SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) February 15, 2000
ADVANCED MACHINE VISION CORPORATION
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
0-20097 33-0256103
(Commission File Number) (IRS Employer Identification No.)
3709 Citation Way #102
Medford, Oregon 97504
(Address of principal executive offices) (Zip Code)
541-776-7700
(Registrant's telephone number, including area code)
Total Number of Pages: 75
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Item 5. Other Events
------------
Effective February 15, 2000, Advanced Machine Vision
Corporation ("AMVC" or the "Company") and Key Technology, Inc.
("Key") entered into an Agreement and Plan of Merger, as
amended (the "Merger Agreement") by and among the Company, Key
and KTC Acquisition Corp. ("KTC"), a wholly-owned subsidiary
of Key, providing for the merger of KTC with and into AMVC,
with AMVC as the surviving corporation (the "Merger").
Following the Merger, AMVC will become a wholly-owned
subsidiary of Key.
Under the terms of the Merger Agreement, a holder of one share
of AMVC common stock would receive:
* $1.00 per share in cash, plus
* one share of Key convertible preferred stock for each
ten (10) shares of AMVC common stock, redeemable for
$1.00 in cash for each AMVC common share any time after
two years, or convertible at any time into 2/3 of a
share of Key common stock for each ten (10) shares of
AMVC common stock, plus
* a five-year warrant to purchase Key common stock,
redeemable at any time for $.25 in cash for each AMVC
common share, or which can be exercised to purchase .025
shares of Key common stock per AMVC common share at an
exercise price of $15.00 per share of Key common stock.
For example, a holder of 1,000 shares of AMVC common stock
will receive:
1. $1,000.00 in cash ($1.00 per AMVC share).
2. 100 shares of Key convertible preferred stock that can
be resold to Key after 24 months for $1,000.00 ($10.00
per Key share or $1.00 per AMVC share). The 100
preferred shares can be converted into 67 shares of Key
common stock at any time.
3. 100 warrants to purchase Key common stock. Each warrant
can be resold to Key for $2.50 at any time ($.25 per
AMVC share). The 100 warrants entitle the holder to
purchase 25 shares of Key common stock at $15.00 per
share.
Each share of AMVC Series B Preferred Stock will convert into
the right to receive $22.00 per share in cash.
The Merger is subject to approval of the issuance of Key
shares by holders representing a majority of the Key common
shares present in person or represented by proxy at a special
meeting of Key shareholders, and approval of the Merger
Agreement by the holders of a majority of the outstanding AMVC
common stock and a majority of the outstanding AMVC preferred
stock at a special meeting of AMVC shareholders. Accordingly,
the Merger is subject to the approval of FMC Corporation,
holder of all the outstanding preferred stock of AMVC. The
Company and Key intend to hold their respective special
shareholder meetings in May 2000. The Merger also is subject
to customary closing conditions, including, without
limitation, the making of all necessary governmental filings
and the effectiveness of a registration statement to be filed
with the Securities and Exchange Commission with respect to
the Key shares and warrants to be issued in the Merger.
Under certain circumstances, either the Company or Key may be
required to pay a termination fee of up to $2,000,000 if the
Merger Agreement is terminated.
In the event the holder of the Series B Preferred Stock does
not approve the merger, and subject to certain other
conditions, Key has agreed to commence a tender offer for all
of AMVC's common stock for the same consideration as set forth
in the merger agreement.
The Company's common shares are quoted on the Nasdaq National
Market under the trading symbol "AMVC." Key's common shares
are quoted on the Nasdaq National Market under the trading
symbol "KTEC."
The Merger Agreement and the Company's press release issued to
announce the Merger are filed as exhibits to this report. The
description of the Merger Agreement herein does not purport to
be complete and is qualified in its entirety by the provisions
of the Agreement.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits
2.1 Agreement and Plan of Merger by and among Key, KTC
and the Company dated February 15, 2000, as amended
February 29, 2000.
2.2 Agreement regarding Tender Offer between Key and the
Company dated February 15, 2000, as amended February
29, 2000.
99.1 Advanced Machine Vision Corporation Press Release
issued February 15, 2000.
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 hereunto duly authorized.
ADVANCED MACHINE VISION CORPORATION
Date: March 10, 2000 By: /s/ Alan R. Steel
---------------------------
Vice President, Finance and
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Description
- ----------- -----------
2.1 Agreement and Plan of Merger by and among Key, KTC and
the Company dated February 15, 2000, as amended
February 29, 2000.
2.2 Agreement regarding Tender Offer between Key and the
Company dated February 15, 2000, as amended February 29,
2000.
99.1 Advanced Machine Vision Corporation Press Release issued
February 15, 2000.
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is made as of February 10, 2000 (this
"Agreement"), by and among KEY TECHNOLOGY, INC., an Oregon corporation
("Parent"), KTC ACQUISITION CORP., an Oregon corporation ("Sub"), and ADVANCED
MACHINE VISION CORPORATION, a California corporation ("AMVC" or "Company").
RECITALS
A. The authorized capital stock of Parent consists of 5 million shares of
Series Preferred Stock, $.01 par value, of which 15,000 shares have been
designated as Series A Junior Participating Preferred Stock, none of which are
issued and outstanding, and 15 million shares of Common Stock ("Parent Common
Stock"), $.01 par value, of which 4,716,460 shares were issued and outstanding
on the close of business on December 31, 1999.
B. The authorized capital stock of Sub consists of 100 shares of Common
Stock, $.001 par value ("Sub Common Stock"), all of which are issued and
outstanding.
C. The authorized capital stock of the Company consists of 60 million
shares of Common Stock, without par value ("Company Common Stock" or the
"Shares"), of which 12,921,884 shares of Class A Common Stock and 47,669 shares
of Class B Common Stock were issued and outstanding at the close of business on
December 31, 1999 and 3,217,529 additional shares were subject to issuance
pursuant to outstanding stock options or warrants ("Company Options")
outstanding, and 3 million shares of Preferred Stock, of which 400,000 shares
have been designated as Series A Junior Participating Preferred Stock, none of
which are issued and outstanding, and 119,106 shares of Series B Preferred Stock
which were issued and outstanding on December 31, 1999.
D. All of the issued and outstanding shares of Sub Common Stock are owned
by Parent.
E. The respective Boards of Directors of Parent, Sub and the Company deem
it advisable and in the best interests of their respective stockholders that Sub
shall merge into the Company pursuant to the articles and certificate of merger
attached hereto as Exhibit A (the "Articles of Merger") and the applicable
provisions of the laws of the States of Oregon and California and have, by
resolutions duly adopted, approved the principal terms of such merger which are
herein set forth, and Sub and the Company have directed that the principal terms
of such merger be submitted to their respective stockholders for approval.
F. The parties desire to state the terms and conditions of such merger, the
mode of carrying the same into effect, the consideration which the holders of
Company Common Stock, Company Options, Company Series B Stock and Sub Common
Stock are to receive in exchange for such shares upon the merger and such other
details and provisions as are deemed necessary or desirable.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. Definitions.
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Accounts Receivable" -- as defined in Section 3.8.
"Affiliate" -- as defined by the Commission.
"Agreement" -- as defined in the first paragraph of this Agreement.
"Applicable Contract" -- any Contract (a) under which the Company has or
may acquire any rights, (b) under which the Company has or may become subject to
any obligation or liability, or (c) by which the Company or any of the assets
owned or used by it are or may become bound.
"Articles of Merger" -- as defined in the Recitals of this Agreement.
"Balance Sheet" -- as defined in Section 3.4.
"Best Efforts" -- the efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to ensure that such result is achieved
as expeditiously as possible; provided, however, that an obligation to use Best
Efforts under this Agreement does not require the Person subject to that
obligation to take actions that would result in a materially adverse change in
the benefits to such Person of this Agreement and the Contemplated Transactions.
"Breach" -- a "Breach" of a representation, warranty, covenant, obligation,
or other provision of this Agreement or any instrument delivered pursuant to
this Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation, or other
provision, and the term "Breach" means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
"CCL" -- as defined in Section 2.1.
"Closing" -- as defined in Section 2.3.
"Closing Date" -- as defined in Section 2.3.
"Commission" -- the United States Securities and Exchange Commission.
"Company" -- as defined in the first paragraph of this Agreement. Unless
otherwise indicated herein, the term "Company" includes in all instances the
Company and all of its subsidiaries, including without limitation SRC Vision,
Inc. and Ventek, Inc.
"Company Common Stock" -- as defined in the Recitals of this Agreement.
"Company Options" -- as defined in the Recitals of this Agreement.
"Company Series B Stock" -- the Company's Series B Preferred Stock.
"Company Stock Rights Plan" - The stock rights plan set forth in the Rights
Agreement entered into with American Stock Transfer and Trust Company dated
February 27, 1998.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by this
Agreement, including:
(a) the Merger;
(b) the performance by Parent, Sub, Company and the Surviving
Stockholders of their respective covenants and obligations under this
Agreement; and
(c) Parent's acquisition and exercise of control over the Company.
"Contract" -- any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Conversion Ratio" -- as defined in Section 2.5(a)(i).
"Copyrights" -- as defined in Section 3.21(a)(iii).
"Disclosure Letter" -- the disclosure letter referenced in Section 3 and to
be delivered by the Company to Parent concurrently with the execution of this
Agreement.
"Dissenting Share" -- means any share of Company Common Stock which any
Stockholder who has exercised his or her dissenter's rights under the CCL holds
of record.
"Effective Time" -- as defined in Section 2.2.
"Employee Benefit Plan" -- as defined in Section 3.12(b)(i).
"Encumbrance" -- any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, restriction on use, voting, transfer, receipt of income, or exercise of
any other attribute of ownership.
"Environment" -- soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental, Health, and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law, Occupational Safety and Health Law or any other Legal
Requirement and consisting of or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and
health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or
response actions ("Cleanup") required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or any other Person) and for
any natural resource damages; or
(d) any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety and Health
Law.
The terms "removal," "remedial," and "response action," include the types
of activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., as amended
("CERCLA").
"Environmental Law" -- as defined in Section 3.18.
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"ERISA Affiliate" -- as defined in Section 3.12.
"Facilities" -- any real property, leaseholds, or other interests currently
or formerly owned or operated by the Company and any buildings, plants, or
structures currently or formerly owned or operated by the Company.
"Financial Statements" -- as defined in Section 3.4.
"GAAP" -- generally accepted United States accounting principles, applied
on a basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in Section 3.4 were prepared.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, or given by or under the
authority of any Governmental Body or pursuant to any Legal Requirement.
"Governmental Body" -- any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) Federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and any court or other tribunal); or
(d) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature.
"Hazardous Activity" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment, or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm to persons or property on or off the
Facilities, or that may affect the value of the Facilities or the Company.
"Hazardous Materials" -- as defined in Section 3.18.
"Intellectual Property Assets" -- as defined in Section 3.21(a).
"IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other matter; or
(b) a prudent individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of conducting a
reasonable investigation concerning the existence of such fact or other
matter.
The Company will be deemed to have "Knowledge" of a particular fact or
other matter if any individual who is serving as a director or officer of the
Company has Knowledge of such fact or other matter.
"Legal Requirement" -- any federal, state, local, or municipal
administrative order, constitution, law, ordinance, principle of common law,
regulation, statute, or treaty.
"Marks" -- as defined in Section 3.21(a)(i).
"Material Adverse Change" -- a material adverse change in the business,
operations, properties, assets or condition of the Company.
"Material Adverse Effect" -- something that has caused or would be likely
to cause a Material Adverse Change.
"Merger" -- as defined in Section 2.1.
"Multiemployer Plan" -- as defined in Section 3.12(b)(i).
"Nasdaq" -- the National Association of Securities Dealers Automated
Quotation System.
"Occupational Safety and Health Law" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:
(a) such action is substantially consistent with the past practices of
such Person and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority) and is not required to be specifically authorized by the
parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or
by any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that
are in the same line of business as such Person.
"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"Parent's Advisors" -- as defined in Section 5.1.
"Parent Disclosure Letter" -- as defined in Section 4.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Plan" -- as defined in Section 3.12.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Related Person" -- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control
with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner, executor,
or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b) or
(c).
For purposes of this definition, (a) the "Family" of an individual includes
(i) the individual, (ii) the individual's spouse and former spouses, (iii) any
other natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least 5% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 5% of the outstanding equity securities or
equity interests in a Person.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"Representative" -- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Rights in Mask Works" -- as defined in Section 3.21.
"Securities Act" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"Series B Preferred" -- as defined in Section 2.5.
"Shares" -- as defined in the Recitals of this Agreement.
"Stockholder" -- any Person who owns at the relevant time one or more of
the Shares.
"Subsidiary" -- with respect to any Person (the "Owner"), any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when
used without reference to a particular Person, "Subsidiary" means a Subsidiary
of the Company.
"Tax" -- any tax (including any income tax, capital gains tax, value-added
tax, sales tax, property tax, gift tax, or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, or other fee, and any
related charge or amount (including any fine, penalty, interest, or addition to
tax), imposed, assessed, or collected by or under the authority of any
Governmental Body or payable pursuant to any tax-sharing agreement or any other
Contract relating to the sharing or payment of any such tax, levy, assessment,
tariff, duty, deficiency, or fee.
"Tax Return" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"Threat of Release" -- a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
"Trade Secrets" -- as defined in Section 3.21(a)(v).
"Transfer Agent" - the Parent's transfer agent as of the Effective Time.
"Warrant" - as defined in Section 2.5.
"Welfare Plan" -- as defined in Section 3.12(b)(i).
"Wholly Owned Subsidiary" - as defined in Section 3.3.
2. Merger and Effective Time; Articles of Incorporation; Bylaws; Directors
and Officers; Conversion and Exchange of Shares.
2.1 The Merger. At the Effective Time (as defined in Section 2.2
hereof), Sub shall be merged (the "Merger") into the Company, which shall
be (and is hereinafter sometimes referred to as) the "Surviving
Corporation." The corporate existence of the Company with all its rights,
privileges, powers and franchises shall continue unaffected and unimpaired
by the Merger, and as the Surviving Corporation it shall be governed by the
laws of the State of California and succeed to all rights, privileges,
powers, franchises, assets, liabilities and obligations of Sub in
accordance with the Oregon Business Corporation Act (the "OBCA") and the
California Corporation Law (the "CCL"). The separate existence and
corporate organization of Sub shall cease at the Effective Time and
thereupon the Company and Sub shall be a single corporation, the Company.
2.2 Effective Time of the Merger. The Merger shall become effective at
the time (the "Effective Time") of filing with the Oregon Secretary of
State and the California Secretary of State of Articles of Merger in such
form as is required by, and executed in accordance with, the applicable
provisions of the OBCA and the CCL or at such later time as may be agreed
to by Parent and the Company and specified in the Articles of Merger. The
parties will cause the Articles of Merger to be filed with the Oregon
Secretary of State and the California Secretary of State as soon as
practicable after the Closing.
2.3 Closing. On the same day as, but immediately prior to the filing
of the Articles of Merger, a closing (the "Closing") will take place for
the purpose of confirming the satisfaction or waiver of the conditions set
forth in Sections 7, 8 and 9 hereof. The Closing will take place as soon as
practicable but not later than three business days after the satisfaction
or waiver of the conditions set forth in such Sections (the date and time
of the Closing being hereinafter referred to as the "Closing Date"), at the
offices of Tonkon Torp LLP, 1600 Pioneer Tower, 888 SW Fifth Avenue,
Portland, OR 97904-2099, unless another time or place is agreed to by the
parties hereto.
2.4 Articles of Incorporation; Bylaws; Directors and Officers.
(a) Articles of Incorporation. The Articles of Incorporation of
the Company, as in effect immediately prior to the Effective Time,
shall be amended at the Effective Time to change Article III thereof
to read in full as follows: "Authorized Stock. The total number of
shares of stock which the corporation shall have the authority to
issue is 100 shares of common stock, without par value." From and
after the Effective Time, such Articles of Incorporation, as so
amended, shall continue as the Articles of Incorporation of the
Surviving Corporation, until amended as provided by law.
(b) Bylaws. The Bylaws of the Company, as in effect at the
Effective Time, shall continue to be the Bylaws of the Surviving
Corporation, until altered, amended or repealed in accordance with
law, the Articles of Incorporation of the Surviving Corporation and
such Bylaws.
(c) Directors and Officers. The directors of the Surviving
Corporation at and immediately following the Effective Time shall be
Thomas C. Madsen and Gordon Wicher, to serve in accordance with the
Bylaws of the Surviving Corporation. The officers of the Surviving
Corporation at and immediately following the Effective Time shall be
Thomas C. Madsen, President and Gordon Wicher, Secretary, to serve in
accordance with the Bylaws of the Surviving Corporation.
2.5 Conversion and Exchange of Shares. The manner and basis of
converting at the Effective Time Company Common Stock into cash and shares
of Parent's Series B Convertible Preferred Stock, $10.00 par value, having
the rights and preferences set forth in the attached Exhibit 2.5A (the
"Series B Preferred") with the attached redeemable Warrant to purchase
shares of Parent's Common Stock in the form attached as Exhibit 2.5B, the
exchange of certificates therefor, the manner and basis of converting the
Company's Series B Stock into cash, and the manner and basis of converting
Company Options outstanding at the Effective Time shall be as set forth
herein.
(a) Conversion of Shares.
(i) (A) Each share of Company Common Stock (both Class A
and Class B) issued and outstanding immediately prior to the
Effective Time (except Dissenting Shares) shall, by virtue
of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive $1.00
in cash and one-tenth of a share of Series B Preferred, with
each share of Series B Preferred to be accompanied by a
Warrant, redeemable at any time by the holder for $2.50 in
cash and exercisable at any time to purchase .25 of a share
of Parent's Common Stock at a price of $15.00 per share
(such Series B Preferred shares and attached Warrants to be
issued for each share of Company Common Stock constituting
the "Conversion Ratio").
(B) Each Dissenting Share shall be converted into the
right to receive payment from the Surviving Corporation with
respect thereto in accordance with the provisions of the
CCL.
(ii) Each share of the Company Series B Preferred Stock
outstanding at the Effective Date will be converted into the
right to receive $22.00 per share in cash.
(iii) Each share of Sub Common Stock issued and
outstanding as of the Effective Time, shall, by virtue of
the Merger and without any action on the part of Parent, the
sole stockholder of Sub, be converted into one share of
legally and validly issued, fully paid and nonassessable
Common Stock, without par value, of the Surviving
Corporation. The stock certificate of Sub evidencing
ownership of Sub Common Stock shall by virtue of the Merger
evidence ownership of Common Stock of the Surviving
Corporation.
(iv) In the event of any stock split, combination,
reclassification, recapitalization, exchange, stock dividend
or other distribution payable in Parent Common Stock with
respect to shares of Parent Common Stock (or if a record
date with respect to any of the foregoing should occur)
during the period between the date of this Agreement and the
Effective Time, then the Conversion Ratio will be
appropriately adjusted to reflect such stock split,
combination, reclassification, recapitalization, exchange,
stock dividend or other distribution.
2.6 Exchange of Certificates; Payment. Series B Preferred and attached
Warrants into which Company Common Stock shall be converted pursuant to the
Merger shall be deemed to have been issued at the Effective Time. At the
Closing, Parent shall deliver to the Transfer Agent certificates evidencing
the number of shares of Series B Preferred and attached Warrants to which
that Stockholder is entitled under Section 2.5, together with the cash
payment applicable thereto. The Company will cause to be delivered such
transmittal letters, documents and instruments as Parent or Parent's
transfer agent may reasonably request, each in form reasonably acceptable
to Parent or such transfer agent. Parent shall also deliver to the Transfer
Agent the payment to be made pursuant to Section 2.5(a)(ii) above with
respect to any shares of Company Series B Stock outstanding on the
Effective Date.
2.7 No further Ownership Rights in Company Common Stock. All shares of
Series B Preferred and attached Warrants issued upon the surrender for
exchange of shares of Company Common Stock in accordance with the terms
hereof and the cash amount per share to be paid pursuant to Section 2.5
shall be deemed to have been issued and paid in full satisfaction of all
rights pertaining to such shares of Company Common Stock, and, on and after
the Effective Time, there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the shares of
Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Section 2, except that any validly issued
shares of Company Common Stock presented for exchange after the Effective
Time in excess of the number of shares of Common Stock represented to be
outstanding under Section 3.3 as updated at the Closing will by virtue of
the Merger be converted into the right to receive $.001 in cash per share.
2.8 Cash in Lieu of Fractional Shares. No fractional shares of Series
B Preferred shall be issued in the Merger but, in lieu of any such
fractional shares, each Stockholder who would otherwise have been entitled
to a fractional share of Series B Preferred will be paid an amount of cash
(without interest) determined by multiplying such fractional amount by
$10.00.
2.9 Company Stock Options. All outstanding Company Options are listed
by holder and amount on Schedule 2.9 hereto. All such options will have
been exercised prior to Closing or will by virtue of the Merger be deemed
cancelled.
2.10 Dissenters' Rights. Any issued and outstanding Company Shares
held by any Shareholder who, in accordance with California Law, dissents
from the Merger (a "Dissenting Shareholder") and requires appraisal of such
Dissenting Shareholder's shares ("Dissenting Shares") shall not be
converted or cancelled as described elsewhere in this Section 2 but instead
shall become the right to receive from the Surviving Corporation such
consideration as may be determined to be due to such dissenting Shareholder
pursuant to California Law; provided, however, that Dissenting Shares
outstanding at the Effective Time and held by a Dissenting Shareholder who
shall after the Effective Time withdraw such Dissenting Shareholder's
demand for appraisal or lose such Dissenting Shareholder's right of
appraisal as provided by California Law shall be deemed to be converted as
of the Effective Time into the right to receive the consideration that
would otherwise have been payable in respect thereof if no dissent had been
made.
3. Representations and Warranties of the Company.
The Company hereby represents and warrants to Parent that, except as
otherwise provided in the Disclosure Letter by reference in each instance to the
specific subsection numbers of this Section 3:
3.1 Organization and Good Standing.
(a) Part 3.1 of the Disclosure Letter contains a complete and
accurate description of the Company name, jurisdiction of
incorporation and other jurisdictions in which it is authorized to do
business. The Company is a corporation duly organized and validly
existing under the laws of California, with full corporate power and
authority to conduct its business as it is now being conducted, to own
or use the properties and assets that it purports to own or use, and
to perform all its obligations under Applicable Contracts. The Company
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each state or other jurisdiction in
which either the ownership or use of the properties owned or used by
it, or the nature of the activities conducted by it, requires such
qualification except where any failure to so qualify would not have a
Material Adverse Effect.
(b) The Company has delivered to Parent correct and complete
copies of its Organizational Documents, as currently in effect.
3.2 Authority; No Conflict.
(a) The Company has the requisite corporate power and authority
to execute and deliver this Agreement and all other agreements and
documents contemplated hereby and to carry out its obligations
hereunder. The execution, delivery and performance of this Agreement
and all other agreements and documents contemplated hereby and the
consummation of the Merger and of the other transactions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement and all other
agreements and documents contemplated hereby or to consummate the
transactions so contemplated (other than, with respect to the Merger,
the approval and adoption of this Agreement by the Company's
stockholders in accordance with the CCL and the Company's Articles of
Incorporation). The affirmative vote of the holders of a majority of
the outstanding shares of Company Common Stock and the approving vote
of any Company Series B Stock outstanding in compliance with the CCL
is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve this Agreement and the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and constitutes, and all
agreements and documents contemplated hereby when executed and
delivered pursuant hereto for value received will constitute, the
valid and binding obligations of the Company.
(b) Except as set forth in Part 3.2 of the Disclosure Letter,
neither the execution and delivery of this Agreement by the Company
nor the consummation or performance of any of the Contemplated
Transactions by the Company will, directly or indirectly (with or
without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of the Company,
or (B) any resolution adopted by the board of directors or the
stockholders of the Company;
(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any
Order to which the Company or any Stockholder, or any of the
assets owned or used by the Company, may be subject that would be
likely to have a Material Adverse Effect;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental
Body the right to revoke, withdraw, suspend, cancel, terminate,
or modify, any Governmental Authorization that is held by the
Company or that otherwise relates to the business of, or any of
the assets owned or used by, the Company;
(iv) cause Parent, Sub or the Company to become subject to,
or to become liable for the payment of, any material Tax;
(v) cause any of the assets owned by the Company to be
reassessed or revalued in any material way by any taxing
authority or other Governmental Body;
(vi) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate, or
modify, any Applicable Contract that would have a Material
Adverse Effect; or
(vii) result in the imposition or creation of any material
charge, claim, community property interest, condition, equitable
interest, lien, option, pledge, security interest or encumbrance
upon or with respect to any of the assets owned or used by the
Company.
Except as set forth in Part 3.2 of the Disclosure Letter, the Company will
not be required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
3.3 Capitalization. The authorized equity securities of AMVC consist
of 60 million shares of common stock, without par value, of which
12,870,000 shares are issued and outstanding and 3 million shares of
Preferred Stock, of which 119,106 shares of Company Series B Stock are
issued and outstanding. Schedule 2.9 sets forth all outstanding options or
other rights to acquire any securities of the Company, together with the
exercise prices therefor. All of the outstanding equity securities of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. There are no Contracts relating to the issuance, sale, or
transfer of any equity securities or other securities of the Company. Since
January 1, 1994, none of the outstanding equity securities or other
securities of the Company was issued in violation of the Securities Act or
any applicable securities laws. The Company owns 100% of all of the
outstanding securities, and there are no outstanding rights to acquire any
securities, of Applied Laser Systems, Inc.; SRC Vision, Inc.; ARC
Netherlands BV and Ventek, Inc. (the "Wholly Owned Subsidiaries"). All
representations made in this Section 3 with respect to the Company are also
made with respect to each Wholly Owned Subsidiary when taken in the context
of having a Material Adverse Effect on the Company. Except as set forth in
Part 3.3 of the Disclosure Letter, the Company does not own, and does not
have any Contract to acquire, any equity securities or other securities of
any Person (including any Subsidiary) or any direct or indirect equity or
ownership interest in any other business.
3.4 Financial Statements. Company has delivered to Parent: an audited
balance sheet of the Company as at December 31, 1999 (the "Balance Sheet")
and the related statements of income, stockholders' equity, and cash flow
for the fiscal year then ended, together with the report thereon of
Pricewaterhouse Coopers LLP, independent certified public accountants (such
financial statements are collectively referred to herein as the "Financial
Statements"). The Financial Statements fairly present the financial
condition and the results of operations, changes in stockholders' equity,
and cash flow of the Company as at the dates of and for the periods
referred to therein, all in accordance with GAAP. The Financial Statements
reflect the consistent application of such accounting principles throughout
the periods involved, except as disclosed in the notes to such financial
statements. No financial statements of any Person other than the Company
are required by GAAP to be included in the consolidated financial
statements of the Company.
3.5 Books and Records. Except as described in Part 3.5 to the
Disclosure Letter, the books of account, minute books, stock record books,
and other records of the Company specifically requested by Parent or its
Representatives, all of which have been or prior to the Closing Date will
be made available to Parent, are complete and correct in all material
respects. Except as described in Part 3.5 to the Disclosure Letter, the
minute books of the Company contain accurate and complete records of all
meetings held of, and corporate action taken by, the stockholders, the
Boards of Directors, and committees of the Boards of Directors of the
Company, and no meeting of any such stockholders, Board of Directors, or
committee has been held for which minutes have not been prepared and are
not contained in such minute books. At the Closing Date, all of those books
and records will be in the possession of the Company.
3.6 Title to Properties; Encumbrances. Part 3.6 of the Disclosure
Letter contains a complete and accurate list of all real property,
leaseholds, or other interests therein, if any, owned by the Company. Upon
request, Company will deliver to Parent copies of the deeds and other
instruments (as recorded) by which the Company acquired such real property
and interests, and copies of all title insurance policies, opinions,
abstracts, and surveys in the possession of the Company and relating to
such property or interests. All material properties and assets reflected in
the Balance Sheet are free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options,
pledges, security interests and encumbrances except, with respect to all
such properties and assets, (a) mortgages or security interests shown on
the Balance Sheet as securing specified liabilities or obligations, with
respect to which no default (or event that, with notice or lapse of time or
both, would constitute a default) exists, (b) mortgages or security
interests incurred in connection with the purchase of property or assets
after the date of the Balance Sheet (such mortgages and security interests
being limited to the property or assets so acquired), with respect to which
no default (or event that, with notice or lapse of time or both, would
constitute a default) exists and which mortgages or security interests are
listed and described in Part 3.6 of the Disclosure Letter, and (c) liens
for current taxes not yet due.
3.7 Condition and Sufficiency of Assets. As of the date of this
Agreement, the buildings, plants, structures, and equipment of the Company
are to the Company's Knowledge structurally sound, are in good operating
condition and repair, and are adequate for the uses to which they are being
put, and none of such buildings, plants, structures, or equipment is in
need of maintenance or repairs except for ordinary, routine maintenance and
repairs that are not material in nature or cost. The building, plants,
structures, and equipment of the Company are sufficient for the continued
conduct of the Company's business after the Closing Date in substantially
the same manner as conducted prior to the Closing Date.
3.8 Accounts Receivable. All accounts receivable of the Company that
are reflected on the Balance Sheet or on the accounting records of the
Company (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. There is no material
contest, claim, or right of set-off, other than returns in the Ordinary
Course of Business, under any Contract with any obligor of an Accounts
Receivable relating to the amount or validity of such Accounts Receivable.
3.9 No Undisclosed Liabilities. Except as set forth in Part 3.9 of the
Disclosure Letter, the Company has no material liabilities or obligations
of any nature (whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or obligations reflected
or reserved against in the Financial Statements for the year ended December
31, 1999 and current liabilities incurred in the Ordinary Course of
Business since the date thereof.
3.10 Taxes.
(a) Except as described in Part 3.10 of the Disclosure Letter,
the Company has filed or caused to be filed all Tax Returns that are
or were required to be filed by it pursuant to applicable Legal
Requirements. Part 3.10 of the Disclosure Letter contains a complete
and accurate list of all such Tax Returns filed since January 1, 1997.
The Company has paid, or made sufficient provision for the full
payment of, all Taxes that have or may have become due pursuant to
those Tax Returns or otherwise, or pursuant to any assessment received
by the Company, except such Taxes, if any, as are listed in Part 3.10
of the Disclosure Letter and are being contested in good faith and as
to which adequate reserves (determined in accordance with GAAP) have
been provided in the Financial Statements for the year ended December
31, 1999 and the Interim Financial Statements.
(b) All deficiencies which have been or may be proposed as a
result of audits of the United States federal and state income Tax
Returns of the Company have been paid, reserved against, settled, or,
as described in Part 3.10 of the Disclosure Letter, are being
contested in good faith by appropriate proceedings. Except as
described in Part 3.10 of the Disclosure Letter, the Company has not
given or been requested to give waivers or extensions (or is or would
be subject to a waiver or extension given by any other Person) of any
statute of limitations relating to the payment of Taxes of the Company
or for which the Company may be liable.
(c) The charges, accruals, and reserves with respect to Taxes on
the books of the Company are adequate (determined in accordance with
GAAP). There exists no proposed or unpaid actual Tax assessment
against the Company except as disclosed in the Financial Statements
for the year ended December 31, 1999, or in Part 3.10 of the
Disclosure Letter. Except as disclosed in Part 3.10 to the Disclosure
Letter, all Taxes that the Company is or was required by Legal
Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper
Governmental Body or other Person.
(d) Except as disclosed in Part 3.10 to the Disclosure Letter,
all Tax Returns filed by the Company are true, correct, and complete
in all material respects. There is no tax sharing agreement that will
require any payment by the Company after the date of this Agreement.
3.11 No Material Adverse Change. Since the date of the Balance Sheet,
and except as set forth in the Disclosure Letter, there has not been any
Material Adverse Change.
3.12 Employee Benefits.
(a) The Company has no ownership interest in, and does not
contribute to, any credit union which has been established by the
Company for any of its employees.
(b)
(i) Neither the Company nor any affiliate of the Company as
determined under IRCss. 414(b), (c), (m) or (o) ("ERISA
Affiliate") maintains, administers or contributes to, nor do the
employees of the Company or any ERISA Affiliate receive or expect
to receive as a condition of employment, benefits pursuant to:
any employee pension benefit plan (as defined inss. 3(2) of
ERISA) ("Plan"), including, without limitation, any multiemployer
plan as defined in IRCss. 3(37) of ERISA ("Multiemployer Plan");
any employee welfare benefit plan (as defined in IRCss. 3(1) of
ERISA) ("Welfare Plan"); or any bonus, deferred compensation,
stock purchase, stock option, stock appreciation, severance,
salary continuation, vacation, sick leave, fringe benefit,
incentive, insurance, welfare or similar plan or arrangement
("Employee Benefit Plan") other than those Plans, Welfare Plans
and Employer Benefit Plans described in Part 3.12 of the
Disclosure Letter. Except as required by IRCss. 4980B or as
disclosed in Part 3.12 of the Disclosure Letter, neither the
Company nor any ERISA Affiliate has promised any former employee
or other individual not employed by the Company or any ERISA
Affiliate medical or other benefit coverage, maintains or
contributes to any plan or arrangement providing medical benefits
to former employees, their spouses or dependents or any other
individual not employed by the Company.
(ii) All Plans, Welfare Plans and Employee Benefit Plans and
any related trust agreements or annuity contracts (or any related
trust instruments) comply with and are and have been operated in
accordance with each applicable provision of ERISA, the IRC
(including, without limitation, the requirements of IRCss. 401(a)
to the extent any Plan is intended to conform to that section),
other Federal statutes, state law (including, without limitation,
state insurance law) and the regulations and rules promulgated
pursuant thereto or in connection therewith. The Company has no
Knowledge of any violation of any of the foregoing by any Plan,
Welfare Plan, or Employee Benefit Plan. Each Welfare Plan which
is a group health plan (within the meaning of ss. 5000(b)(1) of
the Code) complies with and has been maintained and operated in
accordance with each of the requirements of IRCss. 162(k) as in
effect for years beginning prior to 1989, IRCss. 4980B for years
beginning after December 31, 1988 and Part 6 of Subtitle B of
Title I of ERISA. A favorable determination as to the
qualification under the Code of the Company's Profit Sharing or
401(k) Plan and each amendment thereto has been made by the IRS,
the Profit Sharing Plan at all times has been and remains
qualified under the IRC, and the related trust at all times has
been and remains tax exempt.
(iii) Neither any Plan or Welfare Plan fiduciary nor any
Plan or Welfare Plan has engaged in any transaction in violation
of ss. 406 of ERISA or any "prohibited transaction" (as defined
in ss. 4975(c)(1) of the IRC and there has been no "reportable
event" (as defined in ss. 4043(b) of ERISA) with respect to any
Plan. Neither the Company nor any ERISA Affiliate has failed to
make any contributions or to pay any amounts due and owing as
required by the terms of any Plan, Welfare Plan or Employee
Benefit Plan, or collective bargaining agreement or ERISA or any
other applicable law.
(iv) True and complete copies of each Plan, Welfare Plan and
Employee Benefit Plan, related trust agreements, annuity
contracts, determination letters, summary plan descriptions, all
communication to employees regarding any Plan, Welfare Plan, or
Employee Benefit Plan, annual reports on Form 5500 for the last
three years, and each plan, agreement, instrument and commitment
referred to herein, have been identified in writing and made
available to Parent; all of the foregoing are legally valid,
binding, in full force and effect, and there are no defaults
thereunder, and none of the rights of the Company thereunder will
be impaired by this Agreement or the consummation of the
transaction contemplated hereby. The annual reports on Form 5500
fully and accurately set forth the financial and actuarial
condition of each Plan and each trust funding any Welfare Plan.
With respect to each Plan, Welfare Plan and Employee Benefit
Plan, the Disclosure Letter sets forth the name and address of
the administrator and trustees and the policy number and insurer
under all insurance policies.
(v) There are no pending or threatened claims by or on
behalf of any of the Plans, Welfare Plans, or Employee Benefit
Plans by any employee or beneficiary covered under any Plans,
Welfare Plans or Employee Benefit Plans or otherwise involving
any Plan, Welfare Plan or Employee Benefit Plan (other than
routine claims for benefits).
3.13 Compliance with Legal Requirements; Governmental Authorizations.
(a) To the Knowledge of the Company, except as set forth in Part
3.13 of the Disclosure Letter:
(i) the Company is, and at all times has been, in material
compliance with each material Legal Requirement that is or was
applicable to it or to the conduct or operation of its business
or the ownership or use of any of its assets;
(ii) no event has occurred or circumstance exists that (with
or without notice or lapse of time) (A) may constitute or result
in a violation by the Company of, or a failure on the part of the
Company to comply with, any material Legal Requirement, or (B)
may give rise to any obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature, that with respect to either of the
preceding, is likely to have a Material Adverse Effect; and
(iii) since January 1, 1997, the Company has not received
any notice or other communication (whether oral or written) from
any Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of, or failure
to comply with, any Legal Requirement, or (B) any actual,
alleged, possible, or potential obligation on the part of the
Company to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature, that with respect to
either of the preceding, is likely to have a Material Adverse
Effect.
(b) Part 3.13 of the Disclosure Letter contains a complete and
accurate list of each material Governmental Authorization that is held
by the Company. Each material Governmental Authorization listed or
required to be listed in Part 3.13 of the Disclosure Letter is valid
and in full force and effect. Except as set forth in Part 3.13 of the
Disclosure Letter:
(i) the Company is, and at all times has been, in material
compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be
identified in Part 3.13 of the Disclosure Letter;
(ii) to the Knowledge of the Company, no event has occurred
or circumstance exists that may (with or without notice or lapse
of time) (A) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement
of any Governmental Authorization listed or required to be listed
in Part 3.13 of the Disclosure Letter, or (B) result directly or
indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in
Part 3.13 of the Disclosure Letter, that with respect to either
of the preceding, is likely to have a Material Adverse Effect;
(iii) since January 1, 1997, the Company has not received,
at any time, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding
(A) any actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental
Authorization, that with respect to either of the preceding, is
likely to have a Material Adverse Effect; and
(iv) all applications required to have been filed for the
renewal of the material Governmental Authorizations listed or
required to be listed in Part 3.13 of the Disclosure Letter have
been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required to have been
made with respect to such Governmental Authorizations have been
duly made on a timely basis with the appropriate Governmental
Bodies.
The Governmental Authorizations listed in Part 3.13 of the Disclosure Letter
collectively constitute all of the material Governmental Authorizations
necessary to permit the Company to lawfully conduct and operate its business in
the manner it currently conducts and operates such business and to permit the
Company to own and use its assets in the manner in which it currently owns and
uses such assets, except where the failure to have such Governmental
Authorizations would not be reasonably likely to have a Material Adverse Effect.
3.14 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.14 of the Disclosure Letter,
there is no pending Proceeding:
(i) that has been commenced by or against the Company or
that otherwise relates to or may affect the business of, or any
of the assets owned or used by, the Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions.
To the Knowledge of the Company, (1) no such Proceeding has been Threatened, and
(2) no event has occurred or circumstance exists that may give rise to or serve
as a basis for the commencement of any such material Proceeding. Company has
delivered to Parent copies of all pleadings, correspondence, and other documents
relating to each Proceeding listed in Part 3.14 of the Disclosure Letter. The
Proceedings listed in Part 3.14 of the Disclosure Letter taken collectively will
not have a material adverse effect on the business, operations, assets,
condition, or prospects of the Company.
(b) To the Knowledge of the Company,
(i) there is no Order to which the Company, or any of the
assets owned or used by the Company, is specifically subject; and
(ii) no officer, director, agent, or employee of the Company
is specifically subject to any Order that prohibits such officer,
director, agent, or employee from engaging in or continuing any
conduct, activity, or practice relating to the business of the
Company.
3.15 Absence of Certain Changes and Events. Except as set forth in
Part 3.15 of the Disclosure Letter, since the date of the Balance Sheet,
the Company has conducted its business only in the Ordinary Course of
Business and there has not been any:
(a) change in the Company's authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock
of the Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption,
retirement, or other acquisition by the Company of any shares of any
such capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of the Company;
(c) payment or increase by the Company of any bonuses, salaries,
or other compensation to any stockholder, director, officer, or
(except in the Ordinary Course of Business) employee or entry into any
employment, severance, or similar Contract or commitment with any
director, officer, or employee or the adoption of any severance policy
applicable to employees in general;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or
with any employees of the Company;
(e) damage to or destruction or loss of any asset or property of
the Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial
condition, or prospects of the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of (i) any material license, distributorship, dealer,
sales representative, joint venture, credit, or similar agreement, or
(ii) any Contract or transaction involving a total remaining
commitment by or to the Company of at least $10,000 (except for
Contracts or transactions entered into in the Ordinary Course of
Business with the Company's customers or vendors which do not exceed,
individually, a commitment of $50,000);
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of the
Company or mortgage, pledge, or imposition of any lien or other
encumbrance on any material asset or property of the Company,
including the sale, lease, or other disposition of any of the
Intellectual Property Assets, in any case greater than $10,000;
(h) cancellation or waiver of any claims or rights with a value
to the Company in excess of $10,000;
(i) material change in the accounting methods used by the
Company;
(j) any hiring of new employees except as replacements for
persons whose employment with the Company terminated since such date,
or the hiring of any employee at an annual compensation rate of
$75,000 or more per year; or
(k) agreement, whether oral or written, by the Company to do any
of the foregoing.
3.16 Contracts; No Defaults.
(a) Part 3.16(a) of the Disclosure Letter contains a complete and
accurate list of each, and except as so disclosed there is no:
(i) applicable Contract that involves performance of
services or delivery of goods or materials by the Company of an
amount or value in excess of $25,000;
(ii) applicable Contract that involves performance of
services or delivery of goods or materials to the Company of an
amount or value in excess of $25,000;
(iii) applicable Contract that was not entered into in the
Ordinary Course of Business and that involves expenditures or
receipts of the Company in excess of $5,000;
(iv) lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Applicable
Contract affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or personal
property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate
payments of less than $15,000 and with terms of less than one
year);
(v) contract relating to Intellectual Property Assets to
which the Company is a party or by which the Company is bound,
except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software
programs with a value of less than $2,500 under which the Company
is the licensee, including agreements with current or former
employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual
Property Assets;
(vi) collective bargaining agreement and other Applicable
Contract to or with any labor union or other employee
representative of a group of employees;
(vii) joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits, losses,
costs, or liabilities by the Company with any other Person;
(viii) applicable Contract containing covenants that in any
material way purport to restrict the business activity of the
Company or any Affiliate of the Company or limit the freedom of
the Company or any Affiliate of the Company to engage in any line
of business or to compete with any Person;
(ix) applicable Contract providing for payments to or by any
Person based on sales, purchases, or profits, other than direct
payments for goods;
(x) power of attorney that is currently effective and
outstanding;
(xi) applicable Contract for capital expenditures which, by
its terms, provides for an aggregate balance payable thereunder
since December 31, 1999 in excess of $15,000 for any such
Contract;
(xii) written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by
the Company other than in the Ordinary Course of Business; and
(xiii) amendment, supplement, and modification (whether oral
or written) in respect of any of the foregoing.
(b) To the Knowledge of the Company, except as set forth in Part
3.16(b) of the Disclosure Letter, with respect to each Contract
identified or required to be identified in Part 3.16(a) of the
Disclosure Letter:
(i) the Company is, and at all times has been, in material
compliance with all applicable terms and requirements of each
such Contract under which the Company has or had any obligation
or liability or by which the Company or any of the assets owned
or used by the Company is or was bound; and
(ii) each other Person that has or had any obligation or
liability under any material Contract under which the Company has
or had any rights is, and at all times has been, in full material
compliance with all applicable terms and requirements of such
Contract.
3.17 Insurance.
(a) Company has delivered to or otherwise made available for
inspection by Parent:
(i) true and complete copies of all policies of insurance to
which the Company is a party or under which the Company, or any
director of the Company, is or has been covered at any time
preceding the date of this Agreement;
(ii) true and complete copies of all pending applications
for policies of insurance; and
(iii) any statement by the Company's auditors with regard to
the adequacy of such entity's coverage or of the reserves for
claims.
(b) Part 3.17(b) of the Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting the
Company, including any reserves established thereunder;
(ii) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by the
Company; and
(iii) all obligations of the Company to third parties with
respect to insurance (including such obligations under leases and
service agreements) and identifies the policy under which such
coverage is provided.
(c) Part 3.17(c) of the Disclosure Letter sets forth, by year,
for the current policy year and each of the three preceding policy
years:
(i) a summary of the loss experience under each policy in
excess of $5,000; and
(ii) a statement describing the loss experience for all
claims that were self-insured, including the number and aggregate
cost of such claims.
(d) Except as set forth on Part 3.17(d) of the Disclosure Letter:
(i) All policies to which the Company is a party or that
provide coverage to the Company, or any Company-funded policy
providing coverage to any director or officer of the Company: (A)
to the Company's Knowledge, are valid, outstanding, and
enforceable; (B) are sufficient for compliance with all Legal
Requirements and Contracts to which the Company is a party or by
which it is bound; (C) will continue in full force and effect
following the consummation of the Contemplated Transactions; and
(D) do not provide for any retrospective premium adjustment or
other experienced-based liability on the part of the Company.
(ii) To the Company's Knowledge, the Company has not
received (A) any refusal of coverage or any notice that a defense
will be afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance policy is
no longer in full force or effect or will not be renewed or that
the issuer of any policy is not willing or able to perform its
obligations thereunder in connection with any policy of the
Company.
(iii) The Company has paid all premiums due, and has
otherwise performed all of its obligations, under each policy to
which the Company is a party or that provides coverage to the
Company or any director thereof.
(iv) To the Company's Knowledge, the Company has given
notice to the insurer of all claims as to which it has notice
that may be insured thereby.
3.18 Environmental Matters. Except as set forth in Part 3.18 of the
Disclosure Letter, to the Knowledge of the Company, the Company is not in
violation, or aware, of any imminent or alleged violation by the Company,
of any federal, state or local law, statute, rule, regulation, judgment,
consent decree or ordinance relating to public health, safety,
conservation, waste management, pollution or the indoor or outdoor
Environment, including relating to the release, discharge, emission,
storage, treatment, handling or disposal of Hazardous Materials (defined
below) ("Environmental Law"). The Company is not a party to, or threatened
by, and has not been subject to, any judicial, administrative or regulatory
litigation, claim, notice, proceeding or investigation arising from the
operation or violation of any applicable Environmental Law, or is aware
after diligent inquiry of any grounds or basis for such a claim. The
Company does not have or currently use, store, treat, dispose or otherwise
handle hazardous, toxic, radioactive, infectious or harmful substances or
materials, including, without limitation, asbestos and petroleum,
including, crude oil or any fraction thereof and any material prohibited or
regulated by any Environmental Law ("Hazardous Material") except in
compliance with Environmental Law, or know of any release, threat of
release, disposal, cleanup or presence of any Hazardous Material at, on or
under any real property owned, occupied or operated by the Company except
in compliance with Environmental Law.
3.19 Employees.
(a) Part 3.19 of the Disclosure Letter contains a complete and
accurate list of the following information for each employee or
director of the Company, including each employee on leave of absence
or layoff status, in each instance identified by employer as to the
applicable Wholly Owned Subsidiary or AMVC: employee name; job title;
current compensation paid or payable; vacation accrued; and vested and
unvested Company Options.
(b) To the Knowledge of the Company, no director or employee of
the Company is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such director or employee and
any other Person ("Proprietary Rights Agreement") that in any way
adversely affects or will affect (i) the performance of his duties as
an employee or director of the Company, or (ii) the ability of the
Company to conduct its business, including any confidentiality or
proprietary rights agreement with the Company. To the Company's
Knowledge, no director, officer, or other key employee of the Company
intends to terminate his employment with the Company, except as set
forth in Part 3.19 of the Disclosure Letter.
(c) Part 3.19 of the Disclosure Letter also contains a complete
and accurate list of the following information, if applicable, for
each former employee or director of the Company, or their dependents,
receiving benefits or scheduled to receive benefits from the Company
or Company Plans in the future: name, pension benefit, pension option
election, retiree medical insurance coverage, retiree life insurance
coverage, and other benefits.
3.20 Labor Relations; Compliance. The Company has not been, and is
not, a party to any collective bargaining or other labor Contract. There
has not been, there is not presently pending or existing, and to the
Company's Knowledge there is not Threatened, (a) any strike, slowdown,
picketing, work stoppage, or employee grievance process, (b) any Proceeding
against or affecting the Company relating to the alleged violation of any
Legal Requirement pertaining to labor relations or employment matters,
including any charge or complaint filed by an employee or union with the
National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational activity,
or other labor or employment dispute against or affecting the Company or
its premises, or (c) any application for certification of a collective
bargaining agent. To the Knowledge of the Company, no event has occurred or
circumstance exists that could provide the basis for any work stoppage or
other labor dispute. There is no lockout of any employees by the Company,
and no such action is contemplated by the Company. Except as disclosed in
Part 3.20 of the Disclosure Letter, the Company has complied in all
material respects with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security and similar
taxes, occupational safety and health, and plant closing. The Company is
not liable for the payment of any compensation, damages, taxes, fines,
penalties, or other amounts, however designated, for failure to comply with
any of the foregoing Legal Requirements.
3.21 Intellectual Property.
(a) Intellectual Property Assets. The term "Intellectual Property
Assets" includes:
(i) the Company's name, all fictional business names, trade
names, registered and unregistered trademarks, service marks, and
applications (collectively, "Marks");
(ii) patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights and registrations and applications
therefor in both published works and unpublished works
(collectively, "Copyrights");
(iv) all rights in mask works (collectively, "Rights in Mask
Works"); and
(v) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively,
"Trade Secrets");
owned, used, or licensed by the Company as licensee or licensor. All such
Intellectual Property Assets are listed by category as part of Part 3.21 of the
Disclosure Letter.
(b) Agreements. Part 3.21 of the Disclosure Letter sets forth a
complete and accurate list of all Contracts relating to the
Intellectual Property Assets to which the Company is a party or by
which the Company is bound, except for any license implied by the sale
of a product and perpetual, paid-up licenses for commonly available
software programs with a value of less than $2,500 under which the
Company is the licensee. There are no outstanding or Threatened
disputes or disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business. Except as described in
Part 3.21 of the Disclosure Letter:
(i) The Intellectual Property Assets are all those necessary
for the operation of the Company's business as it is currently
conducted. The Company is the owner of all right, title, and
interest in and to each of the material Intellectual Property
Assets, free and clear of all material liens, security interests,
charges, encumbrances, equities, and other adverse claims, and
has the right to use without payment to a third party all of the
Intellectual Property Assets.
(ii) Except as set forth in Part 3.21 of the Disclosure
Letter, since January 1, 1994 all of the former and current
employees of the Company have executed written Contracts with the
Company that assign to the Company all rights to any inventions,
improvements, discoveries, or information relating to the
business of the Company. To the Company's Knowledge, no employee
of the Company has entered into any Contract that restricts or
limits in any way the scope or type of work in which the employee
may be engaged or requires the employee to transfer, assign, or
disclose information concerning his work to anyone other than the
Company.
(d) Patents. Except as described in Part 3.21 of the Disclosure
Letter: Part 3.21(d) of the Disclosure Letter contains a complete and
accurate list (including identifying numbers and dates of issuance)
and summary description of all Patents.
(e) Trademarks. Except as described in Part 3.21 of the
Disclosure Letter:
(i) Part 3.21(e) of Disclosure Letter contains a complete
and accurate list (including identifying numbers and dates of
issuance) and summary description of all Marks that have been
registered with the United States Patent and Trademark Office or
that have been submitted to such Office for registration. The
Company is the owner of all right, title, and interest in and to
each of the trademark applications listed thereon, free and clear
of all liens, security interests, charges, encumbrances,
equities, and other adverse claims.
(ii) To the Company's Knowledge, no Mark has been or is now
involved in any opposition and, to the Company's Knowledge, no
such action is Threatened with the respect to any of the Marks.
(iii) To the Company's Knowledge, there is no potentially
interfering trademark or trademark application of any third
party.
(iv) No Mark is infringed or, to the Company's Knowledge,
has been challenged or threatened in any way. To the Company's
Knowledge, none of the Marks used by the Company infringes or is
alleged to infringe any trade name, trademark, or service mark of
any third party.
(v) All products and materials containing a registered Mark
bear the proper federal registration notice where permitted by
law.
(f) Copyrights. The Company has filed no copyright applications
with the United States Copyright Office except as set forth on Part
3.21(f) of the Disclosure Letter. No Copyright is infringed or, to
Stockholder's Knowledge, has been challenged or threatened in any way.
To the Company's Knowledge, none of the subject matter of any of the
Copyrights infringes or is alleged to infringe any copyright of any
third party or is a derivative work based on the work of a third
party.
(g) Trade Secrets.
(i) With respect to each material Trade Secret, the
documentation relating to such Trade Secret is current, accurate,
and sufficient in detail and content to identify and explain it
and to allow its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) The Company has taken all reasonable precautions to
protect the secrecy, confidentiality, and value of their Trade
Secrets.
(iii) The Company has good title and an absolute (but not
necessarily exclusive) right to use the Trade Secrets. No Trade
Secret is subject to any adverse claim or has been challenged or
threatened in any way that is likely to have a Material Adverse
Effect on the Company's business, assets or financial condition.
(h) Compliance with Legal and Contractual Requirements. Except as
disclosed on Part 3.21(h) of the Disclosure Letter, the Company has
all material software and other Intellectual Property Asset licenses,
and has paid all royalties and fees with respect thereto required to
be paid prior to the date of this Agreement, necessary to operate its
business in compliance with all material contractual requirements and
Legal Requirements to which it may be subject.
3.22 Certain Payments. Since January 1, 1997, to the Knowledge of the
Company neither the Company nor any director, officer, agent, or employee
of the Company, or any other Person associated with or acting for or on
behalf of the Company, has directly or indirectly, in violation of any
Legal Requirement, (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person, private or
public, regardless of form, whether in money, property, or services (i) to
obtain favorable treatment in securing business, (ii) to pay for favorable
treatment for business secured, or (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of the Company
or any Affiliate of the Company, or (b) established or maintained any fund
or asset that has not been recorded in the books and records of the
Company.
3.23 Relationships with Related Persons. No director or officer of the
Company has, or since January 1, 1997 has had, any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used
in or pertaining to the Company's business. Except as described in Part
3.23 to the Disclosure Letter, no director or officer of the Company is, or
since January 1, 1997 has owned (of record or as a beneficial owner) an
equity interest or any other financial or profit interest in, a Person that
has (i) had business dealings or a material financial interest in any
transaction with the Company other than business dealings or transactions
conducted in the Ordinary Course of Business with the Company at
substantially prevailing market prices and on substantially prevailing
market terms, or (ii) engaged in competition with the Company with respect
to any line of the products or services of the Company (a "Competing
Business") in any market presently served by the Company. Except as set
forth in Part 3.23 of the Disclosure Letter, no director or officer of the
Company is a party to any Contract with, or has any claim or right against,
the Company.
3.24 Brokers or Finders. The Company has incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or
agents' commissions or other similar payment in connection with this
Agreement.
3.25 S-4 Registration Statement and Proxy Statement/Prospectus. None
of the information supplied by the Company for inclusion or incorporation
by reference in the S-4 Registration Statement or the Proxy
Statement/Prospectus will (a) in the case of the S-4 Registration
Statement, at the time it becomes effective, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or (b) in the
case of the Proxy Statement/Prospectus, at the time of mailing the Proxy
Statement/Prospectus, and at the time of the Company Shareholders Meeting,
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. If at any time prior to the Effective Time any event
with respect to the Company or its Principal Shareholders, officers or
directors shall occur that is required to be described in the Proxy
Statement/Prospectus or the S-4 Registration Statement, the Company shall
notify Parent thereof by reference to this Section 3.25 and cooperate with
Parent in preparing and filing with the Commission and, as required by law,
disseminating to the shareholders of the Company an amendment or supplement
which accurately describes such event or events in compliance with all
provisions of applicable law.
3.26 Customers and Suppliers. Part 3.26 of the Disclosure Letter sets
forth: (a) a complete and accurate list of the customers of the Company
accounting for 2% or more of the Company's sales during the 24-month period
ended December 31, 1999, showing the approximate total sales by the Company
to each such customer during such period and (b) a complete and accurate
list of the suppliers of the Company from whom the Company has purchased 5%
or more of the goods or services purchased by the Company during the
24-month period ended December 31, 1999.
3.27 Orders, Commitments and Returns. Part 3.27 of the Disclosure
Letter contains (a) an accurate summary of the company's total backlog of
orders as of December 31, 1999 (including all accepted and unfulfilled
sales orders) and (b) the aggregate of all outstanding purchase orders
issued by the Company as of December 31, 1999 (which include all contracts
or commitments for the purchase by the Company of merchandise, materials or
other supplies). A list of all outstanding purchase orders for inventory
components in excess of $10,000 as of December 31, 1999, categorized by
vendor, has been provided by the Company to Parent in writing. All such
sale and purchase commitments were made in the Ordinary Course of Business.
Except as set forth in Part 3.27 of the Disclosure Letter, there are no
outstanding claims in excess of $50,000 in the aggregate or $10,000
individually against the Company to return products or merchandise by
reason of alleged failure to conform to customer expectations, defective
products, missed delivery dates or otherwise, or of products in the
possession of customers under an understanding that such products would be
returnable.
3.28 Disclosure. No representation or warranty of the Company in this
Agreement and no statement in the Disclosure Letter omits to state a
material fact necessary to make the statements herein or therein, in light
of the circumstances in which they were made, not misleading.
4. Representations and Warranties of Parent.
Except as provided in the Parent's Disclosure Letter (the "Parent
Disclosure Letter"), Parent represents and warrants to the Company as follows:
4.1 Organization and Good Standing. Each of Parent and Sub is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Oregon, with full corporate power and authority to
conduct its business as it is now being conducted and to own or use the
properties and assets that it purports to own or use. Each of Parent and
Sub is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the
nature of the activities conducted by it, requires such qualification.
4.2 Authority; No Conflict.
(a) Each of Parent and Sub has the requisite corporate power and
authority to execute and deliver this Agreement and all other
agreements and documents contemplated hereby and to carry out its
obligations hereunder. The execution, delivery and performance of this
Agreement and all other agreements and documents contemplated hereby
and the consummation of the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of Parent and Sub and no other
corporate proceedings on the part of Parent or Sub are necessary to
authorize this Agreement and all other agreements and documents
contemplated hereby or to consummate the transactions so contemplated.
This Agreement has been duly executed and delivered by each of Parent
and Sub and constitutes, and all agreements and documents contemplated
hereby when executed and delivered pursuant hereto for value received
will constitute, the valid and binding obligations of each of Parent
and Sub.
(b) Neither the execution and delivery of this Agreement by
Parent and Sub, nor the consummation or performance of any of the
Contemplated Transactions by Parent or Sub, will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of either
Parent or Sub, or (B) any resolution adopted by the board of
directors or the stockholders of either Parent or Sub;
(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any
Order to which Parent or Sub, or any of the assets owned or used
by Parent or Sub, may be subject;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental
Body the right to revoke, withdraw, suspend, cancel, terminate,
or modify, any Governmental Authorization that is held by Parent
or Sub or that otherwise relates to the business of, or any of
the assets owned or used by, Parent or Sub;
(iv) cause Parent, Sub or the Company to become subject to,
or to become liable for the payment of, any Tax;
(v) cause any of the assets owned by the Company to be
reassessed or revalued by any taxing authority or other
Governmental Body;
(vi) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate, or
modify, any contract to which Parent or Sub is a party; or
(vii) result in the imposition or creation of any charge,
claim, community property interest, condition, equitable
interest, lien, option, pledge, security interest or encumbrance
upon or with respect to any of the assets owned or used by Parent
or Sub.
Except as set forth in Part 4.2 of the Parent Disclosure Letter, neither
Parent nor Sub is or will be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
4.3 Commission Reports. Parent has heretofore delivered or made
available to the Company true and complete copies of all reports,
registration statements and other documents (in each case together with all
amendments thereto) filed by Parent with the Commission since January 1,
1998 (such reports, registration statements, definitive proxy statements
and other documents, together with any amendments thereto, are sometimes
collectively referred to as the "Parent Commission Filings"). The Parent
Commission Filings constitute all of the documents (other than preliminary
material) that Parent was required to file with the Commission since such
date. As of their respective dates, each of the Parent Commission Filings
complied in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations under each
such Act, and none of the Parent Commission Filings contained as of such
date any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.4 Certain Proceedings. There is no pending Proceeding that has been
commenced against Parent or Sub that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions. To Parent's Knowledge, no such Proceeding
has been Threatened.
4.5 Brokers or Finders. Neither Parent, Sub nor their respective
agents have incurred any obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other similar
payment in connection with this Agreement.
4.6 Interim Operations of Sub. Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby and has not engaged in
any business activities or conducted any operations other than in
connection with the transactions contemplated hereby.
4.7 Company Stock Ownership. Neither Parent nor any of its
Subsidiaries owns any shares of Company Common Stock or any securities
convertible into Company Common Stock except as set forth in Part 4.7 of
the Parent Disclosure Letter.
4.8 S-4 Registration Statement and Proxy Statement/Prospectus. None of
the information supplied by Parent for inclusion or incorporation by
reference in the S-4 Registration Statement will at the time it becomes
effective contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. If at any time prior to the Effective Time any
event with respect to Parent shall occur that is required to be described
in the S-4 Registration Statement, Parent shall notify Company thereof by
reference to this Section 4.8 and cooperate with Company in preparing and
filing with the Commission and, as required by law, disseminating to the
shareholders of the Company an amendment or supplement which accurately
describes such event or events in compliance with all provisions of
applicable law.
4.9 Disclosure. No representation or warranty of Parent in this
Agreement and no statement in Parent's Disclosure Letter omits to state a
material fact necessary to make the statements herein or therein, in light
of the circumstances in which they were made, not misleading.
5. Covenants of Company Prior to Effective Time.
5.1 Access and Investigation. Between the date of this Agreement and
the earlier to occur of the Effective Time or termination of this Agreement
under Section 10, Company will, and will cause its Representatives to, (a)
afford Parent and its Representatives (collectively, "Parent's Advisors")
full and free access to the Company's personnel, properties (including
subsurface testing), contracts, books and records, and other documents and
data, (b) furnish Parent and Parent's Advisors with copies of all such
contracts, books and records, and other existing documents and data as
Parent may reasonably request, and (c) furnish Parent and Parent's Advisors
with such additional financial, operating, and other data and information
as Parent may reasonably request.
5.2 Operation of the Businesses of the Company. Between the date of
this Agreement and the earlier to occur of the Effective Time or
termination of this Agreement under Section 10, Company will:
(a) conduct the business of the Company only in the Ordinary
Course of Business;
(b) not grant, nor (except as required under applicable Company
plans) accelerate the vesting of, any options with respect to any
shares of the capital stock of the Company;
(c) use its Best Efforts to preserve intact the current business
organization of the Company, keep available the services of the
current officers, employees, and agents of the Company, and maintain
the relations and goodwill with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships
with the Company;
(d) confer with Parent concerning operational matters of a
material nature; and
(e) otherwise report periodically to Parent concerning the status
of the business, operations, and finances of the Company.
5.3 Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the earlier to occur of
the Effective Time and termination of this Agreement under Section 10,
Company will not, without the prior consent of Parent, take any affirmative
action, or fail to take any reasonable action within its control, as a
result of which any of the changes or events (including without limitation
the entering into of any applicable Contract described therein) listed in
Section 3.15 is likely to occur.
5.4 Required Approvals. As promptly as practicable after the date of
this Agreement, Company will make all filings required by Legal
Requirements to be made by them in order to consummate the Contemplated
Transactions. Between the date of this Agreement and the earlier to occur
of the Effective Time or termination of this Agreement under Section 10,
Company will (a) cooperate with Parent with respect to all filings that
Parent elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions, and (b) cooperate with
Parent in obtaining all required consents.
5.5 Notification. Between the date of this Agreement and the earlier
to occur of the Effective Time or termination of this Agreement under
Section 10, Company will promptly notify Parent in writing if Company
becomes aware of any fact or condition that causes or constitutes a Breach
of any of Company's representations and warranties as of the date of this
Agreement. Should any such fact or condition require any change in the
Disclosure Letter if the Disclosure Letter were dated the date of the
occurrence or discovery of any such fact or condition, Company will
promptly deliver to Parent a supplement to the Disclosure Letter specifying
such change. During the same period, Company will promptly notify Parent of
the occurrence of any Breach of any covenant of Company in this Section 5
or of the occurrence of any event that may make the satisfaction of the
conditions in Sections 7 or 9 impossible or unlikely.
5.6 Payment of Indebtedness by Related Persons. Except for the
indebtedness listed on Schedule 5.6 or as expressly provided otherwise in
this Agreement, Company will cause all indebtedness owed by any Stockholder
or any Related Person of Company to be paid in full prior to the Closing
Date.
5.7 No Solicitations.
(a) The Company shall not, directly or indirectly, through any
Shareholder, officer, director, employee, representative or agent of
the Company or any of its Subsidiaries, solicit or encourage
(including by way of furnishing information) the initiation of any
inquiries or proposals regarding any merger, sale of substantial
assets, sale of shares of capital stock (including, without
limitation, by way of a tender offer) or similar transactions
involving the Company or any of its Subsidiaries (any of the foregoing
inquiries or proposals being referred to herein as an "Acquisition
Proposal"); provided, however, that nothing contained in this
Agreement shall prevent the Board of Directors of the Company from
referring any Third Party to this Section 5.7 or from making a copy of
this Section 5.7 available to any Third Party. Nothing contained in
this Section 5.7 shall prevent the Board of Directors of the Company
from considering, negotiating, approving and recommending to the
shareholders of the Company (after consulting with its financial
advisors, and determining after consulting with counsel that the Board
of Directors is required to do so in order to discharge properly its
fiduciary duties) a Superior Proposal. A "Superior Proposal" shall
mean an unsolicited bona fide Acquisition Proposal made by a Third
Party on terms that a majority of the members of the Company's Board
of Directors determines in their good faith reasonable judgment (based
on the advice of an independent financial advisor) would be more
favorable to the Company's shareholders than the transactions
contemplated by this Agreement and for which any required financing is
committed or which, in the good faith reasonable judgment of a
majority of such members (after consultation with an independent
financial advisor), is reasonably capable of being financed by such
Third Party.
(b) The Company shall promptly (but in no case later than one
business day) notify Parent after receipt of any Acquisition Proposal
or any request for nonpublic information relating to the Company or
any of its Subsidiaries in connection with an Acquisition Proposal or
for access to the properties, books or records of the Company or any
of its Subsidiaries by any Person that informs the Board of Directors
of the Company or such Subsidiary that it is considering making, or
has made, an Acquisition Proposal. Such notice to Parent shall be made
orally and in writing and shall indicate in reasonable detail the
identity of the offeror and the terms and conditions of such proposal,
inquiry or contact.
(c) If the Board of Directors of the Company receives a request
for material nonpublic information by a party who makes a bona fide
Acquisition Proposal and the Board of Directors of the Company
determines that such proposal is a Superior Proposal then, and only in
such case, the Company may, subject to the execution of a
confidentiality agreement substantially similar to that then in effect
between the Company and Parent, provide such party with access to
information regarding the Company. The Company will promptly (but in
no case later than 24 hours) notify Parent of any determination by the
Company's Board of Directors that a "Superior Proposal" has been made.
(d) The Company shall immediately cease and cause to be
terminated any existing discussions or negotiations with any parties
(other than Parent and Sub) conducted heretofore with respect to any
of the foregoing. The Company agrees not to release any Third Party
from an confidentiality or standstill agreement to which the Company
is a party.
(e) The Company shall ensure that the officers, directors and
employees of the Company and its Subsidiaries, and any investment
banker or other advisor or representative retained by the Company, are
aware of the restrictions described in this Section 5.7.
5.8 Meeting of Shareholders. The Company will take all action
necessary in accordance with applicable law and its Articles of
Incorporation and Bylaws to convene a meeting of its Shareholders (the
"Company Shareholders Meeting") as promptly as practicable to consider and
vote upon the Merger. Subject to the fiduciary duties of the Company's
Board of Directors under applicable law as advised by counsel, the Board of
Directors of the Company shall recommend and declare advisable such
approval, and the Company shall as promptly as possible following
dissemination of the Proxy Statement/Prospectus take all lawful action to
solicit, and use all reasonable efforts to obtain, such approval.
5.9 Registration Statement/Proxy Materials. The Company will, as
promptly as practicable, cooperate with Parent to prepare and file with the
Commission preliminary proxy materials that will constitute a proxy
statement in connection with the vote of Company's Shareholders with
respect to the Merger, together with any amendments thereof or supplements
thereto (in each case, in the form or forms mailed to the Company's
shareholders, the "Proxy Statement/Prospectus"). Parent will also prepare
and file with the SEC a registration statement on Form S-4 (the "S-4
Registration Statement"), containing the definitive Proxy
Statement/Prospectus, in connection with the registration under the
Securities Act of the Series B Preferred shares issuable upon conversion of
the Company Shares and the other transactions contemplated hereby. Parent
and the Company will use all reasonable efforts to have the S-4
Registration Statement declared effective as promptly as practicable, and
also will take any other action required to be taken under federal or state
securities laws, and will use all reasonable efforts to cause the Proxy
Statement/Prospectus to be mailed to shareholders of the Company at the
earliest practicable date. If at any time prior to the Effective Time any
event relating to or affecting the Company or Parent shall occur as a
result of which it is necessary, in the opinion of counsel for the Company
or of counsel for Parent, to supplement or amend the S-4 Registration
Statement in order to make such document not misleading in light of the
circumstances existing at the time approval of the shareholders of the
Company is sought, the Company and Parent will forthwith prepare and file
with the SEC an amendment or supplement to the S-4 Registration Statement
so that such document, as so supplemented or amended, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.10 Termination of Company Stock Rights Plan. Between the date hereof
and the Effective Time, the Company's Board of Directors will terminate the
Company Stock Rights Plan.
5.11 Best Efforts. Between the date of this Agreement and the earlier
to occur of the Effective Time and termination of this Agreement under
Section 10, Company will use its Best Efforts to cause the conditions in
Sections 7, 8 and 9 to be satisfied.
6. Covenants of Parent and Sub Prior to Effective Time.
6.1 Approval of Parent. Parent, as the sole shareholder of Sub, will
act by written consent to approve the Merger and the adoption of this
Agreement by Sub, which consent Parent and Sub represent and warrant will
constitute the requisite approval of the Merger and this Agreement by Sub.
6.2 Approvals of Governmental Bodies. As promptly as practicable after
the date of this Agreement, Parent and Sub will, and will cause each of
their Related Persons to, make all filings required by Legal Requirements
to be made by them to consummate the Contemplated Transactions. Between the
date of this Agreement and the earlier to occur of the Effective Time,
Parent will, and will cause each Related Person to, (a) cooperate with
Company and Stockholders with respect to all filings that Company elect to
make or are required by Legal Requirements to make in connection with the
Contemplated Transactions, and (b) cooperate with Company in obtaining all
required consents.
6.3 Conduct of Business of Sub. During the period from the date of
this Agreement to the earlier to occur of the Effective Time or termination
of this Agreement under Section 10, Sub shall not engage in any activities
of any nature except as provided in or contemplated by this Agreement.
6.4 Access and Investigation. Between the date of this Agreement and
the earlier to occur of the Effective Time or termination of this Agreement
under Section 10, Parent will, and will cause its Representatives to, (a)
afford Company and its Representatives (collectively, "Company's Advisors")
full and free access to the Company's books and records, and other
documents and data, (b) furnish Company and Company's Advisors with copies
of all such documents and data as Company may reasonably request, and (c)
furnish Company and Company's Advisors with such additional financial,
operating, and other data and information as Company may reasonably
request.
6.5 Notification. Between the date of this Agreement and the earlier
to occur of the Effective Time or termination of this Agreement under
Section 10, Parent will promptly notify Company in writing if Parent
becomes aware of any fact or condition that causes or constitutes a Breach
of any of Parent's representations and warranties as of the date of this
Agreement. Should any such fact or condition require any change in the
Parent Disclosure Letter if the Disclosure Letter were dated the date of
the occurrence or discovery of any such fact or condition, Parent will
promptly deliver to Company a supplement to the Disclosure Letter
specifying such change. During the same period, Parent will promptly notify
Company of the occurrence of any Breach of any covenant of Parent in this
Section 6 or of the occurrence of any event that may make the satisfaction
of the conditions in Sections 8 or 9 impossible or unlikely.
6.6 Registration Statement/Proxy Materials. Parent will prepare and
file with the SEC a registration statement on Form S-4 (the "S-4
Registration Statement"), containing the definitive Proxy
Statement/Prospectus, in connection with the registration under the
Securities Act of the Series B Preferred shares issuable upon conversion of
the Company Shares and the other transactions contemplated hereby. Parent
will use all reasonable efforts to have the S-4 Registration Statement
declared effective as promptly as practicable, and also will take any other
action required to be taken under federal or state securities laws, and
will use all reasonable efforts to assist the Company to cause the Proxy
Statement/Prospectus to be mailed to shareholders of the Company at the
earliest practicable date. If at any time prior to the Effective Time any
event relating to or affecting the Parent shall occur as a result of which
it is necessary, in the opinion of counsel for the Company or of counsel
for Parent, to supplement or amend the S-4 Registration Statement in order
to make such document not misleading in light of the circumstances existing
at the time approval of the shareholders of the Company is sought, Parent
will with Company's cooperation forthwith prepare and file with the SEC an
amendment or supplement to the S-4 Registration Statement so that such
document, as so supplemented or amended, will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
6.7 Best Efforts. Between the date of this Agreement and the earlier
to occur of the Effective Time or termination of this Agreement under
Section 10, Parent and Sub will use their Best Efforts to cause the
conditions in Sections 7, 8 and 9 to be satisfied.
6.8 Nasdaq Listing. Within 120 days following the Closing, the Company
will cause the Series B Shares and attached Warrants issued in the Merger
to be listed on Nasdaq.
7. Conditions Precedent to Parent's and Sub's Obligation to Close.
The obligation of Parent and the obligation of Sub to effect the Merger and
the other Contemplated Transactions shall be subject to the fulfillment, at or
prior to the Closing Date, of the following conditions:
7.1 Representations and Warranties True at the Effective Time. Each of
the Company's representations and warranties in this Agreement must have
been accurate in all respects as of the date of this Agreement, and the
representations and warranties contained in Sections 3.2, 3.3, 3.11, 3.14
(to the extent of any Proceeding under Section 3.14(a)(ii) or any
Proceeding under Section 3.14(a)(i), excluding matters set forth in the
Disclosure Letter, that may result in an uninsured loss in excess of $2
million), 3.24 and 3.25 must be accurate in all respects as of the Closing
Date as if made on and as of the Closing Date, without giving effect to any
supplement to the Disclosure Letter, and the Company shall have delivered
to Parent a certificate to such effect signed by the Chief Executive
Officer of the Company.
7.2 The Company's Performance. All of the covenants and obligations of
the Company to be performed or complied with pursuant to the terms of this
Agreement on or before the Closing Date shall have been fully performed in
all material respects, and at the Closing Date the Company shall have
delivered to Parent a certificate to such effect signed by the Chief
Executive Officer of the Company.
7.3 Authority. All action required to be taken by, or on the part of,
the Company and its stockholders to authorize the execution, delivery and
performance of this Agreement and the Articles of Merger and the
consummation of the transactions contemplated hereby and thereby shall have
been duly and validly taken by the Company's Board of Directors and by the
holders of the Company's outstanding Common Stock and Preferred Stock.
7.4 Deliveries. Company shall have delivered to Parent the following:
(a) The corporate minute book and stock book of Company.
(b) Resignations of the each of the existing directors and
officers of the Company, to be effective upon the Closing Date.
(c) An opinion of Troy & Gould, P.C., counsel to the Company,
dated the Closing Date, substantially in the form of Exhibit -------
7.4(c) hereto.
(d) A certificate of the Secretary of the Company, dated the
Closing Date, in the form of Exhibit 7.4(d) hereto.
7.5 Certain Litigation. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the Merger
or the other Contemplated Transactions, and (b) has been adopted or issued,
or has otherwise become effective, since the date of this Agreement.
7.6 Consents Obtained. All consents and approvals of Governmental
Entities or third parties necessary for consummation of the Merger shall
have been obtained.
7.7 Termination of Agreements. The agreements listed on Exhibit 7.7
between the Company and FMC Corporation shall have been terminated prior to
the Effective Date. The Company shall have terminated the Company Stock
Rights Plan.
7.8 Action by Company Series B Stock. Either (i) all shares of the
Company Series B Stock shall have been redeemed prior to the shareholders
meeting referenced in Section 5.8 or the holder thereof shall have voted in
favor of the Merger as part of such meeting.
8. Conditions Precedent to Company's Obligation to Close.
The obligation of the Company to effect the Merger and the other
Contemplated Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
8.1 Accuracy of Representations. Each of Parent's representations and
warranties in this Agreement must have been accurate in all respects as of
the date of this Agreement and must be accurate in all respects as of the
Closing Date as if made at the Closing Date and Parent shall have delivered
to Company a certificate to such effect signed by the Chief Executive
Officer of the Parent.
8.2 Parent's and Sub's Performance. All of the covenants and
obligations of the Parent and of Sub to be performed or complied with
pursuant to the terms of this Agreement on or before the Closing Date shall
have been fully performed in all material respects, and at the Closing Date
the Parent and Sub shall have delivered to Company a certificate to such
effect signed by the Chief Executive Officer of the Parent.
8.3 Authority. All action required to be taken by, or on the part of,
the Parent and Sub to authorize the execution, delivery and performance of
this Agreement and the Articles of Merger and the consummation of the
Contemplated Transactions shall have been duly and validly taken by Parent
and Sub.
8.4 Deliveries. Parent and Sub shall have delivered to Company and
Stockholders the following:
(a) An opinion of Tonkon Torp LLP, counsel to Parent and Sub,
dated the Closing Date, substantially in the form of Exhibit 8.4(a)
hereto.
(b) A certificate of the Secretary of each of Parent and of Sub,
dated the Closing Date, in the form of Exhibit 8.4(b) hereto.
8.5 Fairness Opinion. The Company shall have received an opinion as to
the fairness of the Merger transaction to the Company's stockholders in
form acceptable to the Company's board of directors.
8.6 Certain Litigation. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the Merger
or the other Contemplated Transactions, and (b) has been adopted or issued,
or has otherwise become effective, since the date of this Agreement.
9. Conditions to Obligations of Each Party.
The obligations of each party to effect the Merger and the other
Contemplated Transactions shall be subject to the fulfillment, at or prior to
the Closing Date, of the following conditions:
9.1 Commission Approval. The S-4 Registration Statement with respect
to the issuance of the Series B Preferred shares issuable pursuant to the
Merger shall have been declared effective.
9.2 Approval by Company's Common and Preferred Stock. The holders of
the requisite number of the Company's Common Stock under the CCL and the
holder of any Company Series B Stock outstanding at the date of the
Company's special meeting of shareholders held pursuant to Section 5.8
shall have voted such shares in favor of the transaction.
10. Termination.
10.1 Termination Events. This Agreement may, by notice given prior to
or at the Closing, be terminated after the date hereof and prior to the
Closing:
(a) by Parent if a material Breach of any provision of this
Agreement has been committed by Company, and in any such case such
Breach has not been waived by Parent or is not cured by Company within
ten days following receipt of notice of the Breach;
(b) by Parent if any of the conditions in Section 7 has not been
satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Parent to comply with its obligations under this Agreement) and Parent
has not waived such condition on or before the Closing Date;
(c) by Parent or the Company if at the Company Shareholders
Meeting (including any adjournment or postponement thereof), the
requisite vote of the holders of the Company's Common Stock or
Preferred Stock shall not have been obtained;
(d) by Parent if (i) the Board of Directors of the Company shall
fail to recommend, or shall withdraw, modify or change its
recommendation of, this Agreement or the Merger in a manner adverse to
Parent or shall have resolved to do any of the foregoing; (ii) the
Board of Directors of the Company shall have resolved to recommend, or
have recommended, to the shareholders of the Company an Superior
Proposal; or (iii) a tender offer or exchange offer for 25% or more of
the outstanding shares of Company voting stock is commenced and the
Board of Directors of the Company has resolved to recommend, or has
recommended, that the shareholders of the Company tender their shares
in such tender offer or exchange offer;
(e) by Company if a material Breach of any provision of this
Agreement has been committed by Parent or Sub, and in any such case
such Breach has not been waived or is not cured within ten days
following receipt of notice of the Breach;
(f) by Company if any of the conditions in Section 8 has not been
satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Company to comply with their obligations under this Agreement) and
Company has not waived such condition on or before the Closing Date;
(g) by Company or Parent if Company's Board of Directors has
voted to approve a Superior Proposal;
(h) by mutual consent of Parent and Company; or
(i) by Parent or Company if the Closing has not occurred (other
than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement)
on or prior to October 31, 2000, or such later date as the parties may
agree upon.
10.2 Effect of Termination. Except as expressly provided otherwise
herein, each party's right of termination is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies. If this Agreement
is terminated by a party because the other party failed to satisfy a
condition, then termination of this Agreement shall be deemed to be an
election of remedies, and neither party shall have any further right or
claim with respect to the other party; provided, however, that if this
Agreement is terminated by a party because of the other party's failure to
comply with any of its covenants under this Agreement, the terminating
party's right to pursue all legal remedies will survive such termination
unimpaired.
11. General Provisions.
11.1 Fees and Expenses.
(a) Except as set forth in subsection (b) of this Section 11.1 or
as otherwise provided herein, all fees and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or
not the Merger is consummated; provided, however, that Parent shall
pay 100% of all fees and expenses, other than attorneys and
accountants fees (as to which each party shall bear its own expenses),
incurred in connection with the printing and filing of the Proxy
Statement/Prospectus (including any preliminary materials relating
thereto) and the S-4 Registration Statement (including financial
statements and exhibits) and any amendments or supplements thereto
(together, the "Proxy Expenses"); provided further, however, that
Company shall pay 100% of the Proxy Expenses in the event the Merger
is not approved by the holders of the Company's Common Stock and
Preferred Stock.
(b) The Company shall pay Parent a fee of $2 million upon the
earliest to occur of any of the following events:
(i) the termination of this Agreement by Parent pursuant to
Section 10.1(d);
(ii) the termination of this Agreement by Parent pursuant to
Section 10.1(a); or
(iii) the termination of this Agreement by the Company or
Parent pursuant to Section 10.1(g).
(c) The Company shall pay Parent a fee of $500,000 upon the
termination of this Agreement by Parent or the Company pursuant to
Section 10.1(c) as a result of the failure to receive the requisite
approval of the Company's outstanding Common Stock or Preferred Stock,
or by Parent pursuant to Section 10.1(b) based on a failure of the
condition in Section 7.5, or by the Company pursuant to Section
10.1(f) based on the failure of the condition set forth in Section
8.6, if in any such event within 24 months from the date of this
Agreement the Company enters into an agreement to be acquired by any
third party (including any current AMVC shareholder) or a majority of
AMVC Common Stock is acquired by a third party in a tender offer.
(d) Parent shall pay the Company a fee of $2 million upon
termination of this Agreement by the Company pursuant to Section
10.1(e) after a Breach by Parent of this Agreement, or pursuant to
Section 10.1(f) based upon a failure of the conditions set forth in
Sections 8.1 through 8.4.
(e) The fees payable pursuant to Sections 11.1(b), (c) or 11.1(d)
shall be paid within one business day after the first to occur of the
events described in Sections 11.1(b), (c) or 11.1(d), as the case may
be, and the expenses payable pursuant to Section 11.1(a) shall be paid
within five business days after receipt of written documentation of
the amount of expenses so payable; provided, however, that in no event
shall Parent or the Company, as the case may be, be required to pay
such fees or expenses to the other, if, immediately prior to the
termination of this Agreement, the party to receive the fees or
expenses was in material breach of its obligations under this
Agreement.
11.2 Public Announcements. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions
will be issued, if at all, at such time and in such manner as Parent and
Company mutually determine. The Company and Parent will consult with each
other concerning the means by which the Company's employees, customers, and
suppliers and others having dealings with the Company will be informed of
the Contemplated Transactions.
11.3 Legal Proceedings. In the event any legal proceeding is initiated
by either party in connection with this Agreement the parties expressly
consent to exclusive jurisdiction and venue with the state or federal
courts located in Portland, Oregon, with the prevailing party entitled to
recover attorney fees and other costs incurred in all pretrial, trial or
appellate proceedings.
11.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been
duly given when (a) delivered by hand, (b) sent by facsimile, provided that
a copy is mailed by certified mail, return receipt requested, (c) received
by the addressee, if sent by certified mail, return receipt requested, or
(d) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the
appropriate addresses and facsimile numbers set forth below (or to such
other addresses and facsimile numbers as a party may designate by notice to
the other parties):
Company: Advanced Machine Vision Corporation
Attn: William J. Young
2709 Citation Way, Suite 102
Medford, OR 97504
With copy to: Troy & Gould, P.C.
Attn: William D. Gould
1801 Century Park East, 16th Floor
Los Angeles, CA 90067
Parent: Key Technology, Inc.
Attn: Thomas C. Madsen
150 Avery Street
Walla Walla, WA 99362
With copy to: Tonkon Torp LLP
Attn: Ronald L. Greenman
1600 Pioneer Tower
888 SW Fifth Avenue
Portland, OR 97204-2099
11.5 Further Assurances. The parties agree (i) to furnish upon request
to each other such further information, (ii) to execute and deliver to each
other such other documents, and (iii) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out
the intent of this Agreement and the documents referred to in this
Agreement.
11.6 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by
any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any
such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by applicable law, (a)
no claim or right arising out of this Agreement or the documents referred
to in this Agreement can be discharged by one party, in whole or in part,
by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c)
no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
11.7 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be
amended except by a written agreement executed by the party to be charged
with the amendment.
11.8 Assignments, Successors, and No Third-Party Rights. Neither party
may assign any of its rights under this Agreement without the prior consent
of the other parties, which will not be unreasonably withheld, except that
Parent may assign any of its rights under this Agreement to any present or
future Subsidiary of Parent. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any
provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
11.9 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid
or unenforceable.
11.10 Section Headings; Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as
the circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
11.11 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
11.12 Governing Law. This Agreement will be governed by the laws of
the State of Oregon without regard to conflicts of laws principles.
[Remainder of Page Intentionally Left Blank]
<PAGE>
11.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
KEY TECHNOLOGY, INC.
By _____________________________
KTC ACQUISITION CORP.
By _____________________________
ADVANCED MACHINE VISION CORPORATION
By _____________________________
<PAGE>
CERTIFICATE OF DESIGNATION
EXHIBIT 2.5A TO AGREEMENT AND PLAN OF MERGER
KEY TECHNOLOGY, INC.
Key Technology, Inc., an Oregon corporation (the "Corporation"), certifies
that pursuant to the authority contained in Article II of its Restated Articles
of Incorporation, and in accordance with the provisions of Section 60.134 of the
Oregon Revised Statutes, its Board of Directors has adopted the following
resolution creating a series of its $.0001 par Preferred Stock:
RESOLVED, that, pursuant to authority conferred upon the Board of Directors
by the Articles of Incorporation of the Corporation, the Board of Directors
hereby authorizes the issuance of Series B Convertible Preferred Stock of the
Corporation and hereby designates, pursuant to Section 60.134 of the Oregon
Revised Statutes, the rights, preferences, privileges, restrictions and other
matters relating to such Series B Preferred Stock as follows
1. Designation and Amount. [One Million Two Hundred and Eighty-seven
Thousand (1,287,000)] shares of the Corporation's authorized Preferred Stock are
hereby designated as the Series B Convertible Preferred Stock (the "Series B
Preferred Stock").
2. Dividends. No dividends shall be declared and set aside for any shares
of the Series B Preferred Stock except in the event that the Board of Directors
of the Corporation shall declare a dividend payable upon the then outstanding
shares of the Common Stock of the Corporation, in which event the holders of the
Series B Preferred Stock shall be entitled to the amount of dividends per share
of Series B Preferred Stock as would be declared payable on the largest number
of whole shares of Common Stock into which each share of Series B Preferred
Stock held by each holder thereof could be converted pursuant to the provisions
of Section 5 hereof (such number determined as of the record date for the
determination of holders of Common Stock entitled to receive such dividend).
3. Liquidation, Dissolution or Winding Up
3.1 Preference. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of
each share of Series B Preferred Stock shall be entitled to be paid first
out of the assets of the Corporation available for distribution to holders
of the Corporation's capital stock of all classes (whether such assets are
capital, surplus or earnings) before any sums shall be paid or any assets
distributed among the holders of Common Stock, an amount equal to Ten
dollars ($10) per share of Series B Preferred Stock plus an amount equal to
all accrued and unpaid dividends thereon, if any, computed up to and
including the date full payment shall be tendered to the holders of the
Series B Preferred Stock with respect to such liquidation, dissolution or
winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to holders of the Series B Preferred Stock of the amount
thus distributable, then the entire assets of the Corporation available for
such distribution shall be distributed ratably among the holders of the
Series B Preferred Stock.
3.2 Distributions Other than Cash. Whenever the distribution provided
for in this Section 3 shall be paid in property other than cash, the value
of such distribution shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.
4. Voting Power. Except as otherwise required by law, each holder of Series
B Preferred Stock shall be entitled to vote on all matters and shall be entitled
to that number of votes equal to the number of votes that would be accorded to
the largest number of whole shares of Common Stock into which such holder's
shares of Series B Preferred Stock could be converted, pursuant to the
provisions of Section 5 of this Certificate, at the record date for the
determination of shareholders entitled to vote on such matter or, if no such
record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. The holders of shares of Series B
Preferred Stock and Common Stock shall be entitled to vote together as a single
class on all matters. The holders of Series B Preferred Stock shall not be
entitled to vote as a separate class or voting group on any plan of merger.
5. Conversion Rights. The holders of the Series B Preferred Stock shall
have the following conversion rights:
5.1 General. Subject to and in compliance with the provisions of this
Section 5, any shares of Series B Preferred Stock may, at the option of the
holder, be converted at any time or from time to time into fully paid and
nonassessable shares (calculated as to each conversion to the largest whole
share) of Common Stock. The number of shares of Common Stock to which a
holder of Series B Preferred Stock shall be entitled upon conversion shall
be the product obtained by multiplying the appropriate Applicable
Conversion Rate (determined as provided in Sections 5.3, 5.4 and 5.5 by the
number of shares of Series B Preferred Stock being converted.
5.2 Mandatory Conversion.
(a) Conversion Upon Merger, Consolidation, Share Exchange or Sale
of Assets. All the outstanding shares of Series B Preferred Stock
shall, at the option of the Corporation and upon written notice to the
holders thereof given not less than 30 days prior to the closing of a
merger or consolidation of the Corporation with or into another
Corporation, share exchange or the sale of all or substantially all of
the Corporation's assets to any other person, be converted, effective
upon such closing, into the number of shares of Common Stock to which
a holder of Series B Preferred Stock shall be entitled upon conversion
pursuant to Section 5.1, unless redeemed by the holder as provided
herein. Such conversion shall occur automatically on the effective
date of such event without any further action by such holders and
whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent for the Common
Stock, except that any holder may elect to have such holder's Series B
shares redeemed at the liquidation value by sending a notice of
redemption to the Corporation at any time prior to the expiration of
the 30 day notice. Nothing in this Section 5.2, however, shall limit
or in any way restrict the rights of the holders of shares of Series B
Preferred Stock to convert such shares into shares of Common Stock at
any time pursuant to Section 5.1 immediately above. Notwithstanding
any other provision of this subparagraph, the occurrence of a merger
or consolidation of the Corporation with or into another corporation,
share exchange or the sale of all or substantially all of the
Corporation's assets to any other person, shall not be considered a
liquidation, dissolution or winding up of the Corporation under
Section 3 of this Certificate.
(b) Surrender of Certificates. Upon the occurrence of a
conversion specified in this Section 5.2, the holders of such Series B
Preferred Stock shall surrender the certificates representing such
shares at the office of the Corporation or of its transfer agent for
the Common Stock. Thereupon, the Corporation or its transfer agent
shall issue and deliver to such holder a certificate or certificates
for the number of shares of Common Stock into which the shares of the
Series B Preferred Stock surrendered were convertible on the date on
which such conversion occurred. The Corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless certificates evidencing such shares of the
Series B Preferred Stock being converted are either delivered to the
Corporation or any such transfer agent or the holder notifies the
Corporation or any such transfer agent that such certificates have
been lost, stolen or destroyed and executes an agreement satisfactory
to the Corporation to indemnify the Corporation from any loss incurred
by it in connection therewith.
5.3 Series B Applicable Conversion Rate. The conversion rate for each
share of the Series B Preferred Stock in effect at any time (the "Series B
Applicable Conversion Rate") shall be the quotient obtained by dividing Ten
dollars ($10) by the Applicable Conversion Value, calculated as provided in
Section 5.4.
5.4 Applicable Conversion Value. The Applicable Conversion Value shall
be fifteen dollars ($15) for the Series B Preferred Stock, except that such
amount shall be adjusted from time to time in accordance with this Section
5.
5.5 Adjustments to Applicable Conversion Value. Upon the happening of
an Extraordinary Common Stock Event (as hereinafter defined), the
Applicable Conversion Value shall, simultaneously with the happening of
such Extraordinary Common Stock Event, be adjusted by multiplying the then
effective Applicable Conversion Value by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior
to such Extraordinary Common Stock Event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall
thereafter be the Applicable Conversion Value. The Applicable Conversion
Value, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive Extraordinary Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (ii) the subdivision of outstanding shares of
Common Stock into a greater number of shares of the Common Stock or (iii)
the combination of outstanding shares of Common Stock into a smaller number
of shares of Common Stock.
5.6 Dividends. In the event the Corporation shall make, issue or fix a
record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock or in assets (excluding cash
dividends or distributions), then and in each such event provision shall be
made so that the holders of Series B Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon the number of securities or such other assets of the
Corporation that they would have received had their Series B Preferred
Stock been converted into Common Stock on the date of such event and had
they thereafter, during the period from the date of such event to and
including the Conversion Date (as that term is hereafter defined in Section
5.9, retained such securities or such other assets during such period,
giving application to all adjustments called for during such period under
this Section 5 with respect to the rights of the holders of Series B
Preferred Stock.
5.7 Recapitalization or Reclassification. If the Common Stock issuable
upon the conversion of the Series B Preferred Stock shall be changed into
the same or different number of shares of any class or classes of stock of
the Corporation, whether by recapitalization, reclassification or otherwise
(other than a reorganization, merger, consolidation or sale of assets),
then and in each such event the holder of each share of Series B Preferred
Stock shall have the right thereafter to convert such share into the kind
and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change by holders of
the number of shares of Common Stock into which such share of Series B
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification or change, all subject to further
adjustment as provided herein.
5.8 Certificate as to Adjustments. In each case of an adjustment or
readjustment of the Applicable Conversion Rate, the Corporation will
furnish each holder of Series B Preferred Stock with a certificate showing
such adjustment or readjustment, and stating in reasonable detail the facts
upon which such adjustment or readjustment is based.
5.9 Exercise of Conversion Privilege. To exercise a conversion
privilege, a holder of Series B Preferred Stock shall surrender the
certificate or certificates representing the shares being converted to the
Corporation at its principal office, and shall give written notice to the
Corporation at the office that such holder elects to convert such shares.
The certificate or certificates for shares of Series B Preferred Stock
surrendered for conversion shall be accompanied by proper assignment
thereof to the Corporation or in blank. The date when such written notice
is received by the Corporation, together with the certificate or
certificates representing the shares of Series B Preferred Stock being
converted, is the "Conversion Date." As promptly as practicable after the
Conversion Date, the Corporation shall issue and deliver to the holder of
the shares of Series B Preferred Stock being converted (i) such certificate
or certificates as it may request for the number of whole shares of Common
Stock issuable upon the conversion of such shares of Series B Preferred
Stock in accordance with the provisions of this Section 5, (ii) cash in the
amount of all accrued and unpaid dividends on such shares of Series B
Preferred Stock, if any, computed up to and including the Conversion Date
and (iii) cash, as provided in Section 5.10 in respect of any fraction of a
share of Common Stock issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of business
on the Conversion Date, and at such time the rights of the holder as holder
of the converted shares of Series B Preferred Stock shall cease and the
person or person in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby.
5.10 Cash in Lieu of Fractional Shares. No fractional shares of Common
Stock shall be issued upon the conversion of shares of Series B Preferred
Stock. Instead of any fractional shares of Common Stock which would
otherwise be issuable upon conversion of Series B Preferred Stock, the
Corporation shall pay to the holder of the shares of Series B Preferred
Stock which were converted a cash adjustment in respect of such fractional
shares in an amount equal to the same fraction of the market price per
share of the Common Stock (as determined in a reasonable manner prescribed
by the Board of Directors) at the close of business on the Conversion Date.
The determination as to whether or not any fractional shares are issuable
shall be based upon the total number of shares of Series B Preferred Stock
being converted at any one time by any holder thereof, not upon each share
of Series B Preferred Stock being converted.
5.11 Partial Conversion. In the event some but not all of the shares
of Series B Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and
deliver to the holder a new certificate representing the number of shares
of Series B Preferred Stock that were not converted.
5.12 Reservation of Common Stock. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the
shares of the Series B Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of
all outstanding shares of the Series B Preferred Stock. If at any time the
number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the
Series B Preferred Stock, the Corporation shall take such corporate action
as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purpose.
6. Redemption Rights
6.1 Mandatory Redemption. Except as otherwise provided in this Section
6, on the fifth anniversary of the first date on which shares of Series B
Preferred Stock are issued (the "Mandatory Redemption Date"), the
Corporation shall redeem, out of funds legally available therefor, all
outstanding shares of Series B Preferred Stock, by paying therefor $10 per
share, plus an amount equal to any declared and unpaid dividends, if any,
to such date, in cash (the "Redemption Value").
6.2 Notice of Redemption. Notice of any redemption of shares of Series
B Preferred Stock pursuant to Section 6.1 shall be given by notice to the
registered holders of the Series B Preferred Stock not less than 30, nor
more than 60 days prior to the date fixed for redemption (a "Redemption
Notice"), to each holder of Series B Preferred Stock to be redeemed, at
such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the redemption of Series B Preferred
Stock, the Board of Directors may fix a record date for the determination
of Series B Preferred Stock to be redeemed, or may cause the transfer books
of the Corporation for the Series B Preferred Stock to be closed, not more
than 60 days or less than 30 days prior to the date fixed for such
redemption. At any time prior to the expiration of the Redemption Notice,
any holder of the Series B shares may exercise the conversion rights
pursuant to the provisions of Section 5.9 above.
6.3 Cancellation of Series B Preferred Stock. Notice of Redemption
having been given as aforesaid in respect of shares of Series B Preferred
Stock to be redeemed pursuant to Section 6.1, notwithstanding that any
certificates for such shares shall not have been surrendered for
cancellation, from and after the date of redemption designated in the
notice of redemption (i) the shares represented thereby shall no longer be
deemed outstanding, (ii) the rights to receive dividends thereon shall
cease to accrue, and (iii) all rights of the holders of Series B Preferred
Stock to be redeemed shall cease and terminate, excepting only the right to
receive the $10 per share redemption price therefor, plus all accumulated
and unpaid dividends (whether or not earned or declared) to the date of
redemption.
6.4 Acceleration of Redemption Date. If at any time after the first
date on which shares of Series B Preferred Stock are issued (the "Issue
Date") the average closing price of the Company's Common Stock as listed on
the Nasdaq National Market is $15 or more for thirty consecutive trading
days, then the Company will have the right to accelerate redemption of all
of the Series B Preferred Stock at the Redemption Value per share by
sending a Redemption Notice as provided in Section 6.2 above. At any time
prior to the expiration of the Redemption Notice, any holder of the Series
B shares may exercise the conversion rights pursuant to the provisions of
Section 5.9 above.
7. Put Right
7.1 The Put. The Corporation hereby irrevocably grants and issues to
each holder of Series B Preferred Stock the right to require the
Corporation to purchase any time after the second anniversary of the Issue
Date (hereinafter referred to as the "Put") any or all of such Series B
Preferred Stock at the Redemption Value.
7.2 Exercise of Put. The holders of Series B Preferred Stock may
exercise the Put any time after the second anniversary of the Issue Date
(the "Exercise Period"). Any holder of Series B Preferred Stock may
exercise the Put during the Exercise Period by delivery of a written notice
to the Corporation specifying the number of Series B Preferred Stock as to
which the Put is being exercised, together with delivery of one or more
certificates representing the number of Series B shares as to which the Put
is being exercised, duly endorsed in blank by the holders of Series B
Preferred Stock or having attached thereto a stock power duly executed by
the holder of Series B Preferred Stock in proper form for transfer.
7.3 Payment and Delivery of Series B Preferred Stock. The Corporation
shall, within twenty (20) calendar days of the receipt of notice from a
holder of Series B Preferred Stock of its exercise of the Put, pay to such
holder of Series B Preferred Stock in cash or by check, the Redemption
Value for each share of Series B Preferred Stock as to which such holder of
Series B Preferred Stock has exercised the Put. Any residual Series B
shares represented by the certificates surrendered but not included within
the Put will be issued in the name of the holder by the Corporation.
<PAGE>
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
KEY TECHNOLOGY, INC.
EXHIBIT 2.5B TO AGREEMENT AND PLAN OF MERGER
CUSIP ____________
This certifies that __________________________, the registered holder (the
"Holder") is entitled to purchase from Key Technology, Inc., an Oregon
corporation (the "Company"), _______ fully paid and nonassessable shares of the
Company's Common Stock, subject to adjustment as provided herein, at any time or
from time to time up to and including 5:00 p.m. (Pacific Time) on _____________,
2005, such date being referred to herein as the "Expiration Date," upon
surrender to the Company's Transfer Agent (or at such other location as the
Company may advise the Holder in writing) of this Warrant properly endorsed with
the Form of Subscription attached hereto duly filled in and signed and upon
payment of the purchase price for the number of shares for which this Warrant is
being exercised times a per-share purchase price of $15.00 per share (referred
to herein as the stock purchase price). The per-share stock purchase price and
the number of shares purchasable hereunder are subject to adjustment as provided
herein.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
1.1 This Warrant is exercisable at the option of the holder of record
hereof, at any time or from time to time, up to the Expiration Date for all
or any part of the shares of Common Stock which may be purchased hereunder.
Shares of Common Stock purchased under this Warrant shall be issued to the
Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered,
properly endorsed, together with the completed Form of Subscription
attached hereto and payment for such shares. Certificates for the shares of
Common Stock so purchased shall be delivered to the Holder hereof by the
Company at the Company's expense within a reasonable time after this
Warrant has been so exercised. In case of a purchase of less than all the
shares which may be purchased under this Warrant, the Company shall cancel
this Warrant and execute and deliver a new Warrant or Warrants of like
tenor for the balance of the shares purchasable under the Warrant
surrendered upon such purchase to the Holder hereof within a reasonable
time. Each stock certificate so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be
registered in the name of such Holder.
1.2 Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common
Stock is greater than the stock purchase price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the
Holder may elect to receive shares equal to the value (as determined below)
of this Warrant (or the portion thereof being cancelled) by surrender of
this Warrant at the principal office of the company together with the
properly endorsed Form of Subscription and notice of such election in which
event the Company shall issue to the Holder a number of shares of Common
computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being cancelled (at
the date of such calculation)
A = the fair market value of one share of the Company's Common
Stock, as applicable (at the date of such calculation)
B = stock purchase price (as adjusted to the date of such
calculation)
For purposes of this Warrant, including the above calculation, fair market
value of one share of Common Stock shall be the closing price on Nasdaq on the
date that this Warrant is surrendered for exercise.
2. Shares to be Fully Paid; Reservation of Shares.
The Company covenants and agrees that all shares of Common Stock which may
be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable and
free from all preemptive rights of any shareholder and free of all taxes, liens
and charges with respect to the issue thereof. The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, a sufficient number of shares of authorized but
unissued Common Stock will be reserved to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
domestic securities exchange upon which the Company's Common Stock or this
Warrant may be listed.
3. Adjustment of Stock Purchase Price and Number of Shares.
In case the Company shall at any time split or subdivide its outstanding
shares of Common Stock into a greater number of shares, the stock purchase price
in effect immediately prior to such subdivisions hall be proportionately
reduced, and conversely, in case the outstanding shares of the Common Stock of
the Company shall be combined into a smaller number of shares, the stock
purchase price in effect immediately prior to such combination shall be
proportionately increased. Upon each adjustment of the stock purchase price, the
Holder of this Warrant shall thereafter be entitled to purchase, at the stock
purchase price resulting from such adjustment, the number of shares obtained by
multiplying the stock purchase price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately prior
to such adjustment, and dividing the product thereof by the stock purchase price
resulting from such adjustment.
Upon any adjustment of the stock purchase price or any increase or decrease
in the number of shares purchasable upon the exercise of this Warrant, the
Company shall give written notice thereof, by first-class mail, postage prepaid,
addressed to the registered Holder of this Warrant at the address of such Holder
as shown on the books of the Company. The notice shall be signed by the
Company's President or Chief Financial Officer and shall state the stock
purchase price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
4. Notice of Certain Events.
If at any time:
(a) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to
the holders of its Common Stock;
(b) there shall be any capital reorganization or reclassification
of the capital stock of the Company; or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to,
another corporation; or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give, by
first-class mail, postage prepaid, addressed to the Holder of this Warrant
at the address of such Holder as shown on the books of the Company (i) at
least 10 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend,
distribution or subscription rights or for determining rights to vote in
respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, and (ii) in the case
of any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up, at least 10 days' prior written
notice of the date when the same shall take place. Any notice given in
accordance with the foregoing clause (i) shall also specify, in the case of
any such dividend, distribution or subscription rights, the date on which a
shareholder shall be entitled thereto. Any notice given in accordance with
the foregoing clause (ii) shall also specify the date on which shareholders
shall be entitled to exchange their shares for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, winding up, conversion or public
offering, as the case may be.
5. No Voting or Dividend Rights.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote or to consent to receive notice as a shareholder
of the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised.
6. Fractional Shares.
No fractional shares shall be issued upon exercise of this Warrant. The
Company shall, in lieu of issuing any fractional share, pay the holder entitled
to such fraction a sum in cash equal to such fraction multiplied by the then
fair market value per share.
7. Right of Redemption.
The Holder shall at all times prior to the Expiration Date and except to
the extent exercised have the right to require the Company to redeem this
Warrant for cash at a price equal to $10.00 for each whole share of Company
Common Stock that may be purchased under this Warrant. Upon any surrender for
redemption, any fractional share interests represented by this Warrant will be
redeemed for cash. To exercise this right of redemption, the Holder shall
surrender this Warrant, properly endorsed, to the Company's Transfer Agent,
together with the completed form of Redemption Notice attached hereto.
8. Warrant Agreement.
This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of ____________, 2000 (the
"Warrant Agreement"), between the Company and the Warrant Agent, to all of which
terms, provisions and conditions the registered holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is incorporated
herein by reference and made a part hereof and reference is made to the Warrant
Agreement for a full description of the rights, limitations of rights,
obligations, duties and immunities of the Warrant Agent, the Company and the
holders of the Warrant Certificates. Copies of the Warrant Agreement are
available for inspection at the stock transfer office of the Warrant Agent or
may be obtained upon written request addressed to the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its officers, thereunto duly authorized, this ___ day of ___________, 2000.
KEY TECHNOLOGY, INC.
By _______________________
Thomas C. Madsen
President
<PAGE>
FORM OF SUBSCRIPTION
(To be Signed Only Upon Exercise of Warrant)
TO: Key Technology, Inc.
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _____________ (________)1 shares of the common Stock of Key
Technology, Inc. (the "Company") and herewith (check applicable box):
/_/ makes payment of ____________________ Dollars ($___________)
therefor; or
/_/ surrenders the Warrant pursuant to the net exercise
provisions contained therein
/_/ and requests that the certificates for such shares be issued
in the name of and delivered to:
----------------------------
----------------------------
----------------------------
The undersigned represents that it is acquiring such stock for its own
account for investment and not with a view to or for sale in connection with any
distribution thereof.
DATED: ______________________.
-------------------------------------------
(Signature must conform in all respects to
name of Holder as specified on the face of
the Warrant)
- ----------------------------
1 Insert here the number of shares called for on the face of the Warrant (or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised), in either case without making any adjustment for additional
shares of Common Stock or other securities or property or cash which, pursuant
to the adjustment provisions of the Warrant, may be deliverable upon exercise.
<PAGE>
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
Key Technology, Inc. ("Parent"), KTC Acquisition Corp. ("Sub") and Advanced
Machine Vision Corporation ("Company") entered into an Agreement and Plan of
Merger effective February 29, 2000. The parties hereby enter into this Amendment
No. 1 as of February 25, 2000 to provide for the following additions and
modifications to the Merger Agreement:
1. Insurance Coverage.
Parent shall cause the Surviving Corporation to provide, for an aggregate
period of not less than six years from the Effective Time, the Company's current
directors and officers an insurance and indemnification policy that provides
coverage for events occurring prior to the Effective Time (the "D&O Insurance")
that is substantially similar to the Company's existing policy or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, that the Surviving Corporation shall not be
required to pay an annual premium for the D&O Insurance in excess of 200% of the
last annual premiums paid prior to the date hereof but in such case shall
purchase as much coverage as possible for such amount.
2. Increase in Board of Directors.
Within 30 days of the Effective Date, or the date that Key acquires a
majority of the outstanding Common Stock of AMVC if such event occurs prior to
the Effective Date, Key's Board of Directors will create a vacancy by expanding
the size of the Board of Directors by one member and will fill that vacancy by
the appointment of a nominee designated by AMVC's Board of Directors who is
acceptable to Key's chief executive officer.
3. Amendment of Section 7.1.
Section 7.1 of the Merger Agreement is restated in its entirety to read as
follows:
7.1 Representations and Warranties True at the Effective Time. Each of
the Company's representations and warranties in this Agreement must have
been accurate in all respects as of the date of this Agreement, and the
representations and warranties contained in Sections 3.2, 3.3, 3.11, 3.14
(to the extent of any Proceeding under Section 3.14(a)(ii) or any
Proceeding under Section 3.14(a)(i), excluding matters set forth in the
Disclosure Letter, that may result in an uninsured loss in excess of $2
million), 3.24 and 3.25 must be accurate in all respects as of the Closing
Date as if made on and as of the Closing Date, without giving effect to any
supplement to the Disclosure Letter, and the Company shall have delivered
to Parent a certificate to such effect signed by the Chief Executive
Officer of the Company."
4. Construction.
This Amendment is part of the Merger Agreement, and is governed by the
general terms and conditions thereof.
KEY TECHNOLOGY, INC.
By _______________________________
Thomas C. Madsen
President
KTC ACQUISITION CORP.
By _______________________________
Thomas C. Madsen
President
ADVANCED MACHINE VISION CORPORATION
By _______________________________
William J. Young
President
EXHIBIT 2.2
AGREEMENT REGARDING TENDER OFFER
KEY TECHNOLOGY, INC. ("Key"), KTC ACQUISITION CORP. and ADVANCED MACHINE
VISION CORPORATION ("AMVC") entered into an Agreement and Plan of Merger
effective February 15, 2000 (the "Merger Agreement"). In connection with the
merger, AMVC's Board of Directors has requested Key to make a tender offer for
outstanding shares of AMVC Common Stock, offering to each AMVC common
stockholder the consideration to be received in the merger. Key and AMVC wish to
enter into this Agreement in connection with the proposed tender offer.
Capitalized terms used herein which are not defined in this Agreement have the
meaning ascribed to them in the Merger Agreement.
The parties accordingly agree as follows:
1. Subject to the terms of this Agreement, Key agrees that if a commitment
to vote for the Merger Agreement cannot be obtained from the holder of AMVC's
outstanding Series B Preferred Stock by March 31, 2000, Key will promptly
thereafter make an offer for the outstanding shares of AMVC Common Stock (the
"Shares"), subject and pursuant to the terms and conditions of the offer
attached as Exhibit A (the "Offer").
2. AMVC agrees to pay all fees and costs associated with the Offer, whether
incurred by Key or by AMVC. All requests for reimbursement of such fees and
costs which are submitted to AMVC's chief financial officer by Key's chief
executive officer or its chief financial officer will be paid by AMVC within
five business days of receipt of the request. The parties will continue to pay
their own fees and costs in connection with the Merger Agreement, and the
related S-4 Registration Statement.
3. AMVC represents that its Board of Directors has authorized and approved
this Agreement by a vote which includes not more than one director voting
against or abstaining from the vote, and AMVC will supply Key a certificate of
the Secretary of AMVC certifying to such Board vote.
4. Nothing in this Agreement is meant to modify in any way the terms and
conditions of the Merger Agreement, including without limitation any of the
provisions of Section 11.1 of the Merger Agreement, except that the Offer by Key
will not constitute a tender offer for purposes of Section 10.1(d) of the Merger
Agreement. Sections 11.2 through 11.13 of the Merger Agreement are incorporated
herein by reference.
5. Unless the parties mutually otherwise determine, the parties will use
their best efforts to complete and file with the Securities and Exchange
Commission the Form S-4 Registration Statement contemplated in the Merger
Agreement as soon as practicable.
EXECUTED this 7th day of March, 2000.
KEY TECHNOLOGY, INC. ADVANCED MACHINE VISION CORPORATION
By ___________________________ By ________________________________
Thomas C. Madsen, President William J. Young, President
<PAGE>
EXHIBIT A TO
AGREEMENT REGARDING TENDER OFFER
1. The Offer.
(a) Subject to the provisions hereof and the Merger Agreement, Key
shall commence, within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"), the Offer to purchase all
outstanding Shares with each Share to receive the consideration to be paid
pursuant to the terms of the Merger Agreement. The obligation to commence
the Offer and pay for any Shares tendered pursuant to the Offer shall be
subject to the conditions set forth herein (the "Conditions") and subject
to the rights of Key to terminate the Agreement Regarding Tender Offer in
the event of termination of the Merger Agreement. Key expressly reserves
the right to modify the terms of the Offer, except that, without the
consent of AMVC, Key shall not (i) reduce the number of Shares subject to
the Offer, (ii) impose any other conditions to the Offer other than the
Conditions or modify the Conditions (other than to waive any Conditions to
the extent permitted by this Agreement), (iii) except as provided in the
next sentence, extend the Offer, or (iv) change the form of consideration
payable in the Offer. Notwithstanding the foregoing, Key may (i) extend the
Offer, if at the scheduled or extended expiration date of the Offer any of
the Conditions shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer, and (iii) extend the Offer for any reason on one
or more occasions for an aggregate period of not more than 15 business days
beyond the latest expiration date that would otherwise be permitted under
clause (i) or (ii) of this sentence, in each case subject to the right of
Key or AMVC to terminate the Agreement Regarding Tender Offer pursuant to
the terms hereof. Key agrees that if at any scheduled expiration date of
the Offer, either of the conditions set forth in paragraphs 3(d) and 3(e)
below shall not have been satisfied, but at such scheduled expiration date
all the other conditions of Section 3 shall then be satisfied, at the
request of AMVC (confirmed in writing), Key shall extend the Offer for a
reasonable period to permit AMVC the right to cure such failure of
condition subject to the right of Key or AMVC to terminate the Offer and
the Merger Agreement pursuant to the terms hereof and thereof. Subject to
the terms and conditions of the Offer, Key shall pay for all Shares validly
tendered and not withdrawn pursuant to the Offer as soon as it is legally
permitted to do so under applicable law and pay for such Shares promptly.
Any obligations of Key under the terms of the Offer will not apply to any
transactions subsequent to the purchase of Shares tendered in the Offer.
(b) On the date of commencement of the Offer, Key shall file with the
SEC a tender offer statement on Schedule TO (together with any supplements
or amendments thereto, the "Schedule TO") with respect to the Offer, which
shall contain an offer to purchase and a related letter of transmittal and
summary advertisement (such Schedule TO and the documents included therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "Offer Documents"), and Key shall cause to be
disseminated the Offer Documents to holders of Shares as and to the extent
required by applicable Federal securities laws. Key and AMVC each agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become
false or misleading in any material respect, and Key further agrees to take
all steps necessary to cause the Schedule TO as so corrected to be filed
with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable Federal securities laws. AMVC and its counsel shall
be given reasonable opportunity to review and comment upon the Offer
Documents prior to their filing with the SEC or dissemination to the
shareholders of AMVC. Key agrees to provide AMVC and its counsel any
comments Key may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments and to
cooperate with AMVC and its counsel in responding to any such comments.
2. Participation by AMVC.
(a) AMVC hereby approves of the Offer and represents and warrants that
the Board of Directors of AMVC has determined that this Agreement and the
transactions contemplated hereby, including each of the Offer and the
Merger, are fair to and in the best interests of the holders of the Shares,
and resolved to recommend that the shareholders of AMVC accept the Offer;
provided, however, that such recommendation may be withdrawn, modified or
amended in connection with a Superior Proposal as defined in the Merger
Agreement. AMVC hereby consents to the inclusion in the Offer Documents of
the recommendation of AMVC's Board of Directors.
(b) On the date the Offer Documents are filed with the SEC, AMVC shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendation described in
Section 2(a), and AMVC shall cause to be disseminated the Schedule 14D-9 to
holders of Shares as and to the extent required by applicable Federal
securities laws. Each of AMVC and Key agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect, and AMVC further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as
so amended or supplemented to be filed with the SEC and disseminated to
holders of Shares, in each case as and to the extent required by applicable
Federal securities laws. Key and its counsel shall be given reasonable
opportunity to review and comment upon the Schedule 14D-9 prior to its
filing with the SEC or dissemination to shareholders of AMVC. AMVC agrees
to provide Key and its counsel any comments AMVC or its counsel may receive
from the SEC or its staff with respect to the Schedule 14D-9 promptly after
the receipt of such comments and to cooperate with Key and its counsel in
responding to any such comments.
(c) In connection with the Offer and the Merger, AMVC shall direct its
transfer agent or agents to furnish Key promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security position
listings and computer files and all other information in AMVC's possession
or control, to the extent reasonably available to AMVC, regarding the
beneficial owners of Shares and any securities convertible into Shares, and
shall furnish to Key such information and assistance (including updated
lists of shareholders, security position listings and computer files) as
Key may reasonably request in communicating the Offer to AMVC's
shareholders. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any
other documents necessary to consummate the Merger, Key and its agents
shall hold in confidence the information contained in any such labels,
listings and files, will use such information only in connection with the
Offer and the Merger and if the Merger Agreement shall be terminated, will,
upon request, deliver, and will use their best efforts to cause their
agents to deliver, to AMVC all copies of such information then in their
possession or control.
(d) Before commencing the Offer, all officers and all directors of
AMVC other than the FMC Corporation representative will have executed an
agreement in the form of the attached Schedule 1 agreeing to tender their
shares in the Offer and SRC Vision Inc. shall have sent a notice of
termination under the October 14, 1998 Representative Agreement previously
entered into with FMC Corporation.
3. Conditions of the Offer.
Notwithstanding any other term of the Offer or this Agreement, Key shall
not be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Key's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares tendered pursuant to the
Offer unless there shall have been validly tendered and not withdrawn prior to
the expiration of the Offer not less than 9,590,000 Shares. Furthermore,
notwithstanding any other term of the Offer or this Agreement, Key shall not be
required to accept for payment or, subject as aforesaid, to pay for any Shares
not theretofore accepted for payment or paid for, and may terminate the Offer
if, at any time on or after the date of this Agreement and before the acceptance
of such Shares for payment or the payment therefor, any of the following
conditions exists (other than as a result of any action or inaction of Key or
any of its subsidiaries that constitutes a breach of this Agreement):
(a) There shall be pending by any governmental entity any suit, action
or proceeding (i) challenging the acquisition by Key of any Shares under
the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other transactions
contemplated by this Agreement, the Merger Agreement, or seeking to obtain
from AMVC or Key any damages that would have a Material Adverse Effect on
AMVC or Key, (ii) seeking to prohibit or materially limit the ownership or
operation of AMVC by Key or its subsidiaries or to compel AMVC or Key to
dispose of or hold separate any material portion of the business or assets
of AMVC or Key and their respective subsidiaries, taken as a whole, as a
result of the Offer or any of the other transactions contemplated by this
Agreement or the Merger Agreement, (iii) seeking to impose material
limitations on the ability of Key to acquire or hold, or exercise full
rights of ownership of, any Shares to be accepted for payment pursuant to
the Offer, including the right to vote such shares on all matters properly
presented to the shareholders of AMVC, (iv) seeking to prohibit Key or any
of its subsidiaries from effectively controlling in any material respect
any material portion of the business or operations of AMVC and its
subsidiaries or (v) which otherwise is reasonably likely to have a Material
Adverse Effect on AMVC.
(b) There shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any Governmental Entity any
statute, rule, regulation, judgment, order or injunction, that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above.
(c) (i) The Board of Directors of AMVC or any committee thereof shall
have withdrawn or modified in a manner adverse to Key its approval or
recommendation of the Offer or the Merger or approved or recommended any
Superior Proposal or tender offer by a third party, or, upon the request of
Key, failed to reaffirm its approval or recommendation of the Offer or the
Merger, (ii) AMVC shall have entered into any agreement with respect to any
Superior Proposal, or (iii) the Board of Directors of AMVC or any committee
thereof shall have resolved to take any of the foregoing actions.
(d) Any of the representations and warranties of AMVC set forth in the
Merger Agreement shall not be true and correct at the scheduled or extended
expiration of the Offer, except where the failure of such representations,
individually or in the aggregate, to be so true and correct would not have
a Material Adverse Effect on AMVC.
(e) AMVC shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of AMVC to be performed or complied with by it under
this Agreement or the Merger Agreement.
The foregoing conditions are for the sole benefit of Key and may, subject
to the terms of this Agreement, be waived by Key in whole or in part at any time
and from time to time in its sole discretion. The failure by Key at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
<PAGE>
Schedule 1 to Exhibit A to Agreement
Regarding Tender Offer
AGREEMENT TO TENDER SHARES
The undersigned is a director or officer of Advanced Machine Vision
Corporation. I have reviewed, and I approve of, the Agreement Regarding Tender
Offer entered into between Key Technology, Inc. ("Key") and Advanced Machine
Vision Corporation ("AMVC") dated the 29th day of February, 2000 (the "Tender
Offer Agreement").
As an inducement to Key to make the tender offer (the "Offer"), the
undersigned hereby individually represents and covenants that if the tender as
described in the Tender Offer Agreement is made by Key, the undersigned will (i)
recommend to the shareholders of AMVC to accept Key's offer, subject to the
provisions of Section 2(a) of Exhibit A to the Tender Offer Agreement and (ii)
tender in response to the Offer all AMVC shares owned by the undersigned at the
date hereof or any date prior to expiration of the Offer, and use his best
efforts to cause the tender in response to the Offer of all shares of AMVC owned
by any affiliate of the undersigned individual.
This document is being executed on the express understanding that the
execution of similar agreements by all of the AMVC directors [other than the FMC
representative on the Board] is a prerequisite to commencement of the tender
offer by Key pursuant to the terms of the Tender Offer Agreement, and that Key
is relying upon such agreements in initiating the tender.
In the event that Key terminates the Offer (other than due to the breach of
the terms of this Agreement by AMVC), or upon the expiration date of the Offer,
this Agreement will have no further force or effect.
EXECUTED this _______ day of March, 2000.
----------------------------------
EXHIBIT 99.1
ADVANCED MACHINE VISION CORPORATION PRESS RELEASE
ISSUED FEBRUARY 15, 2000
PRESS RELEASE
-------------
FOR IMMEDIATE RELEASE
CONTACTS: Alan Steel, Chief Financial Officer 541-776-7700
Philip Bourdillon/Eugene Heller, Silverman Heller Asso. 310-208-2550
ADVANCED MACHINE VISION CORPORATION
ANNOUNCES AGREEMENT TO BE ACQUIRED BY
KEY TECHNOLOGY, INC.
MEDFORD, Oregon (February 15, 2000)...Advanced Machine Vision Corporation
(Nasdaq-AMVC) announced today that it had signed a definitive Agreement and Plan
of Merger with Key Technology, Inc. (Nasdaq-KTEC). Under the terms of the
Agreement, each share of AMV common stock would receive:
* $1.00 per share in cash, plus
* Key convertible preferred stock, redeemable for $1.00 in cash for each AMV
common share any time after two years, or convertible at any time into 2/3
of a share of Key common stock for each ten (10) shares of AMV common
stock, plus
* A warrant to purchase Key common stock, redeemable at any time for $.25 in
cash for each AMV common share, or which can be exercised to purchase .025
shares of Key common stock per AMV common share at an exercise price of
$15.00 per share of Key common stock.
The Agreement is subject to approval by the holders of Key's common stock
and AMV's common and preferred stock, which will be solicited at stockholders'
meetings expected to be held in May of this year. As part of the acquisition
process, AMV's Board of Directors will support a possible public tender by Key
for AMV common stock.
William J. Young, the Company's Chairman, President and Chief Executive
Officer, stated: "The combination of AMV and Key will combine complimentary
technologies and customers and provide an opportunity to better meet our
customers' needs." Mr. Young indicated that the entities had combined sales of
approximately $92 million in 1999. For its fiscal year ended September 30, 1999,
Key reported sales of $68 million and net income of $3.5 million, or $.75 per
share.
Mr. Young also said: "The transaction will provide a significant premium
over AMV's recent stock price. In addition, the economies of scale of a merged
AMV/Key, stronger market presence, broader product lines and planned process
control product introductions should provide AMV shareholders with a better
upside potential than if AMV remained a separate business."
Advanced Machine Vision Corporation is a worldwide leader in the design,
manufacture and sale of standard and CE-compliant vision systems used to control
manufacturing processes through high-speed product inspection, and to identify
and remove defects, resulting in production and quality yield rates superior to
other process and control methods. AMV's operations are comprised of two
wholly-owned subsidiaries, SRC VISION, Inc. and Ventek, Inc., both utilizing
proprietary image processing technologies.
Key Technology, an ISO-9000 certified company, is a leading designer and
manufacturer of process automation systems, primarily for the food processing
industry, which integrates electro-optical inspection and sorting, specialized
conveying and product preparation equipment. Key systems allow processors to
improve quality, increase yield and reduce cost. With worldwide sales and
service, the company maintains manufacturing facilities and demonstration
laboratories in Beusichem, The Netherlands and Walla Walla, Washington.
Safe Harbor Statement under the Private Securities Litigation Act of 1995:
Statements in this news release that are forward-looking statements are subject
to various risks and uncertainties, such as the successful completion of Key's
acquisition of AMV, the Company's ability to sustain adequate customer order
levels, the impact of economic conditions on our markets, the ability of the
Company to successfully introduce new products, the possible negative impact of
competitive products and/or pricing, the Company's ability to sustain a positive
cash flow, the impact of the strengthening of U. S. currency on the Company's
ability to compete effectively in the foreign markets and the effect of these
and other factors on the market price of the Company's Common Stock. Investors
are encouraged to review a more comprehensive listing of cautionary statements
and risk factors contained in the Company's Forms 10-K and 10-Q SEC filings.
Visit our web site at www.amvcorp.com
