EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 20, 2000
BY AND BETWEEN
CORNING INCORPORATED,
CORNING APPLIED TECHNOLOGIES CORPORATION
AND
NZ APPLIED TECHNOLOGIES CORPORATION
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (hereinafter, the "Agreement") dated this 20th
day of April, 2000, is by and between CORNING INCORPORATED (hereinafter,
"Buyer"), a New York corporation whose executive offices are located at One
Riverfront Plaza, Corning, New York, CORNING APPLIED TECHNOLOGIES CORPORATION, a
Massachusetts corporation and a wholly owned subsidiary of Buyer (hereinafter,
"Merger Sub"), and NZ APPLIED TECHNOLOGIES CORPORATION, a Massachusetts
corporation whose executive offices are located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter, the "Company").
WHEREAS, the respective boards of directors of Buyer, Merger Sub and the Company
have approved the merger of the Merger Sub with and into the Company, with the
Company surviving the merger as a wholly owned subsidiary corporation of Buyer
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, it is intended that, for federal income tax purposes, the Merger shall
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (hereinafter, the "Code"); and
WHEREAS, contemporaneously with the execution and delivery of this Agreement, as
a condition and inducement to Buyer and Merger Sub's willingness to enter into
this Agreement, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, Run
Zhang, and Yingyin (▇▇▇▇▇) Zou are each entering into an agreement (executed
copies of each of which are attached to Appendix 1 of this Agreement) pursuant
to which Messrs. Norris, Zhao, Jiang, Tsang, Wang, Zhang, and Zou each agree
that he: (a) will exercise his Company Stock Options prior to Closing, (b) will
enter into a retention agreement (or employment agreement in the case of Messrs.
▇▇▇▇▇▇ and ▇▇▇▇) in the form attached to each of their respective versions of
the Related Agreement to take effect at Closing, and (c) appoints Buyer, or any
representative of Buyer, as his proxy to vote his shares of Company Common Stock
in favor of the Merger and this Agreement at the Company Special Meeting (each,
a "Related Agreement");
NOW, THEREFORE, in consideration of the premises and the covenants,
representations, warranties and agreements contained herein the parties to this
Agreement agree as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as defined below), Merger Sub shall be
merged with and into the Company and the separate existence of Merger Sub shall
thereupon cease, and the Company shall continue as the surviving corporation of
the Merger (the "Surviving Corporation") under the laws of the Commonwealth of
Massachusetts under the name "Corning Applied Technologies Corporation" (or such
other name as Buyer shall determine) as a wholly owned subsidiary of Buyer and
the separate corporate existence of the Surviving Corporation with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger. Throughout this Agreement, the term the "Company" shall refer to
the Company prior to the Merger and the term "Surviving Corporation" shall refer
to the Company in its status as the surviving corporation in the Merger.
Capitalized terms used in this Agreement and not otherwise defined are used with
the meaning ascribed thereto in Section 10.7 hereof.
Section 1.2 CLOSING. Assuming the conditions to Closing in Article VIII are
satisfied or waived, the closing of the Merger and the consummation of the other
transactions contemplated by this Agreement (the "Closing") will take place as
promptly as practicable, and in no event later than the earlier of five (5) days
after satisfaction or waiver of the conditions set forth in Article VIII or 5:00
p.m. ET on June 30, 2000, though not before May 5, 2000 (the "Closing Date").
The Closing shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, or at such other location as the parties mutually
agree.
Section 1.3 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective upon
the filing of a certificate of merger with the Secretary of State of the
Commonwealth of Massachusetts pursuant to and in
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compliance with this Agreement and the applicable provisions of the Business
Corporation Law of the Commonwealth of Massachusetts (the "Massachusetts Law").
When used in this Agreement, the term "Effective Time" shall mean the time at
which the certificate of merger has been filed and become effective in
accordance with Massachusetts Law. The parties will perform all actions and file
all certificates and other documents and instruments that counsel to the Buyer
and the Company determine to be proper, necessary or appropriate to effect the
Merger in accordance with applicable provisions of Massachusetts Law.
Section 1.4 EFFECT OF THE MERGER. The Merger shall, from and after the Effective
Time, have all the effects provided by applicable law. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that any
further deeds, conveyances, assignments or assurances in law or any other acts
are necessary, desirable or proper to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, the title to any property or rights of
the Company, by reason of, or as a result of, the Merger, or otherwise to carry
out the purposes of this Agreement, the Company agrees that the Surviving
Corporation and its proper officers and directors shall execute and deliver all
such deeds, conveyances, assignments and assurances in law and do all things
necessary, desirable or proper to vest, perfect or confirm title to such
property or rights in the Surviving Corporation and otherwise to carry out the
purposes of this Agreement, and that the proper officers and directors of the
Surviving Corporation are fully authorized in the name of each of the Company
and the Merger Sub or otherwise to take any and all such action.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 CERTIFICATE OF INCORPORATION. The articles of organization of the
Company shall be amended as of the Effective Time to be identical with the
articles of organization of the Merger Sub appointed pursuant to Section 10.4
which shall be the articles of organization of the Surviving Corporation until
thereafter duly amended.
Section 2.2 BY-LAWS. The By-laws of the Company shall be amended as of the
Effective Time to be identical with the by-laws of the Merger Sub appointed
pursuant to Section 10.4 which shall be the by-laws of the Surviving Corporation
until thereafter duly amended.
Section 2.3 BOARD OF DIRECTORS; OFFICERS. The members of the Board of Directors
and the officers of the Surviving Corporation immediately after the Effective
Time shall be the directors and officers of the Merger Sub immediately prior to
the Effective Time, until the earlier of their respective deaths, resignations,
or removals, and the time that their respective successors are duly elected or
appointed and qualified.
Section 2.4 PURPOSE OF THE SURVIVING CORPORATIONS. The corporate purpose of the
Merger Sub is to "develop, produce, and manufacture opto-electronic materials of
any kind and other optical component devices of any kind and to engage in any
and all business activities in which a corporation organized under M.G.L.
Ch. 156B may engage."
Section 2.5 CAPITALIZATION OF THE SURVIVING CORPORATION. The capitalization of
the Merger Sub authorizes the Merger Sub to issue 100,000 shares of common stock
with a par value of $.01 per share, of which 1,000 shares are issued and
outstanding.
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ARTICLE III
CONVERSION OF SHARES; CLOSING MECHANICS
Section 3.1 MERGER CONSIDERATION. As of the Effective Time, by virtue of the
Merger and without any action on the part of any stockholder of the Company or
Merger Sub:
(a) Each share of common stock, par value $.01 per share, of
Merger Sub (the "Merger Sub Common Stock") that is issued and outstanding
immediately prior to the Effective Time shall be converted into one fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(b) Each share of the common stock of the Company without par
value ("Company Common Stock") that is owned by the Company as treasury stock
and any shares of the Company Common Stock that are owned by Buyer shall be
canceled and shall cease to exist, and no stock of Buyer or other consideration
shall be delivered in exchange therefor.
(c) Subject to the provisions of this Section 3.1, each share
of Company Common Stock, other than shares canceled pursuant to Section 3.1(b),
issued and outstanding immediately prior to the Effective Time (such shares
being owned by the "Selling Stockholders") shall by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive a number of validly issued, fully paid and nonassessable shares
of common stock, par value $.50 per share, of Buyer ("Buyer Common Stock")
determined in accordance with the following provisions:
(i) take the sum of the closing prices of Buyer Common
Stock on the New York Stock Exchange over the period
commencing 24 trading days prior to the Closing Date
and ending 5 trading days prior to the Closing Date
inclusive, and divide that sum by 20 (the result
being the "Average Buyer Per Share Price"); then
(ii) divide $150,000,000 by the Average Buyer Per Share
Price (the result being the "Total Number of Shares
of Buyer Common Stock"); then
(iii) divide the Total Number of Shares of Buyer Common
Stock by 691,944.
(d) One-half of the Total Number of Shares of Buyer Common
Stock will be deliverable to the stockholders of the Company at the Closing as
the "Merger Consideration" (less 20% which will be delivered to the Merger
Consideration Escrow Agent). The remaining Total Number of Shares of Buyer
Common Stock will be delivered to the Contingent Merger Consideration Escrow
Agent at the Closing.
(e) If at any time during the period between the date of this
Agreement and the Effective Time, Buyer changes the number of shares of Buyer
Common Stock, issued and outstanding as a result of a stock split, reverse stock
split, stock dividend, recapitalization, redenomination of share capital or
other similar transactions, the Merger Consideration shall be appropriately
adjusted.
(f) Notwithstanding any other provision of this Agreement, no
fractional shares of Buyer Common Stock will be issued as Merger Consideration
or Contingent Merger Consideration, and any Selling Stockholder entitled to
receive a fractional share of Buyer Common Stock but for this Section
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3.1(f) shall be entitled to receive a cash payment in lieu thereof, which
payment shall represent such holder's proportionate interest in a share of
Buyer Common Stock.
Section 3.2 CLOSING MECHANICS.
(a) At the Closing, the Selling Stockholders will surrender or
cause to be surrendered the certificates representing the shares of Company
Common Stock owned by them with executed letters of transmittal in such form as
requested by Buyer.
(b) At the Closing and upon receipt of certificates
representing all shares of Company Common Stock and executed transmittal
letters, and the additional documents, certificates and agreements referenced in
this Section 3.2, Buyer will deliver certificates in the names of the Selling
Stockholders representing the number of whole shares of Buyer Common Stock that
represents 80% of the number of shares of Buyer Common Stock to which each
Selling Stockholder is entitled to receive as Merger Consideration, plus cash in
lieu of any fractional shares.
(c) At the Closing, the stock transfer books of the Company
shall be closed and no transfer of shares of the Company Common Stock shall be
made thereafter, other than transfers of shares of the Company Common Stock that
have occurred prior to the Effective Time.
(d) At the Closing, executed copies of the Key Employee
Retention Agreements (as defined below) required by Buyer shall be delivered to
Buyer.
(e) At the Closing, the Buyer and the Selling Stockholders
will execute a Registration Rights Agreement in substantially the same form as
Appendix 3.
(f) At the Closing, the Company will deliver written waivers
of any pre-emptive rights available to it and to the stockholders of the Company
with respect to the sale or transfer of the shares owned by the Selling
Stockholders pursuant to the Merger, other than the waiver thereof by Buyer
which is hereby granted.
(g) At Closing the Company shall deliver the officer's
certificates and other documents, certificates, instruments, or agreements
referenced in Article VIII and elsewhere in this Agreement.
(h) At the Closing, the President and Secretary of the Company
will execute and deliver the certification requested by Buyer in substantially
the same form as attached hereto as Appendix 4 hereto.
(i) At the Closing, the Contingent Merger Consideration will
be delivered to the Contingent Merger Consideration Escrow Agent.
(j) At the Closing, the Company will deliver the certificates
from the Selling Stockholders referenced in Section 7.10 of this Agreement.
(k) At the Closing, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ will each
execute an employment agreement in the form attached to their respective
versions of the Related Agreement.
(l) At the Closing, Buyer will deliver certificates in the
names of the Selling Stockholders representing the number of whole shares of
Buyer Common Stock that represents 20% of the number of shares of Buyer Common
Stock to which each such Selling Stockholder is entitled to receive as Merger
Consideration, plus cash in lieu of any fractional shares, to the Merger
Consideration Escrow Agent (the "Merger Consideration Escrow Shares").
(m) At the Closing, the employee retention agreements attached
to the Related Agreements executed by the individuals referenced in the third
recital to this Agreement will each be executed.
(n) At the Closing, Buyer will deliver certificates in the
names of the Selling Stockholders representing the number of whole shares of
Buyer Common Stock that may be disbursed as
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the Contingent Merger Consideration, plus cash in lieu of any fractural
shares, to the Escrow Agent referenced in the form of Escrow Agreement
attached as Appendix 10 to this Agreement.
(o) At the Closing, the Related Contingent Merger
Consideration column in the chart included in Appendix 2 will be adjusted to
reflect the number of whole shares of Buyer Common Stock related to each Company
Target consistent with the provisions of Sections 3.1(c) and (d).
(p) At the Closing, the parties to the escrow agreements
contemplated in Section 7.8 and Appendix 2, will execute and deliver, or cause
to be executed and delivered, the escrow agreements contemplated therein in
substantially the same form as Appendix 9 and 10 to this Agreement subject to
revision by the escrow agent identified in such agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer and Merger Sub that, except as
disclosed in the Company Disclosure Schedule which has been delivered to Buyer
prior to the execution of this Agreement (the "Company Disclosure Schedule"):
Section 4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. The Company has the requisite corporate power and
authority to carry on its business as it is now being conducted and is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary. The Company has
heretofore made available to Buyer and Merger Sub a complete and correct copy of
its certificate of incorporation and by-laws, each as amended to the date
hereof. The Company does not own any interest or otherwise have the right to
acquire any interest in the capital stock of another company.
Section 4.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
1,000,000 shares of Company Common Stock. There are currently 696,121 shares of
Company Common Stock currently issued and outstanding, all of which are validly
issued, fully paid and non-assessable. At the time of Closing, it is anticipated
that 691,944 shares of Company Common Stock (excluding shares of Company Common
Stock owned by Buyer) will be issued and outstanding, all of which will have
been validly issued, fully paid and non-assessable (other than encumbrances in
favor of the Company imposed by the arrangements described in Section 6.1).
(b) Appendix 5 sets forth a full and complete listing of the
Selling Stockholders and the number of shares of Company Common Stock owned by
each of them. Each such Selling Stockholder owns his or her shares of Company
Common Stock free and clear of any claim, suit, proceeding, call, commitment,
voting trust, proxy, restriction, limitation, security interest, pledge or lien
or encumbrance of any kind or nature whatsoever (other than encumbrances in
favor of the Company imposed by the arrangements described in Section 6.1), and
has full power and authority to vote said shares of Company Common Stock and to
approve the transactions contemplated by this Agreement, such shares
constituting, in the aggregate, all of the issued and outstanding shares of
capital stock of the Company, other than those shares of Company Common Stock
owned by Buyer.
(c) With the exception of 2,062 shares of Company Common
Stock, no shares of Company Common Stock are held in the treasury of the
Company.
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(d) No shares of Company Common Stock are the subject of any
outstanding rights, options, warrants, conversion rights, or any other rights
owned by any party to acquire Company Common Stock, other than 175,000 shares of
Company Common Stock that are reserved for issuance under stock options (the
"Company Stock Options") issued pursuant to the Company's stock option plan (the
"Company Stock Option Plan"), of which 131,823 shares are subject to outstanding
Company Stock Options. Appendix 5 includes the identity of all holders of
Company Stock Options ("Company Stock Option Holders"), the number of shares of
Company Common Stock acquirable by each Company Stock Option Holder, and the
exercise price for each Company Stock Option. All shares of capital stock of the
Company subject to issuance pursuant to the Company Stock Option Plan, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
non-assessable (other than encumbrances in favor of the Company imposed by the
arrangements described in Section 6.1).
(e) Other than as disclosed in the Company Disclosure Schedule
and the rights acquired by Buyer pursuant to its Agreement with the Company
dated March 6, 1998 (as amended by letter agreements relating to the
transactions contemplated by this Agreement entered into by Buyer and Seller in
April 2000) (the "Buyer Agreement"), there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock appreciation
rights, redemption rights, repurchase rights, agreements, arrangements, calls,
commitments or rights of any kind relating to the issued or unissued capital
stock of the Company or obligating the Company to issue or sell any shares of
capital stock of, or other equity interests in, the Company. Other than the
Buyer Agreement or as disclosed in the Company Disclosure Schedule, as of the
date of this Agreement, there are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of capital stock
of the Company or to provide material funds to, or make any material investment
(in the form of a loan, capital contribution or otherwise) in, any person.
(f) Each Selling Stockholder has full power and authority to
vote the shares of Company Common Stock owned by him or her at the Company
Special Meeting.
(g) Other than the restrictions on transfer of each Selling
Stockholder's shares of Company Common Stock included in the Company's articles
of organization (which will be waived prior to Closing pursuant to Section
3.2(f)) and the encumbrances caused by the Buyer Agreement, each Selling
Stockholder has full power and authority to transfer and dispose of the shares
of Company Common Stock owned by him or her free and clear of any claim, suit,
proceeding, call, voting trust, proxy, restriction, security interest, lien or
other encumbrance of any kind or nature whatsoever (other than encumbrances in
favor of the Company imposed by the arrangements described in Section 6.1).
Section 4.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all necessary
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the Merger. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
Merger have been duly and validly authorized by all necessary corporate action
and no other corporate proceedings on the part of the Company are necessary to
authorize the execution and delivery of this Agreement or to consummate the
Merger other than the adoption of this Agreement by the affirmative vote of
two-thirds of the issued and outstanding Company Common Stock at the Company
Special Meeting (as defined below) and the filing and recordation of appropriate
merger documents as required by applicable provisions of the Massachusetts Law.
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Buyer and Merger
Sub, this Agreement constitutes a legal, valid and binding obligation of the
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Company, enforceable against the Company in accordance with its terms. The
Related Agreements have been duly and validly executed and delivered by the
parties to such agreements (other than Buyer and Merger Sub) and, assuming the
due authorization, execution and delivery by Buyer and Merger Sub and assuming
the mental competency of the individuals executing the Related Agreements, the
Related Agreements constitute a legal, valid and binding obligation of the
parties to such agreements.
Section 4.4 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company will not:
(i) conflict with or violate the articles of organization or by-laws of the
Company, (ii) assuming the consents, approvals, authorizations and waivers
specified in Section 4.4(b) have been received, and any condition precedent to
such consent, approval, authorization, or waiver has been satisfied, conflict
with or violate any domestic (federal, state or local) or foreign law, rule,
regulation, order, judgment or decree (collectively, "Laws") applicable to the
Company or by which any property or asset of the Company is bound or affected,
or (iii) except as set forth in the Company Disclosure Schedule, result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration, or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
pursuant to, any note, bond, mortgage, indenture or credit agreement, or any
other contract, agreement, lease, license, permit, franchise or other instrument
or obligation to which the Company is a party or by which the Company or any its
properties or assets is bound or affected.
(b) Except as referenced in Section 4.21, the execution and
delivery of this Agreement by the Company does not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization,
waiver or permit of, or filing with or notification to, any governmental or
regulatory authority, domestic, foreign or supranational ("Governmental
Entity"), except for filing and recordation of the certificate of merger as
required by the applicable provisions of the laws of the Commonwealth of
Massachusetts.
Section 4.5 REPORTS AND FINANCIAL STATEMENTS.
(a) The consolidated balance sheets of the Company as of
December 31, 1999 and 1998 and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1999 (including the related notes and schedules
thereto) delivered to the Buyer (the "Company Financial Statements") present
fairly, in all material respects, the consolidated financial position and the
consolidated results of operations, retained earnings and cash flows of the
Company as of the dates or for the periods presented therein in conformity with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved except as otherwise noted therein,
including in the related notes.
(b) The consolidated balance sheets and the related statements
of operations and cash flows of the Company contained in the Company's unaudited
quarterly report for the three month period ended March 31, 2000 (the "Company
Quarterly Financial Statements") reflect all adjustments of which the Company is
aware that are necessary to present fairly, in all
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material respects, the consolidated financial position, results of operations
and cash flows of the Company for the period presented therein.
(c) Except for those liabilities that are fully reflected or
reserved against on the Company Financial Statements, the Company Quarterly
Financial Statements or as set forth in the Company Disclosure Schedule, the
Company has no outstanding liability of any nature whatsoever (whether absolute,
accrued, contingent (including any contingent liabilities or obligations arising
out of or relating to any sale of assets outside the ordinary course of
business).
Section 4.6 LITIGATION. Except as disclosed in the Company Disclosure Schedule,
the Company Financial Statements or the Company Quarterly Financial Statements
there is no civil, criminal or administrative suit, action or proceeding pending
or, to the knowledge of the Company, threatened against or affecting the
Company, nor is there any judgment, decree, injunction or order of any
Governmental Entity or arbitrator outstanding against the Company.
Section 4.7 UNDISCLOSED LIABILITIES. Except as disclosed in the Company
Disclosure Schedule, the Company Financial Statements or the Company Quarterly
Financial Statements, the Company has no liabilities of any nature (whether
secured or unsecured, accrued, absolute or contingent, unliquidated or otherwise
and whether known or unknown or due or to become due) as of the date hereof,
other than liabilities incurred since the date of the Company Quarterly
Financial Statements in the ordinary course of the Company's business consistent
with prior practice. The Company knows of no basis for the assertion against it
by any person of a claim based on a liability which is not disclosed.
Section 4.8 GUARANTEES. The Company has not guaranteed, become surety or
contingent obligor for or assumed any obligation, debt or dividend of any person
or entity. No assets owned by the Company are or have been pledged,
hypothecated, delivered for safekeeping, subjected to a security interest or
otherwise provided in any way as security for payment or performance of any
obligation of a person other than the Company.
Section 4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Company Disclosure Schedule, since December 31, 1999, the Company has conducted
its business only in the ordinary course and in a manner consistent with past
practices, and there has not been: (i) any material change in the financial
condition, properties, business or results of operations of the Company, (ii)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the Company's
capital stock, or, any redemption, purchase or other acquisition of any of its
capital stock, (iii) any split, combination or reclassification of any of the
Company's capital stock or, except with respect to the Company Stock Options,
any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of the Company's capital
stock, (iv) any granting by the Company to any officer of the Company of any
increase in compensation or any rights with respect to compensation in the event
of a "change in control" (however defined) of the Company, (v) any granting by
the Company to any officer or any group or class of employees of the Company of
any right to severance or termination pay upon severance or termination of
employment, (vi) any increase in benefits available under or establishment of
any the Company Benefit Plans (as defined below), or (vii) any material change
in accounting methods, principles or practices by the Company, except insofar as
may have been required by a change in GAAP, (viii) any mortgage or pledge of, or
creation of any lien, pledge, charge, security interest or encumbrances
respecting, any property or assets of the Company, except for liens of current
property taxes not yet due and payable, (ix) the disclosure of proprietary
confidential information of the Company to any person not connected or otherwise
related to
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the Company, (x) any loss, waiver or release of any material rights of the
Company, or (xi) the negotiation or execution of any arrangement, agreement or
understanding to which the Company is a party which cannot be terminated by the
Company on notice of thirty (30) days or less without cost or penalty.
Section 4.10 LEASED REAL PROPERTY. The Company is the lessee under the real
estate leases identified in the Company Disclosure Schedule. True, correct and
complete copies of said leases and any amendments, extensions and renewals
thereof have heretofore been delivered by Company to Buyer. Company now enjoys
and on the Closing Date will enjoy quiet and undisturbed possession under each
of said leases. Company's interest in each of such leases is free and clear of
any mortgages and liens, is not subject to any deeds of trust, assignments,
subleases or rights of any third parties other than the lessor thereof, is fully
assignable without the consent of any third party and may be subleased without
the consent of any third party. Such leased real estate is free and clear of any
zoning or use or building restriction or any pending, proposed or threatened
zoning or use or building restriction which would now, or on the Closing Date or
thereafter, interfere with the present use of any of such leased real estate.
Said leases now are, and on the Closing Date will be, valid and binding and in
full force and effect, and are not now, and on the Closing Date will not be, in
default as to the payment of rent or otherwise. The consummation of the
transactions contemplated by this Agreement will not constitute an event of
default under any of said leases and the continuation, validity and
effectiveness of such leases will not be adversely affected by the transactions
contemplated by this Agreement.
Section 4.11 EMPLOYEE BENEFIT PLANS.
(a) The Company Disclosure Schedule sets forth a complete and
correct list of all "employee benefit plans", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and any
other pension plans or employee benefit arrangements or payroll practices
(including, without limitation, severance pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred compensation, bonus or
other incentive compensation, stock option or stock purchase arrangements or
policies) maintained, or contributed to, by the Company or any trade or business
(whether or not incorporated) which is treated with the Company as a single
employer under Section 414(b), (c), (m) or (o) of the Code ("ERISA Affiliate")
with respect to employees of the Company or their ERISA Affiliates (the "Company
Benefit Plans"). Each Company Benefit Plan is in writing and the Company has
furnished Buyer with a true and complete copy of each Company Benefit Plan
document, including all amendments thereto, and a true and complete copy of each
material document prepared in connection with each Company Benefit Plan,
including, without limitation, (i) a copy of each trust or other funding
arrangement, (ii) each summary plan description and summary of material
modifications, (iii) the three most recently filed Form 5500's, including all
attachments thereto, (iv) the most recently received Internal Revenue Service
("IRS") determination letter for each Company Benefit Plan, and (v) the most
recently prepared actuarial report and financial statement in connection with
each Company Benefit Plan. The Company does not have any express or implied
commitment (x) to create or incur liability with respect to or cause to exist
any other employee benefit plan, program or arrangement, (y) to enter into any
contract or agreement to provide compensation or benefits to any individual or
(z) to modify, change or terminate any Company Benefit Plan, other than with
respect to a modification, change or termination required by ERISA or the Code.
10
(b) No "accumulated funding deficiency" as defined in Section
412 of the Code exits with respect to any Company Benefit Plan, whether or not
waived. No "reportable event" within the meaning of Section 4043 of ERISA, and
no event described in Section 4062 or 4063 of ERISA has occurred with respect to
any Company Benefit Plan. Neither the Company nor any ERISA Affiliate of the
Company has: (i) engaged in, or is a successor corporation or parent corporation
to an entity that has engaged in, a transaction described in sections 4069 or
4212(c) of ERISA or (ii) incurred or reasonably expects to incur (A) any
liability under Title IV of ERISA arising in connection with the termination of,
or a complete or partial withdrawal from, any plan covered or previously covered
by Title IV of ERISA, or (B) any liability under Section 4971 of the Code that
in either case could become a liability of Surviving Corporation or Buyer or any
of its Affiliates after the Effective Time. As of December 31, 1999, the fair
market value of the assets of the Company's pension plan, excluding any accrued
but unpaid contributions, exceeded the present value of all benefits accrued
under such pension plan determined on a termination basis using the assumptions
established by the PBGC as in effect on such date. As of December 31, 1999,
there was no unfunded liability under any Company Benefit Plan, computed using
reasonable actuarial assumptions and determined as if all benefits under such
Company Benefit Plans were vested and payable as of such date. No event has
occurred since December 31, 1999 that would cause the Company to believe that as
of the date of this Agreement there is any such unfunded liability.
(c) Each Company Benefit Plan intended to qualify under
Section 401(a) of the Code ("Qualified Plans") has received a favorable
determination letter from the Internal Revenue Service that such Plan is so
qualified, and, except as disclosed on Company Disclosure Schedule, nothing has
occurred with respect to the operation of any such Plan which, either
individually or in the aggregate, would cause the loss of such qualification or
the imposition of any material liability, penalty or tax under ERISA or the
Code.
(d) Except as set forth in the Company Disclosure Schedule,
there has been no prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) with respect to any Company Benefit Plan. The
Company is not currently liable and has not previously incurred any liability
for any tax or penalty arising under Section 4971, 4972, 4975, 4979, 4980 or
4980B of the Code or Section 502 of ERISA, and no fact or event exists which
could give rise to any such liability.
(e) All contributions and premiums required by law or by the
terms of any Company Benefit Plan or any agreement relating thereto have been
timely made (without regard to any waivers granted with respect thereto) in all
material respects.
(f) The liabilities of each Company Benefit Plan that has been
terminated or otherwise wound up, have been fully discharged in material
compliance with applicable law.
(g) There has been no violation of ERISA with respect to the
filing of applicable returns, reports, documents and notices regarding any
Company Benefit Plan with the Secretary of Labor or the Secretary of the
Treasury or the furnishing of such notices or documents to the participants or
beneficiaries of the Company Benefit Plans.
(h) There are no pending legal proceedings which have been
asserted or instituted against any of the Company Benefit Plans, the assets of
any such Plans or the Company or any ERISA
11
Affiliate or the plan administrator or any fiduciary of the Company Benefit
Plans with respect to the operation of such plans (other than routine,
uncontested benefits claims).
(i) Each Company Benefit Plan has been maintained, in all
material respects, in accordance with its terms and all provisions of applicable
laws and regulations. All amendments and actions required to bring each Company
Benefit Plan into conformity in all material respects with all of the applicable
provisions of ERISA and other applicable laws and regulations have been made or
taken.
(j) Except as set forth on the Company Disclosure Schedule,
the Company has never maintained a welfare benefit plan providing continuing
benefits after the termination of employment (other than as required by
applicable law and at the former employee's own expense), and the Company and
each of its ERISA Affiliates have complied in all material respects with the
notice and continuation requirements of Section 4980B of the Code and the
regulations thereunder. The Company's Financial Statements and Quarterly
Financial Statements reflect reserves adequate to provide the benefits accrued
under such retiree welfare benefit plans.
(k) Except as set forth in the Company Disclosure Schedule,
neither the execution and delivery of this Agreement nor the Merger will (i)
result in any payment (including, without limitation, severance, unemployment
compensation or golden parachute) becoming due to any director or employee of
the Company, (ii) increase any benefits otherwise payable under any the Company
Benefit Plan or (iii) result in the acceleration of the time of payment or
vesting of any such benefits extent other than vesting of the Company Stock
Options in accordance with their terms and this Agreement.
Section 4.12 TAXES. The Company has duly filed all foreign, federal, state and
local income, franchise, excise, real and personal property and other Tax (as
defined below) returns and reports required to have been filed by the Company
prior to the date hereof, or requests for extensions to file such returns and
reports have been timely filed. All of the foregoing returns and reports are
true and correct in all material respects, and the Company has paid or, prior to
the Effective Time will pay, all Taxes, whether or not shown on such returns or
reports, as being due or claimed to be due to any Governmental Entity and the
Company has paid and will pay all installments of estimated taxes due on or
before the Effective Time. The Company has paid or made adequate provision in
accordance with GAAP in the Company Financial Statements for all Taxes payable
in respect of all periods ending on or prior to the date of this Agreement and
will have made or provided for all Taxes payable in respect of all periods ended
on or prior to the Closing Date. As of the date hereof, all deficiencies
proposed as a result of any audits have been paid or settled. The Company has
paid, collected or withheld, or caused to be paid, collected or withheld, all
amounts of Taxes required to be paid, collected or withheld, other than such
Taxes for which adequate reserves in the Company Financial Statements or Company
Quarterly Financial Statements have been established or which are being
contested in good faith. There are no claims or assessments pending against the
Company for any alleged deficiency in any Tax, and the Company has not been
notified in writing of any proposed Tax claims or assessments against it. Except
as set forth in the Company Disclosure Schedule, there is no contract,
agreement, plan or arrangement covering any Person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by the Buyer, the Company, or the Surviving Corporation by reason of
Section 280G of the Code.
Section 4.13 COMPLIANCE WITH APPLICABLE LAWS. The business of the Company has
not been, and is not currently being, conducted in violation of any federal,
state, local or foreign law, statute, ordinance, rule,
12
regulation, judgment, order, injunction, decree, arbitration award, agency
requirement, license or permit of any Governmental Entity (collectively,
"Company Permits"). No investigation or review by any Governmental Entity with
respect to the Company is pending or threatened, nor has any Governmental Entity
indicated an intention to conduct the same. No material change is required in
the Company's processes, properties or procedures in connection with any such
Company Permits, and the Company has not received any notice or communication of
any material noncompliance with any such Company Permits that has not been cured
as of the date hereof. The Company has all permits, licenses, franchises,
variances, exemptions, orders and other governmental authorizations, consents
and approvals necessary to conduct its business as presently conducted.
Section 4.14 VOTING REQUIREMENTS. The affirmative vote of the holders of at
least two-thirds of the total number of votes entitled to be cast by the holders
of the Company Common Stock outstanding as of the record date for the Company
Special Meeting is the only vote of the holders of any class or series of the
Company's capital stock or other securities necessary to approve this Agreement
and the transactions contemplated by this Agreement.
Section 4.15 COMPANY MATERIAL CONTRACTS. With the exception of the contracts
addressed by Section 4.21:
(a) The Company Disclosure Schedule lists: (i) all notes,
bonds, mortgages, indentures, leases, licenses, instruments, bids or proposals,
and other financial instruments to which the Company is bound or otherwise
obligated, and any amendment or modification thereto; (ii) all contracts,
agreements, commitments or understandings (other than employment agreements)
(including any amendments or modifications thereto) to which the Company is
bound or otherwise obligated (x) with an annual value of $50,000 or more, (y)
which is not terminable upon notice by the Company, or (z) extends past December
31, 2000; (iii) the names of all employees (including the current annual rate of
compensation and hire date) of the Company, separately identifying (w) those
employees with whom the Company has entered into an employment agreement, (x)
those employees with whom the Company has entered into a noncompetition
agreement, (y) those employees with whom the Company has entered into an
assignment of inventions agreement, and (z) those employees to whom the Company
would be obligated to pay any severance or termination pay upon severance or
termination of employment; (iv) all distributor, agency, or representative
agreements entered into by the Company; (v) all currently effective contracts
entered into by the Company with any Government Entity under which any
obligation on the part of the Company remains outstanding summarizing the
project sponsored by the Government Entity and the principal researcher of the
Company engaged in the project; and (vi) all contracts, agreements, commitments
or undertakings entered into by the Company that is related to or otherwise
impacts, by grant of license, assignment or otherwise, the Company's
Intellectual Property Rights (as defined below). The foregoing are hereinafter
referred to as the "Company Material Contracts".
(b) Other than the contracts referenced in Section 4.21 below
(which shall be made available to the Buyer upon request), the Company has
delivered to Buyer true and accurate copies of the Company Material Contracts,
including all amendments and modifications to each.
(c) All Company Material Contracts are valid and binding and
are in full force and effect and enforceable against the Company in accordance
with their respective terms.
(d) Other than the Company Material Contracts, there are no
contracts, commitments, agreements, undertakings or commitments entered into by
Company that individually or in the aggregate could materially impact the
business, operation, or prospects of the Company.
13
(e) No consent of any person is needed in order that each
Company Material Contract shall continue in full force and effect in accordance
with its terms without penalty, default, acceleration or rights of early
termination by reason of the consummation of the transactions contemplated by
this Agreement.
(f) The Company is not in violation or breach of or default
under any Company Material Contract; nor to the Company's knowledge is any other
party to any Company Material Contract in violation or breach of or default
under any such Company Material Contract.
Section 4.16 TITLE TO PROPERTY. Except as described in the Company Disclosure
Schedule and with respect to the leased real property, the Company has good and
valid title to, or, in the case of leased properties and assets, valid leasehold
interests in, all of its tangible personal properties, used or held for use in
its business, free and clear of any Liens except (i) for liens imposed by Law in
respect of obligations not yet due which are owed in respect of Taxes or which
otherwise are owed to materialmen, workmen, carriers, warehousemen or laborers,
and (ii) as reflected in the Company Financial Statements or the Company
Quarterly Financial Statements. The Company Disclosure Schedule identifies all
tangible personal property used in the business that is the subject of an lease
agreement.
Section 4.17 INTELLECTUAL PROPERTY.
(a) The Company Disclosure Schedule lists all patents,
trademarks, trade names, service marks, and copyrights owned or licensed by the
Company that are material to its business or prospects (the "Company
Intellectual Property Rights"). Other than the license granted to the Buyer by
the Buyer Agreement or to a Government Entity pursuant to a Government Contract,
the Company's Intellectual Property Rights are not subject to any license
granted to any third party.
(b) With respect to the Company Intellectual Property Rights
and any technology or know-how, tangible or intangible, that is material to the
Company's business or prospects: (i) the manufacture, sale, licensing, or use of
any of the services or products of the Company as now manufactured, sold or
licensed or used or proposed for manufacture, use, sale or licensing by the
Company does not infringe on any copyright, patent, trade ▇▇▇▇, service ▇▇▇▇ or
trade secret of a third party, (ii) to the best of the Company's knowledge, the
use by the Company of any trademarks, service marks, trade names, trade secrets,
copyrights, patents, technology or know-how and applications used in the
business of the Company as currently conducted or as proposed to be conducted
does not infringe on any copyright, patent, trade ▇▇▇▇, service ▇▇▇▇ or trade
secret of a third party, and (iii) the Company has not received any information
(nor does the Company have any reason to believe that there may be any threats)
challenging the ownership by the Company or the validity of any of the Company
Intellectual Property Rights. All registered trademarks, service marks and
copyrights held by the Company are valid and subsisting. To the knowledge of the
Company, there is no unauthorized use, infringement or misappropriation of any
of the Company Intellectual Property Rights by any third party, including any
employee or former employee of the Company. No Company Intellectual Property
Right is subject to any outstanding decree, order, judgment, or stipulation
imposing any restriction on such Company Intellectual Property Right.
Section 4.18 ENVIRONMENTAL MATTERS.
Except as disclosed in the Company Disclosure Schedule:
14
(a) the Company (i) is in material compliance with all, and is
not subject to any asserted liability or, to the Company's knowledge, any
liability (including liability with respect to current or former subsidiaries or
operations), in each case with respect to any, Environmental Laws (as defined
below), (ii) holds or has applied for all Environmental Permits (as defined
below) applicable to its business and properties and (iii) is in material
compliance with its Environmental Permits;
(b) the Company has not received any written notice, demand,
letter, claim or request for information alleging that it is or may be in
violation of, or liable under, any Environmental Law;
(c) the Company (i) has not entered into or agreed to any
consent decree or order or is subject to any judgment, decree or judicial order
relating to compliance with Environmental Laws, Environmental Permits or the
investigation, sampling, monitoring, treatment, remediation, removal or cleanup
of Hazardous Materials (as defined below) and, no investigation, litigation or
other proceeding is pending or threatened in writing with respect thereto, or
(ii) is not an indemnitor in connection with any threatened or asserted claim by
any third-party indemnitee for any liability under any Environmental Law or
relating to any Hazardous Materials; and
(d) none of the real property owned or leased by the Company
is listed or, to the knowledge of the Company, proposed for listing on the
"National Priorities List" under CERCLA, as updated through the date hereof, or
any similar state or foreign list of sites requiring investigation or cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended as of the date hereof.
"Environmental Laws" means any applicable federal, state, local or foreign
statute, law, ordinance, regulation, rule, code, treaty, writ or order and any
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree, judgment, stipulation,
injunction, permit, authorization, policy, opinion, or agency requirement, in
each case having the force and effect of law, relating to the pollution,
protection, investigation or restoration of the environment, health and safety
or natural resources, including those relating to the use, handling, presence,
transportation, treatment, storage, disposal, release, threatened release or
discharge of Hazardous Materials or noise, odor, wetlands, pollution,
contamination or any injury or threat of injury to persons or property or to the
siting, construction, operation, closure and post-closure care of waste
disposal, handling and transfer facilities.
"Environmental Permits" means any permit, approval, identification number,
license and other authorization required under any Environmental Law.
"Hazardous Materials" means (i) any petroleum, petroleum products, by-products
or breakdown products, radioactive materials, asbestos-containing materials or
polychlorinated biphenyls or (ii) any chemical, material or other substance
defined or regulated as toxic or hazardous or as a pollutant or contaminant or
waste under any Environmental Law.
Section 4.19 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set forth in the
Company Disclosure Schedule, there is no agreement, judgment, injunction, order
or decree binding upon the Company which has had or could reasonably be expected
to have the effect of prohibiting or materially impairing its business practices
or the continued conduct of the Company's business by the Surviving Corporation.
The Company has not entered into any agreement under which the Company is
restricted from selling, licensing
15
or otherwise distributing any of its products to any class of customers, in any
geographic area, during any period of time or in any segment of the market.
Section 4.20 CERTAIN BUSINESS PRACTICES. Neither the Company nor any of its
directors, officers, employees or agents has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful payments relating to
political activity, (ii) made any unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic political party or
campaign or violated any provision of the Foreign Corrupt Practices Act of 1977,
as amended, (iii) consummated any transaction, made any payment, entered into
any agreement or arrangement or taken any other action in violation of Section
1128B(b) of the Social Security Act, as amended, or (iv) made any other unlawful
payment.
Section 4.21 GOVERNMENT CONTRACTS. The Company has provided Buyer access to all
contracts, agreements, orders and other relationships, and all amendments and
modifications thereof and any consents and waivers thereunder with Governmental
Entities. Assuming government approval of any novation as required by the
Anti-Assignment Act 41 U.S.C. Section 15 and/or execution of an agreement to
recognize the Company's change of name required for said contracts with such
Governmental Entities, the Company is not, and the execution and delivery of
this Agreement by the Company and the consummation of the Transactions will not
result, in any violation, breach or default of any material term or provision of
(a) any contract with such a Governmental Entity, (b) any subcontract executed
by the Company at any tier under a prime contract with such a Governmental
Entity, (c) any bid, proposal or quotation made in connection with a contract
with such a Governmental Entity or a subcontract issued under a contract with a
Governmental Entity (collectively, "Government Contracts"), or (d) any order,
statute, rule or regulation governing any Government Contract. The Company has
not been suspended or debarred from bidding on contracts with Governmental
Entities. The Company has not received Notice of Default or Termination for
Default (as provided in 48 C.F.R. Ch. 1 Section 52.249-8, 52.249-9 or similar
sections) with respect to any Government Contract or has taken any action which
could result in the delivery of such notice. Notwithstanding the foregoing,
nothing contained herein shall be construed to represent that the Company will
remain eligible for award or continued funding under any outstanding bid,
proposal, quotation or existing contract restricted exclusively to participation
by small business concerns.
Section 4.22 INSURANCE. The Company has general and casualty insurance issued by
financially secure insurers providing customary levels of insurance coverage.
Section 4.23 TAX-FREE EXCHANGE. The Company has not taken or agreed to take any
action that would prevent the Merger from constituting a transaction qualifying
under Section 368(a) of the Code. The Company is not aware of any agreement or
plan that would prevent the Merger from qualifying under Section 368(a) of the
Code.
Section 4.24 BROKERS. Except for Soundview Technology Group, Inc. (the
"Company's Financial Advisor") whose fees up to an aggregate amount of $6.72
million shall be paid by the Company, no agent, broker, finder, investment
banker or other firm or Person is or will be entitled to any broker's or
finder's fee or other similar commission or fee in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
Section 4.25 BOARD APPROVAL. The Company's board of directors, by resolutions
duly adopted by unanimous vote of those voting at a meeting duly called and held
and not subsequently rescinded or modified in any way (the "Company Board
Approval"), has duly (i) determined that this Agreement and the Merger are fair
to and in the best interests of the Company and its stockholders, (ii) approved
this Agreement and the Merger and (iii) recommended that the stockholders of the
Company adopt this
16
Agreement and approve the Merger and directed that this Agreement be submitted
for consideration by the Company's stockholders at the Company Special Meeting.
Section 4.26 EXPIRATION OF UNEXERCISED OPTIONS. The Company's board of directors
has taken such action as is required under applicable law to ensure that any
Company Stock Options not exercised by the Company Stock Option Holders will
expire at the Effective Time.
Section 4.27 COMPANY PROPRIETARY AGREEMENTS. Each Key Employee (as that term is
defined in Section 7.2 below) has executed and delivered to the Company either
(a) an Employee Confidentiality and Noncompetition Agreement (in the form
attached to this Agreement as Exhibit 4.27(a)), or (b) a Proprietary Information
and Inventions Agreement (in the form attached to this Agreement as Exhibit
4.27(b)).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUBSIDIARY
Buyer represents and warrants to the Company, and Merger Sub represents to the
Company solely as to those representations specifically referring to it, that,
except as disclosed in Buyer SEC Reports (as defined below) filed with the SEC
prior to the date of this Agreement:
Section 5.1 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York. Buyer has the requisite corporate power and authority to carry on its
business as it is now being conducted. Merger Sub was incorporated on April 19,
2000, in the Commonwealth of Massachusetts, and has not conducted any business
other than to approve the Merger and such other actions as required of the board
of directors by Massachusetts Law to consummate the transaction contemplated by
this Agreement.
Section 5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Buyer and Merger Sub
has all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Merger. This Agreement
has been duly executed and delivered by Buyer and Merger Sub and constitutes a
legal, valid and binding obligation of Buyer and Merger Sub, enforceable against
Buyer and Merger Sub in accordance with its terms.
Section 5.3 LITIGATION. There is no suit, action or proceeding pending or, to
the knowledge of Buyer, threatened against or affecting Buyer or Merger Sub
which, if resolved unfavorably to either, would prohibit the consummation of the
Merger.
Section 5.4 REGISTRATION STATEMENTS ON FORM S-3. Buyer is eligible to file a
registration statement on Form S-3 as contemplated by the Registration Rights
Agreement to be executed at Closing. Buyer is not aware of any circumstance that
would disqualify it from being eligible to use the short form registration
contemplated by Form S-3 to register the shares of Buyer Common Stock to be
issued as Merger Consideration and issuable to the Selling Stockholders as
Contingent Merger Consideration.
Section 5.5 ISSUANCE OF BUYER COMMON STOCK. The shares of Buyer Common Stock
representing the Merger Consideration when issued at the Closing, and the shares
of Buyer Common Stock representing the Contingent Merger Consideration when
released to the Selling Stockholders by the Escrow Agent, will, in each case,
have been duly authorized validly issued, fully paid and non-assessable.
Section 5.6 TAX-FREE EXCHANGE. Neither the Buyer nor the Merger Sub has taken or
agreed to take any action that would prevent the Merger from constituting a
transaction qualifying under Section 368(a)
17
of the Code. The Buyer is not aware of any agreement or plan that would prevent
the Merger from qualifying under Section 368(a) of the Code.
ARTICLE VI
COMPANY COVENANTS PENDING THE MERGER
Section 6.1 EXERCISE OF COMPANY STOCK OPTIONS. As promptly as practicable after
the date of this Agreement,
(a) the Company shall cause all Company Stock Options to
become fully vested in accordance with the Company Stock Option Plans and the
agreements issued pursuant to such plans;
(b) each Company Stock Option Holder shall thereafter exercise
all Company Stock Options owned by him or her;
(c) the Company will issue certificates representing the
shares of Company Common Stock acquired by the Company Stock Option Holders;
(d) the former Company Stock Option Holders will thereafter
participate in the Company Special Meeting and at the Closing shall be included
among the Selling Stockholders.
The Company may facilitate the exercise of such Company Stock Options by
providing bona fide loans or facilitating such other lending arrangements to
enable the exercise of the Company Stock Options by the Company Stock Option
Holders, provided that such loans or funding arrangements include terms,
conditions and security as are reasonable under the circumstances and provided
Buyer provides its consent (not to be unreasonably withheld) to such
arrangements.
Section 6.2. COMPANY SPECIAL MEETING. As promptly as practicable after the date
of this Agreement, but in any event on or before twenty-five (25) business days
after the date hereof, the Company shall call and hold one or more meetings of
its stockholders in accordance with the Company's organizational documents and
the applicable provisions of Massachusetts Law and will use its bests efforts to
obtain at said meetings all approvals of its stockholders required in order to
consummate the Merger. The Company's board of directors shall recommend such
approval and shall take all lawful action to solicit such approval. The former
Company Stock Option Holders will participate in the Company Special Meeting as
stockholders of the Company and pending an affirmative vote of the stockholders
of the Company at the Company Special Meeting, shall participate in the Merger
as Selling Stockholders. At the Company Special Meeting, the Selling
Stockholders shall appoint the NZAT Shareholders Representative and the
Alternate NZAT Shareholders Representative referenced in the form of escrow
agreements attached as Appendix 9 and 10.
Section 6.3 SATISFACTION OF CONDITIONS. The Company shall use its best efforts
to satisfy the conditions precedent to the obligations of the Buyer and the
Merger Sub specified in Article VIII.
Section 6.4 CONDUCT OF THE BUSINESS PENDING THE MERGER
(a) From and after the date hereof, prior to the Effective
Time, except as contemplated by this Agreement or required by Law or regulation,
or unless Buyer shall otherwise agree in writing, the Company covenants and
agrees that it shall (i) carry on its business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, (ii)
use all reasonable efforts to keep available the services of its employees,
(iii) comply with the provisions of all laws, regulations, judicial
18
decrees and orders applicable to it or the conduct of its business, (iv) protect
the Company Intellectual Property Rights so that the Company's goodwill and
on-going business shall not be impaired in any material respect at the Effective
Time, (v) promptly advise Buyer of the threat, assertion or commencement of any
litigation to which the Company is, or may be made, a party.
(b) Unless Buyer shall otherwise agree in writing, prior to
the Effective Time, the Company shall not:
(i) declare, set aside, or pay any dividends on, or
make any other distributions in respect of, any of its capital stock; or
(ii) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any shares of the Company's Common
Stock or other securities in respect of, in lieu of or in substitution for
shares of the Company's capital stock; or
(iii) purchase, redeem or otherwise acquire, any
shares of its capital stock; or
(iv) grant, award or enter into any compensation or
"change of control" arrangement with any employee of the Company without the
prior written consent of Buyer; or
(v) except for the issuance of shares of Company
Common Stock upon the valid exercise of the Company Stock Options and receipt of
consideration required in connection therewith thereby raising the total number
of issued and outstanding shares of Company Common Stock at Closing to 691,944
(excluding the shares of Company Common Stock held by Buyer), (A) issue,
deliver, sell, pledge, dispose of or otherwise encumber any shares of its
capital stock (other than encumbrances in favor of the Company imposed by the
arrangements described in Section 6.1), (B) issue any additional Company Stock
Options, (C) issue rights, options, warrants or other securities convertible
into shares of capital stock of the Company, or (D) amend the terms of any
outstanding securities, rights, warrants or options (including Company Stock
Options, except as contemplated by this Agreement); or
(vi) amend the articles of organization or by-laws of
the Company in any manner detrimental to the rights of Buyer; or
(vii) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof; or
(viii) subject to a Lien or sell, lease, license or
otherwise dispose of or transfer any of its properties or assets or any Company
Intellectual Property Right; or
(ix) (A) incur or modify any indebtedness for
borrowed money (excluding (1) with respect to the Company's $250,000 line of
credit with Cambridge Trust Company which the Company may draw upon to fund its
ongoing operations, though not for capital expenditures in excess of $50,000
without Buyer's consent, in a manner consistent with prior business practices,
and (2) the Company's $153,000 secured note with Massachusetts Development
Finance Agency for the acquisition of capital equipment, further borrowing under
which may be pursued but only with Buyer's approval) or guarantee any such
indebtedness of another Person, (B) issue or sell any debt securities of the
Company,
19
(C) guarantee any debt securities of another Person, (D) enter into any
agreement to maintain any financial condition of another Person, (E) make any
loans, advances or capital contributions to, or investments in, any other person
(except as contemplated in Section 6.1 and as permitted by Buyer), or (F) settle
or compromise any claim or litigation; or
(x) take any action or omit to take any action that
would cause any of its representations and warranties herein to become untrue in
any material respect; or
(xi) waive any preemptive rights with respect to any
proposed sale or transfer of Company Common Stock by its stockholders; or
(xii) authorize any of, or commit or agree to take
any of, the foregoing actions.
(c) The Company shall promptly provide to Buyer copies of all
filings made by the Company with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
(d) The Company shall, before settling or compromising any
litigation, claim, income tax or other liability, consult with Buyer and its
advisors as to the positions and elections that will be taken or made with
respect to such matter and shall not enter into any such settlement or
compromise without the consent of Buyer.
(e) The Company shall promptly advise the Buyer of any request
by any stockholder to sell or transfer any shares of Company Common Stock other
than in connection with the Merger.
Section 6.5 EXCLUSIVITY. The Company shall deal exclusively and in good faith
with Buyer with regard to the Merger and will not, and will direct its officers,
directors, Financial Advisors, accountants, agents, and counsel not to, (i)
solicit submission of proposals or offers from any Person other than Buyer
relating to any acquisition of the Company of all or of a material portion of
its capital stock or assets (including any licenses to the Company Intellectual
Property Rights), or any merger, consolidation or business combination with the
Company that would have the effect of preventing the consummation of the
transactions contemplated by this Agreement (an "Acquisition Proposal"), (ii)
participate in any negotiations regarding, or furnish, in connection with an
Acquisition Proposal, any information to any other Person regarding the Company
other than Buyer and its representatives or otherwise cooperate in any way or
assist, facilitate or encourage any Acquisition Proposal by any Person other
than Buyer, or (iii) enter into any agreement or understanding, whether oral or
written, that would have the effect of preventing the consummation of the
transactions contemplated by this Agreement. If, notwithstanding the foregoing,
the Company or its representatives or agents should receive any Acquisition
Proposal or any inquiry regarding such proposal from a third party, such persons
shall promptly inform Buyer.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 ACCESS TO INFORMATION. From the date hereof through the Effective
Time or earlier termination of this Agreement in accordance with its terms, the
Company shall afford to Buyer and Buyer's accountants, counsel and other
representatives upon reasonable notice and at reasonable times, full
20
and reasonable access to its properties, books, contracts, commitments, records
and personnel and, during such period, shall furnish promptly to Buyer all
information concerning its business, properties and personnel as Buyer may
reasonably request, including information regarding customers, suppliers and
personnel and the opportunity to meet with such persons to discuss the business
and relations with the Company.
Section 7.2 EMPLOYEE RETENTION. Set forth on Exhibit 7.2 is a list of those
persons whom the Buyer determines to be key employees of the Company ("Key
Employees"). The Company will utilize its absolute best efforts to ensure that
the Key Employees execute and deliver, effective as at the Closing, a retention
agreement or letter, in either case as determined by Buyer, in substantially the
same form as Appendix 6 (the "Key Employee Retention Agreements") or Appendix 7
(the "Retention Letters") as the case may be. The Company acknowledges and
agrees that it is a condition precedent to closing the transactions contemplated
by this Agreement (unless waived by Buyer), that the Key Employee Retention
Agreements or Retention Letters, as the case may be, requested by Buyer are
executed and delivered at Closing.
Section 7.3 PUBLIC ANNOUNCEMENTS. On or before the Closing Date, Buyer and the
Company shall not, without prior consultation with the other party and such
other party's review of and consent to any public announcement concerning the
transactions contemplated by this Agreement, issue any press release or make any
public announcement with respect to such transactions during such period, and
Buyer and the Company shall, to the extent practicable, allow the other party
reasonable time to review and comment on such release or announcement in advance
of its issuance and use reasonable efforts in good faith to reflect the
reasonable and good faith comments of such other party, provided, however, no
party shall be prevented from making any disclosure required by law at the time
so required because of any delay on the part of the other party. The parties
intend that the initial announcement of the terms of the transactions
contemplated by this Agreement shall be made by joint press release of Buyer and
the Company.
Section 7.4 NOTICE OF BREACHES. The Company shall give prompt notice to Buyer,
and Buyer or Merger Sub shall give prompt notice to the Company, of (i) any
representation or warranty made by it contained in this Agreement which has
become untrue or inaccurate in any material respect, or (ii) the failure by it
to comply with or satisfy in any material respect any covenant, condition, or
agreement to be complied with or satisfied by it under this Agreement; provided,
however, that such notification shall not excuse or otherwise affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
Section 7.5 RELATED AGREEMENT. Simultaneously with the execution and delivery of
this Agreement, and as material consideration for the execution and delivery of
this Agreement by Buyer and Merger Sub, the persons referenced in the third
recital to this Agreement shall execute and deliver their respective Related
Agreement.
Section 7.6 PLAN OF REORGANIZATION. This Agreement is intended to constitute a
"plan of reorganization" within the meaning of Section 1.368-2(g) of the income
tax regulations promulgated under the Code. From and after the date of this
Agreement and until the Effective Time, each party hereto shall use its
reasonable best efforts to cause the Merger to qualify, and will not knowingly
take any action, cause any action to be taken, fail to take any action or cause
any action to fail to be taken which action or failure to act could prevent the
Merger from qualifying as a reorganization under the provisions of Section
368(a) of the Code. Following the Effective Time, neither the Surviving
Corporation, Buyer nor any of their affiliates shall knowingly take any action,
cause any action to be taken, fail to take any action or cause any
21
action to fail to be taken, which action or failure to act could cause the
Merger to fail to qualify as a reorganization under Section 368(a) of the Code.
Section 7.7 TERM OF WARRANTIES. Notwithstanding (a) any investigation or
examination conducted with respect to, or any knowledge acquired (or capable of
being acquired) about the accuracy or inaccuracy of or compliance with, any
representation, warranty, covenant, agreement, undertaking or obligation made by
or behalf of the Company, or (b) the Closing, all representations and warranties
of the Company contained in this Agreement, and any other certificate or
document delivered pursuant to this Agreement, shall survive the Closing for a
period of 12 months after the Closing Date (the "Warranty Period"). Buyer's
representation in Section 5.4 shall survive until the registration statement
contemplated in the Registration Rights Agreement is declared effective and
Buyer's representation in Section 5.5 shall survive until all Contingent Merger
Consideration is disbursed.
Section 7.8 INDEMNIFICATION. The Selling Stockholders indemnify Buyer and Merger
Sub against losses (including any and all costs, expenses, liabilities,
judgments, assessments or penalties and reasonable attorneys' fees and
disbursements relating thereto) (the "Buyer Losses") suffered or incurred by
Buyer or Merger Sub resulting from or arising out of the inaccuracy or breach of
any representation, warranty or covenant of the Company contained in Article III
of this Agreement or any certificate or instrument delivered to Buyer or Merger
Sub pursuant to this Agreement. Buyer and Merger Sub shall recover any Buyer
Losses solely and exclusively from the Merger Consideration Escrow Shares
deposited at Closing into an escrow account to be maintained by The Chase
Manhattan Bank (the "Merger Consideration Escrow Agent") without any recourse
against the Selling Stockholders, and the Selling Stockholders shall have no
liability to Buyer or Merger Sub hereunder above or beyond the Merger
Consideration Escrow Shares. Buyer and Merger Sub shall not be entitled to
indemnification on account of any Buyer Losses unless the aggregate of Buyer
Losses shall exceed $750,000, and then only to the extent of the excess thereof.
Attached as Appendix 9 is a form of escrow agreement with the Merger
Consideration Escrow Agent.
Section 7.9 NYSE LISTING. Buyer shall promptly prepare and submit to the NYSE a
listing application covering the Buyer Common Shares to be issued as Merger
Consideration and issuable as Contingent Merger Consideration, and shall use its
reasonable efforts to obtain, prior to the declaration of effectiveness of the
registration statement by which Buyer's Common Stock is registered with the SEC
pursuant to the Registration Rights Agreement, approval for the listing of such
Buyer Common Stock.
Section 7.10 NON-ASSIGNMENT OF CONTINGENT MERGER CONSIDERATION. The Company will
procure from each Selling Stockholder a written undertaking deliverable to the
Buyer at the Closing pursuant to which each Selling Stockholder agrees that he
or she will not assign any interest that he or she may have in any installment
of Contingent Merger Consideration until such installment is released by the
Escrow Agent to the Selling Stockholders, provided the related Company Target
has been satisfied.
Section 7.11 FUNDING. Assuming consummation of the Merger, the Buyer agrees to
provide a maximum of $7 million in post-Closing funding in a manner consistent
with the Company's business plan and the budget attached as Appendix 8. The
Buyer and the Company acknowledge and agree that the budget is being reviewed by
the Buyer and a form of the budget will be finally agreed to on or before the
Closing. The timing and payment of the amounts reflected in the agreed form of
the budget will be subject to Buyer's corporate control policies and procedures,
provided that such policies and procedures do not materially impact the funding
of the Surviving Corporation as contemplated in the agreed budget. Assuming
consummation of the Merger, Buyer agrees to provide the Surviving Corporation
with such additional funding as may be necessary to pay the expenses and fees of
Soundview Technology, Inc. as
22
reflected in the engagement letter dated January 21, 2000 between Soundview
Technology and the Company. Assuming consummation of the Merger, the Buyer also
agrees to provide the Surviving Corporation with such additional funding as to
enable it to settle the reasonable fees and expenses of ▇▇▇▇▇▇▇▇ & Company and
Gadsby, Hannah, LLP incurred in connection with this transaction, though in no
event may the fees or expenses of ▇▇▇▇▇▇, ▇▇▇▇▇▇ LLP exceed $400,000. In
addition, Buyer agrees to provide to the Surviving Corporation, commencing
within 60 days of Closing, engineering services equivalent to at least two
additional engineers who have at least two years of optical engineering
experience at its Woburn facility consistent with achieving the Company Targets
reflected in Appendix 2. Buyer shall at all times act in good faith in
connection with the achievement of the Company Targets and shall not
deliberately attempt to avoid its obligation to pay the Contingent Merger
Consideration by preventing the achievement of the Company Targets. Buyer will
not assign duties to the Surviving Corporation's employees that would materially
impact the ability of the Surviving Corporation to achieve the Company Targets.
Section 7.12 BUYER'S OPTION. The option granted to Buyer in Section 4.2 of the
Buyer Agreement is hereby terminated.
Section 7.13 THE COMPANY CALL. The right granted to the Company in Section
4.5(c) of the Buyer Agreement is hereby terminated.
Section 7.14 BUYER'S VOTE. Buyer hereby commits to vote, and does hereby vote,
all shares of Company Common Stock owned by it in favor of the Merger and this
Agreement at the Company Special Meeting.
Section 7.15 MELMAN RELATED AGREEMENT. The Company will use its best efforts to
procure the execution of a Related Agreement by ▇▇▇▇ ▇▇▇▇▇▇ in the form attached
to Appendix 1 as soon as possible from the date of the Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO MERGER
Section 8.1 BUYER'S CONDITIONS PRECEDENT. The obligations of Buyer and Merger
Sub to effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions, unless waived by Buyer:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects,
on the date hereof and as of the Effective Time as if made at the Effective
Time. Buyer shall have received a certificate of an authorized officer of the
Company, on behalf of the Company, to such effect.
(b) The Company shall have performed or materially complied
with all agreements and covenants required to be performed by it under this
Agreement at or prior to the Effective Time in all respects and Buyer shall have
received a certificate of an authorized officer of the Company, on behalf of the
Company, to such effect.
(c) The obligations imposed on those persons identified in the
third recital to this Agreement by the Related Agreements shall have been
performed and such individuals shall have executed the employee retention
agreement attached to each of their respective versions of the Related
Agreement.
(d) The Company shall have delivered to the Buyer the
following:
(i) a good standing certificate and certified charter
documents of the Company, each of recent date from the Secretary of State of the
Commonwealth of Massachusetts and a
23
good standing certificate for the Company from each jurisdiction in which the
Company is qualified to do business
(ii) copies of the resolutions duly adopted by the
board of directors and stockholders of the Company, authorizing the execution,
delivery and performance of this Agreement and the other agreements, instruments
and documents contemplated hereby and to be delivered hereunder, duly certified
by the President of the Company, which resolutions shall be in full force and
effect at the time of delivery on the Closing Date.
(e) Any material consents from Governmental Entities
(excluding consents to the Company's name change or novations) and other third
parties which in any case are required to be received prior to the Effective
Time with respect to the transactions contemplated hereby shall have been
received.
(f) The consummation of the Merger shall not be restrained,
enjoined or prohibited by any order, judgment, decree, injunction or ruling of a
court of competent jurisdiction; provided, however, that the parties shall use
their reasonable best efforts to cause any such order, judgment, decree,
injunction or ruling to be vacated or lifted.
(g) The Key Employee Retention Agreements or Retention Letters
required by Buyer and the employment agreements attached to ▇▇▇▇▇ ▇▇▇▇▇▇' and
▇▇▇▇ ▇▇▇▇'▇ respective Related Agreements shall have been executed and delivered
with effect as of the Closing.
(h) The Company shall obtain all consents from third parties,
including Government Entities, necessary, proper or appropriate to transfer,
assign or vest in Buyer all rights available under the Material Contracts.
Section 8.2 THE COMPANY'S CONDITIONS PRECEDENT. The obligations of the Company
shall be subject to the following conditions, any or all of which may be waived
in writing by the Company:
(a) The representations and warranties of Buyer contained in
Article V of this Agreement shall be true and correct in all respects, on the
date hereof and as of the Effective Time as if made at the Effective Time. The
Company shall have received a certificate of an authorized officer of the
Company, on behalf of the Buyer and Merger Sub, to such effect.
(b) The consummation of the Merger shall not be restrained,
enjoined or prohibited by any order, judgment, decree, injunction or ruling of a
court of competent jurisdiction; provided, however, that the parties shall use
their reasonable best efforts to cause any such order, judgment, decree,
injunction or ruling to be vacated or lifted.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the stockholders of the
Company:
(a) by mutual written consent of Buyer and the Company;
(b) by Buyer if any condition in Section 8.1 becomes
impossible of performance or has not been satisfied in full or previously waived
by Buyer in writing;
(c) by the Company if any condition in Section 8.2 becomes
impossible of performance or has not been satisfied in full or previously waived
by the Company in writing;
(d) by either the Buyer or the Company, upon a material breach
of this Agreement on the part of the other which has not been cured within 10
days of receipt of notice of such breach;
24
(e) by Buyer or the Company if any court of competent
jurisdiction shall have issued, enacted, entered, promulgated or enforced any
order, judgment, decree, injunction or ruling, after reasonable efforts on the
part of Buyer and the Company to resist, resolve or lift, which permanently
restrains, enjoins or otherwise prohibits the Merger and such order, judgment,
decree, injunction or ruling shall have become final and nonappealable.
Termination of this Agreement by Buyer and Merger Sub pursuant to subparagraph
(b) or (d) above, or by the Company pursuant to subparagraph (c) or (d) above,
shall not constitute a waiver of any other rights, remedies or damages available
to the terminating party under this Agreement or by applicable law.
Section 9.2 TERMINATION DATE. This Agreement may be terminated by Buyer and
Merger Sub, or the Company, at any time after June 30, 2000 (the "Termination
Date"). If Buyer and Merger Sub terminate this Agreement after the Termination
Date on account of the Company's failure to materially comply with its
obligations, agreements, and covenants in this Agreement and within 18 months
thereafter the Company enters into an agreement to merge with or into another
company or to sell all or substantially all of its assets to a third party, then
the Buyer shall have the right exercisable at its sole discretion to put all
shares of Company Common Stock owned by it to the Company for mandatory
repurchase and the Company shall repurchase such shares for $100 million, or the
Buyer may participate in such transaction as a stockholder of the Company. If
Buyer and Merger Sub materially breach their obligations in this Agreement and
the Termination Date elapsed and the Closing does not take place on account of
such breach, then Buyer hereby waives its remaining rights under the Buyer
Agreement other than its right to retain the technology licenses granted to the
Buyer in the Buyer Agreement (though on a non-exclusive basis) and the Company
shall otherwise not be subject to the Buyer Agreement, though Buyer will be
entitled to retain ownership of the shares of Company Common Stock owned by it.
Section 9.3 FEES AND EXPENSES. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expense.
Section 9.4 AMENDMENT. This Agreement may be amended by the parties hereto at
any time before or after approval hereof by the stockholders of the Company,
but, after such approval, no amendment shall be made which (i) changes the form
or decreases the amount of the Merger Consideration or the Contingent Merger
Consideration, (ii) in any way materially adversely affects the rights of the
Company's stockholders, or (iii) under applicable law would require approval of
the Company's stockholders, in any such case referred to in clauses (i), (ii)
and (iii), without the further approval of such stockholders. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
Section 9.5 WAIVER. At any time prior to the Effective Time, the parties hereto
may, to the extent permitted by applicable law, (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties by any other
party contained herein or in any documents delivered by any other party pursuant
hereto and (iii) waive compliance with any of the agreements of any other party
or with any conditions to its own obligations contained herein. 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.
25
ARTICLE X
GENERAL PROVISIONS
Section 10.1 NOTICES. All notices or other communications under this Agreement
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by telecopy (with confirmation of
receipt), or by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Company:
NZ Applied Technologies Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer or Merger Sub:
Corning Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
Section 10.2 SPECIFIC PERFORMANCE. The parties hereto 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. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
Section 10.3 ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them with respect to the subject matter hereof.
Section 10.4 ASSIGNMENTS; PARTIES IN INTEREST. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any person not a party
hereto any right, benefit or remedy of any nature
26
whatsoever under or by reason of this Agreement, including to confer third party
beneficiary rights, except for the provisions of Article III.
Section 10.5 GOVERNING LAW. This Agreement, except to the extent that provisions
of Massachusetts Law (with respect to the Merger only) are mandatorily
applicable to the Merger and the rights of the stockholders of the Company,
shall be governed in all respects by the laws of the State of New York (without
giving effect to the provisions thereof relating to conflicts of law). Each of
the parties hereto irrevocably consents and submits to the exclusive personal
jurisdiction of the courts of the State of New York situate in Steuben County,
New York and the United States District Court for the Western District of New
York over any suit, action or other proceedings arising out of or relating to
this Agreement and irrevocably agrees that all claims with respect to such suit,
action or other proceeding may be heard and determined in either such court.
Section 10.6 HEADINGS; DISCLOSURE. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
Section 10.7 CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION.
(a) In addition to those capitalized terms defined elsewhere
in this Agreement, the following terms as used in this Agreement shall have the
meanings ascribed to them below:
"AFFILIATE" as applied to any person, shall mean any other
person directly or indirectly controlling, controlled by, or under common
control with, that person; for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise.
"PERSON" shall include individuals, corporations,
partnerships, limited liability companies, trusts, other entities and groups
(which term shall include a "group" as such term is defined in Section 13(d)(3)
of the Exchange Act).
"TAX" shall mean any federal, state, local, foreign or
provincial income, gross receipts, property, sales, service, use, license,
lease, excise, franchise, employment, payroll, withholding, employment,
unemployment insurance, workers' compensation, social security, alternative or
added minimum, ad valorem, value added, stamp, business license, occupation,
premium, environmental, windfall profit, customs, duties, estimated, transfer or
excise tax, or any other tax, custom, duty, premium, governmental fee or other
assessment or charge of any kind whatsoever, together with any interest, penalty
or additional tax imposed by any Governmental Entity.
(b) Other Rules of Construction.
(i) References in this Agreement to any gender shall
include references to all genders. Unless the context otherwise requires,
references in the singular include references in the plural and vice versa.
References to a party to this Agreement or to other agreements described herein
means those Persons executing such agreements.
(ii) The words "include", "including" or "includes"
shall be deemed to be followed by the phrase
27
"without limitation" or the phrase "but not limited to" in all places where such
words appear in this Agreement.
(iii) This Agreement is the joint drafting product of
Buyer and the Company and each provision has been subject to negotiation and
agreement and shall not be construed for or against either party as drafter
thereof.
(iv) Each case in this Agreement where a contract or
agreement is represented or warranted to be enforceable will be deemed to
include as a limitation to the extent that enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar Laws affecting the enforcement of creditors' rights
generally and to general equitable principles, whether applied in equity or at
law.
(v) All references in the Agreement to financial
terms shall be deemed to refer to such terms as they are defined under GAAP,
consistently applied.
Section 10.8 COUNTERPARTS; FACSIMILE TRANSMISSION. This Agreement may be
executed in two or more counterparts which together shall constitute a single
agreement. Delivery of signature pages by facsimile transmission shall
constitute legally binding and valid execution and delivery of this Agreement.
Section 10.9 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economics or legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon determination that any term or other provision hereof
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 10.10 COOPERATION. Buyer and the Company agree to cooperate fully with
the other and their counsel and accountants and other representatives, will use
best efforts to cause satisfaction of the conditions to consummation of the
Merger as promptly as possible, and will refrain from a course of action
inconsistent with this Agreement. Buyer and the Company shall, upon request of
any of the other, at any time and from time to time execute, acknowledge,
deliver and perform all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and instruments of further assurances as may be
necessary or appropriate to carry out the provisions and intent of this
Agreement.
Section 10.11 EFFECT OF INVESTIGATION. Any inspection, preparation or
compilation of information or schedules, or other matters relating to the
Company conducted by or on behalf of Buyer prior to Closing shall in no way
limit, affect, or impair the ability of Buyer to rely upon the representations,
warranties, covenants, and agreements of the Company set forth in this
Agreement.
28
IN WITNESS WHEREOF, Buyer, Merger Sub and the Company have caused this Agreement
to be signed by their respective officers thereunder duly authorized all as of
the date first written above.
CORNING INCORPORATED
By /s/ ▇▇▇▇▇▇ ▇. Fine
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. Fine
-----------------------------------------
Title: Vice President & General Manager,
---------------------------------------
Photonic Technologies Division
---------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: Senior Vice President & General Counsel
---------------------------------------
CORNING APPLIED TECHNOLOGIES CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. Fine
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. Fine
-----------------------------------------
Title: President
---------------------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Treasurer
--------------------------------------------
NZ APPLIED TECHNOLOGIES CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: President and Chief Executive Officer
---------------------------------------
By /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇
-----------------------------
Title: Treasurer
-----------------------------
29
APPENDICES AND EXHIBITS
APPENDIX
1. Related Agreements with ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, Run Zhang, Zing Zhao and Yingyin Zou
2. Contingent Merger Consideration
3. Registration Rights Agreement
4. Certification
5. Selling Stockholders
6. Form of Key Employee Retention Agreement
7. Form of Retention Letter
8. Draft 24-Month Budget
9. Escrow Agreement (Section 7.8)
10. Escrow Agreement (Contingent Merger Consideration)
EXHIBIT
4.27(a) Form of Employee Confidentiality and Noncompetition Agreement
4.27(b) Form of Proprietary Information and Inventories Agreement
7.2 List of Key Employees