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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 8-K
-------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 12, 1996
------------------
ZYGO CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-12944 06-0864500
- ---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
LAUREL BROOK ROAD, MIDDLEFIELD, CONN. 06455
--------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (860) 347-8506
--------------
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 12, 1996, Zygo Corporation (the "Company") completed the
acquisition of NexStar Automation, Inc. ("Nexstar"), a Canadian company that was
publicly traded on the Vancouver Stock Exchange. NexStar shareholders voted on
September 11, 1996 to approve the acquisition at an extraordinary meeting. In
the transaction, which was structured as a statutory plan of arrangement under
Canadian law, Zygo acquired all the outstanding shares of NexStar in exchange
for 250,000 shares of Zygo's common stock. On September 12, 1996, the closing
price of the Company's common stock, as reported by the Nasdaq National Market,
was $29.75 per share. The acquisition was consummated pursuant to the terms of
the Acquisition Agreement dated as of August 12, 1996 by and among the Company,
NexStar and NX Acquisition Corp., a wholly owned subsidiary of the Company.
NexStar is engaged in the business of designing, developing and
manufacturing automation and parts handling equipment to improve production
efficiency and manufacturing yields within the data storage, semiconductor and
medical disposables markets. Its operations are located in Longmont, Colorado.
The press release issued by NexStar dated September 12, 1996, is attached hereto
as Exhibit 99.1 and incorporated herein by reference. The press release issued
by the Company and NexStar dated September 13, 1996, is attached hereto as
Exhibit 99.2 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
A. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
1. Consolidated Financial Statements of NexStar as of December 31, 1995
and 1994 and for the three years ended December 31, 1995, 1994 and
1993.
Report of Independent Auditors.
Consolidated Balance Sheets as of December 31, 1995 and 1994.
Consolidated Statements of Operations for the years ended
December 31, 1995, 1994 and 1993.
Consolidated Statement of Stockholders' Equity for the years
ended December 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
-2-
<PAGE>
2. Interim Consolidated Financial Statements of NexStar as of March 31,
1996 and for the three-month periods ended March 31, 1996 and 1995.
Consolidated Balance Sheet as of March 31, 1996.
Consolidated Statements of Operations for the three-months ended
March 31, 1996 and 1995.
Consolidated Statement of Stockholders' Equity for the
three-months ended March 31, 1996.
Consolidated Statement of Cash Flows for the three-months ended
March 31, 1996.
Notes to Interim Financial Statements.
It is impracticable for the Company to provide the required Interim
Consolidated Financial Statements as of June 30, 1996 and for the three-month
periods ended June 30, 1996 and 1995 of NexStar (the Business Acquired) on
the date this report is being filed. The Company intends to file the required
Interim Consolidated Financial Statements under cover of Form 8-K/A as soon as
practicable; but not later than 60 days after the date this report must have
been filed.
B. PRO FORMA FINANCIAL INFORMATION.
It is impracticable for the Company to provide the required pro forma
financial information on the date this report is being filed. The Company
intends to file the required Financial Statements under cover of Form 8-K/A as
soon as practicable; but not later than 60 days after the date this report must
have been filed.
C. EXHIBITS.
2. The Acquisition Agreement by and among Zygo Corporation, NX Acquisition
Corp. and NexStar Automation, Inc.
23. Consent of Ehrhardt Keefe Steiner & Hottman PC.
99.1 Press Release issued by NexStar Automation, Inc. dated September 12,
1996.
99.2 Press Release issued by the Company and NexStar Automation, Inc.
dated September 13, 1996.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ZYGO CORPORATION
Date: September 26, 1996 By /s/ GARY K. WILLIS
------------------------------
Gary K. Willis
President and Chief Executive Officer
-4-
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1995, 1994, AND 1993
F-1
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
TABLE OF CONTENTS
Page
----
Independent Auditors' Report................................................F-3
Financial Statements
Consolidated Balance Sheets............................................F-4
Consolidated Statements of Operations..................................F-5
Consolidated Statement of Stockholders' Equity.........................F-6
Consolidated Statements of Cash Flows..................................F-7
Notes to Consolidated Financial Statements..................................F-8
F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT
To The Board of Directors and Stockholders
NexStar Automation, Inc. and Subsidiary
Longmont, CO
We have audited the consolidated balance sheets of NexStar Automation, Inc. and
Subsidiary as of December 31, 1995 and 1994, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of NexStar Automation,
Inc. and Subsidiary as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.
We have reviewed the accompanying balance sheet of NexStar Automation, Inc. and
consolidated subsidiary as of March 31, 1996 and the related statements of
operations and cash flows for the three months ended March 31, 1996 and 1995 for
the three months. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
Ehrhardt Keefe Steiner & Hottman PC
June 13, 1996
Denver, Colorado
F-3
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
----------------------------------- March 31,
1994 1995 1996
--------------- --------------- --------------
(Reviewed)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents (Note 6) $ 111,827 $ 429,039 $ 246,828
Contract receivables 107,092 67,359 648,348
Revenue in excess of billings 53,379 79,250 -
Note receivable - current portion (Note 4) - 13,123 10,053
Inventory - 19,165 17,688
Prepaid engineering costs - 57,674 66,935
Prepaids and other 12,837 21,834 18,000
--------------- -------------- --------------
Total current assets 285,135 687,444 1,007,852
--------------- -------------- --------------
Property and equipment 53,760 121,789 147,431
Less accumulated depreciation (6,837) (24,566) (31,190)
--------------- -------------- --------------
46,923 97,223 116,241
--------------- -------------- --------------
Other assets
Note receivable (Note 4) - 56,877 55,840
Deferred offering costs - 26,629 26,629
Deposits 2,795 2,333 2,333
Organizational costs, net of amortization of $2,256 (1994), $3,384
(1995), and $3,666 (1996) 3,385 2,257 1,975
--------------- -------------- --------------
Total other assets 6,180 88,096 86,777
--------------- -------------- --------------
Total assets $ 338,238 $ 872,763 $ 1,210,870
=============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 148,241 $ 350,363 $ 488,160
Line-of-credit (Note 5) 52,700 - -
Notes payable (Note 5) 35,000 12,000 12,000
Accrued payroll and payroll taxes 25,584 38,753 38,435
Deferred tax liability - 11,265 -
Other accrued expenses 794 6,189 -
Loss contingency - - 31,000
Deferred contract revenue - - 143,754
--------------- -------------- --------------
Total current liabilities 262,319 418,570 713,349
--------------- -------------- --------------
Commitments (Note 6)
Stockholders' equity
Common stock, no par value, 100,000,000 shares authorized,
4,847,001 (1994) and 5,171,618 (1995 and 1996) issued and
outstanding 334,688 630,779 630,779
Retained deficit (258,769) (176,586) (133,258)
--------------- -------------- --------------
Total stockholders' equity 75,919 454,193 497,521
--------------- -------------- --------------
Total liabilities and stockholders' equity $ 338,238 $ 872,763 $ 1,210,870
=============== ============== ==============
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31,
-------------------------------------------------- --------------------------------
1993 1994 1995 1995 1996
--------------- --------------- --------------- --------------- -------------
(Reviewed)
<S> <C> <C> <C> <C> <C>
Sales
Automation projects revenue (Note 9) $ 225,137 $ 735,445 $ 2,625,930 $ 356,248 $ 898,955
Consulting revenue 119,190 - - - -
-------------- ------------- -------------- -------------- -------------
Total revenue 344,327 735,445 2,625,930 356,248 898,955
Cost of automation projects (115,437) (437,377) (1,684,603) (210,318) (538,188)
-------------- ------------- -------------- -------------- -------------
Gross profit 228,890 298,068 941,327 145,930 360,767
Selling, general and administrative expenses
Salaries 121,606 190,556 449,675 73,196 141,470
Professional fees 306,950 31,295 40,652 19,273 22,759
Rent 14,472 27,610 91,069 7,717 29,462
Travel 15,973 18,526 47,726 9,185 42,264
Utilities 13,443 15,438 28,238 4,559 11,380
Research and development - 4,946 67,634 - -
Marketing - 3,641 18,792 473 10,304
Depreciation and amortization 2,909 6,299 18,857 3,349 6,906
Other 6,523 20,207 80,351 19,676 45,294
-------------- -------------- -------------- -------------- -------------
481,876 318,518 842,994 137,428 309,839
-------------- -------------- -------------- -------------- -------------
Earnings (loss) income before income taxes
and extraordinary item (252,986) (20,450) 98,333 8,502 50,928
Income tax (expense)\benefit (7,000) 3,584 (16,150) (1,700) (7,600)
-------------- ------------- -------------- -------------- -------------
(Loss) income before extraordinary item (259,986) (16,866) 82,183 6,802 43,328
Extraordinary item - gain on extinguishment
of debt - net of income tax of $3,969
(Note 8) - 18,083 - - -
-------------- ------------- -------------- -------------- -------------
Net income (loss) $ (259,986) $ 1,217 $ 82,183 $ 6,802 $ 43,328
============== ============= ============== ============== =============
Net (loss) income per share of common stock
before extraordinary item $ (.15) $ *** $ .02 $ *** $ .01
============== ============= ============== ============== =============
Net income per share of common stock on
extraordinary item $ - $ *** $ - $ - $ -
============== ============= ============== ============== =============
Net income per common share $ (.15) $ *** $ .02 $ *** $ .01
============== ============= ============== ============== =============
Weighted common shares outstanding 1,782,729 4,039,801 5,289,215 4,847,001 5,409,204
============== ============= ============== ============== =============
</TABLE>
*** Less than .01 per share.
See notes to consolidated financial statements.
F-5
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional Retained
-------------------------------- Paid-in Earnings
Shares Amount Capital (Deficit) Total
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1992 - $ - $ - $ - $ -
Common stock issued for property and
debt 326,302 326 3,753 - 4,079
Common stock issued for cash 1,673,698 1,674 19,247 - 20,921
Net loss - - - (259,986) (259,986)
-------------- -------------- -------------- -------------- --------------
Balance at December 31, 1993 2,000,000 2,000 23,000 (259,986) (234,986)
Recapitalization and issuance of stock
for assets in reverse acquisition
(including 237,560 shares issued for
finders fee) (Note 1) 2,847,001 332,688 (23,000) - 309,688
Net income - - - 1,217 1,217
-------------- ------------- -------------- ------------- --------------
Balance at December 31, 1994 4,847,001 334,688 - (258,769) 75,919
Stock issued for services, valued at
$.46 (Note 3) 54,617 25,000 - - 25,000
Stock issued in conjunction with
private placement (net of offering
costs) (Note 10) 250,000 256,171 - - 256,171
Exercise of stock options for cash
(Note 10) 20,000 14,920 - - 14,920
Net income - - - 82,183 82,183
-------------- ------------- -------------- ------------- --------------
Balance at December 31, 1995 5,171,618 630,779 - (176,586) 454,193
Net income (reviewed) - - - 43,328 43,328
-------------- -------------- -------------- -------------- --------------
Balance at March 31, 1996 (reviewed)
5,171,618 $ 630,779 $ - $ (133,258) $ 497,521
============== ============== ============== ============== ==============
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31,
-------------------------------------------------- ---------------------------------
1993 1994 1995 1995 1996
--------------- --------------- -------------- -------------- --------------
(Reviewed)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ (259,986) $ 1,217 $ 82,183 $ 6,802 $ 43,328
------------- ------------- ------------- -------------- --------------
Adjustments to reconcile net income to
net cash provided used by operating
activities -
Depreciation and amortization 2,909 6,313 18,857 3,349 6,906
Common stock issued for services - - 25,000 - -
Gain on extinguishment of debt - (18,083) - - -
Changes in assets and liabilities -
Loss contingency - 31,000
Contract receivables (47,207) (59,885) 39,733 46,822 (580,989)
Revenue in excess of billings - (53,379) (25,871) - 79,250
Inventory - - (76,839) - (7,784)
Prepaids and other - (12,837) (8,997) (3,094) 3,834
Accounts payable 129,713 88,586 202,122 (30,141) 137,797
Accrued liabilities 61,002 9,399 18,564 (1,572) (6,507)
Deferred contract revenue 47,891 (47,891) - 53,227 143,754
Deferred tax liability - - 11,265 - (11,265)
------------- ------------- ------------- -------------- --------------
194,308 (87,777) 203,834 68,591 (204,004)
------------- ------------- ------------- -------------- --------------
Net cash (used in) provided by
operating activities (65,678) (86,560) 286,017 75,393 (160,676)
------------- ------------- ------------- -------------- --------------
Cash flows from investing activities
Purchase of property and equipment (13,586) (41,903) (68,029) (21,337) (25,642)
Proceeds from sale of fixed assets - 2,053 - - -
Deposits (4,809) 249 462 - -
Note receivable - - (70,000) - 4,107
------------- ------------- ------------- -------------- --------------
Net cash (used in) investing
activities (18,395) (39,601) (137,567) (21,337) (21,535)
------------- ------------- ------------- -------------- --------------
Cash flows from financing activities
Borrowing (payment) on line-of-credit - 52,700 (52,700) - -
Proceeds from notes payable 68,035 237,974 - - -
Net proceeds from private placement - - 256,171 - -
Cash received upon exercise of stock
options - - 14,920 - -
Deferred offering costs - - (26,629) - -
Proceeds from reverse acquisition 20,920 3,679 - - -
Payment on long-term debt - (61,247) (23,000) (23,000) -
------------- ------------- ------------- -------------- -------------
Net cash provided by financing
activities 88,955 233,106 168,762 (23,000) -
------------- ------------- ------------- -------------- -------------
Net increase (decrease) in cash and cash
equivalents 4,882 106,945 317,212 31,056 (182,211)
Cash and cash equivalents at beginning of
period - 4,882 111,827 111,827 429,039
------------- ------------- ------------- -------------- --------------
Cash and cash equivalents at end of period $ 4,882 $ 111,827 $ 429,039 $ 142,883 $ 246,828
============= ============= ============= ============== ==============
Supplemental schedule of non-cash investing and financing activities
Cash paid during the year for income taxes of $14,100 (1995) and $5,400 (1994)
Issuance of stock in exchange for elimination of debt in conjunction with reverse
acquisition of $311,009 (1994)
Equipment and organization costs donated by stockholder was $4,080 (1993).
</TABLE>
See notes to consolidated financial statements.
F-7
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 1 - INTERIM FINANCIAL STATEMENTS (UNAUDITED)
In the opinion of Nexstar Automation, Incorporated and Subsidiary (the
"Company"), the accompanying unaudited consolidated financial statements contain
all adjustments (consisting of only normal recurring accruals) necessary to
present fairly the financial position of the Company at March 31, 1996 and the
results of their operations and changes in cash flows for the three months ended
March 31, 1996 and 1995. The results of operations for the three months ended
March 31, 1996 and 1995 are not necessarily indicative of the results to be
expected for the full year.
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company is engaged in the business of designing, assembling, customizing,
installing and supporting production automation systems, which typically
incorporate customized robotics. The Company's focus is directed toward the data
storage, medical/pharmaceutical and food processing industries. The Company
commenced operations on January 4, 1993.
In April of 1994, FBA Ventures Ltd. ("FBA") acquired all the issued and
outstanding common shares of NexStar Corporation ("NexStar") in exchange for
2,700,000 shares of common stock of FBA, of which 2,525,000 shares held in
escrow. For financial reporting purposes, the business combination was accounted
for as an additional capitalization of the Company (a reverse acquisition with
NexStar as the acquirer). NexStar is considered the surviving entity. The
historical financial statements prior to the merger are those of NexStar. The
stockholders of NexStar received 2,700,000 shares of FBA stock for an
approximate 58% interest in the new combined entity. FBA's only assets consisted
of cash and funds advanced to NexStar.
ESCROW AGREEMENT
According to the purchase agreement, 2,525,000 shares of FBA common stock are to
be placed in escrow with the Escrow Agent for the Shareholder. In September of
1994, 224,015 shares were released leaving 2,300,985 escrow shares as of
December 31, 1994. The shareholders may exercise all voting rights of these
shares with certain restrictions. Under the escrow agreement, the shares may be
released annually, on a pro rata basis based on the Company's cumulative cash
flow. In the event that any escrow shares are not released from escrow before
December 31, 2004, those escrow shares are to be canceled. The escrow shares are
presented as outstanding in these financial statements as management believes
they will all be released from escrow.
F-8
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PRINCIPLES OF CONSOLIDATION
The 1995 and 1996 consolidated financial statements include the accounts of
NexStar Automation, Inc. and Subsidiary, a Canadian corporation and its wholly
owned subsidiary NexStar Corporation (a Colorado corporation). All significant
intercompany balances and transactions have been eliminated in consolidation.
RECONCILIATION OF CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES
The differences between generally accepted accounting principles used in Canada
(Canadian GAAP) and the United States (U.S. GAAP) do not significantly impact
the financial statements of the Company for all periods presented. All amounts
are expressed in United States dollars.
INVENTORY
Inventory is stated at the lower of cost or market and primarily consists of
purchased raw materials and work in process. Cost is determined using the
first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Replacements, renewals and
improvements are capitalized and costs for repairs and maintenance are expensed
as incurred. Depreciation is computed using the straight-line method over the
estimated useful lives of five years.
ORGANIZATION COSTS
Organization costs are all business start-up costs incurred by the Company.
These costs have been capitalized and are being amortized over a five-year
period.
DEFERRED OFFERING COSTS
Deferred offering costs represent costs incurred in connection with the
Company's proposed public offering in the United States. Deferred offering costs
will be offset against net proceeds, if successful, or expensed in operations if
the offering is unsuccessful.
F-9
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
Revenue from automation projects is accounted for under the
percentage-of-completion method, using labor costs incurred to date in relation
to estimated total labor costs of the contracts to measure the stage of
completion. The cumulative effects of revisions of estimated total contract
costs and revenues are recorded in the period in which the facts requiring the
revision become known. When a loss is anticipated on a contract, the full amount
thereof is provided currently. The differences between amounts billed and
revenue recognized is shown as revenue in excess of billings and deferred
revenue on the accompanying balance sheets.
Totals of revenue earned billings on uncompleted contracts are as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------- March 31,
1994 1995 1996
-------------- --------------- ---------------
(Reviewed)
<S> <C> <C> <C>
Revenue recognized to date $ 150,250 $ 1,592,565 $ 898,955
Billings to date (96,871) (1,513,315) (1,042,709)
-------------- --------------- ---------------
Revenue in excess of billings $ 53,379 $ 79,250 $ (143,754)
============== =============== ===============
</TABLE>
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid cash investments with original maturity dates of three months or less to
be cash equivalents.
CONCENTRATION OF CREDIT RISK
The Company occasionally has deposits in financial institutions which exceed the
federally insured limits as of December 31, 1995. This amount exceeded the
limits by approximately $307,000. The Company reduced its credit risk with
respect to receivables by requiring deposits before production begins and
continually monitors the industries and its customers before granting credit.
RESEARCH AND DEVELOPMENT
Research and development costs for new products are charged to expense as
incurred.
F-10
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLASSIFICATIONS
Certain accounts in the December 31, 1994 and 1995 financial statements have
been reclassified to conform with the current period presentation.
INCOME TAXES
The Company accounts for income taxes pursuant to the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109") (Note 6).
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 3 - RELATED PARTY TRANSACTIONS
In March of 1995, the Company issued 54,617 shares of its common stock to the
President of the Company as compensation for guarantying the line-of-credit. The
shares were valued at $.46 per share, the fair market value of the stock on the
date of issue.
NOTE 4 - NOTE RECEIVABLE
At December 31, 1995, the Company received a note receivable totaling $70,000.
The note is payable in quarterly installments of $4,107, commencing February
1996 through November 2000. The note bears interest at 7% and is without
collateral. Future maturities of this note are as follows:
Year Ending December 31,
------------------------
1996 $ 13,123
1997 12,775
1998 13,693
1999 14,677
2000 15,732
---------
$ 70,000
=========
F-11
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 5 - NOTES PAYABLE AND LINE-OF-CREDIT
Notes payable consist of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------------- March 31,
1995 1994 1996
-------------- --------------- --------------
(Reviewed)
<S> <C> <C> <C>
Unsecured notes payable to individuals due on demand. $ 12,000 $ 35,000 $ 12,000
============== =============== ==============
</TABLE>
NOTE 6 - COMMITMENTS AND CONTINGENCIES
In February 1995, the Company entered into a lease agreement for its office and
manufacturing facilities. Under the terms of the lease, the Company is obligated
to make monthly payments of $8,166 through termination of the lease on April 1,
1997. Amounts due after December 31, 1995 are as follows:
1996 $ 97,992
1997 24,498
-------------
Total $ 122,490
=============
Rental expense for the years ended December 31, 1995 and 1994 and three months
ended March 31, 1996 was approximately $91,000, $28,000, and $24,000,
respectively.
In fiscal 1994, the Company entered into $65,000 line-of-credit agreement with a
bank. During 1995, the line-of-credit was renewed to provide up to $150,000 of
borrowings and matures January 31, 1996. Total outstanding borrowings on the
line-of-credit were $0 and $52,700 at December 31, 1995 and 1994, respectively.
The line is collateralized by the Company's savings account and guaranteed by
the Company's President. The line accrues interest at 7%.
NOTE 7 - INCOME TAXES
Effective for the year ended December 31, 1994, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" (SFAS 109) which requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined based on the
difference between the financial statements and tax basis of assets and
liabilities using the enacted tax rates in effect for the year in which the
difference is expected to reverse. The measurement of deferred tax assets is
reduced, if necessary, by the amount of any tax benefits that, based on
available evidence, are not expected to be realized.
F-12
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 7 - INCOME TAXES (CONTINUED)
The components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
December 31, March 31,
-------------------------------------------------- --------------------------------
1993 1994 1995 1995 1996
--------------- --------------- --------------- --------------- --------------
(Reviewed) (Reviewed)
<S> <C> <C> <C> <C> <C>
Current tax provision
Federal $ - $ 3,200 $ (4,500) $ (1,275) $ (6,500)
State - 384 (380) (425) (1,100)
------------- ------------- ------------- ------------- ------------
- 3,584 (4,880) (1,700) (7,600)
Deferred tax expense
Federal (5,250) - (10,370) - -
State (1,750) - (900) - -
------------- ------------- ------------- ------------- ------------
(7,000) - (11,270) - -
------------- ------------- ------------- ------------- ------------
$ (7,000) $ 3,584 $ (16,150) $ (1,700) $ (7,600)
============= ============= ============= ============= ============
</TABLE>
The principal temporary differences that result in the deferred tax liability
are depreciation for tax purposes in excess of depreciation for financial
reporting purposes as well as other items being amortized for financial
reporting purposes which are currently deductible for tax purposes.
NOTE 8 - GAIN ON EXTINGUISHMENT OF DEBT
During the year ended December 31, 1994, the Company settled outstanding legal
bills totaling $41,052 for $19,000 resulting in an extraordinary gain of
$22,052.
NOTE 9 - MAJOR CUSTOMERS
For the year ended December 31, 1995, 1994, and 1993, approximately 98%, 54%,
and 78% of the Company's sales were to three customers, respectively.
NOTE 10 - STOCKHOLDERS' EQUITY
In August of 1995, the Company completed a private placement for 250,000 shares
of the Company's common stock for proceeds of approximately $256,000 net of
approximately $3,000 of offering costs.
Also during 1995, an option to purchase 20,000 shares of the Company's common
stock at the price of $1.00 (CN$) was exercised.
F-13
<PAGE>
NEXSTAR AUTOMATION, INCORPORATED
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
NOTE 10 - STOCKHOLDERS' EQUITY (CONTINUED)
The Company has granted the following options and warrants to purchase common
stock as of December 31, 1995:
Number of Exercise Expiration
Options Price Date
--------- --------- ----------
(CN$)
35,000 $ .77 1997
95,000 $ 1.10 1998
115,000 $ 1.00 1998
25,000 $ 1.00 1999
7,000 $ .77 2000
20,000 $ 1.92 2000
80,000 $ 2.20 2000
--------
377,000
========
Number of
Warrants
--------
250,000 $ 1.40 1996
=========
F-14
<PAGE>
EXHIBIT INDEX
No. Description
- --- -----------
2. The Acquisition Agreement by and among Zygo Corporation, NX Acquisition
Corp. and NexStar Automation, Inc.
23. Consent of Ehrhardt Keefe Steiner & Hottman PC.
99.1 Press Release issued by NexStar Automation, Inc. dated September 12, 1996.
99.2 Press Release issued by the Company and NexStar Automation, Inc. dated
September 13, 1996.
ACQUISITION AGREEMENT
BY AND AMONG
ZYGO CORPORATION,
NX ACQUISITION CORP.
AND
NEXSTAR AUTOMATION, INCORPORATED
<PAGE>
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "AGREEMENT"), dated as of August 12, 1996,
by and among Zygo Corporation, a Delaware corporation ("ZYGO"), NX Acquisition
Corp., a corporation existing under the laws of British Columbia and a wholly
owned subsidiary of Zygo ("ZYGO CANADA"), and NexStar Automation, Incorporated,
a corporation existing under the laws of British Columbia ("NEXSTAR").
R E C I T A L S
WHEREAS, the Boards of Directors of Zygo, Zygo Canada and NexStar have
approved the acquisition (the "ACQUISITION") of NexStar by Zygo Canada through
the exchange of all the outstanding common shares, no par value, of NexStar
("NEXSTAR COMMON SHARES") for shares of common stock, par value $.10 per share,
of Zygo ("ZYGO COMMON STOCK"); and
WHEREAS, the NexStar Common Shares are listed and posted for trading on the
Vancouver Stock Exchange; and
WHEREAS, the parties hereto intend to enter into a statutory plan of
arrangement under Section 276 of the Company Act (British Columbia) (the
"COMPANY ACT") such that the shareholders of NexStar shall become stockholders
of Zygo, all subject to the terms and conditions of this Agreement and the Plan
of Arrangement (as hereinafter defined); and
WHEREAS, for accounting purposes, it is intended that the transactions
contemplated by this Agreement and the Plan of Arrangement be accounted for as a
"pooling of interests" under United States generally accepted accounting
principles; and
WHEREAS, the parties have entered into this Agreement to provide for the
matters referred to in the foregoing recitals and for other matters relating to
the proposed Arrangement (as hereinafter defined) of the parties as contemplated
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
foregoing and the respective representations, warranties, covenants and
agreements set forth herein, the parties hereto agree as follows:
-1-
<PAGE>
ARTICLE I.
DEFINITIONS
In this Agreement the following words and phrases shall have the meanings
hereinafter set forth:
"Acquisition Proposal" shall have the meaning given such term in Section
5.05 hereof.
"Affiliate" or "affiliate" shall mean, with respect to any Person, any
other Person that, directly or indirectly, controls or is controlled by or is
under common control with such Person. As used in this definition of
"Affiliate", the term "control" and any derivatives thereof mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract, or otherwise.
"Arrangement" shall mean the arrangement proposed to be effected under the
provisions of Section 276 of the Company Act and upon the terms set forth herein
and in the Plan of Arrangement.
"Agreement" shall mean this Acquisition Agreement.
"Audited Financial Statements" shall have the meaning given such term in
Section 3.08 hereof.
"Business Day" shall mean any day, other than a Saturday, Sunday or legal
holiday under the Federal laws of the United States.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contaminated Site List" shall mean any list, registry or other compilation
established by any Governmental Entity of sites that require or potentially
require investigation, removal actions, remedial actions or any other response
under any Environmental Laws or treaty covering environmental matters, as the
result of a Release or threatened Release of any Hazardous Materials.
"Contracts" shall have the meaning given such term in Section 3.17(a)
hereof.
"Court" shall mean the Supreme Court of British Columbia and its
successors.
"Disclosure Schedule" shall have the meaning given such term in the
preamble to Article III hereof.
"Dissenting Shareholder" shall mean a holder of one or more NexStar Common
Shares that exercises the rights of dissent in respect of the Arrangement in
accordance with the procedures set forth in Section 4 of the Plan of
Arrangement.
-2-
<PAGE>
"Effective Date" shall mean the date that the Registrar accepts the Final
Order for filing.
"Employee" shall have the meaning given such term in Section 3.18(j)
hereof.
"Employee Plan" shall have the meaning given such term in Section 3.18(a)
hereof.
"Environmental Conditions" shall mean any pollution, contamination,
degradation, damage or injury caused by, related to, arising from or in
connection with the generation, handling, use, treatment, storage,
transportation or Release of any Hazardous Materials.
"Environmental Laws" shall mean all Federal, provincial, state, local and
foreign environmental laws, rules, statutes, regulations, ordinances, decrees or
orders of Canada or the United States or of any federal, provincial, state,
municipality or other subdivision of any thereof relating to pollution,
hazardous substances or protection of the environment, including but not limited
to the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901 et seq.; the
Superfund Amendments and Reauthorization Act, 42 U.S.C. ss.11011 et. seq.; the
Clean Air Act, 42 U.S.C. ss.7401 et seq.; the Clean Water Act, 33 U.S.C. ss.1251
et. seq.; the Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. ss.2601 et seq.; the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss.9601 et
seq.; the Occupational Safety and Health Act, 29 U.S.C. ss.651 et seq.; and all
applicable published rules, regulations, directives, guidances and policies of
the EPA and of all similar state and local agency requirements.
"Environmental Liabilities" shall mean any and all liabilities,
responsibilities, claims, suits, losses, costs (including remediation, removal,
response, abatement, clean-up, investigative and/or monitoring costs and any
other related costs and expenses, including without limitation Environmental
Remediation Costs), other causes of action recognized now or at any later time,
damages, settlements, expenses, charges, assessments, liens, penalties, fines,
pre-judgment and post-judgment interest, attorney fees and other legal fees (a)
pursuant to any agreement, order, notice, directive (including directives
embodied in Environmental Laws), injunction, judgment or similar documents
(including settlements), or (b) pursuant to any claim by a governmental entity
or other person for personal injury, property damage, damage to natural
resources, remediation or similar costs or expenses incurred or asserted by such
governmental entity or person pursuant to common law or statute.
"Environmental Remediation Costs" shall mean all costs and expenses of
actions or activities to (a) clean-up or remove Hazardous Materials from the
environment, (b) prevent or minimize the movement, leaching or migration of
Hazardous Materials into the environment, (c) prevent, minimize or mitigate the
Release or threatened Release of Hazardous Materials into the environment, or
injury or damage from such Release, and (d) comply with the requirements of any
Environmental Laws. Environmental Remediation Costs include, without limitation,
costs and expenses payable in connection with the foregoing for legal,
engineering or other consultant
-3-
<PAGE>
services, for investigation, testing, sampling and monitoring, for boring,
excavation and construction, for removal, modification or replacement of
equipment or facilities, for labor and material, and for proper storage,
treatment and disposal of Hazardous Materials.
"EPA" shall mean the United States Environmental Protection Agency.
"ERISA" means the Employee Retirement Income Security Act of 1974, as it
now exists and is hereafter amended.
"ERISA Affiliate" means any person, firm or entity (whether or not
incorporated) which, by reason of its relationship with NexStar or the NexStar
Subsidiary, is required to be aggregated with NexStar under Sections 414(b),
414(c) or 414(m) of the Code, or which, together with NexStar or the NexStar
Subsidiary, is a member of a controlled group within the meaning of Section
4001(a) of ERISA.
"Escrowed Shares" shall mean the 2,145,982 issued and outstanding NexStar
Common Shares presently held in escrow subject to the terms of an Escrow
Agreement, dated October 15, 1993.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.
"Exchange Agent" shall have the meaning given such term in Section 2.02(a)
hereof.
"Final Order" shall mean the final order of the Court approving the
Arrangement.
"Financial Statements" shall have the meaning given such term in Section
3.08 hereof.
"Generally accepted accounting principles" shall mean generally accepted
accounting principles in the United States.
"Governmental Entity" shall mean any United States, Canadian or foreign
court, administrative agency or commission or other federal, state, provincial
or local government or governmental authority or instrumentality.
"Hazardous Materials" shall mean any (a) toxic or hazardous materials or
substances; (b) solid wastes, including asbestos, buried contaminants,
chemicals, flammable or explosive materials; (c) radioactive materials; (d)
petroleum wastes and spills or releases of petroleum products; and (e) any other
chemical, pollutant, contaminant, substance or waste that is regulated by any
Governmental Entity under any Environmental Law.
-4-
<PAGE>
"Information Circular" means the Information Circular to be prepared in
connection with the solicitation of proxies by the management of NexStar for the
NexStar Meeting.
"Intellectual Property" shall have the meaning given such term in Section
3.25 hereof.
"Interim Financial Statements" shall have the meaning given such term in
Section 3.08 hereof.
"Interim Order" shall mean the interim order of the Court to be made
pursuant to the application therefrom contemplated by Section 5.03 hereof as the
same may be amended, supplemented or varied by the Court.
"IRS" shall mean the United States Internal Revenue Service.
"License" shall have the meaning given such term in Section 3.26 hereof.
"Liens" shall mean all liens, charges, security interests, pledges, rights
or claims of others, restraints on transfer or other encumbrances.
"Material Adverse Change" shall mean a change or a development involving a
prospective change which would have a Material Adverse Effect.
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on the business, prospects, results of operations,
financial condition or assets of such Person and its Subsidiaries taken as a
whole. In determining whether any individual event would result in a Material
Adverse Effect, notwithstanding that such event does not of itself have such
effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events would result
in a Material Adverse Effect.
"Nasdaq National Market" shall mean the National Association of Securities
Dealers Automated Quotation National Market.
"New Certificates" shall have the meaning given such term in Section
2.02(a) hereof.
"NexStar Common Shares" shall mean the NexStar Freely Trading Shares and
Escrowed Shares.
"NexStar Freely Trading Shares" shall mean the 3,260,636 NexStar Common
Shares issued and outstanding on the Effective Date which are not the Escrowed
Shares, plus any NexStar Common Shares, up to a maximum amount of 266,389
NexStar Common Shares, issued subsequent to the date hereof and prior to the
Effective Date as a result of the exercise of Vested NexStar Options.
"NexStar Interest" shall have the meaning given such term in Section 3.02
hereof.
-5-
<PAGE>
"NexStar Meeting" shall mean the special meeting of the shareholders of
NexStar to be held to consider and, if deemed, advisable, approve the
Arrangement.
"NexStar Quarterly Report" shall have the meaning given such term in
Section 3.08 hereof.
"NexStar Subsidiary" shall mean NexStar Corporation, a Colorado
corporation.
"Note" shall have the meaning given such term in Section 9.02 hereof.
"Old Certificates" shall have the meaning given such term in Section
2.02(a) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Person" shall mean an individual, corporation, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof.
"Plan of Arrangement" shall mean the plan of arrangement agreed to by each
of Zygo, Zygo Canada and NexStar substantially in the form attached hereto as
Appendix I, with such changes as may be agreed by the parties hereto.
"Product Liability" shall have the meaning given such term in Section 3.23
hereof.
"Registrar" shall mean the registrar appointed under Section 345 of the
Company Act.
"Registration Statement" shall have the meaning given such term in Section
4.06 hereof.
"Regulatory Authority" shall mean the Vancouver Stock Exchange and the
Nasdaq National Market, and any foreign, Canadian or United States federal or
state government or governmental authority the approval of which, or filing
with, is legally required or permitted for consummation of the transactions
contemplated by this Agreement and the Plan of Arrangement.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment.
"Requisite Regulatory Approvals" shall have the meaning given such term in
Section 8.01(e) hereof.
"Securities Act" shall mean the securities act (British Columbia) as
amended from time to time, together with all regulations passed thereunder and
all policy statements published in connection therewith from time to time.
-6-
<PAGE>
"Subsequent Transaction" shall have the meaning given such term in Section
9.02 hereof.
"Subsidiary" means, with respect to any entity, any corporation of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are directly or indirectly owned by such entity.
"Tax" and "Taxes" shall have the meaning given such terms in Section 3.12
hereof.
"Tax Return(s)" shall have the meaning given such term in Section 3.12
hereof.
"U.S. Commission" shall mean the Securities and Exchange Commission of the
United States.
"U.S. Securities Act" shall mean the United States Securities Act of 1933,
as amended, and the rules and regulations thereunder.
"Unvested NexStar Options" shall mean the presently issued and outstanding
options to purchase up to 110,611 common shares of NexStar, which pursuant to
their terms are not exercisable on or before September 1, 1996.
"Vested NexStar Options" shall mean the presently issued and outstanding
options to purchase up to 266,389 common shares of NexStar, which pursuant to
their terms are exercisable on or before September 1, 1996.
"Zygo 10-K" shall have the meaning given such term in Section 4.07 hereof.
"Zygo 10-Q" shall have the meaning given such term in Section 4.07 hereof.
"Zygo Disclosure Schedule" shall have the meaning given such term in the
preamble to Article IV hereof.
"Zygo Exchange Act Filings" shall have the meaning given such term in
Section 4.06 hereof.
"Zygo Subsidiary" shall mean any Subsidiary of Zygo, other than Zygo
International Sales Corporation, which is inactive.
ARTICLE II.
SECTION 2.01. THE ARRANGEMENT. In order to complete the proposed
Arrangement, Zygo has incorporated Zygo Canada, a wholly owned subsidiary, under
the laws of British Columbia. Immediately prior to the Effective Date, Zygo
shall subscribe for a sufficient number of shares of Zygo Canada for a price
equal to the fair market value of the outstanding NexStar Common Shares. Zygo
Canada will subscribe
-7-
<PAGE>
for a sufficient number of shares of Zygo Common Stock for a price equal to the
fair market value of the outstanding NexStar Common Shares. All of the above
shall be done in accordance with the terms and conditions of the Arrangement.
Zygo Canada will purchase all of the outstanding NexStar Common Shares from the
shareholders of NexStar and pay for such shares with shares of Zygo Common
Stock. Subject to the terms and conditions of this Agreement, the Plan of
Arrangement shall be implemented to provide inter alia, that, automatically at
the Effective Date, without any additional action required on the part of a
NexStar shareholder:
(i) Each NexStar Freely Trading Share will be exchanged with Zygo
Canada for Zygo Common Stock at the rate of 22.1718 NexStar Freely Trading
Shares for each share of Zygo Common Stock, PROVIDED, HOWEVER, that in the
event that any of the Vested NexStar Options are not exercised prior to the
close of business on the day immediately prior to the date of the NexStar
Meeting, the rate of exchange for each NexStar Freely Trading Share will be
appropriately adjusted downward to a minimum rate of 21.1063 NexStar Freely
Trading Shares for each share of Zygo Common Stock; and
(ii) Each Escrowed Share will be exchanged with Zygo Canada for Zygo
Common Stock at the rate of 23.6021 Escrowed Shares for each share of
Zygo Common Stock, PROVIDED, HOWEVER, that in the event that any of the
Vested NexStar Options are not exercised prior to the close of business on
the day immediately prior to the date of the NexStar Meeting, the rate of
exchange for each Escrowed Share will be appropriately adjusted downward to
a minimum rate of 22.4678 Escrowed Shares for each share of Zygo Common
Stock.
Notwithstanding anything to the contrary contained in this Section 2.01, the
aggregate number of shares of Zygo Common Stock to be exchanged for all
outstanding NexStar Common Shares (excluding shares of Zygo Common Stock that
may be issued pursuant to the proviso of the second sentence of Section 2.02(d)
hereof) will be 250,000 shares of Zygo Common Stock, appropriately adjusted for
stock splits, stock dividends or similar corporate stock transactions which
increase or decrease the number of outstanding shares of Common Stock effected
from the date of the signing of this Agreement through the Effective Date.
Zygo will cause NexStar to be liquidated or wound up into Zygo Canada and
immediately thereafter Zygo intends to cause Zygo Canada to be wound up into
Zygo.
SECTION 2.02. EXCHANGE OF CERTIFICATES.
(a) APPOINTMENT OF EXCHANGE AGENT. Prior to the Effective Date, Zygo shall
appoint a bank or trust company to act as exchange agent in the Arrangement (the
"EXCHANGE AGENT"). Promptly after the Effective Date, until the end of the one
hundred twenty (120) day period following the Effective Date, Zygo Canada shall
make available for exchange in accordance with this Article II certificates
("NEW CERTIFICATES") representing shares of Zygo Common Stock and cash in
amounts sufficient to allow the Exchange Agent to make all deliveries of New
Certificates and payments that may be
-8-
<PAGE>
required in exchange for certificates representing the outstanding NexStar
Common Shares (the "OLD CERTIFICATES") pursuant to this Section 2.02 (unless
Zygo Canada, in its sole discretion, determines to round all fractional
interests up to whole shares of Zygo Common Stock, as provided in subsection
2.02(d) hereof).
(b) EXCHANGE PROCEDURES. At the time the proxy materials with respect to
the NexStar Meeting are first sent to NexStar shareholders or, at Zygo's
discretion, at any time thereafter until the date not later than five (5)
Business Days after the Effective Date, Zygo Canada shall cause the Exchange
Agent to mail or deliver to each Person who was, at the Effective Date, a holder
of record of NexStar Common Shares a form (mutually agreed to by Zygo and
NexStar) of a letter of transmittal containing instructions for use in effecting
the surrender of the Old Certificates in exchange for New Certificates pursuant
to this Section 2.02. Upon surrender to the Exchange Agent of an Old Certificate
for cancellation together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, the holder of such Old
Certificate shall be entitled to receive in exchange therefor a New Certificate
representing the Zygo Common Stock to which such holder is entitled pursuant to
this Article II, and the Old Certificate so surrendered shall forthwith be
cancelled. If any New Certificate is to be issued in a name other than that in
which the Old Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the Person requesting such exchange
shall pay any transfer or other taxes required by reason of the issuance of such
New Certificate in a name other than that of the registered holder of the Old
Certificate surrendered, or shall establish to the satisfaction of Zygo that any
such taxes have been paid or are not applicable. One hundred twenty (120) days
after the Effective Date, Zygo Canada shall be entitled to cause the Exchange
Agent to deliver to Zygo any New Certificates made available to the Exchange
Agent that are unclaimed by the former shareholders of NexStar. Any former
shareholders of NexStar who have not theretofore exchanged their Old
Certificates for New Certificates pursuant to this Article 2.02 shall thereafter
be entitled to look exclusively to Zygo and only as general creditors thereof
for the Zygo Common Stock to which they become entitled upon exchange of their
Old Certificates pursuant to this Article 2.02. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to any former
shareholder of NexStar for any property delivered to a public official pursuant
to applicable abandoned property, escheat or similar laws. Zygo Canada shall pay
all charges and expenses, including those of the Exchange Agent, in connection
with the exchange of New Certificates for Old Certificates as contemplated
hereby.
(c) ILLEGALITY OF DELIVERY OF SHARES. Notwithstanding the foregoing, if it
appears to Zygo Canada that it would be contrary to applicable law to issue Zygo
Common Stock pursuant to the Plan of Arrangement to a person that is not a
resident of Canada or the United States, the Zygo Common Stock that otherwise
would be issued to that person will be issued and delivered to the Exchange
Agent for sale by the Exchange Agent on behalf of that person. The Zygo Common
Stock so delivered to the Exchange Agent will be pooled and sold as soon as
practicable after the Effective Date, on such dates and at such prices as the
Exchange Agent determines in its sole discretion. The Exchange Agent shall not
be obligated to seek or obtain a minimum price for any of the Zygo Common Stock
sold by it. Each such person will receive a pro
-9-
<PAGE>
rata share of the cash proceeds from the sale of the Zygo Common Stock sold by
the Exchange Agent (less commissions, other reasonable expenses incurred in
connection with the sale of the Zygo Common Stock and any amount withheld in
respect of applicable taxes) in lieu of receiving the Zygo Common Stock. The net
proceeds will be remitted in the same manner as other payments pursuant to this
Section 2.02. None of Zygo, Zygo Canada, NexStar or the Exchange Agent will be
liable for any loss arising out of any such sales.
(d) FRACTIONAL SHARES. No fractional shares of Zygo Common Stock will be
issued upon the surrender for exchange of the Old Certificates. In lieu of any
such fractional share, each holder of NexStar Common Shares who would otherwise
have been entitled to a fraction of a share of Zygo Common Stock upon
consummation of the transactions contemplated by this Agreement and the Plan of
Arrangement shall be paid upon such surrender of the Old Certificates cash in
U.S. funds (rounded to the nearest whole cent), without interest, in an amount
equal to the product of (i) such fraction multiplied by (ii) $39.75 (being the
closing price of a share of Zygo Common Stock on April 8, 1996, the date the
exchange ratios were agreed to); PROVIDED, HOWEVER, that Zygo Canada, in its
sole discretion, may elect to round each such fractional share up to the next
higher whole share of Zygo Common Stock in lieu of providing for the payment of
such cash amount. As soon as practicable after the determination of the amount
of cash, if any, to be paid to former shareholders of NexStar in lieu of any
fractional interests, the Exchange Agent shall make available in accordance with
this Agreement and the Plan of Arrangement such amounts to such former
shareholders.
(e) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. Notwithstanding any
other provision of this Agreement, no dividends or other distributions declared
or made after the Effective Date on Zygo Common Stock shall be paid to any
Person holding an Old Certificate evidencing NexStar Common Shares until such
Old Certificate is surrendered for exchange as provided herein. Subject to the
effect of applicable laws, following surrender of any such Old Certificate by
any holder thereof other than a Dissenting Shareholder, there shall be paid to
the holder of the New Certificate issued in exchange therefor, without interest
(i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Date theretofore payable
with respect to the Zygo Common Stock represented thereby and not paid, less the
amount of any withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Date but prior to the time of such surrender and
a payment date subsequent to the time of such surrender payable with respect to
the Zygo Common Stock represented thereby, less the amount of any withholding
taxes which may be required thereon.
(f) TRANSFERS. At or after the Effective Date, there shall be no transfers
on the stock transfer books of NexStar of NexStar Common Shares which were
outstanding immediately prior to the Effective Date.
(g) NO LIABILITY. In the event that any Old Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Old Certificate to be lost, stolen or destroyed and, if
required by Zygo,
-10-
<PAGE>
the posting by such Person of a bond in such reasonable amount as Zygo may
direct as indemnity against any claim that may be made against it with respect
to such Old Certificate, Zygo shall, in exchange for such lost, stolen or
destroyed Old Certificate, issue or cause to be issued the Zygo Common Stock and
pay or cause to be paid the amounts deliverable in respect thereof pursuant to
this Article 2.02.
SECTION 2.03. DISSENTING SHARES. Notwithstanding Section 2.01, holders of
NexStar Common Shares may exercise rights of dissent in accordance with the
procedures set forth in Section 4 of the Plan of Arrangement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF
NEXSTAR
Except as set forth (by reference to the applicable Section of this
Agreement) in the disclosure schedule delivered by NexStar to Zygo on the date
hereof (the "DISCLOSURE SCHEDULE"), a copy of which is attached hereto as
Schedule II, NexStar hereby represents and warrants to Zygo as follows:
SECTION 3.01. ORGANIZATION, ETC. NexStar is a corporation duly organized,
validly existing and in good standing under the laws of British Columbia and has
full corporate power and authority to conduct its business as it is now being
conducted and to own, operate or lease the properties and assets it currently
owns, operates or holds under lease. NexStar is duly qualified or licensed to do
business and is in good standing as a foreign corporation in each jurisdiction
where the character of its business or the nature of its properties makes such
qualification or licensing necessary, except where the failure to so qualify or
be licensed would not have a Material Adverse Effect, all of which jurisdictions
are set forth on the Disclosure Schedule. NexStar has heretofore delivered to
Zygo true and correct copies of the Memorandum and Articles of NexStar as in
effect on the date hereof.
SECTION 3.02. THE NEXSTAR SUBSIDIARY AND OTHER NEXSTAR INTERESTS.
(a) The NexStar Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own, lease and operate
its properties and to conduct its business as it is now being conducted. A true
and correct copy of the Articles of Incorporation and By-laws of the NexStar
Subsidiary as in effect on the date hereof have been provided to Zygo. The
NexStar Subsidiary is duly qualified or licensed to conduct its business and is
in good standing in each jurisdiction where the character of its business or the
nature of its properties makes such qualification or licensing necessary, except
where the failure to so qualify or be licensed would not have a Material Adverse
Effect, all of which jurisdictions are set forth on the Disclosure Schedule.
NexStar acquired the shares of the NexStar Subsidiary for the purposes of long
term investment, dividend payment and capital appreciation.
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(b) The Disclosure Schedule contains a list of all Subsidiaries (other than
the NexStar Subsidiary), partnerships, joint ventures and other entities in
which NexStar has, directly or indirectly, any legal or beneficial interest and
indicates for each such Subsidiary, partnership, joint venture or other entity
(a "NEXSTAR INTEREST"): (i) the percentage and type of equity securities of or
other interest in the NexStar Interest owned or controlled by NexStar; (ii) the
identity of any other beneficial or record owner of any such NexStar Interest
and the percentage and type of such ownership; (iii) the jurisdiction of
incorporation or organization; (iv) each jurisdiction in which it is qualified
or licensed to conduct its business; and (v) in the case of any joint venture,
the identity of each other joint venture partner. NexStar is the direct owner,
beneficially and of record, of all such equity securities or other interests
listed as being owned by it, free and clear of all Liens.
SECTION 3.03. CAPITALIZATION.
(a) The authorized, issued and outstanding capital stock of NexStar is as
set forth on the Disclosure Schedule. NexStar does not hold any shares in its
own capital. The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of each class and series of authorized
capital stock of NexStar are as set forth in NexStar's Articles, and all such
designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable and in accordance with all
applicable and corporate laws. All outstanding shares of capital stock of
NexStar have been duly authorized and validly issued as fully paid and
non-assessable. All of the outstanding securities of NexStar were issued in
compliance with all applicable Canadian and provincial securities and corporate
laws. None of the outstanding securities has been issued in violation of any
pre-emptive rights, rights of first refusal or similar rights. Except as set
forth in the Disclosure Schedule, there are no outstanding options, warrants,
convertible securities, calls, rights, commitments, pre-emptive rights or
agreements or instruments or understandings of any character to which NexStar is
a party or by which NexStar is bound, obligating NexStar to issue, deliver or
sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of its capital stock or any securities or obligations
convertible into or exchangeable for such shares or to grant, extend or enter
into any such option, warrant, convertible security, call, right, commitment,
pre-emptive right or agreement. There are no outstanding obligations, contingent
or other, of NexStar to purchase, redeem or otherwise acquire any shares of its
capital stock. Except as set forth in the Disclosure Schedule, there are no
voting trust agreements or other contracts, agreements, arrangements,
commitments, plans or understandings restricting or otherwise relating to
voting, dividend or other rights with respect to any of the capital stock of
NexStar or the NexStar Subsidiary.
(b) The authorized, issued and outstanding capital stock of the NexStar
Subsidiary is as set forth on the Disclosure Schedule. There are no shares of
capital stock of the NexStar Subsidiary held as treasury shares. All outstanding
shares of capital stock of the NexStar Subsidiary are owned of record and
beneficially by NexStar, free and clear of any and all Liens, and have been duly
authorized and validly issued and are fully paid and non-assessable. All of the
outstanding securities of NexStar were issued in compliance with all applicable
federal and state securities and
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corporate laws. None of the outstanding securities has been issued in violation
of any pre-emptive rights, rights of first refusal or similar rights. There are
no outstanding options, warrants, convertible securities, calls, rights,
commitments, pre-emptive rights or agreements or instruments or understandings
of any character to which NexStar or the NexStar Subsidiary is a party or by
which NexStar or the NexStar Subsidiary is bound, obligating the NexStar
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
contingently or otherwise, additional shares of its capital stock or any
securities or obligations convertible into or exchangeable for such shares or to
grant, extend or enter into any such option, warrant, convertible security,
call, right, commitment, pre-emptive right or agreement. There are no
outstanding obligations, contingent or other, of the NexStar Subsidiary to
purchase, redeem or otherwise acquire any shares of its capital stock. Except as
set forth in the Disclosure Schedule, there are no voting trust agreements or
other contracts, agreements, arrangements, commitments, plans or understandings
restricting or otherwise relating to voting, dividend or other rights with
respect to any of the capital stock of the NexStar Subsidiary.
SECTION 3.04. AUTHORIZATION. NexStar has all requisite corporate power and
authority to enter into this Agreement, the Plan of Arrangement and each of the
other agreements contemplated hereby, to carry out its obligations under this
Agreement, the Plan of Arrangement and each of the other agreements contemplated
hereby and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Plan of Arrangement, the
consummation of the transactions contemplated hereby and the performance by
NexStar of its obligations hereunder have been duly authorized by all necessary
corporate action on the part of NexStar, subject only to the approval of the
Plan of Arrangement by the shareholders of NexStar and the Court. This Agreement
has been duly executed and delivered by NexStar and constitutes the legal, valid
and binding obligation of NexStar enforceable against NexStar in accordance with
its terms (except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether enforceability is considered
in equity or at law). In the event that the Note, the security agreement and the
guaranty described in Section 9.02 hereof are executed and delivered, each of
such agreements will constitute the legal, valid and binding obligation of
NexStar or the NexStar Subsidiary, as the case may be, enforceable against
NexStar or the NexStar Subsidiary, as the case may be, in accordance with its
terms (except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether enforceability is considered
in equity or at law).
SECTION 3.05. NO VIOLATION. The execution and delivery of this Agreement
and the Plan of Arrangement by NexStar do not, and the consummation by NexStar
of the transactions contemplated hereby and thereby, and compliance with the
terms hereof and thereof will not, (a) conflict with, or result in any violation
of or default or loss of any benefit under, any provision of NexStar's
Memorandum and Articles or the organizational documents of the NexStar
Subsidiary; (b) conflict with, or result in any violation of or default or loss
of any benefit under, any License, grant, statute, law, rule or regulation, or
any judgment, decree or order of any court or other governmental
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agency or instrumentality to which NexStar or the NexStar Subsidiary is a party
or to which any of their respective property is subject; (c) conflict with, or
result in a breach or violation of or default or loss of any benefit under, or
accelerate the performance required by, the terms of any agreement, contract,
indenture or other instrument to which NexStar or the NexStar Subsidiary is a
party or to which any of their respective property is subject, or constitute a
default or loss of any right thereunder or an event which, with the lapse of
time or notice or both, might result in a default or loss of any right
thereunder or the creation of any Lien upon any of the assets or properties of
NexStar or the NexStar Subsidiary; or (d) result in any suspension, revocation,
impairment, forfeiture or nonrenewal of any License. Each of NexStar and the
NexStar Subsidiary is in compliance with all applicable laws, rules or
regulations relating to or affecting the operation, conduct or ownership of its
respective property or business, other than violations that individually or in
the aggregate would not, and insofar as may reasonably be foreseen in the future
will not, have a Material Adverse Effect.
SECTION 3.06. APPROVALS. The execution and delivery of this Agreement and
the Plan of Arrangement and the consummation of the transactions contemplated
hereby and thereby by NexStar will not require the consent, approval, order or
authorization of any Governmental Entity or Regulatory Authority or any other
Person under any statute, law, rule, regulation, permit, license, agreement,
indenture or other instrument to which NexStar or the NexStar Subsidiary is a
party or to which any of their respective properties are subject, and no
declaration, filing or registration with any Governmental Entity or Regulatory
Authority is required or advisable by NexStar or the NexStar Subsidiary in
connection with the execution and delivery of this Agreement and the Plan of
Arrangement, the consummation of the transactions contemplated hereby and
thereby, or the performance by NexStar of its obligations hereunder, other than
in connection with or in compliance with the provisions of the Exchange Act, the
U.S. Securities Act, the securities or blue sky laws of the various states, the
provisions of the rules, regulations and By-laws of the Vancouver Stock
Exchange, the Securities Act and the securities laws of the other provinces of
Canada, as applicable, the Interim Order and the Final Order. NexStar will
promptly apply to the Court pursuant to Section 276 of the Company Act for and
will obtain the Interim Order providing for, among other things, the calling and
holding of the NexStar Meeting for the purpose of the shareholders of NexStar
considering and, if thought fit, approving the Arrangement.
SECTION 3.07. SECURITIES ACT FILINGS. NexStar has delivered to Zygo true,
correct and complete copies of (a) each final prospectus, management proxy
circular and press releases, material change reports and interim and annual
financial statements filed by NexStar with the British Columbia Securities
Commission and (b) each report filed by NexStar with the British Columbia
Securities Commission and any other principal regulatory authority having
jurisdiction with respect to NexStar. NexStar has timely filed all the material
required to be filed pursuant to the applicable provisions of the Securities
Act. None of the documents referred to in the initial sentence of this Section
3.07 as of the dates they were respectively filed with the securities
commissions or other regulatory authorities referred to therein contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or
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necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
NexStar is a reporting issuer not in default under the Securities Act and
is not a reporting issuer or the equivalent thereof in any other province of
Canada.
SECTION 3.08. FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) NexStar has delivered to Zygo (i) true, correct and complete copies of
NexStar's audited consolidated balance sheets as of December 31, 1993, 1994 and
1995, and the related statements of operations, accumulated deficit and cash
flows (together with the auditors' reports thereon) for each of the years ended
December 31, 1993, 1994 and 1995, together with notes to such financial
statements (the "AUDITED FINANCIAL STATEMENTS") and (ii) true, correct and
complete copies of NexStar's unaudited balance sheets as at March 31, 1996, and
the related statements of operations, accumulated deficit and cash flows for the
three month periods ended March 31, 1994, 1995 and 1996 (the "INTERIM FINANCIAL
STATEMENTS"). The Audited Financial Statements and Interim Financial Statements
are herein collectively referred to as the "FINANCIAL STATEMENTS".
(b) The Financial Statements are in accordance with the books and records
of NexStar, have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods covered thereby and,
prior to the Effective Date, will be in compliance with U.S. Commission
Regulation S-X for use by Zygo, and the balance sheets included therein present
fairly as of their respective dates the financial condition of NexStar and the
NexStar Subsidiary (subject, in the case of Interim Financial Statements, to
year-end adjustments that may be required upon audit, which adjustments will not
have a Material Adverse Effect on such financial statements). All material
liabilities and obligations, whether absolute, accrued, contingent or otherwise,
whether direct or indirect, and whether due or to become due, which existed at
the date of such Financial Statements have been disclosed in the balance sheets
included in the Financial Statements or in notes to the Financial Statements to
the extent such liabilities were required, under generally accepted accounting
principles, to be so disclosed. The statements of operations, accumulated
deficit and cash flows included in the Financial Statements present fairly the
results of operations, accumulated deficit and cash flows of NexStar and the
NexStar Subsidiary for the periods indicated (subject, in the case of Interim
Financial Statements, to year-end adjustments that may be required upon audit,
which adjustments will not have a Material Adverse Effect on such financial
statements), and the notes included in the Financial Statements present fairly
the information purported to be shown thereby. The statements of operations
included in the Financial Statements do not contain any material items of
special or non-recurring income or other income not earned in the ordinary
course of business except as expressly specified therein.
(c) All properties, investments, tangible assets and deferred costs
reflected in the latest balance sheet included in the Financial Statements have
a fair market or realizable value at least equal to the value thereof as
reflected therein.
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(d) The inventories owned by NexStar and the NexStar Subsidiary shown in
all balance sheets (including the latest balance sheet) included in the
Financial Statements are properly valued at the lower of cost or market,
determined on a first in, first out basis (FIFO), in accordance with generally
accepted accounting principles consistently applied, are usable or saleable and
not obsolete or represent excess quantities and can reasonably be anticipated to
be used or sold in the ordinary course of business of NexStar and the NexStar
Subsidiary. Since December 31, 1995 the inventories of NexStar and the NexStar
Subsidiary have been maintained at levels consistent with past practice as
reflected on their books and records, and neither NexStar nor the NexStar
Subsidiary has caused its inventories to be materially increased or decreased,
other than in the ordinary course of business consistent with past practice.
(e) The accounts and notes receivable of NexStar and the NexStar
Subsidiary, net of the allowance for doubtful accounts applicable thereto
included in the latest balance sheet included in the Financial Statements, are
collectible in full over the period of usual trade terms (by use of NexStar's
and the NexStar Subsidiary's normal collection methods without resort to
litigation or reference to a collection agency), and there do not exist any
defenses, counterclaims and set-offs which would materially adversely affect
such receivables, and all such receivables are actual and bona fide receivables
representing obligations for the total dollar amount thereof shown on the books
of NexStar. NexStar and the NexStar Subsidiary have fully performed all
obligations with respect thereto which they were obligated to perform to the
date hereof. NexStar has delivered to Zygo a true and complete aging schedule
for the accounts receivable as of March 31, 1996.
(f) Except as disclosed in the NexStar Quarterly Report for the three
months ended March 31, 1996 filed with the British Columbia Securities
Commission and the Vancouver Stock Exchange (the "NEXSTAR QUARTERLY REPORT"),
since December 31, 1995 there has been (i) no Material Adverse Change in the
assets or liabilities, or in the business or condition, financial or otherwise,
or in the results of operations or, to the best knowledge of NexStar, prospects,
of NexStar or the NexStar Subsidiary, whether as a result of any legislative or
regulatory change, revocation of any License or right to do business, fire,
explosion, accident, casualty, labor trouble, flood, drought, riot, storm,
condemnation or act of God or otherwise; and, to the best knowledge of NexStar,
no fact or condition exists or is contemplated or threatened which could
reasonably be anticipated to cause such a change in the future and (ii) no
material fact (as defined in the Securities Act) in relation to the capital
stock of NexStar which has not been generally disclosed.
SECTION 3.09. NO UNDISCLOSED LIABILITIES. Except as set forth in the notes
to the Financial Statements, the liabilities on the latest balance sheet
included in the Financial Statements consist solely of accrued obligations and
liabilities incurred by NexStar and the NexStar Subsidiary in the ordinary
course of their business to Persons which are not Affiliates of NexStar or the
NexStar Subsidiary. There are no liabilities of NexStar or the NexStar
Subsidiary of any kind whatsoever, whether or not accrued and whether or not
contingent or absolute, determined or determinable or otherwise, including
without limitation documentary or standby letters of credit, bid or
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performance bonds, or customer or third party guarantees, and no existing
condition, situation or set of circumstances that could reasonably result in
such a liability, other than (a) liabilities disclosed in the Financial
Statements, and (b) liabilities which have arisen after March 31, 1996 in the
ordinary course of business and consistent with past practice (none of which is
a liability for breach of contract, breach of warranty (other than chargebacks
incurred in the ordinary course of business and consistent with past practice),
tort, infringement claim or lawsuit) which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. There are no
asserted claims for indemnification by any Person against NexStar or the NexStar
Subsidiary under any law or agreement or pursuant to the Memorandum and Articles
of NexStar or the Articles of Incorporation and By-laws of the NexStar
Subsidiary and neither NexStar nor the NexStar Subsidiary is aware of any facts
or circumstances that might give rise to the assertion of such a claim against
NexStar or the NexStar Subsidiary thereunder.
SECTION 3.10. CORPORATE ACTION. All corporate action of the Board of
Directors and of the shareholders of NexStar and the NexStar Subsidiary taken on
or prior to the date hereof has been duly authorized, adopted or ratified in
accordance with applicable law and the Memorandum and Articles of NexStar and
the Articles of Incorporation and By-laws of the NexStar Subsidiary, and has
been duly recorded in their respective corporate minute books (true, correct and
complete copies of which have been delivered to or made available for inspection
by Zygo).
SECTION 3.11. EVENTS SUBSEQUENT TO DECEMBER 31, 1995. Except as heretofore
disclosed in the NexStar Quarterly Report, or otherwise set forth in the
Disclosure Schedules, since December 31, 1995 neither NexStar nor the NexStar
Subsidiary has (a) issued any stock, bond or other corporate security (including
without limitation securities convertible into or rights to acquire capital
stock of NexStar or the NexStar Subsidiary), (b) borrowed any amount or incurred
or become subject to any liability (absolute, accrued or contingent), except
current liabilities incurred and liabilities under contracts entered into, all
in the ordinary course of business, (c) discharged or satisfied any Lien or
incurred or paid any obligation or liability (absolute, accrued or contingent)
other than current liabilities shown on the balance sheet included in the
Audited Financial Statements for 1995 and current liabilities incurred since
December 31, 1995 in the ordinary course of business, (d) declared or made any
payment or distribution to shareholders or purchased or redeemed any shares of
its capital stock or other securities, or has any intention to do so, (e)
mortgaged, pledged or subjected to Lien any of its assets, tangible or
intangible, other than liens of current real property taxes not yet due and
payable, (f) sold, assigned or transferred any of its tangible assets except in
the ordinary course of business, or canceled any debt or claim, (g) sold,
assigned, transferred or granted any license with respect to any patent,
trademark, trade name, service mark, copyright, trade secret or other intangible
asset, (h) suffered any loss of property or waived any right of substantial
value whether or not in the ordinary course of business, (i) suffered any
adverse change in its relations with, or any loss or threatened loss of, any of
its suppliers or customers disclosed pursuant to Section 3.24, (j)(i) granted
any severance or termination pay to any of its directors, officers, employees or
consultants, (ii) entered into any employment, deferred compensation or other
similar agreement (or any amendment to any such existing
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agreement) or arrangement with any of its directors, officers, employees or
consultants, (iii) increased any benefits payable under any existing severance
or termination pay policies or employment agreements, or (iv) increased the
compensation, bonus or other benefits payable to any of its directors, officers,
consultants or employees, (k) made any material change in the manner of its
business or operations, (l) made any material change in any method of accounting
or accounting practice, except for any such change required by reason of a
concurrent change in generally accepted accounting principles or disclosed in
the Financial Statements, (m) entered into any transaction except in the
ordinary course of business or as otherwise contemplated hereby or by the Plan
of Arrangement or (n) entered into any commitment (contingent or otherwise) to
do any of the foregoing.
SECTION 3.12. TAXES. Except for matters that would not have a Material
Adverse Effect, (a) all tax returns (including, without limitation, income,
profit, franchise, sales and use, excise, severance, occupation, property, gross
receipts, payroll and withholding tax returns and information returns), deposits
and reports (all such returns, deposits and reports herein referred to
collectively as "TAX RETURNS" or singularly as a "TAX RETURN") of or relating to
any Canadian or United States federal, state, provincial, local or foreign or
other governmental tax (all, together with any penalties, additions to tax,
fines and interest thereon or related thereto, herein referred to collectively
as "TAXES" or singularly as a "TAX") that are required to be filed or deposited
for, by, on behalf of or with respect to NexStar or the NexStar Subsidiary,
including, but not limited to, those relating to the income, business,
operations or property of NexStar and the NexStar Subsidiary and those which
include or should include NexStar and the NexStar Subsidiary, have been filed or
deposited duly and on a timely basis and all Taxes and filing fees shown to be
due and payable on such Tax Returns have been paid in full and all installments,
assessments and charges of which NexStar or the NexStar Subsidiary is aware or
has received notice and which are due and payable by NexStar or the NexStar
Subsidiary have been paid in full; (b) all such Tax Returns and the information
and data contained therein have been properly and accurately compiled and
completed, fairly present the information purported to be shown therein and
reflect all liabilities for Taxes for the periods covered by such Tax Returns;
(c) to the best knowledge of NexStar and the NexStar Subsidiary, no such Tax
Return or designation contains any misstatement or omits any statement that
should have been included therein; (d) all Taxes imposed on NexStar or the
NexStar Subsidiary (or for which NexStar or the NexStar Subsidiary is or could
be liable, whether to any Governmental Entity or to other Persons (as, for
example, under tax allocation agreements)), for all periods up to December 31,
1995, which are due and payable on or before the Effective Date, have been or
will be paid when due or adequately reserved against on the March 31, 1996
balance sheet; (e) none of such Tax Returns are now under audit or examination
by any Canadian or United States federal, state, provincial, local or foreign or
other Governmental Entity and there are no agreements, waivers or other
arrangements providing for an extension of time with respect to the assessment
or collection of any Tax or deficiency of any nature against NexStar or the
NexStar Subsidiary or with respect to any such Tax Return or any suits or other
judicial or administrative actions, proceedings, investigations or claims now
pending or, to the best knowledge of NexStar, threatened against NexStar or the
NexStar Subsidiary with respect to any Tax, governmental charge or assessment;
(f) the
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latest balance sheet included in the Financial Statements reflects and includes
adequate provisions for the payment in full of any and all Taxes for which
NexStar or the NexStar Subsidiary is or could be liable, whether to any
Governmental Entity or to other Persons (as, for example, under tax allocation
agreements), not yet due for any and all periods up to and including the date of
such balance sheet; (g) all Taxes for which NexStar or the NexStar Subsidiary is
or could be liable, whether to any Governmental Entity or to other Persons (as,
for example, under tax allocation agreements), for periods beginning after
December 31, 1995 through the Effective Date have been, or will be, paid when
due or adequately reserved against on the books of NexStar and the NexStar
Subsidiary on or prior to the Effective Date and an amount of cash equal to the
amount of such reserve will have been set aside for payment of such Taxes; (h)
NexStar and the NexStar Subsidiary have withheld and remitted all amounts
required to be withheld and have paid such amounts due to the appropriate
authority on a timely basis and in the form required under the appropriate
legislation; (i) NexStar and the NexStar Subsidiary have not been, and are
currently not, required to file a Tax Return in any jurisdiction other than (a)
Vancouver, British Columbia, Canada and (b) Colorado, Longmont, Boulder County
and the United States of America, respectively; (j) except for the acquisition
of the shares of the NexStar Subsidiary by NexStar, neither NexStar nor the
NexStar Subsidiary has acquired property from, or disposed of property for
proceeds less than fair market value thereof to, any Person with whom it does
not deal at arm's length; (k) there has never been a "change of control" of
NexStar, for the purposes of the Income Tax Act (Canada); and (l) NexStar is not
required to be registered under Section 240 of the Excise Tax Act. The March 31,
1996 balance sheet contains adequate reserves against any liability for Taxes
for which NexStar or the NexStar Subsidiary could be liable in respect of any
audit or examination set forth on the Disclosure Schedule. There is no tax Lien,
whether imposed by any Canadian or United States federal, state, provincial,
county, local or foreign taxing authority, outstanding against the assets,
properties or business of NexStar or the NexStar Subsidiary. All material
elections and consents with respect to any Tax (or the computation thereof)
affecting NexStar or the NexStar Subsidiary as of the date hereof are obvious
from the Tax Returns or are set forth on the Disclosure Schedule. After the date
hereof, no election or consent with respect to any Tax (or the computation
thereof) affecting NexStar or the NexStar Subsidiary will be made without the
written consent of Zygo. Neither NexStar nor the NexStar Subsidiary has agreed
to make or is required to make any adjustment under Section 481(a) of the Code,
by reason of a change in accounting method or otherwise. Neither NexStar nor the
NexStar Subsidiary is a party to any agreement, contract, arrangement or plan
that has resulted, or as a consequence of the transactions contemplated hereby
will result, separately or in the aggregate, in the payment of any excess
parachute payments within the meaning of Section 280G of the Code.
SECTION 3.13. LITIGATION. Except as set forth in the Disclosure Schedule,
there is no action, suit, investigation, arbitration or proceeding pending or,
to the best knowledge of NexStar, threatened against or affecting NexStar or the
NexStar Subsidiary or any of their respective properties or rights (including
without limitation no charge of patent and/or trademark infringement), by or
before any Governmental Entity, or any basis in fact therefor known to NexStar,
against or involving NexStar or the NexStar Subsidiary or any of their
respective officers, directors, employees or
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consultants (in all instances, in their capacity as such), assets, business or
products, whether at law or in equity. With respect to each litigation or claim
described in the Disclosure Schedule, copies of all pleadings, filings,
correspondence with opposing parties and their counsel, opinions of counsel,
results of studies, judgments, orders, attachments, impositions of or recordings
of Liens and other documents have been furnished to Zygo.
SECTION 3.14. COMPLIANCE WITH LAWS. NexStar and the NexStar Subsidiary have
complied in all material respects with all applicable laws (including rules,
regulation, codes, plans, injunctions, judgments, orders, decrees, rulings and
charges thereunder) of any Governmental Entity relating to or affecting the
operation, conduct or ownership of their respective properties or business. No
investigation or review by any Governmental Entity (including without limitation
any audit or similar review by any federal, foreign, state, provincial or local
taxing authority) with respect to NexStar or the NexStar Subsidiary is pending
or, to the best knowledge of NexStar, threatened, nor has any Governmental
Entity indicated in writing to NexStar or the NexStar Subsidiary an intention to
conduct the same. Neither NexStar, the NexStar Subsidiary nor, to the best
knowledge of NexStar, any director, officer, consultant or employee of NexStar
or the NexStar Subsidiary (in all instances, in their capacity as such), is in
default with respect to any order, writ, injunction or decree known to or served
upon NexStar or the NexStar Subsidiary of any Governmental Entity, which default
would have a Material Adverse Effect. There is no existing law, rule, regulation
or order, whether Canadian or United States federal, state, provincial, local or
foreign, which would prohibit or materially restrict NexStar or the NexStar
Subsidiary from, or otherwise materially adversely affect NexStar or the NexStar
Subsidiary in, conducting its business in any jurisdiction in which it is now
conducting business or in which it currently proposes to conduct business.
SECTION 3.15. TITLE TO AND CONDITION OF PROPERTY.
(a) The Disclosure Schedule identifies all of the rights and interests in
real property and leasehold estates owned by NexStar and the NexStar Subsidiary
as of the date hereof, and the nature and amount of its respective interest
therein. NexStar and the NexStar Subsidiary have good and marketable title to
all real property and have valid, subsisting and enforceable leases to all
leasehold estates identified and reflected in the Disclosure Schedule (with such
exceptions as are, individually or in the aggregate, not material and do not,
individually or in the aggregate, materially interfere with the use made and
proposed to be made of such properties by NexStar and the NexStar Subsidiary)
and either good and marketable title or rights as lessee to all personalty of
any kind or nature owned or used by NexStar or the NexStar Subsidiary in their
respective business, in each case free and clear of all Liens except for (i)
Liens, defects or irregularities of title identified on the Disclosure Schedule
which, individually or in the aggregate, do not detract from or materially
interfere with the present or reasonably foreseeable use or value of the
properties subject thereto or otherwise have or reasonably could have a Material
Adverse Effect, and (ii) Liens for non-delinquent ad valorem taxes and
non-delinquent statutory liens arising other than by reason of default by
NexStar or the NexStar Subsidiary. NexStar and the NexStar Subsidiary as lessee
have the right under valid leases to occupy, use, possess and control all
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property leased by NexStar and the NexStar Subsidiary as now occupied, used,
possessed and controlled by NexStar or the NexStar Subsidiary. The assets and
properties owned or leased by NexStar and the NexStar Subsidiary are sufficient
to operate and conduct the business of NexStar and the NexStar Subsidiary in a
manner consistent with at least the same standards of quality and reliability as
have been achieved as of the date hereof.
(b) Each lease or agreement under which NexStar or the NexStar Subsidiary
is a lessee or lessor of any property, real or personal, is a valid and binding
agreement of such Person and, to the best knowledge of NexStar, the other party
thereto (in each case with such exceptions as are, individually or in the
aggregate, not material and do not, individually or in the aggregate, materially
interfere with the use made and proposed to be made of such properties by
NexStar and the NexStar Subsidiary), without any default by NexStar or the
NexStar Subsidiary thereunder and, to the best knowledge of NexStar, without any
default thereunder by any other party thereto. No event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute a
default or event of default by NexStar or the NexStar Subsidiary under any such
lease or agreement or, to the best knowledge of NexStar, by any other party
thereto. NexStar's and the NexStar Subsidiary's possession of such property has
not been disturbed and no claim has been asserted, whether oral or in writing,
against NexStar or the NexStar Subsidiary adverse to its rights in such
leasehold interests.
(c) All buildings, structures, appurtenances and material items of
machinery, equipment and other material tangible assets used by NexStar and the
NexStar Subsidiary are in good operating condition and repair, normal wear and
tear excepted, are usable in the ordinary course of business, are adequate and
suitable for the uses to which they are being put and conform in all material
respects to all applicable laws, ordinances, codes, rules, regulations and
authorizations relating to their construction, use and operation. None of
NexStar's or the NexStar Subsidiary's premises or equipment is in need of
maintenance or repairs other than ordinary routine maintenance and repairs which
are not material, individually or in the aggregate, in nature or cost.
SECTION 3.16. ENVIRONMENTAL MATTERS.
(a) All Licenses required under Environmental Laws that are necessary to
the operations of the business of NexStar and the NexStar Subsidiary have been
obtained and are in full force and effect and neither NexStar nor the NexStar
Subsidiary is aware of any basis for revocation or suspension of any such
licenses, permits, consents or other approvals; and the business of NexStar and
the NexStar Subsidiary has at all times been operated in full compliance in all
material respects with such Licenses, and within the production levels or
emission levels specified in such Licenses. To the best knowledge of NexStar, no
Environmental Laws impose any obligation upon Zygo, as a result of any
transaction contemplated hereby, requiring prior notification to any
Governmental Entity of the transfer of any License which is necessary to the
operations of the business of NexStar and the NexStar Subsidiary. All of the
facilities and operations of the business of NexStar and the NexStar Subsidiary
were constructed, and have been operated, in all material respects in accordance
with
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the representations and conditions made or set forth in the License applications
and the Licenses.
(b) Each of NexStar and the NexStar Subsidiary has at all times operated
its business in compliance in all material respects with all applicable
limitations, restrictions, conditions, standards, prohibitions, requirements and
obligations of Environmental Laws and related orders of any court or other
Governmental Entity.
(c) There are not any existing, pending or, to the best knowledge of
NexStar, threatened actions, suits, claims, investigations, inquiries or
proceedings by or before any Governmental Entity directed against NexStar or the
NexStar Subsidiary in connection with the operation of its business which
pertain or relate to (i) any remedial obligations under any applicable
Environmental Law, (ii) violations by NexStar or the NexStar Subsidiary of any
Environmental Law, (iii) personal injury or property damage claims relating to a
release of chemicals or Hazardous Materials by NexStar or the NexStar
Subsidiary, or (iv) response, removal or remedial costs under the Comprehensive
Environmental Response, Compensation, and Liability Act or any similar state
law.
(d) No portion of the real property owned or leased by NexStar or the
NexStar Subsidiary with respect to its business is listed on any Contaminated
Site List.
(e) There has been no Release of any Hazardous Materials on or underlying
any real property owned or leased by NexStar or the NexStar Subsidiary.
(f) No asbestos-containing materials or polychlorinated biphenyls ("PCBS")
are present on or underlying any real property owned or leased by NexStar or the
NexStar Subsidiary.
(g) There are no underground storage tanks for Hazardous Materials, active
or abandoned, at any property now or previously owned or leased by NexStar or
the NexStar Subsidiary.
(h) NexStar has provided to Zygo all engineering, geologic, environmental
and other documents or maps in the possession of NexStar or the NexStar
Subsidiary relating to (i) any Environmental Conditions existing on any real
property owned or leased by NexStar or the NexStar Subsidiary, or (ii) any
violations by NexStar or the NexStar Subsidiary of any Environmental Laws.
(i) All Hazardous Materials, if any, generated by NexStar and the NexStar
Subsidiary in their business have been transported, stored, treated and disposed
of by transporters or carriers, or at treatment, storage and disposal
facilities, authorized or maintaining valid permits under all applicable
Environmental Laws.
(j) Neither NexStar nor the NexStar Subsidiary is aware of any
Environmental Remediation Costs which are required or have been planned relating
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to the operation of their business by NexStar and the NexStar Subsidiary for
which NexStar reasonably anticipates payment or accrual.
SECTION 3.17. CONTRACTS.
(a) The Disclosure Schedule contains a complete list of all currently
effective written or oral (i) employment contracts, arrangements or policies of
NexStar and the NexStar Subsidiary which may not be immediately terminated
without penalty (or any augmentation or acceleration of benefits); (ii) leases,
sales contracts and other agreements with respect to any property, real or
personal, of NexStar and the NexStar Subsidiary, except for leases of personal
property involving less than U.S.$5,000 individually and U.S.$25,000 in the
aggregate; (iii) contracts or commitments for capital expenditures or
acquisitions in excess of U.S.$25,000 for one project or set of related
projects; (iv) agreements, contracts, indentures or other instruments relating
to the borrowing of money, or the guarantee of any obligation (third party or
otherwise) for the borrowing of money; (v) contracts or agreements providing for
any covenant not to compete by NexStar or the NexStar Subsidiary or otherwise
restricting in any way NexStar's or the NexStar Subsidiary's engaging in any
business activity (including a description of the businesses to which the
covenant not to compete applies); (vi) contracts or agreements relating to
consultancies, professional retentions, agency, sales or distributorship
arrangements pertaining to NexStar, the NexStar Subsidiary or their respective
products or activities; (vii) contracts, agreements or commitments requiring
NexStar or the NexStar Subsidiary to indemnify or hold harmless any Person;
(viii) all contracts with any customer or supplier listed on the Disclosure
Schedule pursuant to Section 3.24 hereto other than outstanding purchase orders
in the ordinary course of business involving less than U.S.$5,000 individually
and U.S.$25,000 in the aggregate; and (ix) contracts, agreements, arrangements
or commitments, other than the foregoing, which could reasonably be considered
material to the business of NexStar or the NexStar Subsidiary (all contracts,
agreements, arrangements or commitments to which NexStar or the NexStar
Subsidiary is a party, whether or not listed on the Disclosure Schedule, being
hereinafter referred to as "CONTRACTS"). True and correct copies of all the
Contracts listed on the Disclosure Schedule have been furnished to Zygo. All
Contracts are valid and binding in all material respects and NexStar and the
NexStar Subsidiary have duly performed their respective obligations thereunder
in all material respects to the extent such obligations have accrued, and no
breach or default thereunder by NexStar or the NexStar Subsidiary or, to the
best knowledge of NexStar, any other party thereto has occurred that could
impair the ability of NexStar or the NexStar Subsidiary to enforce any material
rights thereunder. There are no material liabilities of NexStar or the NexStar
Subsidiary or, to the best knowledge of NexStar, any other party to any of the
Contracts arising from any breach of or default in any provision thereof, nor
has there occurred any breach or default thereof by NexStar or the NexStar
Subsidiary which would permit the acceleration of any obligation of any party
thereto or the creation of a Lien upon any asset(s) of NexStar or the NexStar
Subsidiary.
(b) The consummation of the Acquisition or the other transactions
contemplated hereby will not result in any violation or termination of, default
or loss of benefit under, or give rise to a right of termination under, the
terms of any Contract.
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There are no negotiations pending or in progress to revise, in any material
respect, any Contract.
SECTION 3.18. EMPLOYEE AND LABOR MATTERS AND PLANS.
(a) The Disclosure Schedule lists each of the following plans, contracts,
policies and arrangements which is or, within six years prior to the date
hereof, was sponsored, maintained or contributed to by, or otherwise binding
upon NexStar, the NexStar Subsidiary or, in the case of an "employee pension
plan" (as defined in Section 3(2) of ERISA), an ERISA Affiliate for the benefit
of any current or former employee, director or other personnel (including any
such plan, contract, policy or arrangement approved or adopted before, but
effective on or after, the date of this Agreement): (i) any "employee benefit
plan," as such term is defined in Section 3(3) of ERISA, whether or not subject
to the provisions of ERISA; (ii) any personnel policy; and (iii) any other
employment, consulting, collective bargaining, stock option, stock bonus, stock
purchase, phantom stock, incentive, bonus, deferred compensation, retirement,
severance, vacation, dependent care, employee assistance, material fringe
benefit, medical, dental, sick leave, death benefit, golden parachute or other
compensatory plan, contract, policy or arrangement which is not an employee
benefit plan as defined in Section 3(3) of ERISA (each such plan, contract,
policy and arrangement being herein referred to as an "EMPLOYEE PLAN").
(b) With respect to each Employee Plan, NexStar has delivered to Zygo true
and complete copies of (i) each contract, plan document, policy statement,
summary plan description and other written material governing or describing the
Employee Plan and/or any related funding arrangements (including, without
limitation, any related trust agreement or insurance company contract) or, if
there are no such written materials, a summary description of the Employee Plan;
and (ii), where applicable, (1) the last two annual reports (5500 series) filed
with the IRS or the Department of Labor; (2) the most recent balance sheet and
financial statement; (3) the most recent actuarial report or valuation
statement; (4) the most recent determination letter issued by the IRS, as well
as any other determination letter, private letter ruling, opinion letter or
prohibited transaction exemption issued by the IRS or the Department of Labor
within the last six years and any application therefor which is currently
pending; and (5) the last PBGC-1 filed with the PBGC.
(c) Each Employee Plan (which, for the purpose of this subsection (c),
includes any plan, contract, policy or arrangement which is otherwise described
in subsection (a)) has been maintained and administered in all material respects
in accordance with its terms and in compliance with the provisions of applicable
law, including, without limitation, applicable disclosure, reporting, funding
and fiduciary requirements imposed by ERISA and/or the Code. All contributions,
insurance premiums, benefits and other payments required to be made to or under
each Employee Plan have been made timely and in accordance with the governing
documents and applicable law. With respect to each Employee Plan, (i) no
application, proceeding or other matter is pending before the IRS, the
Department of Labor, the PBGC or any other governmental agency; (ii) no action,
suit, proceeding or claim (other than routine claims for benefits) is pending or
threatened; and (iii) to the knowledge of NexStar, no
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facts exist which could give rise to an action, suit, proceeding or claim which,
if asserted, could result in a material liability or expense to NexStar, the
NexStar Subsidiary or the plan assets.
(d) With respect to each Employee Plan which is an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or which is a "plan" within the
meaning of Section 4975(e) of the Code, there has occurred no transaction which
is prohibited by Section 406 of ERISA or which constitutes a "prohibited
transaction" under Section 4975(c) of the Code and with respect to which a
prohibited transaction exemption has not been granted and is not currently in
effect.
(e) The Disclosure Schedule identifies each funded Employee Plan which is
an employee pension plan within the meaning of Section 3(2) of ERISA (other than
a multiemployer plan within the meaning of Section 3(37) of ERISA). With respect
to each such Employee Plan, (i) the Employee Plan is a qualified plan under
Section 401(a) of the Code, and its related trust is exempt from Federal income
taxation under Section 501(a) of the Code; (ii) a favorable IRS determination
letter is currently in effect and, since the date of the last determination
letter, the Employee Plan has not been amended or operated in a manner which
would adversely affect its qualified status and no event has occurred which has
caused or could cause the loss of such status; (iii) there has been no
termination or partial termination within the meaning of Section 411(d)(3) of
the Code; (iv) with respect to each such Employee Plan which is covered by
Section 412 of the Code, there has been no accumulated funding deficiency,
whether or not waived, within the meaning of Section 302(a)(2) of ERISA or
Section 412 of the Code, and there has been no failure to make a required
installment by its due date under Section 412(m) of the Code; and (v) with
respect to each such Employee Plan which is covered by Title IV of ERISA, (1) no
reportable event within the meaning of Section 4043(b) of ERISA and the
regulations thereunder has occurred; (2) no notice of intent to terminate the
plan has been provided to participants or filed with the PBGC under Section 4041
of ERISA, nor has the PBGC instituted or threatened to institute any proceeding
under Section 4042 of ERISA to terminate the plan; (3) no liability has been
incurred under Title IV of ERISA to the PBGC or otherwise (except for the
payment of PBGC premiums) and no event or set of conditions exists which could
subject the assets of NexStar or the NexStar Subsidiary to a lien under Section
412 of the Code or under ERISA; and (4) in the case of a defined benefit pension
plan, the value of the plan assets exceeds the total present value of the plan's
benefit liabilities on a plan termination basis based upon actuarial assumptions
and asset valuation principles applied by the PBGC (or applicable foreign law).
Neither NexStar nor the NexStar Subsidiary has ceased operations at a facility
so as to become subject to the provisions of Section 4068(f) of ERISA, withdrawn
as a substantial employer so as to become subject to the provisions of Section
4063 of ERISA or ceased making contributions to any Employee Plan which is a
pension plan subject to Section 4064(a) of ERISA.
(f) Each trust which is intended to be exempt from federal income taxation
pursuant to Section 501(c)(9) of the Code has been identified as such on the
Disclosure Schedule, and each such trust satisfies the requirements of that
Section and is covered by a favorable IRS determination letter, and neither the
trust nor any related
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plan has been amended or operated since the date of the most recent
determination letter in a manner which would adversely affect such exempt
status.
(g) No Employee Plan listed on the Disclosure Schedule is a multiemployer
plan within the meaning of Section 3(37) of ERISA. Neither NexStar nor the
NexStar Subsidiary nor any ERISA Affiliate is, or within six years prior to the
date hereof was, obligated to contribute or otherwise a party to any such
multiemployer plan. Neither NexStar nor the NexStar Subsidiary has incurred or
expects to incur any withdrawal liability under Title IV of ERISA (either as a
contributing employer or as part of a controlled group which includes a
contributing employer) in connection with a complete or partial withdrawal from
a multiemployer plan, and no ERISA Affiliate has received notice from any such
multiemployer plan that the plan is in reorganization or insolvency pursuant to
Sections 4241 or 4245 or ERISA or that the plan is intended to terminate or has
terminated under Sections 4041A or 4042 of ERISA.
(h) NexStar and the NexStar Subsidiary and their respective ERISA
Affiliates have complied in all material respects with the provisions of Section
4980B of the Code with respect to any Employee Plan or benefit arrangement which
is a group health plan within the meaning of Section 5001(b)(1) of the Code.
Except as may be required under Section 4980B of the Code or any similar state
law requiring continuous coverage with respect to health plans, neither NexStar
nor the NexStar Subsidiary maintains, contributes to, or is obligated under any
plan, contract, policy or arrangement providing health or death benefits
(whether or not insured) to current or former employees or other personnel
beyond the termination of their employment or other services. Except as set
forth in the Disclosure Schedule, each Employee Plan may be unilaterally
terminated and/or amended by NexStar or the NexStar Subsidiary at any time
without damage or penalty.
(i) The consummation of the transactions contemplated by this Agreement
will not (either alone or in conjunction with another event, such as a
termination of employment or other services) entitle any employee or other
person to receive severance or other compensation which would not otherwise be
payable absent the consummation of the transactions contemplated by this
Agreement or cause the acceleration of the time of payment or vesting of any
award or entitlement under any Employee Plan, except as contemplated by this
Agreement and the Plan of Arrangement.
(j) The Disclosure Schedule sets forth a complete and accurate list showing
the names, the rate of compensation (and the portions thereof attributable to
salary and bonuses, respectively) and location of all employees of or
consultants to NexStar, the NexStar Subsidiary or any ERISA Affiliate (each an
"EMPLOYEE"). Except as set forth on the Disclosure Schedule, there are no
covenants, agreements or restrictions, including but not limited to employee
non-compete agreements, prohibiting, limiting or in any way restricting any
Employee of the NexStar Subsidiary from engaging in any types of business
activity in any location. To the best knowledge of NexStar, no Employee and no
group of employees of NexStar, the NexStar Subsidiary or any ERISA Affiliate,
has any plans to terminate their employment or consultancy. There has not been,
and NexStar does not anticipate, any adverse change in relations
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with Employees as a result of the announcement of the transactions contemplated
by this Agreement. Neither the Company, the NexStar Subsidiary nor any ERISA
Affiliate has instituted any "freeze" of, or delayed or deferred the grant of,
any cost-of-living or other salary adjustments for any of its Employees.
(k) None of the Employees are subject to union or collective bargaining
agreements. There have been no audits of the equal employment opportunity
practices of NexStar or the NexStar Subsidiary and, to the best knowledge of
NexStar, no basis for such claim exists. There is no unfair labor practice
charge or complaint against NexStar or the NexStar Subsidiary pending before the
National Labor Relations Board or similar foreign agency or strike, dispute,
slowdown or stoppage pending or threatened against or involving NexStar or the
NexStar Subsidiary and none has occurred since the respective dates of their
inception. No representation question exists respecting the employees of NexStar
or the NexStar Subsidiary and no collective bargaining agreement is currently
being negotiated by NexStar or the NexStar Subsidiary, nor is any grievance
procedure or arbitration proceeding pending with respect to any Employee and no
claim therefor has been asserted. Neither NexStar nor the NexStar Subsidiary has
received notice from any Employee setting forth demands for representation,
elections or for present or future changes in wages, terms of employment or
working conditions.
(l) The Disclosure Schedule sets forth all outstanding loans and other
advances (other than travel advances in the ordinary course of business which do
not exceed U.S.$5,000 per individual) made by NexStar or the NexStar Subsidiary
to any of its officers, directors, employees, shareholders or consultants.
SECTION 3.19. INSURANCE POLICIES. The Disclosure Schedule contains a
correct and complete description of all insurance policies covering NexStar or
the NexStar Subsidiary and their respective business, employees, agents and
assets. Each such policy is in full force and effect and is adequate in coverage
and amount to insure fully against risks to which NexStar or the NexStar
Subsidiary and their employees, businesses, properties and other assets may be
exposed in the operation of their respective business. Such policies shall not,
pursuant to their terms, in any way be affected by, or terminate or lapse by
reason of, this Agreement or the Plan of Arrangement. All retroactive premium
adjustments under any worker's compensation policy of NexStar or the NexStar
Subsidiary have been recorded in the Financial Statements in accordance with
generally accepted accounting principles and are reflected in the Financial
Statements. All premiums with respect to such insurance policies have been paid
on a timely basis, and no notice of cancellation or termination has been
received with respect to any such policy. Neither NexStar nor the NexStar
Subsidiary has failed to give any notice or present any claim thereunder in due
and timely fashion. There are no pending claims against such insurance by or on
behalf of NexStar or the NexStar Subsidiary as to which the insurers have denied
coverage or otherwise reserved rights. Neither NexStar nor the NexStar
Subsidiary has been refused any insurance with respect to assets or operations,
nor has its coverage been limited, by any insurance carrier to which it has
applied for any such insurance with which it has carried insurance since the
respective dates of their inception.
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SECTION 3.20. RECORDS. NexStar and the NexStar Subsidiary have records that
accurately and validly reflect their respective transactions and accounting
controls sufficient to insure that such transactions are (a) in all material
respects executed in accordance with its management's general or specific
authorization and (b) recorded in conformity with generally accepted accounting
principles.
SECTION 3.21. INFORMATION SUPPLIED. The Information Circular, including any
amendments or supplements thereto, with respect to the NexStar Meeting
contemplated by Section 5.03 hereof, will comply as to form in all material
respects with the applicable provisions of the Securities Act, the Company Act
and, to the extent applicable, the Exchange Act and the rules and regulations
promulgated under any such Act, and such Information Circular will not, on the
date of filing thereof with the British Columbia Securities Commission, on the
date of dissemination thereof to the NexStar shareholders or at any time prior
to the NexStar Meeting, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
SECTION 3.22. BROKERAGE FEES. Neither NexStar, the NexStar Subsidiary nor
any of their respective Affiliates has retained any financial advisor, broker,
agent or finder or paid or agreed to pay any financial advisor, broker, agent or
finder on account of this Agreement or any transaction contemplated hereby or
any transaction of like nature that would be required to be paid by NexStar or
the NexStar Subsidiary.
SECTION 3.23. NO PRODUCT LIABILITIES; PRODUCT WARRANTIES.
(a) Neither NexStar nor the NexStar Subsidiary has incurred, nor does
NexStar know of or have any reason to believe there is any basis for alleging,
any 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 service
rendered by NexStar or the NexStar Subsidiary, 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, other
than chargebacks incurred in the ordinary course of business and consistent with
past practice and none of which have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) NexStar has furnished Zygo with the standard forms of purchase orders
for its and the NexStar Subsidiary's products and services that are in effect or
proposed to be used by the NexStar Subsidiary, which forms contain all
warranties and guarantees given by NexStar and the NexStar Subsidiary to their
customers with respect to their products and services, except for those
warranties imposed by law. There are no pending or, to the best knowledge of
NexStar, threatened claims under any warranty or guaranty against NexStar or the
NexStar Subsidiary. The Disclosure Schedule lists all payments or settlements
made in respect of any such warranty or guaranty (including without limitation
any returns or allowances) in excess of
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U.S.$5,000 since January 1, 1994, indicating the name of each customer, the
amount of each payment and a brief description of the facts relating thereto.
SECTION 3.24. SUPPLIERS AND CUSTOMERS.
(a) The Disclosure Schedule lists (i) all suppliers of NexStar and the
NexStar Subsidiary to which NexStar and the NexStar Subsidiary made payments
during the year ended December 31, 1995, or expect to make payments during the
year ending December 31, 1996, in excess of five percent of the combined cost of
sales of NexStar and the NexStar Subsidiary as reflected on NexStar's
consolidated statement of operations for such year, (ii) all customers that paid
NexStar and the NexStar Subsidiary during the year ended December 31, 1995 or
that NexStar expects will pay to NexStar and the NexStar Subsidiary during the
year ending December 31, 1996, more than five percent of the combined sales
revenues of NexStar and the NexStar Subsidiary as reflected on NexStar's
consolidated statement of operations for such year and (iii) all other suppliers
and customers the loss of any of which, individually or in the aggregate with
all other suppliers or customers Affiliated with such supplier or customer,
would have a Material Adverse Effect.
(b) Neither NexStar nor the NexStar Subsidiary has any information which
might reasonably indicate that any of the customers or suppliers of NexStar and
the NexStar Subsidiary listed on the Disclosure Schedule intend to cease
purchasing from, selling to or dealing with NexStar or the NexStar Subsidiary,
nor has any information been brought to their attention which might reasonably
lead them to believe any such customer or supplier intends to alter in any
material respect the amount of such purchases, sales or the extent of dealings
with NexStar and the NexStar Subsidiary or would alter in any material respect
such purchases, sales or dealings in the event of the consummation of the
Acquisition. NexStar has no information which might reasonably indicate, nor has
any information been brought to its attention which might reasonably lead it to
believe that, (i) any supplier will not be able to fulfill outstanding or
currently anticipated purchase orders placed by it or the NexStar Subsidiary
which, individually or in the aggregate, exceed U.S.$25,000, or (ii) any
customer will cancel outstanding or currently anticipated purchase orders placed
with the NexStar Subsidiary which, individually or in the aggregate, exceed
U.S.$25,000.
(c) Neither NexStar, the NexStar Subsidiary nor, to the best knowledge of
NexStar, any of their respective officers, directors or Affiliates, nor any
relative or spouse (or relative of such spouse) of any such officer, director or
Affiliate, nor any entity controlled by one of more of the foregoing:
(i) owns, directly or indirectly, any interest in (excepting less than
2% stock holdings for investment purposes in securities of publicly held
and traded companies), or is an officer, director, employee or consultant
of, any Person which is, or is engaged in business as, a competitor,
lessor, lessee, supplier, distributor, sales agent, customer or client of
NexStar or the NexStar Subsidiary;
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(ii) owns, directly or indirectly, in whole or in part, any tangible
or intangible property that NexStar or the NexStar Subsidiary uses in the
conduct of business; or
(iii) has any cause of action or other claim whatsoever against, or
owes any amount to, NexStar or the NexStar Subsidiary, except for claims in
the ordinary course of business such as for accrued vacation pay, accrued
benefits under employee benefit plans, and similar matters and agreements
existing on the date hereof.
SECTION 3.25. INTELLECTUAL PROPERTIES. The Disclosure Schedule contains an
accurate and complete list of all domestic and foreign patents, patent
applications, patent licenses, software licenses (other than generally available
pre-packaged "off-the-shelf" software) and know-how licenses, trade names,
trademarks, copyrights, service marks, trademark registrations and applications,
service mark registrations and applications, and copyright registrations and
applications owned (in whole or in part), licensed to any extent or used or
anticipated to be used by NexStar or the NexStar Subsidiary in the conduct of
their business, whether in the name of NexStar, any employee or otherwise
(collectively, the "INTELLECTUAL PROPERTY"). NexStar and the NexStar Subsidiary
either own all right, title and interest in and to, or possess the exclusive
right to use, the Intellectual Property, trade secrets and technology used in
the conduct of their business (including, without limitation, the exclusive
right to use and license the same (in the jurisdiction(s) where registered in
the case of trademarks, service marks and copyrights)) and each item
constituting part of the Intellectual Property in which NexStar or the NexStar
Subsidiary has an ownership or license interest has been, to the extent
indicated on the Disclosure Schedule, duly registered with, filed in or issued
by, as the case may be, the United States Patent and Trademark Office or such
other Governmental Entities as are indicated on the Disclosure Schedule and such
registrations, filings and issuances remain in full force and effect. No claim
of infringement or misappropriation of patents, trademarks, trade names, service
marks, copyrights or trade secrets of any other Person has been made nor, to the
best knowledge of NexStar, threatened against NexStar or the NexStar Subsidiary
and, to the best knowledge of NexStar, neither NexStar nor the NexStar
Subsidiary is infringing or misappropriating any patents, trademarks, trade
names, service marks, copyrights or trade secrets of any other Person. Without
limiting any other provisions hereof, neither NexStar nor the NexStar Subsidiary
has granted any license, franchise or permit to any Person to use any of the
Intellectual Property of NexStar and the NexStar Subsidiary and no other Person
has the right to use the same trademarks, service marks or trade names used by
NexStar and the NexStar Subsidiary or any similar trademarks, service marks or
trade names likely to lead to confusion. Since their respective inception dates,
the business conducted by NexStar and the NexStar Subsidiary has not been
conducted under any corporate, trade or fictitious name. The Disclosure Schedule
sets forth all trademark registrations and applications, service mark
registrations and applications and copyright registrations and applications
abandoned by NexStar or the NexStar Subsidiary since their respective inception
dates.
SECTION 3.26. LICENSES. NexStar and the NexStar Subsidiary have all
licenses, permits, consents and other governmental certificates, authorizations
and
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approvals required by every federal, state, provincial, local and foreign
Governmental Entity for the conduct of its business and the use of its
properties as presently conducted or used including, without limitation, all
licenses required under Environmental Laws and any federal, state, local or
foreign law relating to public health and safety, or employee health and safety
(collectively, "LICENSES"). The Disclosure Schedule contains a true and complete
list of the Licenses. All of the Licenses are in full force and effect and no
action or claim is pending nor, to the best knowledge of NexStar, is threatened
to revoke or terminate any License or declare any License invalid in any
material respect. NexStar and the NexStar Subsidiary have taken all necessary
action to maintain such Licenses. The Disclosure Schedule contains a true and
complete list of all federal, state, local and foreign governmental or judicial
consents, orders, decrees and other compliance agreements relating to NexStar
and the NexStar Subsidiary or any of their respective assets or business under
which NexStar or the NexStar Subsidiary is operating or bound.
SECTION 3.27. NO ILLEGAL OR IMPROPER TRANSACTIONS. Neither NexStar, the
NexStar Subsidiary nor any of their respective directors, officers, employees,
agents or Affiliates, has directly or indirectly used funds or other assets of
NexStar or the NexStar Subsidiary, or made any promise or undertaking in such
regard, for (a) illegal contributions, gifts, entertainment or other expenses
relating to political activity; (b) illegal payments to or for the benefit of
governmental officials or employees, whether domestic or foreign; (c) illegal
payments to or for the benefit of any person, firm, corporation or other entity,
or any director, officer, employee, agent or representative thereof; or (d) the
establishment or maintenance of a secret or unrecorded fund; and there have been
no false or fictitious entries made in the books or records of NexStar or the
NexStar Subsidiary.
SECTION 3.28. RESTRICTIVE DOCUMENTS AND TERRITORIAL RESTRICTIONS. Neither
NexStar nor the NexStar Subsidiary is subject to, or a party to, any charter,
by-law, mortgage, Lien, lease, license, permit, agreement, contract, instrument,
law, rule, ordinance, regulation, order, judgment or decree, or any other
restriction of any kind or character, which materially adversely affects the
business, prospects, operations or condition (financial or otherwise) of NexStar
or the NexStar Subsidiary or any of their respective assets or property, or
which would prevent consummation of the transactions contemplated hereby, or the
continued operation of NexStar or the NexStar Subsidiary's business after the
date hereof on substantially the same basis as heretofore operated or which
would restrict the ability of NexStar or the NexStar Subsidiary to acquire any
property or conduct business in any area.
SECTION 3.29. ACCOUNTING MATTERS. Neither NexStar, the NexStar Subsidiary
nor any of their Affiliates has taken or agreed to take any action that would
prevent Zygo from accounting for the Acquisition to be effected by this
Agreement and the Plan of Arrangement as a "pooling of interests" under
generally accepted accounting principles.
SECTION 3.30. NO MISLEADING STATEMENTS. This Agreement, the information and
schedules referred to herein and the certificates that have been furnished to
Zygo in connection with the transactions contemplated hereby do not include any
untrue
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statement of a material fact and do not omit to state any material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. There is no fact known
to NexStar which materially adversely affects or in the future may (so far as
NexStar can now reasonably foresee) materially adversely affect the business,
condition (financial or otherwise), property or assets of NexStar or the NexStar
Subsidiary which has not been set forth herein.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ZYGO
Except as set forth (by reference to the applicable Section of this
Agreement) in the disclosure schedule delivered by Zygo to NexStar on the date
hereof (the "ZYGO DISCLOSURE SCHEDULE"), a copy of which is attached hereto as
Schedule III, Zygo hereby agrees and represents and warrants to NexStar as
follows:
SECTION 4.01. ORGANIZATION, ETC. Zygo is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to conduct its business as it is now
being conducted and to own, operate or lease the properties and assets it
currently owns, operates or holds under lease. Zygo Canada is a corporation duly
organized, validly existing and in good standing under the laws of British
Columbia and has full corporate power and authority to conduct its business as
it is now being conducted and to own, operate or lease the properties and assets
it currently owns, operates or holds under lease. Each of Zygo and Zygo Canada
is duly qualified or licensed to do business and is in good standing as a
foreign corporation in each jurisdiction where the character of its business or
the nature of its properties makes such qualification or licensing necessary,
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect. Zygo has heretofore made available to NexStar true and correct
copies of its Certificate of Incorporation and By-laws and of the Memorandum and
Articles of Zygo Canada as in effect on the date hereof.
SECTION 4.02. CAPITALIZATION. The authorized capital stock of Zygo consists
of 15,000,000 shares of Common Stock, of which 4,804,311 shares are issued and
outstanding as of June 30, 1996 and 103,800 shares are held in treasury. The
authorized capital of Zygo Canada consists of 100,000,000 common shares and
100,000,000 Class A preferred shares, of which, as of the date hereof, one share
and no shares, respectively, are issued and outstanding and no shares are held
in treasury. The shares of Zygo Common Stock to be issued in the Acquisition
pursuant to Section 2.01 at the Effective Date will be duly authorized, and when
issued pursuant to this Agreement, will be validly issued fully paid and
nonassessable and will not have been issued in violation of any pre-emptive
rights or of any federal or state law.
SECTION 4.03. AUTHORIZATION. Each of Zygo and Zygo Canada has all requisite
corporate power and authority to enter into this Agreement, the Plan of
Arrangement and each of the other agreements contemplated hereby, and to carry
out
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its obligations under this Agreement, the Plan of Arrangement and each of the
other agreements contemplated hereby and thereby. The execution and delivery by
Zygo and Zygo Canada of this Agreement and the Plan of Arrangement, the
consummation of the transactions contemplated hereby and the performance by Zygo
and Zygo Canada of their respective obligations hereunder have been duly
authorized by all necessary corporate action on the part of Zygo and Zygo
Canada, as the case may be, subject to required approvals, to the extent any
shall be required to effect the transactions contemplated by this Agreement and
the Plan of Arrangement. This Agreement has been duly executed and delivered by
Zygo and Zygo Canada and constitutes the legal, valid and binding obligation of
Zygo and Zygo Canada, enforceable against Zygo and Zygo Canada in accordance
with its terms (except as the enforceability thereof may be limited by any
applicable bankruptcy, insolvency or other laws affecting creditors' rights
generally or by general principles of equity, regardless of whether such
enforceability is considered in equity or at law).
SECTION 4.04. NO VIOLATION. The execution and delivery of this Agreement
and the Plan of Arrangement by Zygo and Zygo Canada do not, and the consummation
by Zygo and Zygo Canada of the transactions contemplated hereby and thereby, and
compliance with the terms hereof and thereof will not, (a) conflict with, or
result in any violation of or default or loss of any benefit under, any
provision of Zygo's Certificate of Incorporation or By-laws or the Memorandum
and Articles of Zygo Canada; (b) conflict with, or result in a breach or
violation of or default or loss of any benefit under, or accelerate the
performance required by, the terms of any material agreement, contract,
indenture or other instrument to which Zygo or Zygo Canada is a party or to
which any of their respective properties are subject, or constitute a default or
loss of any right thereunder or an event which, with the lapse of time or notice
or both, might result in a material default or loss of any material right
thereunder or the creation of any Lien upon any of the assets or properties of
Zygo or Zygo Canada, in all instances, where such matter will have a Material
Adverse Effect; or (c) result in any suspension, revocation, impairment,
forfeiture or nonrenewal of any material Zygo License. Each of Zygo and Zygo
Canada are in compliance with all applicable laws, rules or regulations relating
to or affecting the operation, conduct or ownership of its respective properties
or business, other than violations that individually or in the aggregate would
not, and insofar as may reasonably be foreseen in the future will not, have a
Material Adverse Effect.
SECTION 4.05. APPROVALS. The execution and delivery of this Agreement and
the Plan of Arrangement and the consummation of the transactions contemplated
hereby by Zygo and Zygo Canada will not require the consent, approval, order or
authorization of any Governmental Entity or Regulatory Authority or any other
Person under any statute, law, rule, regulation, permit, license, agreement,
indenture or other instrument to which Zygo or Zygo Canada is a party or to
which any of their respective properties are subject, and no declaration, filing
or registration with any Governmental Entity or Regulatory Authority is required
or advisable by Zygo or Zygo Canada in connection with the execution and
delivery of this Agreement and the Plan of Arrangement, the consummation by Zygo
and Zygo Canada of the transactions contemplated hereby and thereby, or the
performance by Zygo and Zygo Canada of their respective obligations hereunder or
thereunder, other than (a) the filing of the Nasdaq
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National Market Notification Form for Listing of Additional Shares, (b)
compliance with any applicable requirements under the Exchange Act, the U.S.
Securities Act and foreign and state securities and "blue sky" laws, and the
securities laws, regulations and policies of the provinces of Canada, as
applicable, (c) filings under the Investment Canada Act, and (d) such other
filings or registrations with, or authorizations, consents or approvals of,
governmental bodies, agencies, officials or authorities, the failure of which to
make or obtain would not have a Material Adverse Effect, or would not materially
adversely affect the ability of Zygo or Zygo Canada to consummate the
Acquisition.
SECTION 4.06. U.S. COMMISSION FILINGS. Zygo has delivered to NexStar true,
correct and complete copies of (a) its Registration Statement on Form S-3 (No.
33-63775), as declared effective by the U.S. Commission on December 12, 1995
(the "REGISTRATION STATEMENT"); and (b) each report, schedule and definitive
proxy statement filed by Zygo with the U.S. Commission on or after June 30, 1995
(the "ZYGO EXCHANGE ACT FILINGS"). Zygo has timely filed in the preceding 12
months all the material required to be filed pursuant to the applicable
provisions of the U.S. Securities Act and pursuant to Section 13, 14 or 15(d) of
the Exchange Act. Neither the Registration Statement, as of the date it became
effective, nor the Zygo Exchange Act Filings, as of their respective filing
dates, contained any untrue statement of a material fact or omitted 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, and the
Zygo Exchange Act Filings were timely filed and complied when filed in all
material respects with the applicable requirements of the Exchange Act.
SECTION 4.07. FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) The audited balance sheet and any related notes and schedules included
in Zygo's Annual Report on Form 10-K for the fiscal year ended June 30, 1995
(the "ZYGO 10-K") and the unaudited balance sheet and any related notes and
schedules included in Zygo's Quarterly Report on Form 10-Q for the quarters
ended September 30, 1995, December 31, 1995 and March 31, 1996 (the "ZYGO
10-QS") each presents fairly the consolidated financial position of Zygo and the
Zygo Subsidiaries as of its respective date and the other financial statements
included in the Zygo 10-K and the Zygo 10-Qs present fairly the consolidated
results of operations or other information included therein of Zygo and the Zygo
Subsidiaries for the respective periods or as of the respective dates therein
set forth, subject, where appropriate, to normal year end adjustments which are
not material in amount or effect, in each case in accordance with generally
accepted accounting principles consisting applied during the periods involved
(except as otherwise stated therein).
(b) Except as disclosed in the Zygo Exchange Act Filings, since June 30,
1995, there has been (i) no Material Adverse Change in the assets or
liabilities, or in the business or condition, financial or otherwise, or in the
results of operations or, to the best knowledge of Zygo, prospects, of Zygo and
the Zygo Subsidiaries taken as the whole, whether as a result of any legislative
or regulatory change, revocation of any license or right to do business, fire,
explosion, accident, casualty, labor trouble, flood, drought, riot, storm,
condemnation or act of God or otherwise, and (ii) no adverse
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change in the assets or liabilities or in the business or condition, financial
or otherwise, of Zygo and the Zygo Subsidiaries except in the ordinary course or
business; and, to the best knowledge of Zygo, no fact or condition exists or is
contemplated or threatened which could reasonably be anticipated to cause such a
change in the future.
SECTION 4.08. COMPLIANCE WITH LAWS. The business of Zygo and the Zygo
Subsidiaries has not been conducted in violation of any law or any ordinance or
regulation of any Governmental Entity, except for violations that individually
or in the aggregate would not and, insofar as may reasonably be foreseen, in the
future will not, have a Material Adverse Effect. No investigation or review by
any Governmental Entity (including without limitation any audit or similar
review by any Federal, state or local taxing authority) with respect to Zygo or
any Zygo Subsidiary is pending or, to the best knowledge of Zygo, threatened,
nor has any Governmental Entity indicated in writing to Zygo an intention to
conduct the same. Neither Zygo nor any Zygo Subsidiary is in default with
respect to any order, writ, injunction or decree known to or served upon Zygo or
any Zygo Subsidiary of any Governmental Entity, which default would have a
Material Adverse Effect.
SECTION 4.09. INFORMATION SUPPLIED. None of the information supplied in
writing by Zygo for inclusion in the Information Circular will contain, at the
time of mailing of the Information Circular to shareholders of NexStar and at
the time of the NexStar Meeting, any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
SECTION 4.10. BROKERAGE FEES. Neither Zygo, any Zygo Subsidiary nor any of
their respective Affiliates has retained any financial advisor, broker, agent or
finder or paid or agreed to pay any financial advisor, broker, agent or finder
on account of this Agreement or any transaction contemplated hereby or any
transaction of like nature that would be required to be paid by Zygo or any Zygo
Subsidiary, other than the fees that will be paid in connection with the opinion
referred to in Section 4.11 hereof.
SECTION 4.11. OPINION OF FINANCIAL ADVISOR. Zygo has received the written
opinion of Alex. Brown & Sons Incorporated, financial advisor to Zygo, to the
effect that, as of the date hereof, the consideration to be paid in the
Acquisition is fair, from a financial point of view, to Zygo and its
stockholders.
SECTION 4.12. NO MISLEADING STATEMENTS. This Agreement, the information and
schedules referred to herein and the certificates that have been furnished to
NexStar by Zygo in connection with the transactions contemplated hereby do not
include any untrue statement of a material fact and do not omit to state any
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to Zygo which materially adversely affects or in the future may
(so far as Zygo can now reasonably foresee) materially adversely affect the
business, condition (financial or otherwise), property or assets of Zygo and the
Zygo Subsidiaries which has not been set forth or incorporated by reference
herein.
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ARTICLE V.
COVENANTS OF NEXSTAR
NexStar agrees that:
SECTION 5.01. CONDUCT OF NEXSTAR AND THE NEXSTAR SUBSIDIARY. From the date
hereof until the Effective Date, NexStar and the NexStar Subsidiary shall
conduct their respective businesses in the usual and ordinary course. Without
limiting the generality of the foregoing, from the date hereof until the
Effective Date, except as contemplated hereby, without the written consent of
Zygo:
(a) NexStar will not, and will not permit the NexStar Subsidiary to, adopt
or propose any change in its Articles of Incorporation or By-laws and Memorandum
or Articles, respectively, or enter into any agreement or incur any obligation
out of the ordinary course of business or the terms of which would be violated
by the consummation of the transactions contemplated by this Agreement;
(b) Except as contemplated by this Agreement or as previously approved by
Zygo in writing, NexStar will not, and will not permit the NexStar Subsidiary
to:
(i) enter into any written contract, agreement, plan or arrangement
covering any director, officer, employee or consultant of NexStar or the
NexStar Subsidiary that provides for the making of any payments, the
acceleration of vesting of any benefit or right or any other entitlement
contingent upon (A) the Acquisition or (B) the termination of employment
after the Acquisition;
(ii) enter into or amend any employment agreements (oral or written)
to increase the compensation payable or to become payable by it to any of
its employees or consultants or otherwise materially alter its employment
relationship with any officer, director, employee or consultant of NexStar
or the NexStar Subsidiary over the amount payable as of the date hereof, or
increase the compensation payable to any other employee of NexStar or the
NexStar Subsidiary (other than pursuant to plans disclosed in the
Disclosure Schedule), or adopt or, except as required by applicable law to
maintain a plan's tax-qualified status, amend any employee benefit plan or
arrangement (oral or written); or
(iii) loan or advance any money to any officer, director, employee,
shareholder or consultant of NexStar or the NexStar Subsidiary, other than
travel advances in the ordinary course of business which do not exceed
U.S.$2,000 at any time outstanding to any one person;
(c) Except pursuant to the exercise and cancellation of currently
outstanding options or warrants, NexStar will not, and will not permit the
NexStar Subsidiary to, (i) purchase, acquire, issue, deliver, sell or authorize
the issuance,
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delivery or sale of any shares of its capital stock of any class or any
securities convertible into or exchangeable for, or rights, warrants or options
to acquire, any such shares of its capital stock or convertible or exchangeable
securities, (ii) make any changes in its capital structure or (iii) enter into
any agreement or understanding or take any preliminary action with respect to
the matters referred to in clause (i) or (ii) of this paragraph (c);
(d) NexStar will, and will cause the NexStar Subsidiary to, keep in full
force and effect its existing insurance policies and will not modify or reduce
the coverage thereunder;
(e) NexStar will not (i) declare or pay any dividend or make any other
distribution to holders of its capital stock (other than dividends paid by the
NexStar Subsidiary to NexStar), (ii) split, combine or reclassify any of its
capital stock or propose or authorize the issuance of any other securities in
respect of or in lieu of or in substitution for any shares of its or their
capital stock, (iii) repurchase, redeem or otherwise acquire any shares of its
capital stock of any class or any securities convertible into or exchangeable
for, or rights, warrants or options to acquire, any such shares of its capital
stock or convertible or exchangeable securities or (iv) take any preliminary
action with respect thereto;
(f) NexStar will not, and will not permit the NexStar Subsidiary to, incur
any additional indebtedness for borrowed money (including, without limitation,
by way of guarantee or the issuance and sale of debt securities or rights to
acquire debt securities), or incur any account payable except in the ordinary
course of business, or enter into or modify any contract, agreement, commitment
or arrangement with respect to the foregoing;
(g) NexStar will not, and will not permit the NexStar Subsidiary to, enter
into any transaction that would, in the reasonable judgment of Zygo, delay the
occurrence of the Effective Date beyond October 31, 1996;
(h) Other than sales of products in the ordinary course of business and
consistent with present practice NexStar will not, and will not permit the
NexStar Subsidiary to, (i) sell, lease or otherwise dispose of any of its assets
having a book or market value in excess of U.S.$5,000 in the aggregate or that
are otherwise material, individually or in the aggregate, to the business,
results of operations or financial condition of NexStar or the NexStar
Subsidiary or (ii) enter into, or consent to the entering into of, any agreement
granting a preferential right to sell, lease or otherwise dispose of any of such
assets;
(i) NexStar will not, and will not permit the NexStar Subsidiary to, (i)
enter into any new line of business; (ii) change its investment, liability
management and other material policies in any material respect; (iii) incur or
commit to any capital expenditures, obligations or liabilities in connection
therewith other than capital expenditures, obligations or liabilities that (A)
are listed on the Disclosure Schedule or (B) in the ordinary course of business
or individually do not exceed U.S.$5,000 and in the aggregate do not exceed
U.S.$25,000; (iv) merge or consolidate with another entity,
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or acquire or agree to acquire by purchasing a substantial portion of the assets
of, or in any other manner, any business or Person; (v) otherwise, except as to
the acquisition of materials and supplies for its products and activities in the
ordinary course of business and consistent with past practices, acquire or agree
to acquire any assets, including any intellectual property rights of the type or
nature referred to in Section 3.25 hereof, for a total consideration in the
aggregate in excess of U.S.$5,000; or (vi) make any investment in any Person;
(j) NexStar will not, and will not permit the NexStar Subsidiary to, (i)
change its methods of accounting in effect at December 31, 1995 except as
required by changes in accounting principles generally accepted in the United
States concurred with by Zygo's independent auditors; (ii) change any of its
methods of accounting for income and deductions for income tax purposes from
those employed in the preparation of the income tax returns of NexStar and the
NexStar Subsidiary for the taxable year ended December 31, 1995; or (iii) change
its fiscal year;
(k) NexStar will not, and will not permit the NexStar Subsidiary to, settle
or compromise, or agree to settle or compromise, any suit or other litigation
matter or matter in an arbitration proceeding;
(l) NexStar will not, and will not permit the NexStar Subsidiary to, take
any action that would cause the transactions contemplated by this Agreement and
the Plan of Arrangement not to qualify for "pooling of interests" accounting
treatment under generally accepted accounting principles;
(m) NexStar will not, and will not permit the NexStar Subsidiary to, enter
into any license, technology development or technology transfer agreement with
any other Person;
(n) NexStar will not, and will not permit the NexStar Subsidiary to, agree
or commit to do any of the foregoing; and
(o) NexStar will not, and will not permit the NexStar Subsidiary to, enter
into any agreement or perform any act which might interfere with or be
inconsistent with the successful completion of the transactions contemplated by
this Agreement or the Plan of Arrangement.
SECTION 5.02. ACCESS TO RECORDS. At all reasonable times from and after the
date hereof until the Effective Date, NexStar shall (and shall cause the NexStar
Subsidiary to) afford Zygo and its accountants, counsel, financial advisor and
other representatives reasonable access to the properties, employees and
officers of NexStar and the NexStar Subsidiary and to all books, accounts,
financial and other records and contracts of every kind of NexStar and the
NexStar Subsidiary; provided, however, that no investigation pursuant to this
Section shall affect any representation or warranty given by NexStar to Zygo
hereunder. NexStar shall also furnish to Zygo as promptly as practicable (a) a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of the Securities Act or United States federal or
state securities laws and (b) all such financial and operating data and other
information
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concerning NexStar's and the NexStar Subsidiary's business, properties and
personnel as Zygo may reasonably request. Before the Effective Date, NexStar
will make available the officers and other appropriate employees of NexStar and
the NexStar Subsidiary to discuss with representatives of Zygo, as requested by
Zygo, the condition, operations, business and prospects of NexStar and the
NexStar Subsidiary.
SECTION 5.03. INTERIM ORDER AND FINAL ORDER. NexStar shall promptly apply
to the Court pursuant to Section 276 of the Company Act for the Interim Order
providing for, among other things, the calling and holding of the NexStar
Meeting for the purpose of the shareholders of NexStar considering and, if
thought fit, approving the Arrangement. If the approval of the Arrangement as
set forth in the Interim Order is obtained, NexStar shall promptly submit the
Arrangement to the Court and apply for the Final Order in such fashion as the
Court may direct; and promptly after the issue of the Final Order, and subject
to compliance with the other conditions provided for in Sections 8.01 and 8.03
hereof, NexStar shall file a certified copy of the Final Order for acceptance by
the Registrar to give effect to the Arrangement pursuant to Section 276 of the
Company Act.
SECTION 5.04. NEXSTAR MEETING; INFORMATION CIRCULAR. NexStar shall cause a
meeting of its shareholders to be duly called and held as promptly as
practicable (currently scheduled for September 5, 1996) for the purpose of
obtaining the shareholder approval required for adoption of the Arrangement. The
Board of Directors of NexStar shall recommend to its shareholders approval and
adoption of the Arrangement. In connection with such meeting, NexStar:
(a) will, together with Zygo, promptly prepare and will file with the
British Columbia Securities Commission and with any other appropriate regulatory
authority in all jurisdictions where the same is required and will concurrently
mail to its shareholders, and other appropriate Persons as required by
applicable law, as promptly as practicable (currently scheduled for August ___,
1996), the Information Circular and all other materials for such meeting;
(b) will use its best efforts to obtain the necessary approvals by its
shareholders of the Arrangement and the transactions contemplated hereby; and
(c) will otherwise comply with all legal requirements applicable to such
meeting.
SECTION 5.05. NO OTHER OFFERS. NexStar shall not, nor shall NexStar
authorize or permit any officer, director or employee of, or any investment
banker, attorney, accountant or other representative retained by, NexStar or the
NexStar Subsidiary to, directly or indirectly, (a) entertain, encourage, solicit
or initiate any inquiries or the making of any proposal that may reasonably be
expected to lead to any Acquisition Proposal (as hereinafter defined); (b) enter
into any agreement with respect to an Acquisition Proposal; or (c) participate
in any way in discussions or negotiations, or provide third parties with any
information, relating to any such inquiry or proposal. NexStar shall immediately
advise Zygo of any such inquiries or proposals and deliver a copy of such
inquiry or proposal (if any) to Zygo. As used herein, "ACQUISITION
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PROPOSAL" shall mean any offer or proposal for, or any indication of interest
in, (a) any merger, consolidation, tender offer, exchange offer or other
business combination involving, directly or indirectly, NexStar or the NexStar
Subsidiary, (b) any acquisition of a substantial equity interest in, or a
substantial portion of the assets of NexStar or the NexStar Subsidiary, other
than in each case the transactions contemplated by this Agreement, or (c) any
license, distribution or similar agreement in respect of any product or right to
Intellectual Property of NexStar or the NexStar Subsidiary. For purposes hereof,
a "SUBSTANTIAL EQUITY INTEREST" shall mean any equity ownership representing
beneficial ownership of five percent or more of the outstanding capital stock of
NexStar.
SECTION 5.06. MAINTENANCE OF BUSINESS. NexStar will, and will cause the
NexStar Subsidiary to, use its commercially reasonable efforts to carry on its
business, keep available the services of its officers and employees and preserve
its goodwill and relationships with those of its customers, suppliers,
licensors, licensees and others having business relationships with it that are
material to its business in substantially the same manner as it has prior to the
date hereof. If NexStar or the NexStar Subsidiary becomes aware of a material
deterioration or facts which are likely to result in a material deterioration in
the relationship with any material customer, supplier, licensor, licensee or
others having business relationships with NexStar or the NexStar Subsidiary, it
will promptly bring such information to the attention of Zygo in writing.
SECTION 5.07. COMPLIANCE WITH OBLIGATIONS. Prior to the Effective Date,
NexStar will, and will cause the NexStar Subsidiary to, comply with (a) all
applicable federal, state, provincial, local and foreign laws, rules and
regulations of Canada and the United States, (b) all agreements and obligations,
including its Memorandum and Articles, and Articles of Incorporation and
By-laws, respectively, by which it, its properties or its assets may be bound,
and (c) all decrees, orders, writs, injunctions, judgments, statutes, rules and
regulations applicable to it, its properties or its assets. Prior to the
Effective Date, NexStar will cause the NexStar Subsidiary to comply with or
perform all its obligations and covenants contained in this Agreement.
SECTION 5.08. COMFORT LETTER OF NEXSTAR'S ACCOUNTANTS; OPINIONS OF
NEXSTAR'S COUNSEL. NexStar shall use its best efforts to cause to be delivered
to Zygo at the Effective Date (a) the "comfort" letter required by Section
8.02(l) hereof and (b) the opinions of NexStar's counsel required by Section
8.02(d) hereof. In addition, following the Effective Date, NexStar shall use its
best efforts to cause to be delivered by Ehrhardt Keefe Steiner & Hottman P.C.
any consents which may be required after the Effective Date in connection with
any filing by Zygo under the U.S. Securities Act and the Exchange Act.
SECTION 5.09. AFFILIATES' LETTERS. NexStar shall cause each person who is
an "affiliate," as that term is used in paragraphs (c) and (d) of Rule 145 under
the U.S. Securities Act, of NexStar and the NexStar Subsidiary to deliver to
Zygo on or prior to the Effective Date a written agreement, substantially in the
form of Exhibit 5.09 hereto (the "AFFILIATE LETTERS"), to the effect that such
person will not offer to sell, sell or otherwise dispose of any shares of Zygo
Common Stock or other securities exchangeable or exercisable for, shares of Zygo
Common Stock or other securities of Zygo received
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or to be received by such person pursuant to the terms of this Agreement and the
Plan of Arrangement, except, in each case, pursuant to an effective registration
statement or in compliance with Rule 145, as amended from time to time, or in a
transaction which, in the opinion of legal counsel satisfactory to Zygo, is
exempt from the registration requirements of the U.S. Securities Act, and, in
any event, only after financial results covering at least thirty (30) days of
combined operations of NexStar and Zygo after the Effective Date shall have been
published, and otherwise in a manner necessary to assure the accounting
treatment of the transaction as a "pooling of interests." NexStar shall use its
commercially reasonable efforts to provide Zygo with such information as Zygo
shall reasonably request for purposes of making its own determination of persons
who may be deemed to be affiliates of NexStar and the NexStar Subsidiary.
SECTION 5.10. IRREVOCABLE PROXY AND VOTING AGREEMENTS. NexStar shall use
its best efforts to cause each of the officers and directors of NexStar and the
NexStar Subsidiary, and the holders of 5% or more of the outstanding NexStar
Common Shares to execute and deliver the Irrevocable Proxy and Voting Agreement,
in the form attached hereto as Exhibit 5.10.
SECTION 5.11. ESCROWED SHARES. NexStar shall use its commercially
reasonable efforts to obtain, on or prior to the Effective Date, the consent of
the Vancouver Stock Exchange and, if required, the consent of the British
Columbia Securities Commission, to the transfer of the Escrowed Shares to Zygo
Canada in connection with the Arrangement, and to the release of such Escrowed
Shares from escrow effective at the Effective Date.
ARTICLE VI.
COVENANTS OF ZYGO
SECTION 6.01. CONDUCT OF ZYGO. From the date hereof until the Effective
Date, without the written consent of NexStar:
(a) Zygo will not adopt or propose any changes in its Certificate of
Incorporation or By-laws, or enter into any agreement or incur any obligation,
the terms of which would be violated by the consummation of the transactions
contemplated by this Agreement; and
(b) Zygo will not, and will not permit any Zygo Subsidiary to, enter into
any transaction that would, in Zygo's reasonable judgment, delay the occurrence
of the Effective Date beyond October 31, 1996.
SECTION 6.02. U.S. COMMISSION FILINGS. Zygo shall furnish to NexStar as
promptly as practicable a copy of each report and other document filed or
received by Zygo pursuant to the requirements of the U.S. Commission.
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SECTION 6.03. NEXSTAR MEETING; NASDAQ LISTING. (a) Zygo will cooperate in a
reasonable manner with NexStar in the preparation of any filings which NexStar
may be required to make under the Securities Act with respect to information
about Zygo and the Zygo Subsidiaries which NexStar reasonably requests in
connection with the preparation of such filings.
(b) Zygo shall use all commercially reasonable efforts to have the shares
of Zygo Common Stock to be issued to the NexStar shareholders in the Acquisition
listed on the Nasdaq National Market.
SECTION 6.04. COMPLIANCE WITH OBLIGATIONS. Prior to the Effective Date,
Zygo will cause Zygo Canada to comply with or perform all its obligations and
covenants contained in this Agreement.
SECTION 6.05. OPINION OF ZYGO'S COUNSEL. Zygo shall use its best efforts to
cause to be delivered to NexStar at the Effective Date the opinion of Zygo's
counsel required by Section 8.03(c) hereof.
SECTION 6.06. ORDERS AND RULINGS. Zygo shall use commercially reasonable
efforts to obtain from securities regulatory authorities in Canada such orders
and rulings as may be required so that the shares of Zygo Common Stock to be
exchanged for NexStar Common Shares will not be subject to restrictions on
resale under the securities laws of the various provinces and terrorities of
Canada other than normal restrictions governing sales from a control block.
ARTICLE VII.
COVENANTS OF NEXSTAR AND ZYGO
NexStar and Zygo agree that:
SECTION 7.01. JOINT TRANSITION COMMITTEE. Promptly following the date
hereof NexStar and Zygo shall establish a joint transition committee, with
representatives of senior management of both companies, to recommend steps to be
carried out in combining the operations of the companies, to facilitate access
to information and to consult and advise with respect to major activities of
NexStar pending consummation of the transactions contemplated hereby and the
Plan of Arrangement; provided that such committee shall neither operate, nor
make any agreement on behalf of, either NexStar or Zygo prior to consummation of
the Plan of Arrangement.
SECTION 7.02. ADVICE OF CHANGES. Each party will promptly advise the other
such party in writing 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 Acquisition;
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(b) any notice or other communication from any Governmental Entity or
Regulatory Authority in connection with the Acquisition;
(c) any actions, suits, claims, investigation or other judicial proceedings
commenced or threatened against it or any of its Subsidiaries which, if pending
on the date of this Agreement, would have been required to have been disclosed
pursuant to this Agreement or which relate to the consummation of the
Acquisition;
(d) any event known to its executive officers occurring subsequent to the
date of this Agreement that would render any representation or warranty of such
party contained in this Agreement, if made on or as of the date of such event or
the Effective Date, untrue, inaccurate or misleading in any material respect
(other than an event so affecting a representation or warranty which is
expressly limited to a state of facts existing at a time prior to the occurrence
of such event); and
(e) any Material Adverse Change in the business condition of the party and
the NexStar Subsidiary or Zygo Subsidiaries, as applicable, taken as a whole.
From time to time prior to the Effective Date, NexStar and Zygo will promptly
supplement or amend the Schedules and Exhibits hereto with respect to any matter
hereafter arising which, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in such Schedule and
Exhibits hereto. No supplement or amendment of a Schedule or Exhibit made
pursuant to this Section shall be deemed to cure any breach of, affect or
otherwise diminish any representation or warranty made in this Agreement unless
the other party hereto specifically agrees thereto in writing.
SECTION 7.03. REGULATORY APPROVALS. Prior to the Effective Date, each party
shall execute and file, or join in the execution and filing of, any application
or other document that may be necessary in order to obtain the authorization,
approval or consent of any Governmental Entity or Regulatory Authority which may
be reasonably required, or that the other party may reasonably request, in
connection with the consummation of the Acquisition. Each party shall use its
commercially reasonable efforts to obtain all such authorizations, approvals and
consents.
SECTION 7.04. ACTIONS CONTRARY TO STATED INTENT. Neither party shall, or
shall permit any of its Subsidiaries to, take any action that would, or
reasonably might be expected to, result in any of its representations and
warranties set forth herein being or becoming untrue in any material respect, or
in any of the conditions to the Acquisition set forth in Article VIII not being
satisfied.
SECTION 7.05. CERTAIN FILINGS. NexStar and Zygo shall cooperate with one
another:
(a) in determining whether any action by or in respect of, or filing with,
any Governmental Entity or Regulatory Authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts,
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in connection with the consummation of the transactions contemplated by this
Agreement; and
(b) in seeking any such actions, consents, approvals or waivers or making
any such filings, furnishing information required in connection therewith and
seeking to obtain in a timely manner any such actions, consents, approvals or
waivers.
SECTION 7.06. PUBLIC ANNOUNCEMENTS. Zygo and NexStar will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and, except
as may be required by applicable law, the Nasdaq National Market or the
Vancouver Stock Exchange, will not issue any such press release or make any such
public statement (other than in response to unsolicited inquiries) prior to such
consultation. NexStar will consult with Zygo before issuing any other press
release or making any public statement and, except as may be required by
applicable law, will not issue any such press release or make any such public
statement without Zygo's prior consent.
SECTION 7.07. SATISFACTION OF CONDITIONS PRECEDENT. NexStar and Zygo will
use their commercially reasonable efforts to satisfy or cause to be satisfied
all the conditions precedent that are set forth in Article VIII, as applicable
to each of them, and to cause the transactions contemplated by this Agreement to
be consummated, and, without limiting the generality of the foregoing, to obtain
all consents and authorizations of third parties and to make all filings with,
and give all notices to, third parties that may be necessary or reasonably
required on its part in order to effect the transactions contemplated hereby.
Each of NexStar and Zygo agrees to negotiate in good faith with respect to any
additional agreement reasonably requested by another party hereto which such
requesting party determines in good faith is necessary to effect the
transactions contemplated hereby.
SECTION 7.08. CONFIDENTIALITY. Each of NexStar and Zygo agree to hold, and
to cause their respective Subsidiaries, directors, officers, employees and
agents to hold, in strict confidence, and not use, disclose or reveal to any
other person any confidential or proprietary information disclosed by any other
party in connection with the transactions contemplated hereby unless and until
such information has become generally available to the public through no fault
or omission on the part of the receiving party. Notwithstanding the foregoing,
NexStar and Zygo shall be permitted to make such disclosures to the public or to
governmental agencies as its respective counsel shall deem necessary to maintain
compliance with and to prevent violation of applicable laws, provided that such
counsel shall give the other party prior notice of such impending disclosure. In
the event that the Acquisition is not consummated, each party hereto will
promptly return all copies of any confidential or proprietary information
disclosed to such party in connection with the transaction contemplated hereby;
PROVIDED, HOWEVER, that one copy may be retained by counsel to such party in
order to evidence compliance with this Section 7.08.
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ARTICLE VIII.
CONDITIONS OF CLOSING
SECTION 8.01. CONDITIONS TO ALL PARTIES' OBLIGATIONS. The obligations of
all the parties to this Agreement to effect the Acquisition and the Arrangement
shall be subject to the fulfillment or satisfaction, at or prior to the
Effective Date, of the following conditions or the mutual waiver by the parties:
(a) FINAL ORDER. The Final Order shall have been obtained in form and
substance satisfactory to the parties hereto, acting reasonably.
(b) SHAREHOLDER APPROVAL. The Arrangement shall have been approved at the
NexStar Meeting in accordance with the Interim Order.
(c) ILLEGALITY OR LEGAL CONSTRAINT. No temporary restraining order,
preliminary or permanent injunction or other order or restraint issued by any
court of competent jurisdiction in the United States or Canada, no statute,
rule, regulation, order, decree, restraint or pronouncement by any Governmental
Entity, and no other legal restraint or prohibition which would prevent or have
the effect of preventing the consummation of the Acquisition or the Arrangement
shall have been issued or adopted or be in effect.
(d) GOVERNMENTAL AUTHORIZATIONS. All permits, approvals, filings and
consents required or advisable to be obtained or made prior to the consummation
of the Acquisition and Arrangement under applicable Canadian law, federal laws
of the United States or applicable laws of any state or foreign country having
jurisdiction over the Acquisition and Arrangement and the other transactions
contemplated herein shall have been obtained or made, as the case may be, on
terms and conditions satisfactory to NexStar and Zygo, acting reasonably,
including without limitation approvals by the Supreme Court of British Columbia,
the U.S. Commission, the Nasdaq National Market, the Vancouver Stock Exchange,
the British Columbia Securities Commission and all other applicable securities
regulatory authorities having jurisdiction over the exchange of Zygo Common
Stock by Zygo Canada for the NexStar Common Shares (all such permits, approvals,
filings and consents and the lapse of all such waiting periods being referred to
as the "REQUISITE REGULATORY APPROVALS"), and all such Requisite Regulatory
Approvals shall be in full force and effect.
(e) EXCHANGE. The exchange of NexStar Common Shares, including the Escrowed
Shares and options to purchase NexStar Common Shares, for Zygo Common Stock
shall be consummated without any material negative impact on the earnings of
Zygo for the current or any prior period, and Zygo shall have received an
opinion of KPMG Peat Marwick LLP to that effect.
(f) RELEASE OF ESCROWED SHARES. The Vancouver Stock Exchange and, if
required, the British Columbia Securities Commission, shall have consented to
the transfer of the Escrowed Shares to Zygo Canada in connection with the
Arrangement, and to the release of such Escrowed Shares from escrow effective at
the Effective Date.
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(g) REGISTERED SHARES. The 250,000 shares (adjusted as provided in Section
2.01 hereof) of Zygo Common Stock to be issued at the Effective Date in exchange
for the then outstanding NexStar Common Shares (i) will be registered under the
U.S. Securities Act, unless an exemption from registration under the U.S.
Securities Act is available, and will be freely tradeable in the United States,
subject only to the restrictions imposed by Rule 145 promulgated under the U.S.
Securities Act, and any restrictions on the sale or transfer of such shares of
Zygo Common Stock required to qualify the transaction for treatment as a pooling
of interests and (ii) will not be subject to restrictions on resale under the
securities laws of the various provinces and territories of Canada other than
normal restrictions governing sales from a control block.
SECTION 8.02. CONDITIONS TO THE OBLIGATIONS OF ZYGO TO EFFECT THE
ACQUISITION AND CONSUMMATE THE ARRANGEMENT. The obligations of Zygo under this
Agreement to effect the Acquisition and consummate the Arrangement are subject
to the fulfillment or satisfaction, at or prior to the Effective Date, of the
following conditions, unless waived by Zygo in its sole discretion:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of NexStar set forth in Article II hereof shall be true and correct
as of the date when made and at and as of the Effective Date, except for such
changes as are permitted by this Agreement and except to the extent a
representation or warranty speaks only as of an earlier date; PROVIDED, HOWEVER,
that any inaccuracy of a representation or warranty in existence on the
Effective Date, and which arose subsequent to the date hereof, shall not result
in the non-satisfaction of this Section 8.02(a) unless any such inaccuracy or
inaccuracies, either (i) individually or in the aggregate, represent a Material
Adverse Effect on NexStar or (ii) are willful and intentional misrepresentations
that constitute common law fraud.
(b) COVENANTS AND AGREEMENTS. NexStar shall have duly performed and
complied with the covenants and agreements required by this Agreement to be
performed by or complied with by it or the NexStar Subsidiary prior to or at the
Effective Date. None of the events or conditions entitling Zygo to terminate
this Agreement under Article IX hereof shall have occurred and be continuing.
(c) CONSENTS. Any consent required for the consummation of the Acquisition
and the Arrangement under any material Contract or License or for the continued
enjoyment by NexStar or the NexStar Subsidiary of the benefits of any such
contract or license after the Acquisition shall have been obtained.
(d) OPINION OF COUNSEL. Zygo shall have received the opinion of Chrisman
Bynum & Johnson, United States counsel to NexStar, and Getz Karby, Canadian
counsel to NexStar, each dated as of the Effective Date, in form and content
satisfactory to Zygo, substantially in the form of EXHIBIT 8.02(d)(1) AND
EXHIBIT 8.02(d)(2), respectively, hereto.
(e) CERTIFICATES OF NEXSTAR. Zygo shall have received certificates of
NexStar, satisfactory in form and substance to Zygo, executed on behalf of
NexStar by
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its Chief Executive Officer or President, as to compliance with the matters set
forth in paragraphs (a), (b), (c), (f) and (h) of this Section 8.02.
(f) NO ADVERSE DECISION. There shall not be any action taken or threatened,
or any statute, rule, regulation or order enacted, entered, threatened, or
deemed applicable to the transactions contemplated hereby, by any foreign,
Canadian or United States federal, provincial, state or local government or
Governmental Entity or Regulatory Authority or court that, whether in connection
with the grant of a Requisite Regulatory Approval, any agreement proposed by any
foreign, Canadian or United States federal, state, local or provincial
government or Governmental Entity or Regulatory Authority, or otherwise, which
(i) requires or could reasonably be expected to require any divestiture by
NexStar or the NexStar Subsidiary of a portion of its business that Zygo in its
reasonable judgment believes will have a Material Adverse Effect on NexStar or
(ii) imposes any condition upon NexStar or the NexStar Subsidiary that in Zygo's
reasonable judgment (x) would be materially burdensome to NexStar and the
NexStar Subsidiary taken as a whole or (y) would materially increase the costs
incurred or that could be incurred by Zygo as a result of consummating the
Acquisition, the Plan of Arrangement and the other transactions contemplated
hereby.
(g) PROCEEDINGS; RECEIPT OF DOCUMENTS. All corporate and other proceedings
taken or required to be taken in connection with the transactions contemplated
hereby and all documents incident thereto shall be reasonably satisfactory in
form and substance to Zygo and Zygo's counsel, and Zygo and Zygo's counsel shall
have received all such information and such counterpart originals or certified
or other copies of such documents as Zygo or its counsel may reasonably request.
Zygo shall have received such other instruments, approvals and other documents
as it may reasonably request to make effective the transactions contemplated
hereby.
(h) ADVERSE CHANGE. From the date hereof through and including the
Effective Date, neither NexStar nor the NexStar Subsidiary shall have suffered
any Material Adverse Change (whether or not such change is described in any
supplement to a Schedule hereto).
(i) EMPLOYMENT, NON-COMPETE, NON-DISCLOSURE AND NON-SOLICITATION
AGREEMENTS. Ahmad Akrami shall have entered into an employment and non-compete
agreement, in substantially the form of EXHIBIT 8.02(i)(1) hereto; each of Jerry
Crisafulli, Bobby Gulati and Richard Muir shall have entered into an employment
agreement and non-compete agreement, in substantially the form of EXHIBIT
8.02(i)(2) hereto; and each other employee of NexStar and the NexStar Subsidiary
shall have entered into a non-disclosure and non-solicitation agreement in
substantially the form of EXHIBIT 8.02(i)(3) hereof.
(j) CANADIAN FEDERAL AND PROVINCIAL TAX LIABILITY. Zygo shall have received
opinions from KPMG Peat Marwick LLP, (or such other Canadian tax auditors
selected by Zygo) and Goodman Phillips & Vineberg (or such other Canadian tax
counsel selected by Zygo) that the proposed transaction set forth in the
Agreement pursuant to which the property of NexStar will be vested in Zygo can
be effected so that Canadian federal and provincial tax liability to Zygo will
not be in excess of
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U.S.$100,000, it being understood that Goodman Phillips & Vineberg can rely upon
the opinion of local counsel in other provinces where necessary.
(k) FAIRNESS OPINION. Zygo shall have received from Alex. Brown & Sons
Incorporated, its financial advisor, an opinion to the effect that, as of the
date hereof, the consideration to be paid in the Acquisition is fair, from a
financial point of view, to Zygo and its stockholders, and Alex. Brown & Sons
Incorporated shall not have withdrawn such opinion on or prior to the Effective
Date.
(l) COMFORT LETTER. Zygo shall have received a letter, dated as of the date
hereof, and reconfirmed as of a date not more than two (2) Business Days prior
to the Effective Date, from Ehrhardt Keefe Steiner & Hottman P.C., independent
public accountants for NexStar, in form and substance reasonably satisfactory to
Zygo, to the effect that (i) they are independent accountants within the meaning
of the U.S. Securities Act and the rules and regulations thereunder, (ii) in
their opinion, the Audited Financial Statements of NexStar which were reported
on by such firm comply as to form in all material respects with the applicable
accounting requirements of the U.S. Securities Act and the Exchange Act and the
requirements of Regulation S-X of the U.S. Commission for continued use by Zygo
in its financial statements, Zygo Exchange Act Filings and other filings with
the U.S. Commission, (iii) on the basis of limited procedures specified in their
letter, which need not constitute an audit in accordance with generally accepted
auditing standards, nothing has come to their attention which would give them
reason to believe that (A) the unaudited consolidated financial statements of
NexStar at March 31, 1996 and for the three months ended March 31, 1996 and 1995
do not comply as to form in all material respects with the applicable accounting
requirements of the U.S. Securities Act and the Exchange Act, (B) since December
31, 1995 to the date of such letter there has been (1) any change in the
outstanding capital stock (other than as a result of the exercise of outstanding
options or warrants) or rights, securities, options or obligations exercisable
for or convertible into shares of capital stock of NexStar or the NexStar
Subsidiary, (2) any increase in the long term debt or short term borrowings of
NexStar or the NexStar Subsidiary or (3) any decrease in total assets or working
capital of NexStar or the NexStar Subsidiary or (C) for the period from December
31, 1995 to the end of the month for which the latest consolidated unaudited
financial statements of NexStar are available, there has been any decrease, as
compared with the corresponding prior period, in revenues, gross profit,
operating profit or net income, except in all instances for any such increase,
change or decrease contemplated by or disclosed pursuant to this Agreement.
(m) CONSENT TO USE NEXSTAR'S AUDITED FINANCIAL STATEMENTS. Zygo shall have
received from Ehrhardt Keefe Steiner & Hottman P.C. consents to use NexStar's
Audited Financial Statements in documents relating to the transaction.
(n) AFFILIATE LETTERS. Zygo shall have received the Affiliate Letters
referred to in Section 5.09.
(o) IRREVOCABLE PROXY AND VOTING AGREEMENT. Zygo shall have received the
Irrevocable Proxy and Voting Agreement referred to in Section 5.10.
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(p) POOLING OF INTERESTS. Zygo shall have received an opinion from KPMG
Peat Marwick LLP, independent public accountants, in form reasonably
satisfactory to Zygo, to the effect that the transactions contemplated by this
Agreement and the Plan of Arrangement would be properly accounted for as a
"pooling of interests" in accordance with generally accepted accounting
principles and all published rules, regulations and policies of the U.S.
Commission.
(q) DISSENTING SHAREHOLDERS OF NEXSTAR. The Dissenting Shareholders shall
not, in the aggregate, hold greater than 5% of the NexStar Common Shares which
are outstanding as of the time of the NexStar Meeting.
(r) CONSENT OF OPTION HOLDERS. Each holder of an Unvested NexStar Option(s)
and/or a Vested NexStar Option(s) shall have agreed in writing with NexStar and
Zygo Canada, in form and substance reasonably satisfactory to Zygo, to cancel
any such Unvested NexStar Options and/or Vested NexStar Options held by such
person and outstanding immediately prior to the Effective Date, without the
payment to such holder of any consideration therefor and all such options shall
have been so cancelled.
(s) SUPPORTING DOCUMENTS. Zygo and its counsel shall have received copies
of the following documents:
(i) (A) the Memorandum and Articles of NexStar and the Articles of
Incorporation of the NexStar Subsidiary, certified as of a recent date by
the Registrar of Companies of British Columbia and the Secretary of State
of the state of Colorado, respectively, (B) a certificate of said Registrar
Secretary dated as of a recent date as to the due incorporation and good
standing of NexStar and the NexStar Subsidiary, respectively, and listing
all documents of such entities on file with said Registrar Secretary, (C) a
certificate from the Secretary of State of each state or jurisdiction
listed on the Disclosure Schedule as to the NexStar Subsidiary's
qualification, good standing and payment of taxes in each such state; and
(D) a certificate of the Secretary or an Assistant Secretary (or other
officer or director executing such certificate) of the NexStar Subsidiary
dated the Effective Date and certifying: (I) that attached thereto is a
true and complete copy of the Articles of Incorporation of the NexStar
Subsidiary as in effect on the date of such certification; (II) that the
Articles of Incorporation have not been amended since the date of the
certification referred to in the certificate delivered pursuant to clause
(A) above; (III) that the NexStar Subsidiary has paid all excise taxes, if
any, owed by it through such date; and (IV) a certification by another
officer or director of the NexStar Subsidiary as to the incumbency and
signature of the officer signing the certificate referred to in this clause
(i);
(ii) a certificate of the Secretary or an Assistant Secretary (or
other officer or director executing such certificate) of NexStar dated the
Effective Date and certifying (A) that attached thereto is a true and
complete copy of all resolutions adopted by the Board of Directors and the
shareholders of NexStar authorizing the execution, delivery and performance
of this Agreement, the Plan of Arrangement and the consummation of the
Arrangement, and that all such resolutions are in full force and effect and
are all the resolutions adopted in
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connection with the transactions contemplated hereby, and (B) to the
incumbency and specimen signature of each officer or director of NexStar
executing this Agreement and any certificate or instrument furnished
pursuant hereto, and a certification by another officer or director of
NexStar as to the incumbency and signature of the officer or director
signing the certificate referred to in this clause (ii); and
(iii) such additional similar supporting documents and other information
with respect to the operations and affairs of NexStar and the NexStar Subsidiary
as Zygo or its counsel may reasonably request.
All such documents shall be satisfactory in form and substance to Zygo and its
counsel.
SECTION 8.03. CONDITIONS TO THE OBLIGATIONS OF NEXSTAR TO EFFECT THE
ACQUISITION AND CONSUMMATE THE ARRANGEMENT. The obligations of NexStar under
this Agreement to effect the Acquisition and consummate the Arrangement are
subject to the fulfillment or satisfaction, at or prior to the Effective Date,
of the following conditions, unless waived by NexStar in its sole discretion:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Zygo set forth in Article IV hereof shall be true and correct as
of the date when made and at and as of the Effective Date (except to the extent
a representation or warranty speaks only as of an earlier date and except for
changes contemplated by this Agreement); PROVIDED, HOWEVER, that any inaccuracy
of a representation or warranty in existence on the Effective Date, and which
arose subsequent to the date hereof, shall not result in the non-satisfaction of
this Section 8.03(a) unless any such inaccuracy or inaccuracies, either (i)
individually or in the aggregate, represent a Material Adverse Effect on Zygo or
(ii) are willful and intentional misrepresentations that constitute common law
fraud.
(b) COVENANTS AND AGREEMENTS. Zygo shall have duly performed and complied
with the covenants and agreements required by this Agreement to be performed or
complied with by it or the Zygo Subsidiaries prior to or at the Effective Date.
None of the events or conditions entitling NexStar to terminate this Agreement
under Article VIII hereof shall have occurred and be continuing.
(c) OPINION OF COUNSEL. NexStar shall have received the opinion of
Fulbright & Jaworski L.L.P., counsel to Zygo, in form and content satisfactory
to NexStar, substantially in the form of EXHIBIT 8.03(C) hereto.
(d) CERTIFICATES OF ZYGO. NexStar shall have received a certificate of
Zygo, satisfactory in form and substance to NexStar, executed on behalf of Zygo
by its Chief Executive Officer as to compliance with the matters set forth in
paragraphs (a) and (b) of this Section 8.03.
(e) PROCEEDINGS; RECEIPT OF DOCUMENTS. All corporate and other proceedings
taken or required to be taken in connection with the transactions contemplated
hereby and all documents incident thereto shall be reasonably satisfactory
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in form and substance to NexStar and NexStar's counsel, and NexStar and
NexStar's counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as NexStar or its
counsel may reasonably request, including, without limitation, representations
from Zygo to enable such counsel to render an opinion that the transaction, with
respect to any person who is subject to income taxation in the United States, is
a tax-free reorganization for United States federal income tax purposes. NexStar
shall have received such other instruments, approvals and other documents as it
may reasonably request to make effective the transactions contemplated hereby.
(f) SUPPORTING DOCUMENTS. NexStar and its counsel shall have received
copies of the following documents:
(i) (A) the Certificate of Incorporation of Zygo, certified as of a
recent date by the Secretary of State of the State of Delaware, (B) a
certificate of said Secretary dated as of a recent date as to the due
incorporation and good standing of Zygo, the payment of all excise taxes by
Zygo and listing all documents of Zygo on file with said Secretary, and (C)
a certificate from the Secretary of State of each state listed on the Zygo
Disclosure Schedule as to Zygo's qualification, good standing and payment
of taxes in each such state;
(ii) a certificate of the Secretary or an Assistant Secretary of Zygo
dated the Effective Date and certifying: (A) that attached thereto is a
true and complete copy of the By-laws of Zygo as in effect on the date of
such certification; (B) that attached thereto is a true and complete copy
of all resolutions adopted by the Board of Directors of Zygo authorizing
the execution, delivery and performance of this Agreement and the Plan of
Arrangement and the consummation of the Acquisition and the Arrangement,
and that all such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated
hereby; (C) that the Certificate of Incorporation of Zygo has not been
amended since the date of filing referred to in the certificate delivered
pursuant to clause (i)(B) above; and (D) to the incumbency and specimen
signature of each officer of Zygo executing this Agreement and any
certificate or instrument furnished pursuant hereto, and a certification by
another officer of Zygo as to the incumbency and signature of the officer
signing the certificate referred to in this clause (ii); and
(iii) such additional supporting documents and other information with
respect to the consummation of the transaction contemplated hereby as
NexStar or its counsel reasonably may request.
(g) NASDAQ LISTING. The common stock, par value $.10 per share, of Zygo
shall be traded on the Nasdaq National Market.
(h) ADVERSE CHANGE. From April 9, 1996, through and including the
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Effective Date, Zygo shall not have suffered any Material Adverse Change
(whether or not such change is described in any supplement to a Schedule
hereto).
ARTICLE IX.
TERMINATION, AMENDMENTS AND WAIVERS
SECTION 9.01. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Date:
(a) by the mutual consent of the Boards of Directors of Zygo and NexStar;
(b) by Zygo or NexStar if the Plan of Arrangement shall not have been
consummated on or before the close of business on October 31, 1996, unless the
failure to so consummate by such time is due to the breach of this Agreement by
the party seeking to terminate;
(c) by Zygo, if it is not in material breach of its obligations under this
Agreement, and if (A) there has been a breach by NexStar of any of its
representations and warranties hereunder such that Section 8.02(a) will not be
satisfied or (B) there has been the willful breach on the part of NexStar of any
of its covenants or agreements contained in this Agreement such that the first
sentence of Section 8.02(b) will not be satisfied, and, in both case (A) and
case (B), such breach has not been cured within ten (10) days after notice to
NexStar;
(d) by NexStar, if it is not in material breach of its obligations under
this Agreement, and if (A) there has been a breach by Zygo of any of its
representations and warranties hereunder such that Section 8.03(a) will not be
satisfied or (B) there has been the willful breach on the part of Zygo of any of
its covenants or agreements contained in this Agreement such that the first
sentence of Section 8.03(b) will not be satisfied, and, in both case (A) and
(B), such breach has not been cured within ten (10) days after notice to Zygo;
(e) by Zygo, if, after the date of this Agreement, there shall have
occurred a Material Adverse Change in NexStar and the NexStar Subsidiary taken
as a whole;
(f) by NexStar if, since April 2, 1996, there shall have occurred a
Material Adverse Change in Zygo and the Zygo Subsidiaries taken as a whole; or
(g) by Zygo if NexStar enters into a material transaction not in the
ordinary course of business without the consent of Zygo.
SECTION 9.02. EFFECT OF TERMINATION. (a) Subject to the succeeding
provisions of this Section 9.02, in the event of termination of this Agreement
by NexStar or Zygo as provided in Section 9.01 hereof, this Agreement shall,
except as
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provided herein, forthwith become void, and there shall not be any liability or
obligation with respect to the terminated provisions of this Agreement on the
part of NexStar, Zygo or Zygo Canada or their respective officers or directors,
except and to the extent such termination results from the willful breach by a
party of any of its representations, warranties or agreements hereunder.
Notwithstanding the foregoing, if a party hereto terminates this Agreement
pursuant to Section 9.01(c) or (d) because of the willful breach by the other
party of its covenants and agreements set forth herein, as the case may be, the
party terminating the Agreement in the case of a termination pursuant to section
9.01(c) or (d) shall be entitled to reimbursement for all its out-of-pocket
expenses incurred in connection with this Agreement from the other party, up to
a maximum amount of U.S.$250,000. If (A) Zygo terminates this Agreement pursuant
to Section 9.01(b) as a result of the failure on the part of NexStar to satisfy
the conditions to closing contained in Section 8.01(b), 8.01(f), 8.02(a),
8.02(i), 8.02(l), 8.02(m), 8.02(n), 8.02(o), 8.02(r) or 8.02(s)(ii), Zygo shall
be entitled to reimbursement for all its out-of-pocket expenses incurred in
connection with this Agreement from NexStar or, at Zygo's option, the NexStar
Subsidiary, up to a maximum amount of U.S.$250,000; (B) Zygo terminates this
Agreement pursuant to Section 9.01(b) as a result of the failure on the part of
NexStar to satisfy the conditions to closing contained in Section 8.02(c),
8.02(d), 8.02(g) or 8.02(h) or 8.02(p) as a result of any actions taken by
NexStar or factors relating to NexStar or by reason of NexStar's inability to
satisfy the requirements necessary for the conditions to be met, Zygo shall be
entitled to reimbursement for all its out-of-pocket expenses incurred in
connection with this Agreement from NexStar or, at Zygo's option, the NexStar
Subsidiary, up to a maximum amount of U.S.$250,000; (C) NexStar terminates this
Agreement pursuant to Section 9.01(b) as a result of the failure on the part of
Zygo to satisfy the conditions to closing contained in Section 8.02(p), 8.03(a),
8.03(c), 8.03(e) or 8.03(f)(ii), as a result of any actions taken by Zygo or
factors relating to Zygo or by reason of Zygo's inability to satisfy the
requirements necessary for the conditions to be met, NexStar shall be entitled
to reimbursement for all its out-of-pocket expenses incurred in connection with
this Agreement from Zygo, up to a maximum amount of U.S.$250,000; (D) Zygo
terminates this Agreement pursuant to Section 9.01(b) as a result of the failure
of the condition to closing contained in Section 8.02(p) to be satified solely
as a result of any actions taken by Zygo, Nexstar shall be entitled to
reimbursment for all its out-of-pocket expenses incurred in connection with this
Agreement from Zygo, up to a maximum amount of U.S.$250,000; and (E) this
Agreement is terminated and the Acquisition is not consummated due to the
failure of any other conditions to closing set forth in Article VIII to be
satisfied, in the absence of a material misrepresentation or omission or bad
faith dealings on the part of NexStar or Zygo, each of NexStar and Zygo shall
bear its own expenses. In the event that NexStar or the NexStar Subsidiary is
obligated to reimburse Zygo for Zygo's out-of-pocket expenses as provided
herein, at NexStar's option, Zygo will accept as payment therefor (a) a
promissory note (the "Note") of NexStar or the NexStar Subsidiary, as
applicable, in the principal amount equal to the amount for which such
reimbursement is owed by NexStar or the NexStar Subsidiary, in substantially the
form attached hereto as Exhibit 9.02A, together with (b) the security agreement
referred to below and (c) a guaranty of such obligation, at Zygo's option, by
the NexStar Subsidiary or NexStar, in substantially the form attached hereto as
Exhibit 9.02C. The Note shall bear interest at the prime rate of Citibank N.A.
plus 1%, be secured by all the assets
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of NexStar and the NexStar Subsidiary (pursuant to a security agreement, in
substantially the form attached hereto as Exhibit 9.02B), and mature on the
earlier of (i) 24 months from the date NexStar fails to satisfy its conditions
to closing, (ii) the date NexStar or the NexStar Subsidiary raises capital
through a financing (whether by the sale, issuance or execution of debt, equity
or other securities) and (iii) the occurrence of a Subsequent Transaction (as
hereinafter defined).
(b) Notwithstanding anything to the contrary in the foregoing, in the event
that the Acquisition and Plan of Arrangement is not consummated for any reason
(other than a breach of this Agreement by Zygo or a failure on the part of Zygo
to satisfy all of its conditions to closing the transaction contemplated by this
Agreement), and within twelve months from April 9, 1996 NexStar publicly
announces, enters into a letter of intent relating to, enters into a definitive
agreement providing for, or consummates, directly or indirectly, a transaction
other than with Zygo which, as announced, or as provided in such letter or
agreement or as consummated, provides for or relates to (including all prior
distributions to shareholders after the date hereof) the sale or disposition of
40% or more in interest of NexStar to a "person or persons affiliated with one
another" (as defined in the U.S. Securities Act), or the sale, transfer or other
distribution of assets constituting a majority (measured by fair market value)
of the consolidated assets of NexStar (each such event being referred to herein
as a "SUBSEQUENT TRANSACTION"), NexStar shall pay to Zygo, immediately after the
first to occur of such Subsequent Transaction, an amount equal to U.S.$500,000
plus all out-of-pocket expenses incurred by Zygo in connection with the
transaction contemplated by this Agreement.
(c) Notwithstanding anything to the contrary stated herein, nothing in this
Agreement shall be construed to prevent or otherwise limit the right of NexStar
or Zygo to pursue any remedy available to it or to prevent or otherwise be
deemed to limit the payment, enforcement or other effectuation of any remedy of
either Zygo or NexStar in the event of a breach of this Agreement, other than
with respect to the limitation on reimbursement of expenses as provided in
Section 9.02(a).
SECTION 9.03. AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken by their respective Boards of Directors, at any time
prior to Effective Date. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
SECTION 9.04. WAIVER. At any time prior to the Effective Date, the parties
hereto, by action taken by their respective Boards of Directors, may (a) extend
the time for the performance of any of the obligations or other acts of the
other party hereto, (b) waive any inaccuracies in the representations and
warranties of the other party hereto contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
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ARTICLE X.
GENERAL PROVISIONS
SECTION 10.01. TAKING OF NECESSARY ACTION; SPECIFIC PERFORMANCE. Subject to
the terms and conditions of this Agreement, each of the parties hereto agrees,
subject to applicable laws, to use all commercially reasonable efforts promptly
to take or cause to be taken all action and promptly to do or cause to be done
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement. Without limiting the foregoing, NexStar and Zygo shall use their
commercially reasonable efforts to obtain and make all consents, approvals,
assurances and filings of or with third parties and Governmental Entities
necessary, or in the reasonable opinion of Zygo or NexStar advisable for the
consummation of the transactions contemplated by this Agreement. Each party
shall cooperate with the other in good faith to help the other satisfy its
obligations hereunder. If at any time after the Effective Date any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers or directors of NexStar shall take all such necessary
action. Zygo and NexStar understand and agree that the covenants and
undertakings on each of their parts herein contained are uniquely related to the
desire of Zygo and NexStar to consummate the Acquisition, that the Acquisition
is a unique business opportunity for NexStar and Zygo, and that, although
monetary damages may be available for the breach of such covenants and
undertakings, monetary damages would be an inadequate remedy therefor.
Accordingly, NexStar and Zygo agree that Zygo shall be entitled to obtain
specific performance by NexStar of every such covenant and undertaking contained
herein to be performed by NexStar and the NexStar Subsidiary and NexStar shall
be entitled to obtain specific performance from Zygo of each and every covenant
and undertaking herein contained to be observed or performed by Zygo or Zygo
Canada.
SECTION 10.02. EFFECT OF DUE DILIGENCE. No investigation by or on behalf of
Zygo into the business, operations, prospects, assets or condition (financial or
otherwise) of NexStar and the NexStar Subsidiary shall diminish in any way the
effect of any representations or warranties made by NexStar in this Agreement or
shall relieve NexStar of any of its obligations under this Agreement. No
investigation by or on behalf of NexStar into the business, operations,
prospects, assets or condition (financial or otherwise) of Zygo and the Zygo
Subsidiaries shall diminish in any way the effect of any representations or
warranties made by Zygo in this Agreement or shall relieve Zygo of any of its
obligations under this Agreement.
SECTION 10.03. EXPENSES. Except as provided in Section 9.02 hereof, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring the same.
SECTION 10.04. SUCCESSORS AND ASSIGNS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties hereto.
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SECTION 10.05. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties made herein, or in any instrument delivered
pursuant to this Agreement, shall survive the Effective Date or termination of
this Agreement, except for the provisions of Sections 7.08 and 9.02 hereof.
SECTION 10.06. ENTIRE AGREEMENT. This Agreement and the other documents
referred to herein contain the entire agreement among the parties hereto with
respect to the transactions contemplated hereby, and controls and supersedes any
prior understandings, agreements or representations by or between the parties,
written or oral, which conflicts with, or may have related to, the subject
matter hereof in any way, including without limitation that certain letter of
intent, dated April 9, 1996, between Zygo and NexStar.
SECTION 10.07. NOTICES. All notices or other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally or sent by telefax communication, by recognized overnight courier
marked for overnight delivery, or by registered or certified mail, postage
prepaid, addressed as follows:
(a) If to NexStar, c/o NexStar Corporation, 2120 Miller Drive, Longmont,
Colorado 80501, Attention: Ahmad Akrami; with a copy to each of: Chrisman Bynum
& Johnson, 1900 15th Street, Boulder, Colorado 80302, Attention: David Cook,
Esq., and Getz Karby, Suite 1810, 1111 West Georgia Street, Vancouver, British
Columbia, V6E 4ME, Canada, Attention: Leon Getz, Esq.; and
(b) If to Zygo or Zygo Canada, c/o Zygo Corporation, Laurel Brook Road,
Middlefield, Connecticut 06455-0448, Attention: Gary K. Willis; with a copy to
each of: Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103, Attention: Paul Jacobs, Esq., and Goodman Phillips & Vineberg, 250 Yonge
Street, Suite 2400, Toronto, Ontario, Canada M5B 2M6, Attention: William P.
Rosenfeld, Esq.;
or such other addresses as shall be furnished by like notice by such party. All
such notices and communications shall, when telefaxed (immediately thereafter
confirmed by telephone), be effective when telefaxed, or if sent by nationally
recognized overnight courier service, be effective one Business Day after the
same has been delivered to such courier service marked for overnight delivery,
or, if mailed, be effective when received.
SECTION 10.08. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware,
without reference to or application of any conflicts of laws principles.
SECTION 10.09. CONSENT TO JURISDICTION; RECEIPT OF PROCESS. Each party
hereby consents to the jurisdiction of, and confers non-exclusive jurisdiction
upon, any federal or state court located in the City of New York, and
appropriate appellate courts therefrom, over any action, suit or proceeding
arising out of or relating to this Agreement, or any of the transactions
contemplated hereby. Each party hereby irrevocably waives, and agrees not to
assert as a defense in any such action, suit or proceeding, any objection which
it may now or hereafter have to venue of any such action, suit or proceeding
brought in any such federal or state court and hereby
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irrevocably waives any claim that any such action, suit or proceeding brought in
any such court or tribunal has been brought in an inconvenient forum. Process in
any such action, suit or proceeding may be served on any party anywhere in the
world, whether within or without the State of New York, provided that notice
thereof is provided pursuant to provisions for notice under this Agreement.
SECTION 10.10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 10.11. HEADINGS. The headings used in this Agreement are for
convenience only and are not to be considered in construing or interpreting any
term or provision of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
ZYGO CORPORATION
By: /s/ GARY WILLIS
--------------------------------
Title: President and
Chief Executive Officer
NEXSTAR AUTOMATION, INCORPORATED
By: /s/ AHMAD AKRAMI
--------------------------------
Title: President
NX ACQUISITION CORP.
By: /s/ GARY WILLIS
--------------------------------
Title: President
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS............................................................ 2
ARTICLE II............................................................. 7
Section 2.01. The Arrangement...................................... 7
Section 2.02. Exchange of Certificates............................. 8
(a) Appointment of Exchange Agent........................ 8
(b) Exchange Procedures.................................. 8
(c) Illegality of Delivery of Shares..................... 9
(d) Fractional Shares.................................... 10
(e) Distributions with Respect to Unexchanged Shares..... 10
(f) Transfers............................................ 10
(g) No Liability......................................... 10
Section 2.03. Dissenting Shares.................................... 11
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF NEXSTAR.............................. 11
Section 3.01. Organization, Etc.................................... 11
Section 3.02. The NexStar Subsidiary and Other NexStar
Interests............................................ 11
Section 3.03. Capitalization....................................... 12
Section 3.04. Authorization........................................ 13
Section 3.05. No Violation......................................... 13
Section 3.06. Approvals............................................ 14
Section 3.07. Securities Act Filings............................... 14
Section 3.08. Financial Statements and Other Information........... 15
Section 3.09. No Undisclosed Liabilities........................... 16
Section 3.10. Corporate Action..................................... 17
Section 3.11. Events Subsequent to December 31, 1995............... 17
Section 3.12. Taxes................................................ 18
Section 3.13. Litigation........................................... 19
Section 3.14. Compliance with Laws................................. 20
Section 3.15. Title to and Condition of Property................... 20
Section 3.16. Environmental Matters................................ 21
Section 3.17. Contracts............................................ 23
Section 3.18. Employee and Labor Matters and Plans................. 24
Section 3.19. Insurance Policies................................... 27
Section 3.20. Records.............................................. 28
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Section 3.21. Information Supplied................................ 28
Section 3.22. Brokerage Fees...................................... 28
Section 3.23. No Product Liabilities; Product Warranties.......... 28
Section 3.24. Suppliers and Customers............................. 29
Section 3.25. Intellectual Properties............................. 30
Section 3.26. Licenses............................................ 30
Section 3.27. No Illegal or Improper Transactions................. 31
Section 3.28. Restrictive Documents and Territorial Restrictions.. 31
Section 3.29. Accounting Matters.................................. 31
Section 3.30. No Misleading Statements............................ 31
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ZYGO................................. 32
Section 4.01. Organization, Etc................................... 32
Section 4.02. Capitalization...................................... 32
Section 4.03. Authorization....................................... 32
Section 4.04. No Violation........................................ 33
Section 4.05. Approvals........................................... 33
Section 4.06. U.S. Commission Filings............................. 34
Section 4.07. Financial Statements and Other Information.......... 34
Section 4.08. Compliance with Laws................................ 35
Section 4.09. Information Supplied................................ 35
Section 4.10. Brokerage Fees...................................... 35
Section 4.11. Opinion of Financial Advisor........................ 35
Section 4.12. No Misleading Statements............................ 35
ARTICLE V.
COVENANTS OF NEXSTAR................................................... 36
Section 5.01. Conduct of NexStar and the NexStar Subsidiary....... 36
Section 5.02. Access to Records................................... 38
Section 5.03. Interim Order and Final Order....................... 39
Section 5.04. NexStar Meeting; Information Circular............... 39
Section 5.05. No Other Offers..................................... 39
Section 5.06. Maintenance of Business............................. 40
Section 5.07. Compliance with Obligations......................... 40
Section 5.08. Comfort Letter of NexStar's Accountants; Opinions
of NexStar's Counsel................................ 40
Section 5.09. Affiliates' Letters................................. 40
Section 5.10. Irrevocable Proxy and Voting Agreements............. 41
Section 5.11. Escrowed Shares..................................... 41
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ARTICLE VI.
COVENANTS OF ZYGO...................................................... 41
Section 6.01. Conduct of Zygo..................................... 41
Section 6.02. U.S. Commission Filings............................. 41
Section 6.03. NexStar Meeting; Nasdaq Listing..................... 42
Section 6.04. Compliance with Obligations......................... 42
Section 6.05. Opinion of Zygo's Counsel........................... 42
Section 6.06. Orders and Rulings.................................. 42
ARTICLE VII.
COVENANTS OF NEXSTAR AND ZYGO.......................................... 42
Section 7.01. Joint Transition Committee.......................... 42
Section 7.02. Advice of Changes................................... 42
Section 7.03. Regulatory Approvals................................ 43
Section 7.04. Actions Contrary to Stated Intent................... 43
Section 7.05. Certain Filings..................................... 43
Section 7.06. Public Announcements................................ 44
Section 7.07. Satisfaction of Conditions Precedent................ 44
Section 7.08. Confidentiality..................................... 44
ARTICLE VIII.
CONDITIONS OF CLOSING.................................................. 45
Section 8.01. Conditions to All Parties' Obligations.............. 45
(a) Final Order.......................................... 45
(b) Shareholder Approval................................. 45
(c) Illegality or Legal Constraint....................... 45
(d) Governmental Authorizations.......................... 45
(e) Exchange............................................. 45
(f) Release of Escrowed Shares........................... 45
(g) Registered Shares.................................... 46
Section 8.02. Conditions to the Obligations of Zygo
to Effect the Acquisition and
Consummate the Arrangement............................ 46
(a) Accuracy of Representations and Warranties............ 46
(b) Covenants and Agreements.............................. 46
(c) Consents.............................................. 46
(d) Opinion of Counsel.................................... 46
(e) Certificates of NexStar............................... 46
(f) No Adverse Decision................................... 47
(g) Proceedings; Receipt of Documents..................... 47
(h) Adverse Change........................................ 47
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(i) Employment, Non-Compete, Non-Disclosure and Non-
Solicitation Agreements............................... 47
(j) Canadian Federal and Provincial Tax Liability......... 47
(k) Fairness Opinion...................................... 48
(l) Comfort Letter........................................ 48
(m) Consent to Use NexStar's Audited Financial Statements. 48
(n) Affiliate Letters..................................... 48
(o) Irrevocable Proxy and Voting Agreement................ 48
(p) Pooling of Interests.................................. 49
(q) Dissenting Shareholders of NexStar.................... 49
(r) Consent of Option Holders............................. 49
(s) Supporting Documents.................................. 49
Section 8.03. Conditions to the Obligations of
NexStar to Effect the Acquisition and
Consummate the Arrangement............................ 50
(a) Accuracy of Representations and Warranties............ 50
(b) Covenants and Agreements.............................. 50
(c) Opinion of Counsel.................................... 50
(d) Certificates of Zygo.................................. 50
(e) Proceedings; Receipt of Documents..................... 50
(f) Supporting Documents.................................. 51
(g) Nasdaq Listing........................................ 51
(h) Adverse Change........................................ 51
ARTICLE IX.
TERMINATION, AMENDMENTS AND WAIVERS..................................... 52
Section 9.01. Termination........................................... 52
Section 9.02. Effect of Termination................................. 52
Section 9.03. Amendment............................................. 54
Section 9.04. Waiver................................................ 54
ARTICLE X.
GENERAL PROVISIONS...................................................... 55
Section 10.01. Taking of Necessary Action; Specific Performance...... 55
Section 10.02. Effect of Due Diligence............................... 55
Section 10.03. Expenses.............................................. 55
Section 10.04. Successors and Assigns................................ 55
Section 10.05. Nonsurvival of Representations and Warranties......... 56
Section 10.06. Entire Agreement...................................... 56
Section 10.07. Notices............................................... 56
Section 10.08. Applicable Law........................................ 56
Section 10.09. Consent to Jurisdiction; Receipt of Process........... 56
Section 10.10. Counterparts.......................................... 57
Section 10.11. Headings.............................................. 57
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EXHIBIT 5.09
AFFILIATE LETTER
, 1996
Zygo Corporation
Laurel Brook Road
Middlefield, Connecticut 06455-0448
Attention: Gary K. Willis
Dear Sirs:
Reference is made to the Acquisition Agreement, dated as of ________ __,
1996 (the "Acquisition Agreement"), by and among (i) Zygo Corporation, a
Delaware corporation ("Zygo"), (ii) NX Acquisition Corp., a corporation
existing under the laws of British Columbia and a wholly-owned subsidiary of
Zygo ("Zygo Canada"), and (iii) NexStar Automation, Incorporated, a corporation
existing under the laws of British Columbia ("NexStar"). Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
ascribed thereto in the Acquisition Agreement.
In connection with the Acquisition, the undersigned will receive shares of
common stock, $.10 par value, of Zygo ("Zygo Common Stock"). The undersigned
acknowledges that the undersigned may be deemed an "affiliate" of NexStar within
the meaning of Rule 145 ("Rule 145") promulgated under the Securities Act of
1933, as amended (the "Act"), by the Securities and Exchange Commission (the
"SEC"), although nothing contained herein should be construed as an admission of
such fact.
If in fact the undersigned is an affiliate under the Act, the undersigned's
ability to sell, assign or transfer the Zygo Common Stock received by the
undersigned in connection with the Acquisition may be restricted unless such
transaction is registered under the Act or an exemption from such registration
is available. The undersigned understands that such exemptions are limited and
the undersigned has obtained advice of counsel as to the nature and conditions
of such exemptions, including information with respect to the applicability to
the sale of such securities of Rules 144 and 145(d) promulgated under the Act.
The undersigned further understands that Zygo does not intend to file a
registration statement under the Act for the purposes of resale of Zygo Common
Stock by the undersigned and if such a registration statement is filed Zygo will
not be required to maintain the effectiveness of such registration statement.
The undersigned understands that, in addition to the restrictions imposed by
Rule 145 on the undersigned's ability to sell, assign or transfer the Zygo
Common Stock, the SEC guidelines regarding pooling-of-interests accounting
restrict the undersigned from
<PAGE>
selling, assigning or transferring the Zygo Common Stock received by the
undersigned in connection with the Acquisition prior to the publication of
financial results covering at least 30 days of post-Acquisition combined
operations.
The undersigned hereby represents to and covenants with Zygo that the
undersigned will not sell, assign or transfer any of the Zygo Common Stock
received by the undersigned in connection with the Acquisition (a) prior to the
publication of financial results covering at least 30 days of post-Acquisition
operations and (b) except (i) pursuant to an effective registration statement
under the Act or (ii) in a transaction which, in the reasonable opinion of
Zygo's counsel, is not required to be registered under the Act and is pursuant
to procedures permitted under Rule 145; PROVIDED, HOWEVER, that in any such
case, such sale, assignment or transfer shall only be permitted if, in the
opinion of counsel of Zygo, such transaction would not have, directly or
indirectly, any adverse consequences for Zygo with respect to the treatment of
the Acquisition for tax purposes.
In the event of a sale or other disposition by the undersigned of Zygo
Common Stock pursuant to Rule 145, the undersigned will supply Zygo with
evidence of compliance with such Rule, in the form of a broker's letter in
customary form or other evidence reasonably satisfactory to Zygo and its
counsel. The undersigned understands that Zygo may instruct its transfer agent
to withhold the transfer of any Zygo Common Stock disposed of by the
undersigned, but that, provided such transfer is not prohibited by any other
provision of this letter agreement, upon receipt of such evidence of compliance,
the transfer agent shall effectuate the transfer of the Zygo Common Stock sold
as indicated in such evidence.
The undersigned acknowledges and agrees that the legend set forth below
will be placed on certificates representing Zygo Common Stock received by the
undersigned in connection with the Acquisition or held by a transferee thereof,
which legend will be removed by delivery of substitute certificates upon receipt
of an opinion in form and substance reasonably satisfactory to Zygo from its
counsel to the effect that such legend is no longer required for purposes of the
Act or the applicable provisions of this letter agreement.
There will be placed on the certificates for the Zygo Common Stock issued
to the undersigned, or any substitutions therefor, a legend stating in
substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933
applies. The shares have been acquired by the holder not with a view to, or
for resale in connection with, any distribution thereof within the meaning
of the Securities Act of 1933 and may not be sold, pledged or otherwise
transferred except in accordance with an exemption from the registration
requirement of the Securities Act of 1933."
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<PAGE>
The undersigned acknowledges that (i) the undersigned has carefully read
this letter and understands the requirement hereof and the limitations imposed
upon the distribution, sale, transfer of other disposition of Zygo Common Stock
and (ii) the receipt by Zygo of this letter is an inducement and a condition to
Zygo's obligations to consummate the Acquisition.
Very truly yours,
------------------------------
(Signature)
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(Print Name)
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<PAGE>
EXHIBIT 5.10
IRREVOCABLE PROXY
AND
VOTING AGREEMENT
VOTING AGREEMENT (this "AGREEMENT"), dated as of _____ __, 1996, between
Zygo Corporation, a Delaware corporation ("ZYGO"), and _________________________
("SELLER").
WHEREAS, concurrently herewith (i) Zygo, (ii) NX Acquisition Corp., a
corporation existing under the laws of British Columbia ("ZYGO CANADA"), and
(iii) NexStar Automation, Incorporated, a corporation existing under the laws of
British Columbia ("NEXSTAR"), are entering into an Acquisition Agreement (the
"ACQUISITION AGREEMENT");
WHEREAS, pursuant to the Acquisition Agreement, all issued and outstanding
common shares of NexStar, no par value ("NEXSTAR COMMON SHARES"), and options
and warrants to purchase NexStar Common Shares, will be exchanged for shares of
the common stock, $.10 par value ("ZYGO COMMON STOCK"), of Zygo;
WHEREAS, as of the date hereof, Seller owns beneficially and of record the
NexStar Common Shares and options to purchase NexStar Common Shares as set forth
on SCHEDULE A hereto (the "EXISTING SECURITIES," together with NexStar Common
Shares acquired after the date hereof and prior to the termination hereof,
whether upon the exercise of options or otherwise, collectively, referred to
herein as the "NEXSTAR SECURITIES"); and
WHEREAS, as a condition to their willingness to enter into the Acquisition
Agreement, Zygo has required that Seller agree, and Seller has agreed, to vote
the NexStar Securities owned by Seller and to grant to Zygo a proxy to vote the
NexStar Securities owned by Seller, all on the terms and conditions provided for
herein;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, the parties hereby agree
as follows, with all capitalized terms used herein and not otherwise defined
herein having the respective meanings ascribed thereto in the Acquisition
Agreement:
1. AGREEMENT TO VOTE; PROXY.
1.1 VOTING. Seller hereby agrees that, during the time this Agreement
is in effect, at any meeting of the NexStar shareholders (including any
adjournments or postponements thereof), Seller shall (i) vote the NexStar
Securities in favor of the Acquisition; (ii) vote the NexStar Securities
against any action or agreement that would result in a breach in any
material respect of any covenant,
<PAGE>
representation or warranty or any other obligation or agreement of NexStar under
the Acquisition Agreement; and (iii) vote the NexStar Securities against any
action or agreement (other than the Acquisition Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay, postpone or
attempt to discourage the Acquisition, including, but not limited to: (a) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving NexStar or the NexStar Subsidiary; (b) a sale or
transfer of a material amount of assets of NexStar or the NexStar Subsidiary or
a reorganization, recapitalization or liquidation of NexStar or the NexStar
Subsidiary; (c) any change in the management or board of directors of NexStar;
(d) any change in the present capitalization or dividend policy of NexStar or
the NexStar Subsidiary; or (e) any material change in the corporate structure or
business of NexStar or the NexStar Subsidiary. Seller agrees not to exercise any
dissenters' rights Seller may have under the Company Act (British Columbia) with
respect to the NexStar Common Shares.
1.2 PROXY. Seller hereby grants to Zygo a proxy to vote the NexStar
Securities as indicated in Section 1.1 above. Seller intends this proxy to
be irrevocable and coupled with an interest and will take such further
action or execute such other instruments as may be necessary to effectuate
the intent of this proxy and hereby revokes any proxy previously granted by
Seller with respect to any of the NexStar Securities.
2. EXPIRATION. This Agreement and Zygo's right to vote the NexStar
Securities governed hereby shall terminate upon the first to occur of (i) the
Effective Time of the Arrangement, (ii) termination of the Acquisition Agreement
in accordance with its terms and (iii) written notice of termination of this
Agreement by Zygo to Seller. This Agreement shall be irrevocable prior to the
termination described in the preceding sentence and shall remain in full force
and effect until such termination. Seller agrees that this Agreement shall not
be terminated by operation of law or upon the occurrence of any event
whatsoever, including the death, disability, incompetence, bankruptcy or
dissolution of Seller. If any event referred to in the preceding sentence shall
occur, whether with or without notice thereof to Zygo, Zygo shall nevertheless
be authorized and empowered to vote the NexStar Securities governed hereby in
accordance with the terms of this Agreement as if such event had not occurred.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Zygo as follows:
3.1 OWNERSHIP OF NEXSTAR SECURITIES. On the date hereof, the Existing
Securities are owned of record and beneficially by Seller. Seller has sole
voting and dispositive power, without restrictions, with respect to all of
the Existing Securities.
3.2 POWER, BINDING AGREEMENT. Seller has the legal capacity, power and
authority to enter into and perform all of his, her or its obligations
under this Agreement. The execution, delivery and performance of this
Agreement by Seller
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<PAGE>
will not violate any other agreement to which Seller is a party, including,
without limitation, any voting agreement, shareholders' agreement,
partnership agreement or voting trust. This Agreement has been duly and
validly executed and delivered by Seller and constitutes a valid and
binding obligation of Seller enforceable against Seller in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
3.3 NO CONFLICTS. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby will not,
conflict with or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, any provision of any loan or credit agreement,
note, bond, mortgage, indenture, lease, or other agreement, instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Seller or any of his, her
or its properties or assets, other than such conflicts, violations or
defaults or terminations, cancellations or accelerations which individually
or in the aggregate do not materially impair the ability of Seller to
perform his, her or its obligations hereunder. No consent, approval, order
or authorization of, or registration, declaration, or filing with, any
governmental entity is required by or with respect to the execution and
delivery of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby.
3.4 SELLER'S ACCESS TO INFORMATION. Seller (i) has received, if
requested, a copy of Zygo's Annual Report on Form 10-K for the year ended
June 30, 1995 and Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1995, December 31, 1995 and March 31, 1996, (ii) has received
a copy of the Acquisition Agreement with all Schedules and Exhibits
attached thereto and (iii) has received such other information relating to
Zygo as Seller has requested (collectively, "WRITTEN INFORMATION"), and,
prior to signing this Agreement, Seller has carefully reviewed the Written
Information that Seller has requested and received. No oral representations
have been made or oral information furnished to Seller in connection with
the Acquisition upon which Seller has relied or in any way based his, her
or its investment decision, or which were in any way inconsistent with the
Written Information. Seller understands the business in which NexStar and
Zygo, respectively, are and will be engaged and is capable of evaluating
the merits and risks of the Acquisition and an investment in the Zygo
Common Stock, and is making an informed investment decision with respect
thereto. Seller has obtained sufficient information to evaluate the merits
and risks of the Acquisition and an investment in the Zygo Common Stock and
to make such a decision.
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<PAGE>
4. CERTAIN COVENANTS OF SELLER. Seller hereby covenants and agrees as
follows:
4.1 RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE. Seller
hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (i) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the NexStar
Securities, (ii) grant any proxies, deposit any NexStar Securities into a
voting trust or enter into a voting agreement with respect to any NexStar
Securities or (iii) take any action that would make any representation or
warranty of Seller contained herein untrue or incorrect or have the effect
of preventing or disabling Seller from performing his, her or its
obligations under this Agreement.
4.2 NON SOLICITATION. Seller agrees not to enter into negotiations
with, or solicit offers from, any party (other than Zygo) regarding the
sale of capital stock or assets of NexStar or the merger, consolidation or
other combination of NexStar with any other person or entity.
4.3 ADDITIONAL SECURITIES. Seller hereby agrees, while this Agreement
is in effect, to promptly notify Zygo of the number of any new NexStar
Securities with respect to which Seller acquires voting rights after the
date hereof.
5. FURTHER ASSURANCES. From time to time, at Zygo's request and without
further consideration, Seller shall execute and deliver such additional
documents and take all such further action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
6. MISCELLANEOUS.
6.1 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i) constitutes the
entire agreement (other than the other agreements entered into which are
referenced in the Acquisition Agreement) among the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof and (ii) shall not be assigned by operation of
law or otherwise.
6.2 AMENDMENTS. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
6.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by hand delivery,
telegram or telecopy, or by mail (registered or certified mail, postage
prepaid, return receipt requested) or by any
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<PAGE>
courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
IF TO THE SELLER: c/o NexStar Corporation
2120 Miller Drive
Longmont, Colorado 80501
Attention: Ahmad Akrami
WITH A COPY TO: Chrisman Byrum & Johnson
1900 15th Street
Boulder, Colorado 80302
Attention: David Cook, Esq.
IF TO ZYGO: Zygo Corporation
Laurel Brook Road
Middlefield, Connecticut 06455-0448
Attention: Gary K. Willis
WITH A COPY TO: Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: Paul Jacobs, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.4 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to its
conflicts of laws rules.
6.5 SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by him, her or it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages
for which it would not have an adequate remedy at law for money damages
and, therefore, each of the parties hereto agrees that in the event of any
such breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
6.6 COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original, but both of which shall
constitute one and the same Agreement.
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<PAGE>
6.7 DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
6.8 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
or portion of any provision had never been contained herein.
IN WITNESS WHEREOF, Zygo and Seller have caused this Agreement to be duly
executed as of the day and year first above written.
ZYGO CORPORATION
By:______________________________________
Name:
Title:
SELLER
By:______________________________________
Name:
Title:
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<PAGE>
EXHIBIT 8.02(d)(1)
OPINION OF CHRISMAN BYNUM & JOHNSON
All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed thereto in the Acquisition Agreement.
1. The NexStar Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado and has all
requisite corporate power and authority to own, lease and operate its properties
and to conduct its business as it is now being conducted. The NexStar Subsidiary
is duly qualified or licensed to conduct its business and is in good standing in
each jurisdiction where the character of its business or the nature of its
properties makes such qualification or licensing necessary, except where the
failure to so qualify or be licensed would not have a Material Adverse Effect,
all of which jurisdictions are set forth on the Disclosure Schedule.
2. The authorized, issued and outstanding capital stock of the NexStar
Subsidiary is as set forth on the Disclosure Schedule. There are no shares of
capital stock of the NexStar Subsidiary held as treasury shares. All outstanding
shares of capital stock of the NexStar Subsidiary are owned of record and
beneficially by NexStar, free and clear of any and all Liens, and have been duly
authorized and validly issued and are fully paid and non-assessable. All of the
outstanding securities of the NexStar Subsidiary were issued in compliance with
all applicable federal and state securities and corporate laws. None of the
outstanding securities has been issued in violation of any pre-emptive rights
or, to the best of such counsel's knowledge, rights of first refusal or similar
rights. To the best of such counsel's knowledge, there are no outstanding
options, warrants, convertible securities, calls, rights, commitments,
pre-emptive rights or agreements or instruments or understandings of any
character to which the NexStar Subsidiary is a party or by which the NexStar
Subsidiary is bound, obligating the NexStar Subsidiary to issue, deliver or
sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of its capital stock or any securities or obligations
convertible into or exchangeable for such shares or to grant, extend or enter
into any such option, warrant, convertible security, call, right, commitment,
pre-emptive right or agreement. To the best of such counsel's knowledge, there
are no outstanding obligations, contingent or other, of the NexStar Subsidiary
to purchase, redeem or otherwise acquire any shares of its capital stock. To the
best of such counsel's knowledge, except as set forth in the Disclosure
Schedule, there are no voting trust agreements or other contracts, agreements,
arrangements, commitments, plans or understandings restricting or otherwise
relating to voting, dividend or other rights with respect to any of the capital
stock of the NexStar Subsidiary.
3. The execution and delivery of the Acquisition Agreement and the Plan
of Arrangement by NexStar do not, and the consummation by NexStar of the
transactions contemplated by either such agreement, and compliance with the
terms thereof will not, (a) conflict with, or result in any violation of or
default or loss of any benefit under, any
<PAGE>
provision of the organizational documents of the NexStar Subsidiary; (b)
conflict with, or result in any violation of or default or loss of any benefit
under, any statute, law, rule or regulation, or, to the best of such counsel's
knowledge, any License, grant, judgment, decree or order of any court or other
governmental agency or instrumentality to which the NexStar Subsidiary is a
party or to which any of its property is subject; (c) conflict with, or result
in a breach or violation of or default or loss of any benefit under, or
accelerate the performance required by, the terms of any agreement, contract,
indenture or other instrument known to such counsel to which the NexStar
Subsidiary is a party or to which any of its property is subject, or constitute
a default or loss of any right thereunder or an event which, with the lapse of
time or notice or both, might result in a default or loss of any right
thereunder or the creation of any Lien upon any of the assets or properties of
the NexStar Subsidiary; or (d) result in any suspension, revocation, impairment,
forfeiture or nonrenewal of any License known to such counsel. To the best of
such counsel's knowledge, the NexStar Subsidiary is in compliance with all
applicable laws, rules or regulations relating to or affecting the operation,
conduct or ownership of its property or business, other than violations that
individually or in the aggregate would not, and insofar as may reasonably be
foreseen in the future will not, have a Material Adverse Effect.
4. In the event that the Note, the security agreement and the guaranty
described in Section 9.02 of the Acquisition Agreement are executed and
delivered, each of such agreements will constitute the legal, valid and binding
obligation of the NexStar Subsidiary, enforceable against the NexStar Subsidiary
in accordance with its terms (except as the enforceability thereof may be
limited by any applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally or by general principles of equity, regardless of
whether enforceability is considered in equity or at law).
5. The execution and delivery of the Acquisition Agreement and the Plan of
Arrangement and the consummation of the transactions contemplated by either such
agreement by NexStar will not require the consent, approval, order or
authorization of any Governmental Entity or Regulatory Authority or any other
Person (i) under any statute, law, rule, regulation or (ii) under any permit,
license, agreement, indenture or other instrument known to such counsel, in any
case to which the NexStar Subsidiary is a party or to which any of its
properties are subject, and no declaration, filing or registration with any
Governmental Entity or Regulatory Authority is required or advisable by the
NexStar Subsidiary in connection with the execution and delivery of the
Acquisition Agreement and the Plan of Arrangement, the consummation of the
transactions contemplated by either such agreement, or the performance by
NexStar of its obligations thereunder.
6. To the best of such counsel's knowledge, there is no action, suit,
investigation, arbitration or proceeding pending or threatened against or
affecting the NexStar Subsidiary or any of its properties or rights (including
without limitation no charge of patent and/or trademark infringement), by or
before any Governmental Entity, or any basis in fact therefor known by such
counsel, against or involving the NexStar Subsidiary or any of its officers,
directors or
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<PAGE>
employees (in all instances, in their capacity as such), assets, business or
products, whether at law or in equity.
7. To the best of such counsel's knowledge, there are no asserted claims
for indemnification by any Person against the NexStar Subsidiary under any law
or agreement or pursuant to the Articles of Incorporation or By-laws of the
NexStar Subsidiary and such counsel is not aware of any facts or circumstances
that might give rise to the assertion of such a claim against the NexStar
Subsidiary thereunder.
8. All corporate action of the Board of Directors and of the shareholders
of the NexStar Subsidiary known to such counsel taken on or prior to the date
hereof has been duly authorized, adopted or ratified in accordance with
applicable law and the Articles of Incorporation and By-laws of the NexStar
Subsidiary, and has been duly recorded in its corporate minute books.
9. Except as heretofore disclosed in the NexStar Quarterly Report, or
otherwise set forth in the Disclosure Schedules, to the best of such counsel's
knowledge, since December 31, 1995 the NexStar Subsidiary has not (a) issued any
stock, bond or other corporate security (including without limitation securities
convertible into or rights to acquire capital stock of the NexStar Subsidiary),
(b) discharged or satisfied any Lien, (c) declared or made any payment or
distribution to shareholders or purchased or redeemed any shares of its capital
stock or other securities, (d) mortgaged, pledged or subjected to Lien any of
its assets, tangible or intangible, other than liens of current real property
taxes not yet due and payable, (e) sold, assigned or transferred any of its
tangible assets except in the ordinary course of business, (f) sold, assigned,
transferred or granted any license with respect to any patent, trademark, trade
name, service mark, copyright, trade secret or other intangible asset, (g)(i)
granted any severance or termination pay to any of its directors, officers or
employees, (ii) entered into any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) or
arrangement with any of its directors, officers or employees, (iii) increased
any benefits payable under any existing severance or termination pay policies or
employment agreements, or (iv) increased the compensation, bonus or other
benefits payable to any of its directors, officers or employees, (h) entered
into any transaction except in the ordinary course of business or as otherwise
contemplated by the Acquisition Agreement or by the Plan of Arrangement or (i)
entered into any commitment (contingent or otherwise) to do any of the
foregoing.
10. To the best of such counsel's knowledge, the NexStar Subsidiary has
complied in all material respects with all applicable laws, rules, regulation,
codes, plans, and injunctions, judgments, orders, decrees, rulings and charges
thereunder of any Governmental Entity relating to or affecting the operation,
conduct or ownership of its properties or business. To the best of such
counsel's knowledge, no investigation or review by any Governmental Entity
(including without limitation any audit or similar review by any federal,
foreign, state or local taxing authority) with respect to the NexStar Subsidiary
is pending or threatened, nor has any
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<PAGE>
Governmental Entity indicated in writing to the NexStar Subsidiary an intention
to conduct the same. To the best of such counsel's knowledge, neither the
NexStar Subsidiary nor any director, officer or employee of the NexStar
Subsidiary (in all instances, in their capacity as such), is in default with
respect to any order, writ, injunction or decree known to or served upon the
NexStar Subsidiary of any Governmental Entity, which default would have a
Material Adverse Effect. To the best of such counsel's knowledge, there is no
existing law, rule, regulation or order, whether United States federal or
Colorado (state or local), which would prohibit or materially restrict the
NexStar Subsidiary from, or otherwise materially adversely affect the NexStar
Subsidiary in, conducting its business in any jurisdiction in which it is now
conducting business.
11. Each lease or agreement known to such counsel under which the NexStar
Subsidiary is a lessee or lessor of any property, real or personal, is a valid
and binding agreement of such Person and, to the best of such counsel's
knowledge, the other party thereto (in each case with such exceptions as are,
individually or in the aggregate, not material and do not, individually or in
the aggregate, materially interfere with the use made of such properties by the
NexStar Subsidiary), to the best of such counsel's knowledge, without any
default by the NexStar Subsidiary thereunder. To the best of such counsel's
knowledge, the NexStar Subsidiary's possession of such property has not been
disturbed and no claim has been asserted, whether oral or in writing, against
the NexStar Subsidiary adverse to its rights in such leasehold interests.
NexStar Subsidiary has not 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.
12. All Licenses required under Environmental Laws that are necessary to
the operations of the business of the NexStar Subsidiary have been obtained and
are in full force and effect and such counsel is not aware of any basis for
revocation or suspension of any such licenses, permits, consents or other
approvals; and nothing has come to the attention of such counsel for it to
conclude that the business of the NexStar Subsidiary has failed at any time to
be operated in full compliance in all material respects with such Licenses. To
the best of such counsel's knowledge, no Environmental Laws impose any
obligation upon Zygo, as a result of any transaction contemplated by the
Acquisition Agreement and the Plan of Arrangement, requiring prior notification
to any Governmental Entity of the transfer of any License which is necessary to
the operations of the business of the NexStar Subsidiary. Nothing has come to
such counsel's attention for it to conclude that the NexStar Subsidiary has at
any time failed to operate its business in compliance in all material respects
with all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations of Environmental Laws and related
orders of any court or other Governmental Entity. To the best of such counsel's
knowledge, there are not any existing, pending or threatened actions, suits,
claims, investigations, inquiries or proceedings by or before any Governmental
Entity directed against the NexStar Subsidiary in connection with the operation
of its business which pertain or relate to (i) any remedial obligations under
any applicable Environmental Law, (ii) violations by the NexStar Subsidiary of
any Environmental Law, (iii) personal injury or property damage claims
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relating to a release of chemicals or Hazardous Materials by the NexStar
Subsidiary, or (iv) response, removal or remedial costs under the Comprehensive
Environmental Response, Compensation, and Liability Act or any similar state
law. No portion of the real property owned or leased by the NexStar Subsidiary
with respect to its business is listed on any Contaminated Site List.
13. All Contracts known to such counsel are valid and binding in all
material respects and nothing has come to such counsel's attention for it to
conclude that the NexStar Subsidiary has not duly performed its obligations
thereunder in all material respects to the extent such obligations have accrued,
or that any breach or default thereunder by the NexStar Subsidiary or any other
party thereto has occurred that could impair the ability of the NexStar
Subsidiary to enforce any material rights thereunder or permit the acceleration
of any obligation of any party thereto or the creation of a Lien upon any
asset(s) of the NexStar Subsidiary. The consummation of the Acquisition or the
other transactions contemplated by the Acquisition Agreement will not result in
any violation or termination of, default or loss of benefit under, or give rise
to a right of termination under, the terms of any Contract known to such
counsel.
14. Nothing has come to the attention of such counsel for it to conclude
that any Employee Plan (which includes any plan, contract, policy or arrangement
which is described in Section 3.18(a) of the Acquisition Agreement) has not been
maintained and administered in all material respects in accordance with its
terms and in compliance with the provisions of applicable law, including,
without limitation, applicable disclosure, reporting, funding and fiduciary
requirements imposed by ERISA and/or the Code. With respect to each Employee
Plan, to the best of such counsel's knowledge, (i) no application, proceeding or
other matter is pending before the IRS, the Department of Labor, the PBGC or any
other governmental agency; and (ii) no action, suit, proceeding or claim (other
than routine claims for benefits) is pending or threatened.
15. To the best of such counsel's knowledge, none of the Employees are
subject to union or collective bargaining agreements. To the best of such
counsel's knowledge, there have been no audits of the equal employment
opportunity practices of the NexStar Subsidiary and no basis for such claim
exists. To the best of such counsel's knowledge, there is no unfair labor
practice charge or complaint against the NexStar Subsidiary pending before the
National Labor Relations Board or similar foreign agency or strike, dispute,
slowdown or stoppage pending or threatened against or involving the NexStar
Subsidiary. To the best of such counsel's knowledge, no collective bargaining
agreement is currently being negotiated by the NexStar Subsidiary, nor is any
grievance procedure or arbitration proceeding pending with respect to any
Employee and no claim therefor has been asserted.
16. To the best of such counsel's knowledge, such Information Circular did
not, on the date of filing thereof with the British Columbia Securities
Commission, on the date of dissemination thereof to the NexStar shareholders or
at any time prior to the NexStar Meeting, as the case may be, contain any untrue
statement of a material fact or omit to state any material
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<PAGE>
fact, in all cases with respect to the NexStar Subsidiary, required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
17. To the best of such counsel's knowledge, no claim of infringement or
misappropriation of patents, trademarks, trade names, service marks, copyrights
or trade secrets of any other Person has been made nor threatened against the
NexStar Subsidiary and, nothing has come to such counsel's attention for it to
conclude that the NexStar Subsidiary is infringing or misappropriating any
patents, trademarks, trade names, service marks, copyrights or trade secrets of
any other Person. To the best of such counsel's knowledge, the NexStar
Subsidiary has not granted any license, franchise or permit to any Person to use
any of the Intellectual Property of the NexStar Subsidiary. Nothing has come to
such counsel's attention for it to conclude that any other Person has the right
to use the same trademarks, service marks or trade names used by the NexStar
Subsidiary or any similar trademarks, service marks or trade names likely to
lead to confusion.
18. Nothing has come to such counsel's attention for it to conclude that
the NexStar Subsidiary does not have all licenses, permits, consents and other
governmental certificates, authorizations and approvals required by every
federal or Colorado (state or local) Governmental Entity for the conduct of its
business and the use of its properties as presently conducted or used including,
without limitation, all licenses required under Environmental Laws and any
federal Colorado (state or local), law relating to public health and safety, or
employee health and safety. All of the Licenses listed on the Disclosure
Schedule are in full force and effect and, to the best of such counsel's
knowledge, no action or claim is pending nor threatened to revoke or terminate
any License or declare any License invalid in any material respect. The
Disclosure Schedule contains a true and complete list of all federal Colorado
(state or local) governmental or judicial consents, orders, decrees and other
compliance agreements known to such counsel relating to the NexStar Subsidiary
or any of its assets or business under which the NexStar Subsidiary is operating
or bound.
19. Nothing has come to such counsel's attention for it to conclude that
the Acquisition Agreement, the information and schedules referred to therein and
the certificates that have been furnished to Zygo in connection with the
transactions contemplated thereby include any untrue statement of a material
fact and omit to state any material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States,
Colorado and other jurisdictions in which they are admitted, to the extent such
counsel deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance reasonably satisfactory to
Zygo) of other counsel reasonably acceptable to Zygo, familiar with the
applicable laws; provided that such counsel shall state that they believe that
Zygo is entitled to rely on such
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<PAGE>
opinion or opinions; and (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers and other representatives
of NexStar, certificates of public officials, and certificates or other written
statements of officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of NexStar and the
NexStar Subsidiary, provided that copies of any such statements or certificates
shall be delivered to Zygo.
Such counsel may state that they are admitted to practice in Colorado and
that such counsel expresses no opinion as to the laws of, or the effect or
applicability of the laws of, any jurisdiction other than Colorado and the
federal laws of the United States to the extent referred to specifically in the
opinion.
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<PAGE>
EXHIBIT 8.02(d)(2)
OPINION OF GETZ KARBY
Whenever our opinion is qualified by the phrase "to the best of our
knowledge" or similar language, it is intended to indicate that during the
course of representing NexStar no information has come to our attention which
has given us actual knowledge of the facts or circumstances referred to.
However, except to the extent expressly described in this letter, we have not
undertaken any special or independent investigation to determine the existence
or absence of such facts or circumstances.
All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed thereto in the Acquisition Agreement.
1. NexStar is a corporation duly organized, validly existing and in good
standing under the laws of British Columbia and has full corporate power and
authority to conduct its business as it is now being conducted and to own,
operate or lease the properties and assets it currently owns, operates or holds
under lease. NexStar is duly qualified or licensed to do business and is in good
standing as a foreign corporation in each jurisdiction where the character of
its business or the nature of its properties makes such qualification or
licensing necessary, except where the failure to so qualify or be licensed would
not have a Material Adverse Effect, all of which jurisdictions are set forth on
the Disclosure Schedule.
2. To the best of our knowledge, the Disclosure Schedule contains a list of
all Subsidiaries (other than the NexStar Subsidiary), partnerships, joint
ventures and other entities in which NexStar has, directly or indirectly, any
legal or beneficial interest and indicates for each such Subsidiary,
partnership, joint venture or other entity: (i) the percentage and type of
equity securities of or other interest in the NexStar Interest owned or
controlled by NexStar; (ii) the identity of any other beneficial or record owner
of any such NexStar Interest and the percentage and type of such ownership;
(iii) the jurisdiction of incorporation or organization; (iv) each jurisdiction
in which it is qualified or licensed to conduct its business; and (v) in the
case of any joint venture, the identity of each other joint venture partner.
NexStar is the direct owner of record and, to the best of our knowledge,
beneficially of all such equity securities or other interests listed as being
owned by it, free and clear of all Liens.
3. The authorized, issued and outstanding shares of NexStar are as set
forth on the Disclosure Schedule. There are no shares of NexStar that have been
repurchased by NexStar and not cancelled. The designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of each class
and series of authorized shares of NexStar are as set forth in NexStar's
Memorandum and Articles, and all such designations, powers, preferences, rights,
qualifications, limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable and corporate laws. All outstanding shares
of NexStar have been duly authorized and validly issued as fully paid and
non-assessable. All of the outstanding securities of NexStar were issued in
compliance with all applicable Canadian and provincial securities and
<PAGE>
corporate laws. None of the outstanding securities of NexStar has been issued in
violation of any pre-emptive rights or, to the best of our knowledge, rights of
first refusal or similar rights. To the best of our knowledge, except as set
forth in the Disclosure Schedule, there are no outstanding options, warrants,
convertible securities, calls, rights, commitments, pre-emptive rights or
agreements or instruments or understandings of any character to which NexStar is
a party or by which NexStar is bound, obligating NexStar to issue, deliver or
sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of its capital stock or any securities or obligations
convertible into or exchangeable for such shares or to grant, extend or enter
into any such option, warrant, convertible security, call, right, commitment,
pre-emptive right or agreement. To the best of our knowledge, there are no
outstanding obligations, contingent or other, of NexStar to purchase, redeem or
otherwise acquire any shares of its capital stock. To the best of our knowledge,
except as set forth in the Disclosure Schedule, there are no voting trust
agreements or other contracts, agreements, arrangements, commitments, plans or
understandings restricting or otherwise relating to voting, dividend or other
rights with respect to any shares of NexStar or the NexStar Subsidiary.
4. NexStar has all requisite corporate power and authority to enter into
the Acquisition Agreement and each of the other agreements contemplated thereby,
to carry out its obligations under the Acquisition Agreement and each of the
other agreements contemplated thereby and to consummate the transactions
contemplated thereby. The execution and delivery of the Acquisition Agreement,
the consummation of the transactions contemplated thereby and the performance by
NexStar of its obligations thereunder have been duly authorized by all necessary
corporate action on the part of NexStar. The Acquisition Agreement has been duly
executed and delivered by NexStar and constitutes the legal, valid and binding
obligation of NexStar enforceable against NexStar in accordance with its terms
(except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether enforceability is considered
in equity or at law). In the event that the Note, the security agreement and the
guaranty described in Section 9.02 of the Acquisition Agreement are executed and
delivered, each of such agreements will constitute the legal, valid and binding
obligation of NexStar or the NexStar Subsidiary, as the case may be, enforceable
against NexStar or the NexStar Subsidiary, as the case may be, in accordance
with its terms (except as the enforceability thereof may be limited by any
applicable bankruptcy, insolvency or other laws affecting creditors' rights
generally or by general principles of equity, regardless of whether
enforceability is considered in equity or at law).
5. The execution and delivery of the Acquisition Agreement by NexStar does
not, and the consummation by NexStar of the transactions contemplated thereby,
and compliance with the terms thereof will not, (a) conflict with, or result in
any violation of or default or loss of any benefit under, any provision of
NexStar's Memorandum and Articles; (b) conflict with, or result in any violation
of or default or loss of any benefit under, any statute, law, rule or regulation
of the Province of British Columbia or Canada, or, to the best of our knowledge,
any License, grant, judgment, decree or order of any court or other governmental
agency or instrumentality
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<PAGE>
to which Nexstar is a party or to which any of NexStar's property is subject;
(c) to the best of our knowledge, conflict with, or result in a breach or
violation of or default or loss of any benefit under, or accelerate the
performance required by, the terms of any agreement, contract, indenture or
other instrument to which NexStar is a party or to which its property is
subject, or constitute a default or loss of any right thereunder or an event
which, with the lapse of time or notice or both, might result in a default or
loss of any right thereunder or result in the creation of any Lien upon any of
the assets or properties of NexStar or the NexStar Subsidiary; or (d) result in
any suspension, revocation, impairment, forfeiture or nonrenewal of any License
known to us. NexStar is in compliance with all applicable laws, rules or
regulations relating to or affecting the operation, conduct or ownership of its
property or business, other than violations that individually or in the
aggregate would not, and insofar as may reasonably be foreseen in the future
will not, have a Material Adverse Effect.
6. The execution and delivery of the Acquisition Agreement and the
consummation by NexStar of the transactions contemplated thereby by NexStar will
not require the consent, approval, order or authorization of any Governmental
Entity or Regulatory Authority or any other Person (i) under any statute, law,
rule, regulation or (ii) under any permit, license, agreement, indenture or
other instrument known to us, in any case to which NexStar is a party or to
which any of its properties are subject, and no declaration, filing or
registration with any Governmental Entity or Regulatory Authority is required by
NexStar in connection with the execution and delivery of the Acquisition
Agreement, the consummation of the transactions contemplated thereby, or the
performance by NexStar of its obligations thereunder, other than in connection
with or in compliance with the provisions of the rules, regulations and By-laws
of the Vancouver Stock Exchange, the Securities Act and the securities laws of
the other provinces of Canada, as applicable, the Interim Order and the Final
Order, all of which actions have been duly taken.
7. The Final Order approving the Plan of Arrangement has been issued by the
Supreme Court of British Columbia.
8. NexStar has timely filed all the material required to be filed pursuant
to the applicable provisions of the Securities Act. To the best of our
knowledge, each final prospectus, management proxy circular and press releases,
material change reports and interim and annual financial statements filed by
NexStar with the British Columbia Securities Commission and each report filed by
NexStar with the British Columbia Securities Commission and any other principal
regulatory authority having jurisdiction with respect to NexStar, as of the
dates they were respectively filed with the securities commissions or other
regulatory authorities, did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. NexStar is a reporting issuer not in default
under the Securities Act and is not a reporting issuer or the equivalent thereof
in any other province of Canada.
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<PAGE>
9. To the best of our knowledge, there is no action, suit, investigation,
arbitration or proceeding pending or threatened against or affecting NexStar or
its properties or rights (including without limitation no charge of patent
and/or trademark infringement), by or before any Governmental Entity, or any
basis in fact therefor known by us.
10. To the best of our knowledge, there are no asserted claims for
indemnification by any Person against NexStar under any law or agreement or
pursuant to the Memorandum and Articles of NexStar.
11. All corporate action of the Board of Directors and of the shareholders
of NexStar known to us taken on or prior to the date hereof has been duly
authorized, adopted or ratified in accordance with applicable law and the
Memorandum and Articles of NexStar, and has been duly recorded in its corporate
minute books.
12. Except as heretofore disclosed in the NexStar Quarterly Report, or
otherwise set forth in the Disclosure Schedules, to the best of our knowledge,
since December 31, 1995 neither NexStar nor the NexStar Subsidiary has (a)
issued any stock, bond or other corporate security (including without limitation
securities convertible into or rights to acquire capital stock of NexStar or the
NexStar Subsidiary), (b) declared or made any payment or distribution to
shareholders or purchased or redeemed any shares of its capital stock or other
securities, (c) entered into any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) or
arrangement with any of its directors or executive officers, (d) increased any
benefits payable under any existing severance or termination pay policies or
employment agreements, or (e) entered into any commitment (contingent or
otherwise) to do any of the foregoing.
13. To the best of our knowledge, NexStar has complied in all material
respects with injunctions, judgments, orders, decrees, rulings and charges
thereunder known to us of any Governmental Entity relating to or affecting the
operation, conduct or ownership of their respective properties or business. To
the best of our knowledge, no investigation or review by any Governmental Entity
(including without limitation any audit or similar review by any federal,
foreign, state, provincial or local taxing authority) with respect to NexStar is
pending or threatened. To the best of our knowledge, neither NexStar nor any
director or executive officer of NexStar (in their capacity as such), is in
default with respect to any order, writ, injunction or decree known to or served
upon NexStar, which default would have a Material Adverse Effect.
14. To the best of our knowledge, no event has occurred and is continuing
which, with due notice or lapse of time or both, would constitute a default or
event of default by NexStar under any lease or agreement under which NexStar is
a lessee or lessor of any property, real or personal, or by any other party
thereto.
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<PAGE>
15. To the best of our knowledge, no Environmental Laws impose any
obligation upon Zygo, as a result of any transaction contemplated by the
Acquisition Agreement and the Plan of Arrangement, requiring prior notification
to any Governmental Entity of the transfer of any License which is necessary to
the operations of the business of NexStar. To the best of our knowledge, NexStar
has at all times operated its business in compliance in all material respects
with all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations of Environmental Laws and related
orders of any court or other Governmental Entity. To the best our knowledge,
there are no existing, pending or threatened actions, suits, claims,
investigations, inquiries or proceedings by or before any Governmental Entity
directed against NexStar in connection with the operation of its business which
pertain or relate to (i) any remedial obligations under any applicable
Environmental Law, or (ii) violations by NexStar of any Environmental Law, (iii)
personal injury or property damage claims relating to a release of chemicals or
Hazardous Materials by NexStar.
16. All Contracts known to us are valid and binding in all material
respects with respect to NexStar, and, to the best of our knowledge, no breach
or default thereunder by NexStar or any other party thereto has occurred that
could impair the ability of NexStar to enforce any material rights thereunder or
which would permit the acceleration of any obligation of NexStar or the creation
of a Lien upon any asset(s) of NexStar or the NexStar Subsidiary. To the best of
our knowledge, the consummation of the Acquisition or the other transactions
contemplated by the Acquisition Agreement will not result in any violation or
termination of, default or loss of benefit under, or give rise to a right of
termination under, the terms of any Contract.
17. To the best of our knowledge, no collective bargaining agreement is
currently being negotiated by NexStar, nor is any grievance procedure or
arbitration proceeding pending with respect to any Employee and no claim
therefor has been asserted.
18. The Information Circular, including any amendments or supplements
thereto, with respect to the NexStar Meeting, complied as to form in all
material respects with the applicable provisions of the Securities Act and the
Company Act and the rules and regulations promulgated under any such Act, and,
to the best of our knowledge, such Information Circular did not, on the date of
filing thereof with the British Columbia Securities Commission, on the date of
dissemination thereof to the NexStar shareholders or at any time prior to the
NexStar Meeting, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
19. To the best of our knowledge, no claim of infringement or
misappropriation of patents, trademarks, trade names, service marks, copyrights
or trade secrets of any other Person has been made or threatened against NexStar
and NexStar is not infringing or misappropriating any patents, trademarks, trade
names, service marks, copyrights or trade secrets of any other Person.
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<PAGE>
20. To the best of our knowledge, the Acquisition Agreement, the
information and schedules referred to therein and the certificates that have
been furnished to Zygo in connection with the transactions contemplated thereby
do not include any untrue statement of a material fact and do not omit to state
any material fact necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading.
In rendering the foregoing opinion, we have relied as to matters of fact on
certificates of responsible officers and other representatives of NexStar,
certificates of public officials, and certificates or other written statements
of officers of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of NexStar, provided that
copies of any such statements or certificates shall be delivered to Zygo.
We are admitted to practice in British Columbia only and express no opinion
as to the laws of, or the effect or applicability of the laws of, any
jurisdiction other than British Columbia and the laws of Canada to the extent
applicable in British Columbia.
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<PAGE>
EXHIBIT 8.02(i)(1)
EMPLOYMENT AGREEMENT
AGREEMENT, made as of ____________, 1996, between NexStar Corporation, a
Colorado corporation (the "Company"), and Ahmad Akrami, residing at
__________________________________ ("Employee").
W I T N E S S E T H :
WHEREAS, the Company desires that Employee be employed by the Company, and
Employee desires to be so employed by the Company upon the terms and conditions
herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, representations and covenants herein contained, the parties hereto
agree as follows:
1. EMPLOYMENT.
The Company hereby employs Employee and Employee hereby accepts such
employment, subject to the terms and conditions herein set forth. Employee shall
hold the position of President of NexStar Corporation, a business unit initially
being operated in the form of a subsidiary of Zygo Corporation ("Zygo"). Zygo
currently intends to continue operating the business unit from its location in
Colorado.
2. TERM.
The initial term of employment under this Agreement shall begin on
____________, 1996 (the "Employment Date") and shall continue for a period of
three (3) years from that date, subject to prior termination in accordance with
the terms hereof. Thereafter, this Agreement shall automatically be renewed for
successive one year terms unless either party shall give the other sixty (60)
days' prior written notice of its or his intent not to renew this Agreement. The
initial term together with all such additional one-year period(s) of employment,
if any, are collectively referred to herein as the "term" of this Agreement.
3. COMPENSATION.
As compensation for the employment services to be rendered by Employee
hereunder, the Company agrees to pay, or cause to be paid, to Employee, and
Employee agrees to accept, an annual salary of $125,000 or such higher amount as
the President of Zygo may determine from time to time, subject to such payroll
deductions as are required by law and deductions for applicable employee
contributions to the Company's normal benefit programs. The annual salary
provided for hereunder shall be payable in equal installments commencing at the
Employment Date, in accordance with
<PAGE>
Company practice. In addition, Employee shall be entitled to additional
contingent compensation from time to time. Such compensation will be based on
the Company's overall performance and will be awarded at the discretion of the
President of Zygo with the approval of the Board of Directors of the Company or
Zygo.
On ____________, 1996, Employee shall receive a grant of options to
purchase 20,000 shares of Common Stock of Zygo with an exercise price equal to
the fair market value on the date of grant, vesting in four equal installments
and otherwise in accordance with the terms of Zygo's Amended and Restated
Non-Qualified Stock Option Plan.
4. EXPENSES.
The Company shall pay or reimburse Employee, upon presentment of
suitable vouchers, for all reasonable business and travel expenses which may be
incurred or paid by Employee in connection with his employment hereunder.
Employee shall comply with restrictions and shall keep records in compliance
with the Company's policy and procedure related to travel and entertainment
expenses.
5. INSURANCE AND OTHER BENEFITS.
(a) Employee shall be entitled to such vacations and to participate in
and receive any other benefits customarily provided by the Company for its
employees generally (including any profit sharing, pension, health insurance,
dental coverage, life insurance, AD&D and short- and long-term disability in
accordance with the terms of such plans) and including stock option and/or stock
purchase plans, all as determined from time to time by the Board of Directors of
the Company or appropriate committee thereof. Unused annual vacations may be
carried over to the extent permitted by Company policy.
(b) Employee acknowledges and agrees that notwithstanding anything to
the contrary contained in any benefit plan maintained by Zygo, except as may be
otherwise agreed to by Employee and Zygo, Employee shall not be entitled to
participate in any of Zygo's employee benefit plans by virtue of his being
employed by the Company or by Zygo (if and when applicable).
6. DUTIES.
(a) Employee shall perform such duties and functions as the President,
Chief Executive Officer or Chief Operating Officer of Zygo and the Board of
Directors of the Company or Zygo shall from time to time determine and Employee
shall comply in the performance of his duties with the policies of, and be
subject to, the direction of such officers and such Boards of Directors.
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<PAGE>
(b) Employee agrees to devote his entire working time, attention and
energies to the performance of the business of the Company and of any of its
subsidiaries or affiliates by which he may be employed; and Employee shall not,
directly or indirectly, alone or as a member of any partnership or other
organization, or as an officer, director or employee of any other corporation,
partnership or other organization, be actively engaged in or concerned with any
other duties or pursuits which interfere with the performance of his duties
hereunder, or which, even if non-interfering, may be inimical, or contrary, to
the best interests of the Company, except those duties or pursuits specifically
authorized by the Board of Directors of the Company or Zygo.
7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION.
(a) Employee's employment hereunder may be terminated at any time
upon written notice from the Company to Employee,
(i) upon the determination by the President, Chief Executive
Officer or Chief Operating Officer of Zygo or the Board of Directors of
the Company or Zygo that Employee's performance of his duties has not
been fully satisfactory for any reason which would not constitute
justifiable cause (as hereinafter defined) upon five (5) days' prior
written notice to Employee; or
(ii) immediately upon determination by the Board of Directors of
the Company or Zygo that justifiable cause exists for such termination.
(b) Employee's employment shall terminate upon:
(i) the death of the Employee; or
(ii) the "disability" of Employee (as hereinafter defined pursuant
to subsection (c) herein).
(c) For the purposes of this Agreement, the term "disability" shall
mean the inability of Employee, due to illness, accident or any other physical
or mental incapacity, to perform his duties in a normal manner for a period of
three (3) consecutive months or for a total of four (4) months (whether or not
consecutive) in any twelve (12) month period during the term of this Agreement.
(d) For the purposes hereof, the term "justifiable cause" shall mean
and be limited to: any repeated failure or refusal by Employee to perform, or
willful neglect by Employee of, any of his duties pursuant to this Agreement;
Employee's conviction (which, through lapse of time or otherwise, is not subject
to appeal) of any crime or offense involving money or other property of the
Company, Zygo or any of their respective subsidiaries or affiliates or which
constitutes a felony in the jurisdiction
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<PAGE>
involved; Employee's performance of any act or his failure to act, for which if
he were prosecuted and convicted, a crime or offense involving money or property
of the Company, Zygo or any of their respective subsidiaries or affiliates, or
which constitutes a felony in the jurisdiction involved, would have occurred;
any disclosure by Employee to any person, firm or corporation other than the
Company, Zygo or any of their respective subsidiaries or affiliates and its and
their directors, officers and employees, of any confidential information or
trade secret of the Company, Zygo or any of their respective subsidiaries or
affiliates or any other breach by Employee of any of the provisions of Section
10, 11 or 12 hereof; any attempt by Employee to secure any personal profit in
connection with the business of the Company, Zygo or any of their respective
subsidiaries or affiliates; or the engaging by Employee in any business or
activities other than the business of the Company, Zygo and any of their
respective subsidiaries or affiliates which interferes with the performance of
his duties hereunder. Upon termination of Employee's employment for justifiable
cause, this Agreement shall terminate immediately and Employee shall not be
entitled to any amounts or benefits hereunder other than such portion of
Employee's annual salary and reimbursement of expenses pursuant to Section 4
hereof as has been accrued through the date of his termination of employment.
(e) If Employee shall die during the term of his employment hereunder,
this Agreement shall terminate immediately. In such event, the estate of
Employee shall thereupon be entitled to receive such portion of Employee's
annual salary and reimbursement of expenses pursuant to Section 4 hereof as has
been accrued through the date of his death.
(f) Upon Employee's "disability," the Company shall have the right to
terminate Employee's employment. Notwithstanding any inability to perform his
duties, Employee shall be entitled to receive his compensation as provided
herein until the termination of his employment for disability. Any termination
pursuant to this subsection (f) shall be effective on the date thirty (30) days
after which Employee shall have received written notice of the Company's
election to terminate. Notwithstanding anything to the contrary contained
herein, during any period that Employee fails to perform his duties hereunder as
a result of his disability (but prior to receiving the notice of termination
specified in this Section 7(f), (i) Employee shall continue to receive his full
salary at the rate then in effect and all benefits provided in Section 5 hereof,
provided that payments made to Employee pursuant to this Section 7(f) shall be
reduced by the sum of the amounts, if any, payable to Employee at or prior to
the time of any such payment under any disability benefit plan or program of, or
provided by, the Company or Zygo, and (ii) the Company shall have the right to
hire any other individual or individuals to perform such duties and functions as
the Company shall desire, including those duties heretofore performed by
Employee.
(g) Notwithstanding any provision to the contrary contained herein, in
the event that Employee's employment is terminated by the Company at any time
for any reason other than justifiable cause, disability or death, the parties
hereto agree that
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<PAGE>
damages to Employee shall be difficult to ascertain in any such event, but in
order to limit the liability of the Company and Zygo in any such event, Employee
shall be entitled to receive as liquidated damages and not as a penalty, and the
Company shall pay to Employee, Employee's salary (payable in such amount and in
such manner as set forth in Section 3 herein) from and after the date of such
termination for a period ending (i) at the end of the three year initial term of
this Agreement if such termination occurs during such initial three year term,
provided, however, that in the event termination occurs within the last six (6)
months of the initial three year term, Employee would be entitled to his salary
for a period ending six (6) months from the date of such termination, or (ii)
six (6) months from the date of termination if such termination occurs during
any renewal term subsequent to such initial three year term, which amount shall
be in lieu of any and all other payments due and owing to Employee under the
terms of this Agreement or otherwise.
8. REPRESENTATIONS AND AGREEMENTS OF EMPLOYEE.
(a) Employee represents and warrants that he is free to enter into this
Agreement and to perform the duties required hereunder, and that there are no
employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder. Employee further represents and warrants that he is in full
compliance with all existing agreements between himself and the Company or Zygo.
(b) Employee agrees to submit to a medical examination and to cooperate
and supply such other information and documents as may be required by any
insurance company in connection with the Employees' inclusion in any insurance
or fringe benefit plan or program as the Company shall determine from time to
time to obtain, or in connection with, in the Company's or Zygo's sole
discretion, the Company's obtaining life insurance for its benefit on the life
of Employee.
9. NON-COMPETITION.
(a) Employee agrees that during his employment by the Company (which
shall be deemed to include the period in which Employee is receiving any
severance payments set forth in Section 7(g) hereto), and for a period of three
(3) years after the later to occur of the termination or expiration of
Employee's employment hereunder (the "Non-Competitive Period"), Employee shall
not, directly or indirectly, as owner, partner, joint venturer, stockholder,
employee, broker, agent, principal, trustee, corporate officer, director,
licensor, or in any capacity whatsoever engage in, become financially interested
in, be employed by, render any consultation or business advice with respect to,
or have any connection with, any business engaged in the research, development,
testing, design, manufacture, sale, lease, marketing, utilization or
exploitation of any products or services which are designed for the same purpose
as, are similar to, or are otherwise competitive with, products or services of
the Company, Zygo or any of their respective subsidiaries or affiliates which
are being sold or
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<PAGE>
provided or proposed to be provided at the time of termination of Employee's
employment, in any geographic area where, at the time of the termination or
expiration of his employment hereunder, the business of the Company, Zygo or any
of their respective subsidiaries or affiliates was being conducted or was
proposed to be conducted in any manner whatsoever; provided, however, that
Employee may own any securities of any corporation which is engaged in such
business and is publicly owned and traded but in an amount not to exceed at any
one time one percent (1%) of any class of stock or securities of such
corporation. In addition, Employee shall not, directly or indirectly, during the
Non-Competitive Period, request or cause contracting parties, suppliers or
customers with whom the Company, Zygo or any of their respective subsidiaries or
affiliates has a business relationship to cancel or terminate any such business
relationship with the Company, Zygo or any of their respective subsidiaries or
affiliates or solicit, interfere with or entice from the Company, Zygo or any of
their respective subsidiaries or affiliates any employee (or former employee) of
the Company, Zygo or any of their respective subsidiaries or affiliates.
Notwithstanding the foregoing, in the event Employee's employment hereunder is
terminated by the Company for justifiable cause pursuant to Section 7(a) hereof,
the Non-Competitive Period shall continue through the expiration of the
scheduled term of this Agreement as provided in Section 2 hereof.
(b) If any portion of the restrictions set forth in this Section 9
should, for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
(c) Employee acknowledges that the Company and/or Zygo conducts
business on a world-wide basis, that its sales and marketing prospects are for
continued expansion into world markets and that, therefore, the territorial and
time limitations set forth in this Section 9 are reasonable and properly
required for the adequate protection of the business of the Company, Zygo and
their respective subsidiaries. In the event any such territorial or time
limitation is deemed to be unreasonable by a court of competent jurisdiction,
Employee agrees to the reduction of the territorial or time limitation to the
area or period which such court deems reasonable.
(d) The existence of any claim or cause of action by Employee against
the Company, Zygo or any of their respective subsidiaries or affiliates shall
not constitute a defense to the enforcement by the Company, Zygo or any such
subsidiary or affiliate of the foregoing restrictive covenants, but such claim
or cause of action shall be litigated separately.
10. INVENTIONS AND DISCOVERIES.
(a) Employee shall promptly and fully disclose to Zygo, and with all
necessary detail for a complete understanding of the same, all developments,
know-how, discoveries, inventions, improvements, concepts, ideas, writings,
formulae, processes and
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<PAGE>
methods (whether copyrightable, patentable or otherwise) made, received,
conceived, acquired or written during working hours, or otherwise, by Employee
(whether or not at the request or upon the suggestion of Zygo) during the period
of his employment with the Company, Zygo or any of their respective subsidiaries
or affiliates, solely or jointly with others, in all instances in or relating to
any activities of the Company, Zygo or any of their respective subsidiaries or
affiliates known to him as a consequence of his employment hereunder
(collectively the "Subject Matter").
(b) Employee hereby assigns and transfers, and agrees to assign and
transfer, to Zygo, all his rights, title and interest in and to the Subject
Matter, and Employee further agrees to deliver to Zygo any and all drawings,
notes, specifications and data relating to the Subject Matter, and to execute,
acknowledge and deliver all such further papers, including applications for
copyrights or patents, as may be necessary to obtain copyrights and patents for
any thereof in any and all countries and to vest title thereto to Zygo. Employee
shall assist Zygo in obtaining such copyrights or patents during the term of
this Agreement, and any time thereafter on reasonable notice, and Employee
agrees to testify in any prosecution or litigation involving any of the Subject
Matter.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) Employee shall not, during the term of this Agreement or at any
time following termination or expiration of this Agreement, directly or
indirectly, disclose or permit to be known (other than as is required in the
regular course of his duties or required by law (in which case Employee shall
give Zygo prior written notice of such required disclosure) or with the prior
written consent of the President of Zygo), to any person, firm or corporation,
any confidential information acquired by Employee during the course of, or as an
incident to, his employment hereunder, relating to the Company, Zygo or any of
their respective subsidiaries or affiliates, the directors of the Company, Zygo
or any of their respective subsidiaries or affiliates, any client of the
Company, Zygo or any of their respective subsidiaries or affiliates, or any
corporation, partnership or other entity owned or controlled, directly or
indirectly, by any of the foregoing, or in which any of the foregoing has a
beneficial interest, including, but not limited to, the business affairs of each
of the foregoing. Such confidential information shall include, but shall not be
limited to, proprietary technology, trade secrets, patented processes, research
and development data, know-how, market studies and forecasts, competitive
analyses, pricing policies, employee lists, personnel policies, the substance of
agreements with customers, suppliers and others, marketing or dealership
arrangements, servicing and training programs and arrangements, customer lists
and any other documents embodying such confidential information. This
confidentiality obligation shall not apply to any confidential information which
thereafter becomes publicly available other than pursuant to a breach of this
Section 11(a), directly or indirectly, by Employee.
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<PAGE>
(b) All information and documents relating to the Company, Zygo and
their respective subsidiaries or affiliates as hereinabove described (or other
business affairs) shall be the exclusive property of the Company or Zygo, as the
case may be, and Employee shall use commercially reasonable best efforts to
prevent any publication or disclosure thereof. Upon termination of Employee's
employment with the Company, all documents, records, reports, writings and other
similar documents containing confidential information, including copies thereof,
then in Employee's possession or control shall be returned and left with the
Company.
(c) Employee will execute the form of "NexStar Corporation
Non-Disclosure and Non-Solicitation Agreement" in the form of Exhibit A hereto,
all the terms and provisions of which are incorporated herein as if fully set
forth herein.
12. RIGHT TO INJUNCTION.
Employee recognizes that the services to be rendered by him hereunder
are of a special, unique, unusual, extraordinary and intellectual character
involving skill of the highest order and giving them peculiar value the loss of
which cannot be adequately compensated for in damages. In the event of a breach
of this Agreement by Employee, the Company shall be entitled to injunctive
relief or any other legal or equitable remedies. Employee agrees that the
Company may recover by appropriate action the amount of the actual damage caused
the Company by any failure, refusal or neglect of Employee to perform his
agreements, representations and warranties herein contained. The remedies
provided in this Agreement shall be deemed cumulative and the exercise of one
shall not preclude the exercise of any other remedy at law or in equity for the
same event or any other event.
13. AMENDMENT OR ALTERATION.
No amendment or alteration of the terms of this Agreement shall be
valid unless made in writing and signed by both of the parties hereto.
14. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of
Connecticut applicable to agreements made and to be performed therein.
15. CONSENT TO JURISDICTION.
Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the courts of the State of Connecticut, including the
jurisdiction of the United States District Courts therein, and agrees not to
assert by way of motion, as a defense or otherwise, in any such suit, action or
proceeding, any claim that he or it is not subject to the jurisdiction of the
above-named courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
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<PAGE>
improper or that this Agreement may not be enforced in or by such courts.
Employee agrees that all actions and proceedings to be instituted hereunder by
Employee or his successors or assigns arising out of or related to this
Agreement or the transactions contemplated hereby shall be commenced only in the
courts having a situs in Connecticut.
16. SEVERABILITY.
The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
17. NOTICES.
Any notices required or permitted to be given hereunder shall be
sufficient if in writing, and if delivered by hand, or sent by certified mail,
return receipt requested, to the addresses set forth above or such other address
as either party may from time to time designate in writing to the other, and
shall be deemed given as of the date of the delivery or mailing.
18. WAIVER OR BREACH.
It is agreed that a waiver by either party of a breach of any provision
of this Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
19. ENTIRE AGREEMENT AND BINDING EFFECT.
This Agreement, together with the Acquisition Agreement, dated as of
_________, 1996 by and among the Company, Zygo, NX Acquisition Corp. and NexStar
Automation, Incorporated, and all agreements and exhibits referred to therein,
contains the entire agreement of the parties with respect to the subject matter
hereof and shall be binding upon and inure to the benefit of the parties hereto
and their respective legal representatives, heirs, distributors, successors and
assigns. Notwithstanding the foregoing, all prior agreements between Employee
and the Company or Zygo relating to the confidentiality of information, trade
secrets and patents shall not be affected by this Agreement.
20. SURVIVAL.
The termination of Employee's employment hereunder shall not affect the
enforceability of Sections 7, 8(a), 9, 10, 11, 12, 14 and 15 hereof.
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<PAGE>
21. NON-ASSIGNABILITY.
This Agreement is entered into in consideration of the personal
qualities of Employee and may not be, nor may any right or interest hereunder
be, assigned by him without the prior written consent of the Company. It is
expressly understood and agreed that this Agreement, and the rights accruing and
obligations owed to the Company hereunder, and the obligations to be performed
by the Company hereunder, may be assigned by the Company at any time without the
consent of Employee to Zygo or any of the Company's successors or assigns. In
the event that this Agreement is assigned by the Company to Zygo pursuant to
this Section 21, all references in this Agreement to "Company" shall refer to
Zygo except that the references thereto contained in Section 5(a) hereof shall
refer to NexStar Corporation, a business unit of Zygo.
22. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
23. FURTHER ASSURANCES.
The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
24. HEADINGS.
This Section headings appearing in this Agreement are for the purposes
of easy reference and shall not be considered a part of this Agreement or in any
way modify, demand or affect its provisions.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NEXSTAR CORPORATION
By:
-------------------------
Name:
Title:
EMPLOYEE
------------------------
Ahmad Akrami
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<PAGE>
EXHIBIT A
NEXSTAR CORPORATION
NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT
AGREEMENT, dated as of ___________ __, 1996, by and between NEXSTAR
CORPORATION, a Delaware corporation (the "Company"), and ______________ (the
"Employee")
W I T N E S S E T H:
In consideration of the Company's employment of the Employee and in
consideration of the covenants contained herein, the parties hereby agree as
follows:
1. The Employee agrees that he will not directly or indirectly disclose or use
at any time any knowledge, information or material relating to any
business, customer, machine, design, apparatus or systems of the Company,
Zygo Corporation, a Delaware corporation and the owner of all the
outstanding capital stock of the Company ("Zygo"), or any of their
respective subsidiaries or affiliates or any of the methods of conducting
any part of their respective businesses or the like which may become known
to the Employee by reason of his employment or otherwise except as may be
reasonably necessary to the performance of his assigned duties as an
employee of the Company.
2. The Employee agrees to promptly and completely disclose in writing to such
person as the Company may designate all ideas, developments, inventions and
improvements heretofore or hereafter made, developed, perfected, devised,
conceived or acquired by the Employee either solely or jointly with others
during the Employee's employment by the Company and within ninety (90) days
after any termination thereof, whether or not during regular working hours,
relating in any way to the actual or anticipated business, research,
developments or products of the Company; and if so requested by the
Company, to assign, transfer and convey to the Company all right, title and
interest in and to all such ideas, developments, inventions and
improvements.
3. The Employee agrees, at the request and expense of the Company, to make,
execute and deliver any and all papers, documents and instruments,
including applications for patents in any and all countries and reissues
and extensions thereof, and to assist and cooperate (without expense to the
Employee) with the Company or its representative in any controversy or
legal proceedings relating to said ideas, developments, inventions and
improvements, and the patents which may be procured thereon.
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<PAGE>
4. The Company does not assume any responsibility for the prosecution or
defense of any application for patents in any countries arising from ideas,
developments, inventions and improvements disclosed to the Company pursuant
to this Agreement.
5. The Employee represents and warrants that he/she is free to enter into the
employment arrangements and, if applicable, the employment agreement, to be
entered into with the Company and to perform the duties required of the
Employee in connection with his/her employment by the Company; and that,
except as indicated on Exhibit 1 hereto, there are no employment
agreements, confidentiality agreements, restrictive covenants or other
agreements or restrictions binding on the Employee or to which the Employee
is a party which limit, prohibit or prevent the full performance by the
Employee of his/her employment duties and arrangements with the Company or
which would preclude the Employee from disclosing or otherwise limit the
Employee's right to disclose to the Company any ideas, inventions,
discoveries or other information.
6. The Employee represents and warrants that he/she has not brought and agrees
that he/she will not bring to the Company or use in the performance of
his/her employment responsibilities at the Company any materials,
documents, trade secrets or confidential information of a former employer
or any other person which are of a confidential nature or which are not
generally available to the public. The Employee agrees that he/she has not
and will not disclose to the Company or seek to induce the Company to use
any such confidential information, materials, documents or trade secrets.
7. The Employee agrees that during his/her employment by the Company and
following the termination of such employment, the Employee will not,
directly or indirectly, request or cause any suppliers or customers with
whom the Company, Zygo or any of its subsidiaries or affiliates has a
business relationship to cancel or terminate any such business relationship
with the Company, Zygo or any of their respective subsidiaries or
affiliates or solicit, interfere with or entice from the Company any
employee or former employee of the Company or Zygo.
8. Neither this Agreement nor any benefits hereunder are assignable by the
Employee, but the terms and provisions hereof shall inure to the benefit of
the Company's successors and assigns.
9. This Agreement is not a contract of employment; it does not give the
Employee any rights to any employment with the Company, and it in no way
abridges, alters, amends or modifies any rights the Company may otherwise
have to terminate its employment of the Employee.
10. This Agreement, together with the Employment Agreement, dated ___________
___, 1996, by and between the Employee and the Company and the Acquisition
Agreement, dated as of ___________, 1996, by and among Zygo, NX Acquisition
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Corp. and NexStar Automation, Incorporated, and all agreements and exhibits
referred to therein, contains the entire understanding and agreement of the
parties with respect to the matters herein contained, and no waiver or
modification hereof shall be binding unless in writing and subscribed by
the parties hereto.
11. If any paragraph, clause, or phrase of this Agreement shall, by any
federal, state or other law or by any decision of any court, be declared or
held illegal, void or unenforceable, the remaining portions of this
Agreement shall continue to be valid and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NEXSTAR CORPORATION
BY:
----------------------------------
Name:
Title:
EMPLOYEE
----------------------------------
Name:
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EXHIBIT 8.02(i)(2)
EMPLOYMENT AGREEMENT
AGREEMENT, made as of __________ ___, 1996, between NexStar Corporation, a
Colorado corporation (the "Company"), and ____________________, residing at
_______________________ ____________________ ("Employee").
W I T N E S S E T H :
WHEREAS, the Company desires that Employee be employed by the Company, and
Employee desires to be so employed by the Company upon the terms and conditions
herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, representations and covenants herein contained, the parties hereto
agree as follows:
1. EMPLOYMENT.
The Company hereby employs Employee and Employee hereby accepts such
employment, subject to the terms and conditions herein set forth. Employee shall
hold the position of _________________ of NexStar Corporation, a business unit
initially being operated in the form of a subsidiary of Zygo Corporation
("Zygo").
2. TERM.
The initial term of employment under this Agreement shall begin on
_________ __, 1996 (the "Employment Date") and shall continue for a period of
two (2) years from that date, subject to prior termination in accordance with
the terms hereof. Thereafter, this Agreement shall automatically be renewed for
successive one year terms unless either party shall give the other sixty (60)
days' prior written notice of its or his intent not to renew this Agreement. The
initial term together with all such additional one-year period(s) of employment,
if any, are collectively referred to herein as the "term" of this Agreement.
3. COMPENSATION.
As compensation for the employment services to be rendered by Employee
hereunder, the Company agrees to pay, or cause to be paid, to Employee, and
Employee agrees to accept, an annual salary of $_________ or such higher amount
as the President of Zygo may determine from time to time, subject to such
payroll deductions as are required by law and deductions for applicable employee
contributions to the Company's normal benefit programs.
<PAGE>
The annual salary provided for hereunder shall be payable in equal installments
commencing at the Employment Date, in accordance with the Company's practice.
On ______________, 1996, Employee shall receive a grant of
options to purchase __________ shares of Common Stock of Zygo with an exercise
price equal to the fair market value on the date of grant, vesting in four equal
installments and otherwise in accordance with the terms of Zygo's Amended and
Restated Non-Qualified Stock Option Plan.
4. EXPENSES.
The Company shall pay or reimburse Employee, upon presentment of suitable
vouchers, for all reasonable business and travel expenses which may be incurred
or paid by Employee in connection with his employment hereunder. Employee shall
comply with restrictions and shall keep records in compliance with the Company's
policy and procedure related to travel and entertainment expenses.
5. INSURANCE AND OTHER BENEFITS.
(a) Employee shall be entitled to such vacations and to participate in and
receive any other benefits customarily provided by the Company for its employees
generally (including any profit sharing, pension, health insurance, dental
coverage, life insurance, AD&D and short- and long-term disability in accordance
with the terms of such plans) and including stock option and/or stock purchase
plans, all as determined from time to time by the Board of Directors of the
Company or Zygo or appropriate committee thereof. Unused annual vacations may be
carried over to the extent permitted by Company policy.
(b) Employee acknowledges and agrees that notwithstanding anything to the
contrary contained in any benefit plan maintained by Zygo, except as may be
otherwise agreed to by Employee and Zygo, Employee shall not be entitled to
participate in any of Zygo's employee benefit plans by virtue of his being
employed by the Company or by Zygo (if and when applicable).
6. DUTIES.
(a) Employee shall perform such duties and functions as the President,
Chief Executive Officer or Chief Operating Officer of Zygo and the Board of
Directors of the Company or Zygo shall from time to time determine and Employee
shall comply in the performance of his duties with the policies of, and be
subject to, the direction of such officers and such Boards of Directors.
(b) Employee agrees to devote his entire working time, attention and
energies to the performance of the business of the Company and of any of its
subsidiaries or affiliates by which he may be employed; and Employee shall not,
directly
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<PAGE>
or indirectly, alone or as a member of any partnership or other organization, or
as an officer, director or employee of any other corporation, partnership or
other organization, be actively engaged in or concerned with any other duties or
pursuits which interfere with the performance of his duties hereunder, or which,
even if non-interfering, may be inimical, or contrary, to the best interests of
the Company, except those duties or pursuits specifically authorized by the
Board of Directors of the Company or Zygo.
7. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION.
(a) Employee's employment hereunder may be terminated at any time upon
written notice from the Company to Employee,
(i) upon the determination by the President, Chief Executive Officer
or Chief Operating Officer of Zygo or the Board of Directors of the Company
or Zygo that Employee's performance of his duties has not been fully
satisfactory for any reason which would not constitute justifiable cause
(as hereinafter defined) upon five (5) days' prior written notice to
Employee; or
(ii) immediately upon determination by the Board of Directors of the
Company or Zygo that justifiable cause exists for such termination.
(b) Employee's employment shall terminate upon:
(i) the death of the Employee; or
(ii) the "disability" of Employee (as hereinafter defined pursuant to
subsection (c) herein).
(c) For the purposes of this Agreement, the term "disability" shall mean
the inability of Employee, due to illness, accident or any other physical or
mental incapacity, to perform his duties in a normal manner for a period of
three (3) consecutive months or for a total of four (4) months (whether or not
consecutive) in any twelve (12) month period during the term of this Agreement.
(d) For the purposes hereof, the term "justifiable cause" shall mean and be
limited to: any repeated failure or refusal by Employee to perform, or willful
neglect by Employee of, any of his duties pursuant to this Agreement; Employee's
conviction (which, through lapse of time or otherwise, is not subject to appeal)
of any crime or offense involving money or other property of the Company, Zygo
or any of their respective subsidiaries or affiliates or which constitutes a
felony in the jurisdiction involved; Employee's performance of any act or his
failure to act, for which if he were prosecuted and convicted, a crime or
offense involving money or property of the Company, Zygo or any of their
respective subsidiaries or affiliates, or which constitutes a felony in the
jurisdiction involved, would have occurred; any disclosure by Employee
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<PAGE>
to any person, firm or corporation other than the Company, Zygo or any of their
respective subsidiaries or affiliates and its and their directors, officers and
employees, of any confidential information or trade secret of the Company, Zygo
or any of their respective subsidiaries or affiliates or any other breach by
Employee of any of the provisions of Section 10, 11 or 12 hereof; any attempt by
Employee to secure any personal profit in connection with the business of the
Company, Zygo or any of their respective subsidiaries or affiliates; or the
engaging by Employee in any business or activities other than the business of
the Company, Zygo or any of their respective subsidiaries or affiliates which
interferes with the performance of his duties hereunder. Upon termination of
Employee's employment for justifiable cause, this Agreement shall terminate
immediately and Employee shall not be entitled to any amounts or benefits
hereunder other than such portion of Employee's annual salary and reimbursement
of expenses pursuant to Section 4 hereof as has been accrued through the date of
his termination of employment.
(e) If Employee shall die during the term of his employment hereunder, this
Agreement shall terminate immediately. In such event, the estate of Employee
shall thereupon be entitled to receive such portion of Employee's annual salary
and reimbursement of expenses pursuant to Section 4 hereof as has been accrued
through the date of his death.
(f) Upon Employee's "disability," the Company shall have the right to
terminate Employee's employment. Notwithstanding any inability to perform his
duties, Employee shall be entitled to receive his compensation as provided
herein until the termination of his employment for disability. Any termination
pursuant to this subsection (f) shall be effective on the date thirty (30) days
after which Employee shall have received written notice of the Company's
election to terminate. Notwithstanding anything to the contrary contained
herein, during any period that Employee fails to perform his duties hereunder as
a result of his disability (but prior to receiving the notice of termination
specified in this Section 7(f), (i) Employee shall continue to receive his full
salary at the rate then in effect and all benefits provided in Section 5 hereof,
provided that payments made to Employee pursuant to this Section 7(f) shall be
reduced by the sum of the amounts, if any, payable to Employee at or prior to
the time of any such payment under any disability benefit plan or program of, or
provided by, the Company or Zygo, and (ii) the Company shall have the right to
hire any other individual or individuals to perform such duties and functions as
the Company shall desire, including those duties heretofore performed by
Employee.
(g) Notwithstanding any provision to the contrary contained herein, in the
event that Employee's employment is terminated by the Company at any time for
any reason other than justifiable cause, disability or death, the parties hereto
agree that damages to Employee shall be difficult to ascertain in any such
event, but in order to limit the liability of the Company and Zygo in any such
event, Employee shall be entitled to receive as liquidated damages and not as a
penalty, and the Company shall pay to Employee, Employee's salary (payable in
such amount and in such manner as set forth in Section 3 herein) from and after
the date of such termination for a period
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<PAGE>
ending six (6) months after the date of termination, which amount shall be in
lieu of any and all other payments due and owing to Employee under the terms of
this Agreement or otherwise.
8. REPRESENTATIONS AND AGREEMENTS OF EMPLOYEE.
(a) Employee represents and warrants that he is free to enter into this
Agreement and to perform the duties required hereunder, and that there are no
employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder. Employee further represents and warrants that he is in full
compliance with all existing agreements between himself and the Company or Zygo.
(b) Employee agrees to submit to a medical examination and to cooperate and
supply such other information and documents as may be required by any insurance
company in connection with the Employees' inclusion in any insurance or fringe
benefit plan or program as the Company shall determine from time to time to
obtain, or in connection with, in the Company's sole discretion, the Company's
or Zygo's obtaining life insurance for its benefit on the life of Employee.
9. NON-COMPETITION.
(a) Employee agrees that during his employment by the Company (which shall
be deemed to include the period in which Employee is receiving any severance
payments set forth in Section 7(g) hereto), and for a period of two (2) years
after the later to occur of the termination or expiration of Employee's
employment hereunder (the "Non-Competitive Period"), Employee shall not,
directly or indirectly, as owner, partner, joint venturer, stockholder,
employee, broker, agent, principal, trustee, corporate officer, director,
licensor, or in any capacity whatsoever engage in, become financially interested
in, be employed by, render any consultation or business advice with respect to,
or have any connection with, any business engaged in the research, development,
testing, design, manufacture, sale, lease, marketing, utilization or
exploitation of any products or services which are designed for the same purpose
as, are similar to, or are otherwise competitive with, products or services of
the Company, Zygo or any of their respective subsidiaries or affiliates which
are being sold or provided or proposed to be provided at the time of termination
of Employee's employment, in any geographic area where, at the time of the
termination or expiration of his employment hereunder, the business of the
Company, Zygo or any of their respective subsidiaries or affiliates was being
conducted or was proposed to be conducted in any manner whatsoever; PROVIDED,
HOWEVER, that Employee may own any securities of any corporation which is
engaged in such business and is publicly owned and traded but in an amount not
to exceed at any one time one percent (1%) of any class of stock or securities
of such corporation. In addition, Employee shall not, directly or indirectly,
during the Non-Competitive Period, request or cause contracting parties,
suppliers or customers with whom the Company, Zygo or any of their respective
subsidiaries or affiliates has a
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<PAGE>
business relationship to cancel or terminate any such business relationship with
the Company, Zygo or any of their respective subsidiaries or affiliates or
solicit, interfere with or entice from the Company, Zygo or any of their
respective subsidiaries or affiliates any employee (or former employee) of the
Company, Zygo or any of their respective subsidiaries or affiliates.
Notwithstanding the foregoing, in the event Employee's employment hereunder is
terminated by the Company for justifiable cause pursuant to Section 7(a) hereof,
the Non-Competitive Period shall continue through the expiration of the
scheduled term of this Agreement as provided in Section 2 hereof.
(b) If any portion of the restrictions set forth in this Section 9 should,
for any reason whatsoever, be declared invalid by a court of Competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
(c) Employee acknowledges that the Company and/or Zygo conducts business on
a world-wide basis, that its sales and marketing prospects are for continued
expansion into world markets and that, therefore, the territorial and time
limitations set forth in this Section 9 are reasonable and properly required for
the adequate protection of the business of the Company, Zygo and their
respective subsidiaries. In the event any such territorial or time limitation is
deemed to be unreasonable by a court of competent jurisdiction, Employee agrees
to the reduction of the territorial or time limitation to the area or period
which such court deems reasonable.
(d) The existence of any claim or cause of action by Employee against the
Company, Zygo or any of their respective subsidiaries or affiliates shall not
constitute a defense to the enforcement by the Company, Zygo or any such
subsidiary or affiliate of the foregoing restrictive covenants, but such claim
or cause of action shall be litigated separately.
10. INVENTIONS AND DISCOVERIES.
(a) Employee shall promptly and fully disclose to Zygo and with all
necessary detail for a complete understanding of the same, all developments,
know-how, discoveries, inventions, improvements, concepts, ideas, writings,
formulae, processes and methods (whether copyrightable, patentable or otherwise)
made, received, conceived, acquired or written during working hours, or
otherwise, by Employee (whether or not at the request or upon the suggestion of
Zygo) during the period of his employment with the Company, Zygo or any of their
respective subsidiaries or affiliates, solely or jointly with others, in all
instances in or relating to any activities of the Company, Zygo or any of their
respective subsidiaries or affiliates known to him as a consequence of his
employment hereunder (collectively the "Subject Matter").
(b) Employee hereby assigns and transfers, and agrees to assign and
transfer, to Zygo, all his rights, title and interest in and to the Subject
Matter, and Employee further agrees to deliver to Zygo any and all drawings,
notes, specifications and data relating to the Subject Matter, and to execute,
acknowledge and deliver all
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<PAGE>
such further papers, including applications for copyrights or patents, as may be
necessary to obtain copyrights and patents for any thereof in any and all
countries and to vest title thereto to Zygo. Employee shall assist Zygo in
obtaining such copyrights or patents during the term of this Agreement, and any
time thereafter on reasonable notice, and Employee agrees to testify in any
prosecution or litigation involving any of the Subject Matter.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) Employee shall not, during the term of this Agreement or at any time
following termination or expiration of this Agreement, directly or indirectly,
disclose or permit to be known (other than as is required in the regular course
of his duties or required by law (in which case Employee shall give Zygo prior
written notice of such required disclosure) or with the prior written consent of
the President of the Company), to any person, firm or corporation, any
confidential information acquired by Employee during the course of, or as an
incident to, his employment hereunder, relating to the Company, Zygo or any of
their respective subsidiaries or affiliates, the directors of the Company, Zygo
or any of their subsidiaries or affiliates, any client of the Company, Zygo or
any their respective subsidiaries or affiliates, or any corporation, partnership
or other entity owned or controlled, directly or indirectly, by any of the
foregoing, or in which any of the foregoing has a beneficial interest,
including, but not limited to, the business affairs of each of the foregoing.
Such confidential information shall include, but shall not be limited to,
proprietary technology, trade secrets, patented processes, research and
development data, know-how, market studies and forecasts, competitive analyses,
pricing policies, employee lists, personnel policies, the substance of
agreements with customers, suppliers and others, marketing or dealership
arrangements, servicing and training programs and arrangements, customer lists
and any other documents embodying such confidential information. This
confidentiality obligation shall not apply to any confidential information which
thereafter becomes publicly available other than pursuant to a breach of this
Section 11(a), directly or indirectly, by Employee.
(b) All information and documents relating to the Company, Zygo and their
respective subsidiaries or affiliates as hereinabove described (or other
business affairs) shall be the exclusive property of the Company or Zygo, as the
case may be, and Employee shall use commercially reasonable best efforts to
prevent any publication or disclosure thereof. Upon termination of Employee's
employment with the Company, all documents, records, reports, writings and other
similar documents containing confidential information, including copies thereof,
then in Employee's possession or control shall be returned and left with the
Company.
(c) Employee will execute the form of "NexStar Corporation Non-Disclosure
and Non-Solicitation Agreement" in the form of Exhibit A hereto, all the terms
and provisions of which are incorporated herein as if fully set forth herein.
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<PAGE>
12. RIGHT TO INJUNCTION.
Employee recognizes that the services to be rendered by him hereunder are
of a special, unique, unusual, extraordinary and intellectual character
involving skill of the highest order and giving them peculiar value the loss of
which cannot be adequately compensated for in damages. In the event of a breach
of this Agreement by Employee, the Company shall be entitled to injunctive
relief or any other legal or equitable remedies. Employee agrees that the
Company may recover by appropriate action the amount of the actual damage caused
the Company by any failure, refusal or neglect of Employee to perform his
agreements, representations and warranties herein contained. The remedies
provided in this Agreement shall be deemed cumulative and the exercise of one
shall not preclude the exercise of any other remedy at law or in equity for the
same event or any other event.
13. AMENDMENT OR ALTERATION.
No amendment or alteration of the terms of this Agreement shall be valid
unless made in writing and signed by both of the parties hereto.
14. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Connecticut
applicable to agreements made and to be performed therein.
15. CONSENT TO JURISDICTION.
Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the courts of the State of Connecticut, including the jurisdiction of the
United States District Courts therein, and agrees not to assert by way of
motion, as a defense or otherwise, in any such suit, action or proceeding, any
claim that he or it is not subject to the jurisdiction of the above-named
courts, that the suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper or that this
Agreement may not be enforced in or by such courts. Employee agrees that all
actions and proceedings to be instituted hereunder by Employee or his successors
or assigns arising out of or related to this Agreement or the transactions
contemplated hereby shall be commenced only in the courts having a situs in
Connecticut.
16. SEVERABILITY.
The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE>
17. NOTICES.
Any notices required or permitted to be given hereunder shall be sufficient
if in writing, and if delivered by hand, or sent by certified mail, return
receipt requested, to the addresses set forth above or such other address as
either party may from time to time designate in writing to the other, and shall
be deemed given as of the date of the delivery or mailing.
18. WAIVER OR BREACH.
It is agreed that a waiver by either party of a breach of any provision of
this Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
19. ENTIRE AGREEMENT AND BINDING EFFECT.
This Agreement, together with the Acquisition Agreement, dated as of
_____________, 1996 by and among the Company, Zygo, NX Acquisition Corp. and
NexStar Automation, Incorporated, and all agreements and exhibits referred to
therein, contains the entire agreement of the parties with respect to the
subject matter hereof and shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, heirs, distributors,
successors and assigns. Notwithstanding the foregoing, all prior agreements
between Employee and the Company or Zygo relating to the confidentiality of
information, trade secrets and patents shall not be affected by this Agreement.
20. SURVIVAL.
The termination of Employee's employment hereunder shall not affect the
enforceability of Sections 7, 8(a), 9, 10, 11, 12, 14 and 15 hereof.
21. NON-ASSIGNABILITY.
This Agreement is entered into in consideration of the personal qualities
of Employee and may not be, nor may any right or interest hereunder be, assigned
by him without the prior written consent of the Company. It is expressly
understood and agreed that this Agreement, and the rights accruing and
obligations owed to the Company hereunder, and the obligations to be performed
by the Company hereunder, may be assigned by the Company at any time without the
consent of Employee to Zygo or any of the Company's successors or assigns. In
the event that this Agreement is assigned by the Company to Zygo pursuant to
this Section 21, all references in this Agreement to "Company" shall refer to
Zygo except that the references thereto contained in Section 5(a) hereof shall
refer to NexStar Corporation, a business unit of Zygo.
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<PAGE>
22. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
23. FURTHER ASSURANCES.
The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
24. HEADINGS.
This Section headings appearing in this Agreement are for the purposes of
easy reference and shall not be considered a part of this Agreement or in any
way modify, demand or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NEXSTAR CORPORATION
By:___________________________
Name:
Title:
EMPLOYEE
___________________________
Name:
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<PAGE>
EXHIBIT A
NEXSTAR CORPORATION
NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT
AGREEMENT, dated as of ___________ __, 1996, by and between NEXSTAR
CORPORATION, a Colorado corporation (the "Company"), and ___________________
(the "Employee").
W I T N E S S E T H:
In consideration of the Company's employment of the Employee and in
consideration of the covenants contained herein, the parties hereby agree as
follows:
1. The Employee agrees that he will not directly or indirectly disclose or use
at any time any knowledge, information or material relating to any
business, customer, machine, design, apparatus, or system of the Company,
Zygo Corporation, a Delaware corporation and the owner of all the
outstanding capital stock of the Company ("Zygo"), or any of their
respective subsidiaries or affiliates or any of the methods of conducting
any part of their respective businesses or the like which may become known
to the Employee by reason of his employment or otherwise except as may be
reasonably necessary to the performance of his assigned duties as an
employee of the Company.
2. The Employee agrees to promptly and completely disclose in writing to such
person as the Company may designate all ideas, developments, inventions and
improvements heretofore or hereafter made, developed, perfected, devised,
conceived or acquired by the Employee either solely or jointly with others
during the Employee's employment by the Company and within ninety (90) days
after any termination thereof, whether or not during regular working hours,
relating in any way to the actual or anticipated business, research,
developments or products of the Company; and if so requested by the
Company, to assign, transfer and convey to the Company all right, title and
interest in and to all such ideas, developments, inventions and
improvements.
3. The Employee agrees, at the request and expense of the Company, to make,
execute and deliver any and all papers, documents and instruments,
including applications for patents in any and all countries and reissues
and extensions thereof, and to assist and cooperate (without expense to the
Employee) with the Company or its representative in any controversy or
legal proceedings relating to said ideas, developments, inventions and
improvements, and the patents which may be procured thereon.
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<PAGE>
4. The Company does not assume any responsibility for the prosecution or
defense of any application for patents in any countries arising from ideas,
developments, inventions and improvements disclosed to the Company pursuant
to this Agreement.
5. The Employee represents and warrants that he/she is free to enter into the
employment arrangements and, if applicable, the employment agreement, to be
entered into with the Company and to perform the duties required of the
Employee in connection with his/her employment by the Company; and that,
except as indicated on Exhibit 1 hereto, there are no employment
agreements, confidentiality agreements, restrictive covenants or other
agreements or restrictions binding on the Employee or to which the Employee
is a party which limit, prohibit or prevent the full performance by the
Employee of his/her employment duties and arrangements with the Company or
which would preclude the Employee from disclosing or otherwise limit the
Employee's right to disclose to the Company any ideas, inventions,
discoveries or other information.
6. The Employee represents and warrants that he/she has not brought and agrees
that he/she will not bring to the Company or use in the performance of
his/her employment responsibilities at the Company any materials,
documents, trade secrets or confidential information of a former employer
or any other person which are of a confidential nature or which are not
generally available to the public. The Employee agrees that he/she has not
and will not disclose to the Company or seek to induce the Company to use
any such confidential information, materials, documents or trade secrets.
7. The Employee agrees that during his/her employment by the Company and
following the termination of such employment, the Employee will not,
directly or indirectly, request or cause any suppliers or customers with
whom the Company, Zygo or any of their respective subsidiaries or
affiliates has a business relationship to cancel or terminate any such
business relationship with the Company, Zygo or any of their respective
subsidiaries or affiliates or solicit, interfere with or entice from the
Company any employee or former employee of the Company or Zygo.
8. Neither this Agreement nor any benefits hereunder are assignable by the
Employee, but the terms and provisions hereof shall inure to the benefit of
the Company's successors and assigns.
9. This Agreement is not a contract of employment; it does not give the
Employee any rights to any employment with the Company, and it in no way
abridges, alters, amends or modifies any rights the Company may otherwise
have to terminate its employment of the Employee.
10. This Agreement, together with the Employment Agreement, dated ___________,
1996, by and between the Employee and the Company and the Acquisition
Agreement, dated as of _______________, 1996 by and among Zygo, NX
Acquisition Corp. and NexStar Automation, Incorporated, and all agreements
and exhibits referred to therein, contains the entire understanding and
agreement of the parties with respect to the matters herein
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<PAGE>
contained, and no waiver or modification hereof shall be binding unless in
writing and subscribed by the parties hereto.
11. If any paragraph, clause, or phrase of this Agreement shall, by any
federal, state or other law or by any decision of any court, be declared or
held illegal, void or unenforceable, the remaining portions of this
Agreement shall continue to be valid and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NEXSTAR CORPORATION
BY: ______________________
Name:
Title:
EMPLOYEE
______________________
Name:
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<PAGE>
EXHIBIT 8.02(i)(3)
NEXSTAR CORPORATION
NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT
AGREEMENT, dated as of ___________ __, 1996, by and between NEXSTAR
CORPORATION, a Delaware Corporation (the "Company"), and ___________________
(the "Employee").
W I T N E S S E T H:
In consideration of the Company's employment of the Employee and in
consideration of the covenants contained herein, the parties hereby agree as
follows:
1. The Employee agrees that he will not directly or indirectly disclose or use
at any time any knowledge, information or material relating to any
business, customer, machine, design, apparatus, or system of the Company,
Zygo Corporation, a Delaware corporation and the owner of all the
outstanding capital stock of the Company ("Zygo"), or any of their
respective subsidiaries or affiliates or any of the methods of conducting
any part of their respective businesses or the like which may become known
to the Employee by reason of his employment or otherwise except as may be
reasonably necessary to the performance of his assigned duties as an
employee of the Company.
2. The Employee agrees to promptly and completely disclose in writing to such
person as the Company may designate all ideas, developments, inventions and
improvements heretofore or hereafter made, developed, perfected, devised,
conceived or acquired by the Employee either solely or jointly with others
during the Employee's employment by the Company and within ninety (90) days
after any termination thereof, whether or not during regular working hours,
relating in any way to the actual or anticipated business, research,
developments or products of the Company; and if so requested by the
Company, to assign, transfer and convey to the Company all right, title and
interest in and to all such ideas, developments, inventions and
improvements.
3. The Employee agrees, at the request and expense of the Company, to make,
execute and deliver any and all papers, documents and instruments,
including applications for patents in any and all countries and reissues
and extensions thereof, and to assist and cooperate (without expense to the
Employee) with the Company or its representative in any controversy or
legal proceedings relating to said ideas, developments, inventions and
improvements, and the patents which may be procured thereon.
4. The Company does not assume any responsibility for the prosecution or
defense of any application for patents in any countries arising from ideas,
developments, inventions and improvements disclosed to the Company pursuant
to this Agreement.
<PAGE>
5. The Employee represents and warrants that he/she is free to enter into the
employment arrangements and, if applicable, the employment agreement, to be
entered into with the Company and to perform the duties required of the
Employee in connection with his/her employment by the Company; and that,
except as indicated on Exhibit 1 hereto, there are no employment
agreements, confidentiality agreements, restrictive covenants or other
agreements or restrictions binding on the Employee or to which the Employee
is a party which limit, prohibit or prevent the full performance by the
Employee of his/her employment duties and arrangements with the Company or
which would preclude the Employee from disclosing or otherwise limit the
Employee's right to disclose to the Company any ideas, inventions,
discoveries or other information.
6. The Employee represents and warrants that he/she has not brought and agrees
that he/she will not bring to the Company or use in the performance of
his/her employment responsibilities at the Company any materials,
documents, trade secrets or confidential information of a former employer
or any other person which are of a confidential nature or which are not
generally available to the public. The Employee agrees that he/she has not
and will not disclose to the Company or seek to induce the Company to use
any such confidential information, materials, documents or trade secrets.
7. The Employee agrees that during his/her employment by the Company and
following the termination of such employment, the Employee will not,
directly or indirectly, request or cause any suppliers or customers with
whom the Company, Zygo or any of their respective subsidiaries or
affiliates has a business relationship to cancel or terminate any such
business relationship with the Company, Zygo or any of their respective
subsidiaries or affiliates or solicit, interfere with or entice from the
Company any employee or former employee of the Company or Zygo.
8. Neither this Agreement nor any benefits hereunder are assignable by the
Employee, but the terms and provisions hereof shall inure to the benefit of
the Company's successors and assigns.
9. This Agreement is not a contract of employment; it does not give the
Employee any rights to any employment with the Company, and it in no way
abridges, alters, amends or modifies any rights the Company may otherwise
have to terminate its employment of the Employee.
10. This Agreement and the Acquisition Agreement, dated as of _______________,
1996 by and among Zygo, NX Acquisition Corp. and NexStar Automation,
Incorporated, and all agreements and exhibits referred to therein, contains
the entire understanding and agreement of the parties with respect to the
matters herein contained, and no waiver or modification hereof shall be
binding unless in writing and subscribed by the parties hereto.
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<PAGE>
11. If any paragraph, clause, or phrase of this Agreement shall, by any
federal, state or other law or by any decision of any court, be declared or
held illegal, void or unenforceable, the remaining portions of this
Agreement shall continue to be valid and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NEXSTAR CORPORATION
BY:________________________
Name:
Title:
EMPLOYEE
________________________
Name:
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<PAGE>
EXHIBIT 8.03(c)
OPINION OF FULBRIGHT & JAWORSKI L.L.P.
All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed thereto in the Acquisition Agreement.
1. Zygo is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to conduct its business as it is now being conducted and to own,
operate or lease the properties and assets it currently owns, operates or holds
under lease. Zygo Canada is a corporation duly organized, validly existing and
in good standing under the laws of British Columbia and has full corporate power
and authority to conduct its business as it is now being conducted and to own,
operate or lease the properties and assets it currently owns, operates or holds
under lease.
2. The authorized capital stock of Zygo consists of 15,000,000 shares of
Common Stock. The authorized capital stock of Zygo Canada consists of
100,000,000 common shares and 100,000,000 Class A preferred shares. The shares
of Zygo Common Stock to be issued in the Acquisition pursuant to Section 2.01 of
the Acquisition Agreement at the Effective Date will be duly authorized, and
when issued pursuant to the Acquisition Agreement, will be validly issued fully
paid and nonassessable and will not have been issued in violation of any
pre-emptive rights or of any federal or state law.
3. Each of Zygo and Zygo Canada has all requisite corporate power and
authority to enter into the Acquisition Agreement, the Plan of Arrangement and
each of the other agreements contemplated by any such agreement, and to carry
out its obligations under the Acquisition Agreement, the Plan of Arrangement and
each of the other agreements contemplated by any such agreement. The execution
and delivery by Zygo and Zygo Canada of the Acquisition Agreement and the Plan
of Arrangement, the consummation of the transactions contemplated by either such
agreement and the performance by Zygo and Zygo Canada of their respective
obligations thereunder have been duly authorized by all necessary corporate
action on the part of Zygo and Zygo Canada, as the case may be, subject to
required approvals, to the extent any are required to effect the transactions
contemplated by the Acquisition Agreement and the Plan of Arrangement. The
Acquisition Agreement has been duly executed and delivered by Zygo and Zygo
Canada and constitutes the legal, valid and binding obligation of Zygo and Zygo
Canada, enforceable against Zygo and Zygo Canada in accordance with its terms
(except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether such enforceability is
considered in equity or at law).
4. The execution and delivery of the Acquisition Agreement and the Plan of
Arrangement by Zygo and Zygo Canada do not, and the consummation by Zygo and
<PAGE>
Zygo Canada of the transactions contemplated by either such agreement, and
compliance with the terms thereof will not, (a) conflict with, or result in any
violation of or default or loss of any benefit under, any provision of Zygo's
Certificate of Incorporation or By-laws or the Memorandum and Articles of Zygo
Canada; (b) conflict with, or result in a breach or violation of or default or
loss of any benefit under, or accelerate the performance required by, the terms
of any material agreement, contract, indenture or other instrument known to such
counsel to which Zygo or Zygo Canada is a party or to which any of their
respective properties are subject, or constitute a default or loss of any right
thereunder or an event which, with the lapse of time or notice or both, might
result in a material default or loss of any material right thereunder or the
creation of any Lien upon any of the assets or properties of Zygo or Zygo
Canada, in all instances, where such matter will have a Material Adverse Effect;
or (c) result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any material Zygo License known to such counsel.
5. The execution and delivery of the Acquisition Agreement and the Plan of
Arrangement and the consummation of the transactions contemplated by either such
agreement by Zygo and Zygo Canada do not require the consent, approval, order or
authorization of any Governmental Entity or Regulatory Authority or any other
Person (i) under any statute, law, rule, regulation, or (ii) under any permit,
license, agreement, indenture or other instrument known to such counsel to which
Zygo or Zygo Canada is a party or to which any of their respective properties
are subject, and no declaration, filing or registration with any Governmental
Entity or Regulatory Authority is required or advisable by Zygo or Zygo Canada
in connection with the execution and delivery of the Acquisition Agreement and
the Plan of Arrangement, the consummation by Zygo and Zygo Canada of the
transactions contemplated by either such agreement, or the performance by Zygo
and Zygo Canada of their respective obligations thereunder, other than (a) the
filing of the Nasdaq National Market Notification Form for Listing of Additional
Shares, (b) compliance with any applicable requirements under the Exchange Act,
the U.S. Securities Act and foreign and state securities and "blue sky" laws,
and the securities laws, regulations and policies of the provinces of Canada, as
applicable, (c) filings under the Investment Canada Act, and (d) such other
filings or registrations with, or authorizations, consents or approvals of,
governmental bodies, agencies, officials or authorities, the failure of which to
make or obtain would not have a Material Adverse Effect, or would not materially
adversely affect the ability of Zygo or Zygo Canada to consummate the
Acquisition.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deem proper
and to the extent specified in such opinion, if at all, upon an opinion or
opinions of other counsel reasonably acceptable to NexStar, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers and other representatives of
Zygo, certificates of public officials, and certificates or other written
statements of officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of Zygo and the
Zygo Canada.
<PAGE>
Such counsel may state that they are admitted to practice in the State of
New York and that such counsel expresses no opinion as to the laws of, or the
effect or applicability of the laws of, any jurisdiction other than the State of
New York, the General Corporation Law of the State of Delaware and the Federal
laws of the United States of America to the extent referred to specifically in
the opinion.
<PAGE>
EXHIBIT 9.02A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW
OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
SECURED PROMISSORY NOTE
$_____________ ___________ __, 1996
For value received, the undersigned, NexStar Corporation, a Colorado
corporation (the "Debtor"), hereby promises to pay to the order of Zygo
Corporation, a Delaware corporation (the "Holder"), the principal sum of
_______________________ Dollars ($______________) in lawful money of the United
States of America, plus interest (computed on the basis of a year consisting of
twelve, 30-day months, for the actual number of days, including the first day
but excluding the last day, elapsed) on any and all principal amounts remaining
unpaid hereunder from time to time from the date hereof until such principal
amounts become due, at a rate per annum equal to the prevailing "prime rate" of
Citibank, N.A., as in effect from time to time, plus 1%. The entire principal
amount of this Note plus all accrued interest thereon shall be due and payable
upon the earlier of (i) 24 months from the date Debtor fails to satisfy the
conditions to closing set forth in Article VIII of the Acquisition Agreement,
dated ________ __, 1996, by and among NexStar Automation, Incorporated, a
corporation existing under the laws of British Columbia, the Holder and a wholly
owned subsidiary of the Holder (the "Acquisition Agreement"), (ii) the date the
Debtor raises capital through a financing (whether by sale, issuance or
execution of debt, equity or other securities) and (iii) the occurrence of a
Subsequent Transaction (as defined in the Acquisition Agreement) (the first to
occur of such events is hereinafter referred to as the "Maturity Date").
As security for the payment of the Note, the Debtor has granted the Holder
of the Note a security interest in the collateral described in the Security
Agreement, dated the date hereof, between the Debtor and the Holder (the
"Security Agreement").
1. PREPAYMENT. The Debtor may, upon at least five business days' notice to
the Holder specifying the principal amount, prepay the Note in whole, but not in
part, at any time without premium or penalty, such prepayment to be accompanied
by the payment of
<PAGE>
accrued interest to the date of such prepayment on the amount prepaid. Notice of
prepayment having been given as aforesaid, the principal amount of the Note
specified in such notice, together with interest thereon to the prepayment date,
shall become due and payable on such prepayment date.
2. NO IMPAIRMENT. The Debtor will not, through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Debtor but will
at all times in good faith assist in the carrying out of all the provisions of
this Note and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Note against
impairment.
3. PAYMENTS OF NOTE - PLACE AND MANNER.
3.1 PLACE. All payments of principal and interest hereunder shall be
made in immediately available funds, no later than 10:00 A.M., New York
City time, to the Holder of the Note at the address set forth in the
Security Agreement or any such other place as the Holder shall have
notified the Debtor in accordance with Section 5(d) hereof.
3.2 BUSINESS DAYS. Notwithstanding anything to the contrary contained
herein, if any amount of principal or interest is due hereunder on a day
which is not a business day, the due date thereof shall be extended to the
immediately succeeding business day and interest thereon shall accrue
during the period of such extension at the rate provided therefor in this
Note.
3.3 REPLACEMENT OF NOTE. Upon receipt of evidence satisfactory to the
Debtor of the loss, theft, destruction or mutilation of this Note and, in
the case of any such mutilation, upon surrender and cancellation of the
Note, the Debtor will issue a new Note of like tenor (and, in the case of
any new Note, dated the date to which interest has been paid), in lieu of
such lost, stolen, destroyed or mutilated Note.
4. DEFAULT AND REMEDIES.
4.1. If any of the following events (an "Event of Default") shall
occur and be continuing for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected
by operation of law or otherwise):
(i) the Debtor defaults in the due and punctual payment of the
principal of this Note when and as the same shall become due and
payable;
(ii) any representation or warranty made by the Debtor in the
Security Agreement or in any writing furnished in connection with or
pursuant to the Security Agreement shall be false in any material
respect on the date as of which made;
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<PAGE>
(iii) a failure to perform or observe any material agreement,
covenant, term or condition contained in the Security Agreement, and
any such default shall not have been remedied within 10 days after
such failure;
(iv) if the Debtor shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts as
they become due, or shall file a voluntary petition in bankruptcy, or
shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any present or future statute, law or regulation, or shall file
any answer admitting or not contesting the material allegations of a
petition filed against it in any such proceeding, or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of it or of all or any substantial part of its properties;
(v) if, within 30 days after the commencement of any proceeding
against Debtor seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall
not have been dismissed;
then (a) if such event is an Event of Default specified in clause (i), (ii)
and (iii) of this paragraph 4.1, the Holder may, by written notice to the
Debtor, declare the unpaid principal amount of this Note, together with
accrued interest thereon, immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by
the Debtor, and (b) if such event is an Event of Default specified in
clause (iv) or (v) of this paragraph 4.1, the Note shall automatically
become immediately due and payable together with interest accrued thereon
without presentment, demand, protest or notice of any kind, all of which
are hereby waived by the Debtor.
4.2. No right or remedy herein conferred upon the Holder is intended
to be exclusive of any other right or remedy contained herein or the
Security Agreement or in any instrument or document delivered in connection
with or pursuant to this Note, and every such right or remedy shall be
cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
4.3. No course of dealing between the Debtor and the Holder or any
failure or delay on the part of the Holder in exercising any rights or
remedies of the Holder and no single or partial exercise of any rights or
remedies hereunder, or under the Security Agreement shall operate as a
waiver or preclude the exercise of any other rights or remedies hereunder.
5. GENERAL.
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<PAGE>
(a) SUCCESSORS AND ASSIGNS. This Note, and the obligations and rights
hereunder, shall be binding upon and inure to the benefit of the Debtor,
the Holder of this Note, and their respective heirs, successors and
assigns. The Debtor may not assign or transfer any of his rights or
obligations hereunder without the prior written consent of the Holder
hereof. The Holder hereof shall have the right to assign or transfer this
Note or any of Holder's rights or obligations hereunder.
(b) AMENDMENT; WAIVER. Changes in or additions to this Note may be
made, or compliance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in
a particular instance and either retroactively or prospectively), upon
written consent of the Debtor and the Holder of this Note.
(c) CURRENCY. All payments shall be made in such coin or currency of
the United States of America as at the time of payment shall be legal
tender therein for the payment of public and private debts.
(d) NOTICES. All notices, requests, consents and demands shall be made
in writing and shall be mailed, postage prepaid, or delivered by hand, to
the Debtor or to the Holder hereof at their respective addresses set forth
in the Securities Purchase Agreement, or otherwise provided pursuant
thereto.
(e) GOVERNING LAW. This Note shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
laws of the State of Delaware, without giving effect to the principles of
conflict of laws thereof. The Debtor hereby irrevocably submits and
consents to the jurisdiction of any Delaware state or federal court sitting
in Delaware over any action or proceeding arising out of or relating to
this Note, and the Debtor hereby irrevocably agrees that all claims in
respect of any such action or proceeding may be heard and determined in
such Delaware state or federal court. Service of process may be made by
giving notice of such process to the Debtor.
(f) TITLES AND SUBTITLES. The titles for the sections and subsections
of this Note are for reference only and are not to be considered in
construing this Note.
IN WITNESS WHEREOF, this Note has been executed and delivered on the date
first above written by the undersigned Debtor.
NEXSTAR CORPORATION
By:
--------------------------------------
Name:
Title:
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<PAGE>
EXHIBIT 9.02B
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of _____________ __, 1996, made by NexStar
Corporation, a Colorado corporation (the "Borrower") [NexStar Automation,
Incorporated, a corporation existing under the laws of British Columbia (the
"Parent")], in favor of Zygo Corporation, a Delaware corporation (the "Secured
Party").
W I T N E S S E T H:
WHEREAS, NexStar Automation, Incorporated, a corporation existing under the
laws of British Columbia (the "Parent"), the Secured Party and a wholly owned
subsidiary of the Secured Party entered into an Acquisition Agreement, dated as
of __________ __, 1996 (the "Acquisition Agreement"), pursuant to which the
Borrower [Parent] has become obligated to reimburse the Secured Party for
out-of-pocket expenses incurred in connection with the transactions contemplated
by such Agreement, and the Secured Party agreed to accept a promissory note as
payment therefor in the amount of $_________;
[WHEREAS, in order to avoid the sale of assets of the Borrower by the
Parent in the event such action would be required in order to satisfy the
obligations of the Parent to the Secured Party, the Borrower [Parent] has agreed
to enter into this Agreement and the Borrower [Parent] has executed and
delivered to the Secured Party its secured promissory note on the date hereof in
the principal amount of $___________ (the "Note") to evidence such amount owing
to the Secured Party];
WHEREAS, pursuant to the terms of the Acquisition Agreement and the Note,
the Borrower [Parent] is required to execute and deliver to the Secured Party a
security agreement providing for the grant to the Secured Party of a security
interest in all of the assets of the Borrower [Parent]; and
WHEREAS, the Borrower [Parent] has determined that its execution, delivery
and performance of this Agreement directly benefit, and are within the corporate
purposes and in the best interests of, the Borrower [Parent].
NOW, THEREFORE, in consideration of the premises and the agreements herein
and in order to comply with the Acquisition Agreement and induce the Secured
Party to accept and hold the Note as payment for the Borrower's [Parent's]
obligations to the Secured Party, the Borrower [Parent] hereby agrees with the
Secured Party as follows:
SECTION 1. DEFINITIONS. All terms used in this Agreement which are defined
in the Note, the Acquisition Agreement or in Article 9 of the Uniform Commercial
Code (the "Code") currently in effect in the State of New York and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein.
SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST. As security for all of
the obligations of the Borrower [Parent] under the Note, the Borrower [Parent]
hereby gives, grants, pledges and assigns to the Secured Party a continuing
security interest in all personal property and fixtures of the Borrower
[Parent], wherever located and whether now or hereafter
<PAGE>
existing and whether now owned or hereafter acquired of every kind and
description, tangible or intangible (the "Collateral"), including, without
limitation, the following:
(a) all of the Borrower's [Parent's] right, title and interest in and to
all equipment of any kind, wherever located and whether now or hereafter
existing and whether now owned or hereafter acquired and all parts thereof and
accessions thereto (any and all such equipment, parts and accessions being
hereinafter referred to as the "Equipment");
(b) all of the [Parent's] right, title and interest in and to all inventory
of any kind, wherever located and whether now or hereafter existing and whether
now owned or hereafter acquired, and all accessions thereto and products thereof
(any and all such inventory, accessions and products being hereinafter referred
to as the "Inventory");
(c) all of the [Parent's] right, title and interest in and to (i) all
accounts, contract rights, chattel paper, instruments, documents, general
intangibles and other rights or obligations of any kind, whether now or
hereafter existing and whether now owned or hereafter acquired, arising out of
or in connection with the sale or lease of goods or the rendering of services or
otherwise, including, without limitation, all rights relating to any license or
contract to which the Borrower is a party, including all moneys due from time to
time in respect thereof and (ii) all rights now or hereafter existing in and to
all security agreements, leases and other contracts, now or hereafter existing
in, securing or otherwise relating to any accounts, contract rights, chattel
paper, instruments, general intangibles or obligations (any and all such
accounts, contract rights, chattel paper, instruments, general intangibles and
obligations being hereinafter referred to as the "Receivables," and any and all
such security agreements, leases and other contracts being hereinafter referred
to as the "Related Contracts");
(d) all of the [Parent's] right, title and interest in and to all
inventions, designs, patents, service marks, service mark registrations,
trademarks, trademark applications, trademark registrations, trade secrets,
copyrights and licenses (collectively, "Patents and Trademarks");
(e) all customer lists, trade secrets, business records, license rights,
and agreements, whether the Borrower [Parent] is a licensor or licensee, license
fees, royalties, advertising materials, operating manuals, methods, processes,
know-how, sales literature, drawings, specifications, descriptions, name plates,
catalogs, supplier contracts, confidential information, consulting agreements,
engineering contracts, and all assets associated with Patents and Trademarks;
(f) all income royalties, damages, and payments relating to Patents and
Trademarks, now or hereafter due and/or payable, including, without limitation,
damages and payments for past or future infringement or any rights conveyed
hereunder;
(g) cash, other monies, and all other tangible and intangible property of
the Borrower [Parent];
(h) all proceeds of any and all of the foregoing Collateral and, to the
extent not otherwise included, all payments under insurance (whether or not the
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral;
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<PAGE>
in each case, howsoever, the [Parent's] interest therein may arise or appear
(whether by ownership, license, security interest, claim or otherwise).
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Borrower [Parent]
represents, warrants and covenants to and with the Secured Party as follows:
(a) All Equipment and Inventory now existing is located at the Borrower's
[Parent's] chief place of business. The [Parent's] chief place of business and
chief executive office, the place where the Borrower [Parent] keeps its records
concerning Receivables and all originals of all chattel paper which constitute
Receivables and the Related Contracts are located at 2120 Miller Drive,
Longmont, Colorado 80501.
(b) The exercise by the Secured Party of its rights and remedies hereunder
will not contravene law or any contractual restriction binding on or affecting
the Borrower [Parent] or any of its properties and will not result in or require
the creation of any Lien upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or other regulatory body is required for
(i) the grant by the Borrower [Parent], or the perfection, of the security
interest purported to be created hereby in the Collateral or (ii) the exercise
by the Secured Party of any of its rights and remedies hereunder, except for the
filing under the Code of financing statements.
(d) This Agreement has been duly executed and delivered by the Borrower
[Parent] and constitutes the legal, valid and binding obligation of the Borrower
[Parent] enforceable against the Borrower [Parent] in accordance with its terms
(except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether enforceability is considered
in equity or at law).
(e) This Agreement creates a valid security interest in favor of the
Secured Party in the Collateral as security for the Note. Such security interest
is, or in the case of Collateral in which the Borrower [Parent] obtains rights
after the date hereof, will be, a perfected security interest. All action
necessary or desirable to perfect and protect such security interest has been
duly taken.
SECTION 4. COVENANTS AS TO THE COLLATERAL. So long as the Note shall remain
outstanding, unless the Secured Party shall otherwise consent in writing:
(a) FURTHER ASSURANCES. The Borrower [Parent] will at its expense, at any
time and from time to time, promptly execute and deliver all further instruments
and documents and take all further action that may be necessary or desirable or
that the Secured Party may reasonably request in order (i) to perfect and
protect the security interest purported to be created hereby, (ii) to enable the
Secured Party to exercise and enforce its rights and remedies hereunder in
respect of the Collateral or (iii) to otherwise effect the purposes of this
Agreement, including, without limitation: (A) executing and filing such
financing or continuation statements, or amendments thereto, as may be necessary
or desirable or that the Secured Party may reasonably request in order to
perfect and preserve the security interest purported to be created hereby and
(B) furnishing to the Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other
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<PAGE>
reports in connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail.
(b) LOCATION OF EQUIPMENT AND INVENTORY. The Borrower [Parent] will not
keep Inventory (other than goods in transit), Equipment or records with respect
to Receivables and Related Contracts in any state in which financing statements
have not theretofore been filed in a manner sufficient to perfect under the
Uniform Commercial Code of such state the security interests in such Inventory,
Equipment, Receivables and Related Contracts granted hereby. The Borrower
[Parent] will provide the Secured Party thirty (30) days prior written notice of
any change in the Borrower's [Parent's] name, identity, chief place of business
or chief executive office which might make any financing statement filed
thereunder misleading, and prior to such change Borrower [Parent] will have
presented to the Secured Party evidence satisfactory to it of the filing of all
amendments to financing statements and all additional financing statements
necessary to maintain the security interests granted hereunder at all times.
(c) CONDITION OF EQUIPMENT. The Borrower [Parent] will cause the Equipment
to be maintained and preserved in the same condition, repair and working order
as when acquired, reasonable wear and tear excepted, and in accordance with any
manufacturer's manual, and will forthwith, or in the case of any loss or damage
to any of the Equipment as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other improvements in
connection therewith which are necessary or desirable or that the Secured Party
may reasonably request to such end. The Borrower [Parent] will promptly furnish
to the Secured Party a statement respecting any loss or damage in excess of
$10,000 to any of the Equipment.
(d) TAXES. The Borrower [Parent] will pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against the
Equipment and Inventory, except to the extent the validity thereof is being
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.
(e) INSURANCE. The Borrower [Parent] will, at its own expense, maintain
insurance with respect to the Equipment and Inventory in such amounts, against
such risks, in such form and with such insurers, as is currently maintained by
Borrower [Parent], all of which is set forth in a certificate of insurance
attached hereto. Each policy for liability insurance shall provide for all
losses to be paid on behalf of the Secured Party and the Borrower [Parent] as
their respective interests may appear, and each policy for property damage
insurance shall provide for all losses to be paid to the Borrower [Parent] until
the insurer shall have received written notice from the Secured Party of the
occurrence of an Event of Default, and thereafter until the insurer shall have
received written notice from the Secured Party that such Event of Default has
been cured, waived, or has otherwise ceased to exist, insurance proceeds shall
be payable directly to the Secured Party. The Borrower [Parent] will, if so
requested by the Secured Party, deliver to the Secured Party original or
duplicate policies of such insurance and, as often as the Secured Party may
reasonably request, a report of a reputable insurance broker with respect to
such insurance.
(f) PROVISIONS CONCERNING THE RECEIVABLES AND THE RELATED CONTRACTS.
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<PAGE>
(i) The Borrower [Parent] will (A) give the Secured Party prompt notice of
any change in the [Parent's] name, identity, corporate structure, chief place of
business or chief executive office, (B) maintain its chief executive office in
the continental United States, (C) keep all originals of all chattel paper which
constitute Receivables at its chief executive office, and (D) keep adequate
records concerning the Receivables and such chattel paper and permit
representatives of the Secured Party at any time during normal business hours to
inspect and make abstracts from such records and chattel paper.
(ii) The Borrower [Parent] will duly perform and observe all of its
obligations under each Related Contract and, except as otherwise provided in
this subsection (f), continue to collect, at its own expense, all amounts due or
to become due under the Receivables. In connection with such collections, the
Borrower [Parent] may (and, at the Secured Party's direction, will) take such
action as the Borrower [Parent] or the Secured Party may deem reasonably
necessary or advisable to enforce collection or performance of the Receivables;
PROVIDED, HOWEVER, that the Secured Party shall have the right at any time, upon
the occurrence and during the continuance of an Event of Default or an event
which, with the giving of notice or the lapse of time or both would constitute
an Event of Default, and upon written notice to the Borrower [Parent] of its
intention to do so, to notify the account debtors or obligors under any
Receivables of the assignment of such Receivables to the Secured Party, and to
direct such account debtors or obligors to make payment of all amounts due or to
become due to the Borrower [Parent] thereunder directly to the Secured Party,
and, upon such notification and at the expense of the Borrower [Parent] and to
the extent permitted by law, to enforce collection of any such Receivables and
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as the Borrower [Parent] might have done. If
requested by the Secured Party, the Borrower [Parent] will co-sign such notice.
After receipt by the Borrower [Parent] of the notice from the Secured Party
referred to in the PROVISO to the immediately preceding sentence, (A) all
amounts and proceeds (including instruments) received by the Borrower [Parent]
in respect of the Receivables shall be received in trust for the benefit of the
Secured Party, shall be segregated from other funds of the Borrower [Parent] and
shall be forthwith paid over to the Secured Party, in the same form as so
received (with any necessary endorsement) to be held as cash collateral and
either (1) released to the Borrower [Parent] so long as no Event of Default
shall have occurred and be continuing or (2) if any Event of Default shall have
occurred and be continuing, applied as specified in Section 6 hereof, and (B)
the Borrower [Parent] will not adjust, settle or compromise the amount or
payment of any Receivable or release wholly or partly any account debtor or
obligor thereof or allow any credit or discount thereon.
(g) RIGHT OF INSPECTION. Borrower [Parent] hereby grants to the Secured
Party and its employees and agents the right to visit [Parent's] facilities at
reasonable times during regular business hours.
(h) DISPOSITION OF COLLATERAL. Other than sales of Inventory in the
ordinary course of business, the Borrower [Parent] shall not sell, encumber or
otherwise dispose of any Collateral.
SECTION 5. ADDITIONAL PROVISIONS CONCERNING THE COLLATERAL.
(a) The Borrower [Parent] hereby authorizes the Secured Party to file,
without the signature of the Borrower [Parent] where permitted by law, one or
more financing or continuation statements, and amendments thereto, relating to
the Collateral. The Borrower
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<PAGE>
[Parent] hereby irrevocably appoints the Secured Party the [Parent's]
attorney-in-fact and proxy, with full authority in the place and stead of the
Borrower [Parent] and in the name of the Borrower [Parent] or otherwise, from
time to time in the Secured Party's discretion, to execute and file financing
statements, continuation statements and amendments thereto.
(b) The Borrower [Parent] hereby irrevocably appoints the Secured Party the
[Parent's] attorney-in-fact and proxy, with full authority in the place and
stead of the Borrower [Parent] and in the name of the Borrower [Parent] or
otherwise, from time to time in the Secured Party's discretion upon the
occurrence and during the continuance of an Event of Default or an event which,
with the giving of notice or the lapse of time or both, would constitute an
Event of Default, to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement and the Note, including, without limitation: (i) to obtain and adjust
insurance required to be paid to the Secured Party, (ii) to ask, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in respect of any Collateral, and
(iii) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper in connection with clause (i) or (ii) above and to
give full discharge for the same, (iv) to file any claims or take any action or
institute any proceedings which the Secured Party may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of the Secured Party with respect to any of the Collateral.
(c) If the Borrower [Parent] fails to perform any agreement contained
herein, the Secured Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Secured Party incurred in
connection therewith shall be payable by the Borrower [Parent] under Section 7
hereof.
(d) The powers conferred on the Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
(e) Anything herein to the contrary notwithstanding, (i) the Borrower
[Parent] shall remain liable under the Related Contracts to perform all of its
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Secured Party of any of its rights hereunder
shall not release the Borrower [Parent] from any of its obligations under the
Related Contracts and (iii) the Secured Party shall not have any obligation or
liability by reason of this Agreement under the Related Contracts nor shall the
Secured Party be obligated to perform any of the obligations or duties of the
Borrower [Parent] thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 6. REMEDIES UPON DEFAULT. If an Event of Default shall have
occurred and be continuing:
(a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all of the rights and remedies of a secured party on default under the
Code (whether or not the Code applies to the affected Collateral), and also may
(i) require the Borrower [Parent] to, and the Borrower
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<PAGE>
[Parent] hereby agrees that it will at its expense and upon request of the
Secured Party, forthwith assemble all or part of the Collateral as directed by
the Secured Party and make it available to the Secured Party at a place to be
designated by the Secured Party which is reasonably convenient to both parties
and (ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of the
Secured Party's offices or elsewhere for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Secured Party may
deem commercially reasonable. The Borrower [Parent] agrees that, to the extent
notice of sale shall be required by law, 10 days' notice to the Borrower
[Parent] of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Secured Party may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.
(b) Any cash held by the Secured Party as Collateral and all cash proceeds
received by the Secured Party in respect of any sale of, collection from, or
other realization upon, all or any part of the Collateral shall be applied as
follows:
(i) First, to the payment of the reasonable costs and expenses,
including reasonable attorney's fees and legal expenses, incurred by the
Secured Party in connection with (A) the administration of this Agreement,
(B) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any Collateral, (C) the
exercise or enforcement of any of the rights of the Secured Party hereunder
or (D) the failure of the Borrower [Parent] to perform or observe any of
the provisions hereof;
(ii) Second, ratably to the payment of the Note, first, in respect of
any fees not covered by clause (i) above, second, in respect of accrued but
unpaid interest on the Note, and third, in respect of the unpaid principal
of the Note; and
(iii) Third, the surplus proceeds, if any, to the Borrower [Parent] or
to whomsoever shall be lawfully entitled to receive the same or as a court
of competent jurisdiction shall direct.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Secured Party is
legally entitled, the Borrower [Parent] shall be liable for the deficiency,
together with interest thereon at the highest rate specified in the Note for
interest on overdue principal thereof or such other rate as shall be fixed by
applicable law, together with the costs of collection and the reasonable fees of
any attorneys employed by the Secured Party, to collect such deficiency.
SECTION 7. INDEMNITY AND EXPENSES.
(a) The Borrower [Parent] agrees to indemnify the Secured Party from and
against any and all claims, losses and liabilities growing out of or resulting
from this Agreement (including, without limitation, enforcement of this
Agreement), except claims, losses or liabilities resulting from the Secured
Party's gross negligence or willful misconduct.
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(b) The Borrower [Parent] will upon demand pay to the Secured Party the
amount of any and all reasonable costs and expenses, including the fees and
disbursements of the counsel retained by the Secured Party for itself and of any
experts and agents, which the Secured Party may incur in connection with (i) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Collateral, (ii) the exercise or enforcement of any
of the rights of the Secured Party hereunder or (iii) the failure by the
Borrower [Parent] to perform or observe any of the provisions hereof.
SECTION 8. NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing and shall be sent by facsimile or sent postage
prepaid by certified mail (return receipt requested) or reputable overnight
courier service and shall be deemed given when so delivered by hand or facsimile
or, if mailed, five days after mailing (two business days in the case of a
courier service), to the parties as follows: to the Borrower at 2120 Miller
Drive, Longmont, Colorado 80501, attention: President, and to the Secured Party
at Laurel Brook Road, Middlefield, Connecticut 06455, attention: President, or
to such other address as shall be designated by either party in a written notice
to such other party complying as to delivery with the terms of this Section 8.
SECTION 9. SECURITY INTEREST ABSOLUTE. All rights of the Secured Party, all
security interests and all obligations of the Borrower [Parent] hereunder shall
be absolute and unconditional irrespective of: (i) any lack of validity or
enforceability of the Note, the Acquisition Agreement or any other agreement or
instrument relating thereto, (ii) any change in the time, manner or place of
payment of, or in any other term in respect of, or any other amendment or waiver
of or consent to any departure from the Note or any other agreement or
instrument relating thereto, (iii) any increase in, addition to, exchange or
release of, or non-perfection of any lien on or security interest in, any other
collateral, (iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower [Parent] in respect of the
Note or this Agreement or (v) the absence of any action on the part of the
Secured Party to obtain payment of the Note from the Borrower [Parent].
SECTION 10. MISCELLANEOUS.
(a) No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by the Borrower [Parent] and the Secured
Party, and no waiver of any provision of this Agreement, and no consent to any
departure by the Borrower [Parent] therefrom, shall be effective unless it is in
writing and signed by the Secured Party, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
(b) No failure on the part of the Secured Party to exercise, and no delay
in exercising, any right hereunder or under the Acquisition Agreement or the
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The rights and remedies of the Secured Party provided herein
and in the Note and the Acquisition Agreement are cumulative and are in addition
to, and not exclusive of, any rights or remedies provided by law.
(c) Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or invalidity without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
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<PAGE>
(d) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full or release of the Note in accordance with its terms and the Acquisition
Agreement and (ii) be binding on the Borrower [Parent] and its successors and
assigns and shall inure, together with all rights and remedies of the Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing, the Secured Party may assign or otherwise transfer
its rights under the Note to any other Person, and such other Person shall
thereupon become vested with all of the benefits in respect thereof granted to
the Secured Party herein or otherwise. None of the rights or obligations of the
Borrower [Parent] hereunder may be assigned or otherwise transferred without the
prior written consent of the Secured Party.
(e) Upon the satisfaction in full of the Note, this Agreement and the
security interest created hereby shall terminate and all rights to the
Collateral shall revert to the Borrower [Parent]. The Secured Party will, upon
the [Parent's] request, in exchange for the [Parent's] signed receipt therefor,
and at the [Parent's] expense, (i) return to the Borrower [Parent] such of the
Collateral as shall not have been sold or otherwise disposed of or applied
pursuant to the terms hereof and (ii) execute and deliver to the Borrower
[Parent] such documents as the Borrower [Parent] shall reasonably request to
evidence such termination.
(f) This Agreement shall be governed by and construed in accordance with
the law of the State of Delaware, except as required by mandatory provisions of
law and except to the extent that the validity or perfection or the perfection
and the effect of the perfection or non-perfection of the security interest
created hereby, or remedies hereunder, in respect of any particular Collateral,
are governed by the law of a jurisdiction other than the State of Delaware.
IN WITNESS WHEREOF, each the Borrower [Parent] and the Secured Party has
caused this Agreement to be executed and delivered by its officer thereunto duly
authorized, as of the date first above written.
NEXSTAR CORPORATION
By:________________________________
Title:_____________________________
ZYGO CORPORATION
By:________________________________
Title:_____________________________
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<PAGE>
EXHIBIT 9.02C
GUARANTY
, 1996
FOR VALUE RECEIVED, NexStar Automation, Incorporated, a corporation
existing under the laws of British Columbia [NexStar Corporation, a Colorado
corporation] (the "Guarantor"), hereby unconditionally guarantees to the Holder
of the secured note made by NexStar Corporation, a Colorado corporation [NexStar
Automation, Incorporated, a corporation existing under the laws of British
Columbia] (the "Borrower"), in favor of Zygo Corporation, a Delaware corporation
(together with its successors and assigns, the "Holder"), in the principal
amount of $__________ (the "Note"), the due and punctual payment of the
principal of and interest on the Note, when and as the same shall become due and
payable, according to the terms of the Note. In case of the failure of the
Borrower punctually to make any such payment of principal or interest, the
Guarantor hereby agrees to punctually pay any such payment when and as the same
shall become due and payable, whether at maturity, by acceleration or otherwise,
as if such payment were being made by the Borrower.
The Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional, irrespective of the validity or enforceability of
the Note, the absence of any action to enforce the same, any recision, waiver,
amendment or modification of any of the terms or provisions of the Note, this
Guarantee, or any security or other agreement entered into by Guarantor and/or
the Borrower with the Holder, any extension or renewal of the Note, the recovery
of any judgment against the Borrower or any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. The Guarantor hereby waives diligence,
presentment, demand for payment, filing of claims with a court in the event of
merger or bankruptcy of the Borrower, any right to require a proceeding first
against the Borrower, protest or notice with respect to the Note or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
this Guaranty will not be discharged except by complete performance of the
obligations contained in the Note and in this Guaranty. The provisions of this
Guaranty shall be binding upon the Guarantor and its successors and assigns and
shall inure to the benefit of the Holder and its successors and assigns.
The Guarantor hereby further agrees that this guarantee constitutes a
guarantee of payment when due and not of collection and waives any right to
require that any resort be had by the Holder to any security held.
The Guarantor hereby represents and warrants that the execution, delivery
and performance by the Guarantor of this Guaranty have been duly authorized by
all necessary corporate action and do not conflict with, or result in any
violation of or default or loss of benefit under, (i) any provision of the
Guarantor's Memorandum and Articles of Association or (ii) statute, law, rule or
regulation, or any judgment, decree or order of any court or other governmental
agency or instrumentality to which the Guarantor is a party or to which its
property is subject.
<PAGE>
This Guaranty shall be construed and enforced in accordance with the laws
of the State of Delaware, without regard to the principles of conflicts of laws
thereunder.
The Guarantor hereby consents to the jurisdiction of, and confers
non-exclusive jurisdiction upon, any federal or state court located in the City
of New York, and appropriate appellate courts therefrom, over any action, suit
or proceeding arising out of or relating to this Guaranty. The Guarantor hereby
irrevocably waives, and agrees not to assert as a defense in any such action,
suit or proceeding, any objection which it may now or hereafter have to venue of
any such action, suit or proceeding brought in any such federal or state court
and hereby irrevocably waives any claim that any such action, suit or proceeding
brought in any such court or tribunal has been brought in an inconvenient forum.
Process in any such action, suit or proceeding may be served on any party
anywhere in the world, whether within or without the State of New York.
IN WITNESS WHEREOF, this Guaranty has been executed and delivered on the
date first above written by the undersigned Guarantor.
NEXSTAR AUTOMATION, INCORPORATED
[NEXSTAR CORPORATION]
By:_____________________________________
Name:
Title:
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in Registration Statements No.
33-62087, No. 33-57060, No. 33-28728, No. 20880, No. 33-34619, and 33-05265 on
Form S-8 of our report dated June 13, 1996, relating to the consolidated balance
sheets of NexStar Automation Inc. as of December 31, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years ended December 31, 1995, 1994 and 1993, which report appears
in the September 12, 1996 Current Report on Form 8-K of Zygo Corporation.
/s/ EHRHARDT KEEFE STEINER & HOTTMAN PC
------------------------------------------
Ehrhardt Keefe Steiner & Hottman PC
September 11, 1996
Denver, Colorado
EXHIBIT 99.1
For Further Information
Please Call:
Ahmad Akrami NexStar Automation, Inc.
President 2120 Miller Drive
Longmont, Colorado 80501
Telephone: (303) 678-9793
NEXSTAR AUTOMATION, INC. ANNOUNCES
SHAREHOLDERS APPROVE NEXSTAR SHARES TO BE
EXCHANGED FOR ZYGO CORPORATION SHARES
LONGMONT, COLORADO (SEPTEMBER 11, 1996)....... NexStar Automation, Inc. is
pleased to announce that at the extraordinary general meeting of shareholders
held in Vancouver today, the shareholders approved the proposed arrangement
under which NexStar shares are to be exchanged for shares of Zygo Corporation,
by a majority of approximately 92% of the shares voted. A total of 4,022,803 of
the approximately 5.4 million shares eligible to vote were voted at the meeting.
The final exchange ratios will be one common share of Zygo Corporation for
22.0637 NexStar freely trading shares, and for 23.4849 NexStar escrowed shares
respectively.
As indicated in the management information circular sent by NexStar to its
shareholders in connection with the meeting, NexStar intends tomorrow to apply
to the Supreme Court of British Columbia for a final order approving the
arrangement, and thereafter to file the court order with the Registrar of
Companies. It is presently expected that the arrangement will become final
shortly thereafter.
Shareholders who have not tendered the certificates for their NexStar
shares to Montreal Trust Company in Vancouver, accompanied by a properly
executed Letter of
<PAGE>
Transmittal, are urged to do so as soon as possible so as to ensure that they
receive certificates for the Zygo shares to which they are entitled, without
delay.
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EXHIBIT 99.2
For Further Information
Please Call:
Gary K. Willis Zygo Corporation
President and CEO Laurel Brook Road
Middlefield, Connecticut 06455
Telephone: (860) 347-8506
Ahmad Akrami NexStar Automation, Inc.
President NexStar Corporation
2120 Miller Drive
Longmont, Colorado 80501
Telephone: (303) 678-9793
FOR IMMEDIATE RELEASE
ZYGO CORPORATION COMPLETES
ACQUISITION OF NEXSTAR AUTOMATION, INC.
MIDDLEFIELD, CONNECTICUT (SEPTEMBER 13, 1996).......Zygo Corporation
(NASDAQ:ZIGO) today announced that it has completed the acquisition of NexStar
Automation, Inc. ("NexStar"), a Canadian company that was publicly traded on the
Vancouver Stock Exchange. NexStar shareholders voted on September 11th to
approve the acquisition at an extraordinary meeting. In the transaction, which
was structured as a statutory plan of arrangement under Canadian law, Zygo
acquired all the outstanding shares of NexStar in exchange for 250,000 shares of
Zygo's common stock. The acquisition will be accounted for as a pooling of
interests.
NexStar is engaged in the business of designing, developing and
manufacturing automation and parts handling equipment to improve production
efficiency and manufacturing yields within the data storage, semiconductor and
medical disposables markets. Its operations are located in Longmont, Colorado.
Gary K. Willis, president and chief executive officer of Zygo, noted, "The
addition of NexStar will strengthen our capability to fully automate the test
and measurement process for our customers. NexStar's parts handling capability
is expected to see
<PAGE>
significantly increased demand as piece parts continue to become smaller and
handling those parts without human intervention becomes more critical in a
variety of industries. Like Zygo, the data storage industry has been a primary
market focus for NexStar with NexStar's emphasis on the disk side of the
industry, and Zygo's emphasis on the head side. The combination will result in
access to major new opportunities." Ahmad Akrami, president of NexStar, added,
"Our merger with Zygo will provide our company with the resources which should
allow us to realize our potential much faster than as a standalone enterprise.
The fit with Zygo is very good; our technologies, our people, our focus on
quality and the customer, and our markets are all very much aligned, and we are
all looking forward to working together as a team."
Shareholders who have not tendered the certificates for their NexStar
shares to Montreal Trust Company in Vancouver, accompanied by a properly
executed Letter of Transmittal, are urged to do so as soon as possible so as to
ensure that they receive certificates for the Zygo shares to which they are
entitled, without delay.
Zygo Corporation designs, develops, manufactures and markets precision
measurement and automation equipment and components used to enhance production
yields in high technology industries. The firm is based in Middlefield,
Connecticut, and also has operations in Sunnyvale, California, and Longmont,
Colorado.
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