’ liability insurance policies at the Effective
Time, providing coverage with respect to matters occurring prior to the
Effective Time that is at least equal to the coverage provided under the
Company’s current directors’ and officers liability insurance policies, for such
premium and on such terms and conditions heretofore described to Parent, and
shall not modify, amend or otherwise alter such terms and conditions without the
prior written consent of Parent, which consent shall not be unreasonably
withheld. In the event such run-on policy is not available, the
Surviving Corporation shall cause to be maintained in effect officers’ and
directors’ liability insurance for six (6) years after the Effective Time in
respect of acts or omissions occurring prior to the Effective Time covering each
such Indemnitee currently covered by the Company’s officers’ and directors’
liability insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date hereof; provided, that, in
satisfying its obligation under this Section 5.8(b),
the Surviving Corporation shall not be obligated to pay an aggregate premium in
excess of 150% of the amount per annum the Company paid in its last full fiscal
year, which amount the Company has disclosed to Parent prior to the date
hereof. The Indemnitees may be required to make reasonable
application and provide reasonable and customary representations and warranties
to applicable insurance carriers for the purpose of obtaining such
insurance.
(c) If
Parent, the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.8.
(d) The
rights of each Indemnitee under this Section 5.8
shall be in addition to any rights such Person may have under the articles of
incorporation or bylaws of the Company or any of its Subsidiaries, or under
Oregon Law or any other applicable Law or under any agreement of any Indemnitee
with the Company or any of its Subsidiaries.
(e) The
Surviving Corporation shall pay all reasonable costs and expenses, including
attorneys’ fees, that may be incurred by any indemnified party in enforcing the
indemnity and other obligations provided for in this Section 5.8, so
long as such indemnified party undertakes in writing to reimburse the Surviving
Corporation for such costs and expenses if it is finally determined by a court
of competent jurisdiction that such indemnified party was not entitled to be
indemnified hereunder.
(f) Parent
guarantees as primary obligor, and not as surety, the full and punctual
performance of the Surviving Corporation’s indemnification obligations under
this Section 5.8.
(g) The
Indemnitees to whom this Section 5.8
applies shall be third party beneficiaries of this Section 5.8. The
provisions of this Section 5.8
shall survive consummation of the Merger and are intended to be for the benefit
of each Indemnitee and his or her heirs.
SECTION 5.9. Securityholder
Litigation. The Company will provide Parent with ongoing
updates and information regarding any securityholder litigation that may be
brought against the Company and/or its directors relating to the
Transactions. The Company will consult with Parent regarding all
significant strategic issues regarding such litigation and will not settle such
litigation without Parent’s consent.
SECTION 5.10. Fees and
Expenses. Except as provided in Section 7.3, in
that certain letter agreement, dated July 13, 2009, from the Company to Parent
and in this Section 5.10,
all fees and expenses incurred in connection with this Agreement, the Note
Exchange Agreement, the Merger and the Transactions shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated,
except that each of the Company and Parent will bear and pay one-half of the
costs and expenses incurred in connection with the filings required under the
HSR Act and Foreign Antitrust Laws. The Company shall pay the
expenses for printing the Registration Form S-4 together with the proxy
statement/prospectus contemplated thereby and for mailing it to the Company’s
stockholders.
SECTION 5.11. Company Rights
Plan. Except as provided in Section 3.20,
the Company shall not redeem the Company Rights or amend or modify (including by
delay of the “Distribution Date” thereunder) or terminate the Company Rights
Agreement prior to the Effective Time unless, and only to the extent that:
(a) it is required to do so by order of a court of competent jurisdiction
or (b) its board of directors has concluded in good faith, after receipt of
advice of its outside legal counsel, that, in light of a Superior Proposal with
respect to it, the failure to effect such amendment, modification or termination
would be reasonably likely to constitute a breach of its fiduciary obligations
to its stockholders under applicable Law.
SECTION 5.12. Representations Relating to
Reorganization Treatment. The Company, Parent and Merger Sub
shall execute and deliver to each of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP,
counsel to the Company, and Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to Parent
and Merger Sub, certificates relating to the status of the merger as a
“reorganization” at such time or times as reasonably requested by each such law
firm. None of the Company, Parent or Merger Sub shall take or cause
to be taken any action which would cause to be untrue any of the representations
in such certificates.
SECTION 5.13. Rule
16b-3. Prior to the Effective Time, the Company and Parent
shall take such steps as may be reasonably requested by any party hereto to
cause dispositions of Company equity securities (including derivative
securities) or acquisitions of Parent Common Stock pursuant to the transactions
contemplated by this Agreement by each individual who is a director or officer
of the Company to be exempt under Rule 16b-3, such steps to be taken in
accordance with the interpretive guidance set forth by the SEC.
SECTION 5.14. Stock Exchange
Listing. Parent shall use its commercially reasonable efforts
to cause the shares of Parent Common Stock to be issued in connection with the
Merger to be listed on the Nasdaq, subject to official notice of
issuance.
SECTION 5.15. Employee Benefits and
Compensation. During the one (1) year period following the
Effective Time, any reductions in compensation or benefits shall be made
equitably and as part of an across-the-board reduction applicable to all
employees within the relevant geographic region. For purposes of
eligibility, vesting and benefit entitlement under the benefit plans of Parent
and its Subsidiaries (and, additionally, for purposes of benefit accrual under
only the vacation and severance plans (but not any other employee benefit plans)
of Parent and its Subsidiaries) Parent and it Subsidiaries shall credit each
employee of the Company and its Subsidiaries who becomes an employee of Parent
or its Subsidiaries with his or her years of service with the Company and its
Subsidiaries (including service with any predecessor entities) credited to such
employee immediately prior to the Effective Time under any similar Company
benefit plan or, in the absence of a similar Company benefit plan, such service
shall be credited under the service crediting rules of the applicable benefit
plan of Parent or its Subsidiaries as if such service had been performed for
Parent and its Subsidiaries.
SECTION 5.16. Employee Stock Purchase
Plan. As soon as practicable following the date of this
Agreement, the board of directors of the Company shall adopt such resolutions or
take such other actions as may be required to provide that with respect to the
Employee Stock Purchase Plan, (i) participants may not increase their
payroll deductions or purchase elections from those in effect on the date of
this Agreement; (ii) no purchase period shall be commenced after the date
of this Agreement; (iii) each participant’s outstanding right to purchase
Company Common Stock under the Employee Stock Purchase Plan shall be suspended
immediately following the end of the purchase period in effect on the date of
this Agreement or if earlier, each participant’s outstanding right to purchase
Company Common Stock under the Employee Stock Purchase Plan shall terminate on
the day immediately prior to the day on which the Effective Time occurs;
provided that, in either case, all amounts allocated to each participant’s
account under the Employee Stock Purchase Plan as of such date shall thereupon
be used to purchase from the Company whole shares of Company Common Stock at the
applicable price for the then outstanding purchase period; and (iv) the
Employee Stock Purchase Plan shall terminate immediately prior to the Effective
Time.
SECTION 5.17. Board
Representation. Parent shall cause to be appointed to the
board of directors of Parent, effective as of the Effective Time, three (3) of
the individuals who serve on the board of directors of the Company as of the
date of this Agreement. The board of directors of Parent, as of the
Effective Time, shall consist of twelve (12) directors.
SECTION 5.18. Financing
Arrangements.
(a) Parent
shall use its commercially reasonable efforts to obtain and effectuate the
Financing contemplated by the Commitment Letter on the terms set forth
therein. Parent agrees to notify the Company as soon as reasonably
practicable if, at any time prior to the Closing Date, (i) the Commitment
Letter shall expire or be terminated for any reason, (ii) any financing
source that is a party to the Commitment Letter notifies Parent or Viasystems
that such source no longer intends to provide financing to Viasystems or
(iii) for any reason Parent no longer believes in good faith that it will
be able to obtain any of the Financing substantially on the terms described in
the Commitment Letter. Parent shall not, nor shall it permit any of
its subsidiaries or Affiliates to, without the prior written consent of the
Company, take any action or enter into any transaction, including, without
limitation, any merger, acquisition, joint venture, disposition, lease, contract
or debt or equity financing that would reasonably be expected to impair, delay
or prevent the Financing contemplated by the Commitment
Letter. Parent shall not, and shall cause Viasystems not to, amend or
alter, or agree to amend or alter, the Commitment Letter in any manner that
would impair, delay or prevent the Closing without the prior written consent of
the Company.
(b) If the
Commitment Letter shall expire or terminate for any reason, Parent shall use its
commercially reasonable efforts to cause Viasystems to obtain, and will provide
the Company with a copy of, a new financing commitment that provides for at
least the same amount of financing as the Commitment Letter as originally
issued, funding conditions no less favorable than those included in the
Commitment Letter as originally issued and other terms and conditions the
aggregate effect of which is not materially adverse to Viasystems in comparison
with those contained in the Commitment Letter as originally issued, which
extension or new commitment shall include a termination date not earlier than
the Walk-Away Date. Parent shall cause Viasystems to accept any such
commitment letter if the funding conditions and other terms and conditions
contained therein are not materially adverse to Viasystems in comparison with
those contained in the Commitment Letter as originally issued.
SECTION 5.19. Exchange
Agreement. Parent shall use its commercially reasonable
efforts to cause the transactions contemplated under the Note Exchange Agreement
to be effectuated in accordance with the terms set forth
therein. Parent shall not, without the prior written consent of the
Company, amend or alter, or agree to amend or alter, the Note Exchange Agreement
in any manner that would impair, delay or prevent the Closing.
SECTION 5.20. Company 2009 Equity
Incentive Plan. The Company agrees that if the Company’s 2009
Equity Incentive Plan is approved by shareholders of the Company, it will not
approve or issue any awards under such plan.
Conditions
Precedent
SECTION 6.1. Conditions to Each Party’s
Obligation to Effect the Merger. The respective obligations of
each party hereto to effect the Merger shall be subject to the satisfaction (or
waiver, if permissible under applicable Law) on or prior to the Closing Date of
the following conditions:
(a) Company Stockholder
Approval. The Company Stockholder Approval shall have been
obtained in accordance with applicable Law and the articles of incorporation and
bylaws of the Company;
(b) Antitrust. The
waiting period (and any extension thereof) applicable to the Merger under the
HSR Act and any other applicable competition, merger control, antitrust or
similar Law shall have been terminated or shall have expired and the receipt of
the approvals and consents have been obtained for merger control filings
required under the Foreign Antitrust Laws;
(c) No Injunctions or
Restraints. No Law, injunction, judgment or ruling enacted,
promulgated, issued, entered, amended or enforced by any Governmental Authority
(collectively, “Restraints”) shall be in effect enjoining,
restraining, preventing or prohibiting consummation of the Merger or making the
consummation of the Merger illegal;
(d) Registration Form
S-4. The Registration Form S-4 shall have become effective
under the Securities Act and no stop order suspending the effectiveness of the
Registration Form S-4 shall have been issued and no proceedings for that purpose
shall have been initiated or threatened by the SEC;
(e) Exchange. The
closing of the Exchange pursuant to the terms and conditions of the Note
Exchange Agreement shall have occurred concurrently with the
Closing;
(f) Other
Actions. The Recapitalization and other actions identified in
Section 5.1(c)
shall have been fully completed as of the Effective Time; and
(g) Financing. Viasystems
shall have received the proceeds of the Financing or alternative financing
contemplated by Section
5.18.
SECTION 6.2. Conditions to Obligations of
Parent and Merger Sub. The obligations of Parent and Merger
Sub to effect the Merger are further subject to the satisfaction (or waiver, if
permissible under applicable Law) on or prior to the Closing Date of the
following conditions:
(a) Representations and
Warranties. The representations and warranties of the Company
contained in this Agreement that are qualified as to materiality or Company
Material Adverse Effect shall be true and correct, and the representations and
warranties of the Company contained in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer or the chief financial officer of the Company to such
effect;
(b) Performance of Obligations
of the Company. The Company shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and
the chief financial officer of the Company to such effect;
(c) Absence of Company Material
Adverse Effect. Since the date of this Agreement, there shall
not have been any state of facts, event, change, effect, development, condition
or occurrence that, individually or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect;
and
(d) Director
Resignations. Parent shall have received written resignation
letters from each of the members of the respective board of directors of the
Company and its Subsidiaries, effective as of the Effective Time.
SECTION 6.3. Conditions to Obligation of
the Company. The obligation of the Company to effect the
Merger is further subject to the satisfaction (or waiver, if permissible under
applicable Law) on or prior to the Closing Date of the following
conditions:
(a) Representations and
Warranties. The representations and warranties of Parent and
Merger Sub contained in this Agreement that are qualified as to materiality or
Parent Material Adverse Effect shall be true and correct, and the
representations and warranties of Parent and Merger Sub contained in this
Agreement that are not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the Closing
Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case as of such earlier date, and the Company shall have received a certificate
signed on behalf of Parent by the chief executive officer or the chief financial
officer of Parent to such effect;
(b) Performance of Obligations
of Parent and Merger Sub. Parent and Merger Sub shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date, and the Company shall
have received a certificate signed on behalf of Parent by the chief executive
officer and the chief financial officer of Parent to such effect;
and
(c) Absence of Parent Material
Adverse Effect. Since the date of this Agreement, there shall not have
been any state of facts, event, change, effect, development, condition or
occurrence that, individually or in the aggregate, has had or would reasonably
be expected to have a Parent Material Adverse Effect.
SECTION 6.4. Frustration of Closing
Conditions. None of the Company, Parent or Merger Sub may rely
on the failure of any condition set forth in Section 6.1,
6.2 or 6.3, as the case may
be, to be satisfied if such failure was caused by such party’s failure to use
its reasonable best efforts to consummate the Merger and the other Transactions,
as required by and subject to Section 5.4.
Termination
SECTION 7.1. Termination. This
Agreement may be terminated and the Transactions abandoned at any time prior to
the Effective Time:
(a) by the
mutual written consent of the Company and Parent duly authorized by each of
their respective boards of directors; or
(b) by either
of the Company or Parent:
(i) if the
Merger shall not have been consummated on or before the Walk-Away Date, provided, however, that the
right to terminate this Agreement under this Section 7.1(b)(i)
shall not be available to a party if the failure of the Merger to have been
consummated on or before the Walk-Away Date was primarily due to the failure of
such party to perform any of its obligations under this Agreement;
(ii) if any
Restraint having the effect set forth in Section 6.1(c)
shall be in effect and shall have become final and nonappealable; provided, however, that the
right to terminate this Agreement under this Section 7.1(b)(ii)
shall not be available to a party if such Restraint was primarily due to the
failure of such party to perform any of its obligations under this
Agreement;
(iii) if the
Company Stockholder Approval shall not have been obtained at the Company
Stockholders Meeting duly convened therefor or at any adjournment or
postponement thereof; provided, however, that the
right of the Company to terminate this Agreement under this Section 7.1(b)(iii)
shall not be available to it if it has failed to comply in all material respects
with its obligations under Section 5.1 or
5.3;
or
(c) by
Parent:
(i) if the
Company shall have breached or failed to perform any of its representations,
warranties, covenants or agreements set forth in this Agreement (or if any of
the representations or warranties of the Company set forth in this Agreement
shall fail to be true), which breach or failure (A) would (if it occurred
or was continuing as of the Closing Date) give rise to the failure of a
condition set forth in Section 6.2(a)
or (b) and
(B) is incapable of being cured, or is not cured, by the Company within 15
calendar days following receipt of written notice from Parent of such breach or
failure;
(ii) if
(A) a Company Adverse Recommendation Change shall have occurred or
(B) the board of directors of the Company or any committee thereof
(x) shall not have rejected any Takeover Proposal within seven days of the
making thereof (including, for these purposes, by taking no position with
respect to the acceptance by the Company’s stockholders of a tender offer or
exchange offer, which shall constitute a failure to reject such Takeover
Proposal) or (y) shall have failed to publicly reconfirm the Company Board
Recommendation within three days after receipt of a written request from Parent
that it do so if such request is made following the making by any Person of a
Takeover Proposal;
(iii) if after
the date of this Agreement there shall have occurred any events or changes that,
individually or in the aggregate, have had or would reasonably be expected to
have a Company Material Adverse Effect; or
(iv) if the
Note Exchange Agreement is not valid, binding and enforceable in accordance with
its terms against the holders of the Company Convertible Securities party
thereto; or
(d) by the
Company:
(i) if Parent
shall have breached or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement (or if any of the
representations or warranties of Parent set forth in this Agreement shall fail
to be true), which breach or failure (A) would (if it occurred or was
continuing as of the Closing Date) give rise to the failure of a condition set
forth in Section 6.3(a)
or (b) and
(B) is incapable of being cured, or is not cured, by Parent within 15
calendar days following receipt of written notice from the Company of such
breach or failure;
(ii) (A) if
the Company receives a Takeover Proposal that is a Superior Proposal,
(B) the board of directors of the Company by affirmative vote of a majority
of all of its members resolves to accept such Superior Proposal, (C) the
Company shall have given Parent three Business Days’ prior written notice of its
intention to terminate pursuant to this provision, (D) such Takeover
Proposal continues to constitute a Superior Proposal after taking into account
any revised proposal made by Parent during such three Business Day period and
(E) the board of directors of the Company concludes in good faith by
affirmative vote of a majority of all of its members, following receipt of
advice of its outside legal counsel, that the failure to accept such Superior
Proposal would result in a breach of its fiduciary duties under applicable
Law;
(iii) if after
the date of this Agreement there shall have occurred any events or changes that,
individually or in the aggregate, have had or would reasonably be expected to
have a Parent Material Adverse Effect; or
(iv) if the
Note Exchange Agreement is not valid, binding and enforceable in accordance with
its terms against the holders of the Company Convertible Securities party
thereto.
SECTION 7.2. Effect of
Termination. In the event of the termination of this Agreement
as provided in Section 7.1,
written notice thereof shall be given to the other party or parties, specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void (other than the last sentence of
Section 5.6(a),
Sections 3.18,
4.17, 5.9, 5.10, 7.2 and 7.3, and Article VIII,
all of which shall survive termination of this Agreement), and there shall be no
liability on the part of Parent, Merger Sub or the Company or their respective
directors, officers and Affiliates, except (i) the Company may have
liability as provided in Section 7.3, and
(ii) nothing shall relieve any party from liability for fraud or any
willful breach of this Agreement.
SECTION 7.3. Termination
Fee.
(a) In the
event that:
(i) (A) this
Agreement is terminated by the Company or Parent pursuant to Section 7.1(b)(i),
and (B) the Company enters into a definitive agreement with respect to, or
consummates, a transaction contemplated by any Takeover Proposal within twelve
(12) months of the date this Agreement is terminated;
(ii) (A) a
Takeover Proposal shall have been made known to the Company or shall have been
made directly to its stockholders generally or any Person shall have publicly
announced an intention (whether or not conditional or withdrawn) to make a
Takeover Proposal and thereafter, (B) this Agreement is terminated by the
Company or Parent pursuant to Section 7.1(b)(iii),
and (C) the Company enters into a definitive agreement with respect to, or
consummates, a transaction contemplated by any Takeover Proposal within twelve
(12) months of the date this Agreement is terminated;
(iii) this
Agreement is terminated by Parent pursuant to Section 7.1(c)(i)
and the Company’s breach or failure triggering such termination shall have been
a material breach of, or failure to comply with, the Company’s obligations under
Section 5.1 or
Section 5.3;
(iv) (A) a
Takeover Proposal shall have been made known to the Company or shall have been
made directly to its stockholders generally or any Person shall have publicly
announced an intention (whether or not conditional or withdrawn) to make a
Takeover Proposal and thereafter, (B) this Agreement is terminated by
Parent pursuant to Section 7.1(c)(i)
in circumstances not covered by Section 7.3(a)(iii),
and the Company’s breach or failure triggering such termination shall have been
willful, and (C) the Company enters into a definitive agreement with respect to,
or consummates, a transaction contemplated by any Takeover Proposal within six
(6) months of the date this Agreement is terminated;
(v) this
Agreement is terminated by Parent pursuant to Section 7.1(c)(ii);
or
(vi) this
Agreement is terminated by the Company pursuant to Section 7.1(d)(ii).
then in
any such event under clause (i), (ii), (iii), (iv), (v) or (vi) of this Section 7.3(a),
the Company shall pay to Parent (i) a termination fee of $1,300,000 in cash
(the “Termination Fee”) and (ii) all documented
Expenses of Parent, not to exceed $3,900,000 in the aggregate (the “Expense Reimbursement Amount”). As
used herein, “Expenses” means all out-of-pocket fees and expenses
(including all fees and expenses of counsel, accountants, financial advisors and
investment bankers 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 Proxy Statement, the Registration Form S-4
and the prospectus contained therein, authorization, preparation, negotiation
and execution of the Note Exchange Agreement and the consummation of the
transactions contemplated thereunder, the filing of any required notices under
applicable Antitrust Laws or other regulations, the authorization, preparation,
negotiation and execution of the Commitment Letter and the consummation of the
transactions contemplated thereunder, and all other matters related to the
Merger and the other Transactions. For purposes of Section 7.3(a)(i)(B),
Section 7.3(a)(ii)(C),
Section 7.3(a)(iv)(C)
and Section 7.3(b)
only, references in the definition of “Takeover Proposal” to “15% or more” shall
be deemed references to “50% or more.”
In the
event that (x) a Takeover Proposal shall have been made known to the
Company or shall have been made directly to its stockholders generally or any
Person shall have publicly announced an intention (whether or not conditional or
withdrawn) to make a Takeover Proposal and thereafter this Agreement is
terminated by the Company or Parent pursuant to Section 7.1(b)(iii)
and no Termination Fee is payable in respect thereof pursuant to Section 7.3(a)(ii);
or (y) this Agreement is terminated by Parent pursuant to Section 7.1(c)(i)
and no Termination Fee is payable in respect thereof pursuant to Section 7.3(a)(iii)
or 7.3(a)(iv),
then in each such case under such clause (x) or (y) the Company shall pay to
Parent the Expense Reimbursement Amount and thereafter the Company shall be
obligated to pay to Parent the Termination Fee in the event such fee is payable
pursuant to Section 7.3(a)(ii),
Section 7.3(a)(iii)
or Section 7.3(a)(iv),
as the case may be.
(b) Any
payment required to be made pursuant to clause (i), (ii) or (iv) of Section 7.3(a)
shall be made to Parent promptly following the earlier of the execution of a
definitive agreement with respect to, or the consummation of, any transaction
contemplated by a Takeover Proposal (and in any event not later than two
Business Days after delivery to the Company of notice of demand for payment);
any payment required to be made pursuant to clause (v) of Section 7.3(a)
shall be made to Parent promptly following termination of this Agreement by
Parent pursuant to Section 7.1(c)(ii)
(and in any event not later than two Business Days after delivery to the Company
of notice of demand for payment); any payment required to be made pursuant to
clause (iii) of Section 7.3(a)
shall be made to Parent promptly following termination of this Agreement by
Parent pursuant to Section 7.1(c)(i)
in the circumstances described in Section 7.3(a)(iii)
(and in any event not later than two Business Days after delivery to the Company
of notice of demand for payment); and any payment required to be made pursuant
to clause (vi) of Section 7.3(a)
shall be made to Parent concurrently with the termination of this Agreement by
the Company pursuant to Section 7.1(d)(ii);
and, in circumstances in which Expenses are payable, such payment shall be made
to Parent not later than two Business Days after delivery to the Company of an
itemization setting forth in reasonable detail all Expenses of Parent and Merger
Sub (which itemization may be supplemented and updated from time to time by such
party until the 60th day after such party delivers such notice of demand for
payment). All such payments shall be made by wire transfer of
immediately available funds to an account to be designated by
Parent.
(c) In the
event that the Company shall fail to pay the Termination Fee and/or Expense
Reimbursement Amount required pursuant to this Section 7.3 when
due, such fee and/or Expenses, as the case may be, shall accrue interest for the
period commencing on the date such fee and/or Expenses, as the case may be,
became past due, at a rate equal to the rate of interest publicly announced by
Citibank, in the City of New York from time to time during such period, as such
bank’s Prime Lending Rate plus 12.5%; provided, however, in no event
shall the applicable interest rate exceed the maximum rate permitted by
law. In addition, if the Company shall fail to pay such fee and/or
Expenses, as the case may be, when due, the Company shall also pay to Parent all
of Parent’s costs and expenses (including attorneys’ fees) in connection with
efforts to collect such fee and/or Expenses, as the case may be. The
Company acknowledges that the fee, Expense and the other provisions of this
Section 7.3 are
an integral part of the Transactions and that, without these agreements, Parent
would not enter into this Agreement.
Miscellaneous
SECTION 8.1. No Survival,
Etc. Except as otherwise provided in this Agreement, the
representations, warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any Person controlling any such party or
any of their officers, directors or representatives, whether prior to or after
the execution of this Agreement, and no information provided or made available
shall be deemed to be disclosed in this Agreement, in the Company Disclosure
Schedule or in the Parent Disclosure Schedule, except to the extent actually set
forth herein or therein. The representations, warranties and
agreements in this Agreement shall terminate at the Effective Time or, except as
otherwise provided in Section 7.2,
upon the termination of this Agreement pursuant to Section 7.1, as
the case may be, except that the agreements set forth in Article II and
Sections 5.8
and 5.10 and
any other agreement in this Agreement which contemplates performance after the
Effective Time shall survive the Effective Time indefinitely and those set forth
in Sections
5.9, 5.10, 7.2 and 7.3 and this Article VIII
shall survive termination indefinitely. The Confidentiality Agreement
shall (i) survive termination of this Agreement in accordance with its terms and
(ii) terminate as of the Effective Time.
SECTION 8.2. Amendment or
Supplement. At any time prior to the Effective Time, this
Agreement may be amended or supplemented in any and all respects, whether before
or after receipt of the Company Stockholder Approval, by written agreement of
the parties hereto, by action taken by their respective boards of directors;
provided, however, that
following approval of the Transactions by the stockholders of the Company, there
shall be no amendment or change to the provisions hereof which by Law would
require further approval by the stockholders of the Company without such
approval.
SECTION 8.3. Extension of Time, Waiver,
Etc. At any time prior to the Effective Time, any party may,
subject to applicable Law, (a) waive any inaccuracies in the
representations and warranties of any other party hereto, (b) extend the
time for the performance of any of the obligations or acts of any other party
hereto or (c) waive compliance by the other party with any of the
agreements contained herein or, except as otherwise provided herein, waive any
of such party’s conditions. Notwithstanding the foregoing, no failure
or delay by the Company, Parent or Merger Sub in exercising any right hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right hereunder. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
SECTION 8.4. Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of law or otherwise, by any of
the parties without the prior written consent of the other parties, except that
Merger Sub may assign, in its sole discretion, any of or all its rights,
interests and obligations under this Agreement to any direct, wholly owned
Subsidiary of Parent, but no such assignment shall relieve Merger Sub of any of
its obligations hereunder. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and permitted
assigns. Any purported assignment not permitted under this Section
shall be null and void.
SECTION 8.5. Counterparts. This
Agreement may be executed in counterparts (each of which shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.6. Entire Agreement; No
Third-Party Beneficiaries. This Agreement, the Company
Disclosure Schedule, the Parent Disclosure Schedule, the Note Exchange Agreement
and the Confidentiality Agreement (a) constitute the entire agreement, and
supersede all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof and
thereof and (b) except for the provisions of Section 5.8, are
not intended to and shall not confer upon any Person other than the parties
hereto any rights or remedies hereunder.
SECTION 8.7. Governing Law; Jurisdiction;
Waiver of Jury Trial.
(a) This
Agreement and all claims or causes of action (whether in contract or tort) than
may be based upon, arise out of or relate to this Agreement shall be governed by
and construed in accordance with the law of the State of Delaware (except with
respect to those provisions set forth herein that are required to be governed by
the OBCA), without regard to the conflicts of law rules of such
state.
(b) The
parties hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with or
relating to, this Agreement or the transactions contemplated hereby shall be
brought in the Court of Chancery of the State of Delaware in and for New Castle
County, Delaware, and each of the parties hereby irrevocably consents to the
exclusive jurisdiction of such court (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 8.9
shall be deemed effective service of process on such party.
(c) EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.8. Specific
Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the Court of
Chancery of the State of Delaware in and for New Castle County, Delaware,
without bond or other security being required, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 8.9. Notices. All
notices, requests and other communications to any party hereunder shall be in
writing and shall be deemed given if delivered personally, facsimiled (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses:
If to
Parent or Merger Sub, to:
Viasystems
Group, Inc.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
with a
copy (which shall not constitute notice) to:
Weil,
Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention: R.
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
If to the
Company, to:
Merix
Corporation
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief
Executive Officer
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
with a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
or such
other address or facsimile number as such party may hereafter specify by like
notice to the other parties hereto. All such notices, requests and
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 P.M. in the place of receipt and such
day is a Business Day in the place of receipt. Otherwise, any such
notice, request or communication shall be deemed not to have been received until
the next succeeding Business Day in the place of receipt.
SECTION 8.10. Severability. If
any term or other provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other terms, provisions and conditions of
this Agreement shall nevertheless remain in full force and
effect. 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 to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
SECTION 8.11. Definitions.
(a) As used
in this Agreement, the following terms have the meanings ascribed thereto
below:
“5-Day Trading Price” means the average of the
daily market prices for the five (5) consecutive Trading Days preceding the
Closing Date. The daily market price for each such Trading Day shall
be (i) the last sale price on such day on the NASDAQ Global Market or the
national securities exchange on which the Company Common Stock is then listed or
admitted to trading or (ii) if no sale takes place on such day on such market or
exchange, the listed closing price on such day.
“Affiliate” means, as to any Person, any other Person
that, directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For this purpose, “control” (including,
with its correlative meanings, “controlled by” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of management or policies of a Person, whether through the
ownership of securities or partnership or other ownership interests, by contract
or otherwise.
“Business
Day” means a day except a Saturday, a Sunday or other day on which
the SEC or banks in the City of New York are authorized or required by Law to be
closed.
“Company
Rights” means the right to purchase one one-hundredth of a share of
Company Preferred Stock per share of Company Common Stock pursuant to the
Company Rights Agreement.
“Company Rights Agreement” means the Rights
Agreement dated as of October 16, 2007, between the Company and American
Stock Transfer & Trust Company, as Rights Agent thereunder.
“Company Stock Plans” means the Company’s 1994
Stock Incentive Plan, the 2000 Nonqualified Stock Option Plan, the 2006 Equity
Incentive Plan, and the 2009 Equity Incentive Plan, in each case as
amended.
“Exchange Ratio” means a fraction (i) the
numerator of which is equal to 2,500,000 shares and (ii) the denominator of
which is equal to the number of shares of the Company Common Stock issued and
outstanding as of the Effective Time. For purposes of clarity, if at
the Effective Time there were 22,727,272 shares of the Company Common Stock
issued and outstanding, then the Exchange Ratio would be equal to
0.11.
“Fractional Share Amount” means an amount equal
to (a) the 5-Day Trading Price divided by (b) the Exchange Ratio.
“GAAP” means generally accepted accounting principles in the
United States.
“Governmental Authority” means any
government, court, regulatory or administrative agency, commission or authority
or other governmental instrumentality, federal, state or local, domestic,
foreign or multinational.
“GSC”
means GSC Partners CDO Fund, Limited, GSC Recovery II, L.P. and GSC Recovery
IIA, L.P.
“▇▇▇▇▇
Muse” means Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Equity Fund III,
L.P., HM3 Coinvestors, L.P., HMTF Equity Fund IV (1999), L.P., HMTF Private
Equity Fund IV (1999), L.P., ▇▇▇▇▇, Muse PG-IV (1999), C.V., HM4-SBS (1999)
Coinvestors, L.P., HM4-EQ (1999) Coinvestors, L.P., Pearl Street, L.P, and Pearl
Street II, L.P.
“HSR
Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
“Knowledge” of any
Person that is not an individual means, with respect to any matter in question,
the knowledge after reasonable inquiry of (i) with respect to the Company, the
executive officers set forth on Section 8.11 of
the Company Disclosure Schedule and (ii) with respect to Parent, the executive
officers set forth on Section 8.11 of
the Parent Disclosure Schedule; provided that
reasonable inquiry shall include inquiry of such Person’s officers and managers
having responsibility relating to the applicable matter.
“Nasdaq” means the Nasdaq Stock Market LLC.
“Parent Stock Plan” means the Parent’s 2003 Stock
Option Plan, as amended.
“Person” means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity,
including a Governmental Authority.
“SEC”
means the Securities and Exchange Commission.
“Subsidiary” when used with respect to any party,
means any corporation, limited liability company, partnership, joint venture,
association, trust or other entity the accounts of which would be consolidated
with those of such party in such party’s consolidated financial statements if
such financial statements were prepared in accordance with GAAP, as well as any
other corporation, limited liability company, partnership, joint venture,
association, trust or other entity of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power (or, in the case of a partnership, more than 50% of the
general partnership interests) are, as of such date, owned by such party or one
or more Subsidiaries of such party or by such party and one or more Subsidiaries
of such party.
“TCW” means TCW Shared Opportunities Fund III,
L.P.
“Trading
Day” means a day on which the NASDAQ Global Market or the national
securities exchange on which the Company Common Stock is listed is open for the
transaction of business.
“Transactions” refers collectively to this Agreement
and the transactions contemplated hereby, including the Merger, the Exchange,
and the Recapitalization, and the Recapitalization Agreement and the
transactions contemplated thereby.
“Viasystems Indenture” means that certain
Indenture, dated as of December 17, 2003, among Parent, the guarantors
party thereto, and The Bank of New York, as Trustee, as amended and
supplemented.
“Walk-Away Date” means March 31, 2009.
The
following terms are defined on the page of this Agreement set forth after such
term below:
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| 54 | ||||
| 3 | ||||
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| 18 | ||||
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| 73 | ||||
| 20 |
SECTION 8.12. Interpretation.
(a) When a
reference is made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or an Exhibit
or Schedule to, this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation”. The words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any statute defined or referred to herein or in
any agreement or instrument that is referred to herein means such statute as
from time to time amended, modified or supplemented, including (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References
to a Person are also to its permitted successors and assigns.
(b) The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as jointly drafted by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provision of this
Agreement.
[signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
VIASYSTEMS
GROUP, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇▇▇ ▇.
▇▇▇
Title: Senior
Vice President and
Chief
Financial Officer
MAPLE
ACQUISITION CORP.
By: /S/ ▇▇▇▇▇▇ ▇.
▇▇▇
Name: ▇▇▇▇▇▇ ▇.
▇▇▇
Title: Treasurer
and Chief Financial Officer
MERIX
CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Title: President
and Chief Executive Officer