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AGREEMENT AND PLAN OF MERGER
DATED AUGUST 31, 2000
AMONG
MILLER BUILDING SYSTEMS, INC.,
COA HOUSING GROUP, INC.,
COACHMEN INDUSTRIES, INC.
AND
DELAWARE MILLER ACQUISITION CORPORATION
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 THE OFFER......................................................1
Section 1.1 The Offer.............................................1
Section 1.2 Company Actions.......................................3
Section 1.3 Boards of Directors and Committees; Section 14(f
of Exchange Act.......................................4
ARTICLE 2 THE MERGER.....................................................4
Section 2.1 The Merger............................................4
Section 2.2 Effective Time........................................5
Section 2.3 Closing of the Merger.................................5
Section 2.4 Effects of the Merger.................................5
Section 2.5 Certificate of Incorporation and Bylaws...............5
Section 2.6 Directors.............................................5
Section 2.7 Officers..............................................5
Section 2.8 Conversion of Shares..................................5
Section 2.10 Exchange of Certificates..............................6
Section 2.11 Assumed Stock Options.................................7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................7
Section 3.1 Organization and Qualification; Subsidiaries;
Investments...........................................8
Section 3.2 Capitalization of the Company and its Subsidiaries....8
Section 3.3 Authority Relative to this Agreement;
Recommendation........................................9
Section 3.4 SEC Reports; Financial Statements....................10
Section 3.5 Information Supplied.................................10
Section 3.6 Consents and Approvals; No Violations................10
Section 3.7 No Default...........................................11
Section 3.8 No Undisclosed Liabilities; Absence of Changes.......11
Section 3.9 Litigation...........................................12
Section 3.10 Compliance with Applicable Law.......................12
Section 3.11 Employee Benefits....................................13
Section 3.12 Labor and Employment Matters.........................15
Section 3.13 Environmental Laws and Regulations...................15
Section 3.14 Taxes................................................17
Section 3.15 Intellectual Property................................18
Section 3.16 Properties...........................................20
Section 3.17 Material Contracts and Commitments...................21
Section 3.18 Insurance............................................22
Section 3.19 Certain Business Practices...........................22
Section 3.20 Product Warranties...................................22
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Section 3.21 Suppliers and Customers..............................22
Section 3.22 Vote Required........................................22
Section 3.23 Opinion of Financial Adviser.........................23
Section 3.24 Brokers..............................................23
Section 3.25 Takeover Statutes....................................23
Section 3.26 Representations Complete.............................23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION......23
Section 4.1 Organization.........................................23
Section 4.2 Authority Relative to this Agreement.................24
Section 4.3 Information Supplied.................................24
Section 4.4 Consents and Approvals; No Violations................24
Section 4.5 Litigation...........................................24
Section 4.6 Brokers..............................................24
Section 4.7 Representations and Warranties.......................25
ARTICLE 5 COVENANTS.....................................................25
Section 5.1 Conduct of Business of the Company....................25
Section 5.2 No Solicitation or Negotiation........................27
Section 5.3 Meeting of Stockholders...............................28
Section 5.4 Access to Information.................................29
Section 5.5 Certain Filings; Reasonable Efforts...................30
Section 5.6 Public Announcements..................................30
Section 5.7 Indemnification and Directors' and Officers'
Insurance.............................................31
Section 5.8 Notification of Certain Matters.......................32
Section 5.9 Additions to and Modification of Company Disclosure
Schedule..............................................32
Section 5.10 Access to Company Employees...........................32
Section 5.11 Company Compensation and Benefit Plans................32
Section 5.12 Takeover Statutes.....................................32
Section 5.13 Employment Agreements.................................32
ARTICLE 6 CONDITIONS TO CONSUMMATION OF THE MERGER......................32
Section 6.1 Conditions...........................................32
ARTICLE 7 TERMINATION; AMENDMENT; WAIVER................................33
Section 7.1 Termination..........................................33
Section 7.2 Effect of Termination................................34
Section 7.3 Fees and Expenses....................................35
Section 7.4 Amendment............................................36
Section 7.5 Extension; Waiver....................................36
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ARTICLE 8 MISCELLANEOUS.................................................36
Section 8.1 Nonsurvival of Representations and Warranties........36
Section 8.2 Entire Agreement; Assignment.........................37
Section 8.3 Validity.............................................37
Section 8.4 Notices..............................................37
Section 8.5 Governing Law ; Waiver of Jury Trial.................38
Section 8.6 Descriptive Headings; Article and Section
References...........................................38
Section 8.7 Parties in Interest..................................38
Section 8.8 Certain Definitions..................................38
Section 8.9 Specific Performance.................................39
Section 8.10 Counterparts.........................................39
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TABLE OF DEFINED TERMS
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Acquisition ...............................Preamble...........................1
Affiliate ..................................Section 8.8(a)....................36
Agreement ..................................Preamble...........................1
Applicable Law .............................Section 8.8(b)....................37
Assumed Option..............................Section 2.11(a)...................37
Business day ...............................Section 8.8(c)....................37
Capital stock ..............................Section 8.8(d)....................37
Certificate of Merger ......................Section 2.2........................4
Certificates ...............................Section 2.10(b)....................6
Claim ......................................Section 1.1(a).....................1
Closing Price ..............................Section 2.11(a)....................5
Closing ....................................Section 2.3........................5
COA.........................................Preamble...........................1
COA Common Stock............................Section 2.11(a)....................6
Code .......................................Section 3.14(a)(i)................16
Commonly Controlled Entity .................Section 3.11(a)...................12
Company Assets .............................Section 3.16......................19
Company Board .............................Section 1.1(c).....................2
Company Common Stock ......................Preamble...........................1
Company Disclosure Schedule ................Article 3..........................7
Company Permits ............................Section 3.10(a)...................12
Company Plans ..............................Section 2.11(a)....................6
Company ....................................Preamble...........................1
Company SEC Reports ........................Section 3.4(a).....................9
Company Securities .........................Section 3.2(a).....................8
Company Stock Options.......................Section 2.11(a)....................6
Compensation and Benefit Plans .............Section 3.11(a)...................12
Contracts ..................................Section 3.17......................20
Copyrights .................................Section 3.15(a)...................17
Craig.......................................Section 6.1(h)....................31
DCP.........................................Section 3.11(o)...................14
DGCL .......................................Section 1.2(a).....................3
Disclosure Statements ......................Section 3.5.......................10
Effective Time .............................Section 2.2........................5
Employee pension benefit plans .............Section 3.11(a)...................12
Employee welfare benefit plans .............Section 3.11(a)...................12
Environmental Laws .........................Section 3.13(a)...................15
ERISA ......................................Section 3.11(a)...................12
Excess parachute payment ...................Section 3.11(i)....................3
Exchange Act ..............................Section 1.1(b).....................1
Exchange Agent .............................Section 2.10(a)....................6
Exchange Fund ..............................Section 2.10(a)....................6
Exchange Exercise Price.....................Section 2.11(a)....................7
Fairness Opinion ...........................Section 1.2(a).....................3
FCPA .......................................Section 3.10(b)...................12
Final Date .................................Section 7.1(b)....................32
Financial Advisor ..........................Section 1.2(a).....................3
Governmental Entity ........................Section 3.6.......................10
Group ......................................Annex A............................2
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Group health plan ..........................Section 3.11(k)...................14
Hazardous Material .........................Section 3.13(a)...................15
Hazardous Substance ........................Section 3.13(a)...................15
Hazardous waste ............................Section 3.13(a)...................15
HSR Act ....................................Section 3.6.......................10
Inbound License Agreements .................Section 3.15(e)...................18
Include ....................................Section 8.8(f)....................37
Indemnified Parties ........................Section 5.7(a)....................29
Initial Expiration Date ...................Section 1.1(c).....................2
Insurance Policies .........................Section 3.18......................21
Intellectual Property ......................Section 3.15(a)...................17
Knowledge ..................................Section 8.8(e)....................37
Lien .......................................Section 3.2(b).....................9
Material Adverse Effect on Parent ..........Section 4.1(b)....................22
Material Adverse Effect on the Company .....Section 3.1(a).....................8
Medtech.....................................Section 1.1(a).....................1
Meeting ....................................Section 5.3(a)....................27
Merger Consideration .......................Section 2.8........................5
Merger .....................................Section 2.1........................4
Minimum Condition .........................Section 1.1(b).....................2
Multiemployer Plan..........................Section 3.11(d)...................13
Notice of Superior Proposal ................Section 5.2(b)....................26
Offer .....................................Preamble...........................1
Offer Documents ............................Section 1.1(d).....................2
Offer Price ...............................Section 1.1(a).....................1
Other Interests ...........................Section 3.1(c).....................8
Outbound License Agreements ................Section 3.15(e)...................18
Parent ....................................Preamble...........................1
Patents ....................................Section 3.15(a)...................17
Pension Plans ..............................Section 3.11(a)...................12
Person .....................................Section 8.8(g)....................37
Prohibited transaction .....................Section 3.11(g)...................13
Proxy Statement ............................Section 3.5.......................10
Release.....................................Section 1.1(a).....................1
Releases ...................................Section 3.13(a)...................15
Schedule 14D-9 .............................Section 1.2(b).....................3
Schedule TO ................................Section 1.1(d).....................2
SEC .......................................Section 1.1(c).....................2
Securities Act .............................Section 2.11(c)....................7
Shares ....................................Preamble...........................1
Software ...................................Section 3.15(k)...................19
Subsequent Offering Period..................Section 1.1(c).....................2
Stock Options ..............................Section 2.11(a)....................6
Subsidiary .................................Section 8.8(h)....................37
Superior Proposal ..........................Section 5.2(c)....................26
Surviving Corporation ......................Section 2.1........................4
Takeover Statute ...........................Section 3.25......................21
Tax Return .................................Section 3.14(a)(iii)..............16
Tax ........................................Section 3.14(a)(ii)...............16
Tender Offer Purchase Time .................Section 1.3(a).....................4
Third Party Acquisition ....................Section 5.2(c)....................26
Third Party ................................Section 5.2(c)....................26
Trade Secrets .............................Section 3.15(a)...................17
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Trademarks .................................Section 3.15(a)...................17
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
August 22, 2000, is by and among Miller Building Systems, Inc., a Delaware
corporation (the "Company"), COA Housing Group, Inc., an Indiana corporation
("Parent"), a wholly owned subsidiary of Coachmen Industries, Inc., an Indiana
corporation ("COA"), and Delaware Miller Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Parent ("Acquisition"). Initially
capitalized and certain other terms not otherwise defined herein shall have the
meanings ascribed to such terms in Section 8.8 of this Agreement.
RECITALS
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A. The Boards of Directors of the Company, COA, Parent and Acquisition
have each (i) determined that the Merger (as defined below) is advisable and
fair and in the best interests of their respective stockholders and (ii)
approved the Merger upon the terms and subject to the conditions set forth in
this Agreement; and
B. In furtherance thereof, it is proposed that Acquisition shall, as
promptly as reasonably practicable after the public announcement hereof,
commence a tender offer (the "Offer") to acquire all of the outstanding shares
(including the company rights attached thereto, the "Shares") of common stock,
par value $.01 per share, of the Company (the "Company Common Stock").
CLAUSES
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In consideration of the foregoing premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Company, Parent and Acquisition hereby agree as
follows:
ARTICLE 1
THE OFFER
Section 1.1 The Offer.
(a) Acquisition shall commence the Offer for the Shares of
Company Common Stock at a price of $8.40 per Share in cash without interest,
plus a future right to receive up to $.30 per Share, in the event that the
Company obtains either: (i) a release or settlement agreement with (collectively
"Release") Modtech Holdings, Inc. ("Modtech") of any claim it might have against
the Company as a result of the Company entering into the Acquisition (the
"Claim"); or (ii) a final judgment with respect to the Claim (the $8.40 plus the
$.30, or any greater amount per Share paid pursuant to the Offer, being
hereinafter referred to as the "Offer Price"), in accordance with the terms and
subject to the conditions provided herein. The Company shall place thirty cents
($.30) per share in escrow (to be invested in short term U.S. government
interest bearing securities) with Bank One. The escrowed funds shall be utilized
to pay Company obligations, if any, including legal fees and escrow fees,
relating to the Claim. The Escrow Agreement between the Company and the escrow
agent shall be mutually reasonably acceptable to the Company, the Parent, COA
and the escrow agent, and shall be a part hereof when so attached. Upon the
entrance of a final judgment with regard to the Claim, or the execution of a
Release, the amount remaining in escrow, net of all costs, charges and expenses
incurred, shall be distributed to the Company's shareholders.
(b) Provided that this Agreement shall not have been
terminated and subject to the terms hereof, on or prior to ten (10) business
days after the public announcement of the execution hereof by the parties,
Acquisition shall (and Parent shall cause Acquisition to) commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), the Offer for all of the Shares, at the Offer Price; provided,
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however, each party tendering Shares will retain and be entitled to said right
to $.30 per Share or lesser amount as provided herein. The obligation of
Acquisition to accept for payment and to pay for any Shares tendered shall be
subject only to (i) the condition that at least fifty-one percent (51%) of
Shares on a fully-diluted basis (including for purposes of such calculation all
Shares issuable upon exercise of all vested and unvested stock options) be
validly tendered (the "Minimum Condition"), and (ii) the other conditions set
forth in Annex A. Acquisition expressly reserves the right to increase the Offer
Price or to make any other changes in the terms and conditions of the Offer;
provided, however, that unless previously approved by the Company in writing, no
change may be made that (i) decreases the Offer Price, (ii) changes the form of
consideration to be paid in the Offer, (iii) reduces the maximum number of
Shares to be purchased in the Offer, (iv) imposes conditions to the Offer in
addition to those set forth in Annex A, (v) amends the conditions set forth in
Annex A to broaden the scope of such conditions, (vi) extends the Offer except
as provided in Section 1.1(c), or (vii) amends the Minimum Condition. It is
agreed that the conditions set forth in Annex A are for the sole benefit of
Parent and Acquisition and may be waived by Parent and Acquisition, in whole or
in part at any time and from time to time, in their sole discretion, other than
the Minimum Condition, as to which prior written Company approval is required.
The failure by Parent and Acquisition at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time. The Company agrees that no Shares held by the Company or any of
its subsidiaries will be tendered in the Offer. Upon the terms and subject to
satisfaction (or waiver to the extent permitted by this Agreement) of the
conditions of the Offer, Acquisition shall and Parent will provide funds for and
cause Acquisition to accept for payment and pay for, as soon as permitted under
the terms of the Offer and Applicable Law, all Shares validly tendered and not
withdrawn pursuant to the Offer, as soon as practicable after the Initial
Expiration Date (as defined below) and promptly upon tender in any Subsequent
Offering Period (as defined below).
(c) Subject to the terms and conditions thereof, the Offer
shall expire at midnight, New York City time, on the date that is twenty (20)
business days after the date the Offer is commenced (the "Initial Expiration
Date"); provided, however, that without the consent of the Company's Board of
Directors (the "Company Board"), Parent may cause Acquisition to (i) from time
to time extend the Offer, if at the Initial Expiration Date of the Offer any of
the conditions to the Offer shall not have been satisfied or waived (other than
the Minimum Condition, to which this clause does not apply), until such time as
such conditions are satisfied or waived, provided that it is reasonably likely
during such extension any condition set forth in Annex A which is not satisfied
as of the date of such extension will be satisfied during such extension; (ii)
extend the Offer for any period required by any rule, regulation, interpretation
or position of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer; or (iii) if all of the conditions to the Offer
are satisfied or waived but the number of Shares validly tendered and not
withdrawn is less than ninety percent (90%) of the then outstanding number of
Shares on a fully diluted basis, extend the Offer to provide for a subsequent
offering period (within the meaning of Rule 14d-11 under the Exchange Act, a
"Subsequent Offering Period") for an aggregate period not to exceed twenty (20)
business days (for all such extensions), provided that the above minimum
conditions have been met, Acquisition shall accept and promptly pay for all
Shares tendered and shall otherwise meet the requirements of Rule 14d-11 under
the Exchange Act in connection with each such extension.
(d) As soon as practicable on the date the Offer is commenced,
Parent and Acquisition shall file with the SEC a Tender Offer Statement on
Schedule TO (together with all amendments and supplements thereto, and including
all exhibits thereto, the "Schedule TO") with respect to the Offer. The Schedule
TO shall contain as an exhibit or incorporate by reference the Offer to Purchase
(or portions thereof) and forms of the related letter of transmittal and summary
advertisement. Parent and Acquisition agree that they shall cause the Schedule
TO, the Offer to Purchase and all amendments or supplements thereto (which
together constitute the "Offer Documents") to comply in all material respects
with the Exchange Act and the rules and regulations thereunder and other
Applicable Laws. Parent and Acquisition further agree that the Offer Documents,
on the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation or warranty of any kind is made by
Parent or Acquisition with respect to information supplied by the Company or any
of its stockholders specifically for inclusion or incorporation by reference in
the Offer Documents. The Company agrees that the information provided by the
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Company for inclusion or incorporation by reference in the Offer Documents shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of Parent, Acquisition and the Company agrees promptly to
correct any information provided by it for use in the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect, and Parent and Acquisition further agree to take all steps
necessary to cause the Schedule TO as so corrected to be filed with the SEC and
the other Offer Documents as so corrected to be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment on the Offer Documents prior to the filing
thereof with the SEC. Parent and Acquisition agree to provide to the Company and
its counsel in writing any comments Parent, Acquisition or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after receipt of such comments.
Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer
and represents that the Company Board, at a meeting duly called and held, has,
subject to the terms and conditions set forth herein, (i) determined that each
of the Offer and the Merger is advisable and is fair to the stockholders of the
Company and in the best interests of such stockholders; (ii) approved this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, in all respects and such approval constitutes approval of the Offer,
this Agreement and the Merger for purposes of Section 203 of the Delaware
General Corporation Law ("DGCL"); and (iii) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
Acquisition and approve and adopt this Agreement and the Merger. The Company
consents to the inclusion of such recommendation and approval in the Offer
Documents. The Company also represents that the Company Board has reviewed the
opinion of Morgan Keegan & Company, Inc., financial advisor to the Company Board
(the "Financial Advisor"), that, as of August 22, 2000, the consideration to be
received pursuant to this Agreement is fair to the stockholders of the Company
from a financial point of view (the "Fairness Opinion"). The Company has been
authorized by the Financial Advisor to permit, subject to the prior review and
consent by the Financial Advisor, the inclusion of the Fairness Opinion (or a
reference thereto) in the Offer Documents, the Schedule 14D-9 and the Proxy
Statement.
(b) The Company shall file with the SEC, concurrently with the
filing of the Schedule TO, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto, and including all
exhibits thereto, the "Schedule 14D-9") containing the recommendations described
in Section 1.2(a) and shall mail the Schedule 14D-9 to the stockholders of the
Company promptly after the commencement of the Offer. The Company agrees that it
shall cause the Schedule 14D-9 to comply in all material respects with the
Exchange Act and the rules and regulations thereunder and other Applicable Laws.
The Company further agrees that the Schedule 14D-9, on the date first published,
sent or given to the Company's stockholders, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation or warranty is made by the Company with respect to information
supplied by the Parent or Acquisition specifically for inclusion or
incorporation by reference in Schedule 14D-9. Each of the Company, Parent and
Acquisition agrees promptly to correct any information provided by it for use in
the Schedule 14D-9 or the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and be disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given reasonable
opportunity to review and comment on the Schedule 14D-9 prior to the filing
thereof with the SEC. The Company agrees to provide to the Parent and its
counsel in writing any comments the Company or its counsel may receive from the
SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of
such comments.
(c) In connection with the Offer, the Company shall, or shall
cause its transfer agent to, promptly following a request by Parent, to furnish
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Parent with such information, including updated lists of the stockholders of the
Company, mailing labels and updated lists of security positions, and such
assistance as Parent or its agents may reasonably request in communicating the
Offer to the record and beneficial holders of Shares. Subject to the
requirements of Applicable Law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, Parent and Acquisition and their agents shall hold in confidence the
information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, will promptly deliver, and will use their
reasonable efforts to cause their agents to promptly deliver, to the Company all
copies and any extracts or summaries from such information then in their
possession or control.
(d) Solely in connection with the tender and purchase of
Shares pursuant to the Offer and the consummation of the Merger, the Company
hereby waives any and all rights of first refusal it may have with respect to
Shares owned by, or issuable to, any person, other than rights to repurchase
unvested shares, if any, that may be held by persons following exercise of
employee stock options.
Section 1.3 Boards of Directors and Committees; Section 14(f) of
Exchange Act.
(a) Promptly upon the purchase and payment by Acquisition of
Shares pursuant to the Offer following the Initial Expiration Date, or, if
applicable, the extended expiration date of the Offer (the "Tender Offer
Purchase Time") and from time to time thereafter, if the Minimum Condition has
been met, the Parent shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Company Board as will
give Parent representation on the Company Board equal to the product of the
number of directors on the Company Board (giving effect to any increase in the
number of directors pursuant to this Section 1.3) and the percentage that such
number of Shares so purchased bears to the total number of outstanding Shares on
a fully-diluted basis, and the Company shall, upon request by Parent, promptly,
at the Company's election, either increase the size of the Company Board or
secure the resignation of such number of directors as is necessary to enable
Parent's designees to be elected to the Company Board and to cause Parent's
designees to be so elected and to constitute at all times after the Tender Offer
Purchase Time a majority of the Company Board. At such times, the Company shall
cause the individuals designated by Parent to constitute at least the same
percentage as is on the Company Board of (i) each committee of the Company Board
(other than any committee of the Company Board established to take action under
this Agreement), (ii) each Board of Directors of each subsidiary of the Company
and (iii) each committee of each such Board of Directors.
(b) The Company's obligation to appoint designees to the
Company Board shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all action
required pursuant to such Section and Rule in order to fulfill its obligations
under this Section 1.3 and shall include in the Schedule 14D-9 such information
with respect to the Company and its officers and directors as is required under
such Section and Rule in order to fulfill its obligations under this Section
1.3. Parent shall supply to the Company in writing and be solely responsible for
any information with respect to itself and its nominees, officers, directors and
affiliates required by such Section and Rule.
ARTICLE 2
THE MERGER
Section 2.1 The Merger. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and in accordance with the DGCL,
Acquisition shall be merged with and into the Company (the "Merger"). Following
the Merger, the Company shall continue as the surviving corporation (the
"Surviving Corporation") and the separate corporate existence of Acquisition
shall cease. Parent, as the sole stockholder of Acquisition, hereby approves
this Agreement and the Merger.
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Section 2.2 Effective Time. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date, (a) a Certificate of Merger
substantially in the form of Exhibit A (the "Certificate of Merger") shall be
duly executed and acknowledged by Acquisition and the Company and thereafter
delivered for filing to the Secretary of State of the State of Delaware pursuant
to Section 251 of the DGCL; and (b) the parties shall make such other filings
with the Secretary of State of the State of Delaware as shall be necessary to
effect the Merger. The Merger shall become effective at such time as a properly
executed copy of the Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware in accordance with Section 251 of the DGCL, or
such later time as Parent and the Company may agree upon and as may be set forth
in the Certificate of Merger (the time the Merger becomes effective being
referred to herein as the "Effective Time").
Section 2.3 Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date (the "Closing Date") to be
specified by the parties, which shall be no later than the second business day
after satisfaction (or waiver) of the latest to occur of the conditions set
forth in Article 6, at the offices of Coachmen Industries, Inc., 2831 Dexter
Drive, Elkhart, Indiana, unless another time, date or place is agreed to in
writing by the parties hereto.
Section 2.4 Effects of the Merger. The Merger shall have the effects
set forth in the DGCL. 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 Acquisition shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and
Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 2.5 Certificate of Incorporation and Bylaws. The Certificate of
Incorporation of Acquisition in effect at the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation until amended in
accordance with Applicable Law. The bylaws of Acquisition in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with Applicable Law.
Section 2.6 Directors. The directors of Acquisition at the Effective
Time shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and bylaws of the
Surviving Corporation until such director's successor is duly elected or
appointed and qualified.
Section 2.7 Officers. The officers of Acquisition at the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Certificate of Incorporation and bylaws of the Surviving
Corporation until such officer's successor is duly elected or appointed and
qualified.
Section 2.8 Conversion of Shares.
(a) At the Effective Time, each Share issued and outstanding
immediately prior to the Effective Time (other than (i) Shares held in the
Company's treasury or by any of the Company's subsidiaries and (ii) Shares held
by Parent, Acquisition or any other subsidiary of Parent) shall, by virtue of
the Merger and without any action on the part of Acquisition, the Company or the
holder thereof, be converted into and shall become the right to receive an
amount in cash equal to the Offer Price, without interest (the "Merger
Consideration").
(b) At the Effective Time, each outstanding share of the
common stock of Acquisition shall be converted into one share of common stock of
the Surviving Corporation.
(c) At the Effective Time, each Share held in the treasury of
the Company and each Share held by Parent, Acquisition or any subsidiary of
Parent, Acquisition or the Company immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of Parent,
Acquisition, the Company or the holder thereof, be canceled, retired and cease
to exist, and no Merger Consideration shall be delivered with respect thereto.
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Section 2.9 Dissenters' Rights. Notwithstanding Section 2.8, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with the DGCL shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses the right to appraisal. If
after the Effective Time such holder fails to perfect or withdraws or loses the
right to appraisal, such Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration. The
Company shall give Parent prompt notice of any demands received by the Company
for appraisal of Shares, and Parent shall have the right to participate in all
negotiation and proceedings with respect to such demands. The Company shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands.
Section 2.10 Exchange of Certificates.
(a) From time to time following the Effective Time, as
required by Subsection (b) below, Parent shall deliver to its transfer agent, or
a depository or trust institution of recognized standing selected by Parent and
Acquisition (the "Exchange Agent") for the benefit of the holders of Shares for
exchange in accordance with this Article 2 an amount of cash equal to the
aggregate Merger Consideration payable pursuant to Section 2.8 (such amount of
cash is hereinafter referred to as the "Exchange Fund"), in exchange for
outstanding Shares.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding Shares (the "Certificates") and whose shares were converted into the
right to receive Merger Consideration pursuant to Section 2.8: (i) a letter of
transmittal (which shall specify that delivery shall be effected and risk of
loss and title to the Certificates shall pass only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting surrender of the Certificates in exchange for
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor a
check representing the Merger Consideration, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of Shares
that is not registered in the transfer records of the Company, a check
representing the proper amount of Merger Consideration may be issued to a
transferee if the Certificate representing such Shares is presented to the
Exchange Agent accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.10, each Certificate
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the Merger Consideration.
(c) In the event that any Certificate for Shares shall have
been lost, stolen or destroyed, the Exchange Agent shall issue in exchange
therefor upon the making of an affidavit of that fact by the holder thereof the
Merger Consideration; provided, however, that Parent or the Exchange Agent may,
in its reasonable discretion, require the delivery of a suitable bond or
indemnity.
(d) If, after the Effective Time, Certificates are presented
to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article 2.
(e) Any portion of the Exchange Fund that remains
undistributed to the stockholders of the Company upon the expiration of two
hundred seventy (270) days after the Effective Time shall be delivered to Parent
upon demand and any stockholders of the Company who have not theretofore
complied with this Article 2 shall thereafter look only to Parent as general
creditors for payment of their claims for Merger Consideration.
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(f) Neither Parent nor Acquisition nor the Company shall be
liable to any holder of Shares amount of cash from the Exchange Fund delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar Applicable Law.
Section 2.11 Assumed Stock Options.
(a) At the Effective Time, each option to purchase Shares
granted under the Company's 1991 Stock Option Plan, 1994 Stock Option Plan or
1997 Stock Option Plan (each a "Company Plan" or collectively the "Company
Plans"; options granted thereunder being "Company Stock Options") which is then
outstanding and unexercised (a "Stock Option" or collectively "Stock Options"),
which Stock Options total 578,009 as of August 23, 2000, shall cease to
represent a right to acquire Shares and shall be converted automatically into
options to purchase shares of common stock of COA ("COA Common Stock"), and COA
shall assume each such option (hereinafter, an "Assumed Option") subject to the
terms of the applicable Company Plan, in each case as heretofore amended or
restated, as the case may be, and the agreement evidencing the grant thereunder
of such Assumed Option; provided, however, that from and after the Effective
Time, the per Share exercise price under each such Assumed Option shall be
adjusted in accordance with Schedule 2.11 (the "Exchange Exercise Price"). In
the case of any Assumed Options which are "incentive stock options" (as defined
in Section 422 of the Code), the exercise price, the number of shares of COA
Common Stock purchasable pursuant to such options and the terms and conditions
of exercise of such options shall be determined in order to comply with Section
424(a) of the Code. The number of shares purchasable upon exercise, duration and
other terms of the Assumed Option shall be the same as the original Stock Option
except that all references to the Company shall be deemed to be references to
COA. Parent acknowledges and agrees that all Assumed Options shall be fully
vested as set forth in the Option agreements. The terms of each Assumed Option
shall, in accordance with its terms, be subject to further adjustment as
appropriate to reflect any stock split, stock dividend, recapitalization or
other similar transaction with respect to COA Common Stock on or subsequent to
the Effective Time. Prior to the Effective Time, the Company plan committee
shall adopt a resolution approving the assumption procedure for Company Stock
Options described in this Section 2.11(a).
(b) At or before the Effective Time, the Company shall take
all action necessary to provide that, as of the Effective Time, all other
options, warrants or other rights to purchase Shares that are not issued
pursuant to a Company Plan shall be terminated.
(c) Parent shall reserve for issuance a sufficient number of
COA Common Stock for delivery upon the exercise of Assumed Options. No later
than thirty (30) days following the Effective Time, COA shall take all action
necessary to register the COA Common Stock subject to the Assumed Options under
the Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder (the "Securities Act") pursuant to
a registration statement on Form S-8 (or any successor form) and to cause the
effectiveness of such registration statement or registration statements (and the
current status of the prospectus or prospectuses contained therein) to be
maintained for so long as the Assumed Options remain outstanding.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of Parent and
Acquisition, subject to the exceptions set forth in the Disclosure Schedule (the
"Company Disclosure Schedule") delivered by the Company to Parent in accordance
with Section 5.9 (which exceptions shall specifically identify a Section,
Subsection or clause of a single Section or Subsection hereof, as applicable, to
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which such exception relates although any disclosure on a particular schedule
shall be deemed to be described on all applicable schedules) that:
Section 3.1 Organization and Qualification; Subsidiaries; Investments.
(a) Section 3.1(a) of the Company Disclosure Schedule sets
forth a true and complete list of all the Company's directly and indirectly
owned subsidiaries and branch offices, together with the jurisdiction of
incorporation of each subsidiary and the percentage of each subsidiary's
outstanding capital stock or other equity interests owned by the Company or
another subsidiary of the Company. Each of the Company and its subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite power
and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the lack of such qualification
or good standing would not have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company has heretofore delivered to Parent
accurate and complete copies of the Certificate of Incorporation and bylaws (or
similar governing documents), as currently in full force and effect, of the
Company and each of its subsidiaries. Section 3.1(a) of the Company Disclosure
Schedule specifically identifies each subsidiary of the Company that contains
any material assets or through which the Company conducts any material
operations. Except as set forth in Section 3.1(a) of the Disclosure Schedule,
the Company has no operating subsidiaries other than those incorporated in a
state of the United States. When used in connection with the Company or its
subsidiaries, the term "Material Adverse Effect on the Company" means any
circumstance, change in, or effect that is, or is reasonably likely in the
future to be, materially adverse to the operations, financial condition,
earnings or results of operations, or the business (financial or otherwise), of
the Company and its subsidiaries, taken as a whole, provided that none of the
following shall be deemed, either alone or in combination, to constitute a
Material Adverse Effect on the Company: (i) a change in the market price or
trading volume of the Company Common Stock, (ii) conditions affecting the U.S.
economy as a whole, or (iii) changes in or affecting the modular building
industry generally. Further, it is agreed, that notwithstanding any other
material adverse effect, an effect of $ 500,000 or more on annual reported
earnings falls within the definition of Material Adverse Effect on the Company.
(b) The Company and its subsidiaries are duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by them or the nature of the business
conducted by them makes such qualification or licensing necessary, except in
such jurisdictions where the failure to be so duly qualified or licensed and in
good standing would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
(c) Section 3.1(c) of the Company Disclosure Schedule sets
forth a true and complete list of each equity investment in an amount of One
Hundred Thousand Dollars ($100,000) or more or that represents a five percent
(5%) or greater ownership interest in the subject of such investment made by the
Company or any of its subsidiaries in any person other than the Company's
subsidiaries ("Other Interests"). Except as set forth on Schedule 3.1(c) of the
Company Disclosure Schedule, the Other Interests are owned by the Company, by
one or more of the Company's subsidiaries or by the Company and one or more of
its subsidiaries, in each case free and clear of all Liens (as defined in
Section 3.2(b), below).
Section 3.2 Capitalization of the Company and its Subsidiaries.
(a) The authorized capital stock of the Company consists of
7,500,000 Shares, of common stock, par value $0.01, of which, as of the close of
business on August 23, 2000, 3,074,092 Shares were issued and outstanding, and
50,000 shares of preferred stock, par value $1.00 per share, of which as of the
close of business on August 1, 2000, no shares of which are outstanding. All of
the outstanding Shares have been validly issued and are fully paid,
nonassessable and free of preemptive rights. As of the close of business on
August 1, 2000, approximately 1,050,000 Shares were reserved for issuance and,
as of the close of business on August 1, 2000, no Shares were issuable upon or
otherwise deliverable in connection with the exercise of outstanding Company
Stock Options. Between the close of business on August 23, 2000 and the date
hereof, no stock options have been granted. Except as set forth above, as of the
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date hereof, there are outstanding (i) no shares of capital stock or other
voting securities of the Company, (ii) no securities of the Company or any of
its subsidiaries convertible into or exchangeable or exercisable for shares of
capital stock or other securities of the Company, (iii) no options, preemptive
or other rights to acquire from the Company or any of its subsidiaries, and,
except as described in the Company SEC Reports (as defined below), no
obligations of the Company or any of its subsidiaries to issue, any capital
stock, voting securities or securities convertible into or exchangeable or
exercisable for capital stock or other securities of the Company and (iv) no
equity equivalent interests in the ownership or earnings of the Company or its
subsidiaries or other similar rights (collectively "Company Securities"). As of
the date hereof, there are no outstanding rights or obligations of the Company
or any of its subsidiaries to repurchase, redeem or otherwise acquire any
Company Securities. There are no stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by which it is
bound relating to the voting or registration of any shares of capital stock of
the Company. The Company has not voluntarily accelerated the vesting of any
Company Stock Options as a result of the Offer or the Merger or any other change
in control of the Company.
(b) All of the outstanding capital stock of the Company's
subsidiaries is owned by the Company, directly or indirectly, free and clear of
any Lien or any other limitation or restriction (including any restriction on
the right to vote or sell the same except as a matter of Applicable Law). There
are no securities of the Company or any of its subsidiaries convertible into or
exchangeable or exercisable for, or other rights to acquire from the Company or
any of its subsidiaries, any capital stock or other ownership interests in or
any other securities of any subsidiary of the Company, and there exists no other
contract, understanding, arrangement or obligation (whether or not contingent)
providing for the issuance or sale, directly or indirectly, of any such capital
stock. There are no outstanding contractual obligations of the Company or its
subsidiaries to repurchase, redeem or otherwise acquire any outstanding shares
of capital stock or other ownership interests in any subsidiary of the Company.
For purposes of this Agreement, "Lien" means, with respect to any asset
(including any security), any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset; provided, however, that the
term "Lien" shall not include (i) statutory liens for Taxes that are not yet due
and payable or are being contested in good faith by appropriate proceedings and
are disclosed in Section 3.14 of the Company Disclosure Schedule or that are
otherwise not material, (ii) statutory or common law liens to secure obligations
to landlords, lessors or renters under leases or rental agreements confined to
the premises rented, (iii) deposits or pledges made in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old age
pension or other social security programs mandated by Applicable Law, (iv)
statutory or common law liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens, and (v) restrictions on transfer of securities imposed by applicable
state and federal securities laws.
(c) The Shares constitute the only class of equity securities
of the Company or its subsidiaries registered or required to be registered under
the Exchange Act.
(d) Section 3.2(d) of the Company Disclosure Schedule sets
forth the following information concerning each of the outstanding Company Stock
Options: the date of grant, the total number of Shares for which the Company
Stock Option is exercisable, and the exercise price.
Section 3.3 Authority Relative to this Agreement; Recommendation.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
under this Agreement, and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly and validly authorized by the
Company Board, and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, except, if required by law, the approval of this Agreement
and the Merger by the holders of a majority of the outstanding Shares. This
Agreement has been duly and validly executed and delivered by the Company and
constitutes the valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to any applicable
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bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.
(b) Without limiting the generality of the foregoing, the
Board of Directors of the Company has (i) approved this Agreement, the Offer,
the Merger and the other transactions contemplated hereby, (ii) resolved to
recommend approval and adoption of this Agreement, the Merger and the other
transactions contemplated hereby by the Company's stockholders, and (iii) has
not withdrawn or modified such approval or resolution to recommend (except as
otherwise permitted in this Agreement).
Section 3.4 SEC Reports; Financial Statements.
(a) The Company has filed all required forms, reports and
documents (the "Company SEC Reports") with the SEC since January 1, 1997, each
of which complied at the time of filing in all material respects with all
applicable requirements of the Securities Act, and the Exchange Act, each law as
in effect on the dates such forms, reports and documents were filed. None of
such Company SEC Reports, including any financial statements or schedules
included or incorporated by reference therein, contained when filed any untrue
statement of a material fact or omitted to state a material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein in light of the circumstances under which they were made not
misleading, except to the extent superseded by a Company SEC Report filed
subsequently and prior to the date hereof. The audited consolidated financial
statements of the Company included in the Company SEC Reports fairly present, in
conformity in all material respects with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto and except as permitted by Form 10Q of the Securities Act), the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and their consolidated results of operations and changes
in financial position for the periods then ended; provided however, that the
interim statements are subject to normal year end adjustments.
(b) The Company has heretofore made, and hereafter will make,
available to Acquisition or Parent a complete and correct copy of any amendments
or modifications that are required to be filed with the SEC but have not yet
been filed with the SEC to agreements, documents or other instruments that
previously had been filed by the Company with the SEC pursuant to the Exchange
Act.
Section 3.5 Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in the
Offer Documents, Schedule 14D-9, and any other tender offer materials, Schedule
14A or 14C, or proxy statement or information statement (the "Proxy Statement")
relating to any meeting of the Company's stockholders to be held in connection
with the Merger (all of the foregoing documents, collectively, the "Disclosure
Statements") will, at the date each and any of the Disclosure Statements is
mailed to stockholders of the Company and at the time of the meeting of
stockholders of the Company to be held, if necessary, in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein in light of the circumstances under which they are made not
misleading. Notwithstanding the foregoing, the Company makes no representation,
warranty or covenant with respect to any information supplied in writing by
Parent or Acquisition for inclusion in the Proxy Statement or Schedule 14D-9.
The Proxy Statement, if any, and Schedule 14D-9 will comply as to form in all
material respects with all provisions of Applicable Law.
Section 3.6 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under
applicable requirements of the Securities Act, the Exchange Act, state
securities or blue sky laws, and the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), any filings under similar merger
notification laws or regulations of foreign Governmental Entities and the filing
and recordation of the Certificate of Merger as required by the DGCL, no
material filing with or notice to and no material permit, authorization, consent
or approval of any United States (federal, state or local) or foreign court or
tribunal, or administrative, governmental or regulatory body, agency or
authority (a "Governmental Entity") is necessary for the execution and delivery
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by the Company of this Agreement or the consummation by the Company of the
transactions contemplated hereby. Neither the execution, delivery and
performance of this Agreement by the Company, nor the consummation by the
Company of the transactions contemplated hereby will (a) conflict with or result
in any breach of any provision of the respective Certificate of Incorporation or
bylaws (or similar governing documents) of the Company or any of its
subsidiaries, (b) except as set forth in Section 3.6 of the Company Disclosure
Schedule, result in a violation or breach of or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
the Company or any of its subsidiaries is a party or by which any of them or any
of their respective properties and assets is bound or (c) except as set forth in
Section 3.6 of the Company Disclosure Schedule, violate any material order,
writ, injunction, decree, law, statute, rule or regulation applicable to the
Company or any of its subsidiaries or any of their respective properties or
assets, except where any of the foregoing would individually or in the
aggregate, does not and would not (i) have a Material Adverse Effect on the
Company, (ii) prevent or materially delay consummation of the transactions
contemplated herein or (iii) require the Company Parent or Acquisition to incur
any additional material cost or material obligations in order to consummate the
transaction.
Section 3.7 No Default. Except as set forth in Section 3.7 of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
in breach, default or violation (and no event has occurred that with notice or
the lapse of time or both would constitute a breach, default or violation) of
any term, condition or provision of (i) its Certificate of Incorporation or
bylaws (or similar governing documents), (ii) any material note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any of its subsidiaries is now a party or by which it or
any of its properties and assets is bound or (iii) any material order, writ,
injunction, decree, law, statute, rule or regulation applicable to the Company
or any of its subsidiaries or any of its properties or assets.
Section 3.8 No Undisclosed Liabilities; Absence of Changes. Except as
and to the extent (i) publicly disclosed by the Company in the Company SEC
Reports, (ii) set forth in Section 3.8 of the Company Disclosure Schedule, (iii)
fully reflected or reserved on the consolidated balance sheet of the Company and
its subsidiaries dated July 1, 2000 or (iv) arisen after such balance sheet
date, in the ordinary course of business of the Company and its subsidiaries,
neither the Company nor any of its subsidiaries has any material liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, that
is not disclosed and would be required by generally accepted accounting
principles to be reflected on a consolidated balance sheet of the Company
(including the notes thereto) and would have a Material Adverse Effect on the
Company and its subsidiaries.
Except as publicly disclosed by the Company in the Company SEC Reports
or as set forth in Section 3.8 of the Company Disclosure Schedule, since
December 31, 1999, there have been no events, changes or effects with respect to
the Company or its subsidiaries that, individually or in the aggregate, have had
or reasonably would be expected to have a Material Adverse Effect on the
Company. Without limiting the generality of the foregoing, except as and to the
extent publicly disclosed by the Company in the Company SEC Reports or as set
forth in Section 3.8 of the Company Disclosure Schedule, since December 31,
1999, the Company and its subsidiaries have conducted their respective
businesses in all material respects only in the ordinary and usual course of
such businesses consistent with past practices, and there has not been, other
than in the ordinary course of business, any (i) material adverse change in the
financial condition, properties, business, prospects or results of operations of
the Company and its subsidiaries; (ii) material damage, destruction or other
casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company or any of its subsidiaries, not covered by
insurance; (iii) declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of the Company or any of its
subsidiaries (other than wholly-owned subsidiaries) except in connection with
the Company's publicly announced stock repurchase program; (iv) amendment of any
material term of any outstanding security of the Company or any of its
subsidiaries; (v) incurrence, assumption or guarantee by the Company or any of
its subsidiaries of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent with past
practices; (vi) creation or assumption by the Company or any of its subsidiaries
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of any Lien on any material asset other than in the ordinary course of business
consistent with past practices; (vii) loan, advance or capital contributions
made by the Company or any of its subsidiaries to, or investment in, any person
other than loans or advances to employees in connection with business-related
travel, (y) loans made to employees consistent with past practices that are not
in the aggregate in excess of Thirty Thousand Dollars ($30,000), and (z) loans,
advances or capital contributions to or investments in wholly-owned
subsidiaries, and in each case made in the ordinary course of business
consistent with past practices; (viii) transaction or commitment made, or any
contract or agreement entered into, by the Company or any of its subsidiaries
relating to its assets or business (including the acquisition (by sale, license
or otherwise) or disposition (by sale, license or otherwise) of any assets) or
any relinquishment by the Company or any of its subsidiaries of any contract,
agreement or other right, in any such case, material to either the Company and
any of its subsidiaries; (ix) labor dispute (other than routine individual
grievances), or any activity or proceeding by a labor union or representative
thereof to organize any employees of the Company or any of its subsidiaries, or
any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to such employees; (x) exclusive license, distribution, marketing, sales
or other agreement entered into or any agreement to enter into any exclusive
license, distribution, marketing, sales or other agreement; (xi) any notice of
violation issued by any government agency of any statute or government
regulation; or (xii) change by the Company or any of its subsidiaries in any of
its accounting principles, practices or methods. Since December 31, 1999, except
as disclosed in the Company SEC Reports filed prior to the date hereof or except
for increases in the ordinary course of business consistent with past practices,
there has not been any increase in the compensation payable or that could become
payable by the Company or any of its subsidiaries to (a) officers of the Company
or any of its subsidiaries or (b) any employee of the Company or any of its
subsidiaries whose annual cash compensation is One Hundred Thousand Dollars
($100,000) or more.
Section 3.9 Litigation. Except as publicly disclosed by the Company in
the Company SEC Reports or as set forth in Section 3.9 of the Company Disclosure
Schedule, there is no suit, claim, action, arbitration, proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries or any of their respective properties or
assets before any Governmental Entity or brought by any person. No litigation is
pending or threatened that is material or would reasonably be expected to
prevent or delay the consummation of the transactions contemplated by this
Agreement beyond the Final Date. Except as publicly disclosed by the Company in
the Company SEC Reports, neither the Company nor any of its subsidiaries is
subject to any outstanding order, writ, injunction or decree that would
reasonably be expected to be material or would reasonably be expected to prevent
or delay the consummation of the transactions contemplated hereby.
Section 3.10 Compliance with Applicable Law.
(a) Except as publicly disclosed and specifically identified
by the Company in the Company SEC Reports or on the attached Schedules,
including Schedule 3.10 of the Company Disclosure Schedule, the Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses, including environmental permits (the "Company Permits").
Except as publicly disclosed and specifically identified by the Company in the
Company SEC Reports or on the attached Schedules, the Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where non-compliance would not have a Material Adverse Effect on the Company.
Any known non-compliance, regardless of materiality, is disclosed on the
attached Schedules. Except as publicly disclosed and specifically identified by
the Company in the Company SEC Reports, the businesses of the Company and its
subsidiaries have been and are being conducted in compliance with all Applicable
Laws, except where non-compliance would not have a Material Adverse Effect on
the Company, and are not being conducted in known non-compliance with any
Applicable laws, except as disclosed in the attached Schedules.. Except as
publicly disclosed by the Company in the Company SEC Reports, no investigation
or review by any Governmental Entity with respect to the Company or any of its
subsidiaries is pending or, to the knowledge of the Company, threatened, nor, to
the knowledge of the Company, has any Governmental Entity indicated an intention
to conduct the same.
(b) The Company and its subsidiaries are in full compliance
with the Foreign Corrupt Practices Act, as amended, 15 U.S.C. ss.ss. 78m,
78dd-1, 78dd-2, 78dd-3 and 78ff (the "FCPA"), and no pending or former
contracts, or pending bids or proposals, of the Company or any of its
subsidiaries were obtained or submitted in violation of the FCPA.
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Section 3.11 Employee Benefits.
(a) For purposes of this Agreement, "Compensation and Benefit
Plans" means, collectively, each written bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, compensation, medical, health, or other plan, agreement, policy,
arrangement or program, that covers current or former employees, officers,
directors, agents or independent contractors of the Company or any of its
subsidiaries, or pursuant to which current or former employees, officers,
directors, agents or independent contractors of the Company or any of its
subsidiaries are entitled to current or future benefits. There are no oral
Compensation and Benefit Plans. The Company has listed on Section 3.11(a) of the
Company Disclosure Schedule, and has made available to Parent copies of, all
"employee pension benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes
referred to herein as "Pension Plans"), "employee welfare benefit plans" (as
defined in Section 3(l) of ERISA) and all other Compensation and Benefit Plans
maintained, or contributed to, by the Company or any person or entity that,
together with the Company, is treated as a single employer under Section 414(b),
(c), (m) or (o) of the Code (the Company and each such other person or entity, a
"Commonly Controlled Entity") for the benefit of any current or former
employees, officers or directors of the Company or any of its subsidiaries. With
respect to each Compensation and Benefit Plan, the Company has also provided to
Parent, complete and correct copies of (1) the most recent determination letter
(or opinion letter, if entitled to rely on such letter) from the Internal
Revenue Service, (2) the last three annual reports on Form 5500 filed with the
Internal Revenue Service (if any such report was required), (3) the most recent
summary plan description and (4) each trust agreement and group annuity contract
related thereto.
(b) Except as otherwise provided in Section 3.11(b) of the
Company Disclosure Schedule, each of the Company and its subsidiaries has
performed its obligations under each Compensation and Benefit Plan; each
Compensation and Benefit Plan and each trust or other funding medium, if any,
established in connection therewith has at all times been established,
maintained and operated in compliance with its terms and the requirements
prescribed by Applicable Law, including ERISA, the Code, the Age Discrimination
in Employment Act of 1967, Title VII of the Civil Rights Act of 1964 and the
Social Security Act, except where noncompliance would not have a Material
Adverse Effect on the Company.
(c) Each Pension Plan that is intended to be qualified under
Section 401(a) of the Code is, and at all times since inception has been so
qualified and its related trust is, and at all times since inception has been,
exempt from taxation under Section 501(a) of the Code.
(d) Neither the Company nor any Commonly Controlled Entity
currently maintains or has ever maintained, contributes to or has ever had an
obligation to contribute to, or otherwise has any obligation with respect to a
Pension Plan that is subject to Title IV of ERISA, a "multiemployer plan" (as
defined in Section 3(37) of ERISA), a "multiple employer plan (as defined in
Section 413 of the Code), or a Compensation and Benefit Plan that is subject to
any law, custom or rule of any jurisdiction outside of the United States.
(e) There are no suits, actions, disputes, claims (other than
non-material routine claims for benefits), arbitrations, administrative or other
proceedings pending or, to the knowledge of Company, threatened, anticipated or
expected to be asserted with respect to any Compensation and Benefits Plan or
any related trust or other funding medium thereunder or with respect to the
Company or any of its subsidiaries, as the sponsor or fiduciary thereof or with
respect to any other fiduciary thereof.
(f) No Compensation and Benefit Plan maintained by the Company
or any of its subsidiaries or any related trust or other funding medium
thereunder or any fiduciary thereof is, to the knowledge of Company, the subject
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of an audit, investigation or examination by an governmental or
quasi-governmental agency.
(g) With respect to each Compensation and Benefit Plan, (1) no
"prohibited transaction" (as such term is used in Section 4975 of the Code
and/or Section 406 of ERISA), has occurred; (2) neither the Company nor any of
its subsidiaries has any commitment, intention or understanding to create,
terminate or adopt any Compensation and Benefit Plan that would result in any
additional liability to Parent, Acquisition, the Company or the Surviving
Corporation or any of their respective subsidiaries; and (3) since the beginning
of the current fiscal year of the Company, no event has occurred and no
condition or circumstance has existed that reasonably would be expected to
result in an increase in the benefits under or the expense of maintaining each
such Compensation and Benefit Plan from the level of benefits or expense
incurred for the most recently completed fiscal year of the Company.
(h) All contributions required to be made under the terms of
any Compensation and Benefit Plan as of the date hereof have been timely made.
(i) Except as provided by this Agreement or as listed on
Section 3.11(i) of the Company Disclosure Schedule, the execution of, and
performance of the transactions contemplated by, this Agreement (including the
Offer and Merger) will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any provision of a
Compensation and Benefit Plan or agreement that will or may reasonably be
expected to result in any payment (whether severance pay or otherwise),
acceleration, vesting or increase in benefits with respect to any current or
former employee, officer, director, agent or independent contractor of the
Company or any of its subsidiaries, whether or not any such payment would be an
"excess parachute payment" (within the meaning of Section 280G of the Code).
(j) Except as set forth on Section 3.11(j) of the Company
Disclosure Schedule, Parent, the Surviving Corporation and the Company or one or
more of its subsidiaries, as applicable, may terminate any Compensation and
Benefit Plan maintained by the Company or such subsidiary at any time or may
cease contributions to any such Compensation and Benefit Plans at any time
without incurring any liability other than ordinary expenses in the
administration of a terminated 401(k) plan or a benefit liability accrued in
accordance with the terms of such Compensation and Benefit Plan immediately
prior to such termination or ceasing of contributions.
(k) Neither the Company nor any of its subsidiaries maintains
any Compensation and Benefit Plan which is a "group health plan" (as such term
is defined in Section 5000(b)(1) of the Code) that has not been administered and
operated in all respects in compliance with the applicable requirements of
Section 601 of ERISA and Section 4980B of the Code and neither the Company nor
any of its subsidiaries is subject to any liability, including without
limitation, additional contributions, fines, penalties or loss of tax deduction
as a result of such administration and operation, except where noncompliance
would not have a Material Adverse Effect on the Company.
(l) Neither the Company nor any of its subsidiaries has
incurred, nor does the Company reasonably expect it or any of its subsidiaries
to incur, any liability for any tax imposed under Sections 4971 through 4980B of
the Code or civil liability under Section 502(i) or (1) of ERISA.
(m) Except as otherwise may result under Section 3.25, no
Compensation and Benefit Plan which is an employee welfare benefit plan provides
post-employment or post-termination benefits of any kind, including without
limitation, hospitalization, life, medical or death benefits to any current or
former officer, employee, agent, director or independent contractor, other than
benefits mandated by law.
(n) Section 3.11(n) of the Company Disclosure Schedule lists
all outstanding Company Stock Options as of the date hereof, identifying for
each such option: (i) the number of shares issuable, (ii) the number of vested
shares, (iii) the date of expiration and (iv) the exercise price.
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(o) Parent and Acquisition shall cause the Company to continue
to allow employee deferrals to the Company's Executive Deferred Compensation
Plan ("DCP") through December 31, 2003, and any Company match to the DCP for the
calendar year 2000 or any period of time thereafter shall be solely at the
Company's discretion. Effective after December 31, 2003, the DCP may be
terminated or amended (including an amendment to discontinue future deferrals
and matching contributions) by Company at its sole discretion in accordance with
the terms of the DCP.
Section 3.12 Labor and Employment Matters. Except as set forth on
Section 3.12 of the Company Disclosure Schedule:
(a) No collective bargaining agreement exists that is binding
on the Company or any of its subsidiaries and, to the Company's knowledge, no
petition has been filed or proceeding instituted, or any action taken in
contemplation of any such filing or institution, by an employee or group of
employees of the Company or any of its subsidiaries, with the National Labor
Relations Board seeking recognition of a bargaining representative.
(b) (i) There is no labor strike, dispute, slow down or
stoppage pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries; and
(ii) Neither the Company nor any of its subsidiaries
has received any demand letters, civil rights charges, suits or drafts of suits
with respect to claims made by any of its or its subsidiaries' employees, or
notice of any governmental or administrative complaints made by any of its or
its subsidiaries' employees.
(c) Section 3.12 of the Company Disclosure Schedule contains a
list of the name of each officer, employee and consultant of the Company and
each of its subsidiaries, with remuneration greater than Eighty Thousand Dollars
($80,000), together with such person's position or function, annual base salary
or wages and any incentives or bonus arrangement with respect to such person. As
of the date hereof, no such person has terminated or has notified the Company of
an intention to terminate such person's relationship or status as an officer,
employee or consultant of the Company or such subsidiary for any reason,
including because of the consummation of the transactions contemplated by this
Agreement. The Company and its subsidiaries have no plans or intentions to
terminate any such officer, employee or consultant.
(d) Each of the Company and its subsidiaries is in compliance
with all Applicable Laws respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to its
employees, except where noncompliance would not have a Material Adverse Effect
on the Company.
(e) Each of the Company and its subsidiaries has withheld and
reported to the applicable Governmental Entities all amounts required by
Applicable Law or by agreement to be withheld and reported with respect to
wages, salaries and other payments to employees.
(f) Except as set forth on Schedule 3.12(f) of the Company
Disclosure Schedule, there are no pending or, to the knowledge of the Company,
threatened claims or actions against the Company or any of its subsidiaries
under any worker's compensation policy or long-term disability policy.
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Section 3.13 Environmental Laws and Regulations.
(a) The term "Environmental Laws" means any applicable
federal, state, local or foreign law, statute, treaty, ordinance, rule,
regulation, policy, permit, consent, approval, license, judgment, order, decree
or injunction relating to: (i) "Releases" (as defined in 42 U.S.C. sec.
9601(22)) or threatened Releases of Hazardous Material (as defined below) into
the environment, (ii) the generation, treatment, storage, disposal, use,
handling, manufacturing, transportation or shipment of Hazardous Material, (iii)
the health or safety of employees in the workplace, (iv) protecting or restoring
natural resources or (e) the environment. The term "Hazardous Material" means
(1) hazardous substances (as defined in 42 U.S.C. sec. 9601(14)), including
"hazardous waste" as defined in 42 U.S.C. sec. 6903, (2) petroleum, including
crude oil and any fractions thereof, (3) natural gas, synthetic gas and any
mixtures thereof, (4) asbestos and/or asbestos containing materials, (5) PCBs or
materials containing PCBs, (6) any material regulated as a medical waste, (7)
lead containing paint, (8) radioactive materials and (9) "Hazardous Substance"
or "Hazardous Material" as those terms are defined in any indemnification
provision in any contract, lease, or agreement to which the Company or any of
its subsidiaries is a party.
(b) During the period of ownership or operation by the Company
and its subsidiaries of any of their current or previously owned or leased
properties, there have been no Releases of Hazardous Material by the Company or
any of its subsidiaries in, on, under or affecting such properties or any
surrounding site, and neither the Company nor any of its subsidiaries has
disposed of any Hazardous Material in a manner that has led, or could reasonably
be anticipated to lead to a Release, except in each case for those which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. There have been no Releases of Hazardous Material by the Company or
any of its subsidiaries in, on, under or affecting their current or previously
owned or leased properties or any surrounding site at times outside of such
periods of ownership, operation or lease, except in each case for those which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. Regardless of materiality, all known Releases of Hazardous Material
at any time are disclosed on the attached Schedules. Neither the Company nor any
of its subsidiaries has received any written notice of, or entered into any
order, settlement or decree relating to: (i) any violation of any Environmental
Laws or the institution or pendency of any suit, action, claim, proceeding or
investigation by any Governmental Entity or any third party in connection with
any alleged violation of Environmental Laws or (ii) the response to or
remediation of Hazardous Material at or arising from any of the Company's
properties or any subsidiary's properties. To the knowledge of the Company,
after reasonable and diligent inquiry, there have been no violations of any
Environmental Laws by the Company or any subsidiary.
(c) Except as set forth on Section 3.13 of the Company
Disclosure Schedule:
(i) to the knowledge of Company, after reasonable and
diligent inquiry, the Company has not exposed any employee or third party to any
Hazardous Material or condition which has subjected or may subject the Company
to liability under any Environmental Law;
(ii) the Company has not assumed by agreement any
liability of any person for cleanup, compliance or required capital expenditures
pursuant or related to any Environmental Law;
(iii) the Company is not required to make any capital
or other expenditures to comply with any Environmental Law nor to the knowledge
of Company, after reasonable and diligent inquiry, is there any reasonable basis
on which any Governmental Entity could take action that would require such
capital or other expenditure; and
(iv) the Company has delivered to Parent copies of
all environmental assessments, audits, studies, and other environmental reports
in its possession relating to the Company or any of its current or former
properties or operations.
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(d) There are no past or present events, conditions,
circumstances, activities, practices, incidents, actions, omissions or plans
that constitute a violation by the Company or any of its subsidiaries of, or are
reasonably likely to prevent or interfere with the Company's or any of its
subsidiaries' future compliance with, any Environmental Laws, other than any of
the foregoing that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company.
Section 3.14 Taxes.
(a) Definitions. For purposes of this Agreement:
(i) the term "Code" means the Internal Revenue Code
of 1986, as amended;
(ii) the term "Tax" (including "Taxes") means (1) all
federal, state, local, foreign and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs, duties or other
taxes, fees, assessments or charges of any kind whatsoever, whether disputed or
not, together with any interest and any penalties, additions to tax or
additional amounts with respect thereto, (2) any liability for payment of
amounts described in clause (1) whether as a result of transferee liability, of
being a member of an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law, and (3) any liability for the
payment of amounts described in clauses (1) or (2) as a result of any tax
sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to indemnify any other person; and
(iii) the term "Tax Return" means any return,
declaration, report, statement, information statement and other document filed
or required to be filed with respect to Taxes.
(b) Except as set forth in Section 3.14(b) of the Company
Disclosure Schedule, the Company and its subsidiaries have duly and timely filed
all Tax Returns required to be filed; and such Tax Returns are complete and
accurate in all material respects and correctly reflect the Tax liability
required to be reported thereon. Such Tax Returns do not contain a disclosure
statement under Section 6662 of the Code (or any predecessor provision or
comparable provision of state, local or foreign law).
(c) The Company and its subsidiaries have paid or adequately
provided in the financial statements included in the SEC Reports for all Taxes
(whether or not shown on any Tax Return) accrued through the date of such
Company SEC Reports; all Taxes the Company and its subsidiaries accrued
following the end of the most recent period covered by the Company SEC Report
have been accrued in the ordinary course of business of the Company and each
such subsidiary and have been paid when due in the ordinary course of business;
and no material election has been made with respect to Taxes of the Company or
its subsidiaries in any Tax Returns that have not been provided to Parent.
(d) Except as set forth in Section 3.14(d) of the Company
Disclosure Schedule, no material claim for assessment or collection of Taxes is
presently being asserted against the Company or its subsidiaries and neither the
Company nor any of its subsidiaries is a party to any pending action,
proceeding, or investigation by any governmental taxing authority nor does the
Company have knowledge of any such threatened action, proceeding or
investigation.
(e) Except as set forth in Section 3.14(e) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to any agreement, contract, arrangement or plan that has resulted or would
result, individually or in the aggregate, in connection with this Agreement or
any change of control of the Company or any of its subsidiaries, in the payment
of any "excess parachute payments" within the meaning of Section 280G of the
Code.
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(f) Except as set forth in Section 3.14(f) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to or bound by any obligation under any Tax sharing, Tax allocation, Tax
indemnity or similar agreement or arrangement.
(g) Except as set forth in Section 3.14(g) of the Company
Disclosure Schedule, there is currently no limitation on the utilization of net
operating losses, built-in losses, tax credits or other similar items of the
Company or its subsidiaries under Section 382, 383, 384 or 1502 of the Code and
the Treasury Regulations thereunder.
(h) Except as set forth in Section 3.14(h) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has agreed
to, or is required to make, any adjustment under Section 481 of the Code by
reason of a change in accounting method.
Section 3.15 Intellectual Property.
(a) Section 3.15(a) of the Company Disclosure Schedule sets
forth, for the Intellectual Property owned, in whole or in part, including
jointly with others, by the Company or any of its subsidiaries, a complete and
accurate list of all United States and foreign (i) patents and patent
applications; (ii) Trademark registrations and applications and material
unregistered Trademarks; and (iii) copyright registrations and applications,
indicating for each, the applicable jurisdiction, registration number (or
application number) and date issued (or date filed). For purposes of this
Agreement, "Intellectual Property" means: trademarks and service marks (whether
register or unregistered), trade names, fictitious business names, logos,
designs and general intangibles of like nature, together with all goodwill
related to the foregoing (collectively, "Trademarks"); patents (including any
continuations, continuations in part, renewals and applications for any of the
foregoing) (collectively "Patents"); copyrights (including any registrations and
applications therefor and whether registered or unregistered) (collectively,
"Copyrights"); computer software; databases; works of authorship; mask works;
technology; trade secrets and other confidential information, know-how,
proprietary processes, formulae, algorithms, models, user interfaces, customer
lists, inventions, discoveries, concepts, ideas, techniques, methods, source
codes, object codes, methodologies and, with respect to all of the foregoing,
related confidential data or information (collectively, "Trade Secrets").
(b) Trademarks.
(i) All Trademark registrations are currently in
compliance in all material respects with all legal requirements (including the
timely post-registration filing of affidavits of use and incontestability and
renewal applications) other than any requirement that, if not satisfied, would
not result in a cancellation of any such registration or otherwise materially
affect the priority and enforceability of the Trademark in question.
(ii) No registered Trademark has been within the last
three (3) years or is now involved in any opposition or cancellation proceeding
in the United States Patent and Trademark Office. To the Company's knowledge, no
such action has been threatened in writing within the one (1)-year period prior
to the date of this Agreement.
(iii) To the Company's knowledge, there has been no
prior use of any material Trademark by any third party that confers upon said
third party superior rights in any such Trademark.
(iv) All material Trademarks registered in the United
States have been in continuous use by the Company or one of its subsidiaries.
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(v) The material Trademarks registered in the United
States have been continuously used in the form appearing in, and in connection
with the goods and services listed in, their respective registration
certificates or renewal certificates, as the case may be.
(c) Patents.
(i) All Patents are currently in compliance with
legal requirements (including payment of filing, examination, and maintenance
fees and proofs of working or use) other than any requirement that, if not
satisfied, would not result in a revocation or otherwise materially affect the
enforceability of the Patent in question.
(ii) No Patent has been or is now involved in any
interference, reissue, reexamination or opposing proceeding in the United States
Patent and Trademark Office. To the Company's knowledge, no such action has been
threatened within the one (1) year period prior to the date of this Agreement.
(iii) To the knowledge of the Company, there is no
patent or patent application of any person that conflicts in any material
respect with any Patent or invalidates any claim the Company or any of its
subsidiaries has in any Patent.
(d) Trade Secrets. The Company and each of its subsidiaries
has taken reasonable steps in accordance with normal industry practice to
protect their respective rights in confidential information and Trade Secrets.
(e) License Agreements. Section 3.15(e)(i) of the Company
Disclosure Schedule sets forth a complete and accurate list of all license
agreements granting to the Company or any of its subsidiaries any material right
to use or practice any rights under any Intellectual Property other than
software commercially available on reasonable terms to any person for a license
fee of no more than Fifty Thousand Dollars ($50,000) (collectively, the "Inbound
License Agreements"), indicating for each the title and the parties thereto and
the amount of any future royalty or license fee payable thereunder. Section
3.15(e)(ii) of the Company Disclosure Schedule sets forth a complete and
accurate list of all license agreements under which the Company or any of its
subsidiaries licenses software or grants other rights in to use or practice any
rights under any Intellectual Property, excluding licenses with customers that
in the twelve-month period prior to the date hereof have purchased or licensed
products for which the total payments to the Company and its subsidiaries did
not exceed Fifty Thousand Dollars ($50,000) and otherwise are not material to
the Company (collectively, the "Outbound License Agreements"), indicating for
each the title and the parties thereto. There is no material outstanding or, to
the Company's knowledge, threatened dispute or disagreement with respect to any
Inbound License Agreement or any Outbound License Agreement.
(f) Ownership; Sufficiency of IP Assets. The Company or one of
its subsidiaries owns or possesses adequate licenses or other rights to use,
free and clear of Liens, orders and arbitration awards, all of its material
Intellectual Property used in its business. The Intellectual Property identified
in Section 3.15(a) of the Company Disclosure Schedule, together with the
Company's and its subsidiaries' unregistered copyrights and the Company's and
such subsidiaries' rights under the licenses granted to the Company or any of
its subsidiaries under the Inbound License Agreements, constitute all the
material Intellectual Property rights used in the operation of the Company's and
its subsidiaries' businesses as they are currently conducted and are all the
Intellectual Property rights necessary to operate such businesses after the
Effective Time in substantially the same manner as such businesses have been
operated by the Company prior thereto.
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(g) No Infringement by the Company. The products used,
manufactured, marketed, sold or licensed by the Company and its subsidiaries,
and all Intellectual Property used in the conduct of the Company's and its
subsidiaries' businesses as currently conducted, do not infringe upon, violate
or constitute the unauthorized use of any valid and enforceable rights owned or
controlled by any third party, including any Intellectual Property of any third
party.
(h) No Pending or Threatened Infringement Claims. Except and
to the extent publicly disclosed in the Company SEC Reports, no litigation is
now or, within the three (3) years prior to the date of this Agreement, was
pending and, to the Company's knowledge, after reasonable and diligent inquiry,
no notice or other claim in writing has been received by the Company within the
one (1) year prior to the date of this Agreement, (i) alleging that the Company
any of its subsidiaries has engaged in any activity or conduct that infringes
upon, violates or constitutes the unauthorized use of the Intellectual Property
rights of any third party or (ii) challenging the ownership, use, validity or
enforceability of any Intellectual Property owned or exclusively licensed by or
to the Company. Except as specifically disclosed in one or more Sections of the
Company Disclosure Schedules pursuant to this Section 3.15, to the knowledge of
the Company, no Intellectual Property (x) that is owned by the Company or any of
its subsidiaries or the subject of an Inbound License Agreement is subject to
any outstanding order, judgment, decree, stipulation or agreement restricting
the use thereof by the Company or any such subsidiary, except as may be
specifically provided in any such Inbound License Agreement, or (y) that is the
subject of an Outbound License Agreement is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the sale, transfer,
assignment or licensing thereof by the Company or any of its subsidiaries to any
person.
(i) No Infringement by Third Parties. Except as and to the
extent publicly disclosed in the Company SEC Reports or as set forth in Section
3.15(i) of the Company Disclosure Schedule, to the knowledge of the Company, no
third party is misappropriating, infringing, diluting or violating any
Intellectual Property owned or exclusively licensed by the Company or any of its
subsidiaries, and no such claims have been brought against any third party by
the Company or any of its subsidiaries.
(j) Assignment; Change of Control. Except as set forth on
3.15(j) of Disclosure Schedule, the execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions contemplated
hereby, will not result in the loss or impairment of, or give rise to any right
of any third party to terminate or alter, any of the Company's or any of its
subsidiaries' rights to own any of its Intellectual Property or their respective
rights under any Inbound License Agreement or Outbound License Agreement, nor
require the consent of any Governmental Authority or third party in respect of
any such Intellectual Property.
(k) Software. The Software owned or purported to be owned by
the Company or any of its subsidiaries, was either (i) developed by employees of
the Company or any of its subsidiaries within the scope of their employment;
(ii) developed by independent contractors who have assigned their rights to the
Company or any of its subsidiaries pursuant to written agreements; or (iii)
otherwise acquired by the Company or a subsidiary from a third party. Except as
set forth in Section 3.15(1) of the Company Disclosure Schedule, to the
knowledge of the Company, the Software does not contain any programming code,
documentation or other materials or development environments that embody
Intellectual Property rights of any person other than the Company or any of its
subsidiaries, except for such materials or development environments obtained by
the Company or any of its subsidiaries from other persons who make such
materials or development environments generally available to all interested
purchasers or end-users on standard commercial terms. For purposes of this
Section 3.15(k), "Software" means any and all (i) computer programs, including
any and all software implementations of algorithms, models and methodologies,
whether in source code or object code, (ii) databases and compilations,
including any and all data and collections of data, whether machine readable or
otherwise, (iii) descriptions, schematics, flow-charts and other work product
used to design, plan, organize and develop any of the foregoing, and (iv) all
documentation, including user manuals and, training materials, relating to any
of the foregoing.
Section 3.16 Properties. Each of the Company and its subsidiaries has
valid title to all real and personal properties, assets and rights shown on its
balance sheet or its last Company SEC Report prior to the date hereof as being
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owned by it and valid leasehold interests in all material properties and assets
(whether real, personal or mixed) leased by it (collectively, the "Company
Assets"). With respect to any leased Company Assets, there are no security
deposits or portions thereof that have been applied in respect of a breach or
default under the applicable lease which has not been redeposited in full and
neither the Company nor any of its subsidiaries has mortgaged, deeded in trust
or otherwise transferred or encumbered such lease or any interest therein except
in the ordinary course of business. There are no pending or, to the Company's
knowledge, threatened condemnation proceedings against or affecting any material
Company Assets.
Section 3.17 Material Contracts and Commitments.
(a) Section 3.17 of the Company Disclosure Schedule contains a
true and complete list as of the date of this Agreement of all of the following
contracts, agreements and commitments, whether oral or written ("Contracts"), to
which the Company or any of its subsidiaries is a party or by which any of them
or any of their material Company Assets is bound, as each such contract or
commitment may have been amended, modified or supplemented:
(i) any agreement (or group of related agreements)
for the lease of personal property to or from any person providing for rent in
excess of One Hundred Thousand Dollars ($100,000) during any twelve-month
period;
(ii) any agreement for the lease of real property
providing for the payment of rent in excess of Two Hundred and Fifty Thousand
Dollars ($250,000) during any twelve-month period;
(iii) any agreement (or group of related agreements)
or indemnity under which the Company or any of its subsidiaries has created,
incurred, assumed or guaranteed any debt including without limitation any
indebtedness for borrowed money, warehouse lines of credit, or any capitalized
lease or purchase money obligation (except for intercompany obligations), in
excess of One Hundred Thousand Dollars ($100,000);
(iv) any agreement under which the Company or any of
its subsidiaries has granted a lien, pledge, security interest or other
encumbrance upon any of its material assets;
(v) any agreement under which the Company or any of
its subsidiaries has an obligation to indemnify a director, officer or employee;
(vi) any agreement for the employment of any
individual on a full-time, part-time, consulting or other basis other than oral
retainers of professionals terminable at will (excluding commissioned
employees);
(vii) any agreement concerning confidentiality or
noncompetition given by the Company other than those agreements (A) entered into
with any person in connection with the proposed sale of the Company and (B) that
do not materially restrict the manner in which the Company or any of its
subsidiaries conduct its business;
(viii) any other plan, contract or arrangement,
whether formal or informal, which involves direct or indirect compensation
(including bonus, stock option, severance, golden parachute, deferred
compensation, special retirement, consulting and similar agreements and all
agreements and arrangements regarding the Company's net branches) for the
benefit of one or more of the current or former directors, officers or employees
of the Company (other than Company Compensation and Benefit Plans described in
Section 3.11(a);
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(ix) any guaranty or suretyship, performance bond or
contribution agreement; and
(x) any marketing, sales representative or dealership
agreement with respect to which the fees paid or payable by the Company are or
will be in excess of One Hundred Thousand Dollars ($100,000) in any twelve (12)
month period, or which is terminable only for cause or upon more than thirty
(30) days notice;.
(b) The Company has heretofore made available to the Parent
true and complete copies of all of the Contracts required to be set forth in
Section 3.17 of the Company Disclosure Schedule. Each such Contract is a valid
and binding agreement of the Company or one of its subsidiaries in accordance
with its terms, and is in full force and effect (except as set forth in Section
3.17 of the Company Disclosure Schedule), except where the failure to be valid
and binding and in full force and effect would not individually or in the
aggregate have a Material Adverse Effect on the Company. Neither the Company nor
any of its subsidiaries is in default with respect to any such Contract, nor (to
the Company's knowledge) does any condition exist that with notice or lapse of
time or both would constitute such a material default thereunder or permit any
other party thereto to terminate such Contract, To the Company's knowledge, no
other party to any such Contract is in default in any respect with respect to
any such Contract, which would have a Material Adverse Effect on the Company. No
party has given any written notice (i) of termination or cancellation of any
such Contract or (ii) that it intends to assert a breach of any such Contract,
Section 3.18 Insurance. True and correct copies of all insurance
policies of the Company and its subsidiaries have been made available to Parent
(the "Insurance Policies"). Each Insurance Policy is in full force and effect
and is valid, outstanding and enforceable, and all premiums due thereon have
been paid in full. Each of the Company and its subsidiaries has complied in all
material respects with the provisions of each Insurance Policy under which it is
the insured party, except where failure would not result in cancellation of any
such policies or material increases in premiums. No insurer under any Insurance
Policy has canceled or generally disclaimed liability under any such policy or,
to the Company's knowledge, indicated any intent to do so or not to renew any
such policy. All material claims under the Insurance Policies have been filed in
a timely fashion.
Section 3.19 Certain Business Practices. None of the Company, any of
its subsidiaries or, to the Company's knowledge, any of its directors, officers,
agents or employees of the Company or any of its subsidiaries has (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (iii) made any other unlawful payment.
Section 3.20 Product Warranties. There have not been any material
deviations from warranties and guaranties currently in effect with respect to
Company products and neither the Company, any of its subsidiaries nor any of
their respective salesmen, employees, distributors and agents is authorized to
undertake obligations to any customer or to other third parties materially in
excess of warranties or guaranties provided by Company or any of its
subsidiaries currently in effect with respect to its products.
Section 3.21 Suppliers and Customers. The documents and information
supplied by the Company to Parent or any of its representatives in connection
with this Agreement with respect to relationships and volumes of business done
with its significant suppliers and customers are accurate in all material
respects. During the last twelve (12) months, the Company has received no
notices of termination or written threats of termination from any of the ten
(10) largest suppliers or the ten (10) largest customers of the Company and its
subsidiaries.
Section 3.22 Vote Required. The affirmative vote of the holders of a
majority of the outstanding Shares is the only vote of the holders of any class
or series of the Company's capital stock necessary to approve and adopt this
Agreement and the Merger.
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Section 3.23 Opinion of Financial Adviser. The Fairness Opinion has not
been withdrawn, revoked or modified. A true and complete copy of such opinion
has been delivered to Parent.
Section 3.24 Brokers. No broker, finder or investment banker (other
than the Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to Parent) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. The fees
payable to Morgan Keegan will not exceed two hundred ninety thousand dollars
($290,000.00),including for the fairness opinion or any other opinion Morgan
Keegan is requested to give the Company.
Section 3.25 Takeover Statutes. No "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute or regulation (each a
"Takeover Statute") is applicable to the Company, the Shares, the Offer, the
Merger or any of the other transactions contemplated by this Agreement. The
Company Board has approved the Offer, the Merger and this Agreement, and such
approval is sufficient to render inapplicable to the Offer, the Merger, this
Agreement, and the transactions contemplated by this Agreement the provisions of
Section 203 of the DGCL to the extent, if any, such Section is applicable to the
Offer, the Merger, this Agreement, or any of the transactions contemplated by
this Agreement.
Section 3.26 Representations Complete. None of the representations or
warranties made by the Company in this Agreement nor any statement made in any
Schedule or certificate furnished by the Company pursuant to this Agreement, or
furnished in or in connection with documents mailed or delivered to the
stockholders of the Company in connection with soliciting their proxy or consent
to this Agreement and the Merger, contains or will contain at the Effective
Time, any untrue statement of a material fact, or omits or will omit at the
Effective Time to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
PARENT AND ACQUISITION
Parent and Acquisition hereby represent and warrant to the Company as
follows:
Section 4.1 Organization.
(a) Each of COA, Parent and Acquisition is duly organized,
validly existing and in good standing under the laws of its respective State of
incorporation, and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
except in such jurisdictions where the failure to be so duly qualified or
licensed would not have a Material Adverse Effect on Parent (defined below).
(b) Each of Parent and Acquisition is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not have a Material Adverse Effect on Parent. When used in
connection with Parent or Acquisition the term "Material Adverse Effect on
Parent" means any circumstance, change in, or effect on (or circumstance, change
in, or effect involving a prospective change on) Parent and its subsidiaries,
taken as a whole, that materially and adversely affects the ability of Parent
and/or Acquisition to consummate the Offer or the Merger, provided that none of
the following shall be deemed, either alone or in combination, to constitute a
Material Adverse Effect on Parent or Acquisition: (i) a change in the market
price or trading volume of Parent common stock, (ii) conditions affecting the
U.S. economy as a whole or (iii) changes in or affecting the modular building
industry generally.
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Section 4.2 Authority Relative to this Agreement. Each of Parent and
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the boards of directors of COA, Parent and
Acquisition and by Parent as the sole stockholder of Acquisition, and no other
corporate proceedings on the part of Parent or Acquisition are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by each of
Parent and Acquisition and constitutes, assuming the due authorization,
execution and delivery hereof by the Company, a valid, legal and binding
agreement of each of Parent and Acquisition enforceable against each of Parent
and Acquisition in accordance with its terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.
Section 4.3 Information Supplied. None of the information supplied or
to be supplied by Parent or Acquisition for inclusion or incorporation by
reference in the Disclosure Statements at the respective times that the Proxy
Statement (if necessary) and the Schedule 14D-9 and any amendments of or
supplements to any of the foregoing are filed with the SEC and are first
published or sent or given to holders of Shares, and in the case of any required
Proxy Statement, at the time that it or any amendment thereof or supplement
thereto is mailed to the Company's stockholders, at the time of the Meeting or
the written consent of the stockholders, if either is required, or at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading except that no representation or warranty is made by Parent
or Acquisition with respect to information supplied or required to be supplied
by the Company for inclusion in the Schedule TO or the Proxy Statement. The
Offer Documents shall comply in all material respects as to form with applicable
federal securities laws.
Section 4.4 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under and
other applicable requirements of the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, and any filings under similar merger
notification laws or regulations of foreign Governmental Entities and the filing
and recordation of the Certificate of Merger as required by the DGCL, no
material filing with or notice to, and no material permit, authorization,
consent or approval of any Governmental Entity is necessary for the execution
and delivery by Parent or Acquisition of this Agreement or the consummation by
Parent or Acquisition of the transactions contemplated hereby. Neither the
execution, delivery and performance of this Agreement by Parent or Acquisition
nor the consummation by Parent or Acquisition of the transactions contemplated
hereby will (a) conflict with or result in any breach of any provision of the
respective Certificates of Incorporation or bylaws (or similar governing
documents) of Parent or Acquisition, (b) result in a violation or breach of or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration
or Lien) under any of the terms, conditions or provisions of any material note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or Acquisition or any of Parent's other
subsidiaries is a party or by which any of them or any of their respective
properties and assets is bound or (c) violate any material order, writ,
injunction, decree, law, statute, rule or regulation applicable to Parent or
Acquisition or any of Parent's other subsidiaries or any of their respective
properties or assets.
Section 4.5 LitigationERROR! BOOKMARK NOT DEFINED.. There is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of
Parent threatened, against Parent or COA or any of either of their subsidiaries
or any of their respective properties or assets before any Governmental Entity
that could reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement beyond the Final Date. Neither COA
nor Parent nor any of either of their subsidiaries is subject to any outstanding
order, writ, injunction or decree that could reasonably be expected to prevent
or delay the consummation of the transactions contemplated hereby.
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Section 4.6 Brokers. No broker finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Acquisition.
Section 4.7 Representations and Warranties. None of the representations
or warranties made by Parent or Acquisition in this Agreement nor any statement
made in any Schedule or certificate furnished by Parent or Acquisition pursuant
to this Agreement, or furnished in or in connection with documents mailed or
delivered to the stockholders of the Company in connection with soliciting their
proxy or consent to this Agreement and the Merger, contains or will contain at
the Effective Time, any untrue statement of a material fact, or omits or will
omit at the Effective Time to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
ARTICLE 5
COVENANTS
Section 5.1 Conduct of Business of the Company. Except as contemplated
by this Agreement or as described in Section 5.1 of the Company Disclosure
Schedule, during the period from the date hereof to the Effective Time, the
Company will and will cause each of its subsidiaries to conduct its operations
in the ordinary course of business consistent with past practice, use all
commercially reasonable efforts to preserve intact its current business
organizations, keep available the service of its current officers and employees
and preserve its relationships with customers, suppliers, distributors, lessors,
creditors, employees, contractors and others having business dealings with it
with the intention that its goodwill and ongoing businesses shall be unimpaired
at the Effective Time. Without limiting the generality of the foregoing, except
in the ordinary course of business or as otherwise expressly provided in this
Agreement, prior to the Effective Time, neither the Company nor any of its
subsidiaries will, without the prior written consent of Parent:
(a) amend its Certificate of Incorporation or bylaws (or other
similar 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 stock of any class or any other debt or equity securities or equity
equivalents (including any stock options or stock appreciation rights) except
for the issuance and sale of Shares pursuant to Company Stock Options
outstanding on the date hereof;
(c) split, combine or reclassify any shares of its capital
stock, 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, make any other actual, constructive or deemed distribution in respect of
its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or repurchase or otherwise acquire any of its
securities or any securities of any of its subsidiaries, except as may be
required under the terms of any Company Stock Option;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than the
Merger);
(e) alter through merger, liquidation, reorganization,
restructuring or any other fashion the corporate structure of any subsidiary;
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(f) (i) incur or assume any long-term or short-term debt or
issue any debt securities except, in each case, for borrowings under existing
lines of credit in the ordinary course of business consistent with past
practice, or modify or agree to any amendment of the terms of any of the
foregoing; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person except for obligations of subsidiaries of the Company incurred
in the ordinary course of business consistent with past practice; (iii) make any
loans, advances or capital contributions to or investments in any other person
(other than to subsidiaries of the Company or customary loans or advances to
employees in each case in the ordinary course of business consistent with past
practice); (iv) pledge or otherwise subject to any Lien shares of capital stock
of the Company or any of its subsidiaries; or (v) mortgage or pledge any of its
material assets, tangible or intangible, or create or suffer to exist any
material Lien thereupon;
(g) except as may be required by Applicable Law or Section
2.11 hereof, enter into, adopt or amend or terminate any bonus, special
remuneration, profit sharing, compensation, severance, change of control,
termination, stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, health, life, or disability
insurance, dependent care, severance or other benefit plan agreement, trust,
fund or other arrangement for the benefit or welfare of any director, officer,
employee or consultant in any manner or increase in any manner the compensation
or fringe benefits of any director, officer or employee or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
(including the granting of stock appreciation rights or performance units);
(h) grant any severance or termination pay to any director,
officer, employee or consultant, except payments made pursuant to written
agreements outstanding on the date hereof, the terms of which are in all
material respects completely and correctly disclosed in Section 5.1(h) of the
Company Disclosure Schedule or as required by applicable federal, state or local
law or regulations;
(i) exercise its discretion or otherwise voluntarily
accelerate the vesting of any Company Stock Option as a result of the Merger,
any other change of control of the Company (as defined in each of the Company
Plans) or otherwise;
(j) (i) acquire, sell, lease, license, transfer or otherwise
dispose of any material assets in any single transaction or series of related
transactions (including in any transaction or series of related transactions
having a fair market value in excess of One Hundred Thousand Dollars ($100,000)
in the aggregate), other than sales of its products and licenses of software in
the ordinary course of business consistent with past practices, (ii) enter into
any exclusive license, distribution, marketing, sales or other agreement or
sell, transfer or otherwise dispose of any Intellectual Property;
(k) except as may be required as a result of a change in law
or in generally accepted accounting principles, and except with notice to
Parent, change any of the accounting principles, practices or methods used by
it;
(l) 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 course of business consistent with past
practice;
(m) (i) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other person or division
thereof or any equity interest therein; (ii) enter into any contract or
agreement that would be material to the Company and its subsidiaries, taken as a
whole; (iii) amend, modify or waive any right under any material contract of the
Company or any of its subsidiaries; (iv) modify its standard warranty terms for
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its products or amend or modify any product warranties in effect as of the date
hereof in any material manner that is adverse to the Company or any of its
subsidiaries; (v) authorize any new capital expenditure other than in accordance
with Company's capital expenditure budget, a copy of which has been provided to
Parent, or (vi) authorize any new or additional manufacturing capacity
expenditure or expenditures for any manufacturing capacity contracts or
arrangements;
(n) make any material tax election or settle or compromise any
material income tax liability or permit any insurance policy naming it as a
beneficiary or loss-payable to expire, or to be canceled or terminated, unless a
comparable insurance policy reasonably acceptable to Parent is obtained and in
effect;
(o) fail to file any Tax Returns when due (or, alternatively,
fail to file for available extensions) or fail to cause such Tax Returns when
filed to be complete and accurate in all material respects;
(p) fail to pay any Taxes or other material debts when due;
(q) settle or compromise any pending or threatened suit,
action or claim that (i) relates to the transactions contemplated hereby or (ii)
the settlement or compromise of which would involve more than One Hundred
Thousand Dollars ($100,000) or that would otherwise be material to the Company;
(r) take any action or fail to take any action that could
reasonably be expected to (i) limit the utilization of any of the net operating
losses, built-in losses, tax credits or other similar items of the Company or
its subsidiaries under Section 382, 383, 384 or 1502 of the Code and the
Treasury Regulations thereunder, or (ii) cause any transaction in which the
Company or any of its subsidiaries was a party that was intended to be treated
as a reorganization under Section 368(a) of the Code to fail to qualify as a
reorganization under Section 368(a) of the Code;
(s) take or agree in writing or otherwise to take any of the
actions described in Sections 5.1(a) through 5.1(r) (and it shall use all
reasonable efforts not to take any action that would make any of the
representations or warranties of the Company contained in this Agreement untrue
or incorrect).
Section 5.2 No Solicitation or Negotiation.
(a) The Company, its subsidiaries and other affiliates (as
reasonably determined by the Company) and their respective officers and other
employees with managerial responsibilities, directors, representatives
(including the Financial Advisor and any other investment banker and any
attorneys and accountants) and agents shall immediately cease any discussions or
negotiations with any other persons with respect to any Third Party Acquisition.
The Company also agrees, if requested by Parent, promptly to request each person
that has heretofore executed a confidentiality agreement in connection with its
consideration of acquiring (whether by merger, acquisition of stock or assets or
otherwise) the Company or any of its subsidiaries, if any, to return all
confidential information heretofore furnished to such person by or on behalf of
the Company or any of its subsidiaries. Neither the Company nor any of its
subsidiaries and other affiliates shall, nor shall the Company authorize or
permit any of its or their respective officers, directors, employees,
representatives or agents to, directly or indirectly, encourage, solicit, or
initiate discussions or negotiations with any person or group (other than Parent
and Acquisition or any designees of Parent and Acquisition) concerning any Third
Party Acquisition; provided, however, that if the Board of Directors of the
Company determines in good faith, that it is required to do so by Applicable
Law, the Company may, in response to a proposal, offer or indication of interest
for a Third Party Acquisition that was not solicited and that the Board of
Directors of the Company determines, is from a Third Party that is reasonably
capable of consummating a Superior Proposal and only for so long as the Board of
Directors reasonably so determines that its actions are likely to lead to a
Superior Proposal, furnish information to and participate in discussions or
negotiation with any such person pursuant to a customary confidentiality
agreement as was executed by Parent prior to the execution of this Agreement;
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provided, further, that nothing herein shall prevent the Company Board from
taking and disclosing to the Company's stockholders a position contemplated by
Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to any
tender or exchange offer. The Company shall promptly (and in any event within
one business day after becoming aware thereof) (i) notify Parent in the event
the Company or any of its subsidiaries and other affiliates or any of their
respective officers, directors, employees and agents receives any proposal or
inquiry concerning a Third Party Acquisition, including the terms and conditions
thereof and the identity of the party submitting such proposal, and any request
for confidential information in connection with a potential Third Party
Acquisition and (ii) advise Parent from time to time of the status and promptly
following any significant developments concerning the same.
(b) Except as set forth in this Section 5.2(b), the Company
Board shall not withdraw or modify its recommendation of the transactions
contemplated hereby or approve or recommend, or cause or permit the Company to
enter into any agreement or obligation with respect to, any Third Party
Acquisition. Notwithstanding the foregoing, if prior to the Tender Offer
Purchase Time the Company Board by a majority vote determines in its good faith
judgment, after consultation with legal counsel, that it is required to do so in
order to comply with its fiduciary duties under Applicable Law, the Company
Board may withdraw its recommendation of the transactions contemplated hereby or
approve or recommend a Superior Proposal, but in each case only (i) after
providing written notice to Parent (a "Notice of Superior Proposal") advising
Parent that the Company Board has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and identifying the
person or group making such Superior Proposal and (ii) if Parent does not,
within two (2) business days after Parent's receipt of the Notice of Superior
Proposal, make an offer that the Company Board by a majority vote determines in
its good faith judgment (after consultation with the Financial Advisor or other
reputable financial advisor retained by the Company) to be at least as favorable
to the Company's stockholders as such Superior Proposal; provided, however, that
the Company shall not be entitled to enter into any agreement with respect to a
Superior Proposal unless and until this Agreement is terminated pursuant to
Section 7.1 and the Company has paid all amounts due to Parent pursuant to
Section 7.3. Any disclosure that the Company Board may be compelled to make with
respect to the receipt of a proposal for a Third Party Acquisition or otherwise
in order to comply with its fiduciary duties or Rule 14d-9 or 14e-2 will not
constitute a violation of this Agreement; provided, however, that such
disclosure states that no action will be taken by the Company Board in violation
of this Section 5.2(b).
(c) For purposes of this Agreement, "Third Party Acquisition"
means the occurrence of any of the following events: (i) the acquisition of the
Company by merger or otherwise by any person (which includes a "person" as such
term is defined in Section 13(d)(3) of the Exchange Act) other than Parent,
Acquisition or any affiliate thereof (a "Third Party"); (ii) the acquisition by
a Third Party of any material portion (which shall include fifteen percent (15%)
or more) of the assets of the Company and its subsidiaries, taken as a whole,
other than the sale of its products in the ordinary course of business
consistent with past practices; (iii) the acquisition by a Third Party of
fifteen percent (15%) or more of the issued and outstanding Shares; or (iv) the
adoption by the Company of a plan of liquidation or the declaration or payment
of an extraordinary dividend. For purposes of this Agreement, a "Superior
Proposal" means any bona fide proposal (1) to acquire, directly or indirectly,
for consideration consisting solely of cash and/or securities, all of the Shares
then outstanding, or all or substantially all the assets, of the Company, (2)
that is financeable and contains terms that the Company Board by a majority vote
determines in its good faith judgment to be more favorable to the Company's
stockholders than the Offer and the Merger (after consultation with its
financial advisor), (3) that the Company Board by a majority vote determines in
its good faith judgment (after consultation with its financial advisor) to be
reasonably capable of being completed (taking into account all legal, financial,
regulatory and other aspects of the proposal and the person making the
proposal), (4) that does not contain a "right of first refusal" or "right of
first offer" with respect to any counter-proposal that Parent might make and (5)
that does not contain any financing or "due diligence" conditions. At and after
the Tender Offer Purchase Time, the Company shall not under any circumstances
withdraw its recommendation of the transactions contemplated hereby or approve
or recommend, or cause the Company to enter into any agreement with respect to,
any Third Party Acquisition.
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Section 5.3 Meeting of Stockholders.
(a) The Company shall, following the acceptance for payment
and payment for the Shares by Acquisition pursuant to the Offer, take all
actions necessary in accordance with the DGCL and its Certificate of
Incorporation and bylaws to duly call, give notice of, convene and hold a
meeting of its stockholders as promptly as reasonably practicable to consider
and vote upon the adoption and approval of this Agreement and the transactions
contemplated hereby (the "Meeting"). The stockholder vote required for the
adoption and approval of the transactions contemplated by this Agreement shall
be the vote required by the DGCL and the Company's Certificate of Incorporation
and bylaws. The Company will, through the Company Board, recommend to its
stockholders approval of such matters subject to the provisions of Section
5.2(b). The Company shall promptly prepare and file with the SEC the Proxy
Statement for the solicitation of a vote of the holders of Shares approving the
Merger, which, subject to the provisions of Section 5.2(b), shall include the
recommendation of the Company Board that stockholders of the Company vote in
favor of the approval and adoption of this Agreement and the written opinion of
the Financial Advisor that the consideration to be received by the stockholders
of the Company pursuant to this Agreement is fair to such stockholders from a
financial point of view. The Company shall use all reasonable efforts to have
the Proxy Statement cleared by the SEC as promptly as practicable after such
filing, and promptly thereafter mail the Proxy Statement to the stockholders of
the Company. Whenever any event occurs which is required to be set forth in an
amendment or supplement to the Proxy Statement, the Company will promptly inform
Parent of such occurrence and cooperate in filing with the SEC or its staff or
any other government officials, and/or mailing to stockholders of the Company,
such amendment or supplement. Notwithstanding anything to the contrary contained
in this Agreement, the Company may adjourn or postpone (i) the Meeting to the
extent necessary to ensure that any necessary supplement or amendment to the
Proxy Statement is provided to the Company's stockholders in advance of a vote
on the Merger and this Agreement or (ii) the time for which the Meeting is
originally scheduled (as set forth in the Proxy Statement), if there are
insufficient Shares represented, either in person or by proxy, to constitute a
quorum necessary to conduct the business of the Meeting. Notwithstanding the
foregoing, if Parent, Acquisition and/or any other subsidiary of Parent shall
acquire at least 90% of the outstanding Shares, the parties shall take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a Meeting in accordance
with Section 253 of the DGCL.
(b) Each of Parent and Acquisition agrees to (and Parent shall
cause Acquisition to) vote in favor of the Merger all Shares purchased pursuant
to the Offer and all other Shares owned by Parent, Acquisition or any other
subsidiary of Parent.
Section 5.4 Access to Information.
(a) Between the date hereof and the Effective Time, upon
reasonable notice the Company will give Parent and its authorized
representatives reasonable access during normal business hours to all employees,
plants, offices, warehouses and other facilities and to all books and records
and personnel files of current employees of the Company and its subsidiaries as
Parent may reasonably require, and will cause its officers and those of its
subsidiaries to furnish Parent with such financial and operating data and other
information with respect to the business and properties of the Company and its
subsidiaries as Parent may from time to time reasonably request. Between the
date hereof and the Effective Time, Parent shall make available to the Company,
as reasonably requested by the Company, a designated officer of Parent to answer
questions and make available such information regarding Parent and its
subsidiaries as is reasonably requested by the Company taking into account the
nature of the transactions contemplated by this Agreement.
(b) Between the date hereof and the Effective Time, as
prepared in the ordinary course of business, the Company shall furnish to Parent
(i) within two (2) business days following preparation thereof, the normal
management information reports concerning revenues, cash flows and other items
for the preceding week and/or month, (ii) within two (2) business days following
preparation an unaudited balance sheet as of the end of such quarter and the
related statements of earnings, stockholders' equity (deficit) and cash flows
for the quarter then ended, and (iii) within two (2) business days following
preparation thereof (and in any event within one hundred twenty (120) calendar
days after the end of each fiscal year) an audited balance sheet as of the end
of such year and the related statements of earnings, stockholders' equity
(deficit) and cash flows, all of such financial statements referred to in
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clauses (i), (ii) and (iii) to be prepared in accordance with generally accepted
accounting principles in conformity with the practices consistently applied by
the Company with respect to such financial statements. All the foregoing shall
be in accordance with the books and records of the Company and shall fairly
present its financial position (taking into account the differences between the
monthly, quarterly and annual financial statements prepared by the Company in
conformity with its past practices) as of the last day of the period then ended.
(c) Each of the parties hereto will hold, and will cause its
consultants and advisers to hold, in confidence all documents and information
furnished to it by or on behalf of another party to this Agreement in connection
with the transactions contemplated by this Agreement pursuant to the terms of
that certain Confidentiality Agreement entered into between the Company and COA
dated July 13, 2000.
Section 5.5 Certain Filings; Reasonable Efforts.
(a) Subject to the terms and conditions herein provided,
including Section 5.2(b), each of the parties hereto agrees to use all
reasonable efforts to take or cause to be taken all action and to do or cause to
be done all things reasonably necessary, proper or advisable under Applicable
Law to consummate and make effective the transactions contemplated by this
Agreement, including using all reasonable efforts to do the following, (i)
cooperate in the preparation and filing of each of the Disclosure Statements and
any amendments thereto, any filings that may be required under the HSR Act and
any filings under similar merger notification laws or regulations of foreign
Governmental Entities; (ii) obtain consents of all third parties and
Governmental Entities necessary, proper, advisable or reasonably requested by
Parent or the Company, for the consummation of the transactions contemplated by
this Agreement; (iii) contest any legal proceeding relating to the Merger; and
(iv) execute any additional instruments necessary to consummate the transactions
contemplated hereby. Subject to the terms and conditions of this Agreement,
Parent and Acquisition agree to use all reasonable efforts to cause the
Effective Time to occur as soon as practicable after the Company stockholder
vote with respect to the Merger. The Company agrees to use all reasonable
efforts to encourage its employees to continue employment with the Company and
the Surviving Corporation after the Effective Time. If at any time after the
Effective Time any further action is necessary to carry out the purposes of this
Agreement the proper officers and directors of each party hereto shall take all
such necessary action. Notwithstanding anything contained elsewhere in this
Agreement, in connection with the compliance by Parent or Acquisition with any
Applicable Law (including the HSR Act) or obtaining the consent or approval of
any Governmental Entity whose consent or approval may be required to consummate
the transactions contemplated by this Agreement, neither Parent nor COA shall be
(i) required, or be construed to be required, to sell or divest any assets or
business or to restrict any business operations in order to obtain the consent
or successful termination of any review of any such Governmental Entity
regarding the transactions contemplated hereby or (ii) prohibited from owning,
and no material limitation shall be imposed on COA's or Parent's ownership,
direct or indirect, of, any material portion of the Company's business or
assets.
(b) Parent and the Company will consult and cooperate with one
another, and consider in good faith the views of one another, in connection with
any analyses, appearances, presentations, letters, white papers, memoranda,
briefs, arguments, opinions or proposals made or submitted by or on behalf of
any party hereto in connection with proceedings under or relating to the HSR Act
or any other foreign, federal, or state antitrust, competition, or fair trade
law. In this regard but without limitation, each party hereto shall promptly
inform the other of any material communication between such party and the
Federal Trade Commission, the Antitrust Division of the United States Department
of Justice, or any other federal, foreign or state antitrust or competition
Governmental Entity regarding the transactions contemplated herein.
Section 5.6 Public Announcements. Neither COA, Parent, Acquisition nor
the Company shall issue any press release or otherwise make any public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, or any Third Party Acquisition, without the prior consent
of Parent and Acquisition (in the case of the Company) or the Company (in the
case of Parent or Acquisition), except (i) as may be required by Applicable Law,
or by the rules and regulations of, or pursuant to any agreement with, the
Nasdaq National Market, or (ii) following a change, if any, of the Company
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Board's recommendation of the Merger (in accordance with Section 5.2(b)). The
first public announcement of this Agreement, the Offer and the Merger shall be a
joint press release agreed upon by COA, Parent, Acquisition and the Company.
Section 5.7 Indemnification and Directors' and Officers' Insurance.
(a) From and after the Effective Time, Parent and the
Surviving Corporation shall jointly and severally indemnify, defend and hold
harmless present or former directors and officers of Company or any of its
subsidiaries (collectively the "Indemnified Parties") against all losses,
expenses, claims, damages or liabilities arising out of actions or omissions
occurring on or prior to the Effective Time (including the transactions
contemplated by this Agreement) to the same extent as provided by and subject to
the conditions of any applicable law and the applicable certificates of
incorporation and bylaws COA, as if the Indemnified Parties were officers and
directors of COA, (and shall also, subject to Section 5.7(b), advance expenses
as may be allowed thereunder and subject to the terms thereof, and provided that
the Person to whom expenses are advanced provides a written undertaking
satisfactory to COA to repay such advances if it is ultimately determined that
such person is not entitled to indemnification); provided, however, that any
such indemnification shall be provided only to the extent any directors' and
officers' liability insurance policy of COA or its subsidiaries does not provide
coverage and actual payment thereunder with respect to the matters that would
otherwise be subject to indemnification hereunder (it being understood that COA,
Parent or Surviving Corporation shall, subject to Section 5.7(b), advance
expenses on a current basis as provided in this Section 5.7(a) notwithstanding
such insurance coverage to the extent that payments thereunder have not yet been
made, if the Indemnified Party has provided said undertaking, and in which case
COA, Parent or Surviving Corporation, as the case may be, shall be entitled to
repayment of such advances from the proceeds of such insurance coverage. COA's,
Parent's and Surviving Corporation's obligation herein to fulfill and honor the
Company's indemnification obligation, and the Company's aggregate obligation to
indemnify and hold harmless persons for all matters to which such persons may be
entitled to be indemnified or held harmless under this Section 5.7(a), shall in
no event exceed the Company's net worth as of June 30, 2000. Parent or Surviving
Corporation shall maintain in effect for not less than six years after the
Effective Time the current policies of directors' and officers' liability
insurance maintained by Company or its subsidiaries with respect to matters
occurring prior to the Effective Time to the extent such insurance is available
at a premium of not more than 3.0 times the premium immediately prior to the
Effective Time; provided, however, that (i) COA, Parent or Surviving Corporation
may substitute therefor policies, or at COA's election may cause coverage to be
provided under any policy maintained for the benefit of COA, for at least the
same face amount of coverage, with an insurance company or companies, the claims
paying ability of which is substantially equivalent to the claims paying ability
of the insurance company or companies providing such insurance coverage for
directors and officers of Parent, and (ii) neither COA, Parent nor Surviving
Corporation shall be required to provide insurance in excess of that presently
provided under Company's current policies of directors' and officers' insurance.
Nothing in this paragraph shall supersede the fiduciary obligations to COA,
Parent or Surviving Corporation, or their respective shareholders, of the Boards
of Directors of such companies.
(b) Any Indemnified Party wishing to claim indemnification
under Section 5.7(a), upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly and timely notify Parent thereof, whereupon
Parent or Surviving Corporation shall have the right, but not the obligation,
from and after the Effective Time, to assume and control the defense thereof,
and upon such assumption, neither COA, Parent nor the Surviving Corporation
shall be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof. Notwithstanding the foregoing, if
counsel for the Indemnified Parties advises that there are non-waivable issues
which raise material and substantial conflicts of interest between COA, Parent
or Surviving Corporation and the Indemnified Parties, the Indemnified Parties
may retain separate counsel and COA, Surviving Corporation or Company will pay
all reasonable fees and expenses of such counsel, for matters that are subject
to indemnification as provided in Section 5.7(a); provided that COA, Parent or
Surviving Corporation will not be obligated pursuant to this sentence to pay in
the aggregate for more than one firm or counsel for all Indemnified Parties for
any Claims in any jurisdiction. Neither COA, Parent nor Surviving Corporation
shall be liable for any Claim settlement effected without its prior written
consent.
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(c) This Section 5.7 is intended to benefit the Indemnified
Parties and shall be binding on all successors and assigns of COA, Parent,
Acquisition and Surviving Corporation.
Section 5.8 Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence
of which has caused or would be likely to cause any representation or warranty
contained in this Agreement by such first party to be untrue or inaccurate in
any material respect at or prior to the Effective Time and (ii) any material
failure by such first party to comply with or satisfy in any material respect
any covenant condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.8 shall not cure such breach or non-compliance or limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
Section 5.9 Additions to and Modification of Company Disclosure
Schedule. Concurrently with the execution and delivery of this Agreement, the
Company has delivered a Company Disclosure Schedule that includes all of the
information required by the relevant provisions of this Agreement. In addition,
the Company shall deliver to Parent and Acquisition such additions to or
modifications of any Sections of the Company Disclosure Schedule necessary to
make the information set forth therein true, accurate and complete in all
material respects as soon as practicable after such information is available to
the Company after the date of execution and delivery of this Agreement;
provided, however, that such disclosure shall not be deemed to constitute an
exception to its representations and warranties under Article 3, nor limit the
rights and remedies of Parent and Acquisition under this Agreement for any
breach by the Company of such representation and warranties.
Section 5.10 Access to Company Employees. Upon reasonable notice, the
Company agrees to provide Parent with, and to cause each of its subsidiaries to
provide Parent with, reasonable access to its employees during normal working
hours following the date of this Agreement, to among other things, deliver
offers of continued employment and to provide information to such employees
about Parent.
Section 5.11 Company Compensation and Benefit Plans. The Company agrees
to take all actions necessary to amend, merge, freeze or terminate all
compensation and benefit plans, effective at the Closing Date, as requested in
writing by Parent, except for plans set forth in Schedule 3.11(j) of the Company
Disclosure Schedule.
Section 5.12 Takeover Statutes. If any Takeover Statute is or may
become applicable to the Offer, the Merger or any of the other transactions
contemplated by this Agreement, the Company and the Company Board shall promptly
grant such approvals and take such lawful actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement, the Offer or the Merger, as the case may be, and
otherwise act to eliminate or minimize the effects of such statute, and any
regulations promulgated thereunder, on such transactions.
Section 5.13 Employment Agreements. The Company shall use its best
efforts to enter into employment agreements with all seven (7) key employees
identified in Section 6.1(h) at or before the Effective Time.
ARTICLE 6
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions. The respective obligations of Parent,
Acquisition and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
conditions:
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(a) Stockholder Approval. If required by law, the stockholders
of the Company shall have duly approved the transactions contemplated by this
Agreement by the requisite vote;
(b) Purchase of Shares. Purchaser shall have accepted for
payment and paid for the Shares pursuant to the Offer in accordance with the
terms hereof;
(c) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity, and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity which
prevents the consummation of the Merger or has the effect of making the purchase
of Shares illegal;
(d) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the Merger shall have expired or been
terminated;
(e) Outstanding Shares. The total number of outstanding shares
and options, fully diluted, of Company shall not exceed 3,652,101;
(f) Environmental. A reasonable resolution shall be achieved:
(a) with respect to the emission in excess of 25 tons per annum, if any, from
the Company's Pennsylvania facility; and (b) with respect to the paint booth
permit issue in the Company's New York facility;
(g) Representations. All warranties and representations of
Company contained in this Agreement shall be true in all material respects; and,
(h) Employment Contracts with Agreed Employees. The Company
shall have entered into modified employment agreements with Rodney Young, James
Metzler, Michael Ploutz, John Catalino, Richard Bedell, and four (4) of seven
(7) of the following key employees: Neal Moss, Edward Bollero, Daniel Berdahl,
Dean Bagg, Donald Selke, Thomas Martini and Rob Winks. The terms and conditions
of the employment agreements shall be substantially in the form to be hereafter
attached to this Agreement, and shall be satisfactory to Parent. The Company
shall have amended the employment agreement of Edward C. Craig ("Craig"), in a
form reasonably satisfactory to Parent, to contain the following provisions: (i)
Craig shall be paid his annual salary of $200,000 for the year 2001; (ii)
Craig's Deferred Compensation (as defined in Craig's employment agreement) will
be paid as follows: $115,000 on or before December 31, 2001; $115,000 on or
before December 31, 2002; and $50,000 on or before December 31, 2003; (iii) the
expiration of Craig's Company Stock Options will not occur until all payments
are made pursuant to subsection (ii) hereof, but in no event shall expiration
occur earlier than three (3) years from the Effective Time; and (iv) Craig shall
be paid the Special Bonus, set forth on Schedule 3.11(i), by the end of fiscal
years 2001 and 2002. Parent and Company will be jointly responsible for payment
of all monies under Craig's employment agreement.
ARTICLE 7
TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time whether before
or after approval and adoption of this Agreement by the Company's stockholders:
(a) by mutual written consent of Parent, Acquisition and the
Company;
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(b) by Parent and Acquisition or the Company if (i) any court
of competent jurisdiction in the United States or other United States federal or
state Governmental Entity shall have issued a final order, decree or ruling, or
taken any other final action, restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action is or shall have
become nonappealable or (ii) the Merger has not been consummated by December 15,
2000 (the "Final Date"); provided, however, that no party may terminate this
Agreement pursuant to this clause (ii) if such party's failure to fulfill any of
its obligations under this Agreement shall have been a principal reason that the
Effective Time shall not have occurred on or before said date;
(c) by the Company if (i) there shall have been a breach of
any representations or warranties on the part of Parent or Acquisition set forth
in this Agreement or if any representations or warranties of Parent or
Acquisition shall have become untrue such that, in either such instance, such
breach or change would be incapable of being cured by the Final Date, provided
that the Company has not breached any of its material obligations hereunder in
any material respect; (ii) there shall have been a breach by Parent or
Acquisition of any of their respective covenants or agreements hereunder having
a Material Adverse Effect on Parent or materially adversely affecting (or
materially delaying) the ability of the Company to consummate the Merger, and
Parent or Acquisition, as the case may be, has not cured such breach within five
(5) business days after notice by the Company thereof, provided that the Company
has not breached any of its material obligations hereunder in any material
respect; (iii) the Company shall have convened the Meeting and shall have failed
to obtain the requisite vote of its stockholders thereat (including any
adjournments thereof); (iv) the Company Board has received a Superior Proposal,
has complied with the provisions of Section 5.2(b), and has made the payment
called for by Section 7.3(a); or (v) Acquisition fails to commence the offer on
or prior to ten (10) business days following the date of this Agreement;
(d) by Parent and Acquisition if (i) there shall have been a
breach of any representations or warranties on the part of the Company set forth
in this Agreement or if any representations or warranties of the Company shall
have become untrue such that, in either such instance, such breach or change
would be incapable of being cured by the Final Date, provided that neither
Parent nor Acquisition has breached any of their respective obligations
hereunder in any respect which has a Material Adverse Effect on the Company;
(ii) there shall have been a breach by the Company of one or more of its
covenants or agreements hereunder having a Material Adverse Effect on the
Company (or, in the case of Section 5.2, any material breach thereof) or
materially adversely affecting (or materially delaying) the ability of
Acquisition to consummate the Offer or of Parent, Acquisition or the Company to
consummate the Merger, and the Company has not cured such breach within five (5)
business days after notice by Parent or Acquisition thereof, provided that
neither Parent nor Acquisition has breached any of their respective obligations
hereunder in any material respect; (iii) the Company Board shall have
recommended to the Company's stockholders a Superior Proposal; (iv) the Company
Board shall have withdrawn or adversely modified its approval or recommendation
of this Agreement, the Offer or the Merger; (v) the Company shall have ceased
using all reasonable efforts to call, give notice of, or convene or hold the
Meeting as promptly as practicable after the date on which Acquisition has
accepted for payment Shares pursuant to the Offer or shall have adopted a
resolution not to effect any of the foregoing; or (vi) the Company shall have
convened the Meeting and shall have failed to obtain the requisite vote of its
stockholders thereat (including any adjournments thereof);
(e) by the Company, if by the Final Date, Acquisition shall
have failed to pay for Shares pursuant to the Offer; provided, however, that the
right to terminate this Agreement pursuant to this Subsection (e) shall not be
available to the Company if it has breached in any material respect its material
obligations under this Agreement that in any manner shall have proximately
contributed in any material respect to the failure referenced in this Subsection
(e); or
(f) by Parent and Acquisition, if Acquisition shall have
terminated the Offer in accordance with the provisions of Annex A; provided,
however, that the right to terminate this Agreement pursuant to this Subsection
(f) shall not be available to Parent and Acquisition if either of them has
breached in any material respect its obligations under this Agreement in any
manner that shall have proximately contributed in any material respect to the
termination of the Offer.
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Section 7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect without any liability on the part of
any party hereto or its affiliates, directors, officers or stockholders other
than the provisions of this Section 7.2 and Sections 5.7(b) and 7.3. Except as
set forth in the final sentence of Section 7.3(a), nothing contained in this
Section 7.2 shall relieve any party from liability for any breach of this
Agreement prior to such termination.
Section 7.3 Fees and Expenses. Except as otherwise specifically
provided in this Section 7.3, each party shall bear its own expenses in
connection with this Agreement and the transactions contemplated hereby.
(a) In the event that this Agreement shall be terminated
pursuant to:
(i) Section 7.1(c)(iv) or 7.1(d)(iii), (iv) or (v);
(ii) Section 7.1(d)(i) or (ii) and, at the time of
such termination, (x) there is outstanding an offer by a Third Party to
consummate, or a Third Party shall have publicly announced (and not withdrawn) a
plan or proposal with respect to, a Third Party Acquisition and such Third Party
Acquisition occurs, or (y) there is no such Third Party offer outstanding or
plan or proposal announced but within twelve (12) months after the date on which
this Agreement has been terminated the Company enters into an agreement with
respect to a Third Party Acquisition or a Third Party Acquisition occurs
involving any person other than Parent or one of its subsidiaries; or
(iii) Section 7.1(f) and, at the time of such
termination, there is outstanding an offer by a Third Party to consummate, or a
Third Party shall have publicly announced (and not withdrawn) a plan or proposal
with respect to a Third Party Acquisition and the Company has entered into an
agreement with respect to such Third Party Acquisition or such Third Party
Acquisition otherwise occurs within twelve (12) months after the date on which
this Agreement has been terminated;
Parent and Acquisition would suffer direct and substantial damages, which
damages cannot be determined with reasonable certainty. To compensate Parent and
Acquisition for such damages the Company shall pay to Parent within three (3)
business days of the termination, the amount of Two Million Dollars
($2,000,000), less any amounts paid pursuant to Section 7.3(b)(ii) below, as
liquidated damages immediately upon the occurrence of the event described in
this Section 7.3(a) giving rise to such damages. It is specifically agreed that
the amount to be paid pursuant to this Section 7.3(a) represents liquidated
damages and not a penalty. If Parent or Acquisition receives the amount in
compliance with this Section 7.3(a), Parent and Acquisition shall not assert or
pursue in any manner, directly or indirectly, any claim or cause of action
against the Company or any of its affiliates, officers, directors,
representatives or agents based in whole or in part upon this Agreement, it
being agreed that such fee represents liquidated damages for all such claims or
causes of action, including but not limited to any damages pursuant to Section
7.3(b)(ii) below.
(b)
(i) Parent shall pay or reimburse the Company for all
the Company's costs, fees and expenses incurred by the Company or on its behalf
in connection with this Agreement, the Offer, the Merger and the consummation of
all transactions contemplated by this Agreement (including fees payable to
investment bankers, counsel to any of the foregoing and accountants). In
addition, Parent shall promptly pay Company the sum of One Million Dollars
($1,000,000) if the transaction contemplated by this Agreement fails to close
due to a breach of a material obligation under this Agreement by COA, Parent or
Acquisition in any material respect, unless the Company shall have breached any
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of its material obligations hereunder in any material respect. If Company
receives the amount in compliance with this Section 7.3(b), Company shall not
assert or pursue in any manner, directly or indirectly, any claim or cause of
action against COA, Parent or Acquisition or any of its affiliates, officers,
directors, representatives or agents based in whole or in part upon this
Agreement, it being agreed that such fee represents liquidated damages for all
such claims or causes of action.
(ii) Company shall pay or reimburse COA, Parent and
Acquisition for all their costs, fees and expenses incurred by any of them or on
any of their behalf in connection with this Agreement, the Offer, the Merger and
the consummation of all transactions contemplated by this Agreement (including
fees payable to investment bankers, counsel to any of the foregoing and
accountants) if the transaction contemplated by this Agreement fails to close
due to a breach of a material obligation under this Agreement by Company in any
material respect, unless either COA, Parent, or Acquisition shall have breached
any of its material obligations hereunder in any material respect.
(c) The Company COA, Parent and Acquisition each acknowledges
that the agreements contained in this Article 7 (including this Section 7.3) are
an integral part of the transactions contemplated by this Agreement and that,
without these agreements, Parent, Acquisition and Company would not enter into
this Agreement. Accordingly, if any party fails promptly to pay the amounts
required pursuant to Section 7.3 when due (including circumstances where, in
order to obtain such payment COA, Parent or Acquisition commences a suit that
results in a final judgment against Company for any of such amounts), the
Company shall pay to COA, Parent or Acquisition (i) their costs and expenses
(including attorneys' fees) in connection with such suit and (ii) interest on
the amount that was determined to be due and payable hereunder at the rate
announced by Chase Manhattan Bank as its "reference rate" in effect on the date
such payment was required to be made, interest accruing from the date such
amount is determined to be due and payable.
(d) If Parent or Acquisition fails promptly to pay the amounts
required pursuant to Section 7.3 when due (including circumstances where, in
order to obtain such payment Company commences a suit which results in a final
judgment against COA, Parent or Acquisition for any such amounts), COA, Parent
or Acquisition shall pay to Company (i) its costs and expenses (including
attorneys' fees) in connection with such suit and (ii) interest on the amount
that was determined to be due and payable hereunder at the rate announced by
Chase Manhattan Bank as its "reference rate" in effect on the date such payment
was required to be made, interest accruing from the date such amount is
determined to be due and payable.
Section 7.4 Amendment. This Agreement may be amended by action mutually
taken by the Company, Parent and Acquisition 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 that requires the approval of such
stockholders under Applicable Law without such approval. This Agreement
(including, subject to Section 5.9, the Company Disclosure Schedule) may be
amended only by an instrument in writing signed on behalf of the parties hereto.
Section 7.5 Extension; Waiver. At any time prior to the Effective Time,
each party hereto 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 any party hereto to any such extension or
waiver shall be valid only if set forth in an instrument, in writing, signed on
behalf of such party. The failure of any party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
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ARTICLE 8
MISCELLANEOUS
Section 8.1 Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the Tender
Offer Purchase Time or a termination of this Agreement. This Section 8.1 shall
not limit any covenant or agreement of the parties hereto that by its terms
requires performance after the Tender Offer Purchase Time.
Section 8.2 Entire Agreement; Assignment. This Agreement (including the
Recitals, the Company Disclosure Schedule and the Exhibits and Annex A, all of
which are incorporated by reference into this Agreement) (a) constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all other prior and contemporaneous agreements and
understandings both written and oral between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise; provided, however, that Acquisition may assign any or all of its
rights and obligations under this Agreement to any wholly owned subsidiary of
COA, but no such assignment shall relieve Acquisition of its obligations
hereunder if such assignee does not perform such obligations.
Section 8.3 Validity. If any provision of this Agreement or the
application thereof to any person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby and to
such end the provisions of this Agreement are agreed to be severable.
Section 8.4 Notices. All notices and other communications pursuant to
this Agreement shall be in writing and shall be deemed given if delivered
personally, telecopied, sent by nationally-recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the addresses set forth below or to such other
address as the party to whom notice is to be given may have furnished to the
other parties hereto in writing in accordance herewith. Any such notice or
communication shall be deemed to have been delivered and received (i) in the
case of personal delivery, on the date of such delivery, (ii) in the case of
telecopier, on the date sent if confirmation of receipt is received and such
notice is also promptly mailed by registered or certified mail (return receipt
requested), (iii) in the case of a nationally-recognized overnight courier in
circumstances under which such courier guarantees next business day delivery, on
the next business day after the date when sent where confirmation of delivery is
provided by the courier and (iv) in the case of mailing, on the third business
day following that on which the piece of mail containing such communication is
posted:
if to Parent or Acquisition: Coachmen Industries, Inc
2831 Dexter Drive
P. O. Box 3300
Elkhart, IN 46515
Telecopier: (219) 206-9613
Attention: Richard M. Lavers
with a copy to: McDermott, Will & Emery
227 West Monroe
Chicago, IL 60606
Telecopier: (312) 984-7700
Attention: Frederick W. Axley
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<PAGE>
if to the Company to: Miller Building Systems, Inc.
58120 County Road 3 South
Elkhart, IN 46517
Telecopier: (219) 522-1544
Attention: Rick Bedell
with a copy to: Much Shelist Freed Denenberg Ament &
Rubenstein, P.C.
200 North LaSalle Street, Suite 2100
Chicago, IL 60601-1095
Telecopier: (312) 621-1750
Attention: Jeffrey C. Rubenstein
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 8.5 Governing Law ; Waiver of Jury Trial.
(a) This Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with
the law of the state of Delaware without regard to the conflicts of law
principles thereof. The parties hereby consent to and agree that mailing of
process or other papers in connection with any such action or proceeding in the
manner provided in Section 8.4 or in such other manner as may be permitted by
Applicable Law, shall be valid and sufficient service thereof.
(b) The parties agree that irreparable damage would occur and
that the parties would not have any adequate remedy at law 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, this being in addition to any other remedy to which they are entitled
at law or in equity.
(c) Each party acknowledges and agrees that any controversy
which may arise under this Agreement is likely to involve complicated and
difficult issues, and therefore each such party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to
this agreement or the transactions contemplated by this agreement. each party
certifies and acknowledges that (i) no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each
such party understands and has considered the implications of this waiver, (iii)
each such party makes this waiver voluntarily, and (iv) each such party has been
induced to enter into this agreement by, among other things, the waivers and
certifications in this Section 8.5.
Section 8.6 Descriptive Headings; Article and Section References. 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. All Article, Section, Subsection, Schedule, Exhibit and Annex
references in this Agreement are to Articles, Sections, Subsections, Schedules,
Exhibits and Annexes, respectively, of or to this Agreement unless specified
otherwise.
Section 8.7 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 expressly provided herein, including in
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<PAGE>
Sections 5.7 and 8.2, nothing in this Agreement 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.
Section 8.8 Certain Definitions. For the purposes of this Agreement the
term:
(a) "Affiliate" means a person that, directly or indirectly,
through one or more intermediaries controls, is controlled by or is under common
control with the first-mentioned person.
(b) "Applicable Law" means, with respect to any person, any
domestic or foreign, federal, state or local statute, law, ordinance, rule,
regulation, order, writ, injunction, judgment, decree or other requirement of
any Governmental Entity existing as of the date hereof or as of the Effective
Time applicable to such Person or any of its respective properties, assets,
officers, directors, employees, consultants or agents.
(c) "business day" means any day other than a day on which the
Nasdaq National Market is closed.
(d) "capital stock" means common stock, preferred stock,
partnership interests, limited liability company interests or other ownership
interests entitling the holder thereof to vote with respect to matters involving
the issuer thereof.
(e) "knowledge" or "known" means, with respect to any matter
in question, the actual knowledge of such matter of any member of the Board of
Directors, Edward C. Craig, Thomas Martini or Rick Bedell.
(f) "include" or "including" means "include, without
limitation" or "including, without limitation," as the case may be, and the
language following "include" or "including" shall not be deemed to set forth an
exhaustive list.
(g) "person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization or
other legal entity including any Governmental Entity.
(h) "subsidiary" or "subsidiaries" of the Company, COA,
Parent, the Surviving Corporation or any other person means any corporation,
partnership, limited liability company, association, trust, unincorporated
association or other legal entity of which the Company, Parent, the Surviving
Corporation or any such other person, as the case may be (either alone or
through or together with any other subsidiary), owns, directly or indirectly,
50% or more of the capital stock the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
Section 8.9 Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties, for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder; provided, however, that if a party
hereto is entitled to receive any payment or reimbursement of expenses pursuant
to Section 7.3(a) or (b) it shall not be entitled to specific performance to
compel the consummation of the Merger.
Section 8.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
COA HOUSING GROUP, INC., AN INDIANA CORPORATION
BY: ______________________________________
NAME: CLAIRE C. SKINNER
TITLE: CHAIRMAN
COACHMEN INDUSTRIES, INC., AN INDIANA
CORPORATION
By:_______________________________________
Name: James E. Jack
Title: Executive Vice President and Chief
Financial Officer
MILLER BUILDING SYSTEMS, INC., A DELAWARE
CORPORATION
By:_______________________________________
Name: Edward C. Craig
Title: Chairman
DELAWARE MILLER ACQUISITION CORPORATION, A
DELAWARE CORPORATION
By:_______________________________________
Name: Richard M. Lavers
Title: Secretary
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<PAGE>
ANNEX A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) relating to
Acquisition's obligation to pay for or return tendered shares after termination
of the Offer, Acquisition shall not be required to accept for payment or pay for
any Shares tendered pursuant to the Offer, may delay the acceptance for payment
of any Shares pursuant to Section 1.1(b) of this Agreement, may amend the Offer
consistent with the terms of this Agreement, including by extending the Offer
one or more times, and may terminate the Offer, if (i) less than a majority of
the outstanding Shares on a fully-diluted basis (including for purposes of such
calculation all Shares issuable upon exercise of all vested and unvested
options) has been tendered pursuant to the Offer and not withdrawn by the
expiration of the Offer, as it may be extended in accordance with the terms of
the Offer; (ii) any applicable waiting period under the HSR Act has not expired
or been terminated prior to the expiration of the Offer; or (iii) at any time
after the date of this Agreement, and before acceptance for payment of any
Shares, any of the following events shall occur and be continuing:
(a) there shall have been any action taken, or any statute,
rule, regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any domestic
or foreign court or other Governmental Entity which directly or indirectly (i)
prohibits, or imposes any material limitations on, Parent's ownership or
operation (or that of any of its subsidiaries or other affiliates) of all or a
material portion of its or the Company's businesses or assets, or compels Parent
or any of its subsidiaries or other affiliates to dispose of or hold separate
any material portion of the business or assets of the Company or Parent and its
respective subsidiaries, in each case taken as a whole, (ii) prohibits, or makes
illegal, the acceptance for payment, payment for or purchase of Shares or the
consummation of the Offer, the Merger or the other transactions contemplated by
this Agreement, (iii) results in the material delay in or materially restricts
the ability of Acquisition, or renders Acquisition unable, to accept for
payment, pay for or purchase some or all of the Shares, (iv) imposes material
limitations on the ability of Parent effectively to exercise full rights of
ownership of the Shares, including the right to vote the Shares purchased by it
on all matters properly presented to the Company's stockholders, or (v)
otherwise has a Material Adverse Effect on the Company;
(b) (i) the representations and warranties of the Company set
forth in this Agreement shall not be true and correct in all material respects
as of the date of this Agreement and as of consummation of the Offer as though
made on or as of such date (except for representations and warranties made as of
a specified date) but only if the respects in which the representations and
warranties made by the Company are inaccurate would in the aggregate have a
Material Adverse Effect on the Company, (ii) the Company shall have failed to
comply with its covenants and agreements contained in this Agreement in all
material respects, or (iii) there shall have occurred any events or changes
which have had or which are reasonably likely to have a Material Adverse Effect
on the Company;
(c) it shall have been publicly disclosed or Parent shall have
otherwise learned that (i) any person or "group" (as defined in Section 13(d)(3)
of the Exchange Act) shall have acquired or entered into a definitive agreement
or agreement in principle to acquire beneficial ownership of more than 20% of
the Shares or any other class of capital stock of the Company, through the
acquisition of stock, the formation of a group or otherwise, or shall have been
granted any option, right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 20% of the Shares and (ii) such person or
group shall not have tendered such Shares pursuant to the Offer;
(d) the Company Board shall have withdrawn, or modified or
changed in a manner adverse to Parent and Acquisition (including by amendment of
the Schedule 14D-9), its recommendation of the Offer, this Agreement or the
Merger, or recommended another proposal or offer, or the Company Board shall
have resolved to do any of the foregoing;
(e) this Agreement shall have terminated in accordance with
its terms; or
<PAGE>
(f) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange or the Nasdaq National Market, for a period in excess of twenty-four
(24) hours, (ii) the commencement of a war, armed hostilities or other national
or international calamity directly or indirectly involving the United States
that has had or is reasonably likely to have a Material Adverse Effect on the
Company or materially adversely affect or delay the consummation of the Offer,
(iii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (iv) any
limitation (whether or not mandatory) by any United States Governmental Entity
on the extension of credit by banks or other financial institutions, (v) a
change in general, financial, bank or capital market conditions which materially
and adversely affects the ability of financial institutions in the United States
to extend credit or syndicate loans, or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof;
which in the good faith judgment of Parent, in any such case, and regardless of
the circumstances (including any action or inaction by Parent) giving rise to
such condition makes it inadvisable to proceed with the Offer or the acceptance
for payment of or payment for the Shares.
The foregoing conditions are for the sole benefit of Parent and Acquisition and
may be waived by Parent and Acquisition, in whole or in part at any time and
from time to time, in the sole discretion of Parent and Acquisition. The failure
by Parent and Acquisition at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
<PAGE>
EXHIBIT A
PLAN AND AGREEMENT OF MERGER
THIS PLAN AND AGREEMENT OF MERGER, dated as of ______________, 2000
("Agreement"), is entered into by and between Miller Building Systems, Inc.
("Miller") and Delaware Miller Acquisition Corporation ("Acquisition"), each a
Delaware corporation. Miller and Acquisition are hereinafter sometimes
collectively referred to as the "Constituent Corporations."
W I T N E S S E T H:
WHEREAS, each of Miller and Acquisition is a corporation duly organized
and existing under the laws of the State of Delaware;
WHEREAS, on the date of this Agreement, Miller has authority to issue
7,550,000 shares of capital stock, consisting of 7,500,000 shares of common
stock, par value $.01 per share (the "Shares"), of which, as of August 1, 2000,
3,072,098 Shares were issued and outstanding, and of the date hereof
______________ Shares are owned by Acquisition; and 50,000 shares of preferred
stock, par value $1.00 per share, no shares of which are outstanding;
WHEREAS, on the date of this Agreement, Acquisition has authority to
issue ______ shares of common stock, par value [$.01] per share ("Acquisition
Common Stock"), of which ____ shares are issued and outstanding and owned by COA
Housing Group, Inc., a Delaware corporation ("Parent");
WHEREAS, the respective Boards of Directors of Miller and Acquisition
have determined that it is advisable and in the best interests of each of such
corporations that Acquisition be merged with and into Miller upon the terms and
subject to the conditions set forth in the Agreement and Plan of Merger dated as
of August ___, 2000 among Parent, Miller and Acquisition (the "Merger
Agreement") and this Agreement for the purpose of completing the acquisition of
Miller by Parent;
WHEREAS, the Board of Directors of Acquisition has, by resolutions duly
adopted, approved, certified, executed and acknowledged this Agreement;
WHEREAS, Parent has approved this Agreement as the sole stockholder of
Acquisition; and
WHEREAS, the Board of Directors of Miller has approved this Agreement,
and directed that this Agreement be submitted to a vote of its stockholders, if
such a vote is necessary under Delaware law. Capitalized terms used and not
defined herein shall have the meanings ascribed to them in the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Miller and Acquisition hereby agree as follows:
1. Merger. Acquisition shall be merged with and into Miller (the
"Merger"), and Miller shall be the surviving corporation (hereinafter sometimes
referred to as the "Surviving Corporation"). The Merger shall become effective
at such time as a properly executed and certified copy of the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware
pursuant to the Delaware General Corporation Law, or such later time as
Acquisition and Miller may agree upon and set forth in the Certificate of Merger
(the time the Merger becomes effective being referred to herein as the
"Effective Time").
2. Governing Documents. The Certificate of Incorporation of Acquisition
in effect at the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation until amended in accordance with applicable law. The
bylaws of Acquisition in effect at the Effective Time shall be the bylaws of the
Surviving Corporation until amended in accordance with applicable law.
<PAGE>
3. Succession. At the Effective Time, the separate corporate existence
of Acquisition shall cease, and Miller shall possess all the assets, rights,
privileges, powers and franchises, of a public and private nature and be subject
to all the restrictions, disabilities and duties of each of the Constituent
Corporations, and all and singular, the assets, rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property, real,
personal and mixed, and all debts due to each of the Constituent Corporations on
whatever account, shall be transferred to, vested in and devolved on the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Corporation as they were of the respective
Constituent Corporations, and the title to any real estate vested by deed or
otherwise, in either of such Constituent Corporations shall not revert or be in
any way impaired by reason of the Merger; but all rights of creditors and all
liens upon any property of Acquisition shall be preserved unimpaired. To the
extent permitted by law, any claim existing or action or proceeding pending by
or against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place. All debts, liabilities and duties of the respective
Constituent Corporations shall thenceforth attach to the Surviving Corporation
and may be enforced against it to the same extent as if such debts, liabilities
and duties had been incurred or contracted by it.
4. Directors and Officers. The directors and officers of Acquisition at
the Effective Time shall be the initial directors and officers, holding the same
titles and positions, of the Surviving Corporation, and after the Effective Time
shall serve in accordance with the Certificate of Incorporation and Bylaws of
the Surviving Corporation, until each director's and officer's successor is duly
elected or appointed and qualified.
5. Further Assurances. From time to time, as and when required by the
Surviving Corporation or by its successors or assigns, there shall be executed
and delivered on behalf of Acquisition such deeds and other instruments, and
there shall be taken or caused to be taken by it all such further and other
action, as shall be appropriate, advisable or necessary in order to vest,
perfect or confirm, of record or otherwise, in the Surviving Corporation the
title to and possession of all property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of Acquisition, and otherwise to
carry out the purposes of this Agreement, and the officers and directors of the
Surviving Corporation are fully authorized in the name and on behalf of
Acquisition or otherwise, to take any and all such action and to execute and
deliver any and all such deeds and other instruments.
6. Conversion of Shares. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (excluding (i) Shares held
in Miller's treasury or by any of Miller's subsidiaries and (ii) Shares held by
Parent, Acquisition or any other subsidiary of Parent) shall, by virtue of the
Merger and without any action on the part of Acquisition, Miller or the holder
thereof, be converted into and shall become the right to receive $_____ in cash,
without interest (the "Merger Consideration"), provided, however, that each such
Share held in Miller's treasury or held by Parent, Acquisition or any subsidiary
of Parent, Acquisition or Miller immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of Parent,
Acquisition, Miller or the holder thereof, be canceled, retired and cease to
exist and no Merger Consideration will be delivered with respect thereto. At the
Effective Time, each share of the common stock of Acquisition issued and
outstanding immediately prior to the Effective Time shall be converted into and
shall become one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.
7. Conditions to Merger. The Merger shall have received the approval,
if such is required by law, of the holders of Shares pursuant to the Delaware
General Corporation Law and to the other conditions set forth in Article 6 of
the Merger Agreement.
8. Stock Certificates. At and after the Effective Time, all of the
outstanding certificates which, immediately prior to the Effective Time,
represented Shares shall, respectively, without further action by any party, be
deemed for all purposes to evidence the right to receive the Merger
Consideration as herein provided. The registered owner on the books and records
of the Surviving Corporation or its transfer agents of any such outstanding
stock certificate shall not have exercised nor be entitled to exercise any
voting or other rights with respect to, or to receive any dividends or other
distributions upon, the shares of Acquisition Common Stock or any other
securities whatsoever.
<PAGE>
9. Options. At the Effective Time, each outstanding option to purchase
Shares issued pursuant to Miller's 1991 Stock Option Plan (the "1991 Option
Plan"), Miller's 1994 Stock Option Plan (the "1994 Option Plan"), Miller's 1997
Stock Option Plan (the "1997 Option Plan") or any other stock option plan,
program, arrangement or agreement to which Miller is a party shall be treated as
set forth in the Merger Agreement. The 1991 Option Plan, 1994 Option Plan and
the 1997 Option Plans shall each terminate as of the Effective Time.
10. Amendment. Subject to applicable law, this Agreement may be
amended, modified or supplemented by written agreement of the parties hereto at
any time prior to the Effective Time with respect to any of the terms contained
herein.
11. Abandonment. At any time prior to the Effective Time, this
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of Miller, notwithstanding approval of this Agreement by the
stockholder of Acquisition or, if such was required, by the stockholders of
Miller, or both, (a) if the conditions to consummation of the Merger set forth
in Article 6 of the Merger Agreement are not satisfied or waived or (b) by
mutual agreement of the Boards of Directors of the parties.
12. Counterparts. In order to facilitate the filing and recording of
this Agreement, the same may be executed in two or more counterparts, each of
which shall be deemed to be an original and the same agreement.
IN WITNESS WHEREOF, Miller and Acquisition have caused this Agreement
to be signed by their respective duly authorized officers as of the date first
above written.
MILLER BUILDING SYSTEMS, INC.
By:
Name: ____________________________________
Title: _____________________________________
By:
Name: ____________________________________
Title: _____________________________________
By:
Name: ____________________________________
Title: _____________________________________
<PAGE>
CERTIFICATE OF THE SECRETARY OF
MILLER BUILDING SYSTEMS, INC.
I, the Secretary of Miller Building Systems, Inc., hereby certify that
the Plan and Agreement of Merger to which this certificate is attached, after
having been first duly signed on behalf of the corporation by the President and
Secretary under the corporate seal of the corporation, was duly approved and
adopted.
WITNESS my hand and seal of Miller Building Systems, Inc. this ____ day
of ________, 2000.
------------------------------------
Secretary
<PAGE>
CERTIFICATE OF THE SECRETARY OF
DELAWARE MILLER ACQUISITION CORPORATION
I, the Secretary of Delaware Miller Acquisition Corporation, hereby
certify that the Plan and Agreement of Merger to which this certificate is
attached, after having been first duly signed on behalf of the corporation by
the President and Secretary under the corporate seal of the corporation, was
duly approved and adopted by written consent of the sole stockholder of the
corporation, dated ________, 2000.
WITNESS my hand and seal of Delaware Miller Acquisition Corporation,
Inc. this ____ day of ________, 2000.
-----------------------------------
Secretary
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), to be effective as of the date
and time a properly executed copy of a Certificate of Merger is duly filed with
the Secretary of State of Delaware in accordance with Section 2.2 of that
certain Agreement and Plan of Merger among Miller Business Systems, Inc., COA
Housing Group, Inc. (a subsidiary of Coachmen Industries, Inc.) and Delaware
Miller Acquisition Corporation dated as of August ___, 2000, (the "Effective
Date"), is entered into between Miller Building Systems, Inc., a Delaware
corporation (the "Company"), and ____________________ of ________________
("Employee"). Employee is an executive of Company, which is anticipated to be
acquired by Delaware Miller Acquisition Corporation on behalf of COA Housing
Group, Inc. and Coachmen Industries, Inc., which are third party beneficiaries
of this Agreement. Employee acknowledges that this Agreement was a material
consideration for that acquisition, but for which the acquisition would not have
taken place. Now, therefore, in consideration of the premises, and for the
mutual promises this Agreement contains, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree to be bound as follows:
1. Employment and Term. Employee will be employed with Coachmen
Industries, Inc. (or any of its subsidiaries, hereinafter collectively referred
to as "Coachmen") for two (2) years from the Effective Date of this Agreement.
Unless Employee consents otherwise in writing, such employment shall be at
Employee's present Company facility; provided, however, that if Coachmen
requests that Employee change his place of employment to another facility and
Employee declines this request, Coachmen shall have the right to terminate
Employee if the position held by Employee at the current location at the time of
the transfer request is no longer available, in which case this Agreement will
terminate. If Coachmen exercises its right to terminate Employee pursuant to
this Section 1, Coachmen will not be required to pay any further payments under
this Agreement. This Agreement will expire on that date unless renewed in
writing or terminated before that time in one of the ways specified below. Any
continued employment of Employee thereafter will be at-will, terminable by
either party at any time, without cause or notice.
2. Compensation. In consideration for the services to be rendered by
Employee hereunder, Coachmen agrees to pay an annual base salary of not less
than $___________, payable in the customary installment period as Coachmen shall
adopt, less customary withholdings for all applicable taxes. Such salary shall
be reviewed annually, at the customary times for reviews for employees of
Coachmen. Employee shall be eligible to participate in any Coachmen bonus or
incentive programs for which like employees are eligible. Employee will be
eligible for such benefits as Coachmen shall establish from time to time and for
which Employee is qualified. Nothing in this Agreement or this employment
relationship shall obligate Coachmen to furnish any particular benefit to
Employee or prevent Coachmen from at any time discontinuing or altering an
existing benefit or the qualifying conditions Employee must meet to obtain such
benefits, provided such discontinuation or alteration shall affect all like
employees. All compensation afforded to Employee under this Section 2 shall
terminate concurrent with the termination of this Agreement. Employee shall be
promptly reimbursed for all reasonable and bona fide business-related
out-of-pocket expenses he incurs, upon presentation of the Coachmen's required
evidence of expenses in accordance with Coachmen policy.
<PAGE>
3. Covenant not to Compete. As additional consideration for the
following covenant not to compete, Employee shall receive on the Effective Date
options to purchase shares of Coachmen stock under the Coachmen 2000 Omnibus
Stock Incentive Program, as set forth on the attached schedule. Employee agrees
that for the longer of two (2) years from the Effective Date of this Agreement
or the term of this Agreement (and for any extensions of or amendments to this
Agreement), or twelve (12) months after his employment with Coachmen ends, if
the employment ends, either voluntarily or for Cause (as defined herein), on or
before the second anniversary of the Effective Date of this Agreement, Employee
will not directly or indirectly:
A. Render any of the services Employee that Employee provides
to Coachmen during his employment to any person, firm, entity, or other
corporation which, directly or indirectly, competes with Coachmen's business as
presently conducted during Employee's employment with Coachmen (a "Competitive
Business") within a two hundred (200) mile radius of Elkhart, Indiana, and any
other locations where Coachmen has or may in the future have a permanent
production facility for which Employee performs substantial and continuous
duties.
B. Engage in any Competitive Business for Employee's own
account within the same geographic territory described above.
C. Become associated with or interested in any Competitive
Business as an individual, partner, shareholder, director, officer, principal,
agent, employee, trustee, consultant, advisor, or in any other relationship or
capacity (except as a minority shareholder holding less than five percent (5%)
of a publicly listed company).
D. Solicit, attempt to hire or hire any employee of Coachmen
or otherwise encourage such employee to terminate his or her employment with the
Coachmen.
E. Solicit, encourage or induce any customer of Coachmen to
purchase any non-Company product or service which serves the same or
substantially similar purpose as any product or service offered by Coachmen.
Employee acknowledges that these limitations are reasonable and
necessary for the protection of Coachmen. Employee agrees that Employee will be
able to make a living without working for or competing with Coachmen. Employee
further agrees that the duration of this Covenant not to Compete shall be tolled
for any period of time during which its terms are violated. Employee
acknowledges that should Employee breach or threaten to breach the provisions
set forth herein, Coachmen will be harmed irreparably, and cannot be made whole
by monetary damages. Employee therefore consents to having these paragraphs
enforced by means of a restraining order, temporary injunction, or permanent
injunction, and any other appropriate relief that a court of competent
jurisdiction may be empowered to grant, in addition to any other remedies
Coachmen may have under this Agreement or otherwise. Employee further agrees
that this Agreement is not for the purpose of preventing my employment with any
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particular person, entity or industry. Employee stipulates and agrees that a
good faith effort by Coachmen to enforce the terms of this Agreement or to delay
or limit the scope of Employee's duties at a new employer to those allowed by
this Agreement, is not and will not be deemed to be an attempt to prevent or
hinder Employee's employment with any person. At the end of the initial term of
this Agreement, as a condition of continued employment and without additional
consideration than already received under this Agreement, Employee shall sign
and agree to the Coachmen Business Protection Agreements (including
non-competition, non-solicitation and confidentiality provisions) in the form
that are then required of Coachmen executives at comparable levels of
management.
4. Protection of Confidential Information. Employee acknowledges that
during his employment with Coachmen, Employee may have access to Coachmen's
proprietary and confidential information, including but not limited to such
things as the identities of Coachmen's clients, its contemplated new products
and services, its marketing methods, its financial information, operational or
business affairs of Coachmen or its affiliates, proprietary trade "know how" and
secrets, sources of supply, and proprietary operational methods and technical
processes. Employee agrees that during the term of this Agreement (and any
renewals of this Agreement, or any continued employment with Coachmen in any
capacity) and for two (2) years after said employment ends, whether voluntarily
or involuntarily, Employee will not divulge to any person, firm, or corporation,
or use for Employee's own benefit, any secret or confidential or proprietary
information that Employee has obtained or learned during the course of
employment with Coachmen or any of its affiliates, except: (i) with Coachmen's
express written consent; (ii) to the extent that any such information is already
in or becomes part of the public domain other than as a result of Employee's
breach of this Agreement; or (iii) where a court requires such information to be
disclosed by means of order, subpoena, or other legal process. Should Employee
be required to make disclosure under court requirement, Employee promptly, but
in no event more than seventy-two hours after learning of such subpoena, court
order, or other legal process, shall notify Coachmen, by personal delivery or
facsimile transmission, that Employee has been asked to make such disclosure.
Employee shall take all reasonably necessary steps Coachmen may request to
defend against the enforcement of such subpoena, court order, or other legal
process and permit Coachmen to intervene and participate with a counsel of its
choice in any proceeding relating to the enforcement of the subpoena, court
order, or legal process.
5. Termination. In lieu of the normal expiration date of this Agreement
as set forth herein, the Agreement may be terminated as follows:
A. Termination of Agreement Due to Death. Upon Employee's
death, this Agreement shall immediately terminate. Salary and benefits owed to
Employee through the date of death will be paid to Employee's estate. Coachmen
will not be responsible for any other compensation to Employee or any third
parties claiming on Employee's behalf under this Agreement.
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B. Termination of Agreement Due to Disability. Should Employee
become unable to perform the essential functions of his job due to disability
which persists for over ninety (90) days, even after reasonable accommodation,
Coachmen may notify Employee of its intention to terminate this Agreement as of
the date set forth in such notice. Should this occur, Employee will be entitled
to receive any salary, benefits, or reimbursable expenses owed through the date
of termination, and shall also receive all necessary notices and information as
required by COBRA and ERISA. Coachmen shall have no further obligation or
liability to Employee.
C. Termination for Cause. Coachmen may terminate Employee's
employment for cause, and should that occur, Coachmen shall be released from all
further obligations under this Agreement, except for accrued salary and benefits
owed to Employee through the date of termination. "Cause" shall be defined as a
material breach of this Agreement for which Employee has received written notice
and for which breach has not been cured within fifteen (15) days of such notice
if the breach is curable. The following are material breaches of this Agreement:
willful misconduct by Employee, including but not limited to theft of company
property; acts of fraud or dishonesty; negligence or willful neglect of duty, or
material failure to follow known company policies and directives; reporting to
work under the influence of alcohol, drugs, or other mind-impairing substances;
or conviction of a felony.
If Coachmen terminates this Agreement other than for Cause (as
defined above) before the end of the term, Coachmen shall pay to Employee, as
the same shall become due, all compensation and benefits contemplated by this
Agreement.
6. Governing Law. Indiana law shall govern enforcement and construction
of this Agreement.
7. Entire Agreement. This Agreement contains all the understandings and
agreements with respect to the matters set forth herein, and there are no others
made either contemporaneously with this Agreement or otherwise. This Agreement
supercedes all other writings or negotiations by the parties and can only be
modified in writing signed by both parties.
8. Severability. Should a court of competent jurisdiction declare that
any part of this Agreement is invalid or unenforceable, that determination shall
not effect the remaining portions of this Agreement, or any part of it.
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Signed at Elkhart, Indiana, this _____day of _______, 2000.
------------------------------------
____________________ (Employee)
STATE OF INDIANA )
: SS
CITY/COUNTY OF __________________ )
The foregoing instrument was subscribed, sworn to and acknowledged
before me this ______ of ____________________, 2000, by ____________________.
My commission expires: _____________________________.
----------------------------------------
Notary Public
Miller Building Systems, Inc.
By:___________________________________
Its:__________________________________
Coachmen Industries, Inc.
By:___________________________________
Its:__________________________________
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