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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 12 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 23, 1997
The Peak Technologies Group, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware 0-20078 22-3028807
(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
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600 Madison Avenue, New York, NY 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 832-2833
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On April 23, 1997, The Peak Technologies Group, Inc., a Delaware
corporation (the "Company"), entered into an Agreement and Plan of Merger (the
"Merger Agreement"), among the Company, Moore U.S.A. Inc., a Delaware
corporation ("Parent") and Kirkwood Acquisition Corp., a Delaware corporation
and an indirect wholly-owned subsidiary of Parent ("Sub").
Pursuant to the Merger Agreement and subject to certain conditions
contained therein, Sub has agreed to promptly, and in no event later than
Tuesday, April 29, 1997, commence a tender offer for all outstanding shares of
common stock of the Company (the "Shares"), at a purchase price of $18.00 per
share net to the seller in cash (the "Offer"). The obligation of Sub to accept
for payment, and pay for, any Shares pursuant to the Offer is subject to certain
conditions, including, but not limited to (i) there having been validly tendered
and not withdrawn prior to the expiration of the Offer such number of shares
that would constitute a majority of the outstanding Shares (determined on a
fully-diluted basis for all outstanding stock options and any other rights to
acquire Shares) and (ii) any waiting period under the HSR Act (as defined in the
Merger Agreement) and the German Competition Act (as defined in the Merger
Agreement) applicable to the purchase of Shares pursuant to the Offer having
expired or been terminated.
The Merger Agreement further provides that, following the expiration of
the Offer and subject to the satisfaction or waiver of certain conditions (i)
all of the issued and outstanding Shares (other than Shares canceled pursuant to
the Merger Agreement and any Shares the holders of which have exercised
appraisal rights under Delaware law) will be converted into the right to receive
in the Merger $18.00 per Share (or any greater amount paid per Share in the
Offer) in cash, and (ii) Sub will be merged with and into the Company (the
"Merger") with the Company to continue as the surviving corporation.
In connection with the Merger Agreement, on April 23, 1997, the Company
and ChaseMellon Shareholder Services, as Rights Agent (the "Rights Agent"),
entered into an amendment (the "Rights Amendment") to the Rights Agreement,
dated as of March 28, 1997, by and between the Company and the Rights Agent (the
"Rights Agreement"), having the effect of exempting the events and transactions
contemplated by the Merger Agreement from the Rights Agreement.
The Merger Agreement and the Rights Amendment are attached hereto as
Exhibits 2 and 10, respectively, and are incorporated herein by reference. The
foregoing descriptions of the Merger Agreement and the Rights Amendment are
qualified in their entirety by reference to such documents.
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Additional information with respect to the transaction is included in the
press release of the company issued April 23, 1997 attached hereto as Exhibit
99.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibit No. Description
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(2) Agreement and Plan of Merger, dated as
of April 23, 1997, among Moore U.S.A.,
Inc., Kirkwood Acquisition Corp. and The
Peak Technologies Group, Inc.
(10) First Amendment to the Rights Agreement, dated as
of April 23, 1997, between the Company and
ChaseMellon Shareholder Services, as Rights Agent.
(99) The Peak Technologies Group, Inc. Press
Release, dated April 23, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Peak Technologies Group
Date: April 25, 1997 By: /s/ Edward A. Stevens
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Name: Edward A. Stevens
Title: Executive Vice President,
Chief Financial Officer,
Chief Accounting Officer,
Director
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THE PEAK TECHNOLOGIES GROUP, INC.
EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
Exhibit
(2) Agreement and Plan of Merger, dated as of
April 23, 1997, among Moore U.S.A., Inc.,
Kirkwood Acquisition Corp. and The Peak
Technologies Group, Inc.
(10) First Amendment to the Rights Agreement, dated as of April 23,
1997, between the Company and ChaseMellon Shareholder Services,
as Rights Agent.
(99) The Peak Technologies Group, Inc. Press Release, dated
April 23, 1997.
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Exhibit 2
AGREEMENT AND PLAN OF MERGER
Among
MOORE U.S.A. INC.,
KIRKWOOD ACQUISITION CORP.
and
THE PEAK TECHNOLOGIES GROUP, INC.
Dated as of April 23, 1997
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TABLE OF CONTENTS
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ARTICLE I The Offer ..................................................... 2
SECTION 1.01. The Offer ............................................. 2
SECTION 1.02. Company Actions ....................................... 4
ARTICLE II The Merger ................................................... 6
SECTION 2.01. The Merger ............................................ 6
SECTION 2.02. Closing ............................................... 6
SECTION 2.03. Effective Time ........................................ 6
SECTION 2.04. Effects of the Merger ................................. 6
SECTION 2.05. Certificate of Incorporation and By-
laws ............................................ 7
SECTION 2.06. Directors ............................................. 7
SECTION 2.07. Officers .............................................. 7
ARTICLE III Effect of the Merger on the Capital Stock
of the Constituent Corporations;
Exchange of Certificates ............................... 7
SECTION 3.01. Effect on Capital Stock ............................... 7
SECTION 3.02. Exchange of Certificates .............................. 9
ARTICLE IV Representations and Warranties of the
Company ................................................ 11
SECTION 4.01. Organization .......................................... 11
SECTION 4.02. Subsidiaries .......................................... 11
SECTION 4.03. Capitalization ........................................ 12
SECTION 4.04. Authority ............................................. 13
SECTION 4.05. Consents and Approvals; No Violations ................. 13
SECTION 4.06. SEC Reports and Financial Statements .................. 14
SECTION 4.07. Absence of Certain Changes or Events .................. 15
SECTION 4.08. No Undisclosed Liabilities ............................ 17
SECTION 4.09. Information Supplied .................................. 17
SECTION 4.10. Benefit Plans ......................................... 18
SECTION 4.11. Other Compensation Arrangements ....................... 20
SECTION 4.12. Litigation ............................................ 20
SECTION 4.13. Compliance with Applicable Law ........................ 20
SECTION 4.14. Tax Matters ........................................... 21
SECTION 4.15. State Takeover Statutes ............................... 23
SECTION 4.16. Brokers; Fees and Expenses ............................ 23
SECTION 4.17. Opinion of Financial Advisor .......................... 24
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SECTION 4.18. Intellectual Property ................................. 24
SECTION 4.19. Rights Agreement ...................................... 26
SECTION 4.20. Labor Matters ......................................... 27
ARTICLE V Representations and Warranties of Parent
and Sub. ............................................... 28
SECTION 5.01. Organization .......................................... 28
SECTION 5.02. Authority ............................................. 28
SECTION 5.03. Consents and Approvals; No Violations ................. 29
SECTION 5.04. Information Supplied .................................. 29
SECTION 5.05. Interim Operations of Sub. ............................ 30
SECTION 5.06. Brokers ............................................... 30
SECTION 5.07. Financing ............................................. 30
SECTION 5.08. Share Ownership ....................................... 30
ARTICLE VI Covenants .................................................... 30
SECTION 6.01. Covenants of the Company .............................. 30
SECTION 6.02. No Solicitation ....................................... 35
SECTION 6.03. Other Actions ......................................... 37
ARTICLE VII Additional Agreements ....................................... 38
SECTION 7.01. Stockholder Approval; Preparation of
Proxy Statement ................................. 38
SECTION 7.02. Access to Information ................................. 39
SECTION 7.03. Reasonable Efforts .................................... 39
SECTION 7.04. Options; Concord Warrants ............................. 40
SECTION 7.05. Directors ............................................. 42
SECTION 7.06. Fees and Expenses ..................................... 43
SECTION 7.07. Indemnification; Insurance ............................ 44
SECTION 7.08. Certain Litigation .................................... 44
ARTICLE VIII Conditions ................................................. 45
SECTION 8.01. Conditions to Each Party's Obligation
To Effect the Merger ............................ 45
ARTICLE IX Termination and Amendment .................................... 46
SECTION 9.01. Termination ........................................... 46
SECTION 9.02. Effect of Termination ................................. 47
SECTION 9.03. Amendment ............................................. 48
SECTION 9.04. Extension; Waiver ..................................... 48
ARTICLE X Miscellaneous ................................................. 48
SECTION 10.01. Nonsurvival of Representations and
Warranties ...................................... 48
SECTION 10.02. Notices .............................................. 49
SECTION 10.03. Interpretation ....................................... 50
SECTION 10.04. Counterparts ......................................... 50
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SECTION 10.05. Entire Agreement; Third Party
Beneficiaries ...................................... 51
SECTION 10.06. Governing Law ........................................... 51
SECTION 10.07. Publicity ............................................... 51
SECTION 10.08. Assignment .............................................. 51
SECTION 10.09. Enforcement ............................................. 51
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Exhibits
Exhibit A - Conditions of the Offer
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AGREEMENT AND PLAN OF MERGER dated as of April 23, 1997, among MOORE
U.S.A. INC., a Delaware corporation ("Parent"), KIRKWOOD ACQUISITION CORP., a
Delaware corporation and an indirect wholly owned subsidiary of Parent ("Sub"),
and THE PEAK TECHNOLOGIES GROUP, INC., a Delaware corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in the Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to
cause Sub to make a tender offer (as it may be amended from time to time as
permitted under the Agreement, the "Offer") to purchase all the outstanding
shares of Common Stock, par value $0.01 per share, of the Company (the "Company
Common Stock"; all the outstanding shares of Company Common Stock being
hereinafter collectively referred to as the "Shares") including the associated
Rights (as defined in Section 4.19 of the Agreement) at a purchase price of $18
per share (the "Offer Price"), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the
Agreement; and the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger (as defined below), recommending that the
Company's stockholders accept the Offer and approving the acquisition of Shares
by Sub pursuant to the Offer;
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have each approved the merger of Sub into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in the Agreement, whereby
each share of Company Common Stock, other than shares of Company Common Stock
owned directly or indirectly by Parent or the Company and Dissenting Shares (as
defined in Section 3.01(d)), will be converted into the right to receive the
price per share paid in the Offer; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
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ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Subject to the provisions of the
Agreement, as promptly as practicable but in no event later than five business
days after the date of the public announcement by Parent and the Company of the
execution and delivery of this Agreement, Sub shall, and Parent shall cause Sub
to, commence the Offer. The obligation of Sub to, and of Parent to cause Sub to,
commence the Offer and accept for payment, and pay for, any Shares tendered
pursuant to the Offer shall be subject to the conditions set forth in Exhibit A
(the "Offer Conditions") and to the terms and conditions of the Agreement. Sub
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, Sub shall not (i) reduce the number of
Shares subject to the Offer, (ii) reduce the Offer Price, (iii) add to the Offer
Conditions, (iv) except as provided in the next sentence, extend the Offer, (v)
change the form of consideration payable in the Offer, (vi) amend any other term
of or add any new term to the Offer in any manner materially adverse to the
holders of the Shares or (vii) waive the Minimum Condition (as defined in
Exhibit A). Notwithstanding the foregoing, Sub may, without the consent of the
Company, (A) Subject to Section 9.01(b)(i)(Y), extend the Offer, if at the
scheduled or extended expiration date of the Offer any of the Offer Conditions
shall not be satisfied or waived, until such time as such conditions are
satisfied or waived, (B) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or the staff thereof applicable to the Offer, (C) extend the Offer
from time to time until two business days after the expiration of the last to
expire of the waiting period under the HSR Act (as defined in Section 4.05
below) and Section 24 a, Subsection 2, sentence 1 of the German Law Against
Restraints of Trade (the "German Competition Act") and (D) extend the Offer for
a period not to exceed 15 business days, notwithstanding that all conditions to
the Offer are satisfied as of such expiration date of the Offer, if, immediately
prior to such expiration date (as it may be extended), the Shares tendered and
not withdrawn pursuant to the Offer equal less than 90% of the outstanding
Shares (on a fully diluted basis). Subject to the terms and conditions of the
Offer and the Agreement, Sub shall, and Parent shall cause Sub to, accept for
payment, and pay for, all Shares validly tendered and not withdrawn pursuant to
the Offer that Sub becomes obligated to accept for payment, and pay for,
pursuant to the Offer as soon as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer
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Statement on Schedule 14D-1 (the "Schedule 14D-1") with respect to the Offer,
which shall contain an offer to purchase and a related letter of transmittal and
summary advertisement (such Schedule 14D-1 and the documents included therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "Offer Documents"). Parent and Sub agree that the Offer
Documents shall comply as to form in all material respects with the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and the Offer Documents, on the date first
published, sent or given to the Company's stockholders, 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 were made, not misleading, except
that no representation or warranty is made by Parent or Sub with respect to
information supplied by the Company or any of its stockholders specifically for
inclusion or incorporation by reference in the Offer Documents. Parent, Sub and
the Company each agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and Parent and Sub further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable securities laws. The Company and its counsel shall be given
reasonable opportunity to review and comment upon the Offer Documents prior to
their filing with the SEC or dissemination to the stockholders of the Company.
Parent and Sub agree to provide the Company and its counsel any comments Parent,
Sub or their counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds necessary to accept for payment, and pay for, any Shares that
Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer.
(d) The Company agrees that neither the Offer nor purchases of
Shares thereunder breach the terms of the Confidentiality Agreement (as defined
in Section 7.02 below).
SECTION 1.02. Company Actions. (a) The Company hereby approves of
and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, duly adopted resolutions approving
the Agreement, the Offer and the Merger, determining that the terms of the Offer
and the Merger are fair to, and in the best interests of, the Company's
stockholders and
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recommending that the Company's stockholders accept the Offer, tender their
shares pursuant to the Offer and approve and adopt the Agreement. The Company
represents that such approval constitutes approval of the Offer, the Agreement
and the transactions contemplated hereby, including the Merger, for purposes of
Section 203 of the Delaware General Corporation Law, as amended (the "DGCL"),
such that Section 203 of the DGCL will not apply to the transactions
contemplated by the Agreement. The Company represents that its Board of
Directors has received the opinion of William Blair & Company dated as of April
22, 1997 that the proposed consideration to be received by the holders of Shares
pursuant to the Offer and the Merger is fair to such holders from a financial
point of view, and a complete and correct signed copy of such opinion has been
delivered by the Company to Parent for inclusion in the Offer Documents.
(b) At the time the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendation described in
paragraph (a) and shall mail the Schedule 14D-9 to the stockholders of the
Company. The Schedule 14D-9 shall comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, 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 were made, not misleading, except
that no representation or warranty is made by the Company with respect to
information supplied by Parent or Sub specifically for inclusion in the Schedule
14D-9. Each of the Company, Parent and Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. Parent and its counsel shall be given reasonable opportunity to
review and comment upon the Schedule 14D-9 prior to its filing with the SEC or
dissemination to stockholders of the Company. The Company agrees to provide
Parent and its counsel any comments 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.
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(c) In connection with the Offer and the Merger, the Company shall
furnish or cause its transfer agent to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares, and shall
furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
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, Parent and Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if the Agreement shall be terminated, will, upon request, deliver, and will use
their best efforts to cause their agents to deliver, to the Company all copies
of such information then in their possession or control.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in the Agreement, and in accordance with DGCL, Sub shall be
merged with and into the Company at the Effective Time (as defined in Section
2.03). Following the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights and
obligations of Sub in accordance with the DGCL. At the election of Parent, any
direct or indirect wholly owned subsidiary (as defined in Section 10.03) of
Moore Corporation Limited may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties agree to execute an
appropriate amendment to the Agreement in order to reflect the foregoing.
SECTION 2.02. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. (New York City time) on a date to be specified by
Parent or Sub, which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VIII (the "Closing
Date"), at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New
York, New York 10112, unless another date, time or place is agreed to in writing
by the parties hereto.
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SECTION 2.03. Effective Time. Subject to the provisions of the
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State, or at
such other time as Sub and the Company shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 2.05. Certificate of Incorporation and By-laws. (a) The
Restated Certificate of Incorporation of the Company, as in effect immediately
prior to the Effective Time, shall be amended as of the Effective Time so that
ARTICLE FOURTH of such certificate of incorporation reads in its entirety as
follows: "The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1000 shares of Common Stock, par
value $.01 per share" and, as so amended, such certificate of incorporation
shall be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(b) The by-laws of the Company as in effect immediately prior to the
Effective Time shall be the by-laws of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be, and the Company shall
procure, prior to and as a condition to the Closing, the resignation of each of
its directors effective as of the Closing.
SECTION 2.07. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
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ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.01. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become 1000 fully paid and
nonassessable shares of Common Stock, par value $.01 per share, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. Each
share of Company Common Stock that is owned by the Company or by any subsidiary
of the Company and each Share that is owned by Parent, Sub or any other
subsidiary of Parent shall automatically be canceled and retired and shall cease
to exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to Section 3.01(d),
each Share issued and outstanding (other than Shares to be canceled in
accordance with Section 3.01(b)) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the price paid in the
Offer (the "Merger Consideration"). As of the Effective Time, all such Shares
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in
the Agreement to the contrary, any issued and outstanding Shares held by a
person (a "Dissenting Stockholder") who complies with all the provisions of
Delaware law concerning the right of holders of Company Common Stock to dissent
from the Merger and require appraisal of their Shares ("Dissenting Shares")
shall not be converted as described in Section 3.01(c) but shall become the
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the laws of the State of Delaware. If, after
the Effective Time, such Dissenting Stockholder withdraws his demand for
appraisal or fails to perfect or otherwise loses his right of appraisal, in any
case pursuant to the DGCL, his Shares shall be deemed to be converted as of the
Effective Time into the right to receive the Merger Consideration. The Company
shall give Parent (i) prompt notice of any demands for appraisal of
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Shares received by the Company and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to any such demands. The
Company shall not, without the prior written consent of Parent, make any payment
with respect to, or settle, offer to settle or otherwise negotiate, any such
demands.
(e) Withholding Tax. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Common Stock outstanding immediately prior to the Effective
Time such amounts as may be required to be deducted and withheld with respect to
the making of such payment under the Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Common Stock outstanding immediately prior to the Effective Time in respect of
which such deduction and withholding was made.
SECTION 3.02. Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as paying agent in the Merger (the
"Paying Agent"), and, from time to time on, prior to or after the Effective
Time, Parent shall make available, or cause the Surviving Corporation to make
available, to the Paying Agent funds in amounts and at the times necessary for
the payment of the Merger Consideration upon surrender of certificates
representing Shares as part of the Merger pursuant to Section 3.01 (it being
understood that any and all interest earned on funds made available to the
Paying Agent pursuant to the Agreement shall be turned over to Parent).
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount
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of cash into which the Shares theretofore represented by such Certificate shall
have been converted pursuant to Section 3.01, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of Shares
that is not registered in the transfer records of the Company, payment may be
made to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the payment to a
person other than the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 3.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the amount of cash, without
interest, into which the Shares theretofore represented by such Certificate
shall have been converted pursuant to Section 3.01. No interest will be paid or
will accrue on the cash payable upon the surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of Certificates in accordance with the terms of this
Article III shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificates. At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Paying Agent for any reason, they
shall be canceled and exchanged as provided in this Article III.
(d) Termination of Fund; No Liability. At any time following six
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) which had been made available to the Paying Agent
and which have not been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
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pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedule attached to this Agreement
setting forth exceptions to the Company's representations and warranties set
forth herein (the "Company Disclosure Schedule"), the Company represents and
warrants to Parent and Sub as set forth below. The Company Disclosure Schedule
will be arranged in sections corresponding to sections of this Agreement to be
modified by such disclosure schedule.
SECTION 4.01. Organization. The Company and each of its subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power and authority would not have a material adverse effect (as defined in
Section 10.03) on the Company. The Company and each of its subsidiaries is duly
qualified or licensed to do business and in good standing in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary, except
in such jurisdictions where the failure to be so duly qualified or licensed and
in good standing would not have a material adverse effect on the Company or
prevent or materially delay the consummation of the Offer and/or the Merger. The
Company has made available to Parent complete and correct copies of its Amended
and Restated Certificate of Incorporation and By-laws and the certificates of
incorporation and by-laws (or similar organizational documents) of its
subsidiaries.
SECTION 4.02. Subsidiaries. The subsidiaries of the Company are as
set forth on Schedule 4.02. All the outstanding shares of capital stock of each
such subsidiary, other than director qualifying shares of foreign subsidiaries,
are owned by the Company, by another wholly owned subsidiary of the Company or
by the Company and another wholly owned subsidiary of the Company, free and
clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens"), except for
immaterial Liens on outstanding shares of capital stock of foreign subsidiaries
of the Company, and are duly authorized, validly issued, fully paid and
nonassessable. Except for the capital stock of its subsidiaries, the Company
does not own, directly or
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indirectly, any capital stock or other ownership interest in any corporation,
partnership, joint venture or other entity.
SECTION 4.03. Capitalization. The authorized capital stock of the
Company consists of 15,000,000 shares of Company Common Stock and 2,000,000
shares of preferred stock, par value $0.01 per share ("Company Preferred
Stock"). At the close of business on April 15, 1997, (i) 9,297,472 shares of
Company Common Stock were issued and outstanding, (ii) 8250 shares of Company
Common Stock were held by the Company in its treasury, (iii) 970,329 shares of
Company Common Stock were reserved for issuance upon exercise of outstanding
Options (as defined in Section 7.04), (iv) a maximum of 12,250 shares of Company
Common Stock were issuable upon the exercise of certain outstanding warrants,
(v) 100,000 shares of Preferred Stock are designated as Series A Junior
Participating Preferred Stock, none of which are issued and outstanding and (vi)
112,991 shares of Company Common Stock have been reserved for issuance pursuant
to the Company ESPPs (as defined in Section 7.04). Except as set forth above and
except for Shares issued upon the exercise of Options since April 15, 1997, as
of the date of the Agreement, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or outstanding. All
outstanding shares of capital stock of the Company are, and all shares which may
be issued will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company may vote. Except as set
forth above, and except for obligations to grant options, subject to the
approval of the Board of Directors of the Company, as of the date of the
Agreement, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date of the Agreement, there
are not any outstanding contractual obligations (i) of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or (ii) of the Company to vote or to dispose of any shares
of the capital stock of any of its subsidiaries.
SECTION 4.04. Authority. The Company has the requisite corporate
power and authority to execute and
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deliver the Agreement and to consummate the transactions contemplated hereby
(other than, with respect to the Merger, the approval and adoption of the terms
of the Agreement by the holders of a majority of the Shares (the "Company
Stockholder Approval")). The execution, delivery and performance of the
Agreement and the consummation by the Company of the Merger and of the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize the Agreement or to
consummate the transactions so contemplated (in each case, other than, with
respect to the Merger, the Company Stockholder Approval). The Agreement has been
duly executed and delivered by the Company and, assuming the Agreement
constitutes a valid and binding obligation of Parent and Sub, constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
SECTION 4.05. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Schedule 14D-9 and a proxy statement relating to any
required approval by the Company's stockholders of the Agreement (the "Proxy
Statement")), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the German Competition Act, the DGCL, the laws of other
states in which the Company is qualified to do or is doing business, state
takeover laws and foreign laws, neither the execution, delivery or performance
of the Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of the Amended and Restated Certificate of Incorporation or
By-laws of the Company or of the similar organizational documents of any of its
subsidiaries, (ii) require any filing with, or permit, authorization, consent or
approval of, any Federal, state or local government or any court, tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, domestic, foreign or supranational (a "Governmental
Entity") (except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not have a material adverse
effect on the Company or prevent or materially delay the consummation of the
Offer and/or the Merger), (iii) except as set forth on Schedule 4.05, result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right
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of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which any of them or any of
their properties or assets may be bound, provided, however, that certain
contracts and agreements, the material ones of which have been identified to
Parent by the Company, (A) provide for their termination upon a change of
control of the Company or (B) contain provisions restricting their assignment,
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) or (iv) for violations, breaches or
defaults that would not have a material adverse effect on the Company or prevent
or materially delay the consummation of the Offer and/or the Merger.
SECTION 4.06. SEC Reports and Financial Statements. The Company has
filed with the SEC, and has heretofore made available to Parent true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it since December 31, 1994, under the Exchange
Act or the Securities Act of 1933 (the "Securities Act") (such forms, reports,
schedules, statements and other documents, including any financial statements or
schedules included therein, are referred to as the "Company SEC Documents"). The
Company SEC Documents, at the time filed, (a) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (b) complied in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as the case may be, and the applicable rules and regulations
of the SEC thereunder. Except to the extent revised or superseded by a
subsequently filed Company Filed SEC Document (as defined in Section 4.07) (a
copy of which has been made available to Parent prior to the date hereof) or by
the Company's annual earnings press release dated April 1, 1997, the Company SEC
Documents and such press release, considered as a whole as of their date, do not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that the foregoing does not cover
future events resulting from public announcement of the Offer and the Merger).
The financial statements of the Company included in the Company SEC Documents
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have
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been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Forms 10-Q and 8-K of the SEC) and fairly present (subject, in the
case of the unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of the Company and its consolidated subsidiaries
as at the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended.
SECTION 4.07. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed and publicly available prior to the
date of the Agreement (the "Company Filed SEC Documents"), and except as
disclosed in the Company's financial statements dated as of December 31, 1996
audited by Ernst & Young LLP (the "Company 1996 Financial Statements") (a copy
of which has been delivered to Parent by the Company), and except as
contemplated by Section 7.04, since December 31, 1996, the Company and its
subsidiaries have conducted their respective businesses only in the ordinary
course, and there has not been any material adverse change (as defined in
Section 10.03) with respect to the Company. Except as disclosed in the Company
Filed SEC Documents or the Company 1996 Financial Statements, since December 31,
1996, there has not been (i) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock or any
redemption, purchase or other acquisition of any of its capital stock, (ii) any
split, combination or reclassification of any of its capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (iii) (w) any
granting by the Company or any of its subsidiaries to any officer of the Company
or any of its subsidiaries of any increase in compensation, except in the
ordinary course of business (including in connection with promotions) consistent
with past practice, (x) any granting by the Company or any of its subsidiaries
to any such officer of any increase in severance or termination pay, except as
part of a standard employment package to any person promoted or hired (but not
including the five most senior officers), (y) except employment arrangements in
the ordinary course of business consistent with past practice with employees
other than any executive officer of the Company, any entry by the Company or any
of its subsidiaries into any employment, severance or termination agreement with
any such employee or executive officer or (z) except as contemplated by Section
7.04, any increase in or establishment of any bonus, insurance, deferred
compensation, pension, retirement, profit-sharing, stock option (including the
granting of stock options, stock appreciation rights, performance awards or
restricted stock awards or the amendment of any existing
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stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan or agreement or
arrangement, except in the ordinary course of business consistent with past
practice, (iv) any damage, destruction or loss, whether or not covered by
insurance, that has or reasonably could be expected to have a material adverse
effect on the Company, (v) any revaluation by the Company of any of its material
assets, (vi) any material change in accounting methods, principles or practices
by the Company or (vii) (A) any licensing or other agreement with regard to the
acquisition or disposition of any material Intellectual Property (as defined in
Section 4.18) or rights thereto other than licenses or other agreements in the
ordinary course of business consistent with past practice or (B) any amendment
or consent with respect to any licensing agreement filed, or required to be
filed, by the Company with the SEC.
SECTION 4.08. No Undisclosed Liabilities. Except as and to the
extent set forth in the Company 1996 Financial Statements, as of December 31,
1996, neither the Company nor any of its subsidiaries had any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, that
would be required by generally accepted accounting principles to be reflected on
a consolidated balance sheet of the Company and its subsidiaries (including the
notes thereto). Since December 31, 1996, except as and to the extent set forth
in the Company Filed SEC Documents, neither the Company nor any of its
subsidiaries has incurred any liabilities of any nature, whether or not accrued,
contingent or otherwise, that would have a material adverse effect on the
Company. The Company and its subsidiaries do not have consolidated indebtedness
for borrowed money in excess of $30,000,000.
SECTION 4.09. Information Supplied. None of the information supplied
or to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or
(iv) the Proxy Statement, will, in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times the Offer
Documents, the Schedule 14D-9 and the Information Statement are filed with the
SEC or first published, sent or given to the Company's stockholders, or, in the
case of the Proxy Statement, at the time the Proxy Statement is first mailed to
the Company's stockholders or at the time of the Stockholders Meeting (as
defined in Section 7.01), 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
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misleading. The Schedule 14D-9, the Information Statement and the Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference therein.
SECTION 4.10. Benefit Plans. (a) Each "employee pension benefit
plan" (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) (a "Pension Plan"), "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA) (a "Welfare Plan") and each other
plan, binding pensions arrangement or policy (written or oral) relating to stock
options, stock purchases, compensation, deferred compensation, bonuses,
severance, fringe benefits or other employee benefits, in each case maintained
or contributed to, or required to be maintained or contributed to, by the
Company or its subsidiaries for the benefit of any present or former employee,
officer or director (each of the foregoing, a "Benefit Plan") has been
administered in all material respects in accordance with its terms, except for
such failures which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect. The Company and its subsidiaries and
all the Benefit Plans are in compliance in all material respects with the
applicable provisions of ERISA, the Code, all other applicable laws, except for
such failures which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect.
(b) Schedule 4.10 attached hereto sets forth a complete list of each
Benefit Plan as well as each employment, termination and severance agreement,
contract, binding arrangement and understanding (whether written or oral) with
employees of the Company and its subsidiaries.
(c) None of the Pension Plans is subject to Title IV of ERISA or
Section 412 of the Code and none of the Company or any other person or entity
that, together with the Company, is treated as a single employer under Section
414 (b), (c), (m) or (o) of the Code (each, including the Company, a "Commonly
Controlled Entity"): (i) currently contributes to, or during any time during the
last six years had an obligation to contribute to, a Pension Plan subject to
Title IV of ERISA or Section 412 of the Code, or (ii) has incurred any liability
to the Pension Benefit Guaranty Corporation (other than for payment of premiums
not yet due), which liability has not been fully paid. All contributions and
other payments required to be made by the Company to any Pension Plan with
respect to any period ending before the
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Closing Date have been made or reserves adequate for such contributions or other
payments have been or will be set aside therefor and have been or will be
reflected in financial statements, except for such failures which, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect.
(d) Neither the Company nor any Commonly Controlled Entity is
required to contribute to any "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where such
withdrawal has resulted or would result in any "withdrawal liability" (within
the meaning of Section 4201 of ERISA) or "mass withdrawal liability" within the
meaning of PBGC Regulation 4219.2 that has not been fully paid.
(e) Each Benefit Plan that is a Welfare Plan may be amended or
terminated, upon thirty (30) days notice, at any time after the Effective Time
without material liability to the Company or its subsidiaries.
(f) Except as set forth in Schedule 4.10, or as required under
Section 4980B of the Code, the Company does not have any obligation to provide
post-retirement health benefits.
(g) The Company has heretofore delivered to Parent correct and
complete copies of each of the following:
(1) All written, and descriptions of all binding oral,
employment, termination and severance agreements, contracts, arrangements
and understandings listed on Schedule 4.10;
(2) Each Benefit Plan and all amendments thereto; the trust
instrument and/or insurance contracts, if any, forming a part of such
Benefit Plan and all amendments thereto;
(3) The most recent IRS Form 5500 and all schedules thereto,
if any;
(4) The most recent determination letter issued by the IRS
regarding the qualified status of each such Pension Plan;
(5) The most recent accountant's report, if any; and
(6) The most recent summary plan description, if any.
SECTION 4.11. Other Compensation Arrangements. Except as disclosed
in the Company Filed SEC Documents or on
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Schedule 4.11, or except as provided in the Agreement, as of the date of the
Agreement, neither the Company nor any of its subsidiaries is a party to any
binding oral or written (i) consulting agreement not terminable on not more than
60 calendar days notice (except for third party agreements for the development
of, and assignment to, the Company of Intellectual Property in the ordinary
course of business) and involving the payment of more than $100,000 per annum,
(ii) agreement with any executive officer or other key employee of the Company
or any of its subsidiaries (x) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving the Company of the nature contemplated by the Agreement or (y)
providing any term of employment or compensation guarantee extending for a
period longer than two years or the payment of more than $100,000 per annum or
(iii) agreement or plan, including any stock option plan, stock appreciation
right plan, restricted stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by the
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by the Agreement.
SECTION 4.12. Litigation. There is no suit, claim, action,
proceeding or investigation pending before any Governmental Entity or, to the
best knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to have a material adverse effect
on the Company. Neither the Company nor any of its subsidiaries is subject to
any outstanding order, writ, injunction or decree that could reasonably be
expected to have a material adverse effect on the Company.
SECTION 4.13. Compliance with Applicable Law. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Company Permits"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals that would not
have a material adverse effect on the Company. The Company and its subsidiaries
are in compliance with the terms of the Company Permits, except where the
failure so to comply would not have a material adverse effect on the Company.
Except as disclosed in the Company Filed SEC Documents, to the best knowledge of
the Company, the businesses of the Company and its subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity, except for possible violations that would not have a material adverse
effect on the Company or prevent or materially delay the consummation of the
Offer and/or the Merger. As of the date of the Agreement, no investigation or
review by any
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Governmental Entity with respect to the Company or any of its subsidiaries is
pending or, to the best knowledge of the Company, threatened, nor has any
Governmental Entity indicated an intention to conduct any such investigation or
review, other than, in each case, those the outcome of which would not be
reasonably expected to have a material adverse effect on the Company or prevent
or materially delay the consummation of the Offer and/or the Merger.
SECTION 4.14. Tax Matters. (a) The Company and each of its
subsidiaries has timely filed all Federal income tax returns and all other
material tax returns and reports required to be filed by it. All such returns
are complete and correct in all material respects (except to the extent a
reserve has been established on the financial statements contained in the
Company Filed SEC Documents or the Company 1996 Financial Statements). Each of
the Company and its subsidiaries (i) has paid (or the Company has paid on its
subsidiaries' behalf) to the appropriate authorities all taxes required to be
paid by it (without regard to whether a tax return is required), except taxes
for which an adequate reserve has been established on the financial statements
contained in the Company Filed SEC Documents or the Company 1996 Financial
Statements, and (ii) has withheld and paid to the appropriate authorities all
material withholding taxes required to be withheld by it. The most recent
financial statements contained in the Company Filed SEC Documents reflect an
adequate reserve for all taxes payable by the Company and its subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements.
(b) No Federal income tax return or other material tax return of the
Company or any of its subsidiaries is under audit or examination by any taxing
authority, and no written or unwritten notice of such an audit or examination
has been received by the Company or any of its subsidiaries. Each material
deficiency resulting from any audit or examination relating to taxes by any
taxing authority has been paid, except for deficiencies being contested in good
faith. No material issues relating to taxes were raised in writing by the
relevant taxing authority in any completed audit or examination that can
reasonably be expected to recur in a later taxable period. The Federal income
tax returns of the Company and each of its subsidiaries do not contain any
positions that could give rise to a material substantial understatement penalty
within the meaning of Section 6662 of the Code.
(c) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any taxes and no
power of attorney with respect to any taxes has been executed or filed with any
taxing authority.
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(d) No material liens for taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries, except for liens for taxes
not yet due.
(e) None of the Company or any of its subsidiaries is a party to or
is bound by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to taxes (including any advance
pricing agreement, closing agreement or other agreement relating to taxes with
any taxing authority).
(f) None of the Company or any of its subsidiaries shall be required
to include in a taxable period ending after the Effective Time taxable income
attributable to income that accrued in a prior taxable period but was not
recognized in any prior taxable period as a result of the installment method of
accounting, the completed contract method of accounting, the long-term contract
method of accounting, the cash method of accounting or Section 481 of the Code
or comparable provisions of state, local or foreign tax law.
(g) Neither the Company nor any of its subsidiaries (i) is a party
to a safe harbor lease within the meaning of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect prior to amendment by the Tax
Equity and Fiscal Responsibility Act of 1982, (ii) is a "consenting corporation"
under Section 341(f) of the Code, (iii) has agreed or is obligated to make any
payments for services which would not be deductible pursuant to Sections
162(a)(1), 162(m) or 280G of the Code, (iv) has participated in an international
boycott as defined in Section 999 of the Code, or (v) is required to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(i) As used in the Agreement, "taxes" shall include all Federal,
state, local and foreign income, property, sales, excise, withholding and other
taxes, tariffs or governmental charges of any nature whatsoever.
SECTION 4.15. State Takeover Statutes. The Board of Directors of the
Company has approved the Offer, the Merger, the Agreement and the acquisition of
Shares by Sub pursuant to the Offer and such approval is sufficient to render
inapplicable to the Offer, the Merger, the Agreement and the transactions
contemplated by the Agreement and the provisions of Section 203 of the DGCL. To
the actual knowledge of the Company without investigation, no other state
takeover statute or similar statute or regulation applies or purports to apply
to the Offer, the Merger, the Agreement, or any of the transactions contemplated
by the Agreement.
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SECTION 4.16. Brokers; Fees and Expenses. No broker, investment
banker, financial advisor or other person, other than William Blair & Company,
the fees and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by the Agreement based upon
arrangements made by or on behalf of the Company. The estimated fees and
expenses incurred and to be incurred by the Company in connection with the
Agreement and the transactions contemplated by the Agreement (including the fees
of the Company's legal counsel and the legal counsel for its financial advisor)
are set forth in a letter dated April 23, 1997 from the Company to Parent. The
Company represents that it has not, and covenants, without the prior written
consent of Parent, not to request that Goldman, Sachs & Co. undertake a study to
enable Goldman Sachs & Co. to render their opinion as to the fairness of the
financial consideration to be received by stockholders of the Company or the
Company.
SECTION 4.17. Opinion of Financial Advisor. The Company has received
the opinion of William Blair & Company, dated April 22, 1997, to the effect
that, as of that date, the consideration to be received in the Offer and the
Merger by the Company's stockholders is fair from a financial point of view, and
a complete and correct signed copy of such opinion has been, or promptly upon
receipt thereof will be, delivered to Parent.
SECTION 4.18. Intellectual Property. (a) Except as listed on
Schedule 4.18, the Company has made available to Parent true and correct copies
of all license agreements relating to Intellectual Property to which the Company
and its subsidiaries are a party that are material, individually or in the
aggregate, to the Company and its subsidiaries and its and their operations,
taken as a whole.
(b) Except to the extent that the inaccuracy of any of the following
(or the circumstances giving rise to such inaccuracy) would not have a material
adverse effect on the Company:
(1) the Company and each of its subsidiaries owns, or is
licensed or otherwise has the right to use (in each case, clear of any
liens or encumbrances of any kind), all Intellectual Property used in or
necessary for the conduct of its business as currently conducted;
(2) no claims are pending or, to the best knowledge of the
Company, threatened that the Company or any of its subsidiaries is
infringing on or otherwise violating the rights of any person with
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regard to any Intellectual Property owned by and/or licensed to the
Company or its subsidiaries;
(3) to the best knowledge of the Company, no person is
infringing on or otherwise violating any right of the Company or any of
its subsidiaries with respect to any Intellectual Property owned by and/or
licensed to the Company or its subsidiaries;
(4) none of the former or current members of management or key
personnel of the Company or any of its subsidiaries, including all former
and current employees, agents, consultants and contractors who have
contributed to or participated in the conception and development of
computer software or other Intellectual Property of the Company or any of
its subsidiaries have any valid claim against the Company or any of its
subsidiaries in connection with the involvement of such persons in the
conception and development of any computer software or other Intellectual
Property of the Company or any of its subsidiaries, and no such claim has
been asserted or threatened;
(5) except as set forth in Schedule 4.18, the execution and
delivery of the Agreement, compliance with its terms and the consummation
of the transactions contemplated hereby do not and will not conflict with
or result in any violation or default (with or without notice or lapse of
time or both) or give rise to any right, license or encumbrance relating
to Intellectual Property owned by the Company or its subsidiaries or with
respect to which the Company or its subsidiaries now has or has had any
agreement with any third party, or right of termination, cancellation or
acceleration of any material Intellectual Property right or obligation set
forth in any agreement to which the Company or its subsidiaries are a
party, or the loss or encumbrance of any Intellectual Property or material
benefit related thereto, or result in or require the creation, imposition
or extension of any lien or encumbrance upon any Intellectual Property or
right, other than certain contracts and agreements, the material ones of
which have been identified to Parent by the Company, that (A) provide for
their termination upon a change of control of the Company or (B) contain
provisions restricting their assignment;
(6) except as set forth in Schedule 4.18, and except in the
ordinary course of business consistent with past practice, no licenses or
rights have been granted to distribute the source code of, or to use
source code to create Derivative Works (as hereinafter defined) of any
product currently marketed by, commercially available from or under
development by
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the Company or any of its subsidiaries for which the Company possesses the
source code; and
(7) the Company and each of its subsidiaries has taken
reasonable and necessary steps to protect their Intellectual Property and
their rights thereunder, and to the best knowledge of the Company no such
rights to Intellectual Property have been lost or are in jeopardy of being
lost through failure to act by the Company or any of its subsidiaries.
As used herein, "Derivative Work" shall mean a work that is
based upon one or more preexisting works, such as a revision, enhancement,
modification, abridgment, condensation, expansion or any other form in
which such preexisting works may be recast, transformed or adapted, and
which, if prepared without authorization of the owner of the copyright in
such preexisting work, would constitute a copyright infringement. For
purposes hereof, a Derivative Work shall also include any compilation that
incorporates such a preexisting work as well as translations from one
human language to another and from one type of code to another.
(c) For purposes of the Agreement, "Intellectual Property" shall
mean trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works, whether copyrighted,
copyrightable or not in any jurisdiction; registration or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights and computer
programs and software (including source code, object code and data); licenses,
immunities, covenants not to sue and the like relating to the foregoing; and any
claims or causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing.
SECTION 4.19. Rights Agreement. The Company has taken all action
which may be necessary under the Rights Agreement dated as of March 28, 1997
between the Company and ChaseMellon Shareholder Services, as Rights Agent (the
"Rights Agreement"), so that (x) the execution of the Agreement and any
amendments thereto by the parties hereto
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and the consummation of the transactions contemplated thereby shall not cause
(i) Parent and/or Sub to become an Acquiring Person (as defined in the Rights
Agreement) or (ii) a Distribution Date or a Shares Acquisition Date (as such
terms are defined in the Rights Agreement) to occur, irrespective of the number
of Shares acquired pursuant to the Offer, and (y) the Rights (as defined in the
Rights Agreement) shall not be exercisable and shall expire immediately prior to
the Effective Time.
SECTION 4.20. Labor Matters (a) Neither the Company nor any of its
subsidiaries is a party to any employment, labor or collective bargaining
agreement and there are no employment, labor or collective bargaining agreements
which pertain to employees of the Company or its subsidiaries.
(b) No employees of the Company or its subsidiaries are represented
by any labor organization; no labor organization or group of employees of the
Company or its subsidiaries has made a pending demand for recognition or
certification to the Company or its subsidiaries and, to the knowledge of the
Company, there are no representation or certification proceedings or petitions
seeking a representation proceeding presently pending or threatened to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority relating to the Company or its subsidiaries. To
the knowledge of the Company, there are no organizing activities involving the
Company or its subsidiaries pending with any labor organization or group of
employees of the Company or its subsidiaries.
(c) There are no unfair labor practice charges, grievances or
complaints pending or, to the knowledge of the Company, threatened in writing by
or on behalf of any employee or group of employees of the Company or its
subsidiaries.
(d) There are no complaints, charges, or claims against the Company
or its subsidiaries pending, or threatened in writing to be brought or filed,
with any Governmental Entity or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment or any individual by the Company or its subsidiaries.
(e) The Company and its subsidiaries are in material compliance with
all laws and regulations governing the employment of labor, including, but not
limited to, all such laws and regulations relating to wages, hours, collective
bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or Social
Security taxes and
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similar taxes except where noncompliance individually or in the aggregate will
not have a material adverse effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 5.01. Organization. Each of Parent and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power
and authority would not be reasonably expected to prevent or materially delay
the consummation of the Offer and/or the Merger.
SECTION 5.02. Authority. Parent and Sub have requisite corporate
power and authority to execute and deliver the Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of the
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Parent and Sub
and no other corporate proceedings on the part of Parent and Sub are necessary
to authorize the Agreement or to consummate such transactions. No vote of Parent
shareholders is required to approve the Agreement or the transactions
contemplated hereby. The Agreement has been duly executed and delivered by
Parent and Sub, as the case may be, and, assuming the Agreement constitutes a
valid and binding obligation of the Company, constitutes a valid and binding
obligation of each of Parent and Sub enforceable against them in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
SECTION 5.03. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Offer Documents), the HSR Act, the German Competition
Act, the DGCL, the laws of other states in which Parent is qualified to do or is
doing business, state takeover laws and foreign laws, neither the execution,
delivery or performance of the Agreement by Parent and Sub nor the consummation
by Parent and Sub of the transactions contemplated hereby will (i) conflict with
or result in any
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breach of any provision of the respective certificate of incorporation or
by-laws of Parent and Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not be reasonably expected to prevent or materially delay the
consummation of the Offer and/or the Merger), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, contract, agreement or other
instrument or obligation to which Parent or any of its subsidiaries is a party
or by which any of them or any of their properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) and (iv) for violations, breaches or
defaults which would not, individually or in the aggregate, be reasonably
expected to prevent or materially delay the consummation of the Offer and/or the
Merger.
SECTION 5.04. Information Supplied. None of the information supplied
or to be supplied by Parent or Sub specifically for inclusion or incorporation
by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Offer Documents will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
SECTION 5.05. Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
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SECTION 5.06. Brokers. No broker, investment banker, financial
advisor or other person, other than Lazard Freres & Co. LLC, the fees and
expenses of which will be paid by Parent, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by the Agreement based upon arrangements made by or on
behalf of Parent or Sub.
SECTION 5.07. Financing. Parent has sufficient funds readily
available to purchase, or to cause Sub to purchase, all the Shares pursuant to
the Offer and the Merger and to pay all fees and expenses related to the
transactions contemplated by the Agreement.
SECTION 5.08. Share Ownership Neither Parent or
Sub owns any Shares.
ARTICLE VI
COVENANTS
SECTION 6.01. Covenants of the Company. Until such time as Parent's
designees shall constitute a majority of the members of the Board of Directors
of the Company, the Company agrees as to itself and its subsidiaries that
(except as expressly contemplated or permitted by the Agreement, or to the
extent that Parent shall otherwise consent in writing):
(a) Ordinary Course. The Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted (it
being understood that the foregoing does not cover future events resulting from
public announcement of the Offer and the Merger) and shall use all reasonable
efforts to preserve intact their present business organizations, keep available
the services of their present officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
the Company and its subsidiaries.
(b) Dividends; Changes in Stock. The Company shall not, and shall
not permit any of its subsidiaries to, (i) declare or pay any dividends on or
make other distributions in respect of any of its capital stock, except for
dividends by a direct or indirect wholly owned subsidiary of the Company to its
parent, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or (iii) repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or its
subsidiaries or any
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other securities thereof except pursuant to contracts existing on the date of
the Agreement.
(c) Issuance of Securities. The Company shall not, and shall not
permit any of its subsidiaries to, issue, deliver, sell, pledge or encumber, or
authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any
shares of its capital stock of any class or any securities convertible into, or
any rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interest (including
stock appreciation rights or phantom stock) other than (i) the issuance of
shares of Company Common Stock upon the exercise of Options outstanding on the
date of the Agreement and in accordance with the terms of such Options, (ii) the
issuance of shares of Company Common Stock upon the exercise of warrants
outstanding on the date of the Agreement and in accordance with the terms of
such warrants as of the date of the Agreement and (iii) issuances of Company
Common Stock under ESPPs in accordance with Section 7.04(d).
(d) Governing Documents. The Company shall not, and shall not permit
any of its subsidiaries to, amend or propose to amend its certificate of
incorporation or by-laws (or similar organizational documents).
(e) No Acquisitions. The Company shall not, and shall not permit any
of its subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, joint venture, association or other business
organization or division thereof or (ii) any assets that are material,
individually or in the aggregate, to the Company and its subsidiaries taken as a
whole, except purchases of inventory in the ordinary course of business
consistent with past practice.
(f) No Dispositions. Other than sales or licenses of its products to
customers in the ordinary course of business consistent with past practice, the
Company shall not, and shall not permit any of its subsidiaries to, sell, lease,
license, encumber or otherwise dispose of, or agree to sell, lease, license,
encumber or otherwise dispose of, any of its assets, except for the disposition
of equipment in the ordinary course of business consistent with past practice.
(g) Indebtedness. The Company shall not, and shall not permit any of
its subsidiaries to, (i) incur (which shall not be deemed to include entering
into credit agreements, lines of credit or similar agreements until borrowings
are made under such agreements) any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or warrants or rights
to
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acquire any debt securities of the Company or any of its subsidiaries, guarantee
any debt securities of others, enter into any "keep-well" or other agreement to
maintain any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, except for
working capital borrowings incurred in the ordinary course of business
consistent with past practice, or (ii) make any loans, advances or capital
contributions to, or investments in, any other person, other than, with respect
to both clause (i) and (ii) above, (A) to the Company or any direct or indirect
wholly owned subsidiary of the Company or (B) any advances to employees in
accordance with past practice.
(h) Advice of Changes; Filings. The Company shall confer with Parent
on a regular and frequent basis as reasonably requested by Parent, report on
operational matters and promptly advise Parent orally and, if requested by
Parent, in writing of any material adverse change with respect to the Company.
The Company shall promptly provide to Parent (or its counsel) copies of all
filings made by the Company with any Governmental Entity in connection with the
Agreement and the transactions contemplated hereby.
(i) Tax Matters. Neither the Company nor any of its subsidiaries
shall make any tax election that would have a material effect on the tax
liability of the Company or any of its subsidiaries or settle or compromise any
material income tax liability of the Company or any of its subsidiaries. The
Company shall, before filing or causing to be filed any material tax return of
the Company or any of its subsidiaries, consult with Parent and its advisors as
to the positions and elections that may be taken or made with respect to such
return, and shall take such positions or make such elections as the Company and
Parent shall jointly agree.
(j) Capital Expenditures. Neither the Company nor any of its
subsidiaries shall make or agree to make any new capital expenditure or
expenditures other than in accordance with the Company's 1997 Operating Plan,
which plan has been made available to Parent.
(k) Discharge of Liabilities. The Company shall not, and shall not
permit any of its subsidiaries to, pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of (i) liabilities recognized or disclosed in
the Company 1996 Financial Statements, (ii) liabilities not required by
generally accepted accounting principles to be recognized or disclosed therein,
or (iii) liabilities
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incurred since the date of such financial statements in the ordinary course of
business consistent with past practice. The Company shall not, and shall not
permit any of its subsidiaries to, willfully waive the benefits of, or agree to
modify in any manner, any confidentiality, standstill or similar agreement to
which the Company or any of its subsidiaries is a party.
(l) Material Contracts. Except in the ordinary course of business,
neither the Company nor any of its subsidiaries shall (i) modify, amend or
terminate any material contract or agreement to which the Company or such
subsidiary is a party, (ii) waive, release or assign any material rights or
claims or (iii) grant any rights to Intellectual Property except for licenses in
the ordinary course of business consistent with past practice. The employment
agreements entered into in connection with the transactions contemplated hereby
are "material contracts or agreements."
(m) Compensation of Company Employees. Except as provided in Section
7.04, the Company and its subsidiaries will not, without the prior written
consent of Parent, except as may be required by law, (i) enter into, adopt,
amend or terminate any Company Benefit Plan or other employee benefit plan or
any agreement, arrangement, plan or policy for the benefit of any director,
officer or current or former employee, (ii) except for normal increases or
bonuses in the ordinary course of business consistent with past practice that,
in the aggregate, do not result in a material increase in benefits or
compensation expense to the Company, increase in any manner the compensation or
fringe benefits of, or pay any bonus to, any director, officer or employee or
(iii) pay any benefit not required by any plan or arrangement as in effect as of
the date hereof (including the granting of, acceleration of exercisability of or
vesting of stock options, stock appreciation rights or restricted stock).
(n) General. The Company shall not, and shall not permit any of its
subsidiaries to, authorize any of, or commit or agree to take any of, the
foregoing actions described in this Section 6.01.
(o) Goldman Sachs Engagement Letter. The Company shall deliver to
Parent as promptly as practicable following the date hereof a fully executed
engagement letter from Goldman, Sachs & Co. in the form of that attached to the
Company Disclosure Schedule as Schedule 6.01(o). The breach of this obligation
shall constitute a failure of condition (f) of the Conditions of the Offer
attached hereto as Exhibit A.
SECTION 6.02. No Solicitation. (a) The Company and its officers,
directors, employees, representatives and agents shall immediately cease any
discussions or
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negotiations with any parties that may be ongoing with respect to a Takeover
Proposal (as hereinafter defined). The Company shall not, nor shall it permit
any of its subsidiaries to, authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage (including by way of
furnishing information), or take any other action to facilitate, any inquiries
or the making of any proposal which constitutes, or may reasonably be expected
to lead to, any Takeover Proposal or (ii) participate in any discussions or
negotiations regarding any Takeover Proposal; provided, however, that if, at any
time prior to the acceptance for payment of Shares pursuant to the Offer, the
Board of Directors of the Company determines in good faith, after consultation
with outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Company
may, in response to an unsolicited Takeover Proposal, and subject to compliance
with Section 6.02(c), (x) furnish information with respect to the Company to any
person pursuant to a confidentiality agreement in a form approved by the Company
and Parent (such approval not to be unreasonably withheld) and (y) participate
in negotiations regarding such Takeover Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any director or executive officer of the Company or
any of its subsidiaries or any investment banker, financial advisor, attorney,
accountant or other representative of the Company or any of its subsidiaries,
whether or not such person is purporting to act on behalf of the Company or any
of its subsidiaries or otherwise, shall be deemed to be a breach of this Section
6.02(a) by the Company. For purposes of the Agreement, "Takeover Proposal" means
any inquiry, proposal or offer from any person relating to any direct or
indirect acquisition or purchase of 20% or more of the assets of the Company and
its subsidiaries or 20% or more of any class of equity securities of the Company
or any of its subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any of its subsidiaries, any
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by the Agreement, or any other transaction the consummation of
which could reasonably be expected to impede, interfere with, prevent or
materially delay the Offer and/or the Merger or which would reasonably be
expected to dilute materially the benefits to Parent of the transactions
contemplated hereby.
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(b) Except as set forth in this Section 6.02, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such Board of Directors or such committee of the Offer, the
Agreement or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Takeover Proposal or (iii) cause the Company to enter into any
agreement with respect to any Takeover Proposal. Notwithstanding the foregoing,
in the event that prior to the acceptance for payment of Shares pursuant to the
Offer the Board of Directors of the Company determines in good faith, after
consultation with outside counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders under applicable
law, the Board of Directors of the Company may (subject to the other provisions
of Section 6.02) withdraw or modify its approval or recommendation of the Offer,
the Agreement and the Merger, approve or recommend a Superior Proposal (as
defined below), cause the Company to enter into an agreement with respect to a
Superior Proposal or terminate the Agreement, but in each case only at a time
that is after the second business day following Parent's receipt of written
notice (a "Notice of Superior Proposal") advising Parent 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. In the event that a Notice of Superior
Proposal is delivered and any material term or condition of the Superior
Proposal described therein is subsequently changed, the Company shall deliver a
supplemental Notice of Superior Proposal describing such change and may withdraw
or modify its approval or recommendation of the Offer, the Agreement and the
Merger, approve or recommend the modified Superior Proposal or cause the Company
to enter into an agreement with respect to the modified Superior Proposal only
at a time that is after the second business day following Parent's receipt of
the supplemental Notice of Superior Proposal. In addition, if the Company
proposes to enter into an agreement with respect to any Takeover Proposal, it
shall concurrently with entering into such agreement pay, or cause to be paid,
to Parent the Termination Fee (as such term is defined in Section 7.06(b)). For
purposes of the Agreement, a "Superior Proposal" means any bona fide proposal
made by a third party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, more than 50% of the shares of Company
Common Stock then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to the
Company's stockholders than the Offer and the Merger.
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(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.02, the Company shall immediately
advise Parent orally and in writing of any request for information or of any
Takeover Proposal, the material terms and conditions of such request or Takeover
Proposal and the identity of the person making such request or Takeover
Proposal. The Company will keep Parent fully informed of the status and details
(including amendments or proposed amendments) of any such request or Takeover
Proposal.
(d) Nothing contained in this Section 6.02 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with outside counsel,
failure so to disclose would be inconsistent with its fiduciary duties to the
Company's stockholders under applicable law; provided, however, neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 6.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Offer, the Agreement or the Merger or
approve or recommend, or propose to approve or recommend, a Takeover Proposal.
SECTION 6.03. Other Actions. The Company shall not, and shall not
permit any of its subsidiaries to, take any action that would, or that could
reasonably be expected to, result in (i) any of the representations and
warranties of the Company set forth in the Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the Offer Conditions not being satisfied (subject to the Company's right to
take actions specifically permitted by Section 6.02).
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ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholder Approval; Preparation of Proxy Statement.
(a) If the Company Stockholder Approval is required by law, the Company will, at
Parent's request, as soon as practicable following the acceptance for payment
of, and payment for, any Shares by Sub pursuant to the Offer and the expiration
of the Offer, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining the
Company Stockholder Approval. The Company will, through its Board of Directors,
recommend to its stockholders that the Company Stockholder Approval be given.
Notwithstanding the foregoing, if Sub or any other subsidiary of Parent shall
acquire at least 90% of the outstanding Shares, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a Stockholders Meeting in accordance with Section 253 of the DGCL.
Without limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to the first sentence of this Section 7.01(a) shall not be
affected by (i) the commencement, public proposal, public disclosure or
communication to the Company of any Takeover Proposal or (ii) the withdrawal or
modification by the Board of Directors of the Company of its approval or
recommendation of the Offer, the Agreement or the Merger.
(b) If the Company Stockholder Approval is required by law, the
Company will, at Parent's request, as soon as practicable following the
acceptance for payment of, and payment for, any Shares by Sub pursuant to the
Offer and the expiration of the Offer, prepare and file a preliminary Proxy
Statement with the SEC and will use its best efforts to respond to any comments
of the SEC or its staff and to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after responding to all such
comments to the satisfaction of the staff. The Company will notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. If at any time prior to the Stockholders Meeting there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, the Company will promptly prepare and mail to its
stockholders such an amendment or supplement. The Company will not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects.
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(c) Parent agrees to cause all Shares purchased pursuant to the
Offer and all other Shares owned by Parent or any subsidiary of Parent to be
voted in favor of the Company Stockholder Approval.
SECTION 7.02. Access to Information. Upon reasonable notice and
subject to restrictions contained in confidentiality agreements to which the
Company is subject (from which it shall use reasonable efforts to be released),
the Company shall, and shall cause each of its subsidiaries to, afford to Parent
and to the officers, employees, accountants, counsel and other representatives
of Parent access, during normal business hours during the period prior to the
Effective Time, to all their respective properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its subsidiaries to) furnish promptly to Parent (a) a copy of each
report, schedule, registration statement and other document filed or received by
it during such period pursuant to the requirements of the Federal or state
securities laws or the Federal tax laws and (b) all other information concerning
its business, properties and personnel as Parent may reasonably request
(including the Company's outside accountants' work papers). Except as otherwise
agreed to by the Company, unless and until Parent and Sub shall have purchased a
majority of the outstanding Shares pursuant to the Offer, and notwithstanding
termination of the Agreement, the terms of the confidentiality agreement (the
"Confidentiality Agreement"), dated February 19, 1997 shall continue to apply.
SECTION 7.03. Reasonable Efforts. Each of the Company, Parent and
Sub agree to use its reasonable efforts to take, or cause to be taken, all
actions necessary to comply promptly with all legal requirements which may be
imposed on itself with respect to the Offer and the Merger (which actions shall
include furnishing all information required under the HSR Act, the German
Competition Act and in connection with approvals of or filings with any other
Governmental Entity) and will promptly cooperate with and furnish information to
each other in connection with any such requirements imposed upon any of them or
any of their subsidiaries in connection with the Offer and the Merger. Each of
the Company, Parent and Sub will, and will cause its subsidiaries to, use its
reasonable efforts to take all reasonable actions necessary to obtain (and will
cooperate with each other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity or other public or
private third party required to be obtained or made by Parent, Sub, the Company
or any of their subsidiaries in connection with the Offer and the Merger or the
taking of any action contemplated thereby or by the Agreement, except that no
party need waive any substantial
35
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rights or agree to any substantial limitation on its operations or to dispose of
any assets.
SECTION 7.04. Options; Concord Warrants. (a) The Company shall amend
The Peak Technologies Group, Inc. Nonqualified Stock Option Plan, The Peak
Technologies Group, Inc. Incentive Stock Option Plan, The Peak Technologies
Group, Inc. 1995 Non-Employee Directors Stock Option Program and any other
program pursuant to which there are holders of options to purchase Shares
granted by the Company (the "Options") to provide that if the optionees do not
exercise their unexercised Options within thirty (30) days of a notice that Peak
proposes to merge into another corporation, to the extent that an optionee does
not exercise within thirty (30) days of the notice the optionee shall receive,
in settlement of each Option held by the optionee, a "Cash Amount" (less any
applicable withholding taxes) with respect to the number of previously
unexercised Shares underlying the Option immediately prior to the Effective
Time. Each Option shall terminate as of the Effective Time. The Cash Amount
payable for each Option shall equal the product of (i) the Merger Consideration
minus the exercise price per Share of each such Option and (ii) the number of
previously unexercised Shares covered by each such Option.
(b) The Company shall provide notice to participants in The Peak
Technologies Group, Inc. Nonqualified Stock Option Plan, The Peak Technologies
Group, Inc. Incentive Stock Option Plan, The Peak Technologies Group Inc. 1995
Non-Employee Directors Stock Option Program and other holders of Options to
purchase Shares granted by the Company that Peak proposes to merge into another
corporation; that the Optionee under the plans or program may exercise his
Options in full for all shares not theretofore purchased by him within thirty
(30) days after such notice; and that the plans and program have been amended to
provide that to the extent an optionee does not exercise such Options within
thirty (30) days of the notice the optionee shall receive, in settlement of each
Option held by the optionee, a "Cash Amount" (less any applicable withholding
taxes) with respect to the number of previously unexercised Shares underlying
the Option immediately prior to the Effective Time. Each Option shall terminate
as of the Effective Time. The Cash Amount payable for each Option shall equal
the product of (i) the Merger Consideration minus the exercise price per Share
of each such Option and (ii) the number of previously unexercised Shares covered
by each such Option.
(c) Except as may be otherwise agreed to by Parent or Sub and the
Company, the Company's 1995 Non-Employee Directors Stock Option Program, the
Incentive Stock Option Plan and the Nonqualified Stock Option Plan (the "Option
Plans") shall terminate as of the Effective Time and the provisions in any other
plan, program or arrangement
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<PAGE> 41
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be deleted as of
the Effective Time.
(d) The Company shall use its best efforts so that following the
Effective Time no holder of employee stock options will have any right to
receive Shares upon exercise of an employee stock option.
(e) Outstanding purchase rights under the Company's Employees Stock
Purchase Plan and Global Employees Stock Purchase Plan (the "Company ESPPs")
shall be exercised upon the earlier of (i) the next scheduled purchase date
under the Company ESPPs or (ii) immediately prior to the Effective Time, and
each participant in the Company ESPPs shall accordingly be issued Shares at that
time which shall be canceled at the Effective Time and converted into the right
to receive the Merger Consideration (less any applicable withholding taxes) for
those Shares. The Company ESPPs shall terminate with such exercise date, and no
purchase rights shall be subsequently granted or exercised under the Company
ESPPs and any cash amounts held under the Company ESPPs and not applied to
acquire Shares shall be returned to the appropriate participants in such plans.
(f) Notwithstanding anything to the contrary herein, if it is
determined that compliance with any of the foregoing would cause any individual
subject to Section 16 of the Exchange Act to become subject to the profit
recovery provisions thereof, any Options held by such individual will be
canceled or purchased, as the case may be, at the Effective Time or at such
later time as may be necessary to avoid application of such profit recovery
provisions and such individual will be entitled to receive from the Company or
the Surviving Corporation an amount in cash or other consideration satisfactory
to the Surviving Corporation and such individual equal to the excess, if any, of
the Merger Consideration over the per Share exercise price of such Option
multiplied by the number of Shares subject thereto (less any applicable
withholding taxes), and the parties hereto will cooperate and take any and all
necessary actions so as to achieve the intent of the foregoing without giving
rise to such profit recovery.
(g) The Company shall give notice as promptly as permitted by the
terms thereof to each holder of a Transferrable Warrant dated as of July 20,
1993 (issued in connection with the acquisition of Concord Technologies, Inc. by
the Company) pursuant to Section 8(ii) thereof permitting such warrant holders
to exercise their warrants in full in accordance with the terms of Section 9
thereof.
SECTION 7.05. Directors. Promptly upon the acceptance for payment
of, and payment for, any Shares by Sub
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pursuant to the Offer, Sub shall be entitled to designate such number of
directors on the Board of Directors of the Company as will give Sub, subject to
compliance with Section 14(f) of the Exchange Act, a majority of such directors,
and the Company shall, at such time, cause Sub's designees to be so elected by
its existing Board of Directors; provided, however, that in the event that Sub's
designees are elected to the Board of Directors of the Company, until the
Effective Time such Board of Directors shall have at least two directors who are
directors on the date of the Agreement and who are not officers of the Company
(the "Independent Directors"); and provided further that, in such event, if the
number of Independent Directors shall be reduced below two for any reason
whatsoever, the remaining Independent Director shall designate a person to fill
such vacancy who shall be deemed to be an Independent Director for purposes of
the Agreement or, if no Independent Directors then remain, the other directors
shall designate two persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its subsidiaries, or officers or affiliates
of Parent or any of its subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of the Agreement. Subject to applicable law,
the Company shall take all action requested by Parent necessary to effect any
such election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 (provided that Sub shall have provided to
the Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company will promptly, at the option of Parent, either increase
the size of the Company's Board of Directors and/or obtain the resignation of
such number of its current directors as is necessary to enable Sub's designees
to be elected or appointed to, and to constitute a majority of, the Company's
Board of Directors as provided above.
SECTION 7.06. Fees and Expenses. (a) Except as provided below in
this Section 7.06, all fees and expenses incurred in connection with the Offer,
the Merger, the Agreement and the transactions contemplated by the Agreement
shall be paid by the party incurring such fees or expenses, whether or not the
Offer or the Merger is consummated.
(b) If (w) the Company shall terminate this Agreement pursuant to
Section 9.01(d)(i), (x) Parent shall terminate this Agreement pursuant to
Section 9.01(c)(ii) hereof, or (y) either the Company or Parent terminates this
Agreement pursuant to Section 9.01(b)(i) and (a) prior thereto there shall have
been publicly announced another Takeover Proposal or an event set forth in
paragraph (i) of Annex A shall have occurred and (b) a Takeover Proposal shall
38
<PAGE> 43
be consummated on or prior to April 30, 1998, the Company shall pay to Parent,
an amount equal to $5.6 million (the "Termination Fee"), plus an amount, not to
exceed $1.0 million, equal to Parent's actual and reasonably documented
out-of-pocket fees and expenses incurred by Parent and Sub in connection with
the Offer, the Merger, this Agreement and the consummation of the transactions
contemplated hereby, which shall be payable in same day funds. The Termination
Fee and Parent's good faith estimate of its expenses shall be paid (1) in the
case of terminations referenced in subparts (w) and (x) above, concurrently with
any such termination and (2) in the case of termination referenced in subpart
(y) above, at the time of consummation of a Takeover Proposal as described in
subpart (y)(b) above, together in each case with delivery of a written
acknowledgment by the Company of its obligation to reimburse Parent for its
actual expenses in excess of such estimated expenses payment.
SECTION 7.07. Indemnification; Insurance. (a) Parent and Sub agree
that all rights to indemnification for acts or omissions occurring prior to the
Effective Time now existing in favor of the current or former directors or
officers (the "Indemnified Parties") of the Company and its subsidiaries as
provided in their respective certificates of incorporation or by-laws (or
similar organizational documents) or existing indemnification contracts as filed
with the Company Filed SEC Documents shall survive the Merger and shall continue
in full force and effect in accordance with their terms.
(b) For six years from the Effective Time, Parent shall, unless
Parent agrees in writing to guarantee the indemnification obligations set forth
in Section 7.07(a), maintain in effect the Company's current directors' and
officers' liability insurance covering those persons who are currently covered
by the Company's directors' and officers' liability insurance policy (a copy of
which has been heretofore delivered to Parent); provided, however, that in no
event shall Parent be required to expend in any one year an amount in excess of
200% of the annual premiums currently paid by the Company for such insurance
which the Company represents is not more than $175,000; and, provided, further,
that if the annual premiums of such insurance coverage exceed such amount,
Parent shall be obligated only to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(c) This Section 7.07 shall survive the consummation of the Merger
at the Effective Time, is intended to benefit the Company, Parent, the Surviving
Corporation and the Indemnified Parties, and shall be binding on all successors
and assigns of Parent and the Surviving Corporation.
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SECTION 7.08. Certain Litigation. The Company agrees that it will
not settle any litigation commenced after the date hereof against the Company or
any of its directors by any stockholder of the Company relating to the Offer,
the Merger or the Agreement, without the prior written consent of Parent. In
addition, the Company will not voluntarily cooperate with any third party which
may hereafter seek to restrain or prohibit or otherwise oppose the Offer or the
Merger and will cooperate with Parent and Sub to resist any such effort to
restrain or prohibit or otherwise oppose the Offer or the Merger, unless the
Board of Directors of the Company determines in good faith, after consultation
with outside counsel, that failing so to cooperate with such third party or
cooperating with Parent or Sub, as the case may be, would constitute a breach of
the Board's fiduciary duties under applicable law.
ARTICLE VIII
CONDITIONS
SECTION 8.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained.
(b) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that each of
the parties shall have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered.
(c) Purchase of Shares. Sub shall have previously accepted for
payment and paid for Shares pursuant to the Offer.
(d) Competition Approvals. The applicable waiting periods under the
HSR Act and the German Competition Act shall have expired or been terminated.
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ARTICLE IX
TERMINATION AND AMENDMENT
SECTION 9.01. Termination. The Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of the terms
of the Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company
(i) if (x) as a result of the failure of any of the Offer
Conditions the Offer shall have terminated or expired in accordance with its
terms without Sub having accepted for payment any Shares pursuant to the Offer
or (y) Sub shall not have accepted for payment any Shares pursuant to the Offer
prior to November 23, 1997; provided, however, that the right to terminate the
Agreement pursuant to this Section 9.01(b)(i) shall not be available to any
party whose failure to perform any of its obligations under the Agreement
results in the failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a breach of representation
or warranty under the Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Company Common Stock pursuant to the Offer or the Merger and such order, decree
or ruling or other action shall have become final and nonappealable;
(c) by Parent or Sub
(i) prior to the purchase of Shares pursuant to the Offer in
the event of a breach by the Company of any representation, warranty, covenant
or other agreement contained in the Agreement which (i) would give rise to the
failure of a condition set forth in paragraph (e) or (f) of Exhibit A and (ii)
cannot be or has not been cured within 20 days after the giving of written
notice to the Company;
(ii) if either Parent or Sub is entitled to terminate the
Offer as a result of the occurrence of any event set forth in paragraph (d) of
Exhibit A to the Agreement; or
(iii) if, due to an occurrence, not involving a breach by
Parent or Sub of their obligations hereunder, which makes it impossible to
satisfy any of the
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conditions set forth in Annex A hereto, Parent, Sub or any of their affiliates
shall have failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer;
(d) by the Company
(i) in connection with entering into a definitive agreement in
accordance with Section 6.02(b), provided it has complied with all provisions
thereof, including the notice provisions therein, and that it makes simultaneous
payment of the Termination Fee;
(ii) if Sub or Parent shall have breached in any material
respect any of their respective representations, warranties, covenants or other
agreements contained in the Agreement, which breach or failure to perform is
incapable of being cured or has not been cured within 20 days after the giving
of written notice to Parent or Sub, as applicable, except, in any case, such
breaches and failures which are not reasonably likely to affect adversely
Parent's or Sub's ability to complete the Offer or the Merger; or
(iii) if Parent, Sub or any of their affiliates shall have
failed to commence the Offer on or prior to five business days following the
date of the initial public announcement of the Offer; provided, that the Company
may not terminate the Agreement pursuant to this Section 9.01(d)(iii) if the
Company is at such time in breach of its obligations under the Agreement such as
to cause a material adverse effect on the Company and its Subsidiaries, taken as
a whole.
SECTION 9.02. Effect of Termination. In the event of a termination
of the Agreement by either the Company or Parent as provided in Section 9.01,
the Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to the last sentence of Section
1.02(c), Section 4.16, Section 5.06, the last sentence of Section 7.02, Section
7.06, this Section 9.02 and Article X; provided, however, that nothing herein
shall relieve any party for liability for any breach hereof.
SECTION 9.03. Amendment. The Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after obtaining the Company Stockholder Approval (if
required by law), but, after any such approval, no amendment shall be made which
by law requires further approval by such shareholders without obtaining such
further approval. The Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto. Following the election
or appointment of the Sub's designees
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pursuant to Section 7.05 and prior to the Effective Time, the affirmative vote
of a majority of the Independent Directors then in office shall be required by
the Company to (i) amend or terminate the Agreement by the Company, (ii)
exercise or waive any of the Company's rights or remedies under the Agreement or
(iii) extend the time for performance of Parent and Sub's respective obligations
under the Agreement.
SECTION 9.04. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) subject
to the proviso of Section 9.03, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to the
Agreement to assert any of its rights under the Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Nonsurvival of Representations and Warranties. The
representations and warranties in the Agreement or in any instrument delivered
pursuant to the Agreement shall terminate at the Effective Time or, in the case
of the Company, shall terminate upon the acceptance for payment of, and payment
for, Shares by Sub pursuant to the Offer, unless the survival thereof is
provided for by their terms.
SECTION 10.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent or Sub, to:
Moore U.S.A. Inc.
100 N. Field Drive
Suite 220-B
One Conway Place
Lake Forest, Illinois 60045
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Attention: Joseph M. Duane, Esq.
Telecopy No.: (847) 615 5784
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: David M. Wilf, Esq.
Telecopy No.: (212) 541 5369
and
(b) if to the Company, to:
The Peak Technologies Group, Inc.
9200 Berger Road
Columbia, Maryland 21046
Attention: Dianne Sagner, Esq.
Telecopy No.: (410) 312 6080
with a copy to:
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attention: John T. O'Connor, Esq.
Telecopy No.: (212) 530 5219
SECTION 10.03. Interpretation. When a reference is made in the
Agreement to an Article or a Section , such reference shall be to an Article or
a Section of the Agreement unless otherwise indicated. The table of contents and
headings contained in the Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of the Agreement. Whenever
the words "include", "includes" or "including" are used in the Agreement, they
shall be deemed to be followed by the words "without limitation". The phrase
"made available" in the Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. As used in the Agreement, the term "subsidiary" of any person
means another person, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first person. As used in the Agreement, "material
adverse change" or "material adverse effect" means, when used in connection with
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<PAGE> 49
the Company, any change or effect (or any development that, insofar as can
reasonably be foreseen, is likely to result in any change or effect) that,
individually or in the aggregate with any such other changes or effects, is
materially adverse to the business, financial condition or results of operations
of the Company and its subsidiaries taken as a whole. Notwithstanding the
foregoing, a material adverse change or material adverse effect shall not
include any material adverse change or material adverse effect caused by any
change resulting from the announcement of the Offer or the Merger.
SECTION 10.04. Counterparts. The Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
SECTION 10.05. Entire Agreement; Third Party Beneficiaries. The
Agreement (including the documents and the instruments referred to herein) (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Section 7.07, are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
SECTION 10.06. Governing Law. The Agreement shall be governed and
construed in accordance with the laws of the State of New York without regard to
any applicable conflicts of law, except to the extent the DGCL shall be held to
govern the terms of the Merger.
SECTION 10.07. Publicity. Except as otherwise required by law or the
rules of the NYSE or the Nasdaq National Market, for so long as the Agreement is
in effect, neither the Company nor Parent shall, or shall permit any of its
subsidiaries to, issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by the
Agreement without the consent of the other party, which consent shall not be
unreasonably withheld.
SECTION 10.08. Assignment. Neither the Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to any
direct or indirect wholly owned subsidiary of Moore Corporation Limited. Subject
to the
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<PAGE> 50
preceding sentence, the Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
SECTION 10.09. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of the Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of the Agreement and to enforce
specifically the terms and provisions of the Agreement in any court of the
United States located in the State of Delaware or in a Delaware state court,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of the
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that such party will
not bring any action relating to the Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the state
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of the
Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
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<PAGE> 51
the Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
MOORE U.S.A. INC.
By: /s/ Joseph M. Duane
------------------------
Name: Joseph M. Duane
Title: Vice President
Corporate Development
and General Counsel
By: ________________________
Name:
Title:
KIRKWOOD ACQUISITION CORP.
By: /s/ Joseph M. Duane
------------------------
Name: Joseph M. Duane
Title: President and
Director
By: ________________________
Name:
Title:
THE PEAK TECHNOLOGIES GROUP,
INC.
By: /s/ Nicholas R. H. Toms
------------------------
Name: Nicholas R. H. Toms
Title: Chairman of the
Board and Chief Executive
Officer
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EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or the Agreement, and in
addition to (and not in limitation of) Sub's right to extend and amend the Offer
at any time in its sole discretion (subject to the provisions of the Agreement),
Sub shall not be required to accept for payment or, subject to applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares after the
termination or withdrawal of the Offer), to pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any Shares tendered pursuant to the Offer unless (i) there shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer such number of Shares that would constitute a majority of the outstanding
Shares (determined on a fully diluted basis for all outstanding stock options
and any other rights to acquire Shares) (the "Minimum Condition") and (ii) any
waiting period under the HSR Act and the German Competition Act applicable to
the purchase of Shares pursuant to the Offer shall have expired or been
terminated. Furthermore, notwithstanding any other term of the Offer or the
Agreement, Sub shall not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer if, at any time on or after the date of the
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists:
(a) there shall be threatened, instituted or pending by any person
or Governmental Entity any suit, action, investigation or proceeding (i)
challenging the acquisition by Parent or Sub of any Shares under the Offer or
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or the performance of any of the other transactions contemplated by the
Agreement, or seeking to obtain from the Company, Parent or Sub any damages that
are material in relation to the Company and its subsidiaries taken as a whole,
(ii) seeking to prohibit or impose any material limitations on Parent's or Sub's
ownership or operation (or that of any of their respective Subsidiaries or
affiliates) of all or a material portion of their or the Company's businesses or
assets, or to compel Parent or Sub or their respective Subsidiaries and
affiliates to dispose of or hold separate any material portion of the business
or assets of the Company or Parent and their respective Subsidiaries, in each
case taken as a whole, (ii) challenging the acquisition by Parent or Sub of any
Shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the
48
<PAGE> 53
other transactions contemplated by the Agreement, or seeking to obtain from the
Company, Parent or Sub any damages that are material in relation to the Company
and its subsidiaries taken as a whole, (iii) seeking to impose material
limitations on the ability of Sub, or render Sub unable, to accept for payment,
pay for or purchase some or all of the Shares pursuant to the Offer and the
Merger, (iv) seeking to impose material limitations on the ability of Sub or
Parent effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote the Shares purchased by it on
all matters properly presented to the Company's stockholders, or (v) which
otherwise is reasonably likely to have a material adverse effect on the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, or any other action shall be taken by any Governmental
Entity or court, other than the application to the Offer or the Merger of
applicable waiting periods under the HSR Act or the German Competition Act that
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred any events after the date of the
Agreement that, either individually or in the aggregate, have caused or are
reasonably likely to cause a material adverse change with respect to the Company
other than a change resulting from the announcement of the Offer or the Merger;
(d)(i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or Sub
its approval or recommendation of the Offer, the Merger or the Agreement, or
approved or recommended any Takeover Proposal, (ii) the Company shall have
entered into any agreement with respect to any Superior Proposal in accordance
with Section 6.02(b) of the Agreement or (iii) the Board of Directors of the
Company or any committee thereof shall have resolved to take any of the
foregoing actions;
(e) any of the representations and warranties of the Company set
forth in the Agreement that are qualified as to materiality shall not be true
and correct or any such representations and warranties that are not so qualified
shall not be true and correct in any material respect, in each case at the date
of the Agreement and at the scheduled or extended expiration of the Offer;
(f) 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 covenant
49
<PAGE> 54
of the Company to be performed or complied with by it under the Agreement;
(g) the Agreement shall have been terminated in accordance with its
terms;
(h) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock Exchange
or on NASDAQ, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) a commencement of a
war, armed hostilities or other international or national calamity directly
involving in the armed forces of the United States, (iv) any general limitation
(whether or not mandatory) by any governmental authority on the extension of
credit by banks or other lending institutions, (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof, (vi) a decline of at least twenty percent
(20%) in the Dow Jones Industrial Average or the Standard and Poors 500 Index
from the date of the Agreement to the expiration or termination of the Offer or
(vii) a change in general financial, bank or capital market conditions which
materially and adversely affects the ability of financial institutions in the
United States to extend credit or syndicate loans; or
(i) any person acquires beneficial ownership (as defined in Rule
13d-3 promulgated under the Exchange Act), of at least 20% of the outstanding
Common Stock of the Company (other than any person not required to file a
Schedule 13D under the rules promulgated under the Exchange Act).
The foregoing conditions are for the sole benefit of Parent and Sub,
may be asserted by Parent or Sub regardless of the circumstances giving rise to
such condition (including any action or inaction by Parent or Sub not in
violation of the Agreement) and may be waived by Parent or Sub in whole or in
part at any time and from time to time in the sole discretion of Parent or Sub,
subject in each case to the terms of the Agreement. The failure by Parent or Sub
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.
50
<PAGE> 1
Exhibit 10
FIRST AMENDMENT TO RIGHTS AGREEMENT
This Amendment, dated as of April 23, 1997 (the "Amendment"),
between The Peak Technologies Group, Inc., a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services (the "Rights Agent").
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of March 28, 1997 (the "Agreement"); and
WHEREAS, pursuant to Section 27 of the Agreement, the Company and
the Rights Agent desire to amend the Agreement as set forth below.
WHEREAS, any capitalized terms not otherwise defined herein shall
have such meaning ascribed to them in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Amendments to Section 1.
(a) Section 1(c) of the Agreement relating to the definitions of
"Beneficial Owner" and "beneficially own" is amended by adding the following at
the end thereof:
"Notwithstanding anything contained in this Agreement to the contrary,
neither Moore or Acquisition Corp., nor any of their Affiliates or
Associates, shall be deemed to be the Beneficial Owner of, nor to
beneficially own, any of the Common Shares of the Company by virtue of the
approval, execution or delivery of the Merger Agreement, the announcement
thereof, commencement of the Offer and the purchase of the Shares
thereunder or the consummation of the Merger and the other transactions
contemplated thereby."
(b) Section 1 of the Agreement is amended by adding the following at
the end thereof:
"(o) The following additional terms have the meanings indicated:
"Acquisition Corp." shall mean Kirkwood Acquisition Corp., a Delaware
corporation.
"Moore" shall mean Moore U.S.A. Inc., a Delaware corporation.
<PAGE> 2
"Merger" shall mean the merger of Acquisition Corp. with and into the
Company in accordance with the General Corporation Law of the State of
Delaware upon the terms and subject to the conditions set forth in the
Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger, dated as
of April 21, 1997, by and among Moore, Acquisition Corp. and the Company,
but shall not include any amendment to such Merger Agreement."
Section 2. Expiration Date.
Section 7(a) of the Agreement is hereby amended by deleting the word
"or" immediately prior to the symbol "(iii)" and by adding to the end of Section
7(a) the following:
", or (iv) the time immediately prior to the Effective Time (as defined in
the Merger Agreement) of the Merger; whereupon the Rights shall expire."
Section 3. New Section 35.
The following is added as a new Section 35 to the Agreement:
"Section 35. Moore Tender Offer and Merger, etc.
Notwithstanding anything in this Agreement to the contrary, none of
the approval, execution or delivery of the Merger Agreement, the announcement
thereof, commencement of the Offer and the purchase of the Shares thereunder or
the consummation of the Merger and the other transactions contemplated thereby
shall cause (i) Moore or Acquisition Corp. or any of their Affiliates or
Associates to be deemed an Acquiring Person, (ii) a Shares Acquisition Date to
occur or (iii) a Distribution Date to occur in accordance with the terms hereof,
which Distribution Date, if any, shall instead be indefinitely deferred until
such time as the Board of Directors may otherwise determine."
Section 4. Severability. If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 5. Governing Law. This Amendment shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State.
2
<PAGE> 3
Section 6. Counterparts. This Amendment may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 7. Effect of Amendment. Except as expressly modified herein,
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: THE PEAK TECHNOLOGIES GROUP, INC.
By: /s/ Dianne R. Sagner By: /s/ Edward A. Stevens
--------------------- -----------------------
Title: Secretary Title: Executive Vice
President, Chief
Financial Officer
Attest: CHASEMELLON SHAREHOLDER SERVICES
By: /s/ James E. Hagen By: /s/ Jared Fassler
---------------------- ------------------------
Title: Vice President Title: Assistant Vice
President
3
<PAGE> 1
Exhibit 99
[PEAK TECHNOLOGIES LETTERHEAD]
FOR IMMEDIATE RELEASE
CONTACT:
<TABLE>
<S> <C>
Nicholas R. H. Toms Edward A. Stevens
Chairman and CEO Executive Vice President and CFO
The Peak Technologies Group, Inc. The Peak Technologies Group, Inc.
(212) 832-2700 (410) 312-6002
Michael Hickey Desmond Towey
Investor Relations Bernadette McLaughlin
The Peak Technologies Group, Inc. Desmond Towey and Associates
(410) 312-6033 (212) 888-7600
</TABLE>
PEAK TECHNOLOGIES ENTERS INTO MERGER AGREEMENT
WITH MOORE CORPORATION LIMITED
New York, NY - April 23, 1997 - The Peak Technologies Group, Inc. (NASDAQ:PEAK)
announced today that it has entered into a definitive agreement with Moore
Corporation Limited (TSE, ME, NYSE:MCL) to merge in an all cash transaction
valued at approximately $210 million. Moore Corporation, through an indirect
wholly-owned subsidiary, will commence an all cash tender offer for all the
outstanding shares of Peak stock at a price of $18 per share.
Nicholas Toms, Peak's Chairman and CEO stated, "We are pleased to join Moore's
team and look forward to serving our mutual customers worldwide. I am confident
that our combined expertise will result in providing customers with superior
data capture and labeling solutions, better and faster than anyone else in the
industry."
Reto Braun, Moore's Chairman and CEO said, "This acquisition moves Moore another
step forward in our strategy to increase the percentage of our revenues coming
from the technology segments of our business, which generate higher margin and
growth. Peak complements Moore's position as the global leader in label systems
and brings to Moore the leading edge technologies in the bar code based data
capture systems as well as a strong track record in capturing increased market
share."
Moore Corporation is the leading global partner helping companies communicate
through print and digital technologies. As the leading supplier of document
formatted information, print outsourcing and data-based marketing, Moore
designs, manufacturers and delivers business communications products, services
and solutions to customers. Founded in 1882,
<PAGE> 2
Moore has approximately 19,000 employees and over 100 manufacturing facilities
serving customers in 47 countries. Sales in 1996 were $2.5 billion.
Howard Cohen, Peak's President and Chief Operating Officer said, "The combined
company will enhance Peak's growth through customer synergies and an expanded
global presence in the business solutions market."
The offer is conditioned upon, among other things, the tendering of at least a
majority of the outstanding Peak shares and the expiration of governmental
waiting periods related to acquisitions.
The Peak Technologies Group, Inc. is the dominant integrator of data capture,
printing and service solutions around the globe. Offering its customers Peak's
software and professional services along with "best of breed" hardware from the
leading manufacturers, Peak operates from 110 locations worldwide, 80 of which
are in the United States and Canada and 30 of which are in Europe.
