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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
__________________
Date of Report (Date of earliest event reported): December 18, 1998
___________________
ATRIX INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-18880 41-1591075
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(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
14301 Ewing Avenue South, Burnsville, Minnesota 55306
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (612) 894-6154
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ITEM 5. OTHER EVENTS.
Atrix International, Inc. (the "Company"), Atrix Acquisition Corp.
("Newco") and Steven D. Riedel have entered into an Agreement and Plan
of Merger, dated as of December 18, 1998 (the "Merger Agreement"),
pursuant to which the Company will be merged with and into Newco (the
"Merger"). As a result of the Merger, each outstanding share of common
stock, $.04 par value, of the Company ("Company Common Stock"), other
than shares of Company Common Stock held by shareholders who perfect
their dissenters' appraisal rights in accordance with the Minnesota
Business Corporation Act, will be converted into the right to receive
$2.00 in cash, without interest, per share. After the Merger, the
Company will no longer exist as a separate corporation, and Newco will
continue as the surviving corporation under the name Atrix
International, Inc. Newco is and will continue to be a privately owned
corporation, with certain officers and directors of the Company owning
100% of the outstanding stock of Newco.
In addition, pursuant to a Shareholder Agreement, dated November 24,
1998 (the "Shareholder Agreement"), between Jerry E. Mathwig and Mr.
Riedel, Mr. Mathwig, who owns 24.44% of the outstanding shares of
Company Common Stock, has agreed to vote (or cause to be voted) his
shares of Company Common Stock for the Merger Agreement (subject to
limitations under the Minnesota Control Share Acquisition Act and the
terms of the Shareholder Agreement). Mr. Mathwig has also granted to
Mr. Riedel an irrevocable proxy to vote Mr. Mathwig's shares for the
Merger, although Mr. Riedel's ability to vote more than 19.99% of the
outstanding shares of the Company common stock is subject to approval
by the Company's shareholders pursuant to the Minnesota Control Share
Acquisition Act.
Completion of the Merger is subject to various conditions, including
approval of the Company shareholders and financing.
The Merger Agreement is attached hereto as Exhibit 2.1 and is
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
b. PRO FORMA FINANCIAL INFORMATION.
Not applicable.
c. EXHIBITS. Attached hereto.
2.1 Agreement and Plan of Merger, dated as of December 18, 1998, by
and among Atrix International, Inc., Atrix Acquisition Corp. and
Steven D. Riedel.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATRIX INTERNATIONAL, INC.
(Registrant)
Dated: December 29, 1998 By /s/ Steven D. Riedel
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President and
Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT ITEM METHOD OF FILING
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2.1 Agreement and Plan of Merger, dated as of
December 18, 1998, by and among Atrix
International, Inc., Atrix Acquisition Corp. and
Steven D. Riedel.................................. Filed herewith
electronically
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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ATRIX ACQUISITION CORP.,
STEVEN D. RIEDEL
AND
ATRIX INTERNATIONAL, INC.
DATED AS OF DECEMBER 18, 1998
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of December 18, 1998 (the
"Agreement"), by and among, Atrix Acquisition Corp., a Minnesota corporation
("Newco"), Steven D. Riedel, an individual ("Riedel"), and Atrix International,
Inc., a Minnesota corporation (the "Company") .
RECITALS:
WHEREAS, Riedel, the President, Chief Executive Officer and a Director of
the Company, has caused Newco to be incorporated for the purpose of completing
the transactions contemplated by this Agreement.
WHEREAS, all of the equity interest of Newco is, or prior to the closing of
the transactions contemplated by this Agreement will be, held by Riedel and
Clifford B. Meacham (collectively, the "Newco Investors").
WHEREAS, the Boards of Directors of Newco and the Company have each
determined that it is in the best interests of their shareholders for Newco to
acquire the Company upon the terms and subject to the conditions set forth
herein; and
WHEREAS, in furtherance of such acquisition, the Board of Directors of
Newco and the Company have each approved the transactions contemplated hereby,
including, without limitation, the merger of the Company with and into Newco in
accordance with the Minnesota Business Corporation Act (the "MBCA") upon the
terms and subject to the conditions set forth herein (the "Merger").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, Newco
and the Company hereby agree as follows:
ARTICLE
1.
THE MERGER
1.1. The Merger. Upon the terms and subject to the satisfaction of the
conditions set forth in Article 6, and in accordance with the MBCA, at the
Effective Time (as defined), the Company will be merged with and into Newco. As
a result of the Merger, the separate corporate existence of the Company will
cease and Newco will continue as the surviving corporation of the Merger (the
"Surviving Corporation").
1.2. Effective Time; Closing. Within three business days after satisfaction
of the conditions set forth in Article 6 (other than the condition that the
Articles of Merger (as defined) be filed and effective), or at an earlier or
later date as may be mutually agreed upon by the parties, Newco and the Company
will duly execute and file articles of merger (the "Articles of Merger") with
the Minnesota Secretary of State in accordance with the MBCA. The Merger will
become effective at such time as the Articles of Merger are filed with the
Minnesota Secretary of State or at such later time as is specified in the
Articles of Merger (the "Effective Time"). A closing (the "Closing") will be
held at the offices of Oppenheimer Wolff & Donnelly LLP, Plaza VII, 45 South
Seventh Street, Minneapolis, Minnesota, or
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such other place as the parties agree, for the purpose of confirming the
satisfaction of the conditions set forth in Article 6 (the date of such Closing
being the "Closing Date").
1.3. Effects of the Merger. At the Effective Time, the effect of the Merger
will be as provided herein and in the applicable provisions of the MBCA. Without
limiting the generality of the foregoing, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company will vest in
Newco, and all debts, liabilities, obligations, restrictions, disabilities and
duties of the Company will become the debts, liabilities, obligations,
restrictions, disabilities and duties of Newco.
1.4. Articles of Incorporation and By-Laws. The Articles of Incorporation
and the By-Laws of Newco in effect at the Effective Time will be the Articles of
Incorporation and By-Laws of the Surviving Corporation, until amended in
accordance with applicable law; provided, however, that Article I of the
Articles of Incorporation of the Surviving Corporation will be amended as of the
Effective Time to read "The name of this corporation is Atrix International,
Inc."
1.5. Directors and Officers. The directors of Newco immediately prior to
the Effective Time will be the initial directors of the Surviving Corporation,
each to hold office in accordance with the Articles of Incorporation and By-Laws
of the Surviving Corporation, and the officers of the Newco immediately prior to
the Effective Time will be the initial officers of the Surviving Corporation, in
each case until their respective successors are duly elected or appointed and
qualified.
1.6. Shares. At the Effective Time, by virtue of the Merger and without any
action on the part of Newco, the Company or the holders of any shares of common
stock, $.04 par value, of the Company ("Company Common Stock ") (shares of
Company Common Stock being collectively referred to as "Shares," or,
individually, as a "Share"), each Share issued and outstanding immediately prior
to the Effective Time (other than any Dissenting Shares (as defined)) will be
canceled and converted automatically into the right to receive an amount equal
to the Merger Consideration (as defined), payable, without interest, to the
holder of such Share upon surrender of the certificate that formerly evidenced
such Share, in the manner provided in Section 1.7. The "Merger Consideration"
will consist of cash in the amount of $2.00. The Merger Consideration will in
all events be equal to $2,826,898; provided, however, that any Shares issued and
outstanding immediately prior to the Effective Time which are then owned
beneficially or of record by Newco will, by virtue of the Merger, be canceled
and retired without payment of any consideration therefor.
1.7. Payment for Shares. Prior to the Effective Time, Newco will deposit,
in trust with Norwest Bank Minnesota (the "Paying Agent") and for the benefit of
the holders of Company Common Stock, immediately available funds in an amount
sufficient to make the payments contemplated by Sections 1.6 and 1.8 on a timely
basis. Such funds may, as directed by Newco (so long as such directions do not
impair the rights of holders of Company Common Stock to receive the Merger
Consideration promptly upon surrender of their Shares in accordance with this
Agreement), be invested by the Paying Agent in short-term obligations of, or
guaranteed by, the United States of America (collectively the "Permitted
Investments") or in money market funds that are invested solely in Permitted
Investments. Any net profit resulting from, or income interest provided by,
Permitted Investments, will be payable to Newco, which will also replace any
monies lost through any investment made at its direction pursuant to this
Section 1.7. Any portion of the Merger Consideration remaining with the Paying
Agent six months after the Effective Time will be released and repaid by the
Paying Agent to Newco, or its nominee, upon demand, after which time persons
entitled to Merger Consideration may look, subject to applicable escheat and
other similar laws, only to Newco therefor, without interest.
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1.8. Company Option Plans and Warrants. No consideration will be paid with
respect to any outstanding option or warrant for the purchase of Shares (each,
an "Option," collectively, the "Options") that has an exercise price of $2.00
per share or more. The parties acknowledge and agree that the Company has no
outstanding Options that have an exercise price less than $2.00 per share.
1.9. Capitalization Changes. If between the date of this Agreement and the
Effective Time the issued and outstanding Shares have been changed into a
different number of Shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares or
stock dividend, the Merger Consideration will be appropriately adjusted.
ARTICLE
2.
DISSENTING SHARES; PAYMENT FOR SHARES
2.1. Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, Shares that are issued and outstanding immediately prior to the
Effective Time and which are held by any holder of Company Common Stock who has
not voted in favor of the Merger and has properly exercised and perfected
appraisal rights in accordance with Sections 302A.471 and 302A.473 of the MBCA
(the "Dissenting Shares") will not be converted into the right to receive Merger
Consideration, but will become the right to receive such consideration as may be
determined to be due such Dissenting Shares pursuant to the MBCA; provided,
however, that any holder of Dissenting Shares who has failed to perfect or who
has effectively withdrawn or lost his or her rights of appraisal of such
Dissenting Shares under the MBCA will forfeit the right to appraisal of such
Dissenting Shares, such Dissenting Shares will no longer be Dissenting Shares
and such Dissenting Shares will thereupon be deemed to have been converted into
the right to receive, as of the Effective Time, the respective amounts and
rights set forth in Section 1.6, without interest. The Company will give Newco
prompt notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other related instruments received by the Company and, prior
to the Effective Time, the Company will not, except with the prior written
consent of Newco, make any payment with respect to, or settle or offer to
settle, any such demands. Notwithstanding anything to the contrary contained in
this Section 2.1, if (a) the Merger is rescinded or abandoned or (b) if the
shareholders of the Company revoke the authority to effect the Merger, then the
right of any shareholder to be paid the fair value of such a shareholder's
Shares will cease. The Surviving Corporation will comply with all of the
obligations of the MBCA with respect to dissenting shareholders.
2.2. Payment for Shares.
(a) Promptly after the Effective Time, Newco will cause the Paying Agent to
mail and/or make available to each holder of record (other than Newco) of a
certificate or certificates, which immediately prior to the Effective Time
represented issued and outstanding Shares (the "Certificates"), a notice and
letter of transmittal and instructions for its use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent, together with the letter of
transmittal, duly executed and completed in accordance with the instructions
therein, the holder of such Certificate will be entitled to receive the Merger
Consideration, and the Certificate so surrendered will be canceled. No interest
will be paid or accrued in respect of the Merger Consideration. In the event of
a transfer of ownership of the Company Common Stock which is not registered in
the transfer records of the Company, it will be a condition to the payment of
the Merger Consideration that the Certificate so surrendered be properly
endorsed or be otherwise in proper form for
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transfer and that such transferee will (i) pay to the Paying Agent any transfer
or other taxes required or (ii) establish to the satisfaction of the Paying
Agent that such tax has been paid or is not payable.
(b) The Merger Consideration paid upon the surrender for exchange of Shares
in accordance with the above terms and conditions will be deemed to have been
issued in full satisfaction of all rights pertaining to such Shares.
(c) After the Effective Time, there will be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the Shares
which were issued and outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates representing such Shares are presented to
Newco, they will be canceled and exchanged as provided above.
(d) In the event any Certificate has been lost, stolen or destroyed, the
Paying Agent will disburse in exchange for such lost, stolen or destroyed
Certificate, upon the making of an affidavit of that fact by the holder thereof,
the Merger Consideration; provided, however, that Newco may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Certificate to deliver a bond, in such sum as it may
direct, as indemnity (or as to any such owner who is a holder of record as of
the date of this Agreement, an agreement to indemnify without any bond) against
any claim that may be made against Newco, the Company, the Paying Agent or any
other party with respect to the Certificate alleged to have been lost, stolen or
destroyed.
ARTICLE
3.
REPRESENTATIONS AND WARRANTIES
OF NEWCO
Newco represents and warrants to the Company as follows:
3.1. Organization and Qualification. Newco is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to carry on its business as
it is now being conducted and to own, lease and operate its property and assets.
Newco is duly qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified would not result in a material
adverse effect on Newco. The copies of the Articles of Incorporation and By-
Laws of Newco previously delivered to the Company are true, complete and correct
as of the date hereof.
3.2. Authority Relative to this Agreement. Newco has all requisite
corporate power and authority to execute and deliver this Agreement, to carry
out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery by Newco of this Agreement and the
consummation by Newco of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors and shareholders of Newco, and no
other corporate proceedings on the part of Newco are necessary to authorize this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Newco and, assuming this
Agreement constitutes a valid and binding obligation of the Company, this
Agreement constitutes a valid and binding agreement of Newco, enforceable
against Newco in accordance with its terms.
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3.3. Proxy Statement. None of the information supplied or to be supplied by
Newco and its Affiliates (as defined) specifically for inclusion in the Proxy
Statement (as defined) will, at the time the Proxy Statement is mailed, at the
time of the meeting of the shareholders to consider approval of the Merger and
this Agreement (the "Meeting") or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Any letter to
shareholders, notice of meeting, proxy statement and form of proxy, or the
information statement, as the case may be, distributed to shareholders in
connection with the Merger, or any schedule required under applicable law to be
filed with the Securities and Exchange Commission (the "SEC") in connection
therewith are collectively referred to herein as the "Proxy Statement." If, at
any time prior to the Effective Time, any event relating to Newco or any of its
Affiliates (as defined in Rule 405, as promulgated under the Securities Act of
1933, as amended), officers or directors is discovered by Newco that should be
set forth in a supplement to the Proxy Statement, Newco will promptly inform the
Company.
3.4. Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Newco, nor the performance by Newco of its
obligations hereunder, nor the consummation of the transactions contemplated
hereby will: (a) conflict with or result in any breach of any provision of the
Articles of Incorporation or By-Laws of Newco; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
third party or any public governmental body or regulatory authority, except (i)
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (ii) the filing of the Articles of Merger pursuant to the MBCA, or (iii)
where the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not prevent or delay consummation of
the Merger and would not otherwise prevent Newco from performing its obligations
under this Agreement; (c) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, lease, mortgage, license, agreement or other instrument
or obligation to which Newco is a party or by which any of its assets may be
bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not result in a material adverse effect on Newco;
or (d) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Newco or any of its assets, except for violations which would not
result in a material adverse effect on Newco.
3.5. Financing; Equity Investment. Newco has entered into a commitment
letter, dated December 9, 1998 (the "Commitment Letter"), with Bremer Business
Financial Corporation ("Bremer") for the borrowing of funds necessary to
consummate the Merger and the transactions contemplated hereby and to pay the
related fees and expenses and will make such funds available to the Paying Agent
on or before the Effective Time. The funds underlying the Commitment Letter,
along with the equity investments of $250,000, will be sufficient to enable
Newco to make the payments contemplated by Sections 1.6, and Newco has no reason
to believe that the terms and conditions set forth in the Commitment Letter will
not be met by it within the time frame contemplated thereby. Newco will not
amend the Commitment Letter (except for amendments that solely extend such
commitment) without the prior written consent of the Company. Prior to the
Effective Time, the Newco Investors will have made an equity investment in Newco
in an aggregate amount of not less than $250,000. Newco has delivered to the
Company true and complete copies of the Commitment Letter and letters from each
Newco Investor evidencing their commitment to provide equity investments in the
aggregate minimum amount of $250,000.
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3.6. Brokerage Fees. Except for Northwest Capital Corporation
("Northwest"), no broker or finder has acted for Newco or any of the Newco
Investors in connection with this Agreement and the transactions contemplated
hereby, and no other natural person, firm, limited liability company,
partnership, corporation, company, association, trust or governmental body
(collectively "Person") is entitled to any payment, fee or commission from the
Company as a result of any of Newco's or the Newco Investors' actions in respect
to this Agreement or the transactions contemplated hereby. Newco is solely
responsible for any payment, fee or commission that may be due Northwest in
connection with the transactions contemplated hereby.
ARTICLE
4.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby represents and warrants to Newco as follows:
4.1. Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power to carry
on its business as it is now being conducted and to own, lease and operate its
property and assets. The Company is duly qualified as a foreign corporation to
do business, and, is in good standing in each jurisdiction where the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
result in a material adverse effect on the Company. The copies of the Company's
Articles of Incorporation and By-Laws previously delivered to Newco are true,
complete and correct as of the date hereof.
4.2. Capitalization. The authorized capital stock of the Company consists
of 12,500,000 Shares, and 3,000,000 preferred shares, par value $.01 per share
(the "Preferred Stock"). As of the date hereof: (a) 1,413,449 Shares were issued
and outstanding; (b) no shares of Preferred Stock were issued or outstanding;
and (c) Options to purchase an aggregate of 188,639 Shares were outstanding,
none of which have an exercise price less than $2.00 per share. All of the
issued and outstanding Shares have been, and all Shares which are to be issued
pursuant to the exercise of the Options will be, when issued in accordance with
the respective terms thereof, duly authorized and validly issued and fully paid
and nonassessable with no liability attaching to the ownership thereof and not
subject to preemptive or similar rights created by statute, the Articles of
Incorporation or By-Laws of the Company or any agreement to which the Company is
a party or is bound. Except as set forth in this Section 4.2 and except for
Shares that may be issued upon exercise of the Options, there are not now, and
at the Effective Time there will not be, any shares of capital stock of the
Company issued or outstanding or any subscriptions, options, warrants, calls,
rights, commitments or any other agreements of any character obligating the
Company to issue any additional Shares or any other shares of capital stock of
the Company or any other securities convertible into or evidencing the right to
subscribe for any Shares or any other shares of capital stock of the Company.
There are no voting trusts or other agreements or understandings to which the
Company is a party with respect to the voting of the capital stock of the
Company. There are no contracts, commitments, understandings or arrangements by
which the Company is obligated to repurchase, redeem or otherwise acquire any
Shares. The Company has no subsidiaries.
4.3. Authority Relative to this Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, to carry
out its obligations hereunder and to
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consummate the transactions contemplated hereby (subject to the approval of the
Merger and this Agreement by the holders of a majority of the outstanding
Shares). The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the approval of this Agreement by shareholders holding a majority of
the votes represented by the Shares). This Agreement has been duly and validly
executed and delivered by the Company, and, assuming this Agreement constitutes
a valid and binding obligation of Newco, this Agreement constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
4.4. Proxy Statement. None of the information supplied or to be supplied by
the Company and its Affiliates specifically for inclusion in the Proxy Statement
will, at the time the Proxy Statement is mailed, at the time of the Meeting or
at the Effective Time, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. If, at any time prior to the Effective Time, any
event relating to the Company or its Affiliates, officers or directors is
discovered by the Company that should be set forth in a supplement to the Proxy
Statement, the Company will promptly inform Newco and cause such supplement to
the Proxy Statement to be prepared, filed and delivered as required under the
Exchange Act and the MBCA.
4.5. Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by the Company, nor the performance by the Company of
the obligations hereunder, nor the consummation of the transactions contemplated
hereby will: (a) conflict with or result in any breach of any provision of the
Articles of Incorporation or By-Laws of the Company; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
third party or any public governmental body or regulatory authority, except (i)
pursuant to the Exchange Act, (ii) the filing of the Articles of Merger pursuant
to the MBCA, (iii) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the Merger and would not otherwise prevent the
Company from performing its obligations under this Agreement; (c) result in a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any document filed as a
material agreement exhibit to the Company's annual report on Form 10-KSB for the
year ended June 30, 1998, except (x) for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which, in the aggregate, would not result in a
material adverse effect on the Company; and (y) as set forth in the last
sentence of this Section 4.5 and except as set forth in a letter to be delivered
by the Company to Newco no later than January 15, 1999 or (d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any of its assets, except for violations which would not in the aggregate
result in a material adverse effect on the Company. The consummation of the
Merger (i) would violate the loan agreement between the Company and Riverside
Bank, (ii) could give rise to certain change in control benefits under separate
letter agreements between the Company and Riedel and the Company and Dean
Gerber, (iii) would result in acceleration of all outstanding options under the
Company's 1994 Stock Option Plan and (iv) may result in a default under the
lease for the Company's facility in Burnsville, Minnesota.
4.6. Brokerage Fees. No broker or finder has acted for the Company in
connection with this Agreement and the transactions contemplated hereby, and no
broker or finder is entitled to any payment, fee or commission from the Company
as a result of any of the Company's actions in respect to this Agreement or the
transactions contemplated hereby.
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4.7. No Further Obligations. Since June 30, 1998, the Board of Directors of
the Company has not obligated the Company to any liabilities or commitments,
which are not reflected in the financial statements included in the Company's
audited financial statements for the fiscal year ended June 30, 1998 or the
Company's quarterly report on Form 10-QSB for the quarter ended September 30,
1998, except for engaging Miller Johnson & Kuehn, Incorporated and Oppenheimer
Wolff & Donnelly LLP in connection with the transactions contemplated hereby.
4.8. No Implied Representation. Notwithstanding anything contained in this
Article 4 or any other provision of this Agreement, (a) Newco and the Company
acknowledge and agree that neither the Company nor any of its Affiliates,
agents, employees or representatives is making any implied warranty or
representation as to the value, condition, merchantability or suitability as to
any of the properties or assets of the business operated by the Company, and (b)
it is understood that except for the representations and warranties contained
herein, Newco takes such business and assets, by virtue of the Merger, "AS IS"
and "WHERE IS" with all faults and without any implied warranties.
ARTICLE
5.
COVENANTS
5.1. Conduct of Business of the Company. Except as otherwise expressly
provided in this Agreement (including, but not limited to, Section 4.7 and
8.10), the Company and Riedel will cause the Company to:
(a) operate the business of the Company in the ordinary course consistent
with past practices;
(b) not issue, sell or pledge, or authorize or propose the issuance, sale
or pledge of: (i) additional shares of capital stock of any class (including the
Shares), or securities convertible into any such shares, or any rights, warrants
or options to acquire any such shares or other convertible securities, or grant
or accelerate any right to convert or exchange any securities of the Company for
Shares, other than Shares issuable pursuant to the terms of outstanding Options
hereof; or (ii) any other securities in respect of, in lieu of or in
substitution for the Shares outstanding on the date hereof;
(c) not purchase or otherwise acquire, or propose to purchase or otherwise
acquire, any of its outstanding securities (including the Shares);
(d) not split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or distribution on any shares of capital
stock of the Company;
(e) not propose or adopt any amendments to the Articles of Incorporation or
By-Laws of the Company;
(f) not make any acquisition of a material amount of assets (by merger,
consolidation or acquisition of stock or assets) or securities, any disposition
of a material amount of assets or securities or any material change in its
capitalization, or enter into a material contract or release or relinquish any
material contract rights not in the ordinary course of business (except as
permitted pursuant to Section 5.2);
(g) not incur any liability or obligation (absolute, accrued, contingent or
otherwise) other than in the ordinary and usual course of business and either
consistent with past practice or in the
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reasonable business judgment of the officers of the Company (including borrowing
in the ordinary course pursuant to existing loan agreements or debt instruments)
or issue any debt securities or assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other individual or
entity in any case in an amount material to the Company, taken as a whole;
(h) not make any change in accounting methods, principles or practices;
(i) not other than as contemplated or permitted by this Agreement: (i)
enter into any new employment agreements with any officers, directors or key
employees or grant any material increases in the compensation or benefits to
officers, directors and key employees other than increases in the ordinary
course of business and consistent with past practice; (ii) pay or agree to pay
any pension, retirement allowance or other employee benefit not required or
permitted by any existing plan, agreement or arrangement to any such director,
officer or key employee in amounts material to the Company; (iii) commit itself
(other than pursuant to any collective bargaining agreement) to any additional
pension, profit-sharing bonus, extra compensation, incentive, defined
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, retirement or other employee benefit plan, agreement
or arrangement, or to any employment or consulting agreement with or for the
benefit of any director, officer or key employee, whether past or present, in
amounts material to the Company; or (iv) except as required by applicable law,
amend in any material respect any such plan, agreement or arrangement; or
(j) agree in writing to or otherwise to take any actions in violation of
this Section 5.1 or any action which would make any representation or warranty
in this Agreement untrue or incorrect.
5.2. No Solicitation. Unless this Agreement is terminated in accordance
with Article 7, neither the Company nor any of its officers, directors,
employees, financial advisors, counsel, representatives, agents and affiliates
will, directly or indirectly, encourage, solicit, initiate, or, subject to the
fiduciary duties of the Company's Board of Directors, officers or shareholders
as advised by outside counsel to the Company, enter into any agreement with
respect to, or participate in any way in discussions or negotiations with any
Third Party (as defined) concerning any tender offer (including a self-tender
offer), exchange offer, merger, sale of substantial assets, sale of securities
or similar transactions involving the Company (each, an "Acquisition Proposal"),
except that nothing contained in this Section 5.2 or in any other provision of
this Agreement will prohibit the Company or its Board of Directors from: (a)
taking and disclosing to the Company's shareholders a position with respect to a
tender or exchange offer by a Third Party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act; (b) making such disclosure to the Company's
shareholders as, in the judgment of its Board of Directors with the advice of
outside counsel, is required under applicable law; or (c) considering and
negotiating an unsolicited Acquisition Proposal if the Board of Directors
determines in good faith, after consultation with its outside counsel, that such
consideration and negotiation would be necessary to fulfill the fiduciary duties
of the Board of Directors. For purposes of this Agreement, "Third Party" will
mean any corporation, partnership, person, or other entity or "group" (as
defined in Section 13(d)(3) of the Exchange Act), other than Newco, its
affiliates and its directors, officers, employees, representatives and agents.
As long as this Agreement remains in effect, the Company may furnish
confidential information regarding the Company to any Third Party if, and only
if, the Company's Board of Directors determines in good faith, with the advice
of outside counsel, that its fiduciary duties require disclosure of the
information. Subject to the provisions of Section 7.1, the Company may approve,
accept and recommend an Acquisition Proposal if, and only if: (x) the Company's
Board of Directors determines in good faith, in the exercise of its fiduciary
duties and after consultation with its outside counsel and financial advisors,
that the Acquisition Proposal would result in
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<PAGE>
a transaction more favorable to the Company's shareholders from a financial
point of view than the transaction contemplated by this Agreement (such
Acquisition Proposal is referred to hereinafter as an "Approved Offer"); and (y)
Newco does not make, within five business days of Newco's receiving notice of
such third-party offer, an offer which the Board of Directors, after
consultation with its financial advisers, determines is superior to such
third-party offer. As used in this Section 5.2, "third-party offer" will mean
any bona fide Third Party offer, other than an offer by Newco or its Affiliates,
for a merger or other business combination involving the Company resulting in
the acquisition of more than 50% of the outstanding Shares or to acquire in any
manner more than 50% of the outstanding Shares or all or substantially all of
the assets of the Company. The Company will promptly notify Newco of the receipt
and the terms of any offer which it may receive in respect of an Acquisition
Proposal, including the identity of the offeror.
5.3. Access to Information. Between the date of this Agreement and the
Effective Time, the Company will, upon reasonable notice: (a) give Newco and its
authorized representatives access during regular business hours to all of the
Company's offices, warehouses and other facilities and to all of its books and
records; (b) permit Newco to make such inspections as it may require during
regular business hours; and (c) cause its officers to furnish Newco with such
financial and operating data and other information with respect to the business
and properties of the Company as Newco may from time to time reasonably request.
5.4. Reasonable Efforts. Subject to the terms and conditions herein, and to
the fiduciary duties of the Company's Board of Directors under applicable laws,
each of the parties hereto agrees to use its reasonable efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
At any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement will take all such necessary action.
Such efforts will include, without limitation: (a) obtaining all necessary
consents, approvals or waivers from third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this
Agreement; and (b) opposing vigorously any litigation or administrative
proceeding relating to this Agreement or the transactions contemplated hereby,
including, without limitation, promptly appealing any adverse court or agency
order.
5.5. Indemnification and Insurance. Newco agrees that all rights to
indemnification existing in favor of, and all limitations on the personal
liability of, the directors and officers of the Company provided for in the
Company's Articles of Incorporation (or similar organizational document) or its
By-Laws, as in effect as of the date hereof, with respect to matters occurring
prior to the Effective Time will continue without amendment in full force and
effect for a period of not less than six years from the Closing; provided,
however, that all rights to indemnification in respect of any claims (a "Claim")
asserted or made within such period will continue until the disposition of such
Claim. At or prior to the Effective Time, Newco also will continue the Company's
existing directors' and officers' liability insurance coverage for the Company's
directors in a form reasonably acceptable to the Company (including the same
policy limits and retention amounts that are contained in the existing policy)
and which will provide such directors with coverage for one (1) year following
the Effective Time. Notwithstanding anything to the contrary in this Section
5.5, nothing contained in this Section 5.5 will at any time be construed to
limit or otherwise impair or will at any time limit or otherwise impair the
rights of any officer or director to indemnification for acts occurring prior to
the Effective Time by the Company, any subsidiary or the Surviving Corporation
under the MBCA, it being understood that the provisions of this Section 5.5
constitute a contractual obligation.
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5.6. Financing; Equity Investment. Newco will use best efforts to obtain
the financing contemplated by the Commitment Letter and will obtain the equity
investments described in Section 3.5, in an aggregate amount sufficient to
consummate the Merger and the transactions contemplated hereby and to pay its
related fees and expenses, and will make such funds available to the Paying
Agent on or before the Effective Time. The parties acknowledge that the
Commitment Letter requires the Company to achieve minimum average monthly
revenues of $382,000, have cash at Closing of at least $745,000 and a borrowing
base at Closing sufficient to support an advance under the line of credit of at
least $800,000, which if not met would permit Bremer not to provide financing
under the Commitment Letter. If the financing under the Commitment Letter is not
made available by Bremer because the Company fails to meet the requirements,
Newco will not be deemed to have failed to use its best efforts to obtain such
financing; provided that Riedel has complied with Section 5.1.
5.7. Meeting of the Company's Shareholders. The Company will promptly take
all action necessary in accordance with the MBCA and its Articles of
Incorporation and By-Laws to convene the Meeting to consider and vote on a
proposal to permit Riedel to vote certain shares for which he has a proxy in
accordance with Section 708A.671 of the MBCA (the "302A.671 Vote") and to
consider and vote on the Merger and this Agreement. At the Meeting, all of the
Shares then owned by Newco and Riedel, or any Shares over which Newco or Riedel
have voting power, if any, will be voted to approve the Merger and this
Agreement. Subject to applicable fiduciary obligations to shareholders of the
Company as advised by counsel, the Board of Directors of the Company will
recommend that the Company's shareholders vote to approve (i) the 302A.671 Vote
and (ii) the Merger and this Agreement if either such vote is sought (which
recommendation will be included in the Proxy Statement), will use all reasonable
efforts to solicit from shareholders of the Company proxies in favor of the
Merger and will take all other action in its judgment necessary and appropriate
to secure the vote of shareholders required by the MBCA to effect the Merger.
5.8. Proxy Statement. The Company and Newco will prepare the Proxy
Statement, file it with the SEC under the Exchange Act as promptly as
practicable after the date hereof and use all reasonable efforts to have it
cleared by the SEC. As promptly as practicable after the Proxy Statement has
been cleared by the SEC, but in no event more than five business days following
such clearance, the Company will mail the Proxy Statement to the shareholders of
the Company as of the record date for the Meeting. The Company will use all
reasonable efforts to obtain and furnish the information required to be included
by it in the Proxy Statement and, after consultation with Newco, respond
promptly to any comments of the SEC relating to the preliminary proxy statement
relating to the transactions contemplated by this Agreement and to cause the
definitive proxy statement relating to the transactions contemplated by this
Agreement to be mailed to its shareholders, all at the earliest practical time.
Whenever any event occurs which should be set forth in an amendment or
supplement to the Proxy Statement or any other filing required to be made with
the SEC, each party will promptly inform the other and cooperate in filing with
the SEC and/or mailing to shareholders such amendment or supplement. The Proxy
Statement, and all amendments and supplements thereto, will comply with
applicable law and be in form and substance satisfactory to Newco.
5.9. Public Announcements. Newco and the Company will, to the fullest
extent practicable, consult with each other before issuing any press release or
otherwise making any public statement with respect to the Merger and will not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any governmental agency if
required by such agency or the rules of the National Association of Securities
Dealers, Inc. or the Nasdaq Small Cap Market.
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<PAGE>
5.10. Section 302A.673. Prior to the Effective Time, a committee of
disinterested directors of the Board of Directors of the Company shall approve
the Merger in accordance with Section 302A.673 of the MBCA. From and after the
date hereof, the Company will not, except pursuant to an Approved Offer or as
otherwise provided in this Agreement, approve any acquisition of Shares by any
Person which would result in such person becoming an interested shareholder (as
such term is defined in Section 302A.011, Subd. 49 of the MBCA) or otherwise be
subject to Section 302A.673 of the MBCA.
5.11. Options and Warrants. Prior to the Effective Time, the Company will
take all action permitted under the Company's 1994 Stock Option Plan (the
"Company Option Plan") to cancel all outstanding options granted thereunder and
will obtain the agreement of each of non-employee director of the Company s to
cancel all Options held by them; provided that the Closing occurs. Prior to the
Effective Time, Newco shall issue and mail to all holders of warrants to
purchase Shares its agreement, in form and content reasonably satisfactory to
the Company, to assume the Company's obligations to provide the Merger
Consideration to such holders upon exercise of such warrants. The Company and
Newco will take such other actions (including, without limitation, giving
requisite notices to holders of Options advising such holders of the actions
taken pursuant to this Section 5.11 as are necessary to fully advise holders of
Options of their rights under this Agreement, the Company Option Plan and the
applicable stock option agreement or warrant agreement.
ARTICLE
6.
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1. Conditions to Obligations of each Party. The respective obligations of
each party to consummate the transactions contemplated by this Agreement will be
subject to the fulfillment at or prior to the Closing of the following
conditions:
(a) Neither Newco nor the Company will be subject to any order, decree or
injunction of a court of competent jurisdiction within the United States which
(i) prevents or materially delays the consummation of the Merger or (ii) would
impose any material limitation on the ability of Newco effectively to exercise
full rights of ownership of the assets or business of the Company.
(b) No investigation and no suit, action or proceeding before any court or
any governmental or regulatory authority will be pending or threatened by any
Authority against Newco, the Company or any of their Affiliates, officers or
directors seeking to restrain, prevent or change in any material respect the
transactions contemplated hereby or seeking damages in connection with such
transactions.
(c) The approval of the shareholders of the Company with respect to the
transactions contemplated by this Agreement will have been obtained, in
accordance with applicable corporate law and the Articles of Incorporation of
the Company.
(d) Articles of Merger for the Merger will have been properly filed with
the Minnesota Secretary of State pursuant to the MBCA and will have become
effective.
(e) Prior to mailing the Proxy Statement, the Company will have received a
written opinion of Miller, Johnson & Kuehn, Incorporated to the effect that the
Merger Consideration to be delivered in connection with the Merger is fair, from
a financial point of view, to the shareholders of the Company, and such opinion
will not have been withdrawn prior to the Effective Time.
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<PAGE>
(f) The Merger Consideration will have been delivered to the Paying Agent.
6.2. Conditions to Obligations of Newco. The obligations of Newco to
consummate the transactions contemplated by this Agreement will be subject to
the fulfillment at or prior to the Closing of the following additional
conditions:
(a) The representations and warranties of the Company and in all
certificates or other documents delivered by the Company to Newco will be true
and correct in all material respects on the date of this Agreement and (except
as to representations that specify a particular time, which will be true and
correct as of such time) on the Closing Date as though such representations and
warranties were made on or as of that date.
(b) The Company will have performed and complied in all material respects
with all agreements, obligations, covenants and conditions required by this
Agreement to be performed or complied with by them on or prior to the Closing.
(c) (i) All consents required hereunder to consummate the transactions
contemplated hereby and to allow Newco to transact the business of the Company
following the Effective Time will have been obtained (and Newco will have
received copies thereof); (ii) such consents will be in effect and no proceeding
will have been initiated or threatened with respect thereto; all applicable
waiting periods with respect to such consents will have expired; (iii) all
conditions and requirements prescribed by applicable law or by such consents
will have been satisfied; and (iv) any consents required hereunder to consummate
the transactions contemplated hereby and to allow Newco to transact the business
of the Company following the Effective Time do not impose regulatory conditions
that cause a material adverse change in the financial condition or operations of
Newco.
(d) The form and substance of all legal matters contemplated hereby and all
papers delivered hereunder will be reasonably acceptable to Lindquist & Vennum
PLLP, counsel to Newco.
(e) The Company will have furnished such certificates of its respective
officers to evidence compliance with the conditions in Sections 6.1 and 6.2 to
be satisfied by the Company.
(f) Newco shall have obtained the financing referred to in the Commitment
Letter.
6.3. Conditions to Obligations of the Company. The obligation of the
Company to consummate the transactions contemplated by this Agreement will be
subject to the fulfillment at or prior to the Closing of the following
additional conditions:
(a) The representations and warranties of Newco contained herein will be
true and correct in all material respects on the date of this Agreement and
(except as to representations that specify a particular time) on the Closing
Date as though such representations and warranties were made on or as of that
date.
(b) Newco will have performed and complied in all material respects with
all agreements, obligations, covenants and conditions required by this Agreement
to be performed or complied with by them on or prior to the Closing.
(c) Newco will have delivered the Merger Consideration to the Paying Agent.
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<PAGE>
(d) The form and substance of all legal matters contemplated hereby and all
papers delivered hereunder will be reasonably acceptable to Oppenheimer Wolff &
Donnelly LLP, counsel to the Company.
(e) Newco will have furnished such certificates of its officers to evidence
compliance with the conditions in Sections 6.1 and 6.3 to be satisfied by Newco.
(f) (i) All consents required hereunder to consummate the transactions
contemplated hereby will have been obtained; (ii) such consents will be in
effect and no proceeding will have been initiated or threatened with respect
thereto; and (iii) all applicable waiting periods with respect to such consents
will have expired; all conditions and requirements prescribed by law or by such
consents will have been satisfied.
ARTICLE
7.
TERMINATION; AMENDMENT; WAIVER
7.1. Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the shareholders of the Company, but prior to the Effective Time:
(a) by mutual written consent duly authorized by the Boards of Directors of
the Company and Newco;
(b) by either the Company or Newco:
(i) if the Merger has not been consummated on or before six months
after the date hereof, unless the failure to consummate the Merger is the
result of a material breach of this Agreement by the party seeking to
terminate this Agreement; or
(ii) if any court of competent jurisdiction or any other governmental
body has issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action has become final and
nonappealable;
(c) by the Company if Newco fails to perform in any material respect any of
their respective obligations under this Agreement and such failure to perform
has not been cured within five business days after notice thereof is given to
Newco by the Company (except that no cure period will be provided for any
failure which, by its nature, cannot be cured);
(d) by Newco if the Company fails to perform in any material respect any of
its obligations under this Agreement and such failure to perform has not been
cured within five business days after notice thereof is given to the Company by
Newco (except that no cure period will be provided for any failure which, by its
nature, cannot be cured); or
(e) by the Company if the Board of Directors of the Company has approved,
accepted or recommended an Approved Offer in accordance with Section 5.2.
7.2. Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 7.1, this Agreement, except for the
provisions of Section 7.3, and will
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become void and have no effect, without any liability on the part of any party
or its directors, officers or shareholders. Nothing in this Section 7.2 will
relieve any party to this Agreement of liability for willful breach of this
Agreement.
7.3. Termination Fee; Reimbursement of Newco's Expenses.
(a) If Newco is not in material breach of any of its representations,
warranties, covenants or other obligations (including, without limitation, its
obligation to use best efforts to obtain financing pursuant to the Commitment
Letter) under this Agreement and this Agreement is terminated pursuant to
Section 7.1 (a), (b) or (d), then the Company will reimburse Newco for all
reasonable and documented out-of-pocket expenses and fees, including, without
limitation, fees payable to all banks, investment banking firms and other
financial institutions, and their respective agents, for arranging or providing
the financing, and all fees of counsel to Newco incurred by Newco in good faith
in connection with the negotiation, preparation, execution and performance of
this Agreement and the financing (all of the foregoing being referred to
collectively as the "Expenses"), subject to a maximum reimbursement of $75,000.
(b) If Newco is not in material breach of any of its representations,
warranties, covenants or other obligations (including, without limitation, its
obligation to use best efforts to obtain financing pursuant to the Commitment
Letter) under this Agreement and this Agreement is terminated by the Company
pursuant to Section 7.1(e) then the Company will pay Newco, upon the closing of
an Approved Offer, a "topping fee" of $150,000, which amount will be payable in
same day funds.
(c) If this Agreement is terminated pursuant to Section 7.1(a) or (b), any
severance benefits that the Company would otherwise be obligated to pay Riedel
upon termination of his employment with the Company pursuant to any agreement,
understanding, resolution of the Board or any committee of the Board or
otherwise, will be reduced by the amount of Expenses that the Company reimburses
Newco under this Agreement; provided, however, that the foregoing offset shall
not apply to any severance benefit that may become payable pursuant to the
letter agreement, dated April 20, 1998, between the Company and Riedel providing
for salary continuation in certain events following a change in control of the
Company.
(d) If this Agreement is terminated by either party for any other reason,
the Company will have no obligation to make any payments to Newco or reimburse
Newco for any Expenses.
7.4. Amendment. To the extent permitted by applicable law, this Agreement
may be amended by action taken by or on behalf of the Boards of the Company and
Newco at any time before or after approval of this Agreement by the shareholders
of the Company but, after any such shareholder approval, no amendment will be
made which decreases or changes the form of the Merger Consideration or which
adversely affects the rights of the Company's shareholders hereunder without the
approval of all such shareholders. This Agreement may not be amended except by
an instrument in writing signed on behalf of all the parties.
7.5. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company or Newco, may: (a) extend the time for the performance
of any of the obligations or other acts of the other parties hereto; (b) waive
any inaccuracies in the representations and warranties contained herein by any
other applicable party or in any document, certificate or writing delivered
pursuant hereto by any other applicable party; or (c) waive compliance with any
of the agreements or conditions contained herein. Any agreement on the part
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<PAGE>
of any party to any such extension or waiver will be valid only if set forth in
an instrument in writing signed on behalf of such party.
ARTICLE
8.
MISCELLANEOUS
8.1. Non-Survival of Representations and Warranties. Except for Section 5.5
and the obligations contained in Article 2 hereof, none of the representations
and warranties made in this Agreement will survive after the Effective Time.
This Section 8.1 will not limit any covenant or agreement of the parties hereto
which by its terms contemplates performance after the Effective Time.
8.2. Entire Agreement; Assignment. This Agreement (a) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof and
(b) will not be assigned by operation of law or otherwise.
8.3. Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties will be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any federal or state
court located in the State of Minnesota (as to which the parties agree to submit
to jurisdiction for the purposes of such action), this being in addition to any
other remedy to which they are entitled at law or in equity.
8.4. Validity. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provisions
of this Agreement, which will remain in full force and effect.
8.5. Notices. All notices, requests, claims, demands and other
communications hereunder will be in writing and will be deemed to have been duly
given when delivered in person, by cable, telegram, facsimile transmission with
confirmation of receipt, or telex, or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
if to Newco:
Atrix Acquisition Corp.
14301 Ewing Avenue South
Burnsville, MN 55306
Attention: Steven D. Riedel
Fax: (612) 894-6154
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with a copy to:
Lindquist & Vennum PLLP
4200 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Attention: Robert Tunheim, Esq.
Fax: (612) 371-3207
if to the Company:
Atrix International, Inc.
c/o William E. Bennett
4170 Myrle
White Bear Lake, MN 55110
Fax: (651) 426-7913
with a copy to:
Oppenheimer Wolff & Donnelly LLP
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, Minnesota 55402
Attention: Thomas A. Letscher, Esq.
Fax: (612) 607-7100
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address will be effective only upon
receipt thereof).
8.6. Governing Law. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of Minnesota regardless of the
laws that might otherwise govern under principles of conflicts of laws
applicable thereto.
8.7. Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
8.8. Parties in Interest. This Agreement will be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement except
for Section 5.5 (which is intended to be for the benefit of the persons entitled
to therein, and may be enforced by such persons).
8.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original, but all of which
will constitute one and the same agreement.
8.10. Expenses. Subject to Section 7.3, all costs and expenses incurred in
connection with the transactions contemplated by this Agreement will be paid by
the party incurring such expenses. Newco
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acknowledges and agrees that the Company has disclosed it is indebted for fees
and expenses (including fees and expenses of its counsel and financial advisors)
incurred by it in connection with the transactions contemplated by this
Agreement. It is understood that certain of such fees and expenses may be paid
by the Company prior to or after the execution of this Agreement, and Newco
agrees to refrain from taking any action which would interfere with the payment
of the foregoing fees and expenses by the Company.
8.11. Submission to Jurisdiction. The parties to this Agreement, acting for
themselves and for their respective successors and assigns, hereby irrevocably
and unconditionally consent to submit to the jurisdiction of the federal or
state courts located in the State of Minnesota for any actions, suits or
proceedings arising out of or relating to this Agreement (and none of such
persons will commence any action, suit or proceeding relating thereto except in
such courts). Such person hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, in the federal or state courts located in the State of
Minnesota.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all at or on
the day and year first above written.
ATRIX ACQUISITION CORP.
By:/s/ Steven D. Riedel
-------------------------------------
Steven D. Riedel, President
STEVEN D. RIEDEL
/s/ Steven D. Riedel
----------------------------------------
Steven D. Riedel
ATRIX INTERNATIONAL, INC.
By:/s/ Les Eck
-------------------------------------
Les Eck, Director
18
