Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
dated as of February 1, 2000
by and among
INVITROGEN CORPORATION
a Delaware Corporation
RESEARCH GENETICS, INC.
an Alabama Corporation
and
RG MERGER CORPORATION
a Delaware Corporation
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TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER.............................................................................................2
1.1 The Merger......................................................................................2
1.2 Effective Time..................................................................................2
1.3 Closing of the Merger...........................................................................2
1.4 Effects of the Merger...........................................................................2
1.5 Certificate of Incorporation and Bylaws.........................................................2
1.6 Directors.......................................................................................2
1.7 Officers........................................................................................3
1.8 Tax Consequences................................................................................3
1.9 Accounting Treatment............................................................................3
ARTICLE II CONVERSION OF SECURITIES..............................................................................3
2.1 Merger Effect...................................................................................3
2.2 Stock Transfer Books............................................................................4
2.3 Appraisal Rights................................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................4
3.1 Organization, Standing and Power................................................................4
3.2 Company Capital Structure.......................................................................5
3.3 Authority; Required Filings and Consents........................................................5
3.4 Financial Statements............................................................................6
3.5 Absence of Undisclosed Liabilities..............................................................6
3.6 Absence of Certain Changes or Events............................................................7
3.7 Taxes...........................................................................................8
3.8 Tangible Assets and Real Property...............................................................8
3.9 Intellectual Property..........................................................................10
3.10 Bank Accounts..................................................................................11
3.11 Contracts......................................................................................11
3.12 Labor Difficulties.............................................................................13
3.13 Trade Regulation; Customers and Distributors...................................................13
3.14 Environmental Matters..........................................................................13
3.15 Employee Benefit Plans.........................................................................14
3.16 Compliance with Laws...........................................................................15
3.17 Employees and Consultants......................................................................15
3.18 Litigation.....................................................................................15
3.19 Restrictions on Business Activities............................................................15
3.20 Governmental Authorization.....................................................................15
3.21 Insurance......................................................................................15
3.22 Interested Party Transactions..................................................................16
3.23 No Existing Discussions........................................................................16
3.24 Real Property Holding Corporation..............................................................16
3.25 Corporate Documents............................................................................16
3.26 No Misrepresentation...........................................................................16
3.27 Brokers' and Finders' Fees.....................................................................17
3.28 Inventories....................................................................................17
3.29 Accounts Receivable............................................................................17
3.30 Employees & Suppliers..........................................................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB...............................................17
4.1 Organization...................................................................................17
4.2 Parent Capital Structure.......................................................................18
4.3 Authority; No Conflict; Required Filings and Consents..........................................18
4.4 SEC Filings; Financial Statements..............................................................19
4.5 Absence of Certain Changes or Events...........................................................20
4.6 Brokers' and Finders' Fees.....................................................................20
4.7 Tax Treatment; Pooling.........................................................................20
ARTICLE V COVENANTS RELATED TO CONDUCT OF BUSINESS..............................................................20
5.1 Conduct of Business of the Company.............................................................20
5.2 Conduct of Business of Parent..................................................................23
ARTICLE VI ADDITIONAL AGREEMENTS................................................................................23
6.1 Access to Information..........................................................................23
6.2 The Stockholders' Meeting......................................................................24
6.3 Legal Conditions to Merger.....................................................................24
6.4 Payment of Taxes...............................................................................25
6.5 Consents.......................................................................................25
6.6 Employee Benefits; Employee Issues.............................................................25
6.7 Reports........................................................................................25
6.8 Notification of Certain Matters................................................................25
6.9 Best Efforts...................................................................................26
6.10 Acquisition Proposals..........................................................................26
6.11 Publicity......................................................................................26
6.12 Incentive Compensation Plan....................................................................27
6.13 Termination of Personal Guaranties.............................................................27
6.14 Indemnification Agreements.....................................................................27
6.15 HSR Act........................................................................................27
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER............................................................27
7.1 Closing Conditions.............................................................................27
7.2 Additional Conditions to Obligations of Parent and MergerSub...................................28
7.3 Additional Conditions to Obligations of the Company............................................30
ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION PROVISIONS..........................30
8.1 Survival of Representations and Warranties.....................................................30
8.2 Indemnification of the Parent..................................................................31
8.3 Limits on Indemnification and Liability........................................................31
8.4 Defense of Third Party Claims..................................................................32
8.5 Escrow.........................................................................................33
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ARTICLE IX TERMINATION; AMENDMENT; WAIVER.......................................................................33
9.1 Termination....................................................................................33
9.2 Effect of the Termination......................................................................33
9.3 Fees and Expenses..............................................................................34
9.4 Amendment......................................................................................34
9.5 Extension; Waiver..............................................................................34
ARTICLE X MISCELLANEOUS.........................................................................................35
10.1 Entire Agreement; Assignment...................................................................35
10.2 Notices........................................................................................35
10.3 Governing Law..................................................................................36
10.4 Descriptive Headings...........................................................................36
10.5 Parties in Interest............................................................................36
10.6 Severability...................................................................................36
10.7 Specific Performance...........................................................................37
10.8 Counterparts...................................................................................37
10.9 Interpretation.................................................................................37
10.10 Definitions....................................................................................38
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of February 1, 2000, by
and among RESEARCH GENETICS, INC., an Alabama corporation (the "COMPANY"),
INVITROGEN CORPORATION, a Delaware corporation ("PARENT"), and RG MERGER
CORPORATION, a Delaware corporation and a direct wholly-owned subsidiary of
Parent ("MERGERSUB").
WHEREAS, the Boards of Directors of each of Parent, MergerSub, and the
Company, have approved, and deem it fair to, advisable, and in the best
interests of their respective stockholders to proceed with the acquisition of
the Company by Parent and MergerSub upon the terms and consideration set forth
herein;
WHEREAS, in furtherance thereof, it is proposed that MergerSub acquire
all of the issued and outstanding shares ("SHARES") of common stock of the
Company ("COMPANY COMMON STOCK"), in exchange for an aggregate of 3,200,000
shares of Parent (the "MERGER SHARES"), upon the terms and subject to the
conditions set forth herein;
WHEREAS, also in furtherance of such acquisition thereof, the Board of
Directors of each of Parent, MergerSub, and the Company have approved the terms
and provisions of this Agreement and the Merger pursuant to which MergerSub
shall merge with and into the Company and the outstanding Shares shall be
converted into the right to receive the Merger Shares, all in accordance with
Delaware General Corporation Law (the "DGCL"), the Code of Alabama (the "AC")
and upon the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company (the "COMPANY BOARD")
has determined that the consideration to be paid for each Share and the terms
and provisions of the Merger are fair to the holders of such Shares and has
resolved to recommend that the holders of such Shares approve and adopt this
Agreement and the Merger upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Company, Parent, and MergerSub desire to make certain
representations, warranties, covenants, and agreements in connection with the
Merger;
WHEREAS, as a further inducement for Parent and MergerSub to enter into
this Agreement, certain key employees and equity holders in the Company will
execute and deliver Non-Solicitation and Non-Competition Agreements effective as
of the closing; and
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants, and agreements herein contained, and
intending to be legally bound hereby, the Company, Parent, and MergerSub hereby
agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time and upon the terms and subject to
the conditions of this Agreement and in accordance with Delaware General
Corporation Law and the AC, the Company shall be merged with and into MergerSub
(the "MERGER"). Following the Merger, MergerSub shall continue as the surviving
corporation (the "SURVIVING CORPORATION") and the separate corporate existence
of the Company shall cease.
1.2 EFFECTIVE TIME. Subject to the provisions of this Agreement,
Parent, MergerSub, and the Company shall cause the Merger to be consummated by
filing an appropriate Agreement of Merger or other appropriate documents (the
"CERTIFICATE OF MERGER") with the Secretaries of State of the States of Delaware
and Alabama, in such form as required by, and executed in accordance with, the
relevant provisions of the DGCL and the AC, as soon as practicable on or after
the Closing Date. The Merger shall become effective upon such filing or at such
time thereafter as is provided in the Certificate of Merger (the "EFFECTIVE
TIME").
1.3 CLOSING OF THE MERGER. The closing of the Merger (the "CLOSING")
will take place at a time and on a date to be specified by the parties hereto
(the "CLOSING DATE"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VII (other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver of those conditions), at the offices of
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other time, date, or place as agreed to in writing
by the parties hereto.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the DGCL and the AC. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights, privileges,
powers, and franchises of the Company and MergerSub shall vest in the Surviving
Corporation, and all debts, liabilities, and duties of the Company and MergerSub
shall become the debts, liabilities, and duties of the Surviving Corporation.
1.5 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) Effective immediately following the Merger, the
certificate of incorporation of MergerSub, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable Law.
(b) Effective immediately following the Merger, the bylaws of
MergerSub, as in effect immediately prior to the Effective Time, shall be the
bylaws of the Surviving Corporation until amended in accordance with applicable
law.
1.6 DIRECTORS. The directors of MergerSub immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation, to
hold office in accordance with the certificate of incorporation and bylaws of
the Surviving Corporation until their successors are duly elected or appointed
and qualified or until their earlier death, resignation, or removal.
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1.7 OFFICERS. The officers of MergerSub immediately prior to the
Effective Time, shall be the initial officers of the Surviving Corporation, with
the automatic addition and appointment of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. as Chief
Executive Officer and President of MergerSub effective as of the Effective Time,
to hold office in accordance with the certificate of incorporation and bylaws of
the Surviving Corporation until their successors are duly elected or appointed
and qualified or until their earlier death, resignation, or removal.
1.8 TAX CONSEQUENCES. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.9 ACCOUNTING TREATMENT. For accounting purposes, the Merger is
intended to be treated as a "pooling of interests."
ARTICLE II
CONVERSION OF SECURITIES
2.1 MERGER EFFECT. As of the Effective Time, by virtue of the Merger
and without any action on the part of the holders of any Shares or any shares of
capital stock of MergerSub:
(a) MERGERSUB CAPITAL STOCK. Each issued and outstanding share
of common stock of MergerSub shall remain outstanding as one fully paid and
nonassessable share of common stock of the Surviving Corporation and shall not
be converted into any other securities or cash pursuant to the Merger. No stock
of MergerSub will be issued pursuant to the Merger.
(b) Each issued and outstanding Share shall be converted into
and exchanged for that number of validly issued, fully paid and nonassessable
shares of Parent equal to the Exchange Ratio (as defined in Section 2.1(c)) (the
"SHARE CONSIDERATION"), provided that 320,000 of such Merger Shares (taken PRO
RATA from the quantities otherwise deliverable to each Company stockholder)
shall be deposited into escrow in accordance with Section 8.5 hereof.
(c) EXCHANGE RATIO. The "Exchange Ratio" shall mean the
quotient obtained by dividing (x) 3,200,000 by (y) the Company Total Shares. As
used herein, the "COMPANY TOTAL SHARES" shall mean that number of Shares of
Company Common Stock that are outstanding immediately prior to the Effective
Time.
(d) No fractional shares of Parent Common Stock shall be
issued in connection with the Merger, and no certificates for any such
fractional shares shall be issued. In lieu of such fractional shares, any holder
of Shares who would otherwise be entitled to receive a fraction of a share of
Parent Common Stock shall, upon delivery of such stockholder's Share, be paid in
cash the dollar amount (rounded to the nearest whole cent), without interest,
determined by multiplying such fraction by the closing price of Parent Common
Stock on the business day immediately preceding the Effective Time.
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2.2 STOCK TRANSFER BOOKS. The stock transfer books of the Company shall
be closed immediately upon the Effective Time and there shall be no further
registration of transfers of Shares thereafter on the records of the Company.
2.3 APPRAISAL RIGHTS. Notwithstanding any other provision of this
Agreement to the contrary, Shares (the "DISSENTING SHARES") that are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders who did not vote in favor of the Merger and who comply with all of
the relevant provisions of Article 13, Title 10 of the AC (the "DISSENTING
STOCKHOLDERS") shall not be converted into or be exchangeable for the right to
receive the Share Consideration, unless and until such holders shall have failed
to perfect or shall have effectively withdrawn or lost their rights under the
AC. If any Dissenting Stockholder shall have failed to perfect or shall have
effectively withdrawn or lost such right, such holder's Shares shall thereupon
be converted into and become exchangeable for the right to receive, as of the
Effective Time, the Share Consideration without any interest thereon. The
Company shall give Parent (i) prompt notice of any written demands for appraisal
of any Shares, attempted withdrawals of such demands, and any other instruments
served pursuant to the AC and received by the Company relating to stockholders'
rights of appraisal, and (ii) the opportunity to direct all negotiations and
proceedings in respect of demands for appraisal under the AC. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of Parent, voluntarily make any payment in respect of, or settle or
offer to settle, any such demand for payment. If any Dissenting Stockholder
shall fail to perfect or shall have effectively withdrawn or lost the right to
dissent, the Shares held by such Dissenting Stockholder shall thereupon be
treated as though such Shares had been converted into the right to receive the
Share Consideration pursuant to Section 2.1(b).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule separately delivered by
the Company to Parent prior to the execution of this Agreement (the "COMPANY
DISCLOSURE SCHEDULE") (each section of which qualifies the correspondingly
numbered representation and warranty or covenant to the extent specified
therein), the Company hereby represents and warrants to each of Parent and
MergerSub as follows:
3.1 ORGANIZATION, STANDING AND POWER. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power to own,
lease and operate its properties and to carry on its business as currently being
conducted and as currently proposed to be conducted, and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
nature of its operations requires such qualification. The Company has delivered
true and correct copies of the articles of incorporation and bylaws of the
Company, each as amended to date, to Parent. The Company is not in violation of
any of the provisions of its articles of incorporation, bylaws or other charter
documents.
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3.2 COMPANY CAPITAL STRUCTURE.
(a) The authorized capital stock of the Company consists of
100,000 shares of the Company Common Stock. As of the date hereof and the
Closing Date, 50,000 shares of the Company Common Stock are and will be issued
and outstanding. To the Company's knowledge, all such outstanding shares of the
Company Common Stock are held by the holder thereof free and clear of all liens,
claims and encumbrances. All such outstanding shares of the Company Common Stock
have been duly authorized, validly issued fully paid and are nonassessable, have
been issued in compliance with all applicable federal and state securities laws,
and, are subject to no preemptive rights or rights of first refusal created by
statute, the charter documents of the Company or any agreement to which the
Company is a party or by which it is bound.
(b) Except as disclosed in Section 3.2(a), there are (i) no
equity or debt securities of any class of the Company, or any securities
exchangeable into or exercisable for such equity or debt securities, issued,
reserved for issuance, or outstanding and (ii) no outstanding subscriptions,
options, warrants, puts, calls, rights, or other commitments or agreements of
any character to which the Company is a party or by which it is bound obligating
the Company to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any equity or debt securities
of the Company or obligating the Company to grant, extend, accelerate the
vesting of, change the exercise price of, or otherwise amend or enter into any
such option, warrant, call, right, commitment or agreement. Except as set forth
on the Company Disclosure Schedule, there are no contracts, commitments or
agreements relating to voting, purchase or sale of the Company's capital stock
to which the Company is a party.
(c) The Company has no subsidiaries. Except as set forth in
Section 3.2(c) of the Company Disclosure Schedule, the Company does not own,
directly or indirectly any equity or similar interest in any corporation,
partnership, joint venture or other business association or entity.
3.3 AUTHORITY; REQUIRED FILINGS AND CONSENTS.
(a) The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Subject to obtaining the consent of the Company's
stockholders to the Merger as contemplated hereby, the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company and its stockholders. This Agreement and all other documents expressly
required to be executed and delivered by the Company hereunder, including the
Certificate of Merger (collectively, the "TRANSACTION DOCUMENTS"), have been or
will be duly executed and delivered by the Company and constitute or will
constitute the valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to creditors' rights generally, and general
principles of equity.
(b) The execution and delivery by the Company of this
Agreement and the other Transaction Documents to which it is or will be a party
do not, and the consummation of
5
the transactions contemplated hereby and thereby will not, (i) conflict with, or
result in any violation or breach of any provision of, the articles of
incorporation or bylaws of the Company, (ii) result in any violation or breach
of or constitute (with or without notice or lapse of time, or both) a default
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit under, any note, mortgage, indenture,
lease, contract or other agreement or obligation to which the Company is a party
or by which the Company, or any of its properties or assets may be bound, or
(iii) conflict with or violate any permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its respective properties or assets, other than a
conflict or violation which would not have a Material Adverse Effect on the
Company.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality ("GOVERNMENTAL
ENTITY") is required by or with respect to the Company in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger with
the Delaware and Alabama Secretaries of State in accordance with the DGCL and
the AC, (ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws or the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"), if applicable, and (iii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not prevent or materially alter or delay any of the transactions
contemplated by this Agreement.
3.4 FINANCIAL STATEMENTS. The Company has delivered to Parent its
audited financial statements for each of the fiscal years ended June 30, 1997,
1998 and 1999 and its unaudited financial statements for the quarter ended
September 30, 1999 (collectively, the "COMPANY FINANCIAL STATEMENTS"). The
Company Financial Statements are correct in all material respects and were
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved. The Company Financial Statements present fairly the financial position
of the Company in all material respects as of the respective dates and the
results of its operations and cash flows for the periods indicated. The Company
has maintained a standard system of accounting established and administered in
accordance with GAAP. Within two business days of its receipt of the unaudited
financial statements for the quarter ended December 31, 1999, the Company will
provide copies thereof to Parent.
3.5 ABSENCE OF UNDISCLOSED LIABILITIES. The Company does not have any
liabilities, either accrued or contingent (whether or not required to be
reflected in financial statements in accordance with GAAP), and whether due or
to become due, other than (i) liabilities reflected or provided for on the
balance sheet as of September 30, 1999 (the "COMPANY BALANCE SHEET") contained
in the Company Financial Statements, (ii) liabilities specifically described in
this Agreement or the Company Disclosure Schedule, and (iii) normal or recurring
liabilities incurred since September 30, 1999 in the ordinary course of business
consistent with past practices.
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3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1999, the
Company has conducted its business in the ordinary course and in a manner
consistent with past practices and, since such date, the Company has not:
(a) suffered any event or occurrence that has had, or is
reasonably likely to have, a Material Adverse Effect on the Company;
(b) suffered any damage, destruction or loss, whether covered
by insurance or not, which in the aggregate has had, or is reasonably likely to
have, a Material Adverse Effect on the Company;
(c) granted any increase in the compensation payable or to
become payable by the Company to its officers or employees other than increases
in the ordinary course of business to employees who are not officers;
(d) declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of its capital stock or declared any
direct or indirect redemption, retirement, purchase or other acquisition of such
shares;
(e) issued any shares of its capital stock or any warrants,
rights, or options for, or entered into any commitment relating to such capital
stock;
(f) made any change in the accounting methods or practices it
follows, whether for general financial or tax purposes, or any change in
depreciation or amortization policies or rates;
(g) sold, leased, abandoned or otherwise disposed of any real
property, machinery, equipment or other operating property other than in the
ordinary course of business;
(h) sold, assigned, transferred, licensed or otherwise
disposed of any patent, patent right, trademark, trade name, brand name,
copyright (or pending application for any patent, trademark or copyright),
invention, work of authorship, process, know-how, formula or trade secret or
interest thereunder or other material intangible asset;
(i) entered into any commitment or transaction (including
without limitation any borrowing) other than commitments or transactions entered
into in the ordinary course of business that are not reasonably likely to have a
Material Adverse Effect on the Company;
(j) permitted or allowed any of its property or assets to be
subjected to any new mortgage, deed of trust, pledge, lien, security interest or
other encumbrance of any kind, except for liens for current taxes not yet due
and purchase money security interests incurred in the ordinary course of
business;
(k) made any capital expenditure or commitment for additions
to property, plant or equipment individually in excess of $10,000, or, in the
aggregate, in excess of $50,000;
(l) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets to, or entered into any agreement
or arrangement with, any of its officers,
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directors or stockholders or any affiliate of any of the foregoing, other than
employee compensation and benefits and reimbursement of employment related
business expenses incurred in the ordinary course of business; or
(m) agreed to take any action described in this Section 3.6 or
which would constitute a breach of any of the representations or warranties of
the Company contained in this Agreement.
3.7 TAXES.
(a) For purposes of this Agreement, a "TAX" or, collectively,
"TAXES," means any and all federal, state and local taxes of any country,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts
and any obligations under any agreements or arrangements with any other person
with respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) The Company has prepared and timely filed all returns,
estimates, information statements and reports required to be filed with any
taxing authority ("RETURNS") relating to any and all Taxes concerning or
attributable to the Company or its operations and such Returns are true and
correct in all material respects and have been completed in all material
respects in accordance with applicable law.
(c) The Company, as of the Closing Date, (i) will have paid
all Taxes it is required to pay prior to the Closing Date and (ii) will have
withheld with respect to its employees all Taxes required to be withheld.
(d) There is no Tax deficiency outstanding or assessed or
proposed against the Company that is not reflected as an estimated liability on
the Company Balance Sheet or set forth on the Company Disclosure Schedule, nor
has the Company executed any agreements or waivers extending any statute of
limitations on or extending the period for the assessment or collection of any
Tax.
(e) The Company has no liabilities for unpaid Taxes that have
not been accrued for or reserved on the Company Balance Sheet, whether asserted
or unasserted, contingent or otherwise.
(f) The Company is not a party to any tax-sharing agreement or
similar arrangement with any other party, or any contractual obligation to pay
any Tax obligations of, or with respect to any transaction relating to, any
other person or to indemnify any other person with respect to any Tax.
3.8 TANGIBLE ASSETS AND REAL PROPERTY.
(a) The Company owns or leases all tangible assets and
properties which are used in the conduct of its business as currently conducted
or which are reflected on the Company
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Balance Sheet or acquired since the date of the Company Balance Sheet (the
"TANGIBLE ASSETS"). The Tangible Assets are in good operating condition and
repair, normal wear and tear excepted. The Company has valid and marketable
title to all Tangible Assets that it owns (except properties, interests in
properties and assets sold or otherwise disposed of since the date of the
Company Balance Sheet in the ordinary course of business), free and clear of all
mortgages, liens, pledges, charges or encumbrances of any kind or character,
except as reflected in the Company Financial Statements and except for liens for
current Taxes not yet due and payable. Assuming the due execution and delivery
thereof by the other parties thereto, all leases of Tangible Assets ("PERSONAL
PROPERTY LEASES") to which the Company is a party are in full force and effect
and valid, binding and enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to creditors' rights
generally, and general principles of equity. The Company Disclosure Schedule
sets forth a true and correct list of all such Personal Property Leases, and
true and correct copies of all such Personal Property Leases have been made
available to Parent.
(b) The Company Disclosure Schedule sets forth a true and
complete list of all real property owned by the Company (the "OWNED PROPERTY").
With respect to the Owned Property:
(i) Seller has good and marketable title to the Owned
Property, and, except as set forth on the Company Disclosure Schedule, free and
clear of any mortgage, lien, pledge, change, easement, covenant, or other
encumbrance or restriction, except for installments of special assessments not
yet delinquent and recorded easements, covenants, and other restrictions which
do not impair the current use, occupancy, or value, or the marketability of
title, of the property subject thereto;
(ii) there are no pending or, to the knowledge of the
Company threatened condemnation proceedings, lawsuits, or administrative actions
relating to the Owned Property or other matters affecting materially and
adversely the current use, occupancy, or value thereof;
(iii) the legal description of the Owned Property
contained in the deed thereof describes such parcel fully and adequately, the
buildings and improvements are located within the boundary lines of the
described parcels of land, are not in violation of applicable setback
requirements, zoning laws, and ordinances (and none of the properties or
buildings or improvements thereon are subject to "permitted non-conforming use"
or "permitted non-conforming structure" classifications), and do not encroach on
any easement which may burden the land, and the land does not serve any
adjoining property for any purpose inconsistent with the use of the land, and
the property is not located within any flood plain or subject to any similar
type restriction for which any permits or licenses necessary to the use thereof
have not been obtained;
(iv) except as set forth on the Company Disclosure
Schedule, there are no leases, subleases, licenses, concessions, or other
agreements, written or oral, granting to any party or parties the right of use
or occupancy of any portion of the parcel of Owned Property;
9
(v) there are no outstanding options or rights of
first refusal to purchase the Owned Property, or any portion thereof or interest
therein; and
(vi) all facilities located on the Owned Property are
supplied with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are adequate in accordance with all
applicable laws, ordinances, rules, and regulations and are provided via public
roads or via permanent, irrevocable, appurtenant easements benefiting the Owned
Property.
(c) The Company Disclosure Schedule sets forth a true and
complete list of all real property leased by the Company. Assuming the due
execution and delivery thereof by the other parties thereto, all such real
property leases (the "LEASES") are in full force and effect and valid, binding
and enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to creditors' rights generally, and general
principles of equity. True and correct copies all such of Leases have been made
available to Parent.
3.9 INTELLECTUAL PROPERTY.
(a) The Company owns, or is licensed or otherwise possesses
legally enforceable rights to use, all patents, trademarks, trade names, service
marks and copyrights, and any applications for and registrations of such
patents, trademarks, trade names, service marks, and copyrights and all
processes, genes, compounds, organisms, reagents, chemicals, formulas, methods,
schematics, technology, know-how, computer software programs, data or
applications and tangible or intangible proprietary information or material that
are used in the business of the Company as currently conducted, or as currently
proposed to be conducted, free and clear of all liens, claims or encumbrances
(all of which are referred to as the "COMPANY INTELLECTUAL PROPERTY RIGHTS").
The foregoing representation as it relates to Licensed Intellectual Property (as
defined below) is limited to the Company's interest pursuant to licenses from
third parties, each of which is in full force and effect, is valid, binding and
enforceable and grants the Company such rights to such intellectual property as
are used in the business of the Company as currently conducted or currently
proposed to be conducted pursuant to the Company's current business plan.
(b) The Company Disclosure Schedule contains an accurate and
complete description of (i) all patents and patent applications and all
trademarks, trade names, service marks and registered copyrights included in the
Company Intellectual Property Rights, including the jurisdictions in which each
such Company Intellectual Property Right has been issued or registered or in
which any such application for such issuance and registration has been filed,
(ii) all licenses and sublicenses, distribution agreements and other agreements
to which the Company is a party and pursuant to which any person is authorized
to use any the Company Intellectual Property Rights or has the right to
manufacture, reproduce, market or exploit any product or service of the Company
(a "COMPANY PRODUCT") or any adaptation, translation or derivative work based on
any Company Product or any portion thereof, other than nonexclusive end-user
licenses entered into in the ordinary course of business pursuant to the
Company's standard forms of license agreement, (iii) all material licenses,
sublicenses and other agreements
10
to which the Company is a party and pursuant to which the Company is authorized
to use any third party technology, trade secret, know-how, process, patent,
trademark or copyright, including software ("LICENSED INTELLECTUAL PROPERTY"),
which is used in the manufacture of, incorporated in or forms a part of any
Company Product (other than licenses for off-the-shelf software used in the
conduct of the Company's business), (iv) all joint development agreements to
which the Company is a party, and (v) all agreements with Governmental Entities
or other third parties pursuant to which the Company has obtained funding for
research and development activities.
(c) The Company is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in breach of any material license, sublicense or other
agreement relating to the Company Intellectual Property Rights or Licensed
Intellectual Property nor will such execution and delivery of this Agreement or
the performance of such obligations render any such material license, sublicense
or other agreement terminable.
(d) All patents and registered trademarks, service marks and
copyrights claimed by or issued to the Company which relate to any Company
Product are valid, currently maintained and subsisting. The manufacturing,
marketing, licensing or sale of any Company Product does not infringe any
patent, trademark, service ▇▇▇▇, copyright, trade secret or other proprietary
right of any third party. The Company (i) has not received notice that it has
been sued in any suit, action or proceeding which involves a claim of
infringement of any patent, trademark, service ▇▇▇▇, copyright, trade secret or
other proprietary right of any third party and (ii) has no knowledge of any
claim challenging or questioning the validity or effectiveness of any license or
agreement relating to any the Company Intellectual Property Rights or Licensed
Intellectual Property.
(e) All designs, drawings, specifications, source code, object
code, documentation, flow charts, data and diagrams incorporated, embodied or
reflected in any Company Product at any stage of its development (the "COMPANY
COMPONENTS") were written, developed and created solely and exclusively by (i)
employees of the Company without the assistance of any third party which have
been assigned, or are assignable, to the Company by written agreement to the
extent permitted by law, or (ii) third parties who assigned ownership of their
rights with respect thereto to the Company by means of valid and enforceable
agreements, which are listed and described in the Company Disclosure Schedule
and copies of which have been made available to Parent.
3.10 BANK ACCOUNTS. The Company Disclosure Schedule sets forth the
names and locations of all banks and other financial institutions at which the
Company maintains accounts of any nature, the type of accounts maintained at
each such institution and the names of all persons authorized to draw thereon or
make withdrawals therefrom.
3.11 CONTRACTS.
(a) Except as set forth in the Company Disclosure Schedule,
the Company is not a party or subject to any agreement, obligation or
commitment, written or oral:
11
(i) that calls for any fixed or contingent payment or
expenditure or any related series of fixed or contingent payments or
expenditures by or to the Company totaling more than $20,000 in any twelve-month
period;
(ii) with agents, advisors, salesmen, sales
representatives, independent contractors or consultants;
(iii) that restricts the Company from carrying on
anywhere in the world its business or any portion thereof as currently
conducted;
(iv) to provide funds to or to make any investment in
any other person or entity (in the form of a loan, capital contribution or
otherwise);
(v) with respect to obligations as guarantor, surety,
co-signer, endorser, co-maker, indemnitor or otherwise in respect of the
obligation of any other person or entity;
(vi) for any line of credit, standby financing,
revolving credit or other similar financing arrangement;
(vii) with any distributor, original equipment
manufacturer, value added remarketer or other person for the distribution of any
of Company Products; or
(viii) regarding any merger or other reorganization
or any joint venture (including, but not limited to, joint ventures involving
supply, research and development or manufacturing).
(b) No party to any such contract, agreement or instrument has
expressed its intention to any officer of the Company to cancel, withdraw,
modify or amend such contract, agreement or instrument, nor does the Company
otherwise know of such an intention.
(c) The Company is not in default under or in breach or
violation of, nor is there any valid basis for any claim of default by the
Company under, or breach or violation by the Company of, any contract,
commitment or restriction to which the Company is a party or by which the
Company or any of its properties or assets is bound or affected, except where
such default, or breach or violation would not have a Material Adverse Effect on
the Company. To the Company's knowledge, no other party is in default under or
in breach or violation of, nor is there any valid basis for any claim of default
by any other party under, or any breach or violation by any other party of, any
contract, commitment, or restriction to which the Company is a party or by which
the Company or any of its properties or assets is bound or affected, except
where such default, or breach or violation would not have a Material Adverse
Effect on the Company. The Company has no reason to believe that it will not be
able to comply with the terms or conditions of any contract to which it is a
party without an increase in its technical or personnel resources allocated to
such contract compared to the resources budgeted by the Company as of the date
of this Agreement or any other increase in the cost of satisfying any covenants
or conditions under such contract compared to the costs budgeted by the Company
as of the date of this Agreement.
12
(d) Each of the contracts, agreements, commitments and
instruments (written or oral) which is material to the Company's business as
currently conducted and as currently proposed to be conducted is listed on the
Company Disclosure Schedule and marked with an asterisk (each a "MATERIAL
CONTRACT" and collectively the "MATERIAL CONTRACTS"). The Company Disclosure
Schedule indicates with a double asterisk each Material Contract requiring the
prior consent of any party thereto to effect the transactions contemplated by
this Agreement.
3.12 LABOR DIFFICULTIES. The Company is not engaged in any unfair labor
practice or in violation of any applicable laws respecting employment,
employment practices or terms and conditions of employment. There is no unfair
labor practice complaint against the Company pending or to the Company's
knowledge, threatened before any Governmental Entity. There is no strike, labor
dispute, slowdown, or stoppage pending or to the Company's knowledge, threatened
against the Company. The Company is not now and has never been subject to any
union organizing activities. The Company has not experienced any work stoppage
or other material labor difficulty.
3.13 TRADE REGULATION; CUSTOMERS AND DISTRIBUTORS. The Company has not,
within the past two years, terminated its relationship with or refused to ship
Company Products to any dealer, distributor, third party marketing entity or
customer which had theretofore paid or been obligated to pay the Company in
excess of $10,000 over any consecutive twelve-month period. To its knowledge,
all of the prices charged by the Company in connection with the marketing or
sale of any of its products or services have been in compliance with all
applicable laws and regulations. No claims have been asserted or, to the
Company's knowledge, threatened against the Company with respect to the wrongful
termination of any dealer, distributor or any other marketing entity,
discriminatory pricing, price fixing, unfair competition, false advertising, or
any other material violation of any laws or regulations relating to
anti-competitive practices or unfair trade practices of any kind, and, to the
Company's knowledge, no specific situation, set of facts, or occurrence provides
any reasonable basis for any such claim. Except as set forth in the Company
Disclosure Schedule, no customer or distributor accounted for more than 5% of
the Company's sales during the most recently completed fiscal year. No customer
or distributor which accounted for revenue to the Company during its most
recently completed fiscal year of $100,000 or more has canceled, or otherwise
terminated its relationship with the Company during the last twelve months, nor
decreased its usage or purchase of the services or products of the Company
during that period by more than 20% from the prior twelve-month period. To the
Company's knowledge, no customer or distributor of the Company has any plan or
intention to terminate or cancel its relationship with the Company or to
decrease or limit its usage or purchase of the Company's Products by more than
20% from the prior twelve-month period.
3.14 ENVIRONMENTAL MATTERS.
(a) As of the date hereof, no amount of any substance that has
been designated by applicable law or regulation to be radioactive, toxic,
hazardous or otherwise a danger to health or the environment, excluding office,
janitorial and similar substances (a "HAZARDOUS MATERIAL"), is present, as a
result of the actions of the Company or, to the Company's knowledge, as a result
of any actions of any third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and surface water, that
the Company has at any time owned, operated, occupied or leased, except for
Hazardous Materials
13
which are stored in appropriate containers at the Company's facilities for use
in the Company's business in compliance with applicable environmental laws and
regulations. To the knowledge of the Company, no underground storage tanks are
present under any property that the Company has at any time owned, operated,
occupied or leased.
(b) At no time has the Company transported, stored, used,
manufactured, disposed of, released or exposed its employees or others to
Hazardous Materials (collectively, "HAZARDOUS MATERIALS ACTIVITIES") in
violation of any law, rule, regulation or treaty promulgated by any Governmental
Entity.
(c) The Company currently holds all environmental approvals,
permits, licenses, clearances and consents (the "ENVIRONMENTAL PERMITS")
necessary for the conduct of its business as such businesses is currently being
conducted.
(d) No action, proceeding, writ, injunction or claim is
pending or, to the knowledge of the Company, threatened concerning any
Environmental Permit or any Hazardous Materials Activity of the Company. The
Company is not aware of any fact or circumstance which could reasonably be
expected to involve the Company in any environmental litigation or impose upon
the Company any material liability concerning Hazardous Materials Activities.
3.15 EMPLOYEE BENEFIT PLANS.
(a) The Company has set forth in the Company Disclosure
Schedule (i) all employee benefit plans, (ii) all bonus, stock option, stock
purchase, incentive, deferred compensation, supplemental retirement, severance
and other similar employee benefit plans, and (iii) all unexpired severance
agreements, written or otherwise, for the benefit of, or relating to, any
current or former employee of the Company (individually, a "COMPANY EMPLOYEE
PLAN," and collectively, the "COMPANY EMPLOYEE PLANS").
(b) With respect to each Company Employee Plan, the Company
has made available to Parent a true and correct copy of (i) such Company
Employee Plan and (ii) each trust agreement and group annuity contract, if any,
relating to such Company Employee Plan.
(c) With respect to the Company Employee Plans, individually
and in the aggregate, no event has occurred, and there exists no condition or
set of circumstances in connection with which the Company could be subject to
any liability which would have a Material Adverse Effect on the Company.
(d) With respect to the Company Employee Plans, individually
and in the aggregate, there are no funded benefit obligations for which
contributions have not been made or properly accrued and there are no unfunded
benefit obligations which have not been accounted for by reserves, or otherwise
properly footnoted, in accordance with GAAP on the financial statements or books
of the Company.
(e) The Company is not a party to any oral or written (i)
union or collective bargaining agreement, (ii) agreement with any officer or
other key employee of the Company, the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving the Company of the nature contemplated by this
14
Agreement, (iii) agreement with any officer of the Company providing any term of
employment or compensation guarantee or for the payment of compensation in
excess of $75,000 per annum, or (iv) agreement or plan, including any stock
option plan, stock appreciation right plan, restricted stock plan or stock
purchase plan, any of the benefits of which will be increased, or the vesting of
the benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement.
3.16 COMPLIANCE WITH LAWS. Except for violations which have not had and
could not reasonably be expected to have a Material Adverse Effect on the
Company, the Company has complied with, is not in violation of, and has not
received any notices of violation with respect to, any statute, law or
regulation applicable to the ownership or operation of its business.
3.17 EMPLOYEES AND CONSULTANTS. The Company Disclosure Schedule
contains a list of the names of all employees and consultants of the Company as
of the date of this Agreement and their salaries or wages, other compensation,
dates of employment and positions. Each employee is terminable "at will" and
there are no agreements or understandings between the Company and any of its
employees that his/her employment will be for any particular period.
3.18 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or known investigation pending before any agency, court or tribunal
or, to the Company's knowledge, threatened against the Company or any of its
properties or officers or directors (in their capacities as such). There is no
judgment, decree or order against the Company, or to the Company's knowledge,
any of the Company's stockholders, directors or officers (in their capacities as
such) that could prevent, enjoin or materially alter or delay any of the
transactions contemplated by this Agreement, or that could reasonably be
expected to have a Material Adverse Effect on the Company. All litigation to
which the Company is a party (or, to its knowledge, threatened to become a
party) is disclosed in the Company Disclosure Schedule.
3.19 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
judgment, injunction, order or decree binding upon the Company which has or
could reasonably be expected to have the effect of prohibiting or materially
impairing any current or currently proposed business practice of the Company or
the conduct of business by the Company as currently conducted or as currently
proposed to be conducted pursuant to the Company's current business plan.
3.20 GOVERNMENTAL AUTHORIZATION. The Company has obtained each
governmental consent, license, permit, grant or other authorization of a
Governmental Entity that is required for the operation of the business of the
Company (collectively, the "COMPANY AUTHORIZATIONS"), and all of such Company
Authorizations are in full force and effect, except where failure to obtain such
consent, license, permit, grant, or other authorization would not have a
Material Adverse Effect on the Company.
3.21 INSURANCE. The Company Disclosure Schedule contains a list and
description of all insurance policies in effect which are maintained by the
Company or as to which it is an insured party. There is no material claim
pending under any of such policies as to which coverage has been questioned,
denied or disputed by the underwriters of such policies. All premiums due and
payable under all such policies have been paid, and the Company is otherwise
15
in compliance with the terms of such policies. The Company has no knowledge of
any threatened termination of, or material premium increase with respect to, any
of such policies.
3.22 INTERESTED PARTY TRANSACTIONS. No director, officer or, to the
Company's knowledge, stockholder, of the Company has any interest in (i) any
material equipment or other material property or asset, real or personal,
tangible or intangible, including, without limitation, any of the Company
Intellectual Property Rights, used in connection with or pertaining to the
business of the Company, (ii) any creditor, supplier, customer, manufacturer,
agent, representative, or distributor of any of the Company Products, (iii) any
entity that competes with the Company, or with which the Company is affiliated
or has a business relationship, or (iv) any material agreement, obligation or
commitment, written or oral, to which the Company is a party; PROVIDED, HOWEVER,
that no such person shall be deemed to have such an interest solely by virtue of
ownership of less than five percent (5%) of the outstanding stock or debt
securities of any company whose stock or debt securities are traded on a
recognized stock exchange or on the Nasdaq/AMEX Market. The Company Disclosure
Schedule lists and describes all businesses and ventures other than the Company
which use or occupy any of the Owned Property or leased real property currently
used or occupied by the Company.
3.23 NO EXISTING DISCUSSIONS. As of the date of this Agreement, the
Company is not engaged, directly or indirectly, in any discussions or
negotiations with any party other than Parent with respect to any merger,
consolidation, sale of substantial assets, sale of shares of capital stock or
similar transactions.
3.24 REAL PROPERTY HOLDING CORPORATION. The Company is not a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
3.25 CORPORATE DOCUMENTS. The Company has furnished to Parent, or its
representatives, for its examination (i) copies of its minute book containing
all records required to be set forth of all proceedings, consents, actions, and
meetings of the stockholders, the Company Board and any committees thereof and
(ii) all permits, orders, and consents issued by any Governmental Entity with
respect to the Company. The corporate minute books and other corporate records
of the Company are complete and accurate in all material respects, and the
signatures of all officers and directors of the Company and the signatures of
all stockholders and other persons appearing on all documents contained therein
are the true signatures of the persons purporting to have signed the same. All
actions reflected in such books and records were duly and validly taken in
material compliance with the laws of the applicable jurisdiction.
3.26 NO MISREPRESENTATION. No representation or warranty by the Company
in this Agreement, or any written statement, certificate or schedule furnished
or to be furnished by or on behalf of the Company pursuant to this Agreement,
when taken together with all the written statements, certificates and schedules
furnished or to be furnished by or on behalf of the Company pursuant to this
Agreement, contains or shall contain any untrue statement of a material fact or
omits or shall omit to state a material fact required to be stated therein or
necessary in order to make such statements, in light of the circumstances under
which they were made, not misleading. The Company has delivered or made
available to Parent or its representatives true and complete copies of all
documents which are referred to in this Article III or in the Company Disclosure
Schedule.
16
3.27 BROKERS' AND FINDERS' FEES. Other than the brokerage fee payable
to ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ upon the Closing of this transaction, no entity or
person will have a claim, directly or indirectly, for liability for brokerage,
financial advisor or finders' fees or agents' commissions or any similar charges
in connection with this Agreement, the Merger or any transaction contemplated
hereby as a result of any agreement of, or action taken by, the Company or its
officers, directors or shareholders.
3.28 INVENTORIES. The Company's inventories are of a quality and
quantity so as to reasonably be anticipated to be saleable in the ordinary
course of business and the Company has and maintains adequate inventory
reserves. The inventories stated in the Company Balance Sheet reflect the usual
and customary inventory valuation policies of the Company and in the best
judgment of the Company are properly valued.
3.29 ACCOUNTS RECEIVABLE. All of the Company's accounts receivable,
whether or not shown on the Company Balance Sheet, represent bona fide completed
sales made in the ordinary course of business, are valid and enforceable claims,
are not subject to any known set-offs or counterclaims and are, in the best
judgment of Company, fully collectible in the normal course of business, after
deducting the reserve set forth in the Company Balance Sheet, which reserve is
Company's best estimate of its uncollectible accounts.
3.30 EMPLOYEES & SUPPLIERS. To the Company's knowledge, no executive of
the Company has any plan or intention to terminate his/her employment with the
Company, nor is the Company aware that any employee is in breach of any
agreement with the Company regarding, without limitation, competition,
confidentiality or intellectual property. To the Company's knowledge, no
material supplier has any plan or intention to terminate or reduce its business
with the Company or to materially and adversely modify its relationship with the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB
Except as set forth in the disclosure schedule which references the
specific representations and warranties as to which the exception is made and
which is separately delivered by Parent to the Company on or before the date of
this Agreement (the "PARENT DISCLOSURE SCHEDULE"), Parent and MergerSub
represent and warrant to the Company as follows:
4.1 ORGANIZATION. Each of Parent and MergerSub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power to own,
lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to transact
business and is in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified would have a Material Adverse Effect on
Parent. Parent is not in violation of any of the provisions of its articles of
incorporation, bylaws or other charter documents.
17
4.2 PARENT CAPITAL STRUCTURE.
(a) The authorized capital stock of Parent consists of
50,000,000 shares of Common Stock, $0.01 par value ("PARENT COMMON STOCK") and
6,405,884 shares of Preferred Stock, $0.01 par value ("PARENT PREFERRED STOCK").
As of November 30, 1999: (i) 18,980,324 shares of Parent Common Stock were
issued and outstanding, all of which are validly issued, fully paid and
nonassessable; (ii) no shares of Parent Common Stock were held in the treasury
of Parent; (iii) no shares of Parent Preferred Stock were outstanding; (vi)
options to purchase 3,119,610 shares of Parent Common Stock were outstanding
under the Parent's 1995 and 1997 Stock Option Plans and options to purchase
350,057 shares of Parent Common Stock were outstanding under the 1996 and 1998
Stock Option Plan of a subsidiary of Parent and 1,419,892 additional shares were
available for grant under the Parent 1995 and 1997 Stock Option Plans; (v)
250,000 shares of Parent Common Stock were reserved for issuance under Parent's
1998 Employee Stock Purchase Plan, of which 215,809 shares remain available for
grant thereunder; and (iv) 150,000 shares of Parent Common Stock were reserved
for issuance pursuant to Parent's 401(k) plan, none of which were outstanding.
All shares of Parent Common Stock subject to issuance as specified above, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable and are not subject to preemptive rights or rights of first
refusal created by statute, the charter documents of Parent or MergerSub or any
agreement to which Parent or MergerSub is a party or by which it is bound. All
of the outstanding shares of capital stock of MergerSub are duly authorized,
validly issued, fully paid and nonassessable, and all such shares are owned by
Parent free and clear of all security interests, liens, claims, pledges,
agreements, limitations on Parent's voting rights, charges or other encumbrances
of any nature.
(b) Except as set forth in this Section 4.2 or as reserved for
future grants of options under the Parent stock option plans (as more fully
described in the Parent SEC Reports defined in Section 4.4), there are (i) no
equity or debt securities of any class of Parent, or any security exchangeable
into or exercisable for such equity or debt securities, issued, reserved for
issuance or outstanding and (ii) no outstanding subscriptions, options,
warrants, puts, calls, rights or other commitments or agreements of any
character to which Parent is a party or by which it is bound obligating Parent
to issue, deliver, sell, repurchase or redeem or cause to be issued, delivered,
sold, repurchased or redeemed any equity or debt securities of Parent or
obligating Parent to grant, extend, accelerate the vesting of, change the
exercise price of or otherwise amend or enter into any such option, warrant,
call, right, commitment or agreement. There are no contracts, commitments or
agreements relating to voting, purchase or sale of the Parent's capital stock to
which the Parent is a party.
(c) The Merger Shares to be issued pursuant to the Merger,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid, and nonassessable.
4.3 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Parent and MergerSub have all requisite corporate power
and authority to enter into this Agreement and the other documents to which they
are or will be parties in connection with this Agreement and to consummate the
transactions contemplated hereby and
18
thereby. The execution and delivery of this Agreement and all other documents
expressly required to be executed and delivered by Parent and MergerSub
hereunder, including the Certificate of Merger (the "Parent Transaction
Documents") to which Parent or MergerSub is or will be a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Parent and
MergerSub, respectively. This Agreement and the other Parent Transaction
Documents to which Parent and/or MergerSub are parties have been or will be duly
executed and delivered by Parent and/or MergerSub and constitute or will
constitute the valid and binding obligations of Parent and/or MergerSub,
enforceable in accordance with their terms, except as such enforceability may be
limited by bankruptcy laws and other similar laws affecting creditors' rights
generally and general principles of equity.
(b) The execution and delivery by Parent and MergerSub of this
Agreement and the other Parent Transaction Documents to which they are or will
be parties do not, and the consummation of the transactions contemplated hereby
and thereby will not, (i) conflict with, or result in any violation or breach of
any provision of the certificate of incorporation or bylaws of Parent or
MergerSub, (ii) result in any violation or breach of, or constitute (with or
without notice or lapse of time, or both) a default under, or give rise to a
right of termination, cancellation or acceleration of any material obligation or
loss of any material benefit under, any note, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which Parent or
MergerSub is a party or by which either of them or any of their properties or
assets may be bound, or (iii) conflict with or violate any permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or MergerSub or any of its or their properties
or assets, except in the case of (ii) and (iii) for any such conflicts,
violations, defaults, terminations, cancellations or accelerations which would
not have a Material Adverse Effect on Parent.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Parent or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger with
the Delaware and Alabama Secretaries of State in accordance with the DGCL and
AC, (ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws and the laws of any foreign country, or the HSR Act, if
applicable, and (iii) such other consents, authorizations, filings, approvals
and registrations which, if not obtained or made, would not prevent or
materially alter or delay any of the transactions contemplated by this Agreement
and would not have a Material Adverse Effect on Parent.
4.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Parent has timely filed and made available to the Company
all forms, reports and documents required to be filed by Parent with the
Securities and Exchange Commission (the "SEC") since February 26, 1999, other
than registration statements on Form S-8 (collectively, the "PARENT SEC
REPORTS"). The Parent SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Act, and
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as the
case may be, and
19
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Parent SEC Reports or necessary in order to make
the statements in such Parent SEC Reports, in the light of the circumstances
under which they were made, not misleading. None of Parent's Subsidiaries are
required to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any related notes) contained in the Parent SEC Reports, complied
as to form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, was prepared in accordance with
United States GAAP applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes to such financial statements or, in the
case of unaudited statements, as permitted by Form 10-Q promulgated by the SEC)
and presented fairly, in all material respects, the consolidated financial
position of Parent as of and at the respective dates and the consolidated
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount. The unaudited consolidated balance sheet of Parent as of September
30, 1999 is referred to herein as the "PARENT BALANCE SHEET."
4.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1999,
there has been no material adverse change in the business, assets, financial
condition or results of operations of Parent, and Parent has conducted its
business in the ordinary course and in a manner consistent with past practices.
Since September 30, 1999, Parent has not agreed to take any action outside the
ordinary course of business or that would (if the action were taken immediately)
constitute a breach of any of the representations or warranties of Parent
contained in this Agreement.
4.6 BROKERS' AND FINDERS' FEES. Other than the brokerage fee due ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ upon the Closing of this transaction, no entity or person will
have a claim, directly or indirectly, for liability for brokerage, financial
advisor or finders' fees or agents' commissions or any similar charges in
connection with this Agreement, the Merger or any transaction contemplated
hereby as a result of any agreement of, or action taken by, Parent or MergerSub
or their officers or directors.
4.7 TAX TREATMENT; POOLING. Neither Parent nor, to the knowledge of
Parent, any of its affiliates, has taken or agreed to take any action that would
prevent the Merger (i) from constituting a reorganization qualifying under the
provisions of Section 368(a) of the Code or (ii) from being treated as a
"pooling of interests" transaction for financial accounting purposes.
ARTICLE V
COVENANTS RELATED TO CONDUCT OF BUSINESS
5.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as expressly provided by
this Agreement, during the period from the date hereof to the Effective Time,
the Company will conduct its operations in the ordinary and usual course of
business consistent with past practice, seek to preserve intact its current
business organizations, seek to keep available the service of its
20
current officers and employees and seek to preserve its relationships with
customers, suppliers, and others having business dealings with it to the end
that its goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement, prior to the Effective Time, the Company
will not without the prior written consent of Parent:
(a) amend its articles of incorporation or bylaws (or other
similar organizational or governing instrument);
(b) authorize for issuance, issue, sell, deliver, or agree or
commit to issue, sell, or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase, or otherwise)
any capital stock of any class or any other securities convertible into or
exchangeable for any capital stock or any equity equivalents (including any
stock options or stock appreciation rights);
(c) (i) split, combine, or reclassify any shares of its
capital stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in respect of
its capital stock; (iii) make any other actual, constructive, or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase,
or otherwise acquire any securities of the Company;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization, or other
reorganization of the Company (other than the Merger);
(e) (i) incur or assume any additional long-term or short-term
debt or issue any debt securities; (ii) assume, guarantee, endorse, or otherwise
become liable or responsible (whether directly, contingently, or otherwise) for
the obligations of any other person; (iii) make any loans, advances, or capital
contributions to, or investments in, any other person (other than to the wholly
owned subsidiaries of the Company or customary loans or expense advances to
employees in the ordinary and usual course of business consistent with past
practice and in amounts not material to the maker of such loan or advance); (iv)
pledge or otherwise encumber shares of capital stock of the Company; or (v)
mortgage or pledge any of its material assets, tangible or intangible, or create
or suffer to exist any material lien or encumbrance thereupon;
(f) acquire, sell, lease, or dispose of any assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to the Company taken as a whole,
enter into any commitment or transaction outside the ordinary and usual course
of business consistent with past practice, grant any exclusive distribution
rights, grant any license, right to use, or covenant not to ▇▇▇ in respect of
any Company Intellectual Property Rights, or disclose any trade secrets or other
confidential proprietary information of the Company or any of its Subsidiaries
to any third person (other than the transactions contemplated hereby);
21
(g) except as may be required as a result of a change in state
or federal regulation, rule or statute or in United States GAAP, change any of
the accounting principles or practices used by it;
(h) revalue in any material respect any of its assets,
including writing down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary and usual course of business consistent
with past practice or as required by United States GAAP;
(i) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership, or other business organization or
division thereof or any equity interest therein; (ii) enter into or amend any
material contract; (iii) authorize any new capital expenditures which,
individually, are in excess of $50,000 (or the foreign currency equivalent
thereof) or, in the aggregate, are in excess of $200,000 (or the foreign
currency equivalent thereof); or (iv) enter into or amend any contract,
agreement, commitment, or arrangement providing for the taking of any action
that would be prohibited hereunder;
(j) make or revoke any Tax election, or settle or compromise
any Tax liability, or change (or make a request to any taxing authority to
change) any aspect of its method of accounting for Tax purposes;
(k) pay, discharge, or satisfy any material claims,
liabilities, or obligations (absolute, accrued, asserted or unasserted,
contingent, or otherwise), other than the payment, discharge, or satisfaction in
the ordinary and usual course of business consistent with past practice of
liabilities reflected or reserved against in the Company Financial Statements or
incurred in the ordinary and usual course of business consistent with past
practice or waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill, or similar agreement to which the Company is a
party;
(l) settle or compromise any pending or threatened claim,
action, suit, or proceeding, relating to the transactions contemplated hereby;
(m) enter into any agreement or arrangement that limits or
otherwise restricts the Company or any successor thereto or that would, after
the Effective Time, limit or restrict the Surviving Corporation and its
affiliates (including Parent) or any successor thereto, from engaging or
competing in any line of business or in any geographic area;
(n) fail to comply in any material respect with any federal or
state rule, regulation or statute (including, any environmental law) applicable
to the Company, or its respective assets;
(o) enter into any direct or indirect arrangements for
financial or other subsidies with any domestic or foreign Governmental Entity or
other person;
(p) make any change to, or amend in any way, the contracts,
salaries, wages, or other compensation (including, any completion bonuses or
change of control payments) of any officer, director, employee, agent, or other
similar representative of the Company, other than changes or amendments that (i)
are made in the ordinary course of business and consistent with
22
past practice and (ii) do not and will not result in increases, in the
aggregate, of more than seven percent in the salary, wages, and other
compensation of any such person;
(q) adopt, enter into, amend, alter, or terminate (partially
or completely) any Company Employee Plan except as contemplated by this
Agreement or to the extent required by applicable law;
(r) enter into any contract with an officer, director,
employee, agent, or other similar representative of the Company that is not
terminable, without penalty or other liability, upon not more than 60 calendar
days' notice; or
(s) take, propose to take, or agree in writing or otherwise to
take, any of the actions described in Sections 5.1(a) through 5.1(r) or any
action which would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect.
5.2 CONDUCT OF BUSINESS OF PARENT. Except as contemplated by this
Agreement, during the period from the date hereof to the Effecctive Time, Parent
will, and will cause each of its subsidiaries, to conduct its operations in a
manner which is not resonably expected to have a Material Adverse Effect on
Parent transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, except as otherwise expressly provided in this
Agreement, prior to the Effective Time, neither Parent nor any of its
subsidiaries will, without the prior written consent of the Company:
(a) knowingly take any action that would result in a failure
to maintain the trading of the Parent Common Stock on the NASDAQ Stock Market;
(b) declare, set aside or pay any dividend or other
distribution in respect of its capital stock, except for dividends payable in
Parent Common Stock or dividends by a subsidiary of Parent to Parent or another
subsidiary of Parent;
(c) adopt or propose to adopt any amendments to its charter
documents which would have a Material Adverse Effect on the consummation of the
transactions contemplated by this Agreement; or
(d) take, or agree in writing or otherwise to take, any of the
actions described in Sections 5.2(a) through 5.2(c) or any action which would
make any of the representations or warranties of Parent contained in this
Agreement untrue or incorrect.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 ACCESS TO INFORMATION.
(a) Between the date hereof and the Effective Time, the
Company will give Parent and MergerSub and their authorized representatives
(including, counsel, financial advisors, auditors, and environmental
consultants) reasonable access during normal business hours to all employees,
plants, offices, warehouses, and other facilities and to all books and
23
records of the Company, will permit Parent and MergerSub to make such
inspections as Parent and MergerSub may reasonably require (including, any
environmental audit, investigation, or study) and will cause the Company's
officers to furnish Parent and MergerSub with such financial and operating data
and other information in respect of the business, properties, and personnel of
the Company as Parent or MergerSub may from time to time reasonably request,
provided that no investigation pursuant to this Section 6.1(a) shall affect or
be deemed to modify any of the representations or warranties made by the
Company.
(b) Between the date hereof and the Effective Time, Parent and
MergerSub will give the Company and their authorized representatives (including,
counsel, financial advisors, auditors, and environmental consultants) reasonable
access during normal business hours to all employees, plants, offices,
warehouses, and other facilities and to all books and records of Parent and
MergerSub, will permit the Company to make such inspections as the Company may
reasonably require (including, any environmental audit, investigation, or study)
and will cause Parent and MergerSub officers to furnish the Company with such
financial and operating data and other information in respect of the business,
properties, and personnel of the Parent or MergerSub as the Company may from
time to time reasonably request, provided that no investigation pursuant to this
Section 6.1(b) shall affect or be deemed to modify any of the representations or
warranties made by Parent and MergerSub.
(c) Between the date hereof and the Effective Time, the
Company shall furnish to Parent and MergerSub within five business days after
the delivery thereof to management, such monthly financial statements and data
as are regularly prepared for distribution to Company management.
(d) Each of Parent, MergerSub and the Company will hold and
will cause its authorized representatives to hold in confidence all documents
and information concerning the other parties hereto furnished to Parent,
MergerSub or the Company in connection with the transactions contemplated by
this Agreement.
6.2 THE STOCKHOLDERS' MEETING. The Company shall call a meeting of
their stockholders to be held as promptly as practicable for the purpose of
voting upon this Agreement and the Merger, or in the alternative, obtain the
unanimous written consent of such stockholders in accordance with the Company's
articles of incorporation and bylaws. The Company will, through its Board of
Directors, recommend to their stockholders approval of such matters and will use
their best efforts to hold such meeting or obtain such unanimous written consent
as soon as practicable after the date hereof. The Company shall use all
reasonable efforts to solicit from their stockholders proxies in favor of such
matters.
6.3 LEGAL CONDITIONS TO MERGER. Each of Parent and the Company will
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to the Merger (which
actions shall include, without limitation, furnishing all information required
in connection with approvals of or filings with any Governmental Entity) and
will promptly cooperate with and furnish information to each other in connection
with any such requirements imposed upon either of them or any of their
subsidiaries in connection with the Merger. Each of Parent and the Company will,
and will cause its subsidiaries to, take all reasonable actions necessary to
obtain (and will cooperate with each
24
other in obtaining) any consent, authorization, order, or approval of, or any
exemption by, any Governmental Entity or other public third party, required to
be obtained or made by Parent or the Company in connection with the Merger or
the taking of any action contemplated thereby or by this Agreement. Nothing in
this Section 6.3, however, shall require Parent, in connection with the receipt
of any regulatory approval, to agree to (i) sell or agree to sell, discontinue,
or limit, before or after the Effective Time, any assets, businesses, or
interests in any assets or businesses of the Company, Parent or any of their
respective affiliates or (ii) agree to any conditions relating to, or changes or
restrictions in, the operations of any such assets or businesses that, in either
case, is reasonably likely to materially and adversely impact the economic or
business benefits of the parties to the transactions contemplated hereby.
6.4 PAYMENT OF TAXES.
(a) The Company shall pay prior to the Effective Time (i) all
Taxes required to be paid by the Company prior to that day, and (ii) shall
withhold with respect to its employees all federal and state income taxes, FICA,
FUTA, and other Taxes required to be withheld.
(b) Parent shall pay prior to the Effective Time (i) all Taxes
required to be paid by Parent prior to that day, and (ii) shall withhold with
respect to its employees all federal and state income taxes, FICA, FUTA, and
other Taxes required to be withheld.
6.5 CONSENTS. Each of Parent and the Company shall use all reasonable
efforts to obtain all necessary consents, waivers, and approvals under any of
Parent's or the Company's material agreements, contracts, licenses, or leases in
connection with the Merger. With respect to any consents by the Company pursuant
to this Section 6.5, Parent and MergerSub agree to provide reasonable further
assurances of the Surviving Corporation's assumption of the Company's rights and
obligations, and the ability of the Surviving Corporation to perform, under the
material agreements, contracts, licenses, or leases as reasonably requested by
the grantors of such consents.
6.6 EMPLOYEE BENEFITS; EMPLOYEE ISSUES. Following the Effective Time
and subject to the eligibility and other participation requirements and terms
contained in Parent's benefit programs and plans, all employees of the Company
shall be given credit for their periods of service with the Company as if such
service were with Parent in determining their eligibility for inclusion in, and
the level of benefits granted after the Effective Time under, Parent's employee
benefit plans.
6.7 REPORTS. From and after the Effective Time and so long as necessary
in order to permit each officer and director of the Company to sell the Merger
Shares received by them as a result of the Merger pursuant to Rule 145 and, to
the extent applicable, Rule 144 under the Securities Act, Parent will use its
best efforts to file on a timely basis all reports required to be filed by it
pursuant to Section 13 or 15(d) of the Exchange Act, referred to in paragraph
(c)(1) of Rule 144 under the Securities Act (or, if applicable, Parent will use
its best efforts to make publicly available the information regarding itself
referred to in paragraph (c)(2) of Rule 144).
6.8 NOTIFICATION OF CERTAIN MATTERS. The Company will give prompt
notice to Parent upon discovery, and Parent will give prompt notice to the
Company upon discovery, of (a) the
25
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty of such party contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Effective Time, and (b) any material failure of such
party, or any director, officer, employee, agent or representative thereof, to
comply with or satisfy any covenant, condition, or agreement to be complied with
or satisfied by it hereunder.
6.9 BEST EFFORTS.
(a) Subject to the terms and conditions of this Agreement,
each party will use its best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper, or advisable under
applicable laws to consummate the Merger and the other transactions contemplated
by this Agreement and each party will use its commercially reasonable efforts to
facilitate the satisfaction of the Article VII closing conditions within the
control and responsibility of the other party.
(b) The Company and Parent agree that in connection with any
litigation which may be brought against the Company or its directors relating to
the transactions contemplated hereby, the Company will keep Parent, and any
counsel which Parent may retain at its own expense, informed of the course of
such litigation, to the extent Parent is not otherwise a party thereto, and the
Company agrees that it will consult with Parent prior to entering into any
settlement or compromise of any such litigation; PROVIDED, HOWEVER, that no such
settlement or compromise will be entered into without Parent's prior written
consent, which consent shall not be unreasonably withheld.
6.10 ACQUISITION PROPOSALS. From the date hereof until the termination
hereof, the Company will not, nor will it authorize or direct any officer,
director, or employee of or any investment banker, attorney, accountant, or
other advisor or representative of, the Company directly or indirectly, (i)
solicit, initiate, or encourage the submission of any Acquisition Proposal or
(ii) participate in any discussions or negotiations regarding, or furnish to any
person any information in respect of, or take any other action to facilitate,
any Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal.
The Company shall take all necessary steps to promptly inform the individuals or
entities referred to in the first sentence of this Section 6.12 of the
obligations undertaken in this Section 6.12. As used herein, "ACQUISITION
PROPOSAL" means an inquiry, offer, or proposal regarding any of the following
(other than the transactions contemplated by this Agreement) involving the
Company: (i) any merger, consolidation, share exchange, recapitalization,
business combination, or other similar transaction; (ii) any sale, lease,
exchange, mortgage, pledge, transfer, or other disposition of all or
substantially all the assets of the Company in a single transaction or series of
related transactions; (iii) any tender offer or exchange offer for 20% or more
of the outstanding Shares or the filing of a registration statement under the
Securities Act in connection therewith; or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
6.11 PUBLICITY. The initial press releases in respect of the execution
of this Agreement shall be acceptable to Parent and the Company and shall be in
the form of EXHIBIT A hereto. Thereafter, so long as this Agreement is in
effect, neither the Company, Parent, nor any of their
26
respective affiliates shall issue or cause to be issued the publication of any
press release in respect of the Merger, this Agreement, or the transactions
contemplated hereby without the prior consultation with the other party, except
as may be required by applicable law or any listing agreement with a national
securities exchange or national securities quotation system.
6.12 INCENTIVE COMPENSATION PLAN. Effective as of the Closing, Parent
shall adopt an incentive compensation plan for the Surviving Corporation which
will provide key employees of the Surviving Corporation with the opportunity to
earn compensation similar to what they earned with the Company in the most
recently completed fiscal year with the same or comparable required performance
levels.
6.13 TERMINATION OF PERSONAL GUARANTIES. After the Effective Time,
Parent shall use its best efforts to secure the termination of any personal
guaranties by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. with respect to the corporate debt of the
Company with South Trust Bank.
6.14 INDEMNIFICATION AGREEMENTS. After the Effective Time, Parent
covenants and agrees that the Surviving Corporation will continue to honor the
indemnification obligations of the Company with respect to its officers and
directors in existence as of the Effective Time.
6.15 HSR ACT. Each Party shall, if applicable, (i) make an appropriate
filing of a Notification and Report Form pursuant to the HSR Act in respect of
the transaction contemplated hereby as promptly as practicable and in any event
within ten (10) business days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and use its best efforts to take, or cause to
be taken all other action necessary to cause the expiration or termination of
the applicable waiting periods under the HSR Act as soon as practicable.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 CLOSING CONDITIONS. The respective obligations of each party to
this Agreement to consummate and effect this Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing of each of the following conditions, any of which may be waived, in
writing, by agreement of all the parties hereto:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall
have been approved and adopted by the requisite vote of the stockholders of the
Company as may be required by law, and by any applicable provisions of the
Company's articles of incorporation and bylaws.
(b) APPROVALS. Any waiting periods applicable to the Merger
under the HSR Act shall have expired or early termination thereof shall have
been granted without limitation, restriction or condition. There shall have been
obtained permits, consents, and approvals of securities or "blue sky"
commissions or agencies of any jurisdiction and of other governmental bodies or
agencies that may reasonably be deemed necessary so that the consummation of the
Merger and the transactions contemplated hereby will be in compliance
27
with applicable laws, the failure to comply with which would have a Material
Adverse Effect on the Surviving Corporation or Parent after consummation of the
Merger.
(c) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction, or other order issued by
any court of competent jurisdiction or other legal or regulatory restraints or
prohibition preventing the consummation of the Merger or materially limiting or
restricting Parent's conduct or operation of the business of Parent or the
Company after the Merger shall have been issued, nor shall any proceedings
brought by any Governmental Entity seeking any of the foregoing be pending; nor
shall there be any action taken, or any statute, rule, regulation, or order
enacted, entered, enforced, or deemed applicable to the Merger which makes the
consummation of the Merger illegal.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND MERGERSUB. The
obligations of Parent and MergerSub to consummate and effect this Agreement and
the transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions, any of which may be
waived, in writing, by Parent:
(a) ACCURACY OF REPRESENTATIONS. Each of the representations
and warranties made by the Company contained or referred to in this Agreement
and in each of the other agreements and instruments delivered to Parent in
connection herewith, shall be true and correct in all material respects at the
Closing as though made at the Closing, except for representations and warranties
that speak as of a specific date or time other than the Closing, which need only
be true and correct as of such date or time.
(b) PERFORMANCE OF COVENANTS. All of the covenants and
obligations that the Company is required to comply with or to perform at or
prior to the Closing shall have been complied with and performed in all material
respects.
(c) DOCUMENTS. Parent shall have received the following
documents:
(i) legal opinion of ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
dated as of the Closing Date, substantially in the form set forth at EXHIBIT B
hereto;
(ii) a certificate executed by the Company's Chief
Executive Officer or other senior executive officer of the Company certifying
that the conditions set forth in 7.2(a) and (b) have been fulfilled as to the
Company.
(iii) Affiliates Agreements in the form of EXHIBIT C
executed by any person who could reasonably be deemed to be an "affiliate" of
the Company for purposes of the Securities Act of 1933, as amended (the
"SECURITIES ACT");
(iv) a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, dated as of
the Closing Date, confirming the appropriateness of Parent accounting for the
Merger as a "pooling of interests" in accordance with generally accepted
principles, Accounting Principles Board Opinion No. 16, and all published rules,
regulations and policies of the SEC;
28
(v) a statement (in such form as may be reasonably
requested by counsel to Parent) conforming to the requirements of Treasury
Regulations Section 1.8972(h)(l)(i);
(vi) Non-Solicitation and Non-Competition Agreements
in substantially the form attached hereto as EXHIBIT D executed and delivered by
the individuals identified on SCHEDULE 7.2 hereto;
(vii) the Indemnity Escrow Agreement; and
(viii) Registration Rights Agreement in substantially
the form attached hereto as EXHIBIT E (the "RIGHTS AGREEMENT") executed and
delivered by the Company's stockholders.
(d) DISSENTING SHARES. Holders of not more than 5% of the
Company's Common Stock shall have demanded that the Company purchase any such
shares of Company Common Stock in accordance with the DGCL.
(e) COMPANY DEBT. At the Closing Date, the Company shall not
have outstanding indebtedness in excess of $14 million.
(f) FIRPTA COMPLIANCE. The Company shall have filed with the
Internal Revenue Service the notification required under Treasury Regulations
Section 1.8972(h)(2).
(g) CONSENTS. All consents of third parties required to be
obtained in connection with the Merger and the other transactions contemplated
by this Agreement (other than those the failure of which to obtain would not
reasonably be expected to have a Material Adverse Effect on the Parent or the
Surviving Corporation), including, without limitation, any required in
connection with Material Contracts, shall have been obtained and shall be in
full force and effect.
(h) Parent shall have received a fairness opinion from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, Financial Advisors, regarding the terms and
provisions of the Merger.
(i) Parent shall have received favorable Phase 1 Evaluation
Reports regarding the environmental condition of the Company's facilities, which
shall be reasonably acceptable to Parent in all respects.
(j) EMPLOYMENT AGREEMENTS. Parent and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
shall have executed and delivered an Employment Agreement in substantially the
form attached hereto as EXHIBIT H (the "EMPLOYMENT AGREEMENT").
(k) TRANSFER OF SHARES OF ▇▇▇▇▇▇ INVESTMENTS. Title to all of
the equity interests (whether shares of capital stock or partner or membership
interests) owned by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. in both Genovations, Inc. and
IntergriDerm, LLC shall have been transferred to the Company as a capital
contribution, without any payment on the part of the Company, pursuant to
documentation reasonably acceptable to counsel for Parent.
29
(l) TRANSFER OF REAL ESTATE. Title to all of the real property
owned by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and used by the Company, including 2130, 2114,
2112, 2110 and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, shall
have been transferred to the Company as a capital contribution, without any
payment on the part of the Company, pursuant to documentation reasonably
acceptable to counsel for Parent, and the leases for such property between ▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇. and the Company shall have been terminated.
7.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions, any of which may be
waived, in writing, by the Company:
(a) ACCURACY OF REPRESENTATIONS. Each of the representations
and warranties made by Parent and MergerSub contained or referred to in this
Agreement and in each of the other agreements and instruments delivered to the
Company in connection herewith, shall be true and correct in all material
respects at the Closing as though made at the Closing, except for
representations and warranties that speak as of a specific date or time other
than the Closing which need only be true and correct as of such date or time.
(b) PERFORMANCE OF COVENANTS. All of the covenants and
obligations that Parent and MergerSub are required to comply with or to perform
at or prior to the Closing shall have been complied with and performed in all
material respects.
(c) DOCUMENTS. The Company shall have received the following
documents:
(i) legal opinion of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
dated as of the Closing Date, substantially in the form set forth at EXHIBIT G
hereto;
(ii) a certificate executed by Parent's Chief
Financial Officer or other senior executive officer of the Parent certifying
that the conditions set forth in 7.3(a) and (b) have been fulfilled;
(iii) the Indemnity Escrow Agreement duly executed by
Parent;
(iv) the Rights Agreement duly executed by Parent;
and
(v) the Employment Agreement duly executed by the
Surviving Corporation.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATION PROVISIONS
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of each of the parties
contained herein shall survive the Merger and shall expire on the first
anniversary of the Effective Time (the
30
"CLAIM DEADLINE") and any liability of the parties with respect to such
representations and warranties shall thereupon cease; and if, at any time before
the Claim Deadline, any person entitled to indemnification hereunder (acting in
good faith) delivers to any indemnifying party hereunder a written notice
asserting a claim for recovery under Section 8.2, then the claim asserted in
such notice shall survive the Claim Deadline with respect to each indemnifying
party who was provided a written notice prior to the Claim Deadline until such
time as such claim is fully and finally resolved.
(b) For purposes of this Agreement, each statement or other
item of information set forth in a Schedule pertaining to a party's
representations and warranties shall be deemed to be a representation and
warranty made by that party in this Agreement.
8.2 INDEMNIFICATION OF THE PARENT.
(a) Following the Effective Time, the Parent, the Surviving
Corporation and the officers, directors, agents and representatives of the
Parent or the Surviving Corporation (collectively, the "PARENT AFFILIATES")
shall be indemnified and held harmless by the stockholders of the Company in
respect of, and shall be compensated and reimbursed for, any and all losses,
damages, costs and expenses (including reasonable attorney's fees)
(collectively, "DAMAGES") which are directly or indirectly suffered or incurred
by any Parent Affiliate or to which any Parent Affiliate may otherwise become
subject (regardless of whether or not such Damages relate to any third-party
claim) and which arise from or as a result of: (i) any misrepresentation or
breach of any representation, warranty, covenant or agreement made by the
Company in this Agreement or in any certificate, instrument, schedule or
document given by the Company in connection with this Agreement, or (ii) any
legal proceeding relating to any inaccuracy or breach of the type referred to in
clause "(i)" above (including any legal proceeding commenced by any Parent
Affiliate for the purpose of enforcing any of its rights under this Section
8.2).
(b) The Parties acknowledge and agree that, if the Surviving
Corporation suffers, incurs or otherwise becomes subject to any Damages as a
result of or in connection with any inaccuracy in or breach of any
representation, warranty, covenant or obligation of the Company set forth
herein, then, without limiting any of the indemnification rights of the
Surviving Corporation, Parent shall also be deemed, by virtue of its ownership
of the Surviving Corporation, to have incurred Damages as a result of and in
connection with such inaccuracy or breach.
8.3 LIMITS ON INDEMNIFICATION AND LIABILITY. Except as expressly
provided in this Section 8.3, the indemnification of the Parent Affiliates shall
be limited to the shares of Parent Common Stock deposited in escrow at the
Closing as provided in Section 8.5 hereof. For purposes of this Article VIII,
the value of a share of Parent Common Stock when satisfying a claim for Damages
hereunder shall be equal to the Closing price of the Parent Common Stock on the
business day immediately preceding the Effective Date. No Parent Affiliate shall
be entitled to indemnification under this Article VIII for individual claims of
less than $5,000. No Parent Affiliate shall be entitled to indemnification under
this Article VIII until the aggregate of all indemnification claims by the
Parent Affiliates exceeds $150,000, but after such threshold is exceeded, the
Parent Affiliates shall be entitled to full indemnification for all such claims.
31
Notwithstanding the foregoing, any indemnification of the Parent Affiliates for
any liability arising from fraudulent or intentional misrepresentations by the
Company, SHALL NOT be limited to the shares of Parent Common Stock deposited in
escrow in accordance with Section 8.5 nor shall be subject to the $5,000 and
$150,000 limitations set forth above, but instead shall be limited to the
recovery by Parent of a maximum of 960,000 shares of Parent Common Stock issued
in this transaction.
8.4 DEFENSE OF THIRD PARTY CLAIMS. In the event of the assertion or
commencement by any person of any claim or legal proceeding (whether against the
Surviving Corporation, against Parent or against any other person) with respect
to which a Parent Affiliate may be entitled to payment pursuant to this Article
VIII, Parent shall, within a reasonable amount of time after learning of such
claim or legal proceeding, notify the Shareholder Representative of such claim
or legal proceeding and shall extend to the Shareholder Representative a
reasonable opportunity to defend against such claim or legal proceeding, at the
shareholders' sole expense and through legal counsel reasonably acceptable to
Parent, provided that the shareholders' defense of such claim or legal
proceeding proceeds in good faith, expeditiously and diligently. Parent shall,
at its option and expense, have the right to participate in any defense
undertaken by the shareholders through the Shareholder Representative with legal
counsel of its own selection. No settlement or compromise of any claim which may
result in Damages or which acknowledges any liability for a violation of law, or
purports to impose any non-monetary obligation on the indemnified party, may be
made by the Shareholder Representative without the prior written consent of
Parent, which consent will not be unreasonably withheld. In the event the
Shareholder Representative does not timely tender a defense to such claim or
legal proceeding or such defense does not proceed in good faith, expeditiously
or diligently, then Parent shall have the right, at its election, to proceed
with the defense of such claim or legal proceeding on its own. If Parent so
proceeds with the defense of any such claim or legal proceeding under such
circumstances:
(a) all reasonable expenses relating to the defense of such
claim or legal proceeding shall be subject to claim as indemnified Damages
hereunder;
(b) the parties shall use reasonable efforts to make available
to Parent any documents and materials in their possession or control that may be
necessary to the defense of such claim or legal proceeding; and
(c) Parent shall have the right to settle, adjust or
compromise such claim or legal proceeding with the written consent of the
Company Representative, which consent will not be unreasonably withheld;
PROVIDED, HOWEVER, that Parent may nevertheless settle or compromise any such
claim or legal proceeding without the Company Representative's prior written
consent if the failure to so settle or compromise such claim or legal proceeding
in a timely manner will, in the reasonable judgment of Parent, materially and
adversely affect Parent or the Surviving Company (but such settlement or
compromise shall not prejudice the rights of any party to maintain that such
settlement or compromise should not result in a claim for indemnification in the
amount of the settlement or at all).
(d) For purposes of this Article VIII, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. is
appointed Shareholder Representative. The Shareholder Representative shall in no
event be liable to Parent
32
or the Surviving Corporation for any action taken in good faith by the
Shareholder Representative in the scope of performing his role hereunder.
8.5 ESCROW. In order to satisfy any indemnification obligation of the
Company, at the Closing 320,000 Merger Shares to be issued pursuant to this
Agreement (the "ESCROW SHARES") shall be deposited in an escrow account pursuant
to the escrow agreement substantially in the form attached hereto as EXHIBIT H
(the "INDEMNITY ESCROW AGREEMENT").
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
9.1 TERMINATION. This Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective Time,
whether before or after approval of matters presented in connection with the
Merger by the stockholders of the Company and Parent:
(a) By the mutual written consent of Parent and the Company.
(b) By either of Parent or the Company if (i) the conditions
to such party's obligation to close contained in Article VII hereof are not
satisfied or waived by the applicable party by March 31, 2000 or (ii) a statute,
rule, or executive order shall have been enacted, entered, or promulgated
prohibiting the transactions contemplated hereby on the terms contemplated by
this Agreement, or (iii) any Governmental Entity shall have issued an order,
decree, or ruling or taken any other action (which order, decree, ruling, or
other action the parties hereto shall use their reasonable efforts to lift), in
each case permanently restraining, enjoining, or otherwise prohibiting the
transactions and such order, decree, ruling, or other action shall have become
final and non-appealable.
(c) By the Company if there is a material breach by Parent or
MergerSub of any of their representations, warranties, covenants, or agreements
contained in this Agreement which breach is not curable or, if curable, is not
cured within fifteen calendar days after written notice of such breach is given
by the Company to Parent.
(d) By Parent or MergerSub if there is a material breach by
the Company of any of its representations, warranties, covenants, or agreements
contained in this Agreement which breach is not curable or, if curable, is not
cured within fifteen calendar days after written notice of such breach is given
by Parent to the Company.
9.2 EFFECT OF THE TERMINATION. In the event of termination of this
Agreement by either the Company or Parent or MergerSub as provided in Section
9.1, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent, MergerSub, or the Company, other
than the provisions of Section 6.1(d), this Section 9.2, Section 9.3, and
Article X and except to the extent of liability for pre-termination material
breach by a party of any of its representations, warranties, covenants, or
agreements set forth in this Agreement.
33
9.3 FEES AND EXPENSES.
(a) Each party to this Agreement shall bear and pay all fees,
costs and expenses (including legal fees and accounting fees) that have been
incurred or that are incurred by such party in connection with the transactions
contemplated by this Agreement, including all fees, costs and expenses incurred
by such party in connection with or by virtue of (i) the investigation and
review conducted by Parent and its representatives with respect to the Company's
business (and the furnishing of information to Parent and its representatives in
connection with such investigation and review), (ii) the negotiation,
preparation and review of this Agreement and all agreements, certificates,
opinions and other instruments and documents delivered or to be delivered in
connection with the transactions contemplated by this Agreement, (iii) the
preparation and submission of any filing, registration statement or notice
required to be made or given in connection with any of the transactions
contemplated by this Agreement, and the obtaining of any consent required to be
obtained in connection with any of such transactions, and (iv) the consummation
of the Merger, PROVIDED, HOWEVER, that (aa) Parent shall pay up to $3,250,000 of
any broker's fee owed by the Company to ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ upon the
successful completion of this transaction; (bb) the stockholders of the Company
shall pay any broker's fee owed by the Company to ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in
excess of the $3,200,000 specified in (aa) above (the "ADDITIONAL BROKER'S
FEE"), which payment obligation shall not become an obligation of the Surviving
Corporation; (cc) Parent shall pay any filing fee required under the HSR Act and
any accounting fees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP; and (dd) all legal and accounting
fees, costs and expenses of the Company set forth in this Section 9.3(a) in
excess of $100,000 in connection with this Agreement and the transactions
contemplated hereby shall be deemed to be expenses of the stockholders of the
Company and shall be borne by the stockholders and not become obligations of the
Surviving Corporation (together with the Additional Broker's Fee, the
"STOCKHOLDER EXPENSES"). Provisions for the payment of the Stockholders Expenses
by the stockholders of the Company reasonably acceptable to Parent shall be made
at Closing.
(b) The Company shall pay all Taxes, such as (i) transfer,
stamp, and documentary Taxes or fees and (ii) sales, use, gains, real property
transfer, and other or similar Taxes or fees, incident to preparing for,
entering into, and carrying out this Agreement and the consummation of the
transactions contemplated hereby.
9.4 AMENDMENT. This Agreement may be amended by action taken by the
Company, Parent, and MergerSub at any time before or after approval of the
Merger by the stockholders of the Company. But, after any such approval, no
amendment shall be made which requires the approval of such stockholders under
applicable law without such approval. This Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.
9.5 EXTENSION; WAIVER. At any time prior to the Effective Time, each
party hereto (for these purposes, Parent and MergerSub shall together be deemed
one party and the Company shall be deemed the other party) may (i) extend the
time for the performance of any of the obligations or other acts of the other
party, (ii) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document, certificate, or writing
delivered pursuant hereto, or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to
34
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE X
MISCELLANEOUS
10.1 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement constitutes the
entire agreement among the parties hereto in respect of the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties in respect of the subject matter hereof
other than the Confidentiality Agreement.
(a) Neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by operation of law (including, by
merger or consolidation) or otherwise; PROVIDED, HOWEVER, that MergerSub may
assign, in its sole discretion, any or all of its rights, interests, and
obligations under this Agreement to any direct wholly owned Subsidiary of
Parent, but no such assignment shall relieve Parent or MergerSub of its
obligations hereunder if such assignee does not perform such obligations. Any
assignment in violation of the preceding sentence shall be void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
permitted assigns.
10.2 NOTICES. All notices, requests, instructions, or other documents
to be given under this Agreement shall be in writing and shall be deemed given,
(i) five business days following sending by registered or certified mail,
postage prepaid, (ii) when sent if sent by facsimile; PROVIDED, HOWEVER, that
the facsimile is promptly confirmed by telephone confirmation thereof, (iii)
when delivered, if delivered personally to the intended recipient, and (iv) one
business day following sending by overnight delivery via a national courier
service, and in each case, addressed to a party at the following address for
such party:
if to MergerSub or to
Parent, to:
Invitrogen Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
35
with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Freidenrich LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Cameron ▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
Research Genetics, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the other in writing in the manner set
forth above.
10.3 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Delaware, without giving effect to
the choice of law principles thereof.
10.4 DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
10.5 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Sections 6.6, 6.12, 6.13, 6.14,
7.2(j), 8.2 and 8.5, nothing in this Agreement, express or implied, is intended
to or shall confer upon any other person any rights, benefits, or remedies of
any nature whatsoever under or by reason of this Agreement.
10.6 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any
36
person or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
10.7 SPECIFIC PERFORMANCE. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of California or in California state court, this being in
addition to any other remedy to which they are entitled at Law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any federal court located in the State of California or
any California state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated hereby in any
court other than a federal or state court sitting in the State of California.
10.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
10.9 INTERPRETATION.
(a) The words "HEREOF," "HEREIN," "HEREWITH," and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit, and schedule references are to the
articles, sections, paragraphs, exhibits, and schedules of this Agreement unless
otherwise specified. Whenever the words "INCLUDE," "INCLUDES," OR "INCLUDING"
are used in this Agreement, they shall be deemed to be followed by the words
"WITHOUT LIMITATION." All terms defined in this Agreement shall have the defined
meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument, or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument, or statute as from time to time, amended, qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
(b) The phrases "THE DATE OF THIS AGREEMENT," "THE DATE
HEREOF," and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to February 1, 2000.
37
The phrase "MADE AVAILABLE" in this agreement shall mean that the information
referred to has been actually delivered to the party to whom such information
is to be made available if so requested.
(c) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
10.10 DEFINITIONS. As used herein,
(a) "MATERIAL ADVERSE EFFECT" means in respect of any entity,
any change, circumstance, or effect that is or is reasonably likely to be
materially adverse to (i) the assets, properties, condition (financial or
otherwise), or results of operations of such entity and its subsidiaries taken
as a whole, or (ii) the ability of such party to consummate the transactions
contemplated by this Agreement.
(b) "PERSON" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
(c) "SUBSIDIARY" means, in respect of any party, any
corporation, partnership, or other entity or organization, whether incorporated
or unincorporated, of which (i) such other party or any other subsidiary of such
party is a general partner (excluding such partnerships where such party or any
subsidiary of such party does not have a majority of the voting interest in such
partnership) or (ii) 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 in respect of such corporation
or other organization is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one or
more of its subsidiaries.
38
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the date first above written.
INVITROGEN CORPORATION
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer
RG MERGER CORPORATION
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer
RESEARCH GENETICS, INC.
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer
39
Exhibits
--------
A Press Releases (6.11)
B ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C Opinion (7.2(c)(i))
C Affiliates Agreement (7.2(c)(iii))
D Non-Competition and Non-Solicitation Agreement (7.2(c)(vi))
E Rights Agreement (7.2(c)(viii))
F ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP Opinion (7.2(j))
G Employment Agreement (7.3(c)(i))
H Indemnity Escrow Agreement (8.5)
Schedules
---------
Company Disclosure Schedule (separately delivered)
Parent Disclosure Schedule (separately delivered)
Schedule 7.2 (individuals to sign non-competes)