EXHIBIT 2.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
ADVANCED ENERGY INDUSTRIES, INC.,
WARPSPEED, INC.
AND
RF POWER PRODUCTS, INC.,
DATED AS OF JUNE 1, 1998
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT"), dated as of June 1,
1998, is made by and among Advanced Energy Industries, Inc., a Delaware
corporation ("PARENT"), Warpspeed, Inc., a New Jersey corporation and a wholly
owned subsidiary of Parent ("MERGER SUB"), and RF Power Products, Inc., a New
Jersey corporation (the "COMPANY").
R E C I T A L S
A. The Boards of Directors of Parent and the Company each have determined
that a business combination between Parent and the Company would enable the
companies to achieve long-term strategic and financial benefits and,
accordingly, is in the best interests of their respective stockholders. Each of
such Boards of Directors desires to effect the Merger (as defined herein), on
the terms and subject to the conditions set forth herein.
B. It is intended that the Merger qualify as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the
"CODE"), for federal income tax purposes.
C. It is intended that the Merger be accounted for as a pooling of
interests for financial accounting purposes.
D. Parent has incorporated and organized Merger Sub solely to facilitate the
Merger.
NOW, THEREFORE, in consideration of the mutual covenants and subject to the
terms and conditions set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1. THE BASIC TRANSACTION. On the terms and subject to the conditions of
this Agreement, at the Effective Time (as defined in Section 1.3), Merger Sub
shall be merged with and into the Company in accordance with this Agreement, and
the separate corporate existence of Merger Sub shall thereupon cease (the
"MERGER"). The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "SURVIVING CORPORATION"), and shall
become a wholly owned subsidiary of Parent. The Merger shall have the effects
specified in the New Jersey Business Corporation Act (the "NJBCA").
1.2. THE CLOSING. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "CLOSING") shall take place (a) at the offices of
▇▇▇▇▇▇, ▇▇▇▇ & Priest LLP, New York, New York at 10:00 a.m., local time, on the
first business day immediately following the day on which the last to be
fulfilled or waived of the conditions set forth in Article 6 shall be completely
fulfilled or waived in accordance herewith, or (b) at such other time, date or
place as Parent and the Company may agree. The date on which the Closing occurs
is hereinafter referred to as the "CLOSING DATE."
1.3. EFFECTIVE TIME. On the Closing Date, a Certificate of Merger meeting
the requirements of Section 14A:10-4.1 of the NJBCA shall be executed and filed
in the office of the New Jersey Secretary of State, in accordance with the
NJBCA. The Merger shall become effective at (a) the time of filing of the
Certificate of Merger with the New Jersey Secretary of State or (b) such later
time as agreed by the parties hereto and designated in the Certificate of Merger
as the effective time of the Merger (the "EFFECTIVE TIME").
1.4. CERTIFICATE OF INCORPORATION AND BY-LAWS. The Certificate of
Incorporation and By-laws of Merger Sub in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation and By-laws of the
Surviving Corporation, until duly amended in accordance with applicable law.
1.5. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors
and officers of Merger Sub immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation until their successors are
duly appointed or elected in accordance with applicable law; and ▇▇▇▇▇▇ ▇▇▇▇▇,
president and chief executive officer of the Company, also shall become an
officer of the Surviving Corporation.
ARTICLE 2
CONVERSION AND EXCHANGE OF SECURITIES
2.1. MERGER SUB STOCK. At the Effective Time, each share of common stock,
par value $0.01 per share, of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and non-assessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
2.2. COMPANY STOCK; OPTIONS.
(a) EXCHANGE RATIO. At the Effective Time, each share of common stock,
par value $0.01 per share, of the Company ("COMPANY COMMON STOCK") that is
issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive the number of shares of
common stock, par value $0.001 per share, of Parent (the "PARENT COMMON
STOCK") that is equal to 3,750,000 divided by the number of shares of
Company Common Stock issued and outstanding immediately prior to the
Effective Time (the "EXCHANGE RATIO"); provided, however, that (A) if the
Closing Price (as defined in this Section 2.2) is less than or equal to
$12.11, then the Exchange Ratio shall be the result obtained by dividing
$3.74 by the Closing Price, but in no event shall the Exchange Ratio
computed pursuant to this clause (A) be greater than 4,000,000 divided by
the number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (the "EFFECTIVE TIME SHARE NUMBER")
and (B) if the Closing Price is greater than or equal to $16.39, the
Exchange Ratio shall be the result obtained by dividing, $5.06 by the
Closing Price, but in no event shall the Exchange Ratio computed pursuant to
this clause (B) be less than 3,500,000 divided by the Effective Time Share
Number. "CLOSING PRICE" means the average closing price of the Parent Common
Stock, as reported in The Wall Street Journal, Eastern Edition, for each of
the 10 consecutive Trading Days immediately preceding the third Trading Day
prior to the Stockholders Meeting (as defined in Section 5.4). "TRADING DAY"
means a day on which trading is conducted on the Nasdaq National Market.
(b) CANCELLATION OF COMPANY COMMON STOCK. At the Effective Time, as a
result of the Merger and without any action on the part of the holders
thereof, all shares of Company Common Stock shall cease to be outstanding,
shall be canceled and retired and shall cease to exist, and each holder of
shares of Company Common Stock shall thereafter cease to have any rights
with respect to such shares of Company Common Stock, except the right to
receive upon the surrender of a certificate (a "CERTIFICATE") representing
such shares of Company Common Stock (i) the number of shares of Parent
Common Stock determined in accordance with this Section 2.2, and (ii) cash,
without interest, payable (A) in lieu of any fractional shares of Parent
Common Stock, in accordance with Section 2.3(b), and (B) as Specified
Post-Closing Dividends (as defined in Section 2.3), in accordance with
Section 2.3(f).
(c) TREASURY SHARES AND SHARES HELD BY SUBSIDIARIES. At the Effective
Time, as a result of the Merger and without any action on the part of
Parent, Merger Sub or the Company, any and all shares of Company Common
Stock issued and held in the Company's treasury or held by a Subsidiary of
the Company shall cease to be outstanding, shall be canceled and retired
without payment of any consideration therefor and shall cease to exist.
(d) OPTIONS.
(i) At the Effective Time, as a result of the Merger and without any
action on the part of holder thereof, each option to purchase Company
Common Stock granted by the Company
(collectively, "COMPANY OPTIONS") under one of its stock option plans
(collectively, "COMPANY OPTION PLANS") that remains outstanding and
unexercised as of the Effective Time, whether or not vested or
exercisable, shall be assumed by Parent and shall be converted into an
option to purchase Parent Common Stock (collectively, "SUBSTITUTED
OPTIONS").
(ii) Subject to subsection 2.2(d)(iii) below, (A) the number of
shares of Parent Common Stock underlying a Substituted Option shall be
equal to the number of shares of Company Common Stock underlying the
subject Company Option multiplied by the Exchange Ratio and rounded to
the nearest whole number, (B) the exercise price per share of a
Substituted Option shall be equal to the exercise price of the subject
Company Option divided by the Exchange Ratio and rounded to the nearest
cent, and (C) each Substituted Option shall be exercisable on the same
terms and subject to the same conditions as had been applicable to the
related Company Option, except to the extent the number of shares and
exercise price per share have been adjusted pursuant to (A) and (B),
respectively, of this subsection 2.2(d)(ii).
(iii) It is the intention of the parties that Company Options that
qualified as incentive stock options, within the meaning of Section 422
of the Code ("ISOS"), immediately prior to the Effective Time, be
converted, when assumed by Parent, into Substituted Options that qualify
as ISOs immediately following the Effective Time, to the extent permitted
by Section 422 of the Code and applicable terms of the Company Option
Plans. In furtherance of such intention, the formulae, terms and
conditions set forth in subsection 2.2(d)(ii) above may be applied to, or
modified for, such Substituted Options as deemed reasonably necessary by
Parent, so long as any such application or modification does not reduce
the benefit of the Substituted Option to the holder thereof.
(iv) On or prior to the Effective Time, Parent shall file with the
Securities and Exchange Commission (the "COMMISSION") a Registration
Statement on Form S-3 or Form S-8, as determined by Parent in its sole
discretion, relating to the issuance of the Parent Common Stock
underlying the Substituted Options or shall cause such Parent Common
Stock to be included in an effective Registration Statement on Form S-8
relating to one or more of Parent's stock option plans (collectively,
"PARENT OPTION PLANS"). So long as any Substituted Options remain
outstanding, Parent shall use its best efforts to maintain the
effectiveness of any Registration Statement or Statements relating to the
Substituted Options (and to maintain the current status of the prospectus
or prospectuses related thereto). At or prior to the Effective Time,
Parent shall take all corporate action necessary to reserve for issuance
a sufficient number of shares of Parent Common Stock for delivery upon
exercise of the Substituted Options.
2.3. EXCHANGE OF CERTIFICATES REPRESENTING COMPANY COMMON STOCK.
(a) As of the Effective Time, Parent shall deposit, or shall cause to be
deposited, with an exchange agent reasonably acceptable to the Company (the
"EXCHANGE AGENT"), for the benefit of the holders of Company Common Stock,
for exchange in accordance with this Article 2, (i) certificates
representing the shares of Parent Common Stock to be issued in connection
with the Merger ("MERGER CERTIFICATES"), and (ii) Parent's good faith
estimate of the cash in lieu of fractional shares expected to be payable in
connection with the Merger. Such cash and Merger Certificates are referred
to herein as the "EXCHANGE FUND."
(b) No fractional shares of Parent Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional share of Parent Common
Stock, cash will be paid in respect of any fractional share of Parent Common
Stock that would otherwise be issuable, and the amount of such cash shall be
equal to such fractional proportion of the Closing Price. No interest will
be paid or accrued on the cash payable to holders of shares of Company
Common Stock.
(c) Promptly after the Effective Time, Parent shall cause the Exchange
Agent to mail to each holder of record of Company Common Stock (i) a letter
of transmittal, in a form and having such
provisions as Parent may reasonably specify ("LETTER OF TRANSMITTAL"), which
shall advise the holder that delivery of Merger Certificates shall be
effected, and risk of loss and title to such holder's shares of Company
Common Stock shall pass, only upon delivery of the Certificates representing
such shares to the Exchange Agent, and (ii) instructions for use in
effecting the surrender of such Certificates in exchange for Merger
Certificates and cash in lieu of fractional shares from the Exchange Fund.
(d) Upon surrender of a Certificate to the Exchange Agent for
cancellation, together with a duly executed and properly completed Letter of
Transmittal, (i) the holder of the shares of Company Common Stock
represented by such Certificate shall be entitled to receive in exchange
therefor from the Exchange Fund (A) a Merger Certificate representing that
number of whole shares of Parent Common Stock determined by multiplying the
number of shares of Company Common Stock represented by the Certificate by
the Exchange Ratio, and (B) a check representing (1) the amount of cash in
lieu of fractional shares of Parent Common Stock, if any, determined
pursuant to paragraph (b) of this Section 2.3, and (2) any Specified
Post-Closing Dividends, in each case less any applicable tax withholding,
and (ii) the Company Common Stock represented by the surrendered Certificate
shall thereupon be canceled.
(e) In the event of a transfer of ownership of Company Common Stock
which is not registered in the transfer records of the Company, a Merger
Certificate representing the proper number of shares of Parent Common Stock,
together with a check for the cash to be paid in lieu of fractional shares,
if any, may be issued to such transferee of such Company Common Stock, if
the Certificate representing such Company Common Stock is presented to the
Exchange Agent, accompanied by all documents, in form and substance
reasonably satisfactory to Parent and the Exchange Agent, required to
evidence and effect such transfer of Company Common Stock and to evidence
that any applicable stock transfer taxes have been paid. There shall be no
transfers on the transfer records of the Company, at or after the Effective
Time, of shares of Company Common Stock which were outstanding immediately
prior to the Effective Time.
(f) Notwithstanding any other provisions of this Agreement, no dividends
or other distributions declared after the Effective Time on Parent Common
Stock ("POST-CLOSING DIVIDENDS") shall be paid with respect to any shares of
Company Common Stock represented by a Certificate until such Certificate is
surrendered for exchange as provided herein. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificates representing whole shares of Parent
Common Stock issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of Post-Closing Dividends with a record date
after the Effective Time theretofore payable with respect to such whole
shares of Parent Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon ("SPECIFIED POST-CLOSING
DIVIDENDS"), and (ii) at the appropriate payment date, the amount of
Post-Closing Dividends with a record date after the Effective Time but prior
to surrender and a payment date subsequent to surrender payable with respect
to such whole shares of Parent Common Stock, less the amount of any
withholding taxes which may be required thereon.
(g) Certificates surrendered for exchange by any person that is an
"affiliate" of the Company for purposes of Rule 145(c) under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), shall not be exchanged until
Parent has received a written agreement from such person as provided in
Section 5.11.
(h) One year after the Effective Time, the Exchange Agent shall deliver
to the Surviving Corporation any portion of the Exchange Fund (including the
proceeds of any investments thereof and any shares of Parent Common Stock)
that remains unclaimed by the former stockholders of the Company.
Thereafter, former stockholders of the Company that have not surrendered
their Certificates for exchange shall look to the Surviving Corporation for
delivery of Merger Certificates, cash in lieu of fractional shares and
unpaid Post-Closing Dividends which such former stockholder is entitled
to receive in respect of the Company Common Stock represented by the
theretofore unsurrendered Certificates, in each case, without any interest
thereon.
(i) None of Parent, the Company, the Surviving Corporation, the Exchange
Agent or any other person shall be liable to any former stockholder of the
Company for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
2.4. LOST CERTIFICATES. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making and delivery of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Parent Common Stock and cash deliverable in respect
thereof pursuant to this Agreement.
2.5. ADJUSTMENT OF EXCHANGE RATIO. In the event that, subsequent to the
date of this Agreement but prior to the Effective Time, the outstanding shares
of Parent Common Stock shall have been changed into a different number of shares
or a different class as a result of a stock split, reverse stock split, stock
dividend, subdivision, reclassification, combination, exchange, recapitalization
or other similar transaction, the Exchange Ratio shall be appropriately
adjusted.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered at or prior to the
execution hereof to Parent (the "COMPANY DISCLOSURE SCHEDULE") or the Company
Reports (as defined in Section 3.6) filed by the Company prior to the date of
this Agreement, the Company makes the following representations and warranties
to Parent and Merger Sub, as of the date of this Agreement. The term "COMPANY
MATERIAL ADVERSE EFFECT" has the meaning given to it in Section 8.14.
3.1. ORGANIZATION AND STANDING.
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation,
(ii) has all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted, and (iii)
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the failure to so qualify, or be
in good standing, would have a Company Material Adverse Effect.
(b) The Company does not have any Subsidiaries (as defined in Section
8.14) other than RFPP Foreign Sales Corporation, a corporation organized
under the United States Virgin Islands ("COMPANY SUBSIDIARY"). Company
Subsidiary (i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (ii) has all
requisite corporate power and authority to carry on its business as now
conducted, and (iii) is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the failure
to so qualify, or be in good standing, would have a Company Material Adverse
Effect. Company Subsidiary does not (x) own, operate or lease any real or
personal property, or (y) have any operations or engage in any activities
other than those related to coordination of export sales by the Company.
(c) Neither the Company nor Company Subsidiary has (i) filed or had
filed against it a petition in bankruptcy or a petition to take advantage of
any other insolvency act, (ii) admitted in writing its inability to pay its
debts generally, (iii) made an assignment for the benefit of creditors, (iv)
consented to the appointment of a receiver for itself or any substantial
part of its property, or (v) generally committed any act of insolvency
(including the failure to pay obligations as they become due) or bankruptcy.
3.2. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 19,000,000
shares of Company Common Stock. As of May 27, 1998, there were 12,149,220
shares of Company Common Stock issued and outstanding. From such date to the
date of this Agreement, no additional shares of capital stock of the Company
have been issued, except pursuant to the exercise of Company Options. As of
May 27, 1998, Company Options to acquire 712,123 shares of Company Common
Stock were outstanding. From such date to the date of this Agreement, no
additional Company Options have been granted.
(b) All of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive or similar rights. Other than Company
Options, there are no existing and outstanding warrants, rights, options,
subscriptions, convertible securities or other agreements or commitments
which obligate the Company to issue, transfer or sell any shares of capital
stock of the Company or of the Company Subsidiary.
(c) Neither the Company nor Company Subsidiary has any outstanding
bonds, debentures, notes or other obligations pursuant to which the holders
thereof have the right to vote (or which are convertible into or exercisable
for securities having the right to vote) with the stockholders of the
Company on any matter.
3.3. AUTHORIZATION; ENFORCEABILITY; NO VIOLATION.
(a) The Company has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
(b) Subject only to the approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company in accordance with
the NJBCA, all corporate action necessary on the part of the Company for the
execution, delivery and performance of this Agreement has been duly taken.
(c) This Agreement constitutes (assuming this Agreement is a valid and
legally binding obligation of Parent and Merger Sub) a valid and legally
binding obligation of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity and
public policy considerations (the "ENFORCEABILITY EXCEPTIONS") and
compliance with the Industrial Site Recovery Act, N.J.S.A. Section 13:1K-6
ET SEQ. and its implementing regulations ("ISRA").
(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the
Certificate of Incorporation or the Bylaws of the Company, (ii) any statute,
rule, regulation, judicial, governmental, regulatory or administrative
decree, order or judgment applicable to the Company or Company Subsidiary,
or (iii) any agreement, lease, license, permit or other instrument to which
the Company is a party or to which any of its assets are subject, except
where any such breach, violation, default, termination or forfeiture would
not have or result in a Company Material Adverse Effect.
(e) There is no action, suit, proceeding or investigation pending or, to
the knowledge of the Company, threatened against the Company that questions
the validity of this Agreement or the right of the Company to enter into
this Agreement or to consummate the transactions contemplated hereby.
3.4. NO CONSENTS. No consent, approval, authorization, order,
registration, qualification or filing of or with any court or any regulatory
authority or any other governmental or administrative body is required on the
Company's part for the consummation by it of the transactions contemplated by
this Agreement, except (i) filings required in order to comply with the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), (ii) notices and filings required in order to comply with the Securities
Act, the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
state securities or "blue sky" laws, (iii) the filing of the Certificate of
Merger with the New Jersey Secretary of State, and (iv) as may be required by
ISRA.
3.5. COMPLIANCE WITH LAWS. Except where the failure to so comply would not
have a Company Material Adverse Effect, the Company and Company Subsidiary (i)
have all valid and current permits, licenses, orders, authorizations,
registrations, approvals and other analogous instruments (collectively,
"PERMITS"), and each Permit is in full force and effect, and (ii) have made all
filings and registrations and the like, necessary or required by law to conduct
their respective businesses as currently conducted. Neither the Company nor
Company Subsidiary has received any governmental notice of any violation by such
company of any laws, rules, regulation or orders applicable to their respective
businesses. Except where the failure to comply would not have a Company Material
Adverse Effect, (a) neither the Company nor Company Subsidiary is in default or
is not in compliance under any Permits, and (b) the business and operations of
each of the Company and Company Subsidiary are in compliance with all applicable
foreign, federal, state, local and county laws, ordinances, regulations,
judgments, orders, decrees or rules of any court, arbitrator or governmental,
regulatory or administrative agency or entity.
3.6. COMPANY REPORTS.
(a) The Company has filed all reports, forms, registrations, schedules,
statements and other documents required to be filed by it with the
Commission since January 1, 1995 (the "COMPANY REPORTS"). As of their
respective dates, the Company Reports complied as to form in all material
respects with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the applicable rules and regulations promulgated
thereunder. Except to the extent that information contained in any Company
Report has been amended, revised or superseded by a Company Report
subsequently filed and publicly available prior to the date of this
Agreement, none of the Company Reports, when filed, contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(b) Each of the consolidated balance sheets of the Company included in
or incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents in all material respects the
consolidated financial position of the Company and Company Subsidiary as of
its date, and each of the consolidated statements of income, retained
earnings and cash flows of the Company included in or incorporated by
reference into the Company Reports (including any related notes and
schedules) fairly presents in all material respects the results of
operations and cash flows of the Company and Company Subsidiary for the
periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments which would not be material in amount or
effect), in each case in accordance with U.S. generally accepted accounting
principles consistently applied during the periods involved ("GAAP"), except
as may be noted therein and subject to the fact that unaudited financial
statements do not contain full notes thereto. Neither the Company nor
Company Subsidiary has any liabilities or obligations required to be
disclosed in a consolidated balance sheet or the notes thereto prepared in
accordance with GAAP, except (i) liabilities or obligations reflected on, or
reserved against in, a consolidated balance sheet of the Company or in the
notes thereto, and included in the Company Reports, (ii) liabilities or
obligations incurred since February 28, 1998, in the ordinary course of
business, consistent with past practices, or (iii) liabilities disclosed in
a Company Report.
3.7. ABSENCE OF LITIGATION, ORDERS, JUDGMENTS.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened which involve transactions of or
otherwise relate to the Company, Company Subsidiary or either of their
businesses or properties, at law or in equity, or before any arbitrator of
any kind, or before or by any federal, state, municipal or other
governmental department, commission, board,
bureau, agency or other instrumentality, domestic or foreign, that are
reasonably likely to have a Company Material Adverse Effect.
(b) There are no outstanding orders, writs, injunctions, decrees,
judgments, awards, determinations or directions, which involve transactions
of or otherwise relate to the Company, Company Subsidiary or either of their
businesses or properties, of any court or arbitrator or under any
outstanding order, regulation or demand of any federal, state, municipal or
other governmental instrumentality, domestic or foreign, that are reasonably
likely to have a Company Material Adverse Effect.
3.8. ABSENCE OF CERTAIN CHANGES. Since February 28, 1998, the Company has
conducted its business only in the ordinary course of such business, and there
has not been (i) any Company Material Adverse Effect or any event which is
reasonably likely to result in a Company Material Adverse Effect; (ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock; or (iii) any material change in its accounting
principles, practices or methods.
3.9. TAXES. The Company (i) has timely filed all material federal, state
and foreign tax returns required to be filed by it for tax years ended prior to
the date of this Agreement or requests for extensions have been timely filed and
any such request shall have been granted and not expired, and all such returns
are complete in all material respects, (ii) has paid or accrued all taxes shown
to be due and payable on such returns and (iii) has properly accrued all such
taxes for such periods subsequent to the periods covered by such returns.
3.10. CONTRACTS. Each (a) agreement, contract and commitment, whether
written or oral, to which the Company is a party or by which it is bound and
which is filed as an exhibit to or described in a Company Report and (b)
material agreement, contract and commitment entered into by the Company, or by
which it became bound, after the date of the Quarterly Report on Form 10-Q most
recently filed by the Company (collectively, "COMPANY CONTRACTS"), is a valid
and legally binding obligation of the Company and, to the knowledge of the
Company, the other parties thereto, enforceable against the Company and, to the
knowledge of the Company, the other parties thereto, in accordance with its
terms, subject to the Enforceability Exceptions. The Company is not, and to the
knowledge of the Company no other party to any Company Contract is, in material
default thereof. The Company has not, and to the knowledge of the Company no
other party to any Company Contract has, performed any act or omitted to perform
any act which act or omission, with the giving of notice or passage of time or
otherwise, will become a material default thereunder.
3.11 INTELLECTUAL PROPERTY.
(a) "INTELLECTUAL PROPERTY" means:
(i) any and all issued patents, reissue or reexamination patents,
revivals of patents, utility models, certificates of invention,
registrations of patents, or extensions thereof, regardless of country or
formal name (collectively, "ISSUED PATENTS");
(ii) patent rights, including, without limitation, all United States
and foreign utility and design patents, and all published or unpublished
nonprovisional and provisional patent applications, including, without
limitation, any and all applications of additions, divisionals,
continuations, continuations-in-part, reexaminations, substitutions,
extensions, renewals, utility models, certificates of invention or
reissues thereof or therefor, invention disclosures and records of
invention abandoned patent applications (collectively "PATENT
APPLICATIONS" and with the Issued Patents, the "PATENTS");
(iii) all copyrights, copyrightable works, semiconductor topography
and mask work interests, including, without limitation, all rights of
authorship, use, publication, reproduction, distribution, performance,
transformation, moral rights and ownership of copyrightable works,
semiconductor topography works and mask works, and all rights to register
and obtain renewals and extensions
of registrations, together with all other interests accruing by reason of
international copyright, semiconductor topography and mask work
conventions (collectively, "COPYRIGHTS");
(iv) trademarks, registered trademarks, applications for
registration of trademark, service marks, registered service marks,
applications for registration of service marks, trade names, registered
trade names, and applications for registrations of trade names
(collectively, "TRADEMARKS");
(v) any and all technology, ideas, inventions, designs, proprietary
information, unpublished research and development information,
manufacturing and operating information, know-how, formulae, trade
secrets and technical data, computer programs, and all hardware, software
and processes; and
(vi) all other intangible assets, properties and rights (whether or
not appropriate steps have been taken to protect, under applicable law,
such other intangible assets, properties or rights).
(b) The Company owns or has the right to use all Intellectual Property
used in the operation of its business as presently conducted, without any
interference or conflict with or misappropriation or infringement of the
Intellectual Property rights of others, other than any interference,
conflict, misappropriation or infringement which is not reasonably likely to
result in (i) a material adverse effect on the Company's ability to
manufacture or sell any of its material products or any material line of
products or otherwise to operate its business, (ii) a material liability of
the Company, or (iii) material redesign or other corrective costs to the
Company. The Company has taken reasonably necessary action to maintain and
protect its rights in the material Intellectual Property that it owns or
uses. Each material item of Intellectual Property owned or used by the
Company immediately prior to the Effective Time hereunder will be owned or
available for use by the Surviving Corporation on substantially identical
terms and conditions immediately subsequent to the Effective Time.
(c) Section 3.11 of the Company Disclosure Schedule sets forth all
Patents, registered Copyrights, registered Trademarks, joint development
agreements, licenses and agreements relating to Intellectual Property owned
or used by the Company that require a consent or waiver to consummate the
transactions contemplated by this Agreement.
(d) The Company has not, within the past four years, interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of others other than any interference,
infringement, misappropriation or conflict which did not and is not
reasonably likely to result in (i) a material adverse effect on the
Company's ability to manufacture or sell any of its material products or any
material line of products or otherwise to operate its business, (ii) a
material liability of the Company, or (iii) material redesign or other
corrective costs to the Company. The Company has not received, and has no
knowledge of, any charge, complaint, claim, demand or notice alleging any
such interference, infringement, misappropriation, or conflict (including,
without limitation, any claim that the Company must license or refrain from
using any Intellectual Property rights of any other person), or that the
Company's use of the Intellectual Property constitutes unfair competition.
(e) To the knowledge of the Company, no fraud or misrepresentation has
been made by the Company or any of its officers, directors or employees or
the relevant inventors during the prosecution of any of the Patents of the
Company, nor has any fraud or misrepresentation been included in any
documentation for or other disclosure of the Intellectual Property of the
Company.
3.12. EMPLOYEE BENEFIT PLANS.
(a) For purpose of this Agreement, (i) "COMPANY BENEFIT PLANS" means all
employee benefit plans and other benefit arrangements covering employees or
former employees of the Company and all employee agreements providing
compensation, severance or other benefits to any employee or former employee
of the Company; and (ii) "ERISA AFFILIATE" means any business or entity
which is a
member of the same "controlled group of corporations," under "common
control" or an "affiliated service group" with an entity within the meanings
of Sections 414(b), (c) or (m) of the Code, or required to be aggregated
with the entity under Section 414(o) of the Code, or is under "common
control" with the entity, within the meaning of Section 4001(a)(14) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
any regulations promulgated or proposed under any of the foregoing Sections.
(b) With respect to each Company Benefit Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code, either
(i) the Internal Revenue Service (the "IRS") has issued a favorable
determination letter that has not been revoked, or (ii) an application for a
favorable determination letter was timely submitted to the IRS for which no
final action has been taken by the IRS. To the knowledge of the Company,
there is no reason that is not susceptible to cure why the qualified status
under Section 401(a) of the Code of any Company Benefit Plan would be denied
or revoked, whether retroactively or prospectively.
(c) Except as would not have a Company Material Adverse Effect, no
Company Benefit Plan, any fiduciary thereof, nor the Company has incurred
any liability or penalty under Section 4975 of the Code or Section 502(i) of
ERISA. Except as would not have a Company Material Adverse Effect, each
Company Benefit Plan has been maintained and administered in all material
respects in compliance with its terms and with ERISA and the Code, to the
extent applicable thereto.
(d) Except as would not have a Company Material Adverse Effect, neither
the Company nor any ERISA Affiliate (during the period of its affiliated
status) has any existing liability currently due and payable that has not
been satisfied in full under Title IV of ERISA or Section 412 of the Code.
To the knowledge of the Company, there are no current plans to terminate,
whether voluntarily or involuntarily, any materially underfunded pension
plan of the Company or any ERISA Affiliate that is subject to Title IV of
ERISA.
(e) Except as would not have a Company Material Adverse Effect, to the
knowledge of the Company, there are no pending or anticipated claims against
or otherwise involving any of the Company Benefit Plans and no suit, action
or other litigation (excluding claims for benefits incurred in the ordinary
course of the Company Benefit Plan activities) has been brought against or
with respect to any such Company Benefit Plan, except for any of the
foregoing which would not have a Company Material Adverse Effect.
(f) All material contributions required to be made as of the date hereof
to the Company Benefit Plans have been made or provided for.
(g) The execution of, and performance of the transactions contemplated
by, this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or is
reasonably likely to result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any employee of the Company.
(h) The Company has not entered into any severance agreements or adopted
any severance policies applicable to the Company or its employees.
3.13. NO BROKERS. The Company has not entered into any contract,
arrangement or understanding with any person or firm which will or is reasonably
likely to result in the obligation of the Company, Parent or Merger Sub to pay
any finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that the Company has retained
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC as its financial advisor, the arrangements
with which have been disclosed in writing to Parent prior to the date hereof.
Other than the foregoing arrangements, the Company is not aware of any claim for
payment of any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
3.14. OPINION OF FINANCIAL ADVISOR. The Company has received the opinion
of NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC substantially to the effect that, as of
the date hereof, the Exchange Ratio is fair to the holders of Company Common
Stock from a financial point of view.
3.15. PARENT STOCK OWNERSHIP. Neither the Company nor any of its
Subsidiaries owns any shares of Parent Common Stock or other securities
convertible into Parent Common Stock.
3.16. POOLING OF INTERESTS; TAX REORGANIZATION. To the knowledge of the
Company, having sought and obtained the advice of its accounting advisors, the
Company has not taken (or as of the date hereof failed to take) any action which
would prevent the accounting for the Merger as a pooling of interests in
accordance with Accounting Principles Board Opinion ▇▇. ▇▇ ("▇▇▇ ▇▇. ▇▇"), the
interpretative releases issued pursuant thereto, and the pronouncements of the
Commission. To the knowledge of the Company, the Company has not taken or failed
to take any action which would prevent the Merger from constituting a
reorganization within the meaning of section 368 of the Code.
3.17. ENVIRONMENTAL MATTERS.
(a) For purposes of this Agreement, (i) "ENVIRONMENTAL REQUIREMENTS"
means any applicable laws, regulations, ordinances or other provisions
having the force or effect of law, or any judicial, governmental, or
administrative orders, requests, or determinations, or any common law
requirements relating to the protection of human health or the environment
(both natural and workplace), including without limitation any Environmental
Requirements concerning (A) the use, generation, treatment, storage,
transportation, handling or disposal of toxic, injurious or hazardous
materials, substances or wastes, toxic pollutants or contaminants, including
petroleum products, crude oil or any by-products or derivatives thereof (as
any of the foregoing terms are defined in federal, state and local laws
applicable to the Company or Parent, as the case may be) (collectively,
"HAZARDOUS MATERIALS"), (B) the control of soil, surface or groundwater
pollution products, (C) air quality and emission standards, or (D) health,
safety and hazard communication matters; and (ii) "COMPANY REAL PROPERTIES"
means all real property ever owned, leased or occupied by the Company or any
Company Predecessor. For purposes of this Section 3.17, "COMPANY
PREDECESSOR" shall include the former operating entities of RF Power
Products, RF Plasma Products and any division or subsidiary of Plasmatherm
which operated a business at the current Company location, or at either of
the two previously disclosed locations: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇.
(b) There has not been any violation of any Environmental Requirements
by the Company or, to the knowledge of the Company, any Company Predecessor,
nor to the knowledge of the Company has there been any third party claim or
demand based upon any Environmental Requirements against the Company or any
Company Predecessor, other than violations, claims or demands that have not
resulted, and are not reasonably likely to result, in a Company Material
Adverse Effect.
(c) The Company has not disposed of, stored or used any Hazardous
Materials on, nor has it transported any Hazardous Materials from, any of
the Company Real Properties owned, leased or occupied by the Company, in
violation of applicable Environmental Requirements other than a disposal,
storage, use or transport which has not resulted in and is not reasonably
likely to result in a Company Material Adverse Effect. To the knowledge of
the Company, no Company Predecessor has disposed of, stored or used any
Hazardous Materials on, nor has any such Company Predecessor transported any
Hazardous Materials from, any of the Company Real Properties owned, leased
or occupied by such Company Predecessor, in violation of applicable
Environmental Requirements.
(d) To the knowledge of the Company, none of the following exists at any
of the real property currently owned, leased or occupied by the Company or
existed at any of the Company Real
Properties at the time the Company or the Company Predecessor operated
there: (i) underground storage tanks, (ii) asbestos-containing material in
any friable or damaged form or condition, (iii) materials or equipment
containing polychlorinated biphenyls (PCBs), or (iv) landfills or surface
impoundments.
(e) To the knowledge of the Company, none of the Company Real Properties
is or has been contaminated by any Hazardous Materials, in a manner that has
given or is reasonably likely to give rise to any material liability on the
part of the Company to any person, including without limitation any
governmental authority, for response costs, corrective action costs,
personal injury, property damage, natural resources damages or attorney
fees, pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), or the Solid Waste Disposal
Act, as amended ("SWDA"), or any other Environmental Requirements, whether
federal, state or locally imposed.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule delivered at or prior to the
execution hereof to the Company (the "PARENT DISCLOSURE SCHEDULE") or in the
Parent Reports (as defined in Section 4.6) filed with the Commission prior to
the date hereof, Parent and Merger Sub make the following representations and
warranties to the Company as of the date of this Agreement. The term "PARENT
MATERIAL ADVERSE EFFECT" has the meaning given to it in Section 8.14.
4.1. ORGANIZATION AND STANDING.
(a) Parent and each of its Significant Subsidiaries (i) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (ii) has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business
as now conducted, and (iii) is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the failure
to so qualify, or be in good standing, would have a Parent Material Adverse
Effect.
(b) Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. Merger
Sub was organized for purposes of consummating the transactions contemplated
by this Agreement. Merger Sub has not engaged in any activity other than as
provided in, or contemplated by, this Agreement and, as of the date hereof,
has no liabilities of any nature, contingent or otherwise, other than
liabilities or obligations that may arise from this Agreement or the
transactions contemplated hereby. The authorized capital stock of Merger Sub
consists of 1,000 shares of Merger Sub Common Stock, all of which are
validly issued, fully paid and nonassessable and are owned by Parent.
(c) Neither Parent nor any of its Subsidiaries (including without
limitation Merger Sub) has (i) filed or had filed against it a petition in
bankruptcy or a petition to take advantage of any other insolvency act, (ii)
admitted in writing its inability to pay its debts generally, (iii) made an
assignment for the benefit of creditors, (iv) consented to the appointment
of a receiver for itself or any substantial part of its property or (v)
generally committed any act of insolvency (including the failure to pay
obligations as they become due) or bankruptcy.
4.2 CAPITALIZATION.
(a) The authorized capital stock of Parent consists of 30,000,000 shares
of Parent Common Stock and 1,000,000 shares of preferred stock, par value
$0.001 per share ("PARENT PREFERRED STOCK"). As of May 31, 1998, there were
22,542,346 shares of Parent Common Stock, and no shares of Parent Preferred
Stock, issued and outstanding. From such date to the date of this Agreement,
no additional shares of capital stock of Parent have been issued, except
pursuant to the exercise of options to
acquire Parent Common Stock granted by Parent ("PARENT OPTIONS"). As of May
31, 1998, Parent Options to acquire 1,550,683 shares of Parent Common Stock
were outstanding. From such date to the date of this Agreement, no
additional Parent Options have been granted.
(b) All of the issued and outstanding shares of Parent Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. Other than Parent Options, there are no
existing and outstanding warrants, rights, options, subscriptions,
convertible securities or other agreements or commitments which obligate
Parent to issue, transfer or sell any shares of capital stock of Parent or
Merger Sub.
(c) All of the shares of Parent Common Stock issuable as consideration
in the Merger at the Effective Time, when issued in accordance with the
terms and conditions of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable and free of preemptive rights.
(d) Neither Parent nor any of its Subsidiaries (including without
limitation Merger Sub) has any outstanding bonds, debentures, notes or other
obligations pursuant to which the holders thereof have the right to vote (or
which are convertible into or exercisable for securities having the right to
vote) with the stockholders of Parent on any matter.
4.3. AUTHORIZATION; ENFORCEABILITY; NO VIOLATION.
(a) Each of Parent and Merger Sub has full corporate power and authority
to execute and deliver this Agreement, and to perform its respective
obligations hereunder.
(b) All corporate action necessary on the part of Parent and Merger Sub
for the execution, delivery and performance of this Agreement has been duly
taken. No approval of the stockholders of Parent is required by applicable
law or the rules of the Nasdaq National Market in connection with the
consummation by Parent or Merger Sub of the transactions contemplated
hereby.
(c) This Agreement constitutes (assuming this Agreement is a valid and
binding obligation of the Company), a valid and legally binding obligation
of each of Parent and Merger Sub, enforceable against Parent and Merger Sub,
as applicable, in accordance with its terms, subject to the Enforceability
Exceptions and compliance with ISRA.
(d) The execution, delivery and performance of this Agreement will not
result in any conflict with, breach or violation of or default (or an event
which, with notice or lapse of time or both, would constitute a default),
termination or forfeiture under (i) any terms or provisions of the
Certificate of Incorporation or the By-laws of Parent or any of its
Subsidiaries (including without limitation Merger Sub), (ii) any statute,
rule, regulation, judicial, governmental, regulatory or administrative
decree, order or judgment applicable to Parent or any of its Subsidiaries
(including without limitation Merger Sub), or (iii) any agreement, lease,
license, permit or other instrument to which Parent or any of its
Subsidiaries (including without limitation Merger Sub) is a party or to
which any of its assets are subject, except where any such breach,
violation, default, termination or forfeiture would not have or result in a
Parent Material Adverse Effect.
(e) There is no action, suit, proceeding or investigation pending or
threatened against Parent or any of its Subsidiaries that questions the
validity of this Agreement or the right of Parent or Merger Sub to enter
into this Agreement or to consummate the transactions contemplated hereby.
4.4. NO CONSENTS. No consent, approval, authorization, order,
registration, qualification or filing of or with any court or any regulatory
authority or any other governmental or administrative body is required on the
part of Parent or any of its Subsidiaries for the consummation by Parent and
Merger Sub of the transactions contemplated by this Agreement, except (i)
filings required in order to comply with the HSR Act, (ii) notices and filings
required in order to comply with the Securities Act, the Exchange Act and state
securities or "blue sky" laws, (iii) the filing of the Certificate of Merger
with the New Jersey Secretary of State, and (iv) as may be required by ISRA.
4.5. COMPLIANCE WITH LAWS. Except where the failure to so comply would not
have a Parent Material Adverse Effect, Parent and each of its Subsidiaries (i)
have all valid and current Permits, and each Permit is in full force and effect,
and (ii) have made all filings and registrations and the like, necessary or
required by law to conduct their respective businesses as currently conducted.
Neither Parent nor any of its Subsidiaries has received any governmental notice
of any violation by such company of any laws, rules, regulation or orders
applicable to their respective businesses, which violation in the case of any
Subsidiary is reasonably likely to have a Parent Material Adverse Effect. Except
where the failure to comply would not have a Parent Material Adverse Effect, (a)
neither Parent nor any of its Subsidiaries is in default or is not in compliance
under any Permits, and (b) the business and operations of each of Parent and its
Subsidiaries are in compliance with all applicable foreign, federal, state,
local and county laws, ordinances, regulations, judgments, orders, decrees or
rules of any court, arbitrator or governmental, regulatory or administrative
agency or entity.
4.6. PARENT REPORTS.
(a) Parent has filed all reports, forms, registrations, schedules,
statements and other documents required to be filed by it with the
Commission since November 17, 1995 (the "PARENT REPORTS"). As of their
respective dates, the Parent Reports complied as to form in all material
respects with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the applicable rules and regulations promulgated
thereunder. Except to the extent that information contained in any Parent
Report has been amended, revised or superseded by a Parent Report
subsequently filed and publicly available prior to the date of this
Agreement, none of the Parent Reports, when filed, contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(b) Each of the consolidated balance sheets of Parent included in or
incorporated by reference into the Parent Reports (including the related
notes and schedules) fairly presents in all material respects the
consolidated financial position of Parent and its Subsidiaries as of its
date, and each of the consolidated statements of income, stockholders'
equity and cash flows of Parent included in or incorporated by reference
into the Parent Reports (including any related notes and schedules) fairly
presents in all material respects the income, stockholders' equity and cash
flows, as the case may be, of Parent and its Subsidiaries for the periods
set forth therein (subject, in the case of unaudited statements, to normal
year-end audit adjustments which would not be material in amount or effect),
in each case in accordance with GAAP, except as may be noted therein and
subject to the fact that unaudited financial statements do not contain full
notes thereto. Parent and its Subsidiaries do not have any liabilities or
obligations required to be disclosed in a consolidated balance sheet or the
notes thereto prepared in accordance with GAAP, except (i) liabilities or
obligations reflected on, or reserved against in, a consolidated balance
sheet of Parent or in the notes thereto, and included in the Parent Reports,
(ii) liabilities or obligations incurred since March 31, 1998 in the
ordinary course of business, consistent with past practices, or (iii)
liabilities disclosed in a Parent Report.
4.7. ABSENCE OF LITIGATION, ORDERS, JUDGMENTS.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of Parent, threatened which involve transactions of or otherwise
relate to Parent or any of its Subsidiaries or any of such companies'
businesses or properties, at law or in equity, or before any arbitrator of
any kind, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign, that are reasonably likely to have a
Parent Material Adverse Effect.
(b) There are no outstanding orders, writs, injunctions, decrees,
judgments, awards, determinations or directions, which involve transactions
of or otherwise relate to Parent or any of its Subsidiaries or any of such
companies' businesses or properties, of any court or arbitrator or under any
outstanding order, regulation or demand of any federal, state, municipal or
other governmental instrumentality, domestic or foreign, that are reasonably
likely to have a Parent Material Adverse Effect.
4.8. ABSENCE OF CERTAIN CHANGES. Since March 31, 1998, Parent and its
Subsidiaries have conducted their businesses only in the ordinary course of such
businesses, except for any action conducted outside the ordinary course of
business which is not reasonably likely to result in a Parent Material Adverse
Effect, and there has not been (i) any Parent Material Adverse Effect or any
event which is reasonably likely to result in a Parent Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or other
distribution with respect to its capital stock; or (iii) any material change in
its accounting principles, practices or methods.
4.9. TAXES. Parent (a) has timely filed all material federal, state and
foreign tax returns required to be filed by it for tax years ended prior to the
date of this Agreement or requests for extensions have been timely filed and any
such request shall have been granted and not expired, and all such returns are
complete in all material respects, (b) has paid or accrued all taxes shown to be
due and payable on such returns and (c) has properly accrued all such taxes for
such periods subsequent to the periods covered by such returns.
4.10. CONTRACTS. Each (a) agreement, contract and commitment, whether
written or oral, to which Parent or any of its Subsidiaries is a party or by
which any of such companies is bound and which is filed as an exhibit to or
described in a Parent Report, and (b) agreement, contract and commitment that is
material to Parent and its Subsidiaries taken as a whole and that was entered
into by Parent or any of its Subsidiaries, or by which such company became
bound, after the date of the Quarterly Report on Form 10-Q most recently filed
by Parent (collectively, "PARENT CONTRACTS"), is a valid and legally binding
obligation of Parent or the Subsidiary party thereto and, to the knowledge of
Parent, the other parties thereto, enforceable against Parent or the Subsidiary
party thereto and, to the knowledge of Parent, the other parties thereto, in
accordance with its terms, subject to the Enforceability Exceptions. Neither
Parent nor any Subsidiary party to a Parent Contract is in material default of
such Parent Contract, and, to the knowledge of Parent, no other party to a
Parent Contract is in material default of such Parent Contract. Neither Parent
nor any Subsidiary party to a Parent Contract has performed any act or omitted
to perform any act which act or omission, with the giving of notice or passage
of time or otherwise, will become a material default thereunder. To the
knowledge of Parent, no other party to a Parent Contract has performed any act
or omitted to perform any act which act or omission, with the giving of notice
or passage of time or otherwise, will become a material default thereunder.
4.11. INTELLECTUAL PROPERTY.
(a) Parent and its Subsidiaries own or have the right to use all
Intellectual Property used by them in the operation of their respective
businesses, except to the extent that the failure to have such rights has
not and is not reasonably likely to result in (i) a material adverse effect
on Parent's or its Subsidiaries' ability to manufacture or sell any product
or line of products that is material to Parent and its Subsidiaries, taken
as a whole, (ii) a material adverse effect on Parent's or any of its
Subsidiaries' ability to operate its businesses, which inability to so
operate would have a Parent Material Adverse Effect, (iii) a liability of
Parent or any of its Subsidiaries, which liability would have a Parent
Material Adverse Effect, or (iv) material redesign or other corrective costs
to Parent or any of its Subsidiaries, which costs would be material to
Parent and its Subsidiaries, taken as a whole. Parent and its Subsidiaries
have taken reasonably necessary action to maintain and protect their rights
in the material Intellectual Property that they own or use.
(b) Parent has not, within the past four years, interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of others, other than any interference,
infringement, misappropriation or conflict with did not and is not
reasonably likely to result in (i) a material adverse effect on Parent's or
its Subsidiaries' ability to manufacture or sell any product or line of
products that is material to Parent and its Subsidiaries, taken as a whole,
(ii) a material adverse effect on Parent's or any of its Subsidiaries'
ability to operate its businesses, which inability to so operate would have
a Parent Material Adverse Effect, (iii) a liability of Parent or any of its
Subsidiaries, which liability would have a Parent Material Adverse Effect,
or (iv) material redesign
or other corrective costs to Parent or any of its Subsidiaries, which costs
would be material to Parent and its Subsidiaries, taken as a whole. Parent
has not received, and has no knowledge of, any charge, complaint, claim,
demand or notice alleging any such interference, infringement,
misappropriation or conflict by Parent or any of its Subsidiaries.
(c) To the knowledge of Parent, no fraud or misrepresentation has been
made by (i) Parent or any of its Subsidiaries, (ii) any of their respective
officers, directors or employees or (iii) the relevant inventors during the
prosecution of any of the Patents of Parent or any of its Subsidiaries, nor
has any fraud or misrepresentation been included in any documentation for or
other disclosure of the Intellectual Property of Parent or any of its
Subsidiaries.
4.12 EMPLOYEE BENEFIT PLANS.
(a) For purpose of this Agreement, (i) "PARENT BENEFIT PLANS" means all
employee benefit plans and other benefit arrangements covering employees or
former employees of Parent and its Subsidiaries and all employee agreements
providing compensation, severance or other benefits to any employee or
former employee of Parent or one of its Subsidiaries.
(b) With respect to each Parent Benefit Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code, either
(i) the IRS has issued a favorable determination letter that has not been
revoked, or (ii) an application for a favorable determination letter was
timely submitted to the IRS for which no final action has been taken by the
IRS. To the knowledge of Parent, there is no reason that is not susceptible
to cure why the qualified status under Section 401(a) of the Code of any
Parent Benefit Plan would be denied or revoked, whether retroactively or
prospectively.
(c) Except as would not have a Parent Material Adverse Effect, no Parent
Benefit Plan, any fiduciary thereof, nor Parent has incurred any liability
or penalty under Section 4975 of the Code or Section 502(i) of ERISA. Except
as would not have a Parent Material Adverse Effect, each Parent Benefit Plan
has been maintained and administered in all material respects in compliance
with its terms and with ERISA and the Code, to the extent applicable
thereto.
(d) Except as would not have a Parent Material Adverse Effect, neither
Parent nor any ERISA Affiliate (during the period of its affiliated status)
has any existing liability currently due and payable that has not been
satisfied in full under Title IV of ERISA or Section 412 of the Code. To the
knowledge of Parent, there are no current plans to terminate, whether
voluntarily or involuntarily any materially underfunded pension plans of
Parent or any ERISA Affiliate that are subject to Title IV of ERISA.
(e) Except as would not have a Parent Material Adverse Effect, to the
knowledge of Parent, there are no pending or anticipated claims against or
otherwise involving any of the Parent Benefit Plans and no suit, action or
other litigation (excluding claims for benefits incurred in the ordinary
course of the Parent Benefit Plan activities) has been brought against or
with respect to any such Parent Benefit Plan, except for any of the
foregoing which would not have a Parent Material Adverse Effect.
(f) All material contributions required to be made as of the date hereof
to the Parent Benefit Plans have been made or provided for.
(g) The execution of, and performance of the transactions contemplated
by, this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or may
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee of Parent or any of
its Subsidiaries.
4.13. NO BROKERS. Neither Parent nor any of its Subsidiaries has entered
into any contract, arrangement or understanding with any person or firm which
will or is reasonably likely to result in the obligation of the Company, Parent
or Merger Sub to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, except
that Parent has retained PaineWebber Incorporated as its financial advisor, the
arrangements with which have been disclosed in writing to the Company prior to
the date hereof. Other than the foregoing arrangements, Parent is not aware of
any claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
4.14. COMPANY STOCK OWNERSHIP. Neither Parent nor any of its Subsidiaries
owns any shares of Company Common Stock or other securities convertible into
Company Common Stock.
4.15. POOLING OF INTERESTS; TAX REORGANIZATION. To the knowledge of
Parent, having sought and obtained the advice of its accounting advisors,
neither Parent nor any of its Subsidiaries has taken (or as of the date hereof
failed to take) any action which would prevent the accounting for the Merger as
a pooling of interests in accordance with APB No. 16, the interpretative
releases issued pursuant thereto, and the pronouncements of the Commission. To
the knowledge of Parent, neither Parent nor any of its Subsidiaries has taken or
failed to take any action which would prevent the Merger from constituting a
reorganization within the meaning of section 368 of the Code.
4.16. ENVIRONMENTAL MATTERS.
(a) For purposes of this Agreement, "PARENT REAL PROPERTIES" means all
real property ever owned, leased or occupied by Parent or any of its
Subsidiaries or any predecessor to their businesses (each, a "PREDECESSOR").
(b) There has not been any violation of any Environmental Requirements
by Parent or any of its Subsidiaries or, to the knowledge of Parent, any
Predecessor, nor to the knowledge of Parent has there been any third party
claim or demand based upon any Environmental Requirements against Parent or
any or its Subsidiaries or any Predecessor, other than violations, claims or
demands that have not resulted, and are not reasonably likely to result in,
a Parent Material Adverse Effect.
(c) Neither Parent nor any of its Subsidiaries has disposed of, stored
or used any Hazardous Materials on, nor has any of such companies
transported any Hazardous Materials from, any of the Parent Real Properties
owned, leased or occupied by Parent or any of its Subsidiaries, in violation
of applicable Environmental Requirements, other than a disposal, storage,
use or transport which has not resulted in and is not reasonably likely to
result in a Parent Material Adverse Effect. To the knowledge of Parent, no
Predecessor has disposed of, stored or used any Hazardous Materials on, nor
has any Predecessor transported any Hazardous Materials from, any of the
Parent Real Properties owned, leased or occupied by such Predecessor, in
violation of applicable Environmental Requirements.
(d) To the knowledge of Parent, none of the following exists at any of
the Parent Real Properties: (i) underground storage tanks, (ii)
asbestos-containing material in any friable or damaged form or condition,
(iii) materials or equipment containing polychlorinated biphenyls (PCBs), or
(iv) landfills or surface impoundments.
(e) To the knowledge of Parent, none of the Parent Real Properties is or
has been contaminated by any Hazardous Materials, in a manner that has given
or is reasonably likely to give rise to any material liability on the part
of Parent or any of its Subsidiaries to any person, including without
limitation any governmental authority, for response costs, corrective action
costs, personal injury, property damage, natural resources damages or
attorney fees, pursuant to CERCLA or SWDA or any other Environmental
Requirements, whether federal, state or locally imposed.
ARTICLE 5
COVENANTS
5.1. ALTERNATIVE PROPOSALS.
(a) Upon execution and delivery of this Agreement, the Company, its
affiliates and their respective officers, directors, employees,
representatives and agents shall immediately cease any existing discussions
or negotiations, if any, conducted with any parties heretofore with respect
to any acquisition of all or any material portion of the assets of, or any
equity interest in, the Company or any business combination with the
Company.
(b) Prior to the Closing Date, the Company may, solely in response to
unsolicited requests therefor, furnish non-public information regarding
itself to any corporation, partnership, person or other entity or group in
respect of, and may participate in discussions and negotiate with such
entity or group concerning, a business combination, merger, sale of material
assets, sale of shares of capital stock or similar transaction involving the
Company (a "TRANSACTION"), PROVIDED that (i) such entity or group has
submitted a written proposal to the Board of Directors of the Company
relating to any such Transaction (an "ALTERNATIVE PROPOSAL"), (ii) the
entity or group enters into confidentiality agreements with the Company with
respect to such non-public information, and (iii) the Board of Directors of
the Company ("COMPANY BOARD"), by a majority vote, determines in its good
faith judgment, based as to legal matters on the advice of legal counsel,
that failing to take such action would constitute a breach of the Company
Board's fiduciary duty. The Company Board shall provide a copy of any such
written proposal to Parent and Merger Sub immediately after receipt thereof,
unless prohibited by the terms of such proposal.
(c) Neither the Company nor any of its affiliates, nor any of such
persons' respective officers, directors, employees, representatives or
agents, shall, directly or indirectly (i) encourage, solicit, participate in
or initiate discussions or negotiations with, or provide any information to,
any corporation, partnership, person or other entity or group (other than
Parent and Merger Sub, any affiliate or associate of Parent and Merger Sub
or any designees of Parent and Merger Sub) concerning any Transaction, or
(ii) authorize, propose or announce an intention to authorize or propose any
Transaction (other than the Merger), unless and until the Company has
received an Alternative Proposal in writing and the Company Board, by
majority vote, has determined in its good faith judgment, based as to legal
matters on the advice of legal counsel, that failing to take such action
would constitute a breach of the Company Board's fiduciary duty; PROVIDED,
HOWEVER, that nothing herein shall prevent the Company Board from taking,
and disclosing to the Company's stockholders, a position contemplated by
Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to any
tender offers; PROVIDED, FURTHER, that the Company Board shall not recommend
that the stockholders of the Company tender their shares in connection with
any such tender offer unless the Company Board by a majority vote determines
in its good faith judgment, based as to legal matters on the advice of legal
counsel, that failing to take such action would constitute a breach of the
Company Board's fiduciary duty.
(d) Nothing in this Section 5.1 shall (i) permit the Company to
terminate this Agreement (except as specifically provided in Article 7
hereof), (ii) permit the Company to enter into any agreement with respect to
a Transaction during the term of this Agreement (it being agreed that during
the term of this Agreement, the Company shall not enter into any agreement
with any person that provides for, or in any way facilitates, a Transaction,
other than a confidentiality agreement in customary form), or (iii) affect
any other obligation of the Company under this Agreement.
5.2. INTERIM OPERATIONS OF THE COMPANY.
(a) Prior to the Effective Time, except as set forth in Section 5.2 of
the Company Disclosure Schedule or as contemplated by any other provision of
this Agreement, unless Parent has consented in writing thereto, the Company:
(i) shall, and shall cause Company Subsidiary to, conduct its
operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(ii) shall use its reasonable efforts to preserve intact its
business organizations and goodwill, keep available the services of its
officers and employees and maintain satisfactory relationships with those
persons having business relationships with them;
(iii) shall not amend its Certificate of Incorporation or Bylaws or
the charter documents of Company Subsidiary;
(iv) shall promptly notify Parent of (A) any material adverse change
in its condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its business or of its properties,
(B) any material litigation or, to the extent known to the Company, any
material governmental complaints, investigations or hearings against or
otherwise involving the Company or Company Subsidiary (or communications
indicating that the same may be contemplated), or (C) the breach of any
Company representation or warranty contained herein;
(v) shall promptly deliver to Parent true and correct copies of any
report, statement or schedule filed by the Company with the Commission
subsequent to the date of this Agreement;
(vi) shall not enter into or amend any employment, severance or
similar agreements or arrangements with any of its or Company
Subsidiary's directors or executive officers, except (A) in the ordinary
course of business consistent with past practice, or (B) as otherwise
provided in this Agreement;
(vii) shall not, and shall not permit Company Subsidiary to,
authorize, propose or announce an intention to authorize or propose, or
enter into negotiations or an agreement with respect to any acquisition
of assets or securities, any disposition of assets or securities or any
release or relinquishment of any contract rights, which acquisitions,
dispositions, releases or relinquishments would be outside the ordinary
course of business and would involve aggregate consideration in excess of
$500,000;
(viii) shall not issue any shares of capital stock or securities,
except upon exercise of Company Options outstanding as of the date
hereof, or effect any stock split or otherwise change its capitalization;
(ix) shall not grant, confer or award any options, appreciation
rights, warrants, conversion rights, restricted stock, stock units,
performance shares or other rights, not existing on the date hereof, with
respect to any shares of its capital stock or other securities of the
Company;
(x) shall not take any actions which would, or would be reasonably
likely to, prevent the Merger from qualifying as a reorganization within
the meaning of Section 368 of the Code;
(xi) shall not take any actions which would, or would be reasonably
likely to, prevent the Merger from qualifying as a transaction to be
accounted for as a pooling of interests in accordance with ▇▇▇ ▇▇. ▇▇;
(xii) except as required by applicable law (in which case prompt
notice shall be given by the Company to Parent), shall not amend in any
material respect the terms of the Company Benefit Plans, including
without limitation any employment, severance or similar agreements or
arrangements in existence on the date hereof, or adopt any new employee
benefit plans, programs or arrangements or any employment, severance or
similar agreements or arrangements;
(xiii) shall not incur, create, assume or otherwise become liable for
borrowed money or assume, guarantee, endorse or otherwise become
responsible or liable for the obligations of any other individual,
corporation or other entity, except in the ordinary course of business;
(xiv) shall not make any loans or advances to any other person,
except in the ordinary course of business;
(xv) shall not make any material tax election other than in the
ordinary course, or without the consent of Parent, which shall not
unreasonably be withheld, settle or compromise any material tax
liability;
(xvi) shall not declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital
stock or other ownership interests;
(xvii) shall not directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock, or make any commitment for any
such action; and
(xviii) shall not agree, in writing or otherwise, to take any of the
foregoing actions or take any action which would make any representation
or warranty in Article 3 hereof untrue or incorrect in any material
respect as of the Closing Date.
5.3. INTERIM OPERATIONS OF PARENT.
(a) Prior to the Effective Time, except as contemplated by another
provision of this Agreement, unless the Company has consented in writing
thereto, Parent:
(i) shall, and shall cause its Subsidiaries to, conduct their
operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted; PROVIDED, HOWEVER,
that any Subsidiary of Parent shall be permitted, and Parent shall be
permitted to cause such Subsidiary, without the written consent of the
Company, to take actions outside the usual, regular and ordinary course
of such Subsidiary's business if such actions do not have a material
effect on the operations of Parent and its Subsidiaries, taken as a
whole;
(ii) shall use its reasonable efforts (A) to preserve intact the
business organizations and goodwill of Parent and its Subsidiaries, (B)
to keep available the services of Parent's officers and employees and
each of its Subsidiaries' officers and key employees and (C) to maintain
satisfactory relationships with those persons having business
relationships with them;
(iii) shall not, and shall not permit any of its Subsidiaries to,
amend their respective Certificates of Incorporation or Bylaws or
comparable charter documents (other than amendments to the charter
documents of any Subsidiary, which amendments are not material to Parent
or to the consummation of the transactions contemplated by this
Agreement);
(iv) shall promptly notify the Company of (A) any material change in
its condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its business or of its properties,
(B) any material litigation or, to the extent known to Parent, material
governmental complaints, investigations or hearings against or otherwise
involving Parent or any of its Subsidiaries (or communications indicating
that the same may be contemplated), or (C) the breach by Parent or Merger
Sub of any of its representations or warranties contained herein;
(v) shall promptly deliver to the Company true and correct copies of
any report, statement or schedule filed by Parent with the Commission
subsequent to the date of this Agreement;
(vi) shall not, and shall not permit any of its Subsidiaries to,
authorize, propose or announce an intention to authorize or propose, or
enter into negotiations or an agreement with respect to any acquisition
of assets or securities, any disposition of assets or securities or any
release or
relinquishment of any contract rights, which acquisitions, dispositions,
releases or relinquishments would be outside the ordinary course of
business and would involve aggregate consideration in excess of
$2,500,000;
(vii) shall not issue any shares of capital stock or securities,
except upon exercise of Parent Options outstanding as of the date hereof;
(viii) except in the ordinary course or business, shall not grant,
confer or award any options, appreciation rights, warrants, conversion
rights, restricted stock, stock units, performance shares or other
rights, not existing on the date hereof, with respect to any shares of
its capital stock or other securities of Parent;
(ix) shall not, and shall not permit any of its Subsidiaries
(including without limitation Merger Sub) to, take any actions which
would, or would be reasonably likely to, prevent the Merger from
qualifying as a reorganization within the meaning of section 368 of the
Code;
(x) shall not, and shall not permit any of its Subsidiaries
(including without limitation Merger Sub) to, take any actions which
would, or would be reasonably likely to, prevent the Merger from
qualifying as a transaction to be accounted for as a pooling of interests
in accordance with ▇▇▇ ▇▇. ▇▇;
(xi) shall not incur, create, assume or otherwise become liable for
borrowed money or assume, guarantee, endorse or otherwise become
responsible or liable for the obligations of any other individual,
corporation or other entity, except in the ordinary course of business;
(xii) shall not declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital
stock;
(xiii) shall not directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or make any commitment for any
such action; and
(xiv) shall not, and shall not permit any of its Subsidiaries to,
agree, in writing or otherwise, to take any of the foregoing actions or
take any action which would make any representation or warranty in
Article 4 hereof untrue or incorrect in any material respect as of the
Closing Date.
5.4. MEETING OF STOCKHOLDERS. The Company will take all action necessary
in accordance with applicable law and its Certificate of Incorporation and
Bylaws to convene a meeting of its stockholders (the "STOCKHOLDERS' MEETING") as
promptly as practicable to consider and vote upon the approval of this Agreement
and the transactions contemplated hereby. The Board of Directors of the Company
shall recommend such approval, and the Company shall take all lawful action to
solicit such approval, including, without limitation, timely mailing the Proxy
Statement/Prospectus (as defined in Section 5.9); PROVIDED, HOWEVER, that such
recommendation or solicitation shall not be required if and to the extent that
the Company Board determines, after the date hereof, and upon the advice of
outside counsel, that the making of such recommendation or solicitation would
involve a breach of its fiduciary duties to its stockholders imposed by law.
5.5. FILINGS; OTHER ACTIONS. Subject to the terms and conditions herein
provided, the Company and Parent shall: (a) promptly make their respective
filings and thereafter make any other required submissions under the HSR Act
with respect to the Merger; (b) use all reasonable efforts to cooperate with one
another in (i) determining which other filings are required to be made prior to
the Effective Time with, and which other consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
governmental or regulatory authorities of the United States, the several states
and foreign jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (c) use all reasonable efforts to take, or cause
to
be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement.
5.6. HSR ACT.
(a) The parties shall take all actions reasonably necessary or
appropriate to cause the prompt expiration or termination of any applicable
waiting period under the HSR Act in respect of the Merger, including without
limitation complying as promptly as practicable with any requests by the
Federal Trade Commission or Department of Justice for additional
information.
(b) In furtherance and not in limitation of the covenants in Sections
5.5 and 5.6(a), the parties shall use their reasonable best efforts to
resolve any objections that may be asserted under any Antitrust Law (as
defined in paragraph (d) of this Section 5.6) with respect to the Merger or
any other transactions contemplated by this Agreement, except that neither
Parent nor the Company nor any of its respective Subsidiaries shall be
required, by this paragraph (b) or otherwise, to sell, hold separate or
divest any of its (or any its Subsidiaries' or affiliates) businesses,
product lines, assets or properties (or to agree or commit to take any such
action) in order to resolve any such objections. If any administrative,
judicial or legislative action or proceeding is instituted (or threatened to
be instituted) challenging the Merger or any other transactions contemplated
hereby as violative of any Antitrust Law, the parties shall cooperate and
use their best efforts vigorously to contest and resist any such action or
proceeding, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the Merger or any other transaction contemplated by this
Agreement, including without limitation by vigorously pursuing all available
avenues of administrative and judicial appeal and legislative action.
(c) Each of the Company, Parent and Merger Sub shall promptly inform the
other parties of any material communication received by such party from the
Federal Trade Commission, the Antitrust Division of the Department of
Justice or any other governmental or regulatory authority regarding any of
the transactions contemplated hereby. Parent and Merger Sub will advise the
Company promptly in respect of any understandings, undertakings or
agreements which Parent or Merger Sub propose to make or enter into with the
Federal Trade Commission, the Antitrust Division of the Department of
Justice or any other governmental or regulatory authority regarding any of
the transactions contemplated hereby.
(d) "ANTITRUST LAW" means the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act,
as amended, the HSR Act, the Federal Trade Commission Act, as amended, and
all other federal, state and foreign statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade.
5.7. INSPECTION OF RECORDS. From the date hereof to the Effective Time,
each of the Company and Parent shall (a) allow all designated officers,
attorneys, accountants and other representatives of the other party reasonable
access at all reasonable times to its respective offices, records and files,
correspondence, audits and properties, as well as to all information relating to
its respective commitments, contracts, titles and financial position, or
otherwise pertaining to its respective business and affairs, (b) furnish to the
other party and the other party's counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as such persons may reasonably request and (c) instruct its
respective employees, counsel and financial advisors to cooperate with the other
party in the other party's investigation of its respective business.
5.8. PUBLICITY. The initial press release relating to this Agreement shall
be a joint press release and thereafter the Company and Parent shall, subject to
their respective legal obligations (including requirements of stock exchanges
and similar self regulatory bodies), consult with each other, and use reasonable
efforts to agree upon the text of any press release, before issuing any such
press release or otherwise
making public statements with respect to the transactions contemplated hereby
and in making any filings with any federal or state governmental or regulatory
agency or with any national securities exchange with respect thereto.
5.9. PROXY STATEMENT/PROSPECTUS.
(a) Parent and the Company shall cooperate and promptly prepare and
Parent shall file with the Commission as soon as practicable a Registration
Statement on Form S-4 under the Securities Act (the "REGISTRATION
STATEMENT"), with respect to the Parent Common Stock issuable in the Merger,
which Registration Statement shall contain the proxy statement with respect
to the meeting of the stockholders of the Company in connection with the
Merger (the "PROXY STATEMENT/PROSPECTUS"). Notwithstanding the foregoing,
the Company and Parent may elect to file the Proxy Statement/ Prospectus
pursuant to Section 14 of the Exchange Act on a confidential basis and to
receive, respond to and clear all Commission comments thereon, prior to
filing the Registration Statement.
(b) The parties will cause the Proxy Statement/Prospectus, and Parent
will cause the Registration Statement, to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange
Act and the rules and regulations thereunder. Parent shall use all
reasonable efforts, and the Company shall cooperate with Parent, (i) to have
the Registration Statement declared effective by the Commission as promptly
as practicable, and (ii) to obtain timely any and all necessary state
securities or "blue sky" permits or approvals required to carry out the
transactions contemplated by this Agreement.
(c) The information supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement/Prospectus and the
Registration Statement shall not (i) at the time the Registration Statement
is declared effective, (ii) at the time the Proxy Statement/Prospectus (or
any amendment thereof or supplement thereto) is first mailed to holders of
Company Common Stock, (iii) at the time of the Stockholders' Meeting, and
(iv) at the Effective Time, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they are made, not misleading.
(d) The information supplied by Parent for inclusion or incorporation by
reference in the Proxy Statement/Prospectus and the Registration Statement
shall not (i) at the time the Registration Statement is declared effective,
(ii) at the time the Proxy Statement/Prospectus (or any amendment thereof or
supplement thereto) is first mailed to holders of Company Common Stock,
(iii) at the time of the Stockholders' Meeting, and (iv) at the Effective
Time, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading.
(e) No amendment or supplement to the Proxy Statement/Prospectus will be
made by the Company or Parent without the approval of the other. Parent will
advise the Company, promptly after it receives notice thereof, of the time
when the Registration Statement has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the suspension of
the qualification of the Parent Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or any request by the
Commission for amendment of the Proxy Statement/ Prospectus or the
Registration Statement or comments thereon and responses thereto or requests
by the Commission for additional information.
5.10. LISTING APPLICATION. Parent shall promptly prepare and submit to the
Nasdaq National Market a listing application covering the shares of Parent
Common Stock issuable in the Merger, and shall use its best efforts to obtain,
prior to the Effective Time, approval for the listing of such Parent Common
Stock, subject to official notice of issuance.
5.11. AFFILIATE LETTERS. At least 30 days prior to the Closing Date, the
Company shall deliver to Parent a list of names and addresses of those persons
who were, in the Company's reasonable judgment, as
of the record date for the Stockholders' Meeting, "affiliates" of the Company
within the meaning of Rule 145 of the rules and regulations promulgated under
the Securities Act (each such person, an "AFFILIATE"). The Company shall provide
Parent such information and documents as Parent shall reasonably request for
purposes of reviewing such list. The Company shall use all reasonable efforts to
deliver or cause to be delivered to Parent, prior to the Closing Date, from each
of the Affiliates of the Company identified in the foregoing list, an affiliate
letter in form and substance reasonably acceptable to the Company and Parent
(collectively, "AFFILIATE LETTERS"). Parent shall be entitled to place legends
as specified in such Affiliate Letters on the certificates evidencing any Parent
Common Stock to be received by such Affiliates pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the Parent Common Stock, consistent with the terms of such Affiliate
Letters.
5.12. EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein and except that the filing fee in connection with the
filing of the Registration Statement or Proxy Statement/Prospectus with the
Commission and the expenses incurred in connection with printing and mailing the
Registration Statement and the Proxy Statement/Prospectus shall be shared
equally by the Company and Parent.
5.13. EMPLOYEE BENEFITS.
(a) For a period of two years following the Effective Time, Parent shall
provide to persons who are employees of the Company at the Effective Time
(the "COMPANY PERSONNEL") employee compensation and benefit plans, programs
and arrangements which collectively for the Company Personnel, as a whole,
are in the aggregate substantially comparable to the employee compensation
and benefit plans, programs and arrangements generally provided to the
employees of the Company immediately prior to the Effective Time; PROVIDED,
HOWEVER, that subject to the foregoing, Parent shall not be precluded from
amending or terminating any particular plan, program or arrangement, or from
substituting any such plans, programs or arrangements with plans, programs
or arrangements applicable and available to other employees of Parent and
its Subsidiaries.
(b) Following the Effective Time, Parent shall cause the benefit plans
covering the Company Personnel following the Effective Time (the "BENEFIT
PLANS") to continue to recognize the service credit of the Company Personnel
accrued as of the Effective Time under the Company Benefit Plans for
purposes of participation, eligibility and vesting of benefits, to the
extent permissible by the terms of such Benefit Plans.
(c) In the event of any change in coverage that applies generally to the
Company Personnel during the two-year period following the Effective Time
under any Benefit Plan that provides medical or health benefits, Parent
shall (i) cause such Benefit Plan to recognize credit toward satisfying
deductible expense requirements, out-of-pocket expense limits and maximum
lifetime benefit limits of such Company Personnel or their eligible
dependents, (ii) waive any pre-existing condition, exclusion or limitation,
as and to the extent any such matter would previously have been recognized
or waived (as the case may be) under the applicable Company Benefit Plan,
and (iii) waive any waiting period or minimum service requirements.
5.14. AGREEMENTS. Between the date hereof and the Closing Date, neither
Parent nor the Company shall enter into any agreement which Parent or the
Company, as the case may be, knows or has reason to know is reasonably likely to
cause any major customer of Parent or the Company (or their respective
subsidiaries) to terminate any material contracts, agreements or other
obligations that exist between that customer on the one hand, and Parent, the
Company (or Parent and the Company following the Merger) or any subsidiary of
either, on the other hand and Parent and the Company shall take all reasonable
action appropriate to an effort to avoid such termination.
5.15. TAKEOVER STATUTE. If any "fair price," "moratorium," "control share
acquisition" or other form of anti-takeover statute or regulation shall become
applicable to the transactions contemplated hereby, the
Company and the Company Board shall grant such approvals and take such actions
as are reasonably necessary so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such statute or regulation
on the transactions contemplated hereby; PROVIDED, HOWEVER, that the Company and
the Company Board shall not be required to grant such approvals or take such
actions if the Company Board, by majority vote, determines in its good faith
judgment, based as to legal matters on the advice of legal counsel, that
granting such approvals or taking such actions would constitute a breach of the
Company's Board's fiduciary duties.
5.16. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation and By-laws of the Surviving
Corporation shall contain the respective provisions that are set forth, as
of the date of this Agreement, in the Certificate of Incorporation and the
By-laws of the Company dealing with indemnification of officers and
directors of the Company, Company Personnel and other persons specified
therein, including without limitation Article VII of the Bylaws of the
Company (collectively, the "INDEMNIFICATION PROVISIONS"), which provisions
shall not be amended, repealed or otherwise modified for a period of six
years from the Effective Time in any manner that would affect adversely the
rights thereunder with respect to actions or events occurring prior to the
Effective Time of individuals who were entitled to such indemnification
prior to the Effective Time.
(b) The Surviving Corporation shall maintain in effect for at least six
years from the Effective Time directors' and officers' liability insurance
with an insurance company rated at least "A" by A.M. Best Company, covering
the persons who, as of the date of this Agreement, are covered by the
Company's directors' and officers' liability insurance policy (the "CURRENT
POLICY"). The coverage provided by the directors' and officers' liability
insurance maintained by the Surviving Corporation shall be substantially
similar to the coverage provided by the Current Policy.
(c) Parent shall guarantee the obligations of the Surviving Corporation
provided by this Section 5.16.
(d) This Section 5.16 shall survive the consummation of the Merger, is
intended to benefit the Company, the Surviving Corporation and each
indemnified party, and shall be enforceable by the indemnified parties.
5.17 BOARD OF DIRECTORS OF PARENT. Parent shall cause each of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ to be appointed to the Board of Directors of
Parent as of the Effective Time, provided such person agrees to so serve, until
the next meeting of the stockholders of Parent at which directors are to be
elected, and until such person's successor has been elected and qualified.
ARTICLE 6
CONDITIONS TO CLOSING
6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the transactions contemplated hereby shall have
been approved by the requisite vote of the holders of the issued and
outstanding shares of capital stock of the Company.
(b) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(c) Neither of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction in the United States which
prohibits the consummation of the transactions
contemplated by this Agreement. In the event any such order or injunction
shall have been issued, each party agrees to use its best efforts to have
any such injunction lifted.
(d) The Registration Statement shall have become effective and shall be
effective at the Effective Time, and no stop order suspending effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding or investigation by the Commission to suspend the effectiveness
thereof shall have been initiated and be continuing, and all material
approvals under state securities laws relating to the issuance or trading of
the Parent Common Stock to be issued to the Company stockholders in
connection with the Merger shall have been received.
(e) The Parent Common Stock to be issued to the Company stockholders in
connection with the Merger shall have been approved for listing on the
Nasdaq National Market, subject only to official notice of issuance.
(f) All consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental commission, board or other regulatory
body required in connection with the execution, delivery and performance of
this Agreement (including without limitation ISRA) shall have been obtained
or made, except for filings in connection with the Merger and any other
documents required to be filed after the Effective Time and except where the
failure to have obtained or made any such consent, authorization, order,
approval, filing or registration would not have a material adverse effect on
the business of Parent (and its Subsidiaries) and the Company, taken as a
whole, following the Effective Time.
6.2. CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Parent shall have performed in all material respects its agreements
contained in this Agreement required to be performed on or prior to the
Closing Date, the representations and warranties of Parent and Merger Sub
contained in this Agreement and in any document delivered in connection
herewith shall be true and correct in all material respects as of the
Closing Date, except that those representations and warranties which address
matters only as of a particular date shall have been true and correct as of
such date, and the Company shall have received a certificate of the
President or a Senior Vice President of Parent, dated the Closing Date,
certifying to such effect.
(b) The Company shall have received, prior to the effective date of the
Registration Statement, the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the
Company, to the effect that the Merger will be treated for federal income
tax purposes as a reorganization within the meaning of section 368(a) of the
Code, and that the Company, Parent and Merger Sub each will be a party to
that reorganization within the meaning of section 368(b) of the Code, and
such firm shall have reconfirmed such opinion as of the Closing Date. In
rendering such opinion, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP may require and rely upon such
certificates of the Company, Parent and Merger Sub and/or their respective
officers or principal stockholders as are customary for such opinions.
(c) The Company shall have received a letter of KPMG Peat Marwick LLP,
its independent public accountants, dated as of the Closing Date, in form
and substance reasonably satisfactory to the Company, stating that such
accountants concur with management's conclusion that the Merger will qualify
as a transaction to be accounted for in accordance with the pooling of
interests method of accounting under the requirements of ▇▇▇ ▇▇. ▇▇.
(d) From the date of this Agreement through the Effective Time, there
shall not have occurred a Parent Material Adverse Effect.
6.3 CONDITIONS TO OBLIGATION OF PARENT AND MERGER SUB TO EFFECT THE
MERGER. The obligations of Parent and Merger Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) The Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior
to the Closing Date, the representations and warranties of the Company
contained in this Agreement and in any document delivered in connection
herewith shall be true and correct in all material respects as of the
Closing Date, except that those representations and warranties which address
matters only as of a particular date shall have been true and correct as of
such date, and Parent shall have received a certificate of the President or
a Senior Vice President of the Company, dated the Closing Date, certifying
to such effect.
(b) Parent shall have received, prior to the effective date of the
Registration Statement, the opinion of Thelen, Marrin, ▇▇▇▇▇▇▇ & Bridges LLP
(or its successor), counsel to Parent, to the effect that the Merger will be
treated for Federal income tax purposes as a reorganization within the
meaning of section 368(a) of the Code, and that the Company, Parent and
Merger Sub each will be a party to that reorganization within the meaning of
section 368(b) of the Code, and such firm shall have reconfirmed such
opinion as of the Closing Date. In rendering such opinion, Thelen, Marrin,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP (or its successor) may require and rely upon such
certificates of the Company, Parent and Merger Sub and/or their officers or
principal stockholders as are customary for such opinions.
(c) Parent shall have received a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLC, its
independent public accountants, dated as of the Closing Date, in form and
substance reasonably satisfactory to Parent, stating that such accountants
concur with management's conclusion that the Merger will qualify as a
transaction to be accounted for in accordance with the pooling of interests
method of accounting under the requirements of ▇▇▇ ▇▇. ▇▇.
(d) The employment agreement, dated as of even date herewith, between
the Surviving Corporation and ▇▇▇▇▇▇ ▇▇▇▇▇, shall not have been terminated
prior to the Effective Time.
(e) From the date of this Agreement through the Effective Time, there
shall not have occurred a Company Material Adverse Effect.
ARTICLE 7
TERMINATION
7.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval of this Agreement by the stockholders of the Company, by the
mutual consent of Parent and the Company.
7.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned by action of the Board of Directors
of either Parent or the Company if (a) the Merger shall not have been
consummated by December 31, 1998, or (b) the approval of the Company's
stockholders required by Section 6.1(a) shall not have been obtained at the
Stockholders' Meeting or any adjournment thereof, or (c) a United States federal
or state court of competent jurisdiction or United States federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; PROVIDED, that the party seeking to terminate this
Agreement pursuant to this paragraph (c) shall have used all reasonable efforts
to remove such injunction, order or decree; and PROVIDED, in the case of a
termination pursuant to paragraph (a) of this Section 7.3, that the terminating
party shall not have breached in any material respect its obligations under this
Agreement in
any manner that shall have proximately contributed to the failure to consummate
the Merger by December 31, 1998.
7.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the adoption and approval by the stockholders of the Company referred to in
paragraph (a) of Section 6.1, by action of the Company Board, if (a) the Company
Board, by majority vote, determines in its good faith judgment, based as to
legal matters on the advice of legal counsel, that terminating this Agreement
and abandoning the Merger is required by the Company Board's fiduciary duties,
or (b) there has been a breach by Parent or Merger Sub of any representation or
warranty contained in this Agreement that has had or is reasonably likely to
have a Parent Material Adverse Effect, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by the Company to Parent, or (c) there has been a material breach of any
of the covenants or agreements set forth in this Agreement on the part of
Parent, which breach is not curable or, if curable, is not cured within 30 days
after written notice of such breach is given by the Company to Parent.
Notwithstanding the foregoing, the Company's ability to terminate this Agreement
pursuant to Section 7.2 or this Section 7.3 is conditioned upon the prior
payment by the Company of the Termination Fee (defined in Section 7.5), if
Section 7.5 so requires.
7.4. TERMINATION BY PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, by action of
the Board of Directors of Parent, if (a) the Company Board shall have (i)
withdrawn or modified in a manner materially adverse to Parent its approval or
recommendation of this Agreement or the Merger or (ii) recommended an
Alternative Proposal to the Company stockholders, or (b) there has been a breach
by the Company of any representation or warranty contained in this Agreement
that has had or is reasonably likely to have a Company Material Adverse Effect,
which breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by Parent to the Company, or (c) there
has been a material breach of any of the covenants or agreements set forth in
this Agreement on the part of the Company, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by Parent to the Company.
7.5. EFFECT OF TERMINATION AND ABANDONMENT.
(a) If this Agreement is terminated by the Company or Parent pursuant to
Section 7.2(b), 7.3(a) or 7.4(a), and (x) prior to such termination, a
proposal with respect to a Transaction shall have been made, and (y) within
six (6) months after such termination, either the Company enters into any
agreement with respect to a Transaction, or any third party shall acquire
beneficial ownership of 50.1% or more of the Company's outstanding shares of
voting stock, then the Company shall pay Parent, by wire transfer of
immediately available funds, a fee (the "TERMINATION FEE") of Two Million
Dollars ($2,000,000) within two (2) business days after the execution of
such agreement or the consummation of such acquisition (whichever shall
first occur).
(b) The Company acknowledges that the agreements contained in this
Section 7.5 are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, Parent and Merger Sub would
not enter into this Agreement; accordingly, if the Company fails to promptly
pay the Termination Fee when due and, in order to obtain such payment,
Parent or Merger Sub commences a suit which results in a judgment against
the Company, the Company shall reimburse Parent for its costs and expenses
(including reasonable attorneys' fees) incurred in connection with such
suit, together with interest on the amount of the Termination Fee at the
prime rate, as then quoted in THE WALL STREET JOURNAL, from the date the
Termination Fee was required to be paid.
(c) In the event of termination of this Agreement and the abandonment of
the Merger pursuant to this Article 7, all obligations of the parties hereto
shall terminate, except (i) the obligations of the parties set forth in this
Section 7.5 and Section 5.12, (ii) the provisions of Sections 8.3, 8.6, 8.9
and 8.13, and (iii) the Confidentiality Agreement previously executed
between the Company and Parent (the "CONFIDENTIALITY AGREEMENT"). Moreover,
in the event of termination of this Agreement pursuant
to Section 7.3 or 7.4, nothing herein shall prejudice the ability of the
nonbreaching party from seeking damages, after taking into account payment
of the Termination Fee, if such fee has been paid, from any other party for
any willful breach of this Agreement, including without limitation,
attorneys' fees and the right to pursue any remedy at law or in equity.
7.6. EXTENSION; WAIVER. At any time prior to the Effective Time, any party
hereto, by action taken by its Board of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions for the benefit of such party 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.
ARTICLE 8
GENERAL PROVISIONS
8.1. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants in this Agreement or in any instrument
delivered pursuant to this Agreement shall not survive the Merger; PROVIDED,
HOWEVER, that the covenants contained in Article 2, the last sentence of Section
5.11, Section 5.12, Section 5.13, Section 5.16 and Section 5.17, and this
Article 8 shall survive the Merger, but not beyond the extent, if any, specified
therein.
8.2. NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to Parent or Merger Sub:
Advanced Energy Industries, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
Thelen, Marrin, ▇▇▇▇▇▇▇ & Bridges LLP
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
If to the Company:
RF Power Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
Facsimile:
with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile:
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 5.13, 5.16 and 5.17, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
8.4. ENTIRE AGREEMENT. This Agreement, the Exhibits, the Company
Disclosure Schedule, the Parent Disclosure Schedule, the Confidentiality
Agreement and any documents delivered by the parties in connection herewith
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
8.5. AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken by their respective Boards of Directors, at any time before or
after approval of the Merger by the stockholders of the Company, but after any
such stockholder approval, no amendment shall be made which by law requires the
further approval of stockholders without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
8.6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without regard to its rules
of conflict of laws.
8.7. COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
8.8. HEADINGS. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
8.9. INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations, partnerships and other
business entities and vice versa.
8.10. WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.11. INCORPORATION OF EXHIBITS. The Company Disclosure Schedule, the
Parent Disclosure Schedule and all Exhibits attached hereto and referred to
herein are hereby incorporated herein and made a part hereof for all purposes as
if fully set forth herein.
8.12. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
8.13. ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any Delaware Court, this being in addition to
any other remedy to which they are entitled at law or in equity.
8.14. CERTAIN DEFINITIONS. As used in this Agreement, the following
capitalized words shall have the meanings given to them in this Section 8.14,
except where the context otherwise requires:
(a) "COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on
or change in the business, results of operations or financial condition of
the Company and Company Subsidiary, taken as a whole, other than any effects
or changes arising out of, resulting from or relating to (i) general
economic, financial or industry conditions, or (ii) a reduction in or
cancellation of customer orders or contracts other than a Material
Cancellation (as defined in paragraph (c) of this Section 8.14).
(b) "PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on
or change in the business, results of operations or financial condition of
Parent and its Subsidiaries, taken as a whole, other than any effects or
changes arising out of, resulting from or relating to (i) general economic,
financial or industry conditions, or (ii) a reduction in or cancellation of
customer orders or contracts other than a Material Cancellation.
(c) "MATERIAL CANCELLATION" means a reduction in or cancellation of
orders or contracts by a customer of the Company or Parent, as the case may
be, that results from: (i) the relevant company's products being designed
out of one or more of such customer's products, systems or platforms; (ii) a
dispute between the relevant company and such customer; (iii) discovery of a
defect in the relevant company's products that were being supplied to or
ordered by such customer; (iv) determination by a customer that the relevant
company's products are not of a quality adequate for use in such customer's
products, systems or platforms; (v) the relevant company's failure otherwise
to perform to the satisfaction of such customer and/or (v) any substantially
similar event or circumstance.
(d) "SUBSIDIARY" of a party means any corporation or other organization,
whether incorporated or unincorporated, of which such party directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of
the board of directors or others performing similar functions with respect
to such corporation or other organization, or any organization of which such
party is a general partner.
(e) "SIGNIFICANT SUBSIDIARIES" of a party means Subsidiaries of such
party which constitute "significant subsidiaries" under Rule 405 promulgated
by the Commission under the Securities Act.
8.15 KNOWLEDGE. For purposes of this Agreement, (a) "to the knowledge of
the Company" or words of like import shall mean to the knowledge of ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇, and (b) "to the knowledge of Parent" or words
of like import shall mean to the knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ ▇▇▇▇.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year set forth in the
Preamble hereto.
COMPANY: RF Power Products, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Title: President, CEO & Chairman of the Board
-----------------------------------------
MERGER SUB: Warpspeed, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
----------------------------------------
PARENT: Advanced Energy Industries, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President, CEO & Chairman of the Board
-----------------------------------------