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CONFIDENTIAL
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LASER POWER CORPORATION,
UNION MINIERE USA INC.
AND
ACEC, INC.
JUNE 1, 2000
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TABLE OF CONTENTS
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Page(s)
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ARTICLE I DEFINITIONS..............................................................1
SECTION 1.1 CERTAIN DEFINITIONS.....................................1
SECTION 1.2 TERMS GENERALLY.........................................7
ARTICLE II THE OFFER...............................................................7
SECTION 2.1. THE OFFER...............................................7
SECTION 2.2. COMPANY ACTIONS.........................................9
SECTION 2.3. COMPOSITION OF THE BOARD OF DIRECTORS..................10
ARTICLE III THE MERGER............................................................11
SECTION 3.1 THE MERGER.............................................11
SECTION 3.2 CONVERSION (OR RETENTION) OF SHARES....................12
SECTION 3.3 PAYMENT OF CASH FOR COMMON STOCK.......................13
SECTION 3.4 DISSENTING SHARES......................................14
SECTION 3.5 STOCK OPTIONS..........................................15
ARTICLE IV THE SURVIVING CORPORATION..............................................16
SECTION 4.1 CERTIFICATE OF INCORPORATION...........................16
SECTION 4.2 BYLAWS.................................................16
SECTION 4.3 DIRECTORS AND OFFICERS.................................16
SECTION 4.4 NAME...................................................16
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................16
SECTION 5.1 CORPORATE EXISTENCE AND POWER..........................16
SECTION 5.2 CORPORATE AUTHORIZATION................................17
SECTION 5.3 GOVERNMENTAL AUTHORIZATION.............................17
SECTION 5.4 NON-CONTRAVENTION......................................17
SECTION 5.5 CAPITALIZATION.........................................18
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SECTION 5.6 SUBSIDIARIES...........................................18
SECTION 5.7 REPORTS AND FINANCIAL STATEMENTS.......................18
SECTION 5.8 OFFER DOCUMENTS; PROXY STATEMENT.......................19
SECTION 5.9 ABSENCE OF CERTAIN CHANGES OR EVENTS...................20
SECTION 5.10 NO UNDISCLOSED MATERIAL LIABILITIES....................21
SECTION 5.11 LITIGATION.............................................22
SECTION 5.12 TAXES..................................................22
SECTION 5.13 ERISA..................................................23
SECTION 5.14 LABOR MATTERS..........................................25
SECTION 5.15 COMPLIANCE WITH LAWS AND COURT ORDERS..................25
SECTION 5.16 FINDERS'FEES...........................................25
SECTION 5.17 ENVIRONMENTAL MATTERS..................................26
SECTION 5.18 YEAR 2000 PROGRAM......................................27
SECTION 5.19 INSURANCE..............................................27
SECTION 5.20 CERTAIN BUSINESS PRACTICES.............................28
SECTION 5.21 SUPPLIERS AND CUSTOMERS................................28
SECTION 5.22 CONTRACTS..............................................28
SECTION 5.23 DISCLOSURE.............................................30
SECTION 5.24 INTELLECTUAL PROPERTY..................................30
SECTION 5.25 RELATED PARTY TRANSACTIONS.............................30
SECTION 5.26 ASSETS.................................................31
SECTION 5.27 DELAWARE SECTION 203...................................31
SECTION 5.28 BUSINESS RELATIONS.....................................31
SECTION 5.29 RIGHTS AGREEMENT.......................................32
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF UMI AND MERGERSUB....................32
SECTION 6.1 CORPORATE EXISTENCE AND POWER..........................32
SECTION 6.2 CORPORATE AUTHORIZATION................................32
SECTION 6.3 GOVERNMENTAL AUTHORIZATION.............................32
SECTION 6.4 NON-CONTRAVENTION......................................33
SECTION 6.5 OFFER DOCUMENTS; PROXY STATEMENT.......................33
SECTION 6.6 LITIGATION.............................................33
SECTION 6.7 FINDERS'FEES...........................................33
SECTION 6.8 FINANCING..............................................34
SECTION 6.9 CAPITALIZATION.........................................34
ARTICLE VII COVENANTS OF THE COMPANY.............................................34
SECTION 7.1 CONDUCT OF THE COMPANY.................................34
SECTION 7.2 PROXY STATEMENT........................................36
SECTION 7.3 STOCKHOLDERS' MEETING..................................36
SECTION 7.4 ACCESS TO INFORMATION; RIGHT OF INSPECTION.............37
SECTION 7.5 OTHER POTENTIAL ACQUIRERS..............................37
SECTION 7.6 RESIGNATION OF DIRECTORS...............................39
ARTICLE VIII COVENANTS OF UMI AND MERGERSUB.......................................39
SECTION 8.1 VOTING OF SHARES.......................................39
SECTION 8.2 DIRECTOR AND OFFICER LIABILITY.........................39
ARTICLE IX COVENANTS OF UMI AND MERGERSUB AND THE COMPANY.........................40
SECTION 9.1 REASONABLE BEST EFFORTS................................40
SECTION 9.2 CERTAIN FILINGS........................................41
SECTION 9.3 PUBLIC ANNOUNCEMENTS...................................41
SECTION 9.4 FURTHER ASSURANCES.....................................42
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SECTION 9.5 NOTICES OF CERTAIN EVENTS..............................42
ARTICLE X CONDITIONS TO THE MERGER................................................42
SECTION 10.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY............42
SECTION 10.2 CONDITIONS TO THE OBLIGATIONS OF UMI AND MERGERSUB.....43
SECTION 10.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY...........44
ARTICLE XI TERMINATION............................................................44
SECTION 11.1 TERMINATION............................................44
SECTION 11.2 TERMINATION FEE........................................46
SECTION 11.3 EFFECT OF TERMINATION..................................46
ARTICLE XII MISCELLANEOUS.........................................................47
SECTION 12.1 NOTICES................................................47
SECTION 12.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............48
SECTION 12.3 AMENDMENTS'NO WAIVERS..................................48
SECTION 12.4 EXPENSES...............................................48
SECTION 12.5 TRANSFER TAXES.........................................48
SECTION 12.6 SUCCESSORS AND ASSIGNS.................................48
SECTION 12.7 GOVERNING LAW..........................................49
SECTION 12.8 COUNTERPARTS; EFFECTIVENESS............................49
SECTION 12.9 SEVERABILITY...........................................49
SECTION 12.10. SPECIFIC PERFORMANCE...................................49
SECTION 12.11 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.........49
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APPENDICES
A. Tender Offer Conditions
DISCLOSURE LETTER
Section 5.1 - Corporate Existence and Power
Section 5.4 - Non-Contravention
Section 5.5 - Capitalization
Section 5.6 - Subsidiaries
Section 5.9 - Absence of Certain Changes or Events
Section 5.10 - No Undisclosed Material Liabilities
Section 5.12 - Taxes
Section 5.13 - ERISA
Section 5.14 - Labor Matters
Section 5.17 - Environmental Matters
Section 5.18 - Year 2000 Program
Section 5.22 - Contracts
Section 5.24 - Intellectual Property
Section 5.25 - Related Party Transactions
Section 5.26 - Assets
Section 7.1 - Conduct of the Company
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AGREEMENT AND PLAN OF MERGER
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This AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") dated as of June
1, 2000 by and between LASER POWER CORPORATION, a Delaware corporation (the
"COMPANY"), UNION MINIERE USA INC., a Delaware corporation ("UMI"), and ACEC,
INC., a Delaware corporation and a wholly owned subsidiary of UMI ("MERGERSUB").
RECITALS
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A. The respective Boards of Directors of the Company, UMI and MergerSub
each have determined that it is fair to, and in the best interests of their
respective companies and stockholders for MergerSub to acquire the Company upon
the terms and subject to the conditions set forth herein.
B. In furtherance of such acquisition, it is proposed that MergerSub
will make a cash tender offer (the "OFFER") to purchase, subject to the terms
and conditions of this Agreement, up to 100% of all the issued and outstanding
shares of common stock, $.001 par value per share (the "COMMON STOCK") of the
Company (the "SHARES"), at a price of Four Dollars ($4.00) per Share, net to the
seller in cash (such price, or such higher price as may be paid in the Offer,
the "OFFER PRICE").
C. The Board of Directors of the Company has approved the making of the
Offer and resolved to recommend that the holders of the Shares tender their
Shares pursuant to the Offer.
D. The respective Boards of Directors of the Company, UMI and MergerSub
each have approved in accordance with Delaware Corporate Law this Agreement and
the merger of the Company with and into MergerSub following the consummation of
the Offer (the "MERGER") and upon the terms and subject to the conditions set
forth herein.
E. The Company, UMI and MergerSub desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe certain conditions to the Offer and
the Merger.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
"BALANCE SHEET" shall mean the consolidated balance sheet of the
Company as of September 30, 1999 (and the notes thereto) set forth in the
Company's annual report on Form 10-K for the fiscal year ended September 30,
1999.
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"BALANCE SHEET DATE" shall mean September 30, 1999.
"BENEFIT ARRANGEMENTS" shall have the meaning set forth in SECTION
5.13(a).
"CERTIFICATE" shall have the meaning set forth in SECTION 3.2(b).
"CERTIFICATE OF MERGER" shall have the meaning set forth in SECTION
3.1(b).
"CLAIMS" shall mean all demands, claims, actions or causes of action,
assessments, losses, damages (including, without limitation, diminution in
value), liabilities, sanctions, costs and expenses, including, without
limitation, interest, penalties and attorneys' fees and disbursements.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON SHARE EXCHANGE RATIO" shall have the meaning set forth in
SECTION 3.2(d).
"COMMON STOCK" shall mean the capital stock of the Company designated
as common stock, .001 par value per share.
"COMPANY" shall mean Laser Power Corporation, a Delaware corporation.
"COMPANY INTELLECTUAL PROPERTY RIGHTS" shall have the meaning set forth
in SECTION 5.24.
"COMPANY SEC REPORTS" shall have the meaning set forth in SECTION 5.7.
"COMPANY SECURITIES" shall have the meaning set forth in SECTION
5.5(b).
"CONFIDENTIALITY AGREEMENT" shall mean the Confidentiality Agreement
dated as of February 25, 1999 by and between the Company and UMI.
"CONTINUING DIRECTORS" shall have the meaning set forth in SECTION 2.3.
"CONTRACTS" shall have the meaning set forth in SECTION 5.22.
"CONTROL" shall mean possession, directly or indirectly, or power to
direct or cause the direction of management or policies (whether through
ownership of voting securities, by agreement or otherwise).
"CURRENT POLICIES" shall have the meaning set forth in SECTION 8.2.
"DELAWARE CORPORATE LAW" shall mean the Delaware General Corporation
Law, as amended.
"DIRECTOR OPTIONS" shall mean the outstanding options to acquire Shares
granted to directors of the Company.
"DISBURSING AGENT" shall have the meaning set forth in SECTION 3.3.
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"DISCLOSURE LETTER" shall have the meaning set forth in the preamble to
ARTICLE V.
"DISSENTING SHARES" shall have the meaning set forth in SECTION 3.4.
"DLJ" shall mean Donaldson, Lufkin & Jenrette Securities Corporation.
"DOD" shall mean the United States Department of Defense.
"EFFECTIVE TIME" shall have the meaning set forth in SECTION 3.1(b).
"EMPLOYEE BENEFIT PLAN" shall have the meaning set forth in Section
3(3) of ERISA.
"EMPLOYEE OPTIONS" shall mean the outstanding options to acquire shares
of Common Stock granted to employees of the Company.
"EMPLOYEE PLANS" shall have the meaning set forth in SECTION 5.13(a).
"ENVIRONMENTAL LAWS" shall mean any Laws (including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act), including any plans, other criteria, or guidelines promulgated
pursuant to such Laws, now or hereafter in effect relating to the manufacture,
importation, distribution, generation, production, installation, use, storage,
treatment, transportation, Release, threatened Release, or disposal of Hazardous
Materials, noise control, or the protection of human health or safety, natural
resources, or the environment.
"ENVIRONMENTAL PERMITS" shall mean any permits, licenses, certificates
and approvals required under any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"EXON-FLORIO PROVISION" shall mean Section 721 of the Defense
Production Act of 1950, as amended (50 U.S.C. App.ss. 2170), and the regulations
promulgated thereunder.
"EXPENSES" shall have the meaning set forth in SECTION 11.2.
"FINANCING" shall have the meaning set forth in SECTION 6.8.
"FURNISHED" shall mean supplied, delivered or provided in any way.
"GAAP" shall mean generally accepted accounting principles, as in
effect in the United States, from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any agency, public or regulatory
authority, instrumentality, department, commission, court, ministry, tribunal or
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board of any government, whether foreign or domestic and whether national,
federal, tribal, provincial, state, regional, local or municipal, including
without limitation the SEC and DOD.
"HAZARDOUS MATERIALS" shall mean any wastes, substances, radiation, or
materials (whether solids, liquids or gases) (i) which are hazardous, toxic,
infectious, explosive, radioactive, carcinogenic, or mutagenic; (ii) which are
or become defined as "pollutants," "contaminants," "hazardous materials,"
"hazardous wastes," "hazardous substances," "toxic substances," "radioactive
materials," "solid wastes," or other similar designations in, or otherwise
subject to regulation under, any Environmental Laws; (iii) the presence of which
on the Real Property cause or threaten to cause a nuisance pursuant to
applicable statutory or common law upon the Real Property or to adjacent
properties; (iv) without limitation, which contain polychlorinated biphenyls
(PCBs), asbestos and asbestos-containing materials, lead-based paints,
urea-formaldehyde foam insulation, or petroleum or petroleum products
(including, without limitation, crude oil or any fraction thereof) or (v) which
pose a hazard to human health, safety, natural resources, industrial hygiene, or
the environment, or an impediment to working conditions.
"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"INSURANCE POLICIES" shall have the meaning set forth in SECTION 5.19.
"INTERNATIONAL TRADE IN ARMS REGULATIONS" shall mean 22 CFR Part 120.
"LAWS" shall mean all foreign, federal, state and local statutes, laws,
ordinances, regulations, rules, resolutions, orders, determinations, writs,
injunctions, common law rulings, awards (including, without limitation, awards
of any arbitrator), judgments and decrees applicable to the specified persons or
entities and to the businesses and assets thereof (including, without
limitation, Laws relating to securities registration and regulation; the sale,
leasing, ownership or management of real property; employment practices, terms
and conditions, and wages and hours; building standards, land use and zoning;
safety, health and fire prevention; and environmental protection, including
Environmental Laws).
"LETTER OF TRANSMITTAL" shall have the meaning set forth in SECTION
2.1.
"LIEN" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset.
"MATERIAL ADVERSE EFFECT" shall mean with respect to the same or any
similar events, acts, conditions or occurrences, whether individually or in the
aggregate, a material adverse effect on (i) the business, prospects, condition
(financial or otherwise), results of operations, assets or liabilities of such
party, (ii) the legality or enforceability against a party to this Agreement or
(iii) the ability of a party to perform its obligations and to consummate the
transactions under this Agreement. An adverse change in the market price or
trading volume of the Shares shall not be deemed, by itself, to constitute a
Material Adverse Effect.
"MERGER" shall have the meaning set forth in the Recitals hereto.
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"MERGER CONSIDERATION" shall have the meaning set forth in SECTION
3.2(a).
"MERGERSUB" shall have the meaning set forth in the Recitals hereto.
"MERGERSUB SECURITIES" shall have the meaning set forth in SECTION 5.9.
"NATIONAL INDUSTRIAL SECURITY PROGRAM REGULATIONS" shall mean
implementing regulations under the National Industrial Security Program,
Executive Order 12829, January 6, 1993; DoD 5220.22-M.
"NOTICE OF SUPERIOR PROPOSAL" shall have the meaning set forth in
SECTION 7.5(b).
"OFFER DOCUMENTS" shall have the meaning set forth in SECTION 2.1.
"OFFER TO PURCHASE" shall have the meaning set forth in SECTION 2.1.
"OPTIONS" shall mean Employee Options and Director Options.
"PENSION PLANS" shall have the meaning set forth in SECTION 5.12(a).
"PERMITS" shall mean any licenses, franchises, permits, certificates,
consents, approvals or other similar authorizations affecting, or relating in
any way to, the assets or business of the Company.
"PERSON" shall mean any individual, corporation, limited liability
company, partnership, association, trust or any other entity or organization,
including any government or political subdivision or any agency or
instrumentality thereof.
"PREFERRED STOCK" shall mean the capital stock of the Company
designated as Series A Preferred Stock, $.001 par value per share.
"PROCEEDING" shall have the meaning set forth in SECTION 5.10.
"PROXY STATEMENT" shall have the meaning set forth in SECTION 5.8.
"REAL PROPERTY" shall mean the real property owned, leased, operated,
or used by the Company or the Subsidiaries as of the date of this Agreement.
"RELATED PARTIES" shall have the meaning set forth in SECTION 5.26.
"RELEASE" shall mean any emission, spill, seepage, leak, escape,
leaching, discharge, injection, pumping, pouring, emptying, dumping, disposal,
or release of Hazardous Materials from any source (including, without
limitation, the Real Property and property adjacent to the Real Property) into
or upon the environment, including the air, soil, improvements, surface water,
groundwater, the sewer, septic system, storm drain, publicly owned treatment
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works, or waste treatment, storage, or disposal systems at, on, from, above, or
under the Real Property or any other property at which Hazardous Materials
originating on or from the Real Property or the businesses or Assets of the
Company or any Subsidiary have been stored, treated or disposed.
"REPLACEMENT POLICIES" shall have the meaning set forth in SECTION 8.2.
"RIGHTS AGREEMENT" shall mean the Rights Agreement, dated October 15,
1999, between the Company and American Securities Transfer & Trust, Inc.
"ROTH" shall mean Roth Capital Partners, Inc.
"SCHEDULE TO" shall have the meaning set forth in SECTION 2.1.
"SCHEDULE 14D-9" shall have the meaning set forth in SECTION 2.2.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"STOCKHOLDERS' MEETING" shall have the meaning set forth in SECTION
5.8.
"SUBSIDIARY" shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"SUPERIOR PROPOSAL" shall have the meaning set forth in SECTION 7.5(c).
"SURVIVING CORPORATION SHARES" shall mean the common stock, $1.00 par
value, of the Surviving Corporation.
"SURVIVING CORPORATION" shall have the meaning set forth in SECTION
3.1(a).
"SYSTEM" has the meaning set forth in SECTION 5.18.
"TAX" or "TAXES" shall mean (A) all taxes, charges, fees, duties,
levies, penalties or other assessments, including, without limitation, income,
gross receipts, excise, real and personal property, sales, use, transfer,
license, payroll, withholding, social security, franchise, unemployment
insurance, workers' compensation, employer health tax or other taxes, fees,
assessments or charges of any kind whatsoever, imposed by any Governmental
Authority and shall include any interest, penalties or additions to tax
attributable to any of the foregoing, (B) any liability for payment of amounts
described in clause (A) whether as a result of transferee liability, of being a
member of an affiliated, consolidated, combined or unitary group for any period,
or otherwise through operation of law, and (C) any liability for the payment of
amounts described in clauses (A) or (B) as a result of any tax sharing
agreement, tax allocation agreement, tax indemnity agreement, or other agreement
that includes indemnification for any tax liability.
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"TAX RETURN" shall mean all returns, declarations, reports, forms,
estimates, information returns, statements or other documents (including any
related or supporting information) filed or required to be filed with or
supplied to any Governmental Authority in connection with any Taxes.
"TENDER OFFER CONDITIONS" shall have the meaning set forth in SECTION
2.1.
"TERMINATION DATE" shall have the meaning set forth in SECTION 11.1(b).
"THIRD PARTY" shall have the meaning set forth in SECTION 7.5(c).
"THIRD PARTY ACQUISITION" shall have the meaning set forth in SECTION
7.5(c).
"UMI DESIGNEES" shall have the meaning set forth in SECTION 2.3.
"UMI INFORMATION" shall have the meaning set forth in SECTION 6.5.
"YEAR 2000 COMPLIANT" shall have the meaning set forth in SECTION 5.18.
SECTION 1.2 TERMS GENERALLY. The definitions in SECTION 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation"
even if not followed actually by such phrase unless the context expressly
provides otherwise. All references herein to Sections, paragraphs and Exhibits
and Schedules shall be deemed references to Sections or paragraphs of or
Exhibits or Schedules to this Agreement unless the context shall otherwise
require. Unless otherwise expressly defined, terms defined in this Agreement
shall have the same meanings when used in any Exhibit or Schedule and terms
defined in any Exhibit or Schedule shall have the same meanings when used in
this Agreement or in any other Exhibit or Schedule. The words "herein,"
"hereof," "hereto" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
THE OFFER
SECTION 2.1. THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with ARTICLE XI hereof and so long as none of the events set forth on
ANNEX A hereto (the "TENDER OFFER CONDITIONS") shall have occurred and are
continuing, MergerSub shall, and UMI shall cause MergerSub to, commence (within
the meaning of Rule 14d-2 promulgated under the Exchange Act) the Offer at the
Offer Price as promptly as reasonably practicable, but in no event later than
twenty (20) business days after the date of this Agreement. The obligation of
MergerSub to accept for payment and to pay for any Shares tendered pursuant to
the Offer shall be subject only to the satisfaction of the Tender Offer
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Conditions. Subject to the terms of this Agreement, UMI and MergerSub expressly
reserve the right to modify the terms of the Offer, including, without
limitation, to extend the Offer beyond any scheduled expiration date or waive
any Tender Offer Condition; PROVIDED, HOWEVER, that neither UMI nor MergerSub
shall, without the prior written consent of the Company, (i) reduce the number
of Shares to be purchased pursuant to the Offer, (ii) reduce the Offer Price,
(iii) impose any additional conditions to the Offer, (iv) change the form of
consideration payable in the Offer, (v) make any change to the terms of the
Offer which is adverse in any manner to the holders of the Shares, (vi) extend
the expiration date of the Offer beyond the twentieth (20th) business day after
commencement of the Offer, except (A) as required by applicable law and (B) that
if any condition to the Offer has not been satisfied or waived, MergerSub may,
in its sole discretion, extend the expiration date of the Offer for one or more
periods not exceeding, in each case, twenty (20) business days, but in no event
later than the Termination Date, (vii) waive the Minimum Condition (as defined
in ANNEX A), or (viii) waive the Tender Offer Condition relating to the
expiration of the waiting period under the HSR Act or the Tender Offer
Conditions set forth in clause (iii), (iv), (v)(a), (v)(b) or (v)(f) of ANNEX A;
PROVIDED, HOWEVER, that the Offer may be extended in connection with an increase
in the consideration to be paid pursuant to the Offer so as to comply with
applicable rules and regulations of the SEC. Assuming prior satisfaction or
waiver of the Tender Offer Conditions, UMI shall provide funds to MergerSub and
MergerSub shall, as soon as practicable after the expiration of the Offer, and
in any event in compliance with the obligations respecting prompt payment
pursuant to Rule 14e-1(c) under the Exchange Act, accept for payment and pay
for, in accordance with the terms of the Offer, the Shares which have been
validly tendered and not withdrawn pursuant to the Offer. If, on any scheduled
expiration date of the Offer, the Offer would have expired without MergerSub
being able to purchase the Shares pursuant to the Offer due to the failure to
satisfy (x) any of the Tender Offer Conditions set forth in clause (iii), (iv),
(v)(a), (v)(b) or (v)(c) of ANNEX A, (y) the Tender Offer Condition relating to
the expiration of the waiting period under the HSR Act or (z) the Minimum
Condition, then UMI shall, at the request of the Company, cause MergerSub to
extend the expiration date of the Offer for one or more periods not exceeding,
in each case, twenty (20) business days, but in no event later than the
Termination Date. In addition, notwithstanding anything in this SECTION 2.1(a)
to the contrary, if the Company shall have affirmatively announced to the
stockholders of the Company a neutral position with respect to a Third Party
Acquisition proposal, UMI shall, at the request of the Company, cause MergerSub
to extend the expiration date of the Offer to ten (10) business days after the
date of initial announcement of such neutral position.
(b) As soon as reasonably practicable on the date the Offer is
commenced, UMI and MergerSub shall file with the SEC a Tender Offer Statement on
Schedule TO (together with all amendments and supplements thereto, the "SCHEDULE
TO") with respect to the Offer. The Schedule TO shall contain (included as an
exhibit) or shall incorporate by reference an offer to purchase (the "OFFER TO
PURCHASE") and the related letter of transmittal (the "LETTER OF TRANSMITTAL")
and summary advertisement, as well as all other information and exhibits
required by law (which Schedule TO, Offer to Purchase, Letter of Transmittal,
summary advertisement and such other information and exhibits, together with any
supplements or amendments thereto, are referred to herein collectively as the
"OFFER DOCUMENTS"). UMI and MergerSub shall cause to be disseminated the Offer
to Purchase and related Letter of Transmittal to holders of Shares promptly upon
commencement of the Offer. The Company and its counsel shall be given reasonable
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opportunity to review and comment upon the Schedule TO prior to its filing with
the SEC. The Schedule TO shall comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and the date first published, sent or given to the holders of the Shares,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by UMI or MergerSub with
respect to any information supplied by the Company in writing for inclusion in
the Schedule TO. Each of UMI and MergerSub, on the one hand, and the Company, on
the other hand, agrees to promptly correct any information provided by it for
use in the Offer Documents that shall be, or have become, false or misleading in
any material respect, and UMI and MergerSub further agree to take all steps
necessary to cause the Schedule TO as so corrected to be filed with the SEC and
the other Offer Documents as so corrected to be disseminated to holders of the
Shares, in each case as and to the extent required by applicable federal
securities laws. Each of UMI and MergerSub agrees to provide the Company and its
counsel with information with respect to any oral comments and copies of any
written comments or other correspondence UMI and MergerSub or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments and shall provide the Company and its counsel
an opportunity to participate in the response of UMI or MergerSub to such
comments, including by participating with UMI and MergerSub or their counsel in
any discussions with the SEC or its staff.
SECTION 2.2 COMPANY ACTIONS.
The Company hereby consents to the Offer and the Merger and represents
and warrants that:
(a) its Board of Directors (at a meeting duly called and held) has,
based on the recommendation of a special committee of two (2) independent
directors, (i) determined that each of the Offer and the Merger is fair to, and
in the best interest of, the holders of Common Stock, (ii) approved the Offer
and the Merger and adopted this Agreement in accordance with the provisions of
Delaware Corporate Law, (iii) recommended that the stockholders of the Company
accept the Offer, tender their Shares pursuant to the Offer and approve this
Agreement and transaction contemplated hereby, including the Merger and (iv)
taken all other actions necessary to render Section 203 of Delaware Corporate
Law inapplicable to the Offer and the Merger.
(b) Roth has delivered to the Board of Directors of the Company its
opinion that the consideration to be received by the holders of Common Stock,
other than UMI and any direct or indirect Subsidiary of UMI (including
MergerSub), pursuant to the Offer and the Merger is fair to such holders of
Common Stock from a financial point of view, subject to the assumptions and
qualifications contained in such opinion.
(c) The Company shall file with the SEC, as soon as practicable on the
date of the commencement of the Offer, a Solicitation/Recommendation Statement
on Schedule 14D-9 (together with all amendments and supplements thereto, the
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"SCHEDULE 14D-9"), containing the recommendations referred to in SECTION
2.2(a)(iii) (unless the Board of Directors of the Company determines in good
faith that such action would be inconsistent with its fiduciary duties to the
stockholders of the Company under Delaware Corporate Law) and shall disseminate
the SCHEDULE 14D-9 as required by Rule 14d-9 under the Exchange Act. UMI and
MergerSub and their counsel shall be given reasonable opportunity to review and
comment upon the Schedule l4D-9 prior to its filing with the SEC. The Schedule
14D-9 will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to the holders of the Common Stock, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by the Company with respect to
information supplied by UMI or MergerSub in writing for inclusion in the
Schedule 14D-9. Each of UMI and MergerSub shall promptly supply to the Company
in writing, for inclusion in the Schedule 14D-9, all information concerning the
UMI Designees (as defined in SECTION 2.3), as required by Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder, and the Company shall include such
information in the Schedule 14D-9. Each of the Company, on the one hand, and UMI
and MergerSub, on the other hand, agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that the
Schedule 14D-9 shall be, or have become false or misleading in any material
respect; and the Company further agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company agrees to provide UMI and its counsel with
information with respect to any oral comments and copies of any written comments
or other correspondence the Company 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 shall provide UMI and its counsel an opportunity to participate in
the response of the Company to such comments, including by participating with
the Company and its counsel in any discussions with the SEC or its staff.
(d) In connection with the Offer, the Company shall promptly furnish
MergerSub with mailing labels, security position listings and any available
listing or computer list containing the names and addresses of the record
holders of Common Stock as of the most recent practicable date and shall furnish
MergerSub with such additional information (including, but not limited to,
updated lists of holders of Common Stock and their addresses, mailing labels and
lists of security positions) and such other assistance as MergerSub or its
agents may reasonably request in communicating the Offer to the holders of
Common Stock. 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, MergerSub shall hold in confidence
the information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger and, if this
Agreement is terminated, shall deliver to the Company all copies of such
information in their possession.
SECTION 2.3 COMPOSITION OF THE BOARD OF DIRECTORS.
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(a) Promptly upon the acceptance for payment of, and payment by
MergerSub for, Shares equal to at least a majority of the outstanding shares of
Common Stock pursuant to the terms of the Offer, MergerSub shall be entitled to
designate three directors ("UMI DESIGNEES") on the Board of Directors of the
Company, one of whom shall be an outside director who is completely
disinterested, i.e. having had no prior relationship with the Company, UMI,
MergerSub, or any of their respective affiliates, and the Company shall, at such
time, use commercially reasonable efforts to take any and all such action
necessary to cause such UMI Designees, which UMI Designees shall be reasonably
satisfactory to the Company, to be appointed to the Board of Directors of the
Company (including using its commercially reasonable efforts to cause relevant
directors to resign and/or increasing the size of the Board of Directors of the
Company (subject to the limitations set forth in the Company's articles of
incorporation and the Company's bylaws)). At the Effective Time, the Company, if
so requested, shall use its commercially reasonable efforts to cause each UMI
Designee to be a member of each committee of its Board of Directors, each Board
of Directors of each Subsidiary of the Company and each committee of each such
Board of Directors (in each case to the extent of the Company's ability to elect
such persons).
(b) Notwithstanding the provisions of this SECTION 2.3, the parties
hereto shall use their respective commercially reasonable efforts to ensure that
at least two (2) of the members of the Board of Directors shall, at all times
prior to the Effective Time, be persons who are directors of the Company on the
date hereof and who are U.S. citizens eligible to have a Department of Defense
personnel security clearance at the level of the Company's security clearance
(the "CONTINUING DIRECTORS"); PROVIDED that, if there shall be in office less
than two (2) Continuing Directors, the Board of Directors may cause the person
designated by the remaining Continuing Director or Continuing Directors to fill
such vacancy and such person shall be deemed to be a Continuing Director for all
purposes of this Agreement, or if no Continuing Directors then remain, the other
directors of the Company then in office shall designate two (2) persons to fill
such vacancies who will not be officers, employees or Affiliates of the Company
or UMI and such persons shall be deemed to be Continuing Directors for all
purposes of this Agreement; PROVIDED, FURTHER, that UMI, MergerSub and the UMI
Designees shall take no action prior to the Effective Time to remove any
Continuing Director. Following the election or appointment of the UMI Designees
pursuant to this SECTION 2.3 and prior to the Effective Time, any amendment or
modification of this Agreement, the Company's articles of incorporation or the
Company's bylaws, any termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of UMI and MergerSub or waiver of any of the Company's
rights hereunder, and any other consent or action by the Company hereunder,
shall be effected only if there are in office one or more Continuing Directors
and such action is approved by a majority of the Continuing Directors.
ARTICLE III
THE MERGER
SECTION 3.1 THE MERGER.
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(a) Upon the terms and subject to the satisfaction or waiver of
the conditions contained herein, at the Effective Time, the Company shall be
merged with and into MergerSub in accordance with Delaware Corporate Law. Upon
consummation of the Merger, the separate existence of the Company shall cease
and MergerSub shall be the surviving corporation to the Merger (the "SURVIVING
CORPORATION").
(b) As soon as practicable after satisfaction of (or, to the
extent permitted hereunder, waiver of) all conditions to the Merger, the Company
and MergerSub will file a certificate of merger (the "CERTIFICATE OF MERGER")
with the Secretary of State of the State of Delaware in accordance with Delaware
Corporate Law and make all other filings or recordings required by Law in
connection with the Merger. The Merger shall become effective at such time as
the Certificate of Merger is certified by the Secretary of State of the State of
Delaware or at such later time as is specified in the Certificate of Merger (the
"EFFECTIVE TIME").
(c) The Merger shall have the effects set forth in Sections 251,
259 and 261 of Delaware Corporate Law.
SECTION 3.2 CONVERSION OF SHARES. At the Effective Time, pursuant to
this Agreement and by virtue of the Merger and without any action on the part of
MergerSub, the Company or the holders of any of the following securities:
(a) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time other than: (i) Dissenting Shares and (ii) any
shares of Common Stock to be canceled pursuant to SECTION 3.2(c), shall be
canceled and shall be converted automatically into the right to receive an
amount equal to $4.00 in cash, without interest (the "MERGER Consideration"),
payable to the holder thereof upon surrender of the certificate formerly
representing such share of common stock in the manner provided in Section 3.3.
(b) All of the shares of Common Stock converted into cash
pursuant to this SECTION 3.2 shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each certificate (each a
"CERTIFICATE") previously representing any such shares of Common Stock shall
thereafter represent the right to receive the Merger Consideration. Certificates
previously representing shares of Common Stock shall be exchanged for cash upon
the surrender of such Certificates in accordance with SECTION 3.3 hereof,
without any interest thereon. If prior to the Effective Time the Company should
split or combine its common stock, or pay a dividend or other distribution in
such common stock, then the Merger Consideration shall be appropriately adjusted
to reflect such split, combination, dividend or distribution.
(c) At the Effective Time, all shares of Common Stock that are
owned by the Company as treasury stock shall be canceled and shall cease to
exist and no Merger Consideration shall be delivered in exchange therefor.
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SECTION 3.3 PAYMENT OF CASH FOR COMMON STOCK.
(a) At the Effective Time, UMI shall cause the Surviving
Corporation to irrevocably deposit or cause to be deposited with a bank or trust
company to be designated by the Surviving Corporation which is organized and
doing business under the laws of the United States or any state thereof and has
a combined capital and surplus of at least $100,000,000 (the "DISBURSING
AGENT"), as agent for the holders of Common Stock, cash in the aggregate amount
required to pay the Merger Consideration in respect of the shares of Common
Stock outstanding immediately prior to the Effective Time. Pending distribution
pursuant to SECTION 3.3(b) hereof of the cash deposited with the Disbursing
Agent, such cash shall be held in trust for the benefit of the holders of Common
Stock and such cash shall not be used for any other purposes; provided; however,
that the Surviving Corporation may direct the Disbursing Agent to invest such
cash, provided that such investments (i) shall be obligations of or guaranteed
by the United States of America, in commercial paper obligations receiving the
highest rating from either Moody's Investors Services, Inc. or Standard & Poor's
Corporation, or in certificates of deposit, bank repurchase agreements or
bankers acceptances of domestic commercial banks with capital exceeding
$250,000,000 (collectively "PERMITTED INVESTMENTS") or in money market funds
which are invested solely in Permitted Investments and (ii) shall have
maturities that will not prevent or delay payments to be made pursuant to
SECTION 3.3(b) hereof. Each holder of a Certificate or Certificates canceled and
extinguished at the Effective Time pursuant to SECTION 3.2(a) hereof may
thereafter surrender such Certificate or Certificates to the Disbursing Agent,
as agent for such holder of Common Stock, to effect the exchange of such
Certificate or Certificates on such holder's behalf for a period ending six
months after the Effective Time.
(b) After surrender to the Disbursing Agent of any Certificate
which prior to the Effective Time shall have represented any shares of Common
Stock, the Disbursing Agent shall promptly distribute to the person in whose
name such Certificate shall have been registered, a check in the amount of the
Merger Consideration into which such shares of Common Stock shall have been
converted at the Effective Time pursuant to SECTION 3.2(a) hereof. Until so
surrendered and exchanged, each such Certificate shall, after the Effective
Time, be deemed to represent only the right to receive the Merger Consideration,
and until such surrender and exchange, no cash shall be paid to the holder of
such outstanding Certificate in respect thereof. The Surviving Corporation shall
promptly after the Effective Time cause to be distributed to such holders
appropriate materials to facilitate such surrender.
(c) If payment is to be made to a Person other than the
registered holder of the Common Stock represented by the Certificate or
Certificates surrendered in exchange therefor, it shall be a condition to such
payment that the Certificate or Certificates so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay to the Disbursing Agent any transfer or other
taxes required as a result of such payment to a Person other than the registered
holder of such shares of Common Stock or establish to the satisfaction of the
Disbursing Agent that such tax has been paid or is not payable.
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(d) After the Effective Time, there shall be no further transfers
on the stock transfer books of the Surviving Corporation of the shares of Common
Stock that were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates representing shares of Common Stock are
presented to the Surviving Corporation for transfer, they shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this ARTICLE III.
(e) If any cash deposited with the Disbursing Agent for purposes
of payment in exchange for shares of Common Stock remains unclaimed six months
after the Effective Time, such cash shall be returned to the Surviving
Corporation, upon demand, whereupon the Disbursing Agent's duties shall
terminate and any such holder who has not converted his, her or its shares of
Common Stock into the Merger Consideration prior to that time shall thereafter
look only to the Surviving Corporation for payment of the Merger Consideration.
Notwithstanding the foregoing, the Surviving Corporation shall not be liable to
any holder of shares of Common Stock for any amount paid to a public official
pursuant to applicable unclaimed property laws. Any amounts remaining unclaimed
by holders of shares of Common Stock seven (7) years after the Effective Time
(or such earlier date immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Authority) shall, to
the extent permitted by applicable Law, become the property of the Surviving
Corporation free and clear of any claims or interest of any Person previously
entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Disbursing Agent pursuant to SECTION 3.5(a) to pay for shares of Common Stock
for which dissenter's rights have been perfected shall be returned to the
Surviving Corporation, upon demand.
(g) No dividends or other distributions with respect to capital
stock of the Surviving Corporation with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate for shares of
Common Stock.
(h) From and after the Effective Time, the holders of shares of
Common Stock outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares of Common Stock, other than the
right to receive the Merger Consideration as provided in this Agreement.
(i) In the event that any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Company, the posting by such holder of a bond in such reasonable amount as
the Company may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Disbursing Agent will issue in exchange
for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof pursuant to this Agreement and the Merger.
SECTION 3.4 DISSENTING SHARES. Notwithstanding SECTION 3.2,
shares of Common Stock which are issued and outstanding immediately prior to the
Effective Time and which are held by a holder who has not tendered such shares
of Common Stock in the Offer and who has delivered a written demand for relief
as a dissenting stockholder in the manner provided by Delaware Corporate Law and
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who, as of the Effective Time, shall not have effectively withdrawn or lost such
right to relief as a dissenting stockholder ("DISSENTING SHARES") shall not be
converted into a right to receive the Merger Consideration. The holders thereof
shall be entitled only to such rights as are granted by Section 262 of Delaware
Corporate Law. Each holder of Dissenting Shares who becomes entitled to payment
for such Dissenting Shares pursuant to Section 262 of Delaware Corporate Law
shall receive payment therefor from the Surviving Corporation in accordance with
Delaware Corporate Law; provided, however, that if any such holder of Dissenting
Shares (i) shall have failed to establish his, her or its entitlement to relief
as a dissenting stockholder as provided in Section 262 of Delaware Corporate
Law, (ii) shall have effectively withdrawn his, her or its demand for relief as
a dissenting stockholder with respect to such shares or lost his, her or its
right to relief as a dissenting stockholder and payment for his, her or its
Dissenting Shares under Section 262 of Delaware Corporate Law or (iii) shall
have failed to file a complaint with the appropriate court seeking relief as to
determination of the value of all Dissenting Shares within the time provided in
Section 262 of Delaware Corporate Law, such holder shall forfeit the right to
relief as a dissenting stockholder with respect to such Dissenting Shares and
each such Dissenting Share shall be converted into the right to receive the
appropriate Merger Consideration without interest thereon, from the Surviving
Corporation as provided in SECTION 3.2. The Company shall give UMI and MergerSub
prompt notice of any demands received by the Company for relief as a dissenting
stockholder and UMI and MergerSub shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of UMI and MergerSub, make any
payment with respect to, or settle or offer to settle, any such demands.
SECTION 3.5 STOCK OPTIONS.
(a) Each Option that either (i) has an exercise price equal to or
greater than $4.00 or (ii) is not vested and exercisable as of the Effective
Time shall be canceled at the Effective Time.
(b) Immediately prior to the Effective Time, all other
outstanding Options that are vested and exercisable as of the Effective Time
shall be canceled and, in lieu thereof, as soon as reasonably practicable as of
or after the Effective Time, the holders of such Options shall receive a cash
payment from the Company equal to the product of (i) the total number of Shares
previously subject to such Option and (ii) the excess of (A) the Merger
Consideration that would be paid with respect to each shares of Common Stock
subject to such Option if the Option were exercised over (B) the exercise price
per share of Common Stock subject to such Option, as reduced by any required
withholding of taxes.
(c) Prior to the Effective Time, the Company shall (i) take
all steps necessary to cause the Company's stock option plans to be terminated
on or prior to the Effective Time and to otherwise make any amendments to the
terms of such stock option plans that are necessary to give effect to the
transactions contemplated by this Agreement, and (ii) use all necessary efforts
to obtain at the earliest practicable date all written consents from holders
of Options to the cancellation of such holder's Options to take effect at the
Effective Time. Notwithstanding any other provision of this SECTION 3.5(c),
payment may be withheld in respect of any vested and exercisable Director Option
or Employee Option until necessary or appropriate consents are obtained with
respect to such Director Option or Employee Option.
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ARTICLE IV
THE SURVIVING CORPORATION
SECTION 4.1 CERTIFICATE OF INCORPORATION. The certificate of
incorporation of MergerSub in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation until
amended in accordance therewith and with applicable Law.
SECTION 4.2 BYLAWS. The bylaws of MergerSub in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until amended in
accordance therewith and in accordance with applicable law.
SECTION 4.3 DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable Law, (i) the directors of the Surviving Corporation at the Effective
Time shall be (a) the three UMI Designees, including one outside director, (b)
two officers of MergerSub and (c) one additional outside director to be
appointed by UMI and MergerSub, who shall be a completely disinterested person
having had no prior relationship with the Company, UMI, MergerSub or any of
their respective affiliates and (ii) the officers of MergerSub at the Effective
Time shall be the officers of the Surviving Corporation.
SECTION 4.4 NAME. MergerSub shall take all action as is necessary to
change its name to "Laser Power Corporation" effective as of the Effective Time.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to UMI and MergerSub that except as
set forth in the corresponding sections or subsections of the Disclosure Letter
delivered to UMI and MergerSub by the Company concurrently with entering into
this Agreement (the "DISCLOSURE LETTER"):
SECTION 5.1 CORPORATE EXISTENCE AND POWER. Each of the Company
and its Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and has all
corporate powers required to carry on its business as now conducted. Each of the
Company and its Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified would not, individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect on the Company. Without limiting the
generality of the foregoing, the Company and its Subsidiaries are qualified to
do business in the states shown on SECTION 5.1 of the Disclosure Letter. The
Company has heretofore made available to UMI and MergerSub true and complete
copies of the currently effective certificate of incorporation and bylaws or
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similar organizational documents of the Company and its Subsidiaries (as the
same may be amended and restated as of the date hereof).
SECTION 5.2 CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby (i) are within the Company's corporate
powers and (ii) except for the adoption of this Agreement by the affirmative
vote of a majority in voting interests of the shares of Common Stock, have been
duly authorized by all necessary corporate and stockholder action. This
Agreement has been duly and validly executed and delivered by the Company and
constitutes a valid, legal and binding agreement of the Company enforceable
against the Company in accordance with its terms, except (i) as rights to
indemnity hereunder may be limited by federal or state securities laws or the
public policies embodied therein, (ii) as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
enforcement of creditors' rights generally, and (iii) as the remedy of specific
performance and other forms of injunctive relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
SECTION 5.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Merger by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (i) the filing of a
certificate of merger in accordance with Delaware Corporate Law; (ii) compliance
with any applicable requirements of the HSR Act; (iii) compliance with the
applicable requirements of the Exchange Act; (iv) compliance with the applicable
requirements of the Securities Act; (v) compliance with any applicable foreign
or state securities or Blue Sky laws; (vi) the completion of a review under the
Exon-Florio Provision; (vii) compliance with the requirements of the National
Industrial Security Program Regulations; (viii) compliance with the requirements
of the International Trade in Arms Regulations; (ix) the filing of appropriate
documents with the relevant authorities of the jurisdictions in which the
Company is qualified to do business; and (x) such other items (A) required
solely by reason of the participation of UMI and MergerSub in the Merger or (B)
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect on the Company.
SECTION 5.4 NON-CONTRAVENTION. Other than as set forth in SECTION
5.4 of the Disclosure Letter, the execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not (i) contravene or conflict
with the organizational documents of the Company or any of its Subsidiaries,
(ii) contravene or conflict with or constitute a violation of any provision of
any Law, regulation, judgment, writ, injunction, order or decree of any court or
Governmental Authority binding upon or applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, (iii) constitute a
default under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of the Company or any of its
Subsidiaries or to a loss of any benefit to which the Company or any of its
Subsidiaries is entitled under any provision of any agreement, contract or other
instrument binding upon the Company or any of its Subsidiaries, or (iv) result
in the creation or imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
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SECTION 5.5 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of (i)
15,000,000 shares of Common Stock of which as of May 31, 2000 there were
9,679,001 shares issued and outstanding and (ii) 3,000,000 shares of Preferred
Stock of which as of the date hereof there are no shares issued and outstanding.
As of May 31, 2000 there were outstanding Options to purchase an aggregate of
367,977 shares of Common Stock (all of which Options were vested and
exercisable). All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable.
(b) Except for the Rights Agreement, except as set forth in this
SECTION 5.5 and except for changes since May 31, 2000 resulting from the
exercise of Options outstanding on such date, there are no outstanding (i)
shares of capital stock or other voting securities of the Company, (ii)
securities of the Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company or its Subsidiaries, (iii) options or
other rights to acquire from the Company or its Subsidiaries, or obligations of
the Company or its Subsidiaries to issue, any shares of capital stock, voting
securities or securities convertible into or exchangeable for shares of capital
stock or voting securities of the Company or any Subsidiary, and (iv) no equity
equivalent interests in the ownership or earnings of the Company or its
Subsidiaries or other similar rights (the items in clauses (b)(i), (ii), (iii)
and (iv) being referred to collectively as the "COMPANY SECURITIES"). Except as
set forth on SECTION 5.5 of the Disclosure Letter, there are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any Company Securities. There are no stockholder agreements, voting
trusts or other agreements or understandings to which the Company or any of its
Subsidiaries is a party or by which it is bound relating to the voting or
registration of any shares of capital stock of the Company or any of its
Subsidiaries or any preemptive rights with respect thereto.
SECTION 5.6 SUBSIDIARIES. SECTION 5.6 of the Disclosure Letter
lists each Subsidiary of the Company together with the jurisdiction of
incorporation of each Subsidiary and the percentage of each Subsidiary's
outstanding capital stock or other equity interests owned by the Company or
another Subsidiary of the Company. Except as disclosed on SECTION 5.6 of the
Disclosure Letter, all the outstanding shares of capital stock of each
Subsidiary have been validly issued, are fully paid and nonassessable and are
owned by the Company, by another Subsidiary or by the Company and another such
Subsidiary, free and clear of all Liens or any other limitation or restriction.
Except for the capital stock of the Subsidiaries and except as set forth on
SECTION 5.6 of the Disclosure Letter, the Company does not own directly or
indirectly, any capital stock or other ownership interest in any other Person.
SECTION 5.7 REPORTS AND FINANCIAL STATEMENTS.
(a) The Company has timely filed with the SEC all forms, reports,
schedules, statements and other documents required to be filed by it since April
2, 1997 under the Securities Act or the Exchange Act (such documents, as
supplemented or amended since the time of filing, the "COMPANY SEC REPORTS"). As
of their respective dates, the Company SEC Reports, including without
limitation, any financial statements or schedules included or incorporated by
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reference therein, at the time filed (and, in the case of registration
statements and proxy statements, on the dates of effectiveness and the dates of
mailing, respectively) (i) complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and (ii) did not contain
any untrue statement of a material fact or omit 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. The
audited consolidated financial statements and unaudited consolidated interim
financial statements included or incorporated by reference in the Company SEC
Reports (including any related notes and schedules) fairly present, in all
material respects, the financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the results of their operations and
their cash flows for the periods set forth therein, in each case in accordance
with past practice and GAAP consistently applied during the periods involved
(except as otherwise disclosed in the notes thereto and subject, where
appropriate, to normal year-end adjustments that would not be material in amount
or effect).
(b) The Company has heretofore made available to UMI and
MergerSub a complete and correct copy of any amendments or modifications to any
Company SEC Reports filed prior to the date hereof which are required to be
filed with the SEC but have not yet been filed with the SEC.
SECTION 5.8 OFFER DOCUMENTS; PROXY STATEMENT. The Schedule 14D-9,
when filed with the SEC and first published, sent or given to stockholders of
the Company, will comply in all material respects with the Exchange Act and the
rules and regulations thereunder. Neither the Schedule 14D-9 nor any of the
information provided by or on behalf of the Company specifically for inclusion
in the Schedule TO or the Offer Documents will, at the respective times the
Schedule 14D-9, the Schedule TO and the Offer Documents or any amendments or
supplements thereto are filed with the SEC or first published, sent or given to
stockholders of the Company, 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 made therein, in light of the circumstances under
which they were made, not misleading. No representation is made by the Company
with respect to written information supplied by UMI or MergerSub specifically
for inclusion in the Schedule 14D-9. Any proxy statement to be sent to the
stockholders of the Company in connection with a meeting of the Company's
stockholders to consider the Merger (the "STOCKHOLDERS' MEETING") (such proxy
statement, as amended or supplemented, is herein referred to as the "PROXY
STATEMENT"), will comply in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is being made by the Company with
respect to UMI Information contained therein. The Proxy Statement will not, at
the time the Proxy Statement is filed with the SEC or first sent to
stockholders, at the time of the Stockholders' 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.
SECTION 5.9 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since the Balance Sheet Date, and except as discussed in the
Company SEC Reports, the business of the Company and its Subsidiaries has been
conducted in all material respects in the ordinary course consistent with past
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practice, neither the Company nor any of its Subsidiaries has engaged in any
transaction or series of related transactions material to the Company and its
Subsidiaries taken as a whole other than in the ordinary course consistent with
past practice, and there has not been any event, occurrence or development,
alone or taken together with all other existing facts, that, individually or in
the aggregate, has had, or would reasonably be expected to have, a Material
Adverse Effect on the Company.
(b) Without limiting the generality of the foregoing SECTION
5.9(a), since the Balance Sheet Date and except as disclosed in SECTION 5.9 of
the Disclosure Letter, there has not been:
(i) any damage, destruction or loss to any of the assets or
properties of the Company or any of its Subsidiaries that,
individually or in the aggregate, has a Material Adverse Effect
on the Company;
(ii) any declaration, setting aside or payment of any
dividend or distribution or capital return in respect of any
shares of the Company's capital stock or any redemption, purchase
or other acquisition by the Company or any of its Subsidiaries of
any shares of the Company's capital stock or any repurchase,
redemption or other purchase by the Company or any of its
Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or
any of its Subsidiaries, or any amendment of any material term of
any outstanding security of the Company or any of its
Subsidiaries;
(iii) any sale, assignment, transfer, lease or other
disposition or agreement to sell, assign, transfer, lease or
otherwise dispose of any of the assets of the Company or any of
its Subsidiaries for consideration in the aggregate in excess of
One Hundred Thousand Dollars ($100,000) or other than in the
ordinary course of business consistent with past practices;
(iv) any acquisition (by merger, consolidation, or
acquisition of stock or assets) by the Company or any of its
Subsidiaries of any corporation, partnership or other business
organization or division thereof or any equity interest therein
for consideration, or any loans or advances to any Person in
excess of One Hundred Thousand Dollars ($100,000) in the
aggregate;
(v) any incurrence of or guarantee with respect to any
indebtedness for borrowed money by the Company or any of its
Subsidiaries other than pursuant to the Company's existing credit
facilities in the ordinary course of business or any creation or
assumption by the Company or any of its Subsidiaries of any
material Lien on any material asset;
(vi) any material change in any method of accounting or
accounting practice used by the Company or any of its
Subsidiaries, other than such changes required by a change in law
or generally accepted accounting principles;
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(vii) (B) any employment, deferred compensation, severance
or similar agreement entered into or amended by the Company or
any of its Subsidiaries and any employee, in each case other than
sales commission agreements entered into in the ordinary course
of business consistent with past practice, (B) any increase in
the compensation payable or to become payable by it to any of its
directors or officers or generally applicable to all or any
category of the Company's employees, (C) any increase in the
coverage or benefits available under any vacation pay, company
awards, salary continuation or disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance,
pension or other employee benefit plan, payment or arrangement
made to, for or with any of the directors or officers of the
Company or generally applicable to all or any category of the
Company's employees or (D) severance pay arrangements made to,
for or with such directors, officers or employees other than, in
the case of (B) and (C) above, increases in the ordinary course
of business consistent with past practice and that in the
aggregate have not resulted in a material increase in the
benefits or compensation expense of the Company or any of its
Subsidiaries;
(viii) any revaluing in any material respect of any of the
assets of the Company or any of its Subsidiaries, including
without limitation writing down the value of inventory or writing
off notes or accounts receivable other than in the ordinary
course of business;
(ix) any loan, advance or capital contribution made by the
Company or any of its Subsidiaries to, or investment in, any
person other than loans, advances or capital contributions, or
investments of the Company made in the ordinary course of
business consistent with past practices; or
(x) any agreement to take any actions specified in this
SECTION 5.9(b), except for this Agreement.
SECTION 5.10 NO UNDISCLOSED MATERIAL LIABILITIES. Except as
disclosed in the Company's Annual Report on Form 10-K for the year ended
September 30, 1999 and the Company's Quarterly Reports on Form 10-Q for each of
the periods ended December 31, 1999 and March 31, 2000, there are no liabilities
of the Company or any of its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, which
would be required by GAAP to be reflected on a consolidated balance sheet of the
Company (including the notes thereto), other than liabilities and obligations
which, individual or in the aggregate, will not have a Material Adverse Effect
on the Company, and other than:
(i) actual trade payables incurred in the ordinary course of
business consistent with past practices;
(iii) liabilities incurred to perform this Agreement; and
(iii) those set forth in SECTION 5.10 of the Disclosure
Letter.
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SECTION 5.11 LITIGATION. Except as set forth on SECTION 5.11 to
the Disclosure Letter, (a) there is no action, suit, investigation or proceeding
pending against, or to the knowledge of the Company threatened against or
affecting, the Company or any of its Subsidiaries or their respective businesses
or properties before any court or arbitrator or any Governmental Authority
which, if determined adversely, would reasonably be expected to have a Material
Adverse Effect on the Company (a "PROCEEDING") and (b) to the knowledge of the
Company, there is no basis for any such Proceeding.
SECTION 5.12 TAXES.
(a) Except as set forth on SECTION 5.12 to the Disclosure
Letter, the Company:
(i) has timely paid or caused to be paid all Taxes required
to be paid by it (including, but not limited to, any such Taxes
shown due on any Tax Return). The accrual for current Taxes
payable in the latest financial statements included or
incorporated by reference in the Company SEC Reports is adequate
to cover all Taxes attributable to periods or portions thereof
ending on the date of such financial statements, and no Taxes
attributable to periods following the date of such financial
statements have been incurred other than in the ordinary course
of business;
(ii) has filed or caused to be filed in a timely and proper
manner (within any applicable extension periods) all Tax Returns
required to be filed by it with the appropriate taxing authority
in all jurisdictions in which such Tax Returns are required to be
filed, and all Tax Returns filed by the Company are true, correct
and complete and accurately set forth all items to the extent
required to be included therein; and
(iii) has not requested or caused to be requested any
extension of time within which to file any material Tax Return,
which Tax Return has not since been filed.
(b) The Company has made available to UMI and MergerSub true,
correct and complete copies of all federal Tax Returns filed by or on
behalf of the Company or any of its Subsidiaries through the date hereof for all
periods open to audit.
(c) Except as set forth in SECTION 5.12 to the Disclosure Letter:
(i) the Company has not been notified by the Internal
Revenue Service or any other taxing authority that any issues
have been raised by the Internal Revenue Service or any other
taxing authority in connection with any Tax Return filed by or on
behalf of the Company;
(ii) there are no pending Tax audits and no waivers of
statutes of limitations have been given or requested;
(iii) no Liens have been filed against the Company, except
for Liens for current Taxes not yet due and payable for which
adequate reserves have been provided for in the latest balance
sheet of the Company;
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(iv) no unresolved deficiencies or additions to Taxes have
been proposed, asserted, or assessed against the Company;
(v) the Company has not received notice within the last
three years from any taxing authority in a jurisdiction in which
the Company does not file Tax Returns that the Company is or may
be subject to taxation by that jurisdiction;
(vi) the Company has withheld and paid all Taxes required to
be withheld and paid in connection with amounts paid or owing to
any employee, independent contractor, creditor, shareholder or
other third party;
(vii) the Company is not a party to a Tax sharing, Tax
allocation or similar agreement and is not bound by any closing
agreement, offer in compromise or other agreement with any Tax
authority; and
(viii) except in accordance with past practice, the Company
has not taken any action that would have the effect of deferring
any taxable income of the Company from any taxable period or
portion thereof ending before the Effective Time to any period
following the Effective Time. The Company is not required to
include in its income any adjustment pursuant to Section 481 of
the Code following the Effective Time.
SECTION 5.13 ERISA.
(a) SECTION 5.13(a) of the Disclosure Letter sets forth a list
identifying each "EMPLOYEE BENEFIT PLAN" (as defined in Section 3(3) of ERISA),
material benefit arrangement, plan, or policy, including without limitation, (i)
each deferred compensation plan, (ii) each equity compensation plan, (iii) each
plan or arrangement providing severance benefits ("BENEFIT ARRANGEMENTS") which
(i) is subject to any provision of ERISA or (ii) is maintained, administered or
contributed to by the Company or any affiliate (as defined below) within the
last three (3) years, under which the Company has any liability. The most recent
copies of such plans (and, if applicable, related trust agreements) and all
amendments thereto have been made available to MergerSub together with (A) the
most recent annual reports (Form 5500 including applicable schedules and
financial reports) or ERISA alternative compliance statements prepared in
connection with any such plan and (B) the most recent actuarial valuation report
prepared in connection with any such plan. Such plans are referred to
collectively herein as the "EMPLOYEE PLANS." For purposes of this SECTION 5.13,
"AFFILIATE" of any Person means any other Person which, together with such
Person, would be treated as a single employer under Section 414 of the Code.
Employee Plans which individually or collectively would constitute an "employee
pension benefit plan" as defined in Section 3(2) of ERISA (the "PENSION PLANS")
are identified as such in the list referred to above.
(b) Neither the Company nor any of its affiliates maintains or
contributes to or has maintained or contributed to within the last five (5)
years a Pension Plan subject to Title IV of ERISA or Section 412 of the Code.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any Employee Plan has or will make the Company or
any Subsidiary, any officer or director of the Company or any Subsidiary subject
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to any liability under Title I of ERISA or liable for any tax pursuant to
Section 4975 of the Code that could have a Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that such Employee Plan is so qualified and no
amendments have been adopted since the receipt of such determination letter that
would result in the revocation of such letter. The Company has made available to
MergerSub copies of the most recent Internal Revenue Service determination
letters with respect to each such Employee Plan. Nothing has occurred since the
date of the most recent Internal Revenue Service determination letters that
would adversely affect the tax-qualified status of any Employee Plan. Each
Employee Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to such
Employee Plan other than any non-compliance which could not have a Material
Adverse Effect.
(d) Except as set forth on SECTION 5.13(d) of the Disclosure
Letter, there is no contract, agreement, plan or arrangement covering any
employee or former employee of the Company or any of its affiliates that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to the terms of Section 280G of the Code or
that could obligate the Company to make any payments that will not be fully
deductible by virtue of Section 162(m) of the Code.
(e) Except as set forth on SECTION 5.13(e) of the Disclosure
Letter, there has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its affiliates relating to, or
change in employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended on the Balance Sheet Date.
(f) Except as disclosed on SECTION 5.13(f) of the Disclosure
Letter, the Company or any Subsidiary is not a party to or subject to (i) any
employment contract or arrangement providing for annual future compensation of
$75,000 or more with any officer, consultant, director or employee, or that have
a remaining term in excess of one year or are not cancelable (without material
penalty, cost or other liability) within one year; (ii) any severance
agreements, programs and policies with or relating to its employees except
programs and policies required to be maintained by law; or (iii) any plans,
programs, agreements and other arrangements with or relating to its employees
which contain change in control provisions. The Company has made available to
UMI and MergerSub copies (or descriptions in detail reasonably satisfactory to
UMI and MergerSub) of all such agreements, plans, programs and other
arrangements.
(g) Except as disclosed in SECTION 5.13(g) of the Disclosure
Letter, there will be no payment, accrual of additional benefits, acceleration
of payments or vesting in any benefit under any Employee Plan or similar
agreement or arrangement disclosed in this Agreement solely by reason of the
Company's entering into this Agreement or in connection with the transactions
contemplated by this Agreement.
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SECTION 5.14 LABOR MATTERS. There are no strikes, slowdowns, work
stoppages, lockouts, union organizational campaigns or other protected concerted
activity under the National Labor Relations Act or, to the knowledge of Company,
threats thereof, by or with respect to any employees of the Company or any of
its Subsidiaries which could have a Material Adverse Effect on the Company.
There are no controversies pending or, to the knowledge of the Company,
threatened between the Company or any of its Subsidiaries and any of their
respective employees, which controversies have or would reasonably be expected
to have a Material Adverse Effect on the Company. Neither the Company nor any of
its Subsidiaries is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or its
Subsidiaries except as disclosed in SECTION 5.14 of the Disclosure Letter. There
are no pending or, to the knowledge of the Company, threatened charges or
complaints against the Company or its Subsidiaries by the National Labor
Relations Board or any comparable state agency which, if adversely determined,
would have a Material Adverse Effect on the Company.
SECTION 5.15 COMPLIANCE WITH LAWS AND COURT ORDERS. Neither the
Company nor its Subsidiaries is in violation of, nor has it since January 1,
1997 violated, and to the knowledge of the Company nothing is under
investigation with respect to or has been threatened to be charged with or given
notice of any violation of, any applicable Law, except for possible violations
that have not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company. This Section does
not relate to matters with respect to Taxes or Environmental Laws which are
exclusively the subject of SECTIONS 5.12 and 5.17, respectively.
SECTION 5.16 FINDERS' FEES. With the exception of fees payable to
Roth, there is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf, of the Company or any of
its Subsidiaries who might be entitled to any fee or commission from the Company
or any of its affiliates upon consummation of the transactions contemplated by
this Agreement.
SECTION 5.17 ENVIRONMENTAL MATTERS.
(a) The Company and each Subsidiary have complied and are in
compliance with, and the Real Property and all improvements thereon are in
compliance with, all Environmental Laws.
(b) Neither the Company nor any Subsidiary have any liability
(known or unknown, contingent or non-contingent) under any Environmental Law,
nor is the Company or any Subsidiary responsible for any liability of any other
person under Environmental Law, either by contract or by operation of law. There
are no pending or, to the knowledge of the Company, threatened actions, suits,
orders, claims, legal proceedings or other proceedings based on, and neither the
Company nor any Subsidiary, nor any officer, director or stockholder thereof has
directly or indirectly received any formal or informal notice of any complaint,
order, directive, citation, notice of responsibility, notice of potential
responsibility, or information request from any governmental authority or any
other person or entity or knows or suspects any fact(s) which might reasonably
form the basis for any such actions or notices arising out of or attributable
to: (i) the current or past presence, Release, or threatened Release of
Hazardous Materials at or from any part of the Real Property or any real
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property formerly owned, operated, leased or used by the Company or any
Subsidiary; (ii) the off-site disposal or treatment of Hazardous Materials
originating on or from the Real Property or the businesses or Assets of the
Company or any Subsidiary; or (iii) any violation of Environmental Laws at any
part of the Real Property or arising from the Company's or any Subsidiary's
activities (or the activities of the Company's or any Subsidiary's predecessors
in title) involving Hazardous Materials.
(c) The Company and the Subsidiaries have been duly issued, and
currently have and will maintain through the Closing Date, all Environmental
Permits necessary to operate the business or assets of the Company as currently
operated. A true and complete list of all such Environmental Permits, all of
which are valid and in full force and effect, is set out in SECTION 5.17(c) of
the Disclosure Letter. The Company and the Subsidiaries have timely filed
applications for all Environmental Permits. Except in accordance with
Environmental Permits, there has been no Release of Hazardous Materials at, on,
under, or from (i) the Real Property, or (ii) any real property formerly owned,
operated or leased by the Company or the Subsidiaries, during the period of such
ownership, operation, or tenancy. All of the Environmental Permits listed on the
Disclosure Schedule are transferable and none require consent, notification, or
other action to remain in full force and effect following consummation of the
transaction contemplated hereby.
(d) The Real Property contains no underground improvements,
including but not limited to treatment or storage tanks, or underground piping
associated with such tanks, used currently or in the past for the management of
Hazardous Materials, and no portion of the Real Property is or has been used as
a dump or landfill or consists of or contains filled in land or wetlands. With
respect to any real property formerly owned, operated, or leased by the Company
or the Subsidiaries, during the period of such ownership, operation or tenancy,
no portion of such property was used as a dump or landfill. Neither PCBs nor
asbestos-containing materials are present on or in the Real Property or the
improvements thereon.
(e) The Company has Furnished to UMI and MergerSub copies of all
environmental assessments, reports, audits and other documents in its possession
or under its control that relate to the Real Property, compliance with
Environmental Laws, or any other real property that the Company or the
Subsidiaries formerly owned, operated, or leased. Any information the Company or
the Subsidiaries has Furnished to UMI and MergerSub concerning the environmental
history of the Real Property and the operations of the Company or the
Subsidiaries related to compliance with Environmental Laws is accurate and
complete.
(f) No Real Property, and no property to which Hazardous
Materials originating on or from such properties or the businesses or assets of
the Company or any Subsidiary has been sent for treatment or disposal, is listed
or proposed to be listed on the National Priorities List or CERCLIS or on any
other governmental database or list of properties that may or do require
investigation or cleanup under Environmental Laws.
(g) No Lien in favor of any person relating to or in connection
with any Claim under any Environmental Law has been filed or has attached to the
Real Property.
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(h) No authorization, notification, recording, filing, consent,
waiting period, remediation, investigation, or approval is required under any
Environmental Law in order to consummate the transaction contemplated hereby.
(i) No proposed or final regulation published pursuant to
Environmental Laws and no Environmental Permit for which the Company or the
Subsidiaries has or should have applied, could reasonably be expected to result
in a capital expenditure in excess of $100,000.
SECTION 5.18 YEAR 2000 PROGRAM.
(a) Except as described in SECTION 5.18 of the Disclosure Letter,
to the knowledge of the Company, the Company's central operating and accounting
systems described in the Company's most recently filed Form 10-K (the "SYSTEM")
are Year 2000 Compliant.
(b) "YEAR 2000 COMPLIANT" means the System:
(i) will accurately input, process and output all date and
time data, whether from years in the same century or in different
centuries, including by yielding correct results in arithmetic
operations, comparisons, sequencing and sorting of date and time
data and in leap year calculations; and
(ii) will not operate abnormally or cease to operate, return
an error message or otherwise fail due to date- or time-related
processing relating to the then current date being after January
1, 2000 or any other date.
SECTION 5.19 INSURANCE. Each of the Company and its Subsidiaries
maintains insurance policies (the "INSURANCE POLICIES") against all risks of a
character and in such amounts as are usually insured against by similarly
situated companies in the same or similar businesses. Each Insurance Policy is
in full force and effect and is valid, outstanding and enforceable, and all
premiums due thereon have been paid in full. None of the Insurance Policies will
terminate or lapse (or be affected in any other materially adverse manner) by
reason of the transactions contemplated by this Agreement. Each of the Company
and its Subsidiaries has complied in all material respects with the provisions
of each Insurance Policy under which it is the insured party. No insurer under
any Insurance Policy has canceled or generally disclaimed liability under any
such policy or, to the Company's knowledge, indicated any intent to do so or not
to renew any such policy. All material claims under the Insurance Policies have
been filed in a timely fashion.
SECTION 5.20 CERTAIN BUSINESS PRACTICES. None of the Company, any
of its Subsidiaries or any directors, officers, agents or employees of the
Company or any of its Subsidiaries has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment. Neither the Company
nor any of its Subsidiaries has participated in any boycotts.
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SECTION 5.21 SUPPLIERS AND CUSTOMERS. The documents and
information supplied by the Company to UMI and MergerSub or any of their
representatives in connection with this Agreement with respect to relationships
and volumes of business done with its significant suppliers and customers are
accurate in all material respects. During the last twelve (12) months, the
Company has received no notices of termination or material alteration of a
contract or business relationship, or written threats of any such action from
any of the fifteen (15) largest suppliers or the fifteen (15) largest customers
of the Company and its Subsidiaries.
SECTION 5.22 CONTRACTS.
(a) SECTION 5.22 of the Disclosure Letter contains a complete and
accurate list of all contracts (written or oral), undertakings, commitments or
agreements (other than contracts, undertakings, commitments or agreements for
employee benefit matters set forth in SECTION 5.12 of the Disclosure Letter and
real property leases set forth in SECTION 5.26 of the Disclosure Letter) of the
following categories to which the Company or any of its Subsidiaries is a party
or by which any of them is bound (collectively, and together with the contracts,
undertakings, commitments or agreements for employee benefit matters set forth
in SECTION 5.12 of the Disclosure Letter and the real property leases set forth
in SECTION 5.26 of the Disclosure Letter, the "CONTRACTS"):
(i) Contracts requiring annual expenditures by or
liabilities of the Company and its Subsidiaries in excess of One
Hundred Thousand Dollars ($100,000) which have a remaining term
in excess of one hundred eighty (180) days or are not cancelable
(without material penalty, cost or other liability) within one
hundred eighty (180) days;
(ii) promissory notes, loans, agreements, indentures,
evidences of indebtedness or other instruments relating to the
lending of money, whether as borrower, lender or guarantor, in
excess of One Hundred Thousand Dollars ($100,000).
(iii) Contracts containing covenants limiting the freedom of
the Company or any of its Subsidiaries to engage in any line of
business (other than prohibitions against engaging in business
relating to specific product lines) or compete with any person,
in any product line or line of business, or operate at any
location;
(iv) joint venture or partnership agreements or joint
development or similar agreements pursuant to which any third
party has been entitled or is reasonably expected to be entitled
to share in profits or losses of the Company or its Subsidiaries;
(v) Contracts with any federal, state or local government
which have a remaining term in excess of one year or are not
cancelable (without material penalty, cost or other liability)
within one year;
(vi) other Contracts or commitments in which the Company or
any of its Subsidiaries has granted manufacturing rights or
exclusive marketing rights relating to any product or service,
any group of products or services or any territory; and
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(vii) to the knowledge of the Company, as of the date hereof
any other Contract the performance of which could be reasonably
expected to require expenditures by the Company or any of its
Subsidiaries in excess of One Hundred Thousand Dollars
($100,000).
(b) Except as set forth in SECTION 5.22 of the Disclosure Letter,
true and complete copies of the written Contracts and descriptions of verbal
Contracts, if any, have been delivered or made available to UMI and MergerSub.
Each of the Contracts is a valid and binding obligation of the Company and, to
the Company's knowledge, the other parties thereto, enforceable against the
Company in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium, reorganization, arrangement or similar laws
affecting creditors' rights generally and by general principles of equity. To
the knowledge of the Company, except for the execution of this Agreement and the
consummation of the transactions contemplated hereby and thereby, no event has
occurred which would, on notice or lapse of time or both, entitle the holder of
any indebtedness issued pursuant to a Contract identified in SECTION 5.22 of the
Disclosure Letter in response to paragraph (ii) above to accelerate, or which
does accelerate, the maturity of any such indebtedness.
(c) None of the Company or its Subsidiaries is in breach, default
or violation (and no event has occurred or not occurred through the Company's
action or inaction or, to the knowledge of the Company, through the action or
inaction of any third parties, which with notice or the lapse of time or both
would constitute a breach, default or violation) of any term, condition or
provision of any Contract to which the Company or any of its Subsidiaries is now
a party or by which any of them or any of their respective properties or assets
may be bound, except for violations, breaches or defaults that, individually or
in the aggregate, would not have a Material Adverse Effect on the Company.
SECTION 5.23 DISCLOSURE. None of the representations or warranties
made by the Company herein or in any schedule hereto, including the Disclosure
Letter, or in any certificate furnished by the Company pursuant to this
Agreement, or in the Company SEC Reports, when all such documents are read
together in their entirety, contains or will contain at the Effective Time any
untrue statement of a material fact, or omits or will omit at the Effective Time
to state any material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which made, not
misleading.
SECTION 5.24 INTELLECTUAL PROPERTY.
(a) Each of the Company and its Subsidiaries owns or possesses
adequate licenses or other valid rights to use all existing United States and
foreign patents, trademarks, trade names, service marks, copyrights, trade
secrets and applications therefor (the "COMPANY INTELLECTUAL PROPERTY RIGHTS")
except where the failure to own or possess valid rights to use such Company
Intellectual Property Rights would not have a Material Adverse Effect on the
Company.
(b) The validity of the Company Intellectual Property Rights and
the title thereto of the Company or any Subsidiary, as the case may be, is not
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being questioned in any pending litigation proceeding to which the Company or
any Subsidiary is a party nor, to the knowledge of the Company, is any such
litigation proceeding threatened. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company and except as set forth in SECTION 5.24 of the Disclosure Letter, the
conduct of the business of the Company and its Subsidiaries as now conducted
does not, to the knowledge of the Company, infringe any valid patents,
trademarks, trade names, service marks or copyrights of others, and the
consummation of the transactions completed by this Agreement will not result in
the loss or impairment of any Company Intellectual Property Rights.
SECTION 5.25 RELATED PARTY TRANSACTIONS. Except as set forth in
SECTION 5.25 of the Disclosure Letter, (a) no beneficial owner of 5% or more of
the Company's outstanding capital stock, or (b) officer or director of the
Company or (c) any Person (other than the Company) in which any such beneficial
owner, officer or director owns any beneficial interest (other than a publicly
held corporation whose stock is traded on a national securities exchange or in
the over-the-counter market and less than 1% of the stock of which is
beneficially owned by all such Persons) (collectively, "RELATED PARTIES") has
any interest in: (i) any contract, arrangement or understanding with, or
relating to, the business or operations of, the Company or any of its
Subsidiaries; (ii) any loan, arrangement, understanding, agreement or contract
for or relating to indebtedness of the Company or any of its Subsidiaries; or
(iii) any property (real, personal or mixed), tangible or intangible, used in
the business or operations of the Company or any of its Subsidiaries, excluding
any such contract, arrangement, understanding or agreement constituting an
Employee Plan. Following the Effective Time, except for obligations set forth in
this Agreement, neither the Company nor any of its Subsidiaries will have any
obligations to any Related Party except for (i) accrued salary for the pay
period commencing immediately prior to the Effective Time and (ii) the
obligations set forth in the SECTION 5.25 of the Disclosure Letter.
SECTION 5.26 ASSETS.
(a) The assets and properties of the Company and its
Subsidiaries, considered as a whole, constitute all of the material assets and
properties which are reasonably required for the business and operations of the
Company and its Subsidiaries as presently conducted. The Company and its
Subsidiaries have good and marketable title to or a valid leasehold estate in
(i) all personal properties and assets reflected on the Company's Balance Sheet
at the Balance Sheet Date (except for properties or assets subsequently sold in
the ordinary course of business consistent with past practice), except as would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company.
(b) SECTION 5.26 of the Disclosure Letter sets forth (i) a
complete and accurate list of all improved and unimproved Real Property of the
Company or any of its Subsidiaries, and the current use of such Real Property
and indicating whether the Real Property is owned or leased, (ii) a complete and
accurate list of all leases pursuant to which the Company or any of its
Subsidiaries lease personal property and which require an annual expenditure by
the Company or any of its Subsidiaries individually in excess of One Hundred
Thousand Dollars ($100,000) or which are not cancelable (without material
penalty, cost or other liability) within one year and (iii) with respect to each
lease for real property, the term (including renewal options) and current fixed
rent.
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(c) Except as set forth in SECTION 5.26 of the Disclosure Letter,
there are no pending or, to the knowledge of the Company, threatened
condemnation or similar proceedings relating to any of the Real Properties of
the Company and its Subsidiaries, except for such proceedings which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
SECTION 5.27 DELAWARE SECTION 203. The provisions of Section 203
of Delaware Corporate Law will not apply to this Agreement, as it may be amended
from time to time, or any of the transactions contemplated hereby. The Company
has heretofore delivered to UMI and MergerSub a complete and correct copy of the
resolutions of the Board of Directors of the Company to the effect that pursuant
to 203(a)(1) of the Delaware Corporate Law, the restrictions contained in
Section 203 of Delaware Corporate Law are and shall be inapplicable to the
Merger and the transactions contemplated by this Agreement, as it may be amended
from time to time.
SECTION 5.28 BUSINESS RELATIONS. The Company does not have any
knowledge that any customer, supplier or licensor engaged in doing business with
the Company will cease to do business with the Company after the consummation of
the Merger as previously conducted with the Company except for any terminations
which will not, in the aggregate, result in a Material Adverse Change.
SECTION 5.29 RIGHTS AGREEMENT. The Company has taken all actions
necessary to cause the Rights Agreement to be amended to (a) render the Rights
Agreement inapplicable to the acquisition by MergerSub of Shares pursuant to the
Offer in accordance with this Agreement and the Merger and (b) ensure that (i)
neither UMI nor MergerSub is an Acquiring Person (as defined in the Rights
Agreement) pursuant to the Rights Agreement solely by virtue of the execution of
this Agreement or the consummation of the Offer, the Merger or the other
transactions contemplated by this Agreement and (ii) the provisions of the
Rights Agreement, including the occurrence of a Distribution Date (as defined in
the Rights Agreement) are not triggered solely by reason of the execution of
this Agreement or the consummation of the Offer, the Merger or the consummation
of the other transactions contemplated by this Agreement in accordance with the
provisions hereof.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF UMI AND MERGERSUB
UMI and MergerSub represent and warrant to the Company that:
SECTION 6.1 CORPORATE EXISTENCE AND POWER. Each of UMI and
MergerSub is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers to execute and deliver this Agreement and to consummate the
Merger and the transactions contemplated hereby.
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SECTION 6.2 CORPORATE AUTHORIZATION. The execution, delivery and
performance by UMI and MergerSub of this Agreement and the consummation by
MergerSub of the transactions contemplated hereby are within the corporate
powers of UMI and MergerSub and have been duly authorized by all necessary
corporate and stockholder action. This Agreement constitutes a valid and binding
agreement of UMI and MergerSub.
SECTION 6.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery
and performance by UMI and MergerSub of this Agreement and the consummation by
UMI and MergerSub of the transactions contemplated by this Agreement require no
action by or in respect of, or filing with, any Governmental Authority other
than (a) the filing of a certificate of merger in accordance with Delaware
Corporate Law, (b) compliance with any applicable requirements of the HSR Act;
(c) compliance with the applicable requirements of the Exchange Act; (d)
compliance with the applicable requirements of the Securities Act; (e)
compliance with any applicable foreign or state securities or Blue Sky laws; (f)
the completion of a review under the Exon-Florio Provision; (g) compliance with
the requirements of the National Industrial Security Program Regulations; (h)
compliance with the requirements of the International Trade in Arms Regulations;
an (i) such other items the failure of which to be obtained will not have a
Material Adverse Effect on UMI and MergerSub.
SECTION 6.4 NON-CONTRAVENTION. The execution, delivery and
performance by UMI and MergerSub of this Agreement and the consummation by UMI
and MergerSub of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of UMI
and MergerSub, (b) contravene, conflict with or constitute a violation of any
provision of law, regulation, judgment, order or decree binding upon UMI and
MergerSub, or (c) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of UMI and
MergerSub or to a loss of any benefit to which UMI and MergerSub is entitled
under any agreement, contract or other instrument binding upon UMI and MergerSub
which in the aggregate would have a Material Adverse Effect on UMI and
MergerSub.
SECTION 6.5 OFFER DOCUMENTS; PROXY STATEMENT. None of the
information supplied by or on behalf of UMI or MergerSub for inclusion in the
Schedule TO, the Schedule 14D-9 or the Proxy Statement (the "UMI INFORMATION"),
will, at the time the Schedule TO, the Schedule 14D-9 or the Proxy Statement, as
the case may be, is filed with the SEC or sent to shareholders, at the time of
the Stockholders' 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. The Offer Documents
will not, at the respective times the Offer Documents are filed with the SEC or
first published, sent or given to the Company's stockholders, 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 statement therein, in light of
the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, UMI and MergerSub do not make any representation or warranty with
respect to statements made or incorporated by reference in any of the foregoing
documents based upon information that has been supplied by the Company or its
accountants, counsel or other authorized representatives for use in any of the
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foregoing documents. The Offer Documents will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder.
SECTION 6.6 LITIGATION. There is no action, suit or proceeding,
claim, arbitration or investigation against UMI or MergerSub pending or, to
UMI's and MergerSub's knowledge, threatened against UMI and/or MergerSub or any
of their properties, assets or rights before any court, arbitrator or
administrative or environmental body, which could prevent UMI and MergerSub from
consummating the transactions contemplated by this Agreement.
SECTION 6.7 FINDERS' FEES. Except for fees payable to DLJ, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of UMI and MergerSub who would be
entitled to any fee or commission from UMI or MergerSub or any of its affiliates
upon consummation of the transactions contemplated by this Agreement.
SECTION 6.8 FINANCING. UMI and MergerSub shall have at the Closing
sufficient cash to enable it to pay the full Merger Consideration as provided
herein, to make all other necessary payments by it in connection with the
Merger and to pay all of the related fees and expenses (the "FINANCING").
The Company shall use all reasonable efforts to cooperate with and assist
MergerSub in obtaining the consent of Wells Fargo Bank to the assignment to the
Surviving Corporation of the Company's obligations under its outstanding
indebtedness. If such consent cannot be obtained from Wells Fargo Bank, then UMI
and MergerSub shall have at the Closing sufficient cash to enable it to repay
the Company's outstanding indebtedness.
SECTION 6.9 CAPITALIZATION. As of the date hereof, the authorized
capital shares of MergerSub consists of 3,000 shares of common stock, $1.00 par
value per share, of which as of the date hereof there are outstanding 1,014
shares. All outstanding capital stock of UMI and MergerSub have been duly
authorized and validly issued and are fully paid and nonassessable. As of the
moment immediately prior to the Effective Time, except as set forth in this
SECTION 6.9, there will be, (A) no capital stock or other voting securities of
MergerSub, (B) no securities of MergerSub convertible into or exchangeable for
capital stock of MergerSub and (C) no options or other rights to acquire from
MergerSub, and no obligation of MergerSub to issue any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of MergerSub (the items referred to in clauses (A), (B) and
(C) being referred to collectively as the "MERGERSUB SECURITIES"). There are no
outstanding obligations of MergerSub to repurchase, redeem or otherwise acquire
any MergerSub Securities.
ARTICLE VII
COVENANTS OF THE COMPANY
SECTION 7.1 CONDUCT OF THE COMPANY. Except for matters set forth
in SECTION 7.1 of the Disclosure Letter or as otherwise contemplated by or
specifically provided in this Agreement, without the prior written consent of
UMI and MergerSub from the date hereof to the Effective Time, the Company shall
carry on its business in the ordinary and usual course of business and
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consistent with past practice and shall use its reasonable best commercial
efforts to (i) preserve intact its present business organization, (ii) maintain
in effect all material federal, state and local Permits that are required for
the Company or any of its Subsidiaries to carry on its business, (iii) keep
available the services of its key officers and employees and (iv) maintain
satisfactory relationships with its customers, lenders, suppliers and others
having material business relationships with it. Without limiting the generality
of the foregoing, and except for matters set forth in SECTION 7.1 of the
Disclosure Letter attached hereto or as otherwise contemplated by or
specifically provided in this Agreement, without the prior written consent of
UMI and MergerSub, prior to the Effective Time, the Company shall not and shall
not permit its Subsidiaries to:
(a) adopt any change in its amended and restated certificate of
incorporation or bylaws or comparable organizational documents;
(b) except pursuant to existing agreements or arrangements (i)
acquire (by merger, consolidation, acquisition of stock or assets, joint venture
or otherwise of a direct or indirect ownership interest or investment) any
corporation, partnership or other business organization or division thereof, or
sell, lease or otherwise dispose of a material amount of assets (excluding sales
of inventory or other assets in the ordinary course of business) or securities;
(ii) waive, release, grant, or transfer any rights of material value; (iii)
modify or change in any material respect any material Permit; (iv) except to
refund or refinance commercial paper, incur, assume or prepay any indebtedness
for borrowed money except in the ordinary course of business, consistent with
past practice; (v) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for any indebtedness
for borrowed money or trade payables of any other Person, except in the ordinary
course of business consistent with past practice; (vi) make any loans, advances
or capital contributions to, or investments in, any other Person, except in the
ordinary course of business, consistent with past practice; (vii) authorize any
capital expenditure or expenditures not in the ordinary course of business that
have not been authorized and approved prior to the date hereof (other than the
Company's computer upgrade currently in process) which individually or in the
aggregate is in excess of One Hundred Thousand Dollars ($100,000); (viii) pledge
or otherwise encumber shares of capital stock of the Company or any of its
Subsidiaries; (ix) mortgage or pledge any of its material assets, tangible or
intangible, or create or suffer to exist any material Lien thereupon; (x) enter
into any contract or agreement other than in the ordinary course of business
consistent with past practice that would be material to the Company and its
Subsidiaries, taken as a whole; or (xi) amend, modify or waive in any material
respects any right under any material contract of the Company or any of its
Subsidiaries;
(c) take any action that would result in any representation and
warranty of the Company hereunder becoming untrue in any material respects as of
the Effective Time;
(d) split, combine or reclassify any shares of, declare, set
aside or pay any dividend (including, without limitation, an extraordinary
dividend) or other distribution (whether in cash, stock or property or any
combination thereof) in respect of Company Securities or redeem, repurchase or
otherwise acquire or offer to redeem, repurchase, or otherwise acquire any
Company Securities;
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(e) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, agreement, trust, plan, fund
or other arrangement for the benefit and welfare of any director, officer or
employee, or increase in any manner the compensation or fringe benefits of any
director, officer or any class of employees (or support any portion thereof) or
pay any benefit not required by any existing plan or arrangement (including,
without limitation, the granting of stock options or stock appreciation rights
or the removal of existing restrictions in any benefit plans or agreements);
provided, however, that notwithstanding the foregoing, the Company shall be
entitled to adopt or amend any bonus, profit sharing, compensation, severance,
deferred compensation, termination of employment agreement for the benefit and
welfare of any individual employee (excluding officers), or increase in any
manner the compensation or fringe benefits of any such employee in each case in
the ordinary course of business and consistent with past practice;
(f) except as required by applicable Law or GAAP, revalue in any
material respect any of its assets, including writing down the value of
inventory in any material manner or write-off of notes or accounts receivable in
any material manner;
(g) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, or as otherwise required by
the terms thereof;
(h) make any material Tax election or settle or compromise any
material Tax liability;
(i) make any change in accounting methods, principles or
practices materially affecting the reported consolidated assets, liabilities or
results of operations of the Company, except insofar as may have been required
by a change in GAAP;
(j) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any Company Securities or equity equivalents;
(k) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of the Company or any of its Subsidiaries (other than the Merger);
(l) alter through merger, liquidation, reorganization,
restructuring or any other fashion the corporate structure of ownership of any
Subsidiary; or
(m) agree or commit to do any of the foregoing.
SECTION 7.2 PROXY STATEMENT. As promptly as practicable after the
consummation of the Offer and if required by law in order to consummate the
Merger, the Company shall prepare and file with the SEC the Proxy Statement. The
Company shall use its reasonable efforts to cause the Proxy Statement to be
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cleared by the SEC for mailing to the stockholders of the Company as promptly as
practicable and shall mail the Proxy Statement to its stockholders as promptly
as practicable thereafter. UMI shall furnish all information concerning it and
the holders of its capital stock as the Company may reasonably request in
connection with such actions.
SECTION 7.3 STOCKHOLDERS' MEETING. Promptly after the consummation of
the Offer, if required by law in order to consummate the Merger, the Company
shall take all action reasonably necessary in accordance with Delaware Corporate
Law and its articles of incorporation and bylaws to convene the Stockholders'
Meeting. The Company shall use commercially reasonable efforts to solicit
from stockholders of the Company proxies in favor of the approval of this
Agreement and the Merger. Notwithstanding the foregoing, if MergerSub or
any other subsidiary of UMI shall acquire at least ninety percent (90%) of the
outstanding Shares, and provided that the conditions set forth in ARTICLE X
shall have been satisfied or waived, the Company shall, at the request of UMI,
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without the approval of
the stockholders of the Company, in accordance with Section 253 of Delaware
Corporate Law.
SECTION 7.4 ACCESS TO INFORMATION; RIGHT OF INSPECTION. From the
date hereof until the Effective Time, the Company will give UMI, MergerSub,
their counsel, financial advisors, auditors and other authorized representatives
full access to the offices, properties, books and records of the Company (so
long as such access does not unreasonably interfere with the operations of the
Company), will furnish to UMI, MergerSub, their counsel, financial advisors,
auditors and other authorized representatives such financial and operating data
and other information as such Persons may reasonably request and will instruct
the Company's employees, counsel and financial advisors to cooperate with UMI
and MergerSub in their investigation of the business of the Company; provided,
that any information PROVIDED to UMI and MergerSub pursuant to this SECTION 7.4
shall be subject to the Confidentiality Agreement. The Company hereby grants to
UMI and MergerSub a license to enter and inspect the Real Property, such
inspection to be completed prior to Closing. In order to complete their
investigation pursuant to this section, UMI and MergerSub or their designated
consultant shall have the right but not the obligation: (1) to conduct tests of
the soil, surface or subsurface waters, and air quality at, in, on, beneath or
about the Property, in a manner consistent with good engineering practice; (2)
to inspect all records, reports, permits, applications, monitoring results,
studies, correspondence, data and any other information or documents related to
Hazardous Materials, compliance with Environmental Laws or other environmental
conditions; and (3) to inspect all buildings and equipment at the Real Property
for asbestos-containing materials or other Hazardous Materials. UMI and
MergerSub agree to conduct such investigations in a manner that minimizes the
disruption to the business activities of the Company and the Subsidiaries, and
the Company agrees to permit UMI and MergerSub reasonable access to all portions
of the Real Property, both during business hours and after business hours. UMI
and MergerSub agree to keep and hold any and all reports, summaries, studies or
results that are the product of their investigations of the Real Property in
accordance with the terms of the Confidentiality Agreement, and not to disclose
such reports prior to the Closing without the written consent of the Company or
unless required to do so by applicable Law.
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SECTION 7.5 OTHER POTENTIAL ACQUIRERS.
(a) Neither the Company nor any of its affiliates shall, nor
shall the Company authorize or permit any of its or their respective officers,
directors, employees, representatives or agents to, directly or indirectly,
encourage, solicit or engage in discussions or negotiations with or provide any
non-public information to any person or group (other than UMI or its affiliates
or any designees of UMI or its affiliates) concerning any Third Party
Acquisition; provided, however, that nothing herein shall prevent the Board of
Directors of the Company from (i) making any disclosure required under
applicable law; and (ii) conducting such "due diligence" inquiries (which shall
be in writing to the extent possible) in response to any Third Party Acquisition
proposal as the Board of Directors of the Company, by a majority disinterested
vote, determines in its good faith judgment, after consultation with and based,
among other things, upon the advice of legal counsel, may be required in order
to comply with its fiduciary duties. The Company shall immediately notify UMI
and MergerSub in the event it receives any proposal or inquiry concerning a
Third Party Acquisition, including the terms and conditions thereof and the
identity of the party submitting such proposal, and shall promptly update UMI
and MergerSub of the status and any material developments concerning the same,
including furnishing copies of any such written inquiries.
(b) Except as set forth in this SECTION 7.5(b), the Board of
Directors of the Company shall not withdraw its recommendation of the
transactions contemplated hereby or approve or recommend, or cause the Company
to enter into any agreement with respect to, any Third Party Acquisition. If the
Board of Directors of the Company, by a majority disinterested vote determines
in its good faith judgment after consultation with and based, among other
things, upon the advice of legal counsel, that it is required to do so in order
to comply with its fiduciary duties, the Board of Directors of the Company may
withdraw its recommendation of the transactions contemplated hereby or approve
or recommend a Superior Proposal (as defined in subsection (c) below), but in
each case only (i) after providing written notice to UMI and MergerSub (a
"NOTICE OF SUPERIOR PROPOSAL") advising UMI and MergerSub that the Board of
Directors of the Company has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal and (ii) if UMI and MergerSub do not,
within two (2) business days of UMI's and MergerSub's receipt of the Notice of
Superior Proposal, make an offer that the Board of Directors of the Company by a
majority disinterested vote determines in its good faith judgment (after receipt
of written advice of a financial adviser of nationally recognized reputation
consistent with such determination) to be at least as favorable to the Company's
stockholders as such Superior Proposal; provided, however, that the Company
shall not be permitted to enter into any agreement with respect to a Superior
Proposal unless and until this Agreement is terminated by its terms pursuant to
SECTION 11.1 and the Company has paid all amounts due to UMI and MergerSub
pursuant to SECTION 11.2. Any disclosure that the Board of Directors of the
Company may be compelled to make with respect to the receipt of a proposal for a
Third Party Acquisition or otherwise in order to comply with its fiduciary
duties or Rule 14d-9 or 14e-2 will not constitute a violation of this Agreement,
provided that such disclosure states that no action will be taken by the Board
of Directors of the Company in violation of this SECTION 7.3(b).
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(c) For the purposes of this Agreement, "THIRD PARTY ACQUISITION"
means the occurrence of any of the following events: (i) the acquisition of the
Company by merger or otherwise by any person (which includes a "person" as such
term is defined in Section 13(d)(3) of the Exchange Act) other than MergerSub or
any affiliate thereof (a "THIRD PARTY"); (ii) the acquisition by a Third Party
of any material portion of the assets of the Company and its Subsidiaries taken
as a whole, other than the sale of its products in the ordinary course of
business consistent with past practices; (iii) the acquisition by a Third Party
of ten percent (10%) or more of the outstanding Common Stock or the issuance by
the Company of preferred stock of a new series containing terms which are
inconsistent with the consummation of the transactions contemplated by this
Agreement; (iv) the adoption by the Company of a plan of liquidation or the
declaration or payment of an extraordinary dividend; (v) the repurchase by the
Company or any of its Subsidiaries of more than ten percent (10%) of the
outstanding Shares; or (vi) the acquisition by the Company or any of its
Subsidiaries by merger, purchase of stock or assets, joint venture or otherwise
of a direct or indirect ownership interest or investment in any business whose
annual revenues, net income or assets is equal or greater than ten percent (10%)
of the annual revenues, net income or assets of the Company, other than any such
acquisition to which UMI and MergerSub have consented pursuant to SECTION
7.1(b). For purposes of this Agreement, a "SUPERIOR PROPOSAL" means any bona
fide proposal to acquire directly or indirectly for consideration consisting of
cash and/or securities more than ten percent (10%) of the shares of Common Stock
then outstanding or all or substantially all the assets of the Company and
otherwise for a consideration higher than the Merger Consideration and on terms
that the Board of Directors of the Company by a majority vote determines in its
good faith judgment (after receipt of written advice of a financial advisor of
nationally recognized reputation consistent with such determination) to be more
favorable to the Company's stockholders than the Merger.
SECTION 7.6 RESIGNATION OF DIRECTORS. Prior to the Effective
Time, the Company shall deliver to MergerSub evidence satisfactory to MergerSub
of the resignation of all directors of the Company effective at the Effective
Time.
ARTICLE VIII
COVENANTS OF UMI AND MERGERSUB
SECTION 8.1 VOTING OF SHARES. MergerSub agrees, and UMI agrees to
cause MergerSub, to vote all Shares beneficially owned by it in favor of
adoption of this Agreement at the Company Stockholder Meeting.
SECTION 8.2 DIRECTOR AND OFFICER LIABILITY.
(a) The Surviving Corporation shall honor all of the Company's
obligations to indemnify and hold harmless (including any obligations to advance
funds for expenses) the present and former officers and directors of the Company
in respect of acts or omissions occurring prior to the Effective Time to the
extent provided under the Company's articles of incorporation and bylaws in
effect on the date hereof, and such obligations shall survive the Merger and
shall continue in full force and effect in accordance with the terms of the
Surviving Corporation's articles of incorporation and bylaws, from the Effective
Time until the expiration of the applicable statue of limitations with respect
to any claims against such directors or officers arising out of such acts or
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omissions; provided that such indemnification shall be subject to any limitation
imposed from time to time under applicable Law. For a period of three (3) years
after the Effective Time, the Surviving Corporation shall cause to be maintained
the current policies of officers' and directors' liability insurance maintained
by the Company (the "CURRENT POLICIES") (provided that the Surviving Corporation
may substitute therefor policies with reputable and financially sound carriers
of at least the same coverage and amount containing terms and conditions that
are no less favorable (the "REPLACEMENT POLICIES")) in respect of acts or
omissions occurring prior to the Effective Time covering each such Person
currently covered by such Current Policies; provided, however, that in no event
will the Surviving Corporation be required to expend in excess of 150% of the
annual premium currently paid by the Company for such coverage (or such coverage
as is available for 150% of such annual premium); provided further that if the
annual premium required to cause the Current Policies to be maintained as
provided in this SECTION 8.2(a) exceeds 150% of the annual premium currently
paid by the Company, any present or former officer or director of the Company
who desires to be covered by the Current Policies may so elect and shall be
covered by the Current Policies so long as such former officer or director pays
the portion of the premium for such Current Policies in excess of the amount
which the Surviving Corporation is obligated to pay pursuant to this SECTION
8.2(a).
(b) The Surviving Corporation shall keep in effect the provisions
in its articles of incorporation and bylaws to honor the Company's
indemnification obligations as set forth in Section 8.2(a) to the fullest extent
permitted by law and such provisions shall not be amended, repealed or otherwise
modified in any manner adverse to the present and former officers and directors
of the Company, without the prior written consent of such persons, except as
required by applicable law.
(c) In the event that the Surviving Corporation or any of its
controlling persons or successors or assigns (i) consolidates with or mergers
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then, in each such
case, to the extent necessary to effectuate the purpose of this SECTION 8.2,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation or such controlling persons shall succeed to the
obligations set forth in this SECTION 8.2.
ARTICLE IX
COVENANTS OF UMI AND MERGERSUB AND THE COMPANY
The parties hereto agree that:
SECTION 9.1 REASONABLE BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement, including without
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limitation the Exon-Florio Provision, the National Industrial Security Program
Regulations, and the International Trade in Arms Regulations. Each party shall
also refrain from taking, directly or indirectly, any action which would impair
such party's ability to consummate the Merger and the other transactions
contemplated hereby. Without limiting the foregoing, the Company shall use its
reasonable best efforts to (i) take all action necessary so that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Merger or any of the other transactions contemplated by this Agreement and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to any of the foregoing, take all action necessary so that the Merger
and the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Merger and
the other transactions contemplated by this Agreement. Notwithstanding the
foregoing, the Board of Directors of the Company shall not be prohibited from
taking any action permitted by SECTION 7.4.
SECTION 9.2 CERTAIN FILINGS.
(a) The parties shall cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (ii) in seeking any such actions, consent approvals or waivers or
making any such filings, furnishing information required in connection therewith
or with the Company Proxy Statement and seeking to obtain any such actions,
consents, approvals or waivers, provided, however, that the Company shall not be
required to make any material monetary expenditure or grant any material
accommodation (financial or otherwise) in connection with any of the foregoing.
(b) The Company and UMI shall (i) use their respective reasonable
best efforts to take or cause to be taken, (A) all actions necessary, proper or
advisable by such party with respect to the prompt preparation and filing with
the SEC of the Company Proxy Statement, (B) such actions as may be required to
have the Company Proxy Statement cleared by the SEC, as promptly as practicable,
and (C) such actions as may be required to be taken under the Exchange Act and
state securities or applicable Blue Sky Laws in connection with the Merger and
(ii) promptly prepare and file all necessary documentation, effect all necessary
applications, notices, petitions and filings, and use all reasonable efforts to
obtain all necessary permits, consents, approvals and authorizations of
Governmental Authorities (including, without limitation, any filing under the
Exon-Florio Provision, the National Industrial Security Program Regulations, the
International Trade in Arms Regulations and the HSR Act or any other applicable
antitrust law or regulation).
(c) The Company agrees to provide and will cause its Subsidiaries
and its and their respective officers, employees and advisors to provide, (i)
prior to the Effective Date, all documents that UMI and MergerSub may reasonably
request relating to the existence of the Company and the authority of the
Company for this Agreement, all in form and substance reasonably satisfactory to
UMI and MergerSub.
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SECTION 9.3 PUBLIC ANNOUNCEMENTS. UMI and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby (other than following a change, if any, of the Board of Directors of the
Company's recommendation of the Merger (in accordance with SECTION 7.5(b))), and
except for any press release or public statement as may be required by
applicable Law or any listing agreement with Nasdaq, will not issue any such
press release or make any such public statement prior to such consultation.
SECTION 9.4 FURTHER ASSURANCES. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company, UMI or MergerSub
(as appropriate), any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company, UMI or MergerSub, any
other actions and things to vest, perfect or confirm of record or otherwise in
the Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger.
SECTION 9.5 NOTICES OF CERTAIN EVENTS. Each of the parties hereto
shall promptly notify the other party of:
(i) the receipt by such party of any notice or other
communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions
contemplated by this Agreement;
(ii) the receipt by such party of any notice or other
communication from any Governmental Authority in connection with
the transactions contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of such party's knowledge
threatened against, or affecting such party which, if pending on
the date of this Agreement, would have been required to have been
disclosed pursuant to this Agreement or which relate to the
consummation of the transactions contemplated by this Agreement.
ARTICLE X
CONDITIONS TO THE MERGER
SECTION 10.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of the Company and MergerSub to consummate the Merger are subject to
the satisfaction of the following conditions:
(a) If required by Delaware Corporate Law, this Agreement shall
have been approved in accordance with Delaware Corporate Law by the affirmative
vote of the holders of a majority in voting interests of the shares of Common
Stock.
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(b) Any applicable waiting period under the HSR Act relating to
the Merger shall have expired or been terminated.
(c) The Committee on Foreign Investments in the United States
(the "CFIUS") shall have concluded a review of the notification pursuant to the
Exon-Florio Provision and shall have issued a written notice of its
determination not to conduct a full investigation.
(d) No provision of any applicable Law and no judgment, order,
decree or injunction shall prohibit or restrain the consummation of the Merger;
provided, however, that the parties shall each use their reasonable best efforts
to have any such judgment, order, decree or injunction vacated.
(e) Representations shall have been obtained from the DOD under
the National Industrial Security Program Regulations that UMI will be able to
own after the Merger those portions of the business of the Surviving Corporation
that are governed by the National Industrial Security Program Regulations,
either unconditionally or subject only to such conditions as are customarily
imposed under the National Industrial Security Program, e.g. restrictions on the
ability of foreign nationals to access classified information, and are not, in
the judgment of UMI, after consultation with the Company, to the extent
practicable, materially burdensome to UMI and its affiliates.
(f) MergerSub shall have accepted for payment and paid for all
Shares validly tendered in the Offer and not withdrawn.
SECTION 10.2 CONDITIONS TO THE OBLIGATIONS OF UMI AND MERGERSUB.
The obligations of UMI and MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) The Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained in
this Agreement shall be true in all material respects at and as of the Effective
Time (provided that representations made as of a specific date shall be required
to be true as of such date only) as if made at and as of such time and MergerSub
shall have received a certificate signed by the Chief Executive Officer and the
Chief Financial Officer of the Company to his knowledge to the foregoing effect;
(b) There shall not be pending (i) any action or proceeding by
any Governmental Authority or (ii) any action or proceeding by any other Person,
in any case referred to in clauses (i) and (ii), before any court or
Governmental Authority that has reasonable likelihood of success seeking to (w)
make illegal, to delay materially or otherwise directly or indirectly to
restrain or prohibit the consummation of the Merger or seeking to obtain
material damages, (x) restrain or prohibit UMI's (including its affiliates)
ownership or operation of all or any material portion of the business or assets
of the Surviving Corporation or the Company, or to compel UMI or any of its
affiliates to dispose of or hold separate all or any material portion of the
business or assets of the Surviving Corporation or the Company, (y) impose or
confirm material limitations on the ability of UMI or any of its affiliates to
effectively control the business or operations of the Surviving Corporation or
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the Company or effectively to exercise full rights of ownership of the shares of
Common Stock, including, without limitation, the right to vote any Shares
acquired or owned by UMI or any of its affiliates on all matters properly
presented to the Company's stockholders, or (z) require divestiture by UMI or
any of its affiliates of any material amount of shares, and no court, arbitrator
or Governmental Authority shall have issued any judgment, order, decree or
injunction, and there shall not be any statute, rule or regulation, that, in the
sole judgment of UMI is likely, directly or indirectly, to result in any of the
consequences referred to in the preceding clauses (w) through (z); provided,
however, that UMI shall use its reasonable best efforts to have any such
judgment, order, decree or injunction vacated;
(c) The parties shall have received, each in form and substance
satisfactory to UMI and MergerSub, all authorizations, consents, orders and
approvals of all Governmental Authorities and officials, including, without
limitation, approvals or agreements required by the DOD under the National
Industrial Security Program Regulations, and all third party consents and
estoppel certificates, which UMI and MergerSub deem necessary or desirable for
the consummation of the transactions contemplated by this Agreement or the
conduct of the business of the Company and its Subsidiaries by UMI after the
Merger;
(d) The aggregate number of Dissenting Shares shall not equal 10%
or more of the shares of the Company outstanding as of the record date for the
Company Stockholder Meeting; and
(e) Since the date of this Agreement, there shall not have
occurred any change, event, occurrence, development or circumstance which,
individually or in the aggregate, has had, or would reasonably be expected to
have, a Material Adverse Effect on the Company.
SECTION 10.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.
The obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further conditions:
(a) UMI and MergerSub shall have performed in all material
respects all of their obligations hereunder required to be performed by it at or
prior to the Effective Time, the representations and warranties of UMI and
MergerSub contained in this Agreement and in any certificate or other writing
delivered by it pursuant hereto shall be true in all material respects at and as
of the Effective Time (provided that representations made as of a specific date
shall be required to be true as of such date only) as if made at and as of such
time and the Company shall have received a certificate signed by the President
or any Vice President of UMI to the foregoing effect; and
(b) The Board of Directors of the Company shall have received
advice, reasonably satisfactory to the Board, from an independent advisor to the
effect that the transactions contemplated herein are fair and reasonable to the
Company and its stockholders.
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ARTICLE XI
TERMINATION
SECTION 11.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
(a) By mutual written consent of the Company on the one hand and
UMI and MergerSub on the other hand;
(b) By either the Company or MergerSub, if the Offer has not been
consummated within 120 days of the date of this Agreement (the "TERMINATION
DATE"), provided that the party seeking to exercise such right is not then in
breach in any material respect of any of its obligations under this Agreement;
and provided, further that the Termination Date may be extended for one (1)
additional 30-day period in the event no party is in breach of this Agreement
and the sole condition to the Merger that remains unsatisfied is the consent,
authorization or approval of a Governmental Authority;
(c) By either the Company or UMI and MergerSub at any time prior
to the consummation of the Offer, if UMI and MergerSub (in the case of
termination by the Company) or the Company (in the case of termination by UMI
and MergerSub) shall have breached in any material respect any of its covenants
or obligations under this Agreement or any representation or warranty of UMI and
MergerSub (in the case of termination by the Company) or of the Company (in the
case of termination by UMI and MergerSub) shall have been incorrect in any
material respect when made or at any time prior to the Effective Time (unless
such breach is capable of cure and, in such case, the breaching party shall not
have cured such breach within 15 days after the receipt of written notice from
the non-breaching party to the breaching party of such breach);
(d) By either the Company or UMI and MergerSub, if any court of
competent jurisdiction in the United States or other United States federal or
state Governmental Authority shall have issued a final order, decree or ruling,
or taken any other final action restraining, enjoining or otherwise prohibiting
acceptance for payment of, or payment for, Shares pursuant to the Offer or
Shares pursuant to the Merger and such order, decree, ruling or other action is
or shall have become nonappealable;
(e) By UMI and MergerSub (i) if prior to the consummation of the
Offer and to the extent permitted by SECTION 7.5, the Board of Directors of the
Company shall have withdrawn, or modified or changed in a manner adverse to UMI
and MergerSub its approval or recommendation of this Agreement or the Merger or
shall have approved a Third Party Acquisition; or (ii) if there shall have
occurred a Third Party Acquisition; or (iii) if the Company, or any of the
Company's officers, directors, employees, representatives or agents, shall take
any of the actions described in the first sentence of SECTION 7.5(a) hereof,
other than the proviso thereto;
(f) By the Company at any time prior to the consummation of the
Offer, if the Company has approved a Superior Proposal in accordance with
SECTION 7.5(b), provided the Company has complied with all provisions thereof,
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including the notice provisions therein, and that it makes simultaneous payment
of the Termination Fee;
(g) By the Company if (i) the Offer shall not be commenced upon
the twentieth business day immediately following the date of this Agreement;
PROVIDED, that the failure to so commence has not been caused by and does not
result from the failure of the Company to perform any of its representations,
warranties, covenants or agreements contained in this Agreement or (ii)
MergerSub terminates the Offer; or
(h) By UMI and MergerSub at any time prior to the consummation of
the Offer, if the Offer is terminated or expires in accordance with its terms
without MergerSub having purchased any Shares and pursuant to ANNEX A hereto and
ARTICLE II hereof, MergerSub is neither required to accept and pay for the
Shares tendered in the Offer nor extend the expiration date of the Offer,
provided that UMI and MergerSub may not terminate this Agreement pursuant to
this SECTION 11.1(h) of UMI or MergerSub is in material breach of this
Agreement.
The party desiring to terminate this Agreement pursuant to SECTIONS
11.1(b) through (h) shall give written notice of such termination to the other
party in accordance with SECTION 12.1.
SECTION 11.2 TERMINATION FEE.
(a) Notwithstanding any other provision of this Agreement, if
this Agreement is terminated pursuant to either of SECTIONS 11.1(e) or 11.l(f),
then the Company shall immediately pay to UMI a break-up fee of Two Million
Dollars ($2,000,000) (the "TERMINATION FEE"). The parties hereto agree that the
Termination Fee is not a penalty, but rather is liquidated damages in a
reasonable amount that will compensate MergerSub for the costs incurred, efforts
expended and opportunities foregone while negotiating this Agreement and in
reliance on this Agreement and on the expectation of the consummation of the
transactions contemplated hereby, which amount would otherwise be impossible to
calculate with precision.
SECTION 11.3 EFFECT OF TERMINATION. If this Agreement is
terminated pursuant to SECTION 11.1, this Agreement shall become void and of no
effect with no liability on the part of any party hereto except to the extent
that such termination results from the willful and material breach by a party of
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any representation, warranty or covenant contained in this Agreement except that
the agreements contained in the last proviso of SECTION 7.4 and SECTIONS 11.2,
11.3, 12.1, 12.4 and 12.7 shall survive the termination hereof.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to UMI or MergerSub, to:
Union Miniere USA Inc.
3120 Highwood Blvd
Suite 110
Raleigh, NC 27604
Attention: Richard Laird, Executive Vice President
Telephone: (919) 874-7156
Facsimile: (919) 874-7195
with a copy to:
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, DC 20005
Attention: J. Hovey Kemp, Esq.
Telephone: (202) 637-5623
Facsimile: (202) 637-5910
if to the Company, to:
Laser Power Corporation
36570 Briggs Road
Munrieta, CA 92563
Attention: Dick Sharman
Telephone: (909) 926-1986
Facsimile: (909) 926-9026
with a copy to:
Best Best & Krieger
3750 University Avenue
P.O. Box 1026
Riverside, California 92502
Attention: George Reyes, Esq.
Telephone: (909) 686-1450
Facsimile: (909) 686-3083
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or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (ii) if given by any other
means when delivered at the address specified in this SECTION 12.1.
SECTION 12.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall survive until (but not beyond) the
Effective Time. This SECTION 12.2 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Effective
Time.
SECTION 12.3 AMENDMENTS' NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment by the Company and MergerSub or
in the case of a waiver, by the party against whom the waiver is to be
effective; provided that after the adoption of this Agreement by the
stockholders of the Company, there shall be no amendment that by law requires
further approval by the stockholders of the Company without the further approval
of such stockholders.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by Law.
SECTION 12.4 EXPENSES. Except as provided in Sections 7.5 and 11.2,
all costs and expenses incurred in connection with this Agreement shall be paid
by the party incurring such cost or expense.
SECTION 12.5 TRANSFER TAXES. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar taxes (including
interest, penalties and additions to any such Taxes) ("TRANSFER TAXES") incurred
in connection with the transactions contemplated by this Agreement shall be paid
by either MergerSub or the Surviving Corporation, and the Company shall
cooperate with MergerSub in preparing, executing and filing any returns with
respect to such Transfer Taxes.
SECTION 12.6 SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto.
SECTION 12.7 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware.
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SECTION 12.8 COUNTERPARTS; EFFECTIVENESS; FACSIMILE TRANSMISSION.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the other
parties hereto. Signatures of a party to this Agreement or other documents
executed in connection herewith which are sent to the other parties by facsimile
transmission shall be binding as evidence of acceptance of the terms hereof or
thereof by such signatory party, with originals to be circulated to the other
parties in due course.
SECTION 12.9 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 12.10 SPECIFIC PERFORMANCE. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties, for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder.
SECTION 12.11 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, (i) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement and (ii) except for the
provisions of ARTICLE III and SECTION 8.2, is not intended to confer upon any
Person other than the parties any rights or remedies.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURES
----------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
LASER POWER CORPORATION
By: /s/ Dick Sharman
-----------------------------------------------
Name: Dick Sharman
Title: Chief Executive Officer
UNION MINIERE USA INC.
By: /s/ Richard C. Laird
-----------------------------------------------
Name: Richard C. Laird
Title: Executive Vice President
ACEC, INC.
By: /s/ Richard C. Laird
-----------------------------------------------
Name: Richard C. Laird
Title: Vice President
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ANNEX A
-------
TENDER OFFER CONDITIONS
The capitalized terms used but not defined in this ANNEX A shall have
the meanings set forth in the Agreement to which it is annexed.
Notwithstanding any other provision of the Offer and subject to the
provisions of the Merger Agreement, MergerSub 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 MergerSub's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares tendered pursuant to the Offer and
may terminate or amend the Offer and may postpone the acceptance of, and payment
for, any Shares, if:
(i) there shall not have been validly tendered and not properly
withdrawn prior to the expiration of the Offer a number of Shares which,
together with the Shares owned by UMI on the date of this Agreement, represent
in the aggregate a majority of all issued and outstanding Shares, on a fully
diluted basis ("on a fully-diluted basis" meaning, at any time, the number of
Shares outstanding, together with the Shares which the Company may be required
to issue pursuant to options or other obligations outstanding at such time under
employee stock or similar benefit plans or otherwise, whether or not vested or
then exercisable), on the date of purchase (the "MINIMUM CONDITION");
(ii) any applicable waiting period (and any extension thereof)
under the HSR Act shall not have expired or been terminated; or
(iii) CFIUS shall not have concluded a review of the notification
pursuant to the Exon-Florio Provision or shall not have issued a written notice
of its determination not to conduct a full investigation;
(iv) Representations shall not have been obtained from the DOD
under the National Industrial Security Program Regulations that UMI will be able
to own after the Merger those portions of the business of the Surviving
Corporation that are governed by the National Industrial Security Program,
either unconditionally or subject only to such conditions as are customarily
imposed under the National Industrial Security Program Regulations, E.G.
restrictions on the ability of foreign nationals to access classified
information, and are not, in the judgment of UMI, after consultation with the
Company, to the extent practicable, materially burdensome to UMI and its
affiliates; or
(v) if, at any time on or after the date of the Merger Agreement
and at or before the time of payment for any such Shares (whether or not any
Shares have theretofore been accepted for payment or paid for pursuant to the
Offer) any of the following shall occur:
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(a) there shall be instituted or pending any action or
proceeding by any Governmental Entity before any court of competent jurisdiction
or Governmental Entity, (i) challenging or seeking to, or which would reasonably
be expected to make, illegal, impede, materially delay or otherwise directly or
indirectly restrain or prohibit the Offer or the Merger, (ii) seeking to
prohibit or materially limit the ownership or operation by UMI or MergerSub of
all or any material portion of the business or assets of the Company and the
Company Subsidiaries taken as a whole or to compel UMI or MergerSub to dispose
of or hold separately all or any material portion of the business or assets of
UMI and the UMI Subsidiaries taken as a whole or the Company and the Company
Subsidiaries taken as a whole, or seeking to impose any limitation on the
ability of UMI or MergerSub to conduct its business or own such assets, (iii)
seeking to impose limitations on the ability of UMI or MergerSub effectively to
exercise full rights of ownership of the shares of Common Stock, including,
without limitation, the right to vote any shares of Common Stock acquired or
owned by MergerSub or UMI on all matters properly presented to the Company's
shareholders, (iv) seeking to require divestiture by UMI or MergerSub of any
shares of Common Stock or (v) seeking any material diminution in the benefits
expected to be derived by UMI or MergerSub as a result of the transactions
contemplated by the Offer or the Merger;
(b) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended or issued and applicable to or deemed
applicable to (i) UMI, MergerSub, the Company or any Company Subsidiary or (ii)
the Offer or the Merger, by any legislative body, court or Governmental Entity,
other than the routine application of the waiting period provisions of the HSR
Act, to the Offer or to the Merger, that would reasonably be expected to result
directly or indirectly in any of the consequences referred to in paragraph (a)
above;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any United States
securities exchange or in any United States over-the-counter market, for a
period in excess of three hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) any material
limitation (whether or not mandatory) by any United States Federal or United
States state or governmental authority or agency on, the extension of credit by
banks or other financial institutions, or (iv) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(d) any representation or warranty of the Company contained
in the Agreement that (i) is qualified as to Company Material Adverse Effect
shall not be true and correct as of the date of consummation of the Offer as
though made on or as of such date (other than representations and warranties
which by their terms address matters as of another specified date, which shall
be true and correct as of such other specified date), or (ii) is not qualified
as to Company Material Adverse Effect shall not be true and correct (except
where the failure of any such representation or warranty referred to in this
clause (ii) to be so true and correct would not, in the aggregate, have a
Company Material Adverse Effect), as of the date of consummation of the Offer as
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though made on or as of such date (other than representations and warranties
which by their terms address matters as of another specified date, which shall
be true and correct as of such other specified date);
(e) the Company shall have failed to perform in any material
respect any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed or
complied with by it under the Merger Agreement;
(f) the Merger Agreement shall have been terminated in
accordance with its terms; or
(g) since the date of this Agreement, there shall have
occurred an event, change, effect or development which would reasonably be
expected to have a Company Material Adverse Effect;
which, in the reasonable judgment of MergerSub, in any such case and regardless
of the circumstances (including any action or inaction by UMI or MergerSub)
giving rise to any such condition, makes it inadvisable to proceed with the
Offer and/or with such acceptance for payment of, or payment for, Shares.
The foregoing conditions are for the sole benefit of UMI and MergerSub,
subject to the Company's rights under the Merger Agreement, and may be asserted
by UMI or MergerSub, or may be waived by UMI or MergerSub, in whole or in part
at any time and from time to time in their respective sole discretion. The
failure by UMI or MergerSub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
52
