EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
dated as of
December 13, 2000
between
THERMACORE INTERNATIONAL, INC.
and
MODINE MANUFACTURING COMPANY
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TABLE OF CONTENTS
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TABLE OF CONTENTS I
ARTICLE 1 1
SECTION 1.1. MERGER 1
SECTION 1.2. SURRENDER AND PAYMENT 2
SECTION 1.3. THE MERGER DATE 4
SECTION 1.4. STOCK OPTIONS OF THE COMPANY 5
SECTION 1.5. FRACTIONAL SHARES 6
SECTION 1.6. DISSENTING SHARES 6
SECTION 1.7. AGGREGATE CONSIDERATION; EXCHANGE RATIO;
VALUATION OF BUYER COMMON STOCK 7
ARTICLE 2 8
SECTION 2.1. ARTICLES OF INCORPORATION; BYLAWS 8
SECTION 2.2. DIRECTORS AND OFFICERS 8
ARTICLE 3 8
SECTION 3.1. CORPORATE EXISTENCE AND POWER 9
SECTION 3.2. CORPORATE AUTHORIZATION 9
SECTION 3.3. GOVERNMENTAL AUTHORIZATION 9
SECTION 3.4. NON-CONTRAVENTION 10
SECTION 3.5. CAPITALIZATION 10
SECTION 3.6. SUBSIDIARIES 11
SECTION 3.7. FINANCIAL STATEMENTS 12
SECTION 3.8. DISCLOSURE DOCUMENTS 12
SECTION 3.9. ABSENCE OF CERTAIN CHANGES 13
SECTION 3.10. NO UNDISCLOSED MATERIAL LIABILITIES 14
SECTION 3.11. LITIGATION; INVESTIGATIONS 14
SECTION 3.12. TAXES 14
SECTION 3.13. ERISA AND LABOR MATTERS 15
SECTION 3.14. COMPLIANCE WITH LAWS 18
SECTION 3.15. INTELLECTUAL PROPERTY RIGHTS 18
SECTION 3.16. ENVIRONMENTAL MATTERS 20
SECTION 3.17. FINDERS FEES 21
SECTION 3.18. TITLE TO AND CONDITION OF PROPERTIES 22
SECTION 3.19. CONTRACTS 22
SECTION 3.20. ACCOUNTS RECEIVABLE 23
SECTION 3.21. RELATIONSHIPS WITH CUSTOMERS AND
SUPPLIERS 23
SECTION 3.22. PRODUCT WARRANTIES AND LIABILITIES 24
SECTION 3.23. AFFILIATE TRANSACTIONS 24
SECTION 3.24. INSURANCE 24
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SECTION 3.25. POOLING OF INTERESTS TREATMENT 25
SECTION 3.26. INVENTORIES 25
SECTION 3.27. NO GUARANTIES; EXTENSIONS OF CREDIT 25
SECTION 3.28. RELATIONSHIPS WITH SALES REPRESENTATIVES 26
SECTION 3.29. PERMITS 26
SECTION 3.30. RELATIONSHIPS WITH JOINT VENTURE PARTNERS 26
ARTICLE 4 27
SECTION 4.1. CORPORATE EXISTENCE AND POWER 27
SECTION 4.2. CORPORATE AUTHORIZATION 27
SECTION 4.3. GOVERNMENTAL AUTHORIZATION 27
SECTION 4.4. NON-CONTRAVENTION 28
SECTION 4.5. SEC FILINGS 28
SECTION 4.6. FINANCIAL STATEMENTS 29
SECTION 4.7. DISCLOSURE DOCUMENTS 29
SECTION 4.8. ABSENCE OF CERTAIN CHANGES 30
SECTION 4.9. NO UNDISCLOSED MATERIAL LIABILITIES 30
SECTION 4.10. FINDERS FEES 30
SECTION 4.11. PERMITS 30
SECTION 4.12. POOLING OF INTERESTS TREATMENT 31
ARTICLE 5 31
SECTION 5.1. CONDUCT OF THE COMPANY 31
SECTION 5.2. SHAREHOLDER MEETING; PROXY MATERIALS 35
SECTION 5.3. OTHER OFFERS 36
SECTION 5.4. INTELLECTUAL PROPERTY MATTERS 36
SECTION 5.5. AFFILIATE LETTERS 36
SECTION 5.6. ACCESS TO INFORMATION 37
ARTICLE 6 37
SECTION 6.1. CONDUCT OF BUYER 38
SECTION 6.2. DEPARTMENTS 38
SECTION 6.3. REGISTRATION STATEMENT 38
SECTION 6.4. LISTING ON NASDAQ 38
SECTION 6.5. ORGANIZATIONAL STRUCTURE 38
SECTION 6.6. BOARD OF DIRECTORS 38
ARTICLE 7 39
SECTION 7.1. COMMERCIALLY REASONABLE EFFORTS 39
SECTION 7.2. COOPERATION 39
SECTION 7.3. PUBLIC ANNOUNCEMENTS 39
SECTION 7.4. FURTHER ASSURANCES 40
SECTION 7.5. NOTICES OF CERTAIN EVENTS 40
SECTION 7.6. DIRECTOR AND OFFICER LIABILITY 40
SECTION 7.7. GOVERNMENTAL AUTHORIZATION 42
SECTION 7.8. CERTAIN CORPORATE MATTERS 42
SECTION 7.9. EMPLOYMENT 42
SECTION 7.10. TAX-FREE REORGANIZATION 42
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SECTION 7.11. POOLING 42
ARTICLE 8 43
SECTION 8.1. CONDITIONS TO THE OBLIGATIONS OF EACH
PARTY 43
SECTION 8.2. CONDITIONS TO THE OBLIGATIONS OF BUYER 44
SECTION 8.3. CONDITIONS TO THE OBLIGATIONS OF THE
COMPANY 45
ARTICLE 9 45
SECTION 9.1. TERMINATION 45
SECTION 9.2. EFFECT OF TERMINATION 46
ARTICLE 10 46
SECTION 10.1. NOTICES 46
SECTION 10.2. ENTIRE AGREEMENT; NON-SURVIVAL OF
REPRESENTATIONS AND WARRANTIES;
NO THIRD PARTY BENEFICIARIES 48
SECTION 10.3. AMENDMENTS; NO WAIVERS 48
SECTION 10.4. EXPENSES 49
SECTION 10.5. DOLLAR AMOUNTS 49
SECTION 10.6. SUCCESSORS AND ASSIGNS 49
SECTION 10.7. GOVERNING LAW 49
SECTION 10.8. COUNTERPARTS; EFFECTIVENESS 49
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DEFINITIONS
1933 Act 9
1934 Act 9
Adjusted Option 5
Affiliate 2
Articles of Merger 4
Benefit Arrangements 16
Buyer 1
Buyer 10-K 28
Buyer 10-Qs 28
Buyer Balance Sheet 28
Buyer Balance Sheet Date 28
Buyer Common Stock 1
Buyer Disclosure Documents 29
Buyer Disclosure Schedule 26
Buyer Option Plan 5
Buyer Party 27
Buyer SEC Disclosure Documents 29
Buyer SEC Documents 28
Claim 40
Code 5
Company 1, 21
Company Balance Sheet 12
Company Disclosure Documents 12
Company Disclosure Schedule 8
Company Securities 11
Company Shareholder Meeting 35
Company Stock 1
Company Stock Options 5
Company Stock Plans 5
Company Subsidiary Securities 11
Contract 22
D&O Insurance 41
defined benefit plan 16
employee benefit plan 15
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employee pension benefit plan 15
Employee Plans 15
Environmental Laws 20
Environmental Permits 21
ERISA 15
ERISA Affiliate 15
Exchange Agent 2
Form S-4 29
Governmental Authority 9
Hazardous Substance 21
HSR Act 9
Indemnified Party 40
Intellectual Property 18
Lien 10
Material Adverse Effect 9
Merger 1
Merger Date 4
Merger Sub 1
Merger Sub Common Stock 2
multiemployer plan 16
Pennsylvania Law 2
Pension Plans 16
Person 2
Pre-Merger Matters 40
Product Liability 23
Required Shareholder Vote 9
Series A Preferred Stock 10
Subsequent Buyer SEC Documents 28
Subsidiary 2
Subsidiary of the Company 21
Surviving Corporation 1
Surviving Corporation Common Stock 2
Tax Return 15
Taxes 15
Taxing Authorities 15
U.S. GAAP 12
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 13, 2000
(this "Agreement"), is entered into between Modine Manufacturing Company,
a Wisconsin corporation ("Buyer"), and Thermacore International, Inc.,
a Pennsylvania corporation (the "Company"). The parties intend that
the Merger (as defined herein) shall qualify as a reorganization within
the meaning of Section 368(a) of the Code (as defined herein) and that
this Agreement shall constitute a plan of reorganization for purposes
of Section 368(a) of the Code and be treated for financial reporting
purposes as a pooling of interests.
The parties hereto agree as follows:
ARTICLE 1
THE MERGER
Section 1.1. Merger. (a) The Buyer shall form a new Pennsylvania
corporation as a wholly-owned subsidiary ("Merger Sub"). Upon the terms
and subject to the conditions set forth herein, on the Merger Date, the
Buyer shall cause Merger Sub to merge into the Company (the "Merger")
and the separate existence of Merger Sub shall cease. The Company shall
be the surviving corporation in the Merger (hereinafter sometimes referred
to as the "Surviving Corporation") and its separate corporate existence,
with all its purposes, objects, rights, privileges, powers and franchises,
shall continue unaffected and unimpaired by the Merger.
(b) Pursuant to the Merger:
(i) Each share of common stock, $.01 par value, of the Company
(the "Company Common Stock") held by the Company or any Subsidiary
of the Company as treasury stock or by Buyer, in each case
immediately prior to the Merger Date, shall be canceled and no
payment shall be made with respect thereto;
(ii) Each share of Company Common Stock outstanding immediately
prior to the Merger Date shall, except as otherwise provided in
Section 1.1(b)(i), be converted into the right to receive a number of
shares of common stock of the Buyer, $0.625 par value ("Buyer Common
Stock"), equal to the Exchange Ratio, as defined in Section 1.7(b);
(iii) Each share of the Series A Convertible Preferred Stock, $.01
par value, of the Company (the "Company Preferred Stock" and, together
with the Company Common Stock, the "Company Stock") outstanding
immediately prior to the Merger Date shall be converted into the right
to receive that number of shares of Buyer Common Stock which the holder
of a share of Company Preferred Stock would have been entitled to receive
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under Section 1.1(b)(ii) if the share of Company Preferred Stock had
been converted into Company Common Stock immediately prior to the
Merger; and
(iv) At the Merger Date, each share of common stock of Merger
Sub ("Merger Sub Stock") outstanding immediately prior to the Merger
Date shall be converted into an equal number of shares of common
stock, par value $.01 per share, of the Surviving Corporation
("Surviving Corporation Common Stock").
From and after the Merger Date, all shares of Company Stock
converted in accordance with Section 1.1(b)(ii) and (iii) shall no longer
be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of such shares shall cease to have any
rights with respect thereto, except the right to receive the number of
shares of Buyer Common Stock set forth in Section 1.1(b)(ii) or (iii),
as applicable (collectively, the "Merger Consideration"), the right to
exercise dissenters' rights in accordance with, and subject to the
provisions of, the Pennsylvania Business Corporation Law (the
"Pennsylvania Law") and the other rights specified in this Agreement.
From and after the Merger Date, all certificates representing Merger
Sub Common Stock shall be deemed for all purposes to represent the
number of shares of Surviving Corporation Common Stock into which they
were converted in accordance with Section 1.1(b)(iv). For purposes of
this Agreement, "Subsidiary", when used with respect to any Person,
means any other Person, whether incorporated or unincorporated, of which
securities or other ownership interests having ordinary power to elect a
majority of the board of directors or other persons performing similar
functions are directly or indirectly owned or controlled by such Person
or by any one or more of its Subsidiaries. For purposes of this Agreement,
"Person" means an individual, a corporation, a limited liability company,
a partnership (general or limited), an association, a trust or any other
entity or organization, including, without limitation, a government or
political subdivision or any agency or instrumentality thereof. For
purposes of this Agreement, an "Affiliate", when used with respect to any
Person, means any other Person who is, or is deemed to be, an affiliate
of such Person within the meaning of the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the Securities
and Exchange Commission (the "SEC") thereunder (the "1933 Act").
Section 1.2. Surrender and Payment (a) Prior to the Merger Date,
Buyer shall appoint an agent reasonably satisfactory to the Company (the
"Exchange Agent") for the purpose of exchanging certificates representing
shares of Company Stock for the Merger Consideration. Buyer will make
available to the Exchange Agent, as needed, certificates representing the
Buyer Common Stock constituting the Merger Consideration to be paid in
exchange for shares of Company Stock, in accordance with the terms of
Section 1.1(b). Promptly after the Merger Date, Buyer shall send, or
shall cause the Exchange Agent to send, to each holder of shares of
Company Stock whose shares were converted into a right to receive
the Merger Consideration in accordance with Section 1.1(b)(ii) or
(iii) at the Merger Date a letter of transmittal for use in such
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exchange (which shall specify that delivery of the Merger Consideration
shall be effected, and risk of loss and title to certificates representing
shares of Company Stock shall pass, only upon proper delivery of the
certificates representing shares of Company Stock to the Exchange Agent).
(b) Each holder of shares of Company Stock that have been converted
into a right to receive the Merger Consideration, upon surrender to the
Exchange Agent of a certificate or certificates representing such shares
of Company Stock, together with a properly completed letter of transmittal
covering such shares of Company Stock, will be entitled to receive (i) the
Merger Consideration payable in respect of such shares of Company Stock,
(ii) cash in lieu of any fractional shares of Buyer Common Stock pursuant
to Section 1.5, and (iii) certain dividends or other distributions in
accordance with Section 1.2(f). Until so surrendered, each such
certificate shall, after the Merger Date, represent for all purposes only
the right to receive (i) the Merger Consideration, (ii) cash in lieu of
any fractional shares pursuant to Section 1.5 and (iii) certain dividends
or other distributions in accordance with Section 1.2(f). The Merger
Consideration paid pursuant to this Article 1 upon surrender of
certificates representing shares of Company Stock shall be deemed to have
been paid in full satisfaction of all rights pertaining to such shares of
Company Stock represented thereby.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the shares of Company Stock
represented by the certificate or certificates surrendered in exchange
therefor, it shall be a condition to such payment that the certificate
or certificates so surrendered shall be properly endorsed or otherwise
be in proper form for transfer and that the Person requesting such payment
shall pay to the Exchange Agent any transfer or other taxes required as a
result of such payment to a Person other than the registered holder of
such shares of Company Stock or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Merger Date, there shall be no further registration
of transfers of shares of Company Stock. If, after the Merger Date,
certificates representing shares of Company Stock are presented to the
Surviving Corporation, they shall be canceled and exchanged for the
Merger Consideration provided for, and in accordance with the procedures
set forth, in this Article 1.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.2(a) that remains unclaimed by
the holders of shares of Company Stock twelve (12) months after the
Merger Date shall be returned to Buyer, upon demand, and any such
holder who has not exchanged his shares of Company Stock for the Merger
Consideration in accordance with this Section 1.2 prior to that time
shall thereafter look only to Buyer for his claim for (i) the Merger
Consideration, (ii) any cash in lieu of any fractional shares pursuant
to Section 1.5 and (iii) certain dividends or other distributions in
accordance with Section 1.2(f). Notwithstanding the foregoing, Buyer shall
not be liable to any holder of shares of Company Stock for any amount
paid to a public official pursuant to applicable escheat or abandoned
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property laws. Any amounts remaining unclaimed by holders of shares of
Company Stock two years after the Merger Date (or such earlier date
immediately prior to such time as such amounts would otherwise escheat
to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of Buyer free and clear
of any claim or interest of any Person previously entitled thereto.
(f) No dividends or other distributions with respect to the Buyer
Common Stock constituting all or a portion of the Merger Consideration
shall be paid to the holder of any unsurrendered certificate representing
Company Stock until such certificates are surrendered as provided in this
Section 1.2. Subject to the effect of applicable laws, following such
surrender, there shall be paid, without interest, to the record holder
of the certificates representing the Buyer Common Stock (i) at the time
of such surrender, the amount of dividends or other distributions with a
record date after the Merger Date payable prior to or on the date of such
surrender with respect to such whole shares of Buyer Common Stock, and
not paid, and the amount of cash payable in lieu of any fractional shares
pursuant to Section 1.5, less the amount of any withholding taxes which
may be required thereon under any provision of federal, state, local or
foreign tax law, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Merger Date
but prior to the date of surrender and a payment date subsequent to the
date of surrender payable with respect to such whole shares of Buyer
Common Stock, less the amount of any withholding taxes which may be
required thereon under any provision of federal, state, local or foreign
tax law. Buyer shall make available to the Exchange Agent cash for these
purposes.
(g) If any certificate representing Company Stock that was converted
into a right to receive the Merger Consideration in accordance with Section
1.1(b)(ii) or (iii) shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such certificate
to be lost, stolen or destroyed and, if required by Buyer, the posting by
such Person of a bond in such reasonable amount as Buyer may direct as
indemnity against any claim that may be made against it with respect to
such certificate, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed certificate (i) the applicable Merger Consideration,
(ii) cash in lieu of any fractional shares pursuant to Section 1.5 and
(iii) any unpaid dividends and distributions on shares of Buyer Common
Stock deliverable in respect thereof in accordance with Section 1.2(f).
Section 1.3. The Merger Date. As soon as practicable after the
satisfaction or, to the extent permitted hereunder or under applicable law,
waiver of all conditions to the Merger, but in no event later than three
(3) calendar days after the later of the dates on which the conditions set
forth in Section 8.1(a) and 8.1(b) of this Agreement are satisfied, or on
such other date as shall have been mutually agreed upon by the parties,
(a) the Company shall file, and the Buyer shall cause Merger Sub to file,
a copy of this Agreement or, to the extent permitted by the Pennsylvania
Law, Articles of Merger (the "Articles of Merger") with the Pennsylvania
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Secretary of State and make all other filings or recordings required
by the Pennsylvania Law in connection with the Merger and (b) the Merger
shall become effective at such time as the Articles of Merger are duly
filed with the Secretary of State, or at such later date or time as Buyer
and the Company shall agree and shall be specified in the Articles of
Merger (such time and date are referred to as the "Merger Date").
Section 1.4. Stock Options of the Company. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee of the Board of Directors administering
the Company Stock Plans, as defined below) shall adopt such resolutions or
take such other actions as may be required to effect the following.
(i) adjust, in accordance with their terms, the terms
of all outstanding options to purchase shares of Company Common
Stock (the "Company Stock Options") granted under the plans or
arrangements providing for the grant of options to purchase
shares of Company Common Stock to current or former officers,
directors, employees or consultants of the Company listed in
Section 1.4 of the Company Disclosure Schedules (as defined in
the preamble to Article 3) (the "Company Stock Plans"), whether
vested or unvested, as necessary to provide that, at the Merger
Date, each Company Stock Option outstanding immediately prior to
the Merger Date shall be amended and converted into an option to
acquire, on the same terms and conditions as were applicable under
the Company Stock Option, the number of shares of Buyer Common
Stock (rounded down to the nearest whole share) determined by
multiplying the number of shares of Company Stock subject to
such Company Stock Option by the Exchange Ratio, at a price per
share of Buyer Common Stock equal to (A) the aggregate exercise
price for the shares of Company Common Stock otherwise purchasable
pursuant to such Company Stock Option divided by (B) the aggregate
number of shares of Buyer Common Stock deemed purchasable pursuant
to such Company Stock Option (each, as so adjusted, an "Adjusted
Option"); provided that such exercise price shall be rounded up
to the nearest whole cent; and
(ii) make such other changes, if any, to the Company Stock
Plans and Company Stock Options as Buyer and the Company may agree
are appropriate solely to give effect to the Merger and consistent
with the parties' intent that the Merger be treated for financial
reporting purposes as a pooling of interests.
(b) Notwithstanding Section 1.4(a), the adjustments provided in
Section 1.4(a) with respect to any Company Stock Options that are
"incentive stock options" as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), shall be and are intended
to be effected in a manner which is consistent, to the extent permitted
by applicable law, with Section 424(a) of the Code.
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(c) Prior to the Merger Date, Buyer shall adopt an option plan
(the "Buyer Option Plan") which shall provide for the issuance of
the Adjusted Options at the Merger Date and by virtue of the Merger,
and without the need of any further corporate action, Buyer shall
assume all obligations of the Company under the Company Stock Plans,
including with respect to the Company Stock Options outstanding at
the Merger Date.
(d) Within two (2) business days after the Merger Date, Buyer
shall prepare and file with the SEC a registration statement on Form
S-8 (and on Form S-3, if required) registering a number of shares of
Buyer Common Stock equal to the number of shares subject to the
Adjusted Options. Such registration statement shall be kept effective
(and the current status of the initial offering prospectus or
prospectuses required thereby shall be maintained) at least for so
long as any Adjusted Options may remain outstanding.
(e) As soon as practicable after the Merger Date, Buyer shall
deliver to the holders of Company Stock Options appropriate notices
setting forth such holders' rights pursuant to the respective Company
Stock Plans and the agreements evidencing the grants of such Company
Stock Options and that such Company Stock Options and agreements shall
be assumed by Buyer and shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 1.4
after giving effect to the Merger).
(f) A holder of an Adjusted Option may exercise such Adjusted Option
in accordance with its terms.
(g) Except to the extent required under the respective terms of the
Company Stock Options or other applicable agreements, all restrictions
or limitations on transfer and vesting with respect to Company Stock
Options awarded under the Company Stock Plans or any other plan, program
or arrangement of the Company, to the extent that such restrictions or
limitations shall not have already lapsed, shall remain in full force
and effect with respect to such options after giving effect to the
Merger and the assumption by Buyer as set forth above.
Section 1.5. Fractional Shares. No fractional shares of Buyer
Common Stock shall be issued in the Merger, but in lieu thereof each
holder of Company Stock otherwise entitled to a fractional share of
Buyer Common Stock will be entitled to receive a cash payment in lieu
of such fractional shares of Buyer Common Stock equal to such fraction
times the Buyer Average Price (as defined in Section 1.7(b) of this
Agreement). As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Company Stock in lieu
of any functional shares of Buyer Common Stock, the Exchange Agent
shall make available such amounts to such holders of shares of Company
Stock without interest.
Section 1.6. Dissenting Shares. Notwithstanding Section 1.1,
shares of Company Stock outstanding immediately prior to the
Merger Date and held by a holder who has not voted in
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favor of the Merger and who has exercised dissenters' rights in respect
of such shares of Company Stock in accordance with the Pennsylvania Law
shall not be converted into a right to receive the applicable Merger
Consideration unless such holder fails to perfect or withdraws or
otherwise loses his dissenters rights. Shares of Company Stock in
respect of which dissenters' rights have been exercised shall be treated
in accordance with Section 1575 of the Pennsylvania Law. If after the
Merger Date such holder fails to perfect or withdraws or otherwise loses
his right to demand the payment of fair value for shares of Company Stock
under Pennsylvania Law, such shares of Company Stock shall be treated as
if they had been converted as of the Merger Date into a right to receive
the applicable Merger Consideration. The Company shall give Buyer prompt
notice of any demands received by the Company for the exercise of
dissenters rights with respect to shares of Company Stock, and Buyer shall
have the right to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior
written consent of Buyer, make any payment with respect to, or settle or
offer to settle, any such demands. In the event any amounts shall become
due and payable in respect of any such demands, such amounts shall be paid
by the Surviving Corporation.
Section 1.7. Aggregate Consideration; Exchange Ratio; Valuation of
Buyer Common Stock. (a) For purposes of this Agreement, the aggregate
consideration to be paid in exchange for the Company Stock in the Merger
shall be ninety-three million five hundred forty-two thousand dollars
($93,542,000) (the "Aggregate Consideration"). The "Per Share Consideration"
shall equal the Aggregate Consideration divided by 3,569,825, which, as of
the date of this Agreement, equals the sum of the number of outstanding
shares of Company Common Stock, the number of shares of Company Common
Stock into which the outstanding Company Preferred Stock is convertible,
and the number of shares of Company Common Stock issuable upon the exercise
of all outstanding Company Stock Options, whether vested or unvested as
of the date of this Agreement.
(b) The Exchange Ratio shall equal the Per Share Consideration
divided by the Buyer Average Price (as defined below), with the quotient
being rounded to the nearest one one hundred thousandth of a point. The
"Buyer Average Price" means the unweighted average of the last-sale prices
for the Buyer Common Stock, as reported on The Nasdaq Stock Market, for the
twenty (20) trading days ending on the fifth trading day (the "Valuation
Date") preceding the Merger Date, but not more than $32.00 nor less than
$22.08.
(c) If at any time during the period between the date of this Agreement
and the Merger Date, any change in the outstanding shares of Buyer Common
Stock shall occur by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of shares or any stock
dividend thereon with a record date during such period or any similar
transaction or event (each a "Share Change"), the minimum and maximum Buyer
Average Price set forth in Section 1.7(b) shall be changed by multiplying
each such number by the Adjustment Ratio (as defined herein). The
"Adjustment Ratio" shall be the number obtained by dividing the number
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of shares of Buyer Common Stock issued and outstanding immediately prior
to the Share Change by the number of shares of Buyer Common Stock issued
and outstanding immediately after the Share Change.
ARTICLE 2
THE SURVIVING CORPORATION
Section 2.1. Articles of Incorporation; Bylaws. The articles of
incorporation and bylaws of the Merger Sub in effect at the Merger Date
shall be the articles of incorporation and bylaws, respectively, of the
Surviving Corporation until amended in accordance with applicable law,
except for Article I thereof which shall include the name of the Surviving
Corporation designated by Buyer. The Surviving Corporation shall succeed
to all of the rights, privileges, powers and franchises, of a public as
well as of a private nature, of the Company and Merger Sub, all of the
properties and assets and all of the debts of the Company and Merger Sub,
and all choses in action and other interests due or belonging to the
Company and Merger Sub and shall be subject to, and responsible for, all
of the debts, liabilities and duties of the Company and Merger Sub with
the effect set forth in the Pennsylvania Law.
Section 2.2. Directors and Officers. From and after the Merger
Date, until successors are duly elected or appointed and qualified in
accordance with applicable law, (a) the directors of Merger Sub immediately
prior to the Merger Date shall be the directors of the Surviving Corporation,
and (b) the officers of Merger Sub immediately prior to the Merger Date
shall be the officers of the Surviving Corporation. On or prior to the
Merger Date, the Company shall deliver to Buyer evidence satisfactory to
Buyer of the resignations (to be effective as of the Merger Date) of those
directors of the Company and/or its Subsidiaries, and, without affecting
their employment status or any rights they may have under any severance
agreement, employment agreement or similar arrangement disclosed in the
Company Disclosure Schedules, those officers of the Company and/or its
Subsidiaries whose resignations as a director or officer have been
requested by the Buyer.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule of the Company attached
hereto (the "Company Disclosure Schedules") or as otherwise provided herein,
the Company represents and warrants to Buyer that:
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Section 3.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania, and has all corporate
powers required to carry on its business as now conducted and is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased
by it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified or in
good standing is not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on the Company. For purposes of this
Agreement, a "Material Adverse Effect" means, with respect to any Person,
any change, effect, event, occurrence or state of facts that is, or would
reasonably be expected to be, materially adverse to the financial condition,
business, operations, assets or results of operations of such Person and
its Subsidiaries taken as a whole, or that would or would reasonably be
expected to, materially impair the ability of such Person to perform its
obligations under this Agreement. Section 3.1 of the Company Disclosure
Schedules includes a list of all jurisdictions in which the Company or
any Subsidiary of the Company is duly qualified to conduct business, and
complete and correct copies of the Company's articles of incorporation
and by-laws, each as amended to date, are included in the set of due
diligence documents delivered by the Company to the Buyer concurrently
with this Agreement (the "Company Disclosure Documents").
Section 3.2. Corporate Authorization. (a) The execution, delivery
and performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated by this Agreement are within
the Company's corporate powers and, except for the required approval of
the shareholders of the Company in connection with the consummation of
the Merger, have been duly authorized by all necessary corporate action.
The affirmative vote of a majority of the votes cast by all shareholders
of the Company entitled to vote on the Merger and the affirmative vote of
two-thirds of the holders of the Company Preferred Stock, voting as a
class, (collectively, the "Required Shareholder Vote") are the only votes
of any class or series of the Company's capital stock necessary to approve
and adopt this Agreement and the transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms.
(b) The Board of Directors of the Company, at a meeting duly called
and held, has (i) determined that this Agreement and the transactions
contemplated by this Agreement (including the Merger) are fair to and
in the best interests of the shareholders of the Company, (ii) approved
this Agreement and the transactions contemplated by this Agreement
(including the Merger), and (iii) resolved to recommend adoption of this
Agreement and the transactions contemplated hereby by the shareholders of
the Company, subject to the terms hereof.
Section 3.3. Governmental Authorization. The execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions
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contemplated by this Agreement require no action by or in respect of,
or filing with, any federal, state, local or foreign governmental body,
agency, official or authority ("Governmental Authority") other than
(a) the filing of the Articles of Merger in accordance with the
Pennsylvania Law; (b) compliance with any applicable requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"); (c) compliance with any applicable requirements of
the Securities and Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "1934 Act"); (d) compliance
with any applicable requirements of the 1933 Act; (e) compliance with
any applicable foreign or state securities or Blue Sky laws; and
(f) immaterial actions or filings relating to ordinary operational
matters.
Section 3.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated by this Agreement do not
and will not, (a) assuming receipt of the Required Shareholder Vote,
contravene or conflict with the articles of incorporation or bylaws of
the Company or any Subsidiary of the Company, (b) assuming compliance
with the matters referred to in Section 3.3, contravene or conflict with
or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the
Company or any Subsidiary of the Company, (c) except as set forth in
Section 3.4 of the Company Disclosure Schedules, constitute a default
(or an event which with notice, the lapse of time or both would become
a default) under, or give rise to a right of termination, cancellation
or acceleration of any right or obligation of the Company or any
Subsidiary of the Company or to a loss of any benefit to which the
Company or any Subsidiary of the Company is entitled under any provision
of any material agreement, contract or other instrument binding upon the
Company or any Subsidiary of the Company or any license, franchise,
permit or other similar authorization held by the Company or any
Subsidiary of the Company, (d) except as set forth in Section 3.4 of
the Company Disclosure Schedules, require any action or consent or
approval of any Person other than a Governmental Authority or (e) result
in the creation or imposition of any Lien on any asset of the Company or
any Subsidiary of the Company. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, claim, lien, pledge,
charge, security interest or encumbrance of any kind in respect of
such asset.
Section 3.5. Capitalization. The authorized capital stock of
the Company consists of (i) 5,000,000 shares of Company Common Stock
and (ii) 62,500 shares of Company Preferred Stock, all of which are
designated as Series A Convertible Preferred Stock. As of the date
of this Agreement, there were (i) 2,254,425 shares of Company Common
Stock outstanding and (ii) 62,500 shares of Company Preferred Stock
outstanding, each share of which is convertible, by its terms, into
ten shares of Company Common Stock. As of the date of this Agreement,
there were Company Stock Options to purchase an aggregate of 690,400
shares of Company Common Stock outstanding, (421,975 of which Company
Stock Options were exercisable) granted under the Company Stock Plans.
All outstanding shares of capital stock of the Company have been,
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and all shares of Company Common Stock which may be issued upon the
exercise of the Company Stock Options or the conversion of the Company
Preferred Stock will be, when issued, duly authorized and validly
issued, fully paid and nonassessable and not subject to preemptive
rights. Except (i) as set forth in this Section 3.5 and (ii) for
changes arising from the acceleration of vesting of Company Stock
Options upon consummation of the Merger as set forth in Section 3.4
of the Company Disclosure Schedules, there are outstanding (a) no
shares of capital stock or other voting securities of the Company,
(b) no securities of the Company convertible into or exchangeable
for shares of capital stock or voting securities of the Company and
(c) no options, warrants, calls, subscriptions or other rights to
acquire from the Company, and no obligation of the Company to issue,
any capital stock, voting securities or securities convertible into
or exchangeable for capital stock or voting securities of the Company
(the items in clauses (a), (b) and (c) being referred to collectively
as the "Company Securities"). Except as set forth in Section 3.5 of
the Company Disclosure Schedules, there are no outstanding obligations
of the Company or any Subsidiary of the Company to repurchase, redeem
or otherwise acquire any Company Securities. Section 3.5 of the Company
Disclosure Schedules sets forth (i) every agreement pursuant to which the
Company has granted to any Person registration rights related to shares
of Company Stock and (ii) every agreement to which the Company is a
party or of which the Company has Knowledge relating to the voting of
any shares of Company Stock (copies of which agreements are included in
the Company Disclosure Documents).
Section 3.6. Subsidiaries. (a) Each Subsidiary of the Company is
duly incorporated, validly existing and in good standing under the laws
of its jurisdiction of incorporation, has all corporate powers to carry
on its business as now conducted and is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those
jurisdictions where failure to be so qualified or licensed is not,
individually or in the aggregate, reasonably likely to have a Material
Adverse Effect on the Company.
(b) The Company does not own, directly or indirectly, any equity
or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise, except for the Subsidiaries
of the Company set forth in Section 3.6 of the Company Disclosure
Schedules. Except as set forth in Section 3.6 of the Company Disclosure
Schedules, the Company is not subject to any obligation or requirement
to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any such entity. The
Company owns beneficially and of record, either directly or through a
wholly-owned subsidiary, ownership interests having by their terms
ordinary voting power to elect a majority of directors (or others
performing similar functions with respect to such Subsidiary) of
each of the Company's Subsidiaries, free and clear of any Liens.
Each of the outstanding shares of capital stock of each of
the Company's Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable. True and correct information for each
Subsidiary of the Company is set forth in Section 3.6 of the Company
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Disclosure Schedules, as applicable: (i) its name and jurisdiction of
incorporation or organization; (ii) its authorized capital stock or
share capital; and (iii) the number of issued and outstanding shares
of capital stock or share capital and the record owner(s) thereof.
There are no outstanding subscriptions, options, warrants, puts, calls,
agreements, understandings, claims or other commitments or rights of
any type relating to the issuance, sale or transfer of any securities
of any Subsidiary of the Company (collectively, the "Company Subsidiary
Securities"), nor are there outstanding any securities which are
convertible into or exchangeable for any Company Subsidiary Securities;
and no Subsidiary of the Company has any obligation of any kind to issue
any additional Company Subsidiary Securities or to pay for any Company
Subsidiary Securities.
Section 3.7. Financial Statements. The Company has delivered
to Buyer copies of the following financial statements (the "Financial
Statements"):
(i) consolidated balance sheets of the Company and its
Subsidiaries at June 30, 2000 (the "Company Balance Sheet") and at
June 30, 1999 and 1998, as audited by Arthur Anderson LLP, independent
accountants to the Company and its Subsidiaries;
(ii) consolidated statements of income, cash flows and
shareholders'equity of the Company and its Subsidiaries for the years
ended June 30, 2000,1999 and 1998, as audited by Arthur Anderson LLP,
independent accountants to the Company and its Subsidiaries; and
(iii) an unaudited consolidated balance sheet of the Company
and its Subsidiaries at September 30, 2000 and unaudited consolidated
statements of income of the Company and its Subsidiaries for the quarter
ended September 30, 2000.
Except as set forth in the Financial Statements or in Section
3.7 of the Company Disclosure Schedules, neither the Company nor any
of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by
generally accepted accounting principles applied in the United States
("U. S. GAAP") to be set forth on the balance sheets provided hereunder
that are not set forth therein. Such Financial Statements (i) were
prepared in accordance with the books and records of the Company;
(ii) were prepared in accordance with U.S. GAAP consistently followed
as of and for the periods presented; and (iii) fairly present the
consolidated financial position of the Company and its Subsidiaries
as of the indicated dates and the consolidated results of operations
and cash flows of the Company and its Subsidiaries for the indicated
periods, in conformity with U.S. GAAP (subject, in the case of unaudited
statements, to normal, recurring audit adjustments).
Section 3.8. Disclosure Documents. Each document delivered
by the Company to shareholders of the Company in connection
with the transactions contemplated by this Agreement (the "Company
Disclosure Documents") and any information supplied or to be
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<PAGE>
supplied by the Company for inclusion in the proxy statement-
prospectus prepared in connection with the adoption of this
Agreement by the holders of Company Stock and included in the
Buyer's Form S-4 (the "Proxy Statement-Prospectus") and any
amendments or supplements thereto, at the time that the Form S-4
or any amendment or supplement thereto becomes effective under
the 1933 Act, at the time the Proxy Statement-Prospectus or any
amendment or supplement thereto is first mailed to shareholders
of the Company, and at the time such shareholders vote on the
adoption of this Agreement, will not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading. At the time of any distribution of any Company
Disclosure Document, such Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties
contained in this Section 3.8 will not apply to statements
included in or omissions from the Company Disclosure Documents
based upon information furnished to the Company by the Buyer
specifically for use therein.
Section 3.9. Absence of Certain Changes. Except as set forth
in Section 3.9 of the Company Disclosure Schedules, (I) since
June 30, 2000, the Company has conducted its business only in the
ordinary course consistent with past practice and there has not
been (i) any change by the Company in accounting principles or
methods except insofar as may have been required by U.S. GAAP,
(ii) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with
respect to Company Stock, (iii) any split, combination or
recapitalization of any Company Stock or any issuance of any
other securities in respect of, in lieu of, or in substitution
for shares of Company Stock, except for issuances of Company
Common Stock upon the exercise of Company Stock Options in
accordance with their terms, and (iii) there has not been (A) any
granting by the Company to any officer or director of the Company
of any increase in compensation, except in the ordinary course of
business consistent with prior practice, (B) any granting by the
Company to any such officer of any increase in severance or
termination payment, (C) any entry by the Company into any
employment, severance or termination agreement with any such
officer or (D) any purchase, redemption, or other acquisition
of shares of the Company's capital stock or any interest therein;
and (II) since June 30, 2000, there has not been any event,
occurrence or development of a state of circumstances or facts
which has had, or is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on the Company, other
than any of the foregoing (i) relating to the economy or securities
markets in general, (ii) relating to the Company's industry in
general, or (iii) arising from the announcement or thereafter
the pendency of this Agreement or the transactions contemplated
by this Agreement.
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<PAGE>
Section 3.10. No Undisclosed Material Liabilities. There are
no material liabilities, commitments or obligations (whether pursuant
to contracts or otherwise) of the Company or any Subsidiary of the
Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances which is reasonably
likely to result in such a material liability, commitment or
obligation, including, without limitation, any fines, disciplinary
actions or other adverse actions that may be taken or reported
concerning the conduct of the Company or any of its Subsidiaries,
other than:
(a) liabilities, commitments or obligations disclosed or
provided for in the Company Balance Sheet (including the notes
thereto);
(b) liabilities, commitments or obligations incurred in the
ordinary course of business consistent with past practice since
June 30, 2000; and
(c) liabilities, commitments or obligations under this
Agreement.
Any liabilities, obligations, or commitments incurred in connection
with judicial, administrative, or arbitration proceedings or claims
against the Company or any of its Subsidiaries shall not be deemed
to have been incurred in the ordinary course of business.
Section 3.11. Litigation; Investigations. Except as set forth
in Section 3.11 of the Company Disclosure Schedules, there is no suit,
action or legal, administrative, arbitration or other proceeding or
governmental investigation ("Action") pending or, to the Company's
Knowledge, threatened, to which the Company is, or would be, a party
or by which the Company is or would be affected, or which would impair
the ability of the Company to consummate the transactions contemplated
by this Agreement or perform its obligations under this Agreement. For
the purposes of this Agreement, the term "Company's Knowledge" or similar
words means the conscious awareness of any executive officer of the
Company after due inquiry.
Section 3.12. Taxes. (a) Except as set forth in the Company
Balance Sheet (including the notes thereto) or as set forth in
Section 3.12 of the Company Disclosure Schedules, (i) all material
Tax Returns for the Company or any Subsidiary of the Company required
to be filed with any Taxing Authority by, or with respect to, the
Company and its Subsidiaries have been filed in accordance with
all applicable laws and are true, correct and complete in all
material respects; (ii) the Company and its Subsidiaries have
timely paid all Taxes shown as due and payable on the Tax
Returns for the Company or any Subsidiary of the Company that
have been so filed; (iii) the Company and its Subsidiaries have
made adequate provision for all Taxes payable by the Company and
its Subsidiaries for which no Tax Return for the Company or any
Subsidiary of the Company has yet been filed; (iv) there is no
action, suit, proceeding, audit or claim now proposed or pending
against or with respect to the Company or any of its Subsidiaries
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in respect of any Tax; (v) neither the Company nor any of its
Subsidiaries has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code; (vi) neither the Company nor any of its Subsidiaries
has been at any time a member of an affiliated, consolidated,
combined or unitary group other than one of which the Company was
the common parent; (vii) all Tax Returns filed with respect to tax
years of the Company and its Subsidiaries through the tax year
ended June 30, 2000 have been examined and closed or are returns
with respect to which the applicable period for assessment under
applicable law, after giving effect to extensions or waivers, has
expired; (viii) neither the Company nor any Subsidiary has been
granted any extension or waiver of the statute of limitations period
applicable to any Tax Return, which period (after giving effect to
such extension or waiver) has not yet expired; and (ix) neither the
Company nor any Subsidiary of the Company is a party to a tax sharing
agreement, including, without limitation, any agreement with respect
to the shifting of losses or income among parties or has been a party
to a tax sharing agreement that imposes obligations of the Company or
any Subsidiary of the Company as of the date of this Agreement.
(b) For purposes of this Agreement, "Taxes" means all United
States federal, state, local and foreign taxes, levies and other
assessments, including, without limitation, all income, sales, use,
goods and services, value added, capital, capital gains, net worth,
transfer, profits, withholding, payroll, PAYE, employer health,
unemployment insurance payments, excise, real property and personal
property taxes, and any other taxes, assessments or similar charges
in the nature of a tax, including, without limitation, interest,
additions to tax, fines and penalties, imposed by a governmental or
public body, agency, official or authority (the "Taxing Authorities").
"Tax Return" means any return, report, information return or other
document (including any related or supporting information) required
to be filed with any Taxing Authority in connection with the
determination, assessment, collection, administration or imposition
of any Taxes.
Section 3.13. ERISA and Labor Matters. (a) Section 3.13(a) of
the Company Disclosure Schedules contains a list identifying each
"employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), which is maintained,
administered or contributed to by the Company or any Subsidiary or ERISA
Affiliate of the Company and covers any employee or former employee
of the Company or any Subsidiary of the Company or in connection with
which the Company or any Subsidiary of the Company has any liability.
Such plans are referred to collectively herein as the "Employee Plans".
For purposes of this Section, "ERISA Affiliate" of the Company
means any other Person which, together with the Company, would be
treated as a single employer under Section 414 of the Code. The only
Employee Plans which individually or collectively would constitute an
"employee pension benefit plan" as defined in Section 3(2) of ERISA (the
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"Pension Plans") is the Thermacore International, Inc. 401(k) Profit
Sharing Plan identified in the list referred to above.
(b) Neither the Company nor any ERISA Affiliate has ever
maintained or been obligated to contribute to or had any
liability in connection with any "multiemployer plan", as defined
in Section 3(37) of ERISA, or any "defined benefit plan", as defined
in Section 3(35) of ERISA. Nothing done or omitted to be done and
no transaction or holding of any asset under or in connection with
any Employee Plan has made or will make the Company or any Subsidiary
of the Company subject to any liability under Title I of ERISA or
Section 4975 of the Code.
(c) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination
from the IRS that it is so qualified in form, and nothing has
occurred since the issuance of such determination letter to
adversely affect such determination. Each Employee Plan has been
maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA, the Code, the 1933 Act and the
1934 Act, which are applicable to the Employee Plan.
(d) Section 3.13(d) of the Company Disclosure Schedules contains
a list of each employment, severance or other similar contract, and
each arrangement, policy or plan (whether written or oral) providing
for deferred compensation, profit-sharing, bonuses, stock options,
stock purchase, stock awards, stock appreciation or other forms of
incentive compensation or post-termination insurance, compensation
or benefits that is not an Employee Plan, that is entered into,
maintained or contributed to, as the case may be, by the Company
or any Subsidiary of the Company and that covers any employee or
former employee of the Company or any of its Subsidiaries. The
contracts, plans, policies and arrangements described above are
referred to collectively herein as the "Benefit Arrangements." Each
Benefit Arrangement has been maintained in compliance with its terms
and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including ERISA, the Code, the 1933 Act and
the 1934 Act, that are applicable to such Benefit Arrangement.
(e) No Employee Plan or Benefit Arrangement provides post-
termination health, medical or life insurance benefits, and no
agent or representative of the Company or of any Subsidiary of
the Company has made any statements that would require the Company
or any of its Subsidiaries to provide such benefits, except to the
extent required by ERISA Section 606 et seq.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any Subsidiary of
the Company relating to, or change in employee participation or coverage
under, any Employee Plan or Benefit Arrangement which would increase the
expense of maintaining such Employee Plan or Benefit Arrangement above
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the level of the expense incurred in respect thereof for the fiscal
year ended on June 30, 2000 (the "Company Balance Sheet Date").
(g) Except as otherwise set forth in Section 3.13(g) of
the Company Disclosure Schedules, the execution of, and
performance of the transactions contemplated in, this Agreement
will not (either alone or upon the occurrence of any additional
or subsequent events) under any Employee Plan or Benefit
Arrangement result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund
benefits or result in the triggering or imposition of any
restrictions or limitations on the right of Buyer, the Company
or any Subsidiary of the Company to amend or terminate any
Employee Plan or Benefit Arrangements. Except as set forth in
Section 3.13(g) of the Company Disclosure Schedules, there is no
contract, agreement, plan or arrangement covering any employee
or former employee of the Company or any Subsidiary that,
individually or collectively, could give rise to the payment of
any amount that in connection with the performance of the
transactions contemplated by this Agreement would not be
deductible pursuant to the terms of Section 280G of the Code.
(h) Other than routine claims for benefits, there is no
claim pending against any Employee Plan or Benefit Arrangement
nor, to the Company's Knowledge, is any such claim threatened.
There are no audits of an Employee Plan or Benefit Arrangement
pending with any governmental or regulatory agency and all
material reports and returns required to be filed with any
governmental authority or distributed to any participant in
connection with any Employee Plan or Benefit Arrangement have
been so duly filed or distributed.
(i) The Company and each of its ERISA Affiliates have made
(or shall have made by the Merger Date) full and timely payment
of all amounts required to be contributed or paid under the
terms of each Employee Plan and Benefit Arrangement for periods
ending before the Merger Date, or if such amounts are not yet
required to be made, such amounts are reflected as an accrued
liability on the Company's Balance Sheet.
(j) The Company Disclosure Documents include, with respect
to each Employee Plan and Benefit Arrangement, as applicable, a
copy of each plan document, including any amendments thereto, a
summary plan description and subsequent summaries of material
modifications, if any, any related funding medium documents
(including trust agreements, insurance contracts or similar
documents, together with any amendments thereto), any material
contracts (including third party administrator agreements,
record keeping agreements or similar agreements, together with
any amendments thereto), the most recent Internal Revenue
Service determination letter for the plan, the most recent
Annual Report on Form 5500 (including any Schedule Bs or any
certified financial statements filed with any such Annual
Report) and the most recent actuarial report for an Employee
Plan subject to Title IV of ERISA.
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(k) Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement. There are no labor
unions voluntarily recognized or certified to represent any
bargaining unit of employees at the Company or any of its
Subsidiaries. No work stoppage, labor strike or slowdown against
the Company or any of its Subsidiaries is pending or threatened.
Neither the Company nor any of its Subsidiaries is involved in
or threatened with any labor dispute or grievance. There is no
organizing effort or representation question at issue with respect
to any employee of the Company or any of its Subsidiaries.
Section 3.14. Compliance with Laws. The Company has not
violated or failed to comply with any applicable statute, law,
ordinance, regulation, rule, judgment, decree or order of any
Governmental Authority, including, without limitation, any
applicable U.S. federal or state securities laws, except where
such violation or non-compliance will not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
The Company has not received any written communication from a
Governmental Authority that alleges that it is not in compliance
with any applicable law. Except for expenditures to maintain
routine business licenses and Taxes not yet due and payable, the
Company is not required to make, and the Company has no reasonable
expectation that it will be required to make, any expenditures to
achieve or maintain compliance with applicable law.
Section 3.15. Intellectual Property Rights. (a) Set forth
in Section 3.15 of the Company Disclosure Schedules is a true and
complete list, as of the date of this Agreement (the "Scheduled
Intellectual Property"), of (i) all of the Company's and
each of its Subsidiary's foreign and domestic patents, patent
applications, invention disclosures, trademarks, service marks,
trade names (and any registrations or applications for registration
for any of the foregoing), (ii) all design right and copyright
applications and registrations, including all patents, trademarks,
copyrights and applications under which the Company or any
Subsidiary has obtained rights from others, and (iii) all material
agreements to which the Company or any Subsidiary of the Company is a
party which may concern any Intellectual Property (of which true and
complete copies of all such agreements are included in the Company
Disclosure Documents). "Intellectual Property" shall mean all
intellectual property or other proprietary rights of every kind used
by the Company or any of its Subsidiaries in the conduct of their
business as such business is currently or proposed to be conducted,
including, without limitation, all domestic or foreign patents, patent
applications, inventions (whether or not patentable) processes,
products, technologies, discoveries, copyrightable and copyrighted
works, apparatus, trade secrets, trademarks and trademark applications
and registrations, service marks and service mark applications and
registrations, trade names, domain names, trade dress, copyright
regulations, design rights, customer list, marketing and customer
information, mask works rights, know-how, licenses, technical
information (whether confidential or otherwise), software, and
all documentation thereof. The Company or its Subsidiaries, as
applicable, has such ownership of or such rights by license, lease
or other agreement to the Intellectual Property as are necessary
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for the operation of the business of the Company or any Subsidiary
in substantially the same manner as such business is currently or
proposed to be conducted.
(b) Other than the Scheduled Intellectual Property, no name,
patent invention, trade secret, proprietary right, computer software,
trademark, trade name, service mark, logo, copyright, franchise,
license, sublicense, or other such right is necessary for the
operation of the business of the Company or any Subsidiary in
substantially the same manner as such business is currently or
proposed to be conducted. Except as set forth in Section 3.15
of the Company Disclosure Schedules, (i) the Company or its
Subsidiaries, as applicable, owns, free and clear of any Liens,
the Scheduled Intellectual Property and has the exclusive right
to bring actions for the infringement thereof; (ii) the Company
or one of its Subsidiaries, as applicable, owns or has a binding,
enforceable right to use the Intellectual Property, is the owner of
record of any application, registration or grant for each item of
Intellectual Property, and has properly executed and recorded all
documents necessary to perfect its title to such Intellectual
Property; (iii) no Person or entity has asserted to the Company or
any Subsidiary of the Company (and the Company and its Subsidiaries
do not otherwise have Knowledge) that the Intellectual Property or
the research, development, business, products, services or commercial
activities of the Company or any Subsidiary of the Company infringes
upon, misappropriates or is inconsistent with the proprietary
rights of any other Person or entity, including assertions of
infringement of any domestic or foreign patent, trademark, service
mark, trade name, copyright or design right or misappropriation or
improper use or disclosure of any trade secret or know-how, (iv) to
the Knowledge of the Company and its Subsidiaries, neither the
conduct of any other Person's or entity's business, nor the nature
of any of the products it manufactures or sells or services it
provides, infringes upon or is inconsistent with any Intellectual
Property; (v) all working requirements and all maintenance fees,
annuities, and other payments which are due from or controlled by
the Company or any Subsidiary of the Company on or before the date
of this Agreement for any of the Intellectual Property, including,
without limitation, all material foreign or domestic patents, patent
applications, trademark registrations, service mark registrations,
copyright registrations and any applications for any of the preceding,
have been met or paid; (vi) to the Knowledge of the Company and its
Subsidiaries no part of the Intellectual Property has been obtained
through inequitable conduct or fraud in the United States Patent
and Trademark Office or any foreign Governmental Authority; (vii)
neither the Company nor any Subsidiary of the Company have Knowledge
of any conduct or use by the Company or any Subsidiary of the
Company that would void or invalidate or constitute misuse of, any
of the Intellectual Property; (viii) the execution, delivery and
performance of this Agreement by the Company, and the consummation
of the transactions contemplated by this Agreement will not impair
the right of Buyer or the Surviving Corporation, after the Merger
Date, to use, sell, license or dispose of, or to bring any action
for the infringement of, any Intellectual Property; (ix) there are no
material royalties, honoraria, fees or other payments payable to any
Person by reason of the ownership, use, license, sublicense, sale or
disposition of the Intellectual Property; and (x) the Company and
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its Subsidiaries, to their Knowledge, have no liability for, and,
except in the ordinary course of business, have given no
indemnification for, patent, trademark or copyright infringement
with respect to any products manufactured, used, distributed, or
sold by any of them or with respect to services rendered by them
in connection with their business.
(c) The Company and its Subsidiaries have required all
professional and technical employees, and other employees or
contractors having access to valuable non-public information,
trade secrets and know-how of the Company or its Subsidiaries
(collectively, "Technology"), to execute agreements under which
such employees and contractors are required to convey to the
Company or its Subsidiaries, as applicable, ownership of all
inventions and developments conceived or created by them in the
course of their employment and to maintain the confidentiality
of all such Technology. To the Knowledge of the Company and its
Subsidiaries, the Company and its Subsidiaries (i) have at all
times maintained and diligently enforced commercially reasonably
procedures to protect all confidential information and trade
secrets relating to the Technology and (ii) are not under any
contractual or other obligation to disclose any Technology to
any third party or to permit any third party to use such
Technology. Except as set forth in Section 3.15 of the Company
Disclosure Schedules, to the Knowledge of Company and its
Subsidiaries, no third party is entitled to use the Technology
for any purpose.
Section 3.16. Environmental Matters. (a) (i) Except as set
forth in Section 3.16 of the Company Disclosure Schedules, no notice,
notification, demand, request for information, citation, summons or
order has been received by the Company, no complaint has been filed
against and received by the Company, no penalty has been assessed,
and no action or review is pending before any Governmental Authority
or, to the Knowledge of the Company or any Subsidiary of the Company,
threatened by any Governmental Authority or other Person with respect
to any matters relating to the Company or any Subsidiary of the Company
and arising out of any Environmental Law or Environmental Permit; and
(ii) the Company and each Subsidiary of the Company are in
compliance with all Environmental Laws and with all Environmental
Permits, except where any noncompliance or failure to obtain or
comply with Environmental Permits will not, individually or in the
aggregate, have a Material Adverse Effect on the Company; and
(iii) neither the Company nor any Subsidiary of the Company
has Knowledge of any liabilities of, or relating to, the Company
or any Subsidiary of the Company of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or
otherwise, arising under or relating to any Environmental Law or
Environmental Permit.
(b) Except as disclosed in Section 3.16 of the Company Disclosure
Schedules, there are no actions, activities, circumstances, events or
incidents, including without limitation, the release or presence of a
Hazardous Substance on any property, that are disclosed in any environmental
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assessment, investigation, study, audit, test, review or other analysis
conducted at the request of the Company or any Subsidiary of the Company
or of which the Company has Knowledge relating to the current or prior
business of the Company or any Subsidiary of the Company or any property
or facility now or previously owned, leased or operated by the Company
or any Subsidiary of the Company or any property used by the Company or
any Subsidiary of the Company for the disposal of a Hazardous Substance
which might reasonably be expected to give rise to liability under any
Environmental Laws and which have not been disclosed to Buyer in writing
as of the date hereof.
(c) For purposes of this Section 3.16, the following terms shall
have the meanings set forth below:
(i) "Environmental Laws" means any federal, state, local and
foreign law (including, without limitation, common law), treaty,
judicial decision, regulation, rule, judgment, order, decree,
injunction, agreement or contract with any Governmental Authority
relating to protection of human health and safety or the
environment or to the regulation or remediation of pollutants,
contaminants, wastes or chemicals or toxic, radioactive, ignitable,
corrosive, reactive or otherwise hazardous substances, wastes or
materials as such Environmental Laws exist on the Merger Date;
(ii) "Environmental Permits" means all permits, licenses,
franchises, certificates, approvals and other similar authorizations
of Governmental Authorities relating to or required by Environmental
Laws for the operation of the business of the Company or any
Subsidiary of the Company as currently conducted;
(iii) "Hazardous Substance" means any material, substance,
chemical, raw material, product, byproduct or waste whose release
to the environment, including remediation of such releases, is
regulated under any Environmental Law or Environmental Permit; and
(iv) "Company" and "Subsidiary of the Company" shall include
any entity which is, in whole or in part, a predecessor of the
Company or any Subsidiary of the Company.
Section 3.17. Finders Fees. Except for SG Cowen Securities
Corporation, a copy of whose engagement agreement is included in the
Company Disclosure Documents, there is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized
to act on behalf of the Company or any of its Subsidiaries who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
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Section 3.18. Title to and Condition of Properties. (a) Except
as set forth in Section 3.18 of the Company Disclosure Schedules, the
Company and each Subsidiary owns or holds under valid leases all real
property, plants, machinery and equipment necessary for the conduct of
the business of the Company and such Subsidiary as currently conducted
and such buildings, plants, machinery and equipment are structurally
sound and in good operating condition and repair. Except as set forth
in Section 3.18 of the Company Disclosure Schedules, there are no Liens
on any assets, rights or real or personal properties of the Company or
any Subsidiary.
(b) Section 3.18(a) of the Company Disclosure Schedules sets forth
a true and complete list of all real property used by the Company or any
of its Subsidiaries in the conduct of its business, indicates whether
such real property is owned or leased by the Company, and, if leased,
sets forth the material terms of the lease under which such real property
is leased (true and complete copies of which leases have been included in
the Company Disclosure Documents). The Company has good and marketable
title to all real property listed as owned by the Company in Section
3.18(a) of the Company Disclosure Schedules and has a valid right to
use or a valid leasehold interest in all real property listed as leased.
All material certificates, licenses and permits required for the lawful
use and occupancy of any real property by the Company or any of its
Subsidiaries have been obtained and are in full force and effect.
(c) Section 3.18(b) contains a list of all capitalized fixed
assets used in the conduct of the business of the Company or any of its
Subsidiaries having an original cost in excess of $250,000.
Section 3.19. Contracts. Section 3.19 of the Company Disclosure
Schedules lists all written or oral contracts, agreements, guarantees,
leases and executory commitments (each a "Contract") to which the
Company or any Subsidiary is a party as of the date of this Agreement
and which fall within any of the following categories (of which true
and complete copies have been included in the Company Disclosure
Documents): (a) contracts not entered into in the ordinary course of
the Company's or any of its Subsidiaries' business that involve aggregate
expenditures or receipts in excess of $100,000; (b) joint venture,
partnership and like agreements; (c) Contracts which are service contracts
(excluding contracts for delivery services entered into in the ordinary
course of business) or equipment leases involving payments by the
Company or any Subsidiary of more than $100,000 per year, (d) Contracts
containing covenants purporting to limit the freedom of the Company
or any Subsidiary of the Company to compete in any line of business in
any geographic area or to hire any individual or group of individuals,
(e) Contracts which contain minimum purchase conditions or requirements
or other terms that restrict or limit the purchasing relationships of
the Company or any Subsidiary of the Company, (f) Contracts relating
to any outstanding commitment for capital expenditures of the Company
or any Subsidiary of the Company in excess of $100,000, (g) indentures,
mortgages, promissory notes, loan agreements, guarantees, in each
case involving amounts in excess of $250,000, letters of credit or other
agreements or instruments of the Company or any Subsidiary of the Company
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or commitments for the borrowing or the lending of amounts, in each
case in excess of $250,000, by the Company or any Subsidiary of the
Company or providing for the creation of any charge, security
interest, encumbrance or lien upon any of the assets of the
Company or any Subsidiary of the Company, (h) Contracts relating to
the lease or sublease of, or sale or purchase of, real or personal
property involving any annual expense or price in excess of $100,000
and not cancelable by the Company or any Subsidiary (without premium
or penalty) within one month and (i) Contracts involving annual
revenues to or expenditures by the Company or any Subsidiary of
the Company in excess of 2% of the consolidated annual revenues
of the Company and its Subsidiaries. All such Contracts are valid
and binding obligations of the Company and its Subsidiaries, as
applicable, and, to the Knowledge of the Company, valid and binding
obligations of each other party thereto. None of the Company, any
Subsidiary of the Company nor, to the Knowledge of the Company, any
other party thereto is in violation of or in default in respect of,
nor has there occurred any event or condition which with the passage
of time or giving of notice (or both) would constitute a default
under, any such Contract.
Section 3.20. Accounts Receivable. All accounts receivable
and accrued interest receivable of the Company and its Subsidiaries
have arisen out of bona fide transactions in the ordinary course of
business and the accounts receivable reserves reflected on the most
recent balance sheet included in the Company Financial Statements are,
as of the date of such balance sheet, established in accordance with
U.S. GAAP. To the Knowledge of the Company, all accounts receivable
and accrued interest receivable of the Company and its Subsidiaries
will be collectible in the aggregate within a commercially reasonable
time, in an amount not less than the amounts carried on the most recent
balance sheet included in the Financial Statements, net of any reserves
included therein. No obligor under any of the Accounts Receivable has
any right of set-off against any of the Accounts Receivable under any
contract with the Company or any of its Subsidiaries.
Section 3.21. Relationships with Customers and Suppliers. As
of the date of this Agreement, to the Company's Knowledge, the
relationship of the Company and its Subsidiaries with its respective
customers and suppliers are satisfactory. Section 3.21 of the Company
Disclosure Schedules contains a list of the names and addresses of
the ten largest customers and the ten largest suppliers (measured
by the dollar volume of purchases or sales in each case) of the
Company and its Subsidiaries during each of the years ended June 30,
2000 and June 30, 1999 and the period from July 1, 2000 through
September 30, 2000. There exists no actual or, to the Knowledge of
the Company, threatened termination, cancellation, or material adverse
change in, the business relationship of the Company or any of its
Subsidiaries with any customer or group of customers listed in
Section 3.21 of the Company Disclosure Schedules or whose purchases
individually or in the aggregate are material to the operations
of the Company and its Subsidiaries, or with any supplier
or group of suppliers listed in Section 3.21 of the Company
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Disclosure Schedules or whose sales individually or in the
aggregate are material to the operations of the Company and its
Subsidiaries
Section 3.22. Product Warranties and Liabilities. (a) Section
3.22 of the Company Disclosure Schedules contains a list of each
Contract containing an express warranty given by the Company or any
of its Subsidiaries prior to the date of this Agreement covering any
class or group of products sold or distributed by the Company or any
of its Subsidiaries and in effect as of the date of this Agreement
(of which true and complete copies of any written warranties and/or
Contracts have been included in the Company Disclosure Documents).
The reserve for liabilities with respect to warranty claims contained
in the Company Balance Sheet fairly reflects in all material respects
the amount required in accordance with U.S. GAAP to be shown thereon
as of the Company Balance Sheet Date, and the reserve for such
liabilities to be contained in the books and records of the Company
and its Subsidiaries on the Merger Date will fairly reflect in all
material respects the amount required in accordance with U.S. GAAP
to be shown thereon as of the Merger Date.
(b) Neither the Company nor any Subsidiary of the Company has
incurred, nor does the Company know or have any reason to believe
that there is any basis for alleging, any material liability, damage,
loss, cost or expense as a result of any defect or other deficiency
(whether of design, materials, workmanship, labeling instructions or
otherwise) ("Product Liability") with respect to any product sold or
services rendered by or on behalf of the Company or any Subsidiary of
the Company whether such Product Liability is incurred by reason of
any express or implied warranty (including, without limitation, any
warranty of merchantability or fitness), any doctrine of common law
(tort, contract or other), any statutory provision or otherwise and
irrespective of whether such Product Liability is covered by insurance.
Section 3.23. Affiliate Transactions. Except as set forth in
Section 3.23 of the Company Disclosure Schedules, there are no
contracts or other transactions between the Company or any Subsidiary
of the Company, on the one hand, and any (i) officer or director of
the Company or any Subsidiary of the Company, (ii) record or beneficial
owner of five percent (5%) or more of the voting securities of the
Company or (iii) affiliate (as such term is defined in Regulation 12b-2
promulgated under the Exchange Act) of any such officer, director or
beneficial owner, on the other hand.
Section 3.24. Insurance The Company and its Subsidiaries
are presently insured, and during this and each of the past five
calendar years have been insured against such risks as companies
engaged in a similar business would, in accordance with good
business practice, customarily be insured. Section 3.24 of the
Company Disclosure Schedules contains a list and brief description
(including type of coverage, limits, deductibles, carriers and
effective and termination dates) of all policies of insurance
maintained by the Company or any of its Subsidiaries since January 1,
1998 (of which true and complete copies of those policies have
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been included in the Company Disclosure Documents). The Company or
one or more of its Subsidiaries are named insureds or are otherwise
covered under each such policy, and each such policy is in full force
and effect and will not in any way be affected by or terminate or
lapse by reason of the transactions contemplated by this Agreement.
Section 3.25. Pooling of Interests Treatment. The Company has
disclosed to its independent public accountants all actions taken by
it or by any of its Subsidiaries that would impact the accounting of
the business combination to be effected by the Merger as a pooling of
interests. To the Knowledge of the Company and its Subsidiaries,
neither the Company nor its Subsidiaries has taken or agreed to take
any action, or knows of any reason arising out of the conduct of the
Company or any of its Subsidiaries, that would prevent the Buyer from
accounting for the business combination to be effected by the Merger
as a pooling-of-interests. Without limitation of the foregoing,
since June 30, 1998 (i) the Company has been autonomous and not a
subsidiary or division of another company or part of an acquisition
which was later rescinded, (ii) there has not been any sale or
spin-off of a significant amount of assets of the Company or any
affiliate of the Company other than in the ordinary course of
business, (iii) the Company has not acquired any of its capital
stock, and (iv) any and all changes in the voting capital structure
and the relative ownership of the Company Securities are set forth
in Section 3.25 of the Company Disclosure Schedules and none of such
changes, if any, have been made in contemplation of a business
combination. The Company does not own and has not owned any of the
outstanding shares of Buyer Common Stock. The Company has not issued
any of its capital stock pursuant to awards, grants or bonuses (other
than pursuant to options that were granted to key employees during
the past two years in the ordinary course of Company's business
pursuant to a pre-existing option plan and prior to any contemplated
business combination). The Company has not incurred and repaid any
indebtedness owed to any shareholder of the Company (other than debt
incurred in the ordinary course and on terms and conditions consistent
with the past practices of Company). The Company does not lease any
real estate from any shareholder of the Company or affiliates of the
Company.
Section 3.26. Inventories. The inventories of the Company and
its Subsidiaries (including raw materials, supplies, work-in-progress,
finished goods and other materials) net of applicable reserves, taken
as a whole, are in merchantable condition in all material respects and
are reflected in all material respects in the books and records of the
Company and its Subsidiaries at the lower of average cost or market
value.
Section 3.27. No Guaranties; Extensions of Credit. No obligations
of the Company or any of its Subsidiaries are guaranteed by or subject
to a similar contingent obligation of any other Person, nor has the
Company or any Subsidiary of the Company guaranteed or become subject
to a similar contingent obligation in respect of the obligations or
liabilities of , or extended credit to, any Person other than the
Company or a Subsidiary of the Company.
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Section 3.28. Relationships with Sales Representatives. The
Company Disclosure Documents contain a true and complete copy of
the standard forms of agreement entered into by the Company in the
United States and Europe with its sales representatives (the "Sales
Representative Agreement"), and Section 3.28 of the Company
Disclosure Schedules contains a list of those persons or entities
that are currently parties to such agreements with the Company (the
"Company Sales Representatives"). The Sales Representative Agreements
entered into between the Company and the Company Sales Representatives
do not differ, in any material respect, from the forms of Sales
Representative Agreement included in the Company Disclosure Documents.
No Company Sales Representative has provided the Company with notice
of such Company Sales Representative's intent to terminate a Sales
Representative Agreement with the Company and, to the Knowledge of
the Company, there has been no threatened termination by or, since
the Balance Sheet Date, any adverse change in the business relationship
between the Company and any Company Sales Representative. Neither the
Company nor any Company Sales Representative is in default under any
Sales Representative Agreement. Except as set forth in Section 3.28
to the Company Disclosure Schedules, no Company Sales Representative
will have the right to terminate such Company Sales Representative's
Sales Representative Agreement with the Company as a result of the
consummation of the transactions contemplated by this Agreement.
Section 3.29. Permits. The Company and each of its Subsidiaries
possesses all material governmental franchises, permits, licenses,
certificates, variances, approvals and other material authorizations
necessary to own or lease and operate their properties and to conduct
their businesses as now conducted (collectively, the "Permits"),
including but not limited to environmental Permits. All Permits are
set forth in Section 3.29 of the Company Disclosure Schedules, except
for such Permits which would be readily obtainable by any qualified
applicant without undue burden in the event of any lapse, termination,
cancellation or forfeiture. All Permits are in full force and effect,
and no consent, approval or act of, or the making of any filing with,
any Governmental Authority or other party will be required to be
obtained or made by the Company or any Subsidiary in respect of any
Permit as a result of the consummation of the Merger and the other
transactions contemplated by this Agreement. Neither the Company nor
any of its Subsidiaries is in default in any material respect under
the terms of any such Permit or has received notice of any material
default thereunder.
Section 3.30. Relationships with Joint Venture Partners. Except as
set forth in Section 3.30 of the Company Disclosure Schedules, no party
to any joint venture agreement with the Company, including without
limitation the Joint Venture Agreement, dated January 17, 1998, between the
Company and John Yang and the Joint Venture Agreement, dated July 23, 1998,
between the Company and Young Lee, has obtained, or has alleged that he has
obtained, any rights under such agreement to any of the Intellectual
Property. Except as set forth in Section 3.30, no party to any joint
venture is using, or has permitted any other person to use, any of the
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Intellectual Property in a manner which infringes upon the Intellectual
Property or may otherwise impair the Company's rights to such Intellectual
Property.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in the disclosure schedule of Buyer
attached hereto (the "Buyer Disclosure Schedules"), Buyer represents
and warrants to the Company that:
Section 4.1. Corporate Existence and Power. (a) Buyer
is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
has all corporate powers required to carry on its business as it
is now being conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except
for those jurisdictions where the failure to be so qualified or in
good standing is not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect on Buyer. Buyer has
heretofore delivered to the Company true and complete copies of
Buyer's certificate of incorporation and by-laws as currently in
effect.
(b) Merger Sub will be a corporation duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and have all corporate powers
required to carry on its business as it is conducted prior to
the Merger. From its date of incorporation to the Merger Date,
Merger Sub will not engage in any activities other than in
connection with the transactions contemplated by this Agreement.
Section 4.2. Corporate Authorization. The execution,
delivery and performance by Buyer of this Agreement and the
consummation by each of Buyer and Merger Sub (each, a "Buyer Party")
of the transactions contemplated by this Agreement are, or in the
case of Merger Sub, will be within the corporate powers of such
Buyer Party and have been, or in the case of Merger Sub, will be,
prior to the Merger duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered by
Buyer and constitutes a valid and binding agreement of Buyer
enforceable against Buyer in accordance with its terms.
Section 4.3. Governmental Authorization. The execution,
delivery and performance by Buyer of this Agreement and the
consummation by each Buyer Party of the transactions contemplated
by this Agreement require no action by or in respect of, or filing
with, any Governmental Authority other than (a) the filing of the
Articles of Merger in accordance with the Pennsylvania Law;
(b) compliance with any applicable requirements of the HSR Act;
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(c) compliance with any applicable requirements of the 1934 Act;
(d) compliance with any applicable requirements of the 1933 Act;
(e) compliance with any applicable foreign or state securities or
Blue Sky laws; (f) filings and notices not required to be made or
given until on or after the Merger Date; and (g) immaterial actions
or filings relating to ordinary operational matters.
Section 4.4. Non-Contravention. The execution, delivery and
performance by each Buyer Party of this Agreement and the consummation
by such Buyer Party of the transactions contemplated by this Agreement
do not, in the case of Buyer, and will not, in the case of both Buyer
and Merger Sub (a) contravene or conflict with the Articles of
Incorporation or bylaws of such Buyer Party, (b) assuming compliance
with the matters referred to in Section 4.3, contravene or conflict
with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to
Buyer or any Subsidiary of Buyer, (c) constitute a default (or an
event which with notice, the lapse of time or both would become a
default) under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of Buyer or any Subsidiary
of Buyer or to a loss of any benefit to which Buyer or any Subsidiary
of Buyer is entitled under any provision of any agreement, contract
or other instrument binding upon Buyer or any Subsidiary of Buyer or
any license, franchise, permit or other similar authorization held
by Buyer or any Subsidiary of Buyer, (d) except for the approval
of the Board of Directors of Merger Sub and of the Buyer as sole
shareholder of Merger Sub, both of which approvals will have been
obtained prior to the Merger and which the Buyer shall cause to
occur, require any action or consent or approval of any Person
other than a Governmental Authority, or (e) result in the creation
or imposition of any Lien on any asset of Buyer or any Subsidiary
of Buyer, other than, in the case of the events specified in
clauses (b), (c), (d) and (e) (other than indebtedness of Buyer or
any Subsidiary of Buyer), any such event which, individually or in
the aggregate, has not had, and is not reasonably likely to have,
a Material Adverse Effect on Buyer.
Section 4.5. SEC Filings. The Buyer has delivered to
Company (i) the Buyer's Annual Report on Form 10-K for the fiscal
year ended March 31, 2000 (the "Buyer 10-K"); (ii) its Quarterly
Reports on Form 10-Q for its fiscal quarters ended June 26, 2000
and September 26, 2000 and filed with the SEC (the "Buyer 10-Qs");
(iii) its proxy or information statements relating to meetings of,
or actions taken without a meeting by, the stockholders of the
Company held since March 31, 2000 and (iv) all of its other reports,
statements, schedules and registration statements filed with
the SEC since April 1, 1998 and through the date of this Agreement.
The Buyer has timely filed all required reports, schedules, forms,
statements and other documents with the SEC since April 1, 1998
(collectively, the "Buyer SEC Documents"). As of their respective
dates, or if amended, as of the date of the last such amendment,
the Buyer SEC Documents complied, and all documents required to be
filed by the Buyer with the SEC after the date hereof and prior
to the Merger Date (the "Subsequent Buyer SEC Documents") will
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comply, in all material respects with the requirements of the
1933 Act or the 1934 Act, as the case may be, and the applicable
rules and regulations promulgated thereunder, and none of the
Buyer SEC Documents contained, and the Subsequent Buyer SEC
Documents when filed will not contain, any untrue statement
of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
Section 4.6. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial
statements of the Buyer included in the Buyer SEC Documents at the
time such Buyer SEC Documents were filed with the SEC complied as
to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with U.S.
GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC),
and fairly present (subject in the case of unaudited statements to
normal, recurring audit adjustments) the consolidated financial
position of the Buyer as at the dates thereof and the consolidated
results of its operations and cash flows for the periods then
ended. For purposes of this Agreement, "Buyer Balance Sheet" means
the consolidated balance sheet of the Buyer as of March 31, 2000 set
forth in the Buyer 10-K and "Buyer Balance Sheet Date" means March 31,
2000.
Section 4.7. Disclosure Documents. Each document required to
be filed by Buyer with the SEC in connection with the transactions
contemplated by this Agreement (the "Buyer SEC Disclosure Documents"),
including, without limitation, the registration statement of Buyer to
be filed with the SEC on Form S-4 (or other appropriate form) in
connection with the issuance of Buyer Common Stock pursuant to this
Agreement (the "Form S-4") and any amendments or supplements thereto,
will, when filed, comply as to form in all material respects with the
applicable requirements of the 1933 Act. Buyer is eligible to use
Form S-4 for the registration of the Buyer Common Stock to be issued
pursuant to the Merger. Each document required to be filed by Buyer
under the United States securities laws in connection with the
transactions contemplated by this Agreement (together with the Buyer
SEC Disclosure Documents, the "Buyer Disclosure Documents"), will,
when filed, comply as to form in all material respects with the
applicable requirements of the United States securities laws, as
applicable.
The Form S-4, at the time that it becomes effective, and the
Proxy Statement-Prospectus which forms a part of the Form S-4 or
any amendment or supplement thereto, at the time it is first mailed
to shareholders of the Company, and at the time such shareholders
vote on the Merger, will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements made therein, in light of the circumstances
under which they were made, not misleading. At the time of the
filing of any Buyer Disclosure Document and at the time of any
distribution thereof, such Buyer Disclosure Document will not
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contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this
Section 4.7 will not apply to statements included in or omissions
from the Buyer Disclosure Documents, including but not limited to
the Proxy Statement-Prospectus, based upon information furnished to
Buyer by the Company specifically for use therein.
Section 4.8. Absence of Certain Changes. Since the Buyer
Balance Sheet Date and except as set forth in the Buyer SEC Documents,
Buyer and its Subsidiaries have conducted their business in the
ordinary course consistent with past practice and there has not been
any event, occurrence or development of a state of circumstances or
facts which has had or is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Buyer other than any of
the foregoing (i) relating to the economy or securities markets in
general, (ii) relating to Buyer's industry in general or (iii) arising
from the announcement or thereafter the pendency of this Agreement or
the transactions contemplated by this Agreement.
Section 4.9. No Undisclosed Material Liabilities. There are
no liabilities, commitments or obligations (whether pursuant to
contracts or otherwise) of Buyer or any Subsidiary of Buyer of any
kind whatsoever which, individually or in the aggregate, have had
or are reasonably likely to have a Material Adverse Effect on Buyer,
whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of
circumstances which is reasonably likely to result in such a liability,
commitment or obligation, including, without limitation, any fines,
disciplinary actions or other adverse actions that may be taken or
reported concerning the conduct of Buyer or any of its Subsidiaries,
other than:
(a) liabilities, commitments or obligations disclosed or provided
for in the Buyer Balance Sheet (including the notes thereto) or in the
Buyer SEC Documents;
(b) liabilities, commitments or obligations incurred in the
ordinary course of business consistent with past practice since the
Buyer Balance Sheet Date; and
(c) liabilities, commitments or obligations under this Agreement.
Section 4.10. Finders Fees. There is no investment banker,
broker, finder or other intermediary which has been retained by or
is authorized to act on behalf of the Buyer or any of its Subsidiaries
who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement.
Section 4.11. Permits. The Buyer possesses all material
governmental franchises, permits, licenses, certificates, variances,
approvals and other material authorizations necessary to own or lease and
operate their properties and to conduct their businesses as now conducted
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(collectively, the "Buyer Permits"). All Buyer Permits are in full
force and effect, and no consent, approval or act of, or the making
of any filing with, any Governmental Authority or other party will
be required to be obtained or made by the Buyer in respect of any
Buyer Permit as a result of the consummation of the Merger and the
other transactions contemplated by this Agreement. The Buyer is
not in default in any material respect under the terms of any
such Buyer Permit or has received notice of any material default
thereunder.
Section 4.12. Pooling of Interests Treatment. The Buyer has
disclosed to its independent public accountants all actions taken
by it that would impact the accounting of the business combination
to be effected by the Merger as a pooling of interests. To the
Knowledge of the Buyer, the Buyer has not taken nor has agreed to
take any action, or knows of any reason arising out of the conduct
of the Buyer, that would prevent the business combination to be
effected by the Merger from being accounted for as a pooling-of-
interests. Without limitation of the foregoing, since June 30,
1998 (i) the Buyer has been autonomous and not a subsidiary or
division of another company or part of an acquisition which was
later rescinded, (ii) there has not been any sale or spin-off of
a significant amount of assets of the Buyer or any affiliate of the
Buyer other than in the ordinary course of business, (iii) except
as set forth in Section 4.12 of the Buyer Disclosure Schedules,
the Buyer has not acquired any of its capital stock, and (iv) any
and all changes in the voting capital structure and the relative
ownership of the Buyer securities are set forth in Section 4.12
of the Buyer Disclosure Schedules and none of such changes, if
any, have been made in contemplation of a business combination.
The Buyer does not own and has not owned any of the outstanding
shares of Company Stock. Except as set forth in Section 4.12 of
the Buyer Disclosure Schedules, the Buyer has not issued any of
its capital stock pursuant to awards, grants or bonuses (other
than pursuant to stock awards or options that were granted to key
employees during the past two years in the ordinary course of
Buyer's business pursuant to a pre-existing stock award or option
plan and prior to any contemplated business combination). The Buyer
has not incurred and repaid any indebtedness owed to any shareholder
of the Buyer (other than debt incurred in the ordinary course and on
terms and conditions consistent with the past practices of Buyer).
The Buyer does not lease any real estate from any shareholder of the
Buyer or affiliates of the Buyer.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that:
Section 5.1. Conduct of the Company. From the date
hereof until the Merger Date, except (i) as expressly permitted
in this Agreement, or (ii) as otherwise consented to in writing
by Buyer (which consent shall not be unreasonably withheld or
delayed), the Company shall, and shall cause its Subsidiaries to,
conduct their business in the ordinary course consistent with past
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practice and use their commercially reasonable efforts to preserve
intact their business organizations and relationships with third
parties, including but not limited to customers, suppliers and
Company Sales Representatives, and to keep available the services of
their present officers and employees. Without limiting the
generality of the foregoing, except (i) with the written consent
of the Buyer (which consent shall not be unreasonably withheld
or delayed) or (ii) as expressly permitted in this Agreement,
from the date hereof until the Merger Date:
(a) Neither the Company, nor any Subsidiary of the
Company, will adopt or propose any change in its respective
articles of incorporation or bylaws;
(b) The Company will not, and will not permit any
Subsidiary of the Company to, merge or consolidate with any
other Person or, other than as provided in the Company's capital
expenditure budget (included as Section 5.1(b) of the Company
Disclosure Schedules) in the ordinary course of business,
acquire a material amount of assets of any other Person;
(c) The Company will not, and will not permit any
Subsidiary of the Company to, declare, set aside or pay any
dividend or make any other distribution with respect to any
shares of the capital stock of the Company or any Subsidiary of
the Company or in respect of any securities convertible or
exchangeable for, or any rights, options or warrants to acquire,
any capital stock of the Company or any Subsidiary of the
Company;
(d) The Company will not, and will not permit any
Subsidiary of the Company to create or assume any Lien on any
material asset;
(e) The Company will not, and will not permit any
Subsidiary of the Company to, issue, grant, deliver or sell, or
authorize or propose the issuance, grant, delivery or sale of,
any Company Securities, any Company Subsidiary Securities or any
securities convertible into or exchangeable for, or any rights,
warrants or options to acquire, any Company Securities or
Company Subsidiary Securities other than pursuant to the
exercise of a Company Stock Option or the conversion of Company
Preferred Stock outstanding on the date of this Agreement;
(f) The Company (i) will not adjust, split, combine or
reclassify, or take any other similar action with respect to,
any capital stock of the Company, and (ii) will not, and will
not permit any Subsidiary of the Company to, directly or
indirectly, repurchase, redeem or otherwise acquire an amount of
shares of capital stock of, or in respect of any securities
convertible or exchangeable for, or any rights, options or
warrants to acquire, any capital stock of, or other ownership
interests in, the Company or any Subsidiary of the Company, or
(iii) enter into any agreement, understanding or arrangement
with respect to the sale or voting of any capital stock of the
Company or any Subsidiary;
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(g) The Company will not, and will not permit any
Subsidiary of the Company to, incur or assume any indebtedness
from any Person (other than, in the case of a Subsidiary of the
Company, the Company or any other subsidiary of the Company) for
borrowed money or guarantee any such indebtedness;
(h) Except for (i) loans, advances or capital contributions
to or investments in Subsidiaries of the Company, (ii) loans or
advances to employees for expenses incurred in the ordinary
course of business consistent with past practice and in amounts
not exceeding $5,000 per employee or (iii) investments in
securities in the ordinary course of business consistent with
past practices, the Company will not, and will not permit any
Subsidiary of the Company to, make any material loans, advances
or capital contributions to, or investments in, any other
Person;
(i) The Company will not, and will not permit any of its
Subsidiaries to, (i) grant any severance or termination pay to,
or enter into any employment, termination or severance
arrangement with, any director, officer, consultant or employee
of the Company or any Subsidiary of the Company; (ii) enter into
any employment, deferred compensation or other similar agreement
(or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any Subsidiary;
(iii) increase or decrease benefits payable under any existing
severance or termination pay policies or employment agreements;
(iv) increase compensation, bonus or other benefits payable to
directors, officers, consultant or employees of the Company or
any Subsidiary of the Company, other than in the ordinary course
of business consistent with past practice; (v) adopt any new
Employee Plan or Benefit Arrangement; or (vi) otherwise amend or
modify, any existing Employee Plan or Benefit Arrangement except
to the extent required by applicable law;
(j) The Company will not, and will not permit any of its
Subsidiaries to, authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation or
dissolution of the Company or any Subsidiary of the Company, or
any plan of division or share exchange involving the Company or
any of its Subsidiaries;
(k) The Company will not, and will not permit any
Subsidiary of the Company to, change any method of accounting or
any accounting principle or practice used by the Company or any
Subsidiary of the Company, except for any such change required
by reason of a change in U.S. GAAP;
(l) Neither the Company nor any Subsidiary shall, to
the extent it may affect or relate to the Company or any
Subsidiary, make or change any Tax election, change any
annual Tax accounting period, adopt or change any method
of Tax accounting, file any amended Tax Return, enter into
any closing agreement, settle any Tax claim or assessment,
surrender any right to claim a Tax refund, consent to any
extension or waiver of the limitations period applicable to any
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Tax claim or assessment or take or omit to take any other action,
if any such action or omission would have the effect of, in the
aggregate, increasing the Tax liability, or in the aggregate,
reducing any Tax asset of the Company or any Subsidiary of the
Company except to the extent such increase or reduction is
adequately provided for, under U.S. GAAP, on the Company Balance
Sheet;
(m) All Tax Returns not required to be filed on or before
the date hereof (i) shall be filed when due (including extensions)
in accordance with all applicable laws and (ii) as of the time of
filing, shall correctly reflect in all material respects the facts
regarding the income, business, assets, operations, activities and
status of the Company, its Subsidiaries and any other information
required to be shown therein;
(n) Neither the Company nor any Subsidiary of the Company
shall reserve any amount for or make any payment of Taxes to any
Person or any Taxing Authority, except for such Taxes as are due
or payable or have been properly estimated in accordance with
applicable law as applied in a manner consistent with past
practice of the Company or any such Subsidiary, as the case may
be;
(o) Neither the Company nor any of its Subsidiaries will:
(i) settle any Actions, whether now pending or hereafter
made or brought, for anything other than cash damages or for
cash in an amount in excess of $100,000;
(ii) modify, amend or terminate, or waive, release or
assign any material rights or claims with respect to, any
Contract set forth in Section 3.19 of the Company Disclosure
Schedules, or, except to the extent required by Applicable
Law and advised by outside counsel, any confidentiality
agreement to which the Company or any Subsidiary of the
Company is a party;
(iii) incur or commit to any capital expenditures,
obligations or liabilities in respect thereof which exceed
or would exceed $100,000, individually, or $250,000 in the
aggregate, other than capital expenditures related to the
Company's on-going improvements to its facilities which do
not exceed amounts previously disclosed by the Company to
Buyer;
(iv) make any material changes or modifications to any
pricing policy or investment policy;
(v) take any action that would result in the representations
and warranties set forth in Article III being false or
incorrect in any material respect, other than inadvertent
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actions that do not result in the representations and warranties
being unable to be true and correct in all material respects by
the Merger Date;
(vi) enter into any contract, lease, agreement or
commitment not otherwise specified in this Section 5.1,
that obligates the Company to expend an amount in excess of
$100,000 individually;
(vii) enter into, amend or terminate any real property
lease or any commitment in respect thereof;
(viii) terminate the employment or engagement of any
employee or consultant or agent of the Company or any
Subsidiary; or
(ix) pay or approve any other expense or disbursement
in excess of $25,000 individually (except for payroll and
related tax withholding and other expenses (including
insurance and 401(k) contributions), Tax liabilities,
utilities, lease payments, principal and interest payments
on outstanding indebtedness of the Company and/or any of
its Subsidiaries, payments to suppliers, legal fees and
expenses and, upon closing of the Merger, investment
banking fees and expenses).
(p) The Company will not, and will not permit any Subsidiary of
the Company to, agree to do any of the foregoing.
The Company and its Subsidiaries will consult regularly with the
Buyer in respect of the operation of its business prior to the
Merger Date; provided, however, that the provisions of this
sentence will not be deemed to have been breached unless and
until Buyer has notified the Company in writing of such breach
and the Company and its Subsidiaries have failed to comply with
the specific terms of such notice.
Section 5.2. Shareholder Meeting; Proxy Materials. (a) Subject
to Section 5.3, the Company shall cause a meeting of its shareholders
(the "Company Shareholder Meeting") to be duly called and held as
soon as reasonably practicable for the purpose of voting on the
adoption of this Agreement and, to the extent submitted to the
Company's shareholders for approval, the transactions contemplated
by this Agreement, and the Board of Directors of the Company shall
recommend adoption of this Agreement by the Company's shareholders.
The Company shall use its best efforts to obtain the necessary
approval of the adoption of this Agreement and the transactions
contemplated by this Agreement from the Company's shareholders
at the Company Shareholder Meeting.
(b) Subject to Section 5.3, in connection with the Company
Shareholder Meeting, the Company will (i) mail to its
shareholders the Proxy Statement-Prospectus and all other proxy
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materials for such meeting, (ii) use commercially reasonable
efforts to obtain the necessary adoption by its shareholders of
this Agreement and the approval of the transactions contemplated
by this Agreement and (iii) otherwise comply with all legal
requirements applicable to such meeting.
Section 5.3. Other Offers. From the date hereof until
the termination of this Agreement, the Company will not, and
will cause its Subsidiaries and the directors, officers, employees,
financial advisors and other agents or representatives of the
Company or any of its Subsidiaries not to, directly or indirectly,
take any action to solicit, initiate or encourage any Acquisition
Proposal with respect to the Company or engage in negotiations with,
or disclose any non-public information relating to the Company or
any Subsidiary of the Company or afford access to the properties,
books or records of the Company or any Subsidiary of the Company
to, any Person that has informed the Company that it is considering
making, or has made, an Acquisition Proposal with respect to the
Company, or any Person that the Company after reasonable inquiry
believes is a potential purchaser of the Company. For the purposes
of this Agreement, "Acquisition Proposal" means any offer or proposal
for, or any indication of interest in, a merger or other business
combination or the acquisition in any manner of an equity interest
in an amount equal to or greater than 20% of the class of any equity
security then outstanding or a substantial portion of the assets of,
the Company or any Subsidiary of the Company, in each case other
than the transactions contemplated by this Agreement. The Company
shall provide prompt written notice to the Buyer upon the receipt
of any Acquisition Proposal.
Section 5.4. Intellectual Property Matters. The Company shall,
and shall cause each of its Subsidiaries to, preserve their ownership
rights to the Intellectual Property free and clear of any Liens and
to use their commercially reasonable efforts to assert, contest and
prosecute any infringement of any issued foreign or domestic patent,
trademark, service mark, or copyright that forms a part of the
Intellectual Property owned by the Company or any of its Subsidiaries
or any misappropriation or disclosure of any trade secret, confidential
information or know-how that forms part of the Intellectual Property
owned by the Company or any of its Subsidiaries.
Section 5.5. Affiliate Letters. The Company shall provide the
Buyer with such information as may be reasonably necessary to determine
the identity of those persons who may be deemed to be "affiliates"
of the Company within the meaning of Rule 145 (or any successor rule)
of the SEC under the 1933 Act or within the meaning of Commission
Staff Accounting Bulletin No. 65 (interpreting certain requirements
for treating a business combination as a pooling of interests)
and a list of those persons whom the Company believes may be deemed
to be affiliates. Within ten business days of the execution of
this Agreement, the Company will obtain and deliver to the Buyer
affiliate letters, substantially in the form of Exhibit A to this
---------
Agreement, from each of the directors and executive officers of the
Company, providing that such person will not sell, pledge, transfer or
otherwise dispose of (i) any shares of Buyer Common Stock held by such
affiliate, except to the extent and under the conditions permitted
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therein, during the period beginning 30 days prior to the Merger and
ending at the time of the Buyer's publication of financial results
covering at least 30 days of combined operations of the Buyer and
the Company, and (ii) any shares of Buyer Common Stock to be
received by such affiliate in the Merger, except in compliance
with the applicable provisions of the 1933 Act. The Company will
use its best efforts to obtain such letters within ten business
days of the date of this Agreement from the beneficial owners of
five percent or more of the outstanding shares of Company Common
Stock and from any other Persons who, in the opinion of counsel
for the Buyer, may be deemed to be affiliates within the meaning
of Rule 145 or Commission Staff Accounting Bulletin No. 65.
Section 5.6. Access to Information. From the date hereof
until the Merger Date, the Company will give (or cause to be
given) to the Buyer, its counsel, financial advisors, auditors
and other authorized representatives full access, during regular
business hours, to the offices, properties, employees and
consultants, books and records of the Company, will furnish
(or cause to be furnished) to the Buyer, its counsel, financial
advisors, auditors and other authorized representatives such
financial and operating data and other information as such the
Buyer may reasonably request and will instruct the employees,
counsel and financial advisors of the Company and its Subsidiaries
to cooperate with the Buyer in its investigation of the business
of the Company and its Subsidiaries; provided that no investigation
pursuant to this Section shall affect any representation or warranty
given by the Company to the Buyer hereunder. Unless otherwise
required by applicable law, each party hereto agrees that it shall,
and it shall cause its Subsidiaries and its and their respective
officers, directors, employees, auditors and agents to, hold, in
confidence all non-public information so acquired and to use
such information solely for purposes of effecting the
transactions contemplated by this Agreement. From the date
hereof until the Merger Date and upon prior consultation and
agreement between the Company and the Buyer, the Company will
cooperate with the efforts of the Buyer, its counsel, financial
advisors, auditors and other authorized representatives to have
reasonable access to the Company customers and suppliers. The
information obtained pursuant to this Section shall be subject
to any confidentiality agreements or other confidentiality
obligations currently binding upon the Company or any of its
Subsidiaries; provided that the Company shall use commercially
reasonable efforts to obtain any waivers under such agreements
or obligations to permit the Company to comply with its
obligations hereunder.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
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Section 6.1. Conduct of Buyer. From the date hereof until
the Merger Date, Buyer shall, and shall cause its Subsidiaries to,
conduct their business in all material respects in the ordinary
course consistent with past practice and use their commercially
reasonable efforts to preserve intact their business organizations
and relationships with third parties and to keep available the
services of their present officers and employees. Without limiting
the generality of the foregoing, except as expressly permitted in
this Agreement, from the date hereof until the Merger Date, Buyer
will not adopt or propose any change in either its certificate
of incorporation or bylaws that would materially and adversely
affect the rights of holders of Company Stock as anticipated
holders of Buyer Common Stock.
Section 6.2. Departments. Buyer shall, and cause its
Subsidiaries to, maintain the Sales and Marketing, Engineering
and Technology departments of the electronic cooling business unit
of the Surviving Corporation in Lancaster, Pennsylvania until the
second anniversary of the Merger Date.
Section 6.3. Registration Statement. The Buyer shall (i)
promptly prepare and file with the SEC the Form S-4 with respect to
the Buyer Common Stock issuable in connection with the Merger and
shall use its reasonable best efforts to cause the Form S-4 to be
declared effective by the SEC as soon as practicable; (ii) take
any action required to be taken under applicable Blue Sky laws in
connection with such issuance of Buyer Common Stock or pursuant to
any Adjusted Option; and (iii) within seventy-five (75) days of the
Merger Date, promptly prepare and file with the SEC a report on Form
8-K , 10-K or 10-Q, which publicizes financial results covering at
least 30 days of combined operations of the Buyer and the Company.
Section 6.4. Listing on Nasdaq. The Buyer shall take all
action necessary to ensure that the shares of Buyer Common Stock
issuable in the Merger or upon the exercise of the Adjusted Options
have been approved for listing on the The Nasdaq Stock Market's
National Market on or before the Merger Date; subject to official
notice of issuance.
Section 6.5. Organizational Structure. Effective as of the
Merger Date and for a period of not less than two (2) years
thereafter, the management of the Company shall report directly
to most senior executive of the Buyer responsible for the
Buyer's operations or to such other senior executive with
comparable responsibilities as may be designated by the chief
executive officer of the Buyer.
Section 6.6. Board of Directors. On the Merger Date
and for a period of not less than two (2) years thereafter,
the Buyer shall cause the Company's Board of Directors
to consist of seven (7) members. During such two year period,
four (4) members of the Board of Directors shall be appointed
by the Buyer, which members shall initially be Donald Johnson,
David Rayburn, Ronald Hoover and a person to be designated by
Buyer, and three (3) members shall be appointed by the Seller's
representative, who shall be John Ryan. The Company's Board of
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Directors shall meet not less than quarterly. The expenses of
the members of the Company's Board of Directors shall be paid
by the Company.
ARTICLE 7
COVENANTS OF BUYER AND THE COMPANY
Section 7.1. Commercially Reasonable Efforts. (a) Subject to
the terms and conditions of this Agreement, each party will use its
commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate the
Merger and the other transactions contemplated by this Agreement.
(b) Neither Buyer nor the Company shall take any action,
or omit to take any action, that would cause its representations
and warranties contained herein to be inaccurate such that the
conditions in Article 8 would not be satisfied.
Section 7.2. Cooperation. Without limiting the generality of
Section 7.1(a), Buyer and the Company shall together, or pursuant to
an allocation of responsibility to be agreed between them, coordinate
and cooperate (i) in connection with the preparation of the Company
Disclosure Documents and the Buyer Disclosure Documents, (ii) in
determining whether any action by or in respect of, or filing with,
any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the Merger
or the other transactions contemplated by this Agreement, and (iii) in
seeking any such actions, consents, approvals or waivers or making any
such filings, furnishing information required in connection therewith
or with the Company Disclosure Documents and the Buyer Disclosure
Documents, and timely seeking to obtain any such actions, consents,
approvals or waivers. Subject to the terms and conditions of this
Agreement, Buyer and the Company will each use its reasonable best
efforts to have the Form S-4 declared effective by the SEC under the
1933 Act as promptly as practicable after the Form S-4 is filed with
the SEC.
Section 7.3. Public Announcements. Upon execution of this
Agreement, the Buyer and the Company will each issue a press release,
each in form satisfactory to the other party, announcing the transactions
contemplated by this Agreement. The Buyer and the Company will consult
with each other before issuing any other press release or making any
public statement with respect to this Agreement and the transactions
contemplated by this Agreement and, except, as may be required by
applicable law or any listing or similar agreement with any securities
exchange on which the Buyer Common Stock is listed, will not issue any
such press release or make any such public statement prior to such
consultation.
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Section 7.4. Further Assurances. At and after the Merger Date,
the directors and officers of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of
the Company or Merger Sub, any deeds, bills of sale, assignments
or assurances and to take and do, in the name and on behalf of the
Company or Merger Sub, any other actions and things to vest, perfect
or confirm of record or otherwise in the Surviving Corporation any
and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of the Merger or otherwise
carry out the provisions of the Agreement, and the Company and its
officers and directors shall be deemed to have granted to the
Surviving Corporation an irrevocable power of attorney in respect
of the foregoing.
Section 7.5. Notices of Certain Events. Each of the Company
and Buyer shall promptly notify the other party of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this
Agreement;
(b) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this
Agreement;
(c) any Actions commenced or, to its Knowledge threatened
against, relating to or involving or otherwise affecting such
party that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 3.11 or
that relate to the consummation of the transactions contemplated
by this Agreement; and
(d) (i) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would cause any
representation or warranty of such party contained in this
Agreement to be untrue or inaccurate at or prior to the Merger
Date, and (ii) any material failure of such party to comply with
or satisfy 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 7.5(d) shall not
limit or otherwise affect the remedies available hereunder to
either Buyer or the Company, as applicable.
Section 7.6. Director and Officer Liability. (a) From and
after the Merger Date, the Buyer shall cause the Surviving
Corporation to indemnify, defend and hold harmless any Person who is
on the date hereof, or has been at any time prior to the date hereof,
or who becomes prior to the Merger Date, an officer, director, or
employee or agent (the "Indemnified Party") of the Company or any
of its Subsidiaries against all losses, claims, damages, liabilities,
costs and expenses (including attorney's fees and expenses), judgments,
fines, losses, and amounts paid in settlement in connection with any
actual or threatened action, suit, claim, proceeding or
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investigation (each a "Claim") to the extent that any such Claim
is based on, or arises out of, (i) the fact that such Person is or
was a director, officer, employee or agent of the Company or any
of its Subsidiaries at any time prior to the Merger Date or is or
was serving at the request of the Company or any of its Subsidiaries
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise at any time
prior to the Merger Date, or (ii) this Agreement or any of the
transactions contemplated hereby or thereby in each case to the
extent that any such Claim pertains to any matter or fact arising,
existing, or occurring prior to or at the Merger Date, regardless
of whether such Claim is asserted or claimed prior to, at or after
the Merger Date (the matters described in clauses (i) and (ii) the
"Pre-Merger Matters") to the fullest extent that such Person is
indemnified under the Company's articles of incorporation and
by-laws in effect as of the date hereof, including provisions
relating to advancement of expenses incurred in the defense of
any action or suit; provided that such indemnification shall be
subject to any limitation imposed from time to time under
applicable laws. Buyer and the Surviving Corporation shall also
honor the indemnification agreements between the Company or any
of its Subsidiaries, as the case may be, and any current or
former officer or director of the Company or any such Subsidiary,
as the case may be, existing on the date of this Agreement and
which are listed in Section 7.6 of the Company Disclosure Schedules
(complete and accurate forms of which have been provided to Buyer).
(b) Buyer and the Surviving Corporation agree that all rights
to indemnification and all limitations or exculpation of liabilities
existing in favor of the Indemnified Party as provided in the
Company's articles of incorporation and by-laws as in effect as of
the date hereof shall continue in full force and effect with respect
to Pre-Merger Matters, without any amendment thereto, for a period of
three years from the Merger Date to the extent such rights are
consistent with Pennsylvania Law; provided that, in the event any
Claim or Claims with respect to any such Pre-Merger Matters are
asserted or made within such three year period, all rights to
indemnification in respect of any such Claim or Claims shall continue
until disposition of any and all such Claims; provided however, that
any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth
under Pennsylvania Law, the Company's articles of incorporation or
by-laws or such agreements, as the case may be, shall be made by
independent legal counsel selected by the Indemnified Party and
reasonably acceptable to Buyer, retained at Buyer's expense; and
provided further, that nothing in this Section 7.6 shall impair
any rights or obligations of any present or former directors or
officers of the Company.
(c) Buyer or the Surviving Corporation shall provide directors
and officers of the Company officers' and directors' liability
insurance coverage as of the Merger Date ("D&O Insurance") with
respect to Pre-Merger Matters for a period of not less than three
years after the Merger Date which coverage will be substantially
similar to the Company's existing D&O Insurance including, without
limitation, an overall coverage amount not less than the overall
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coverage amount under the Company's existing D&O Insurance, policy,
a complete and accurate copy of which is included in Section 3.25
of the Company Disclosure Schedules.
Section 7.7. Governmental Authorization. Each of Buyer and
the Company shall take all actions by or in respect of, or make all
filings with, any Governmental Authority required for the execution,
delivery and performance by Buyer and the Company of this Agreement
and the consummation by Buyer and the Company of the transactions
contemplated by this Agreement, including compliance with any
requirements referred to in Section 3.3 or Section 4.3.
Section 7.8. Certain Corporate Matters. Buyer shall take all
necessary corporate action for the amendment to or establishment of
the Buyer Stock Option Plan contemplated by Section 1.4 hereof.
Section 7.9. Employment. As of the Merger Date, Buyer shall
assume the obligations of the Company to perform any and all
employment and severance agreements identified in Section 7.9 of
the Company Disclosure Schedules.
Section 7.10. Tax-Free Reorganization. None of the Company,
the Buyer or any Subsidiary of the Company or the Buyer shall take
any action, or omit to take any action, which action or omission
would cause the Merger not to qualify as a reorganization under
Section 368(a) of the Code.
Section 7.11. Pooling. (a) From and after the date hereof
and until the expiration of the Restricted Period, none of Company
or the Buyer shall take, or shall permit any of their respective
Subsidiaries to take, and the Company and the Buyer shall use their
respective best efforts to cause their respective affiliates not to
take, any action, or fail to take any action, that would jeopardize
the treatment of the transactions contemplated hereby as a pooling
of interests. The "Restricted Period" shall mean the period commencing
on the date hereof and terminating on the date on which at least thirty
days of combined operations are publicly announced by the Buyer in an
annual report on Form 10-K, a quarterly report on Form 10-Q, or a
current report on Form 8-K, or in such other manner as may be agreed
upon by the parties.
(b) Without limitation of the provisions of Section 7.11(a), the
Company and the Buyer shall each use reasonable commercial efforts to
cure any inability to treat the Merger as a pooling of interests, to
the extent that such inability arises out of transactions involving
shares of the Company's or the Buyer's capital stock and to the extent
that the Company or the Buyer is able to cure such inability.
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ARTICLE 8
CONDITIONS TO THE MERGER
Section 8.1. Conditions to the Obligations of Each Party. The
obligations of Buyer and the Company to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement and the transactions contemplated by this
Agreement shall have been adopted by the shareholders of the Company
in accordance with Pennsylvania Law;
(b) any applicable waiting period under the HSR Act and any
applicable pre-merger notification or similar statutes and rules shall
have expired;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree of a court of competent
jurisdiction shall prohibit the consummation of the Merger;
(d) no Action shall be instituted by any Governmental Authority
which seeks to prevent consummation of the Merger or seeking material
damages in connection with the transactions contemplated hereby which
continues to be outstanding.
(e) the Form S-4 shall have been declared effective under the
1933 Act and no stop order suspending the effectiveness of the Form
S-4 shall be in effect and no proceedings for such purpose shall be
pending before or threatened by the SEC;
(f) the shares of Buyer Common Stock issuable in the Merger or
upon the exercise of the Adjusted Options shall have been approved
for listing on The Nasdaq Stock Market's National Market, subject to
official notice of issuance;
(g) all actions by or in respect of or filings with any
Governmental Authority required to permit the consummation of the
Merger shall have been made or obtained other than any such actions
or filings, the failure of which to make or obtain shall not be
reasonably likely to have a Material Adverse Effect on Buyer or
the Company;
(h) each party shall have received from the other party such
other closing documents, certificates and legal opinions reasonably
requested by such party to evidence the other party's compliance with
the conditions to the Merger under this Agreement; and
(i) The Buyer's independent public accountants shall have
delivered to Buyer and the Company a letter dated the Merger Date,
stating to Buyer's and Company's reasonable satisfaction that they
concur with Buyer management that the business combination
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contemplated by this Agreement qualifies for treatment for
financial purposes on a pooling of interests basis.
Section 8.2. Conditions to the Obligations of Buyer. The
obligations of Buyer to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) (i) The Company shall have performed in all material
respects all of its obligations hereunder required to be
performed by it at or prior to the Merger Date, (ii) the
representations and warranties of the Company contained in this
Agreement that are qualified as to materiality shall be true and
correct at and as of the Merger Date, as if made at and as of
the Merger Date and the representations and warranties of the
Company that are not so qualified shall be true and correct in
all material respects at and as of the Merger Date, as if made
at and as of the Merger Date, and (iii) Buyer shall have
received a certificate signed by an executive officer of the
Company to the foregoing effect;
(b) All consents and approvals of third parties to the
transactions contemplated by this Agreement shall have been
obtained, and all notices with respect to the transactions
contemplated by this Agreement and required to be delivered
prior to the Merger Date shall have been delivered;
(c) Holders of not more than 2% of the Company Common
Stock, on a fully diluted basis, shall have exercised, and not
withdrawn or failed to perfect, dissenters rights under the
Pennsylvania Law;
(d) The Buyer shall have received from Schiff Hardin &
Waite, counsel to the Buyer, an opinion, dated the Merger Date,
to the effect that the Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and that the
Buyer and the Company will each be a party to such
reorganization within the meaning of Section 368(b) of the Code.
The tax opinion shall be supported by one or more fact
certificates or affidavits from the Company and its
Subsidiaries, in such form and content as may reasonably be
requested by counsel to the Buyer;
(f) At any time after the date of this Agreement, there
shall not have occurred any material adverse change to the
Company and its Subsidiaries, taken as a whole;
(g) The Company shall have entered into employment
agreements with each of Donald M. Ernst, Jerry E. Toth, David R.
Longsderff, Lawrence Bostwick, George Meyer, and John Molony,
and such employment agreements shall be in full force and effect
on the Merger Date; and
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(h) The License Agreement, dated January 17, 1998, between
the Company and Yeh-Chaing Technology Corporation, as amended by
the Addendum dated April 29, 1999, and the Trademark License,
dated January 17, 1998, between the Company and Yeh-Chaing
Technology Corporation, shall have been terminated in accordance
with the terms of the Agreement, dated September 29, 2000,
between the Company and Yeh-Chaing Technology Corporation.
Section 8.3. Conditions to the Obligations of the Company.
The obligations of the Company to consummate the Merger are
subject to the satisfaction of the following further conditions:
(a)(i) the Buyer shall have performed in all material
respects all of its obligations hereunder required to be
performed by it at or prior to the Merger Date, (ii) the
representations and warranties of Buyer and Merger Sub contained
in this Agreement shall be true and correct at and as of the
Merger Date, as if made at and as of the Merger Date (except to
the extent expressly made as of an earlier date, in which case
as of such date), and (iii) the Company shall have received a
certificate signed by an executive officer of Buyer to the
foregoing effect; and
(b) The Buyer shall have received from Pepper Hamilton
LLP, counsel to the Buyer, an opinion, dated the Merger Date, to
the effect that the Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, that the Buyer
and the Company will each be a party to such reorganization
within the meaning of Section 368(b) of the Code, and that no
gain or loss will be recognized by the holders of Company Stock
upon the receipt of Buyer Common Stock in exchange for their
shares of Company Stock, except to the extent of any cash
received in lieu of a fractional share of Buyer Common Stock.
The tax opinion shall be supported by one or more fact
certificates or affidavits from the Buyer and its Subsidiaries,
in such form and content as may reasonably be requested by
Pepper Hamilton LLP.
ARTICLE 9
TERMINATION
Section 9.1. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Merger Date
(notwithstanding any approval or adoption of this Agreement by the
stockholders of the Company or the shareholders of Buyer):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining
Buyer or the Company from consummating the Merger is entered and such
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judgment, injunction, order or decree shall have become final and
non-appealable; (provided that any judgment, injunction, order or
decree other than a temporary restraining order shall be deemed to
have become final and non-appealable thirty days following the entry
thereof);
(c) by Buyer, upon a breach of any representation, warranty,
covenant or agreement of the Company, or if any representation or
warranty of the Company shall become untrue, the effect of which is
a Material Adverse Effect on the Company, provided that in either
case such breach cannot or has not been cured within twenty (20) days
after giving notice of such breach;
(d) by the Company, upon a breach of any representation, warranty,
covenant or agreement of Buyer, or if any representation or warranty of
Buyer shall become untrue, the effect of which is a Material Adverse
Effect on Buyer, provided that in either case such breach cannot or
has not been cured within twenty (20) days after giving notice of
such breach; or
(e) by either of Buyer or Company, if the transaction
contemplated by this Agreement shall not have been consummated on
or before one hundred eighty (180) days from the date of this
Agreement; provided, however, that the right to terminate this
Agreement under this Section 9.1(e) shall not be available to any
party whose breach of any obligation under this Agreement has been
the cause of, or resulted in, the failure of such transaction to
occur on or before such date.
The party desiring to terminate this Agreement pursuant to
this Section 9.1 shall give written notice of such termination
to the other party in accordance with Section 10.1.
Section 9.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.1, this Agreement shall become
void and of no effect with no liability on the part of any party
hereto, except that the agreements contained in the second
sentence of Section 5.6, this Section 9.2 and Article 10 shall
survive the termination hereof. Notwithstanding the foregoing,
nothing in this Section 9.2 shall relieve any party to this
Agreement of liability for a breach of any representation or
warranty or other provision of this Agreement prior to termination.
ARTICLE 10
MISCELLANEOUS
Section 10.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing
(including telecopy or similar writing) and shall be given,
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if to either Buyer Party, to:
Modine Manufacturing Company
1500 DeKoven Avenue
Racine, Wisconsin 53403
Fax: (262) 636-1424
Attention: President
with a copy to:
Modine Manufacturing Company
1500 DeKoven Avenue
Racine, Wisconsin 53403
Fax: (262) 636-1424
Attention: General Counsel
and
Schiff Hardin & Waite
1101 Connecticut Avenue
Washington, D.C. 20036
Fax: (202) 778-6460
Attention: Shirley M. Lukitsch, Esq.
if to the Company, to:
Thermacore International, Inc.
780 Eden Road
Lancaster, PA 17601
Fax: (717) 569-3258
Attention: Chairman
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with a copy to:
Pepper Hamilton LLP
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Fax: (610) 640-7835
Attention: James D. Rosener, Esq.
or to such other address or telecopy number as such party may
hereafter specify for the purpose by notice given to the other
parties in accordance with this Section 10.1. Each such notice,
request or other communication shall be effective (a) if given
by telecopy, when such telecopy is transmitted to the telecopy
number specified in this Section and the appropriate telecopy
confirmation is received (b) if by overnight delivery service,
with proof of delivery, the next business day or (c) if given by
any other means, when delivered at the address specified in this
Section.
Section 10.2. Entire Agreement; Non-Survival of Representations
and Warranties; No Third Party Beneficiaries. (a) This Agreement and
the Confidentiality Agreement, dated August 11, 2000, between the
Buyer and the Company constitute the entire agreement among the
parties with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to such
subject matter. None of this Agreement or any other agreement
contemplated hereby or thereby (or any provision hereof or thereof)
is intended to confer on or give any Person other than the parties
hereto or thereto any rights or remedies (except that Section 7.6
is intended to confer rights and remedies on the respective Persons
specified therein).
(b) The representations and warranties contained herein
shall not survive the Merger Date.
Section 10.3. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Merger Date if,
and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Company and Buyer or, in the case
of a waiver, by the party against whom the waiver is to be effective;
provided that after the adoption of this Agreement by the shareholders
of the Company, no such amendment or waiver shall, without the further
approval of such shareholders, alter or change (A) the amount or kind
of consideration to be received in exchange for any shares of capital
stock of the Company, or (B) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the
holders of any shares of capital stock of the Company. Notwithstanding
the foregoing, the conditions set forth in Section 8.1 may be amended
or waived only to the extent, if any, permitted under applicable law.
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(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 10.4. Expenses. (a) Except as otherwise provided in
this Section, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or
expense.
(b) Each of Buyer and the Company shall bear and pay one-
half of the costs and expenses incurred in connection with the
filing, printing and mailing of the Form S-4 and the Company
Proxy Statement (including SEC filing fees but excluding legal
and accounting fees related thereto).
(c) Buyer's right to receive any amounts contemplated by
this Section 10.4, and its ability to enforce the provisions of
Section 10.4 shall not be subject to approval by the
stockholders of the Company.
Section 10.5. Dollar Amounts. All dollar amounts in this
Agreement refer to United States Dollars.
Section 10.6. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; provided
that no party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of
the other parties hereto; provided further that Buyer may assign
its rights, but not its obligations, under this Agreement to a
wholly-owned subsidiary of Buyer.
Section 10.7. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the Commonwealth of
Pennsylvania (without regard to principles of conflict of laws).
Section 10.8. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
MODINE MANUFACTURING COMPANY
By: s/Donald R. Johnson
----------------------------------------
Name:Donald R. Johnson
---------------------------------------
Title:President and Chief Executive Officer
--------------------------------------
THERMACORE INTERNATIONAL, INC.
By: s/L. Ronald Hoover
-----------------------------------------
Name: L. Ronald Hoover
---------------------------------------
Title: CEO - Chairman
--------------------------------------
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