Execution Copy
AGREEMENT AND PLAN OF
MERGER
by and among
Hirsch International
Corp.
a Delaware corporation ,
HIC Acquisition
Company
a Delaware corporation,
and
Hirsch Holdings,
Inc.
a Delaware corporation
July 2, 2009
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ARTICLE I
DEFINITIONS
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Section 1.01
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Definitions
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1
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Section 1.02
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Interpretation
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3
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ARTICLE II
THE MERGER
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Section 2.01
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The Merger
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3
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Section 2.02
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Closing
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4
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Section 2.03
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Effective Time
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4
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Section 2.04
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Effect of the Merger
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4
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Section 2.05
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Certificate of Incorporation and
Bylaws of the Surviving Corporation
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4
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Section 2.06
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Directors and Officers of the
Surviving Corporation
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5
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Section 2.07
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Further Assurances
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5
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ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF
CERTIFICATES
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Section 3.01
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Effect on Capital Stock
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5
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Section 3.02
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Exchange of Certificates
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6
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Section 3.03
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Stock Options
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9
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ARTICLE IV
REPRESENTATIONS AND
WARRANTIES
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Section 4.01
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Representations and Warranties of
the Company
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9
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Section 4.02
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Representations and Warranties of
Parent and Merger Sub
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15
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ARTICLE V
COVENANTS RELATING TO CONDUCT OF
BUSINESS; NO SOLICITATION
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Section 5.01
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Conduct of Business by the
Company
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18
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Section 5.02
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No Solicitation
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21
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ARTICLE VI
ADDITIONAL AGREEMENTS
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Section 6.01
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Preparation of the Proxy Statement
and Schedule 13E-3; Stockholders’ Meeting
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24
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Section 6.02
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Access to Information;
Confidentiality
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25
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Section 6.03
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Reasonable Best Efforts
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26
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Section 6.04
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Indemnification, Exculpation and
Insurance
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28
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Section 6.05
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Fees and Expenses
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29
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Section 6.06
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Public Announcements
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31
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Section 6.07
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Financing
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31
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ARTICLE VII
CONDITIONS PRECEDENT
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Section 7.01
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Conditions to Each Party’s
Obligation to Effect the Merger
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32
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Section 7.02
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Conditions to Obligations of Parent
and Merger Sub
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33
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Section 7.03
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Conditions to Obligation of the
Company
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34
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Section 7.04
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Frustration of Closing
Conditions
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34
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ARTICLE VIII
TERMINATION, AMENDMENT AND
WAIVER
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Section 8.01
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Termination
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34
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Section 8.02
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Effect of Termination
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35
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Section 8.03
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Amendment
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36
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Section 8.04
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Extension; Waiver
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36
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Section 8.05
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Procedure for Termination or
Amendment
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36
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ARTICLE IX
GENERAL PROVISIONS
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Section 9.01
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Nonsurvival of Representations and
Warranties
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36
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Section 9.02
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Notices
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36
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Section 9.03
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Consents and Approvals
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37
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Section 9.04
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Counterparts
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37
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Section 9.05
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Entire Agreement; No Third-Party
Beneficiaries
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37
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Section 9.06
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Governing Law
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37
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Section 9.07
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Assignment
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38
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Section 9.08
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Enforcement; Consent to
Jurisdiction
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38
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Section 9.09
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Severability
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38
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Section 9.10
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No Recourse
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38
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Section 9.11
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WAIVER OF JURY TRIAL
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39
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INDEX OF DEFINED TERMS
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Term
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Section
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Acceptable Confidentiality Agreement
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5.02(a)
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Affiliate
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1.01
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Agreement
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Preamble
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Appraisal Shares
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3.01(d)
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Benefit Plans
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1.01
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Business Day
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1.01
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Cancelled Shares
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3.01(b)
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Capitalization Date
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4.01(c)
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Certificate
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3.01(c)
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Certificate of Merger
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2.03
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Change in Recommendation
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5.02(e)
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Class A Stock
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Recitals
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Class B Stock
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Recitals
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Closing
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2.02
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Closing Date
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2.02
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Code
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3.02(h)
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Company
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Preamble
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Company Board
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4.01(d)(ii)
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Company Board Recommendation
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4.01(d)(ii)
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Company Bylaws
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4.01(a)
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Company Charter
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4.01(a)
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Company Stock
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Recitals
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Company Information
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4.01(j)
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Company SEC Documents
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4.01(e)(i)
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Company Stock Option
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3.03(b)
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Company Stock Plan
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3.03(b)
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Company Stock-Based Awards
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4.01(c)
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Company Termination Fee
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6.05(b)(ii)
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Contract
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4.01(d)(iii)
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Converted Shares
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3.01(c)
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DGCL
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2.01
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Effective Time
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2.03
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Exchange Act
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4.01(d)(iii)
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Exchange Fund
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3.02(a)
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Excluded Party
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5.02(b)
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Expenses
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6.05(c)
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Filed Company SEC Documents
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4.01
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Financing
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4.02(d)
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Financing Agreements
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6.07(a)
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Financing Commitment
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4.02(d)
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GAAP
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4.01(e)(i)
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Go-Shop Period
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5.02(b)
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Governmental Entity
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4.01(d)(iii)
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Interim Period
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5.01(a)
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Key Persons
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5.01(a)(vii)
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Knowledge
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1.01
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Law
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4.01(d)(iii)
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Liens
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4.01(b)
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Material Adverse Effect
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1.01
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Merger
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Recitals
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Merger Consideration
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Recitals
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Merger Sub
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Preamble
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New Financing Commitment
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6.07(a)
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Notice Period
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5.02(f)(i)
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Order
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4.01(d)(iii)
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Outside Date
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8.01(b)(i)
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Parent
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Preamble
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Parent Information
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4.02(f)
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Parent Material Adverse Effect
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1.01
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Paying Agent
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3.02(a)
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Person
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1.01
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Preferred Stock
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4.01(c)
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Proxy Statement
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4.01(d)(iii)
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Representative
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1.01
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Schedule 13E-3
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4.01(d)(iii)
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SEC
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4.01(d)(iii)
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Section 262
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3.01(d)
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Securities Act
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4.01(e)(i)
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Stockholder Approval
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4.01(f)
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Stockholders
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3.01
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Stockholders’ Meeting
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6.01(c)
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SOX
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4.01(e)(i)
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Special Committee
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Recitals
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Solvent
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4.02(i)
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Subsidiary
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1.01
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Superior Proposal
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5.02(a)
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Surviving Corporation
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2.01
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Tajima
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4.01(d)(iii)
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Takeover Proposal
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5.02(a)
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Tax
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1.01
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Taxing authority
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1.01
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AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER
(this “ Agreement ”) is made and entered into as
of July 2, 2009 among Hirsch Holdings, Inc., a Delaware corporation
(“ Parent ”), HIC Acquisition Company, a
Delaware corporation (“ Merger Sub ”), and
Hirsch International Corp., a Delaware corporation (the “
Company ”).
RECITALS
WHEREAS, the board of directors of
each of the Company and Merger Sub, a special committee of the
board of directors of the Company (the “ Special
Committee ”) has approved and declared advisable, and the
board of directors of Parent has approved, this Agreement and the
merger of Merger Sub with and into the Company, with the Company
continuing as the surviving corporation in the merger (the “
Merger ”), upon the terms and subject to the
conditions set forth in this Agreement, whereby each issued and
outstanding share of class A common stock, par value $0.01 per
share, of the Company (“ Class A Stock ”), and
each issued and outstanding share of class B common stock, par
value $0.01 per share, of the Company (“ Class B Stock
” and, together with the Class A Stock, “ Company
Stock ”) other than any Appraisal Shares or Cancelled
Shares (as defined below), will be converted into the right to
receive $0.31 in cash, per share, without interest (the “
Merger Consideration ”); and
WHEREAS, Parent, Merger Sub and the
Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger, and also to
prescribe various conditions to the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of
the representations, warranties, covenants and agreements contained
in this Agreement, and subject to the conditions set forth herein,
the parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE I
DEFINITIONS
Section
1.01
Definitions . For purposes of this Agreement:
(a) “
Affiliate ” of any Person means another Person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first Person. For purposes hereof, “control” means the
possession directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person by virtue
of ownership of voting securities, by contract or
otherwise.
(b) “
Benefit Plans ” means all employee benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended) and all employment benefit, compensation,
stock option, stock purchase, restricted stock, deferred
compensation, retiree medical or life insurance, split dollar
insurance, supplemental retirement, severance, change of control,
fringe benefit, bonus, incentive, employee loan or other employee
benefit,
arrangements, plans, policies or
programs, in each case, which are provided, maintained, contributed
to or sponsored by the Company or any of its Subsidiaries on behalf
of current or former directors, officers, employees, or consultants
or for which the Company or any of its Subsidiaries has any
liability, contingent or otherwise.
(c) “
Business Day ” shall mean any day other than a
Saturday, Sunday or a day on which the banks in New York, New York
are authorized by Law or executive order to be closed.
(d) “
Knowledge ” of the Company or Parent means, with
respect to any matter in question, the actual knowledge of the
Company’s or Parent’s respective executive officers
after making due inquiry regarding such matter of the other
executives and managers having primary responsibility for such
matter, as well as that knowledge that a reasonably prudent
executive officer would have pertaining to such matter in the
course of duly performed duties as an officer of such
party.
(e) “
Material Adverse Effect ” means any fact,
circumstance, change, occurrence or effect that, individually or in
the aggregate with all other facts, circumstances, changes,
occurrences or effects, (1) is, or would reasonably be expected to
be, materially adverse to the business, condition (financial or
otherwise), results of operations or liabilities (contingent or
otherwise) of the Company and its Subsidiaries, taken as a whole,
or (2) that would reasonably be expected to prevent or materially
impede, interfere with, hinder or delay the ability of the Company
to consummate the Merger, except for any such facts, circumstances,
changes, occurrences or effects arising out of or relating to (i)
the announcement or the existence of this Agreement and the
transactions contemplated hereby, or actions by Parent or the
Company required to be taken pursuant to this Agreement, (ii)
changes in general economic or political conditions or the
financial markets (so long as the Company or its Subsidiaries are
not disproportionately affected thereby), (iii) changes in
applicable Laws, rules, regulations or orders of any Governmental
Entity or interpretations thereof by any Governmental Entity or
changes in accounting rules or principles (so long as the Company
or its Subsidiaries are not disproportionately affected thereby),
(iv) changes affecting generally the industries in which the
Company or its Subsidiaries conduct business (so long as the
Company or its Subsidiaries are not disproportionately affected
thereby), or (v) any outbreak or escalation of hostilities or war
or any act of terrorism (so long as the Company or its Subsidiaries
are not disproportionately affected thereby).
(f) “
Parent Material Adverse Effect ” means any fact,
circumstance, change, occurrence, or effect that, individually or
in the aggregate, that would reasonably be expected to prevent or
materially impede, interfere with, hinder or delay the consummation
of the Merger or the other transactions contemplated by this
Agreement (other than if any portion of the Financing becomes
unavailable in the manner or from the sources contemplated in the
Financing Commitment).
(g) “
Person ” means an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization, or other entity.
(h) “
Representative ” means any officer, employee, counsel,
investment banker, accountant, consultant, debt financing source,
or other authorized representative of any Person.
(i) “
Subsidiary ” of any Person means another Person of
which such first Person directly or indirectly owns an amount of
the voting securities, other voting rights or voting partnership
interests 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 thereof).
(j) “
Tax ” means any federal, state, local or foreign
income, gross receipts, property, sales, use license, excise,
franchise employment, payroll, withholding, alternative or add on
minimum, ad valorem, transfer or excise tax, or any other tax,
custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever (including withholding on amounts paid to or
by any Person), together with any related interest, penalty,
addition to tax or additional amount.
(k) “
Taxing Authority ” means any federal, state, local or
foreign government, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising tax
regulatory authority.
Section
1.02
Interpretation . When a reference is made in this Agreement
to an “Article,” or a “Section,” such
reference shall be to an Article or a Section of this Agreement
unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include”,
“includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words
“without limitation.” The words “hereof”,
“herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such
term. Any Contract, instrument or Law defined or referred to herein
or in any Contract or instrument that is referred to herein means
such Contract, instrument or Law as from time to time amended,
modified or supplemented, including (in the case of Contracts or
instruments) by waiver or consent and (in the case of Laws) by
succession of comparable successor Laws and references to all
attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and
assigns. The parties have participated jointly in the negotiation
and drafting of this Agreement; consequently, in the event of an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
ARTICLE II
THE MERGER
Section
2.01
The Merger . Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General
Corporation Law of the State of Delaware (the “ DGCL
”), Merger Sub shall be merged with and into the Company at
the Effective Time. At the Effective Time, as defined below, the
separate corporate existence of Merger Sub shall cease and the
Company shall continue as the surviving corporation in the Merger
(the “ Surviving Corporation ”) and shall
succeed to and assume all of the rights and obligations of Merger
Sub and the Company in accordance with the DGCL.
Section
2.02
Closing . The closing of the Merger (the “
Closing ”) will take place at 10:00 a.m. on a date to
be specified by the parties, which shall be no later than the third
Business Day after satisfaction or (to the extent permitted by
applicable Law) waiver of the conditions set forth in Article VII
(other than those conditions that by their terms are to be
satisfied at the Closing, but subject to the satisfaction or (to
the extent permitted by applicable Law) waiver of those
conditions), at the offices of Baker & McKenzie, LLP, 1114
Avenue of the Americas, New York, New York 10036, unless another
time, date or place is agreed to in writing by Parent and the
Company; provided , however , that if all the
conditions set forth in Article VII shall no longer be satisfied or
(to the extent permitted by applicable Law) waived on such third
Business Day, then the Closing shall take place on the first
Business Day on which all such conditions shall again have been
satisfied or (to the extent permitted by applicable Law) waived
unless another time is agreed to in writing by Parent and the
Company. The date on which the Closing occurs is referred to as the
“ Closing Date .”
Section
2.03
Effective Time . Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties
shall file with the Secretary of State of the State of Delaware a
certificate of merger regarding the Merger (the “
Certificate of Merger ”) in accordance with the
relevant provisions of the DGCL and, as soon as practicable on or
after the Closing Date, shall make or cause to be made all other
filings or recordings required under the DGCL in connection with
the Merger. The Merger shall become effective upon the filing of
the Certificate of Merger with the Secretary of State of the State
of Delaware, or at such later time as Parent and the Company shall
agree in writing and specify in the Certificate of Merger (the time
the Merger becomes effective being the “ Effective
Time ”).
Section
2.04 Effect of
the Merger . The Merger shall have the effects set forth in
this Agreement and in the DGCL. Without limiting the generality of
the foregoing and subject thereto, at the Effective Time, all of
the properties, rights, privileges, powers and franchises of the
Company and Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving
Corporation.
Section
2.05
Certificate of Incorporation and Bylaws of the Surviving
Corporation .
(a) The
certificate of incorporation of the Company in effect immediately
prior to the Effective Time shall be amended and restated as of the
Effective Time as a result of
the Merger so as to read in its
entirety as the form of amended and restated certificate of
incorporation set forth in Exhibit A hereto and, as so amended and
restated, shall be the Surviving Corporation’s certificate of
incorporation until thereafter changed or amended as provided
therein or by applicable Law.
(b) The
bylaws of the Company, as in effect as of immediately prior to the
Effective Time, shall be amended and restated as of the Effective
Time so as to read in their entirety as the bylaws of Merger Sub as
in effect immediately prior to the Effective Time (except the
references to Merger Sub’s name shall be replaced by
references to Hirsch International Corp.) and, as so amended and
restated, shall be the Surviving Corporation’s bylaws until
thereafter changed or amended as provided therein or by applicable
Law.
Section
2.06
Directors and Officers of the Surviving Corporation . From
and after the Effective Time, the directors of Merger 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. From and after the Effective Time,
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.
Section
2.07
Further Assurances . If at any time after the Effective Time
the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other acts
or things are necessary, desirable or proper (a) to vest, perfect
or confirm, of record or otherwise, in the Surviving Corporation
its right, title or interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of either
Merger Sub or the Company or both, or (b) otherwise to carry out
the purposes of this Agreement, the Surviving Corporation and its
proper officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of
either Merger Sub or the Company or both, all such deeds, bills of
sale, assignments and assurances and to do, in the name and on
behalf of either Merger Sub or the Company, all such other acts and
things as may be necessary, desirable or proper to vest, perfect or
confirm the Surviving Corporation’s right, title or interest
in, to, or under any of the rights, privileges, powers, franchises,
properties or assets of Merger Sub and the Company, and otherwise
to carry out the purposes of this Agreement.
ARTICLE III
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
Section
3.01
Effect on Capital Stock . At the Effective Time, by virtue
of the Merger and without any action on the part of the Parent,
Merger Sub, or the Company, or the holder of any shares of Company
Stock (collectively, the “ Stockholders
”):
(a)
Capital Stock of Merger Sub . Each share of common stock,
par value $0.01 per share, of Merger Sub that is issued and
outstanding immediately prior to the Effective Time shall be
converted into one (1) share of common stock of the Surviving
Corporation.
(b)
Cancellation of Certain Stock . Each share of Company Stock
that is (i) owned, directly or indirectly, by Parent, Merger Sub or
Paul Gallagher immediately prior to the Effective Time, or (ii)
held in the treasury of the Company (together, the “
Cancelled Shares ”) shall be automatically canceled
and shall cease to exist, and no consideration shall be delivered
in exchange therefore.
(c)
Conversion of Company Stock . Subject to Section 3.01(d),
each share of Company Stock issued and outstanding immediately
prior to the Effective Time other than the Cancelled Shares or
Appraisal Shares, shall be converted into the right to receive the
Merger Consideration on the terms set forth in this Agreement (the
“ Converted Shares ”). As of the Effective Time,
subject to Section 3.01(d), all of the Converted Shares shall no
longer be outstanding and shall automatically be canceled and shall
cease to exist, and each holder of a certificate or uncertificated
shares representing Company Stock which immediately prior to the
Effective Time represented any such Converted Shares (each, a
“ Certificate ”) shall cease to have any rights
with respect thereto, except the right to receive the Merger
Consideration to be issued or paid in consideration therefor upon
surrender of such Certificate and other required documentation in
accordance with Section 3.02(c). The right of any holder of a
Certificate to receive the Merger Consideration shall be subject to
and reduced by the amount of any withholding that is required under
applicable tax Law.
(d)
Appraisal Rights . Notwithstanding anything in this
Agreement to the contrary, shares (the “ Appraisal
Shares ”) of Company Stock issued and outstanding
immediately prior to the Effective Time that are held by any holder
who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies in all respects
with, the provisions of Section 262 of the DGCL (“ Section
262 ”) shall not become Converted Shares as provided in
Section 3.01(c), but instead such holder shall be entitled to
payment of the fair value of such Appraisal Shares in accordance
with the provisions of Section 262. At the Effective Time, all
Appraisal Shares shall no longer be outstanding, shall
automatically be canceled and shall cease to exist, and each holder
of Appraisal Shares shall cease to have any rights with respect
thereto, except the right to receive the fair value of such
Appraisal Shares in accordance with the provisions of Section 262.
Notwithstanding the foregoing, if any such holder shall fail to
perfect or otherwise shall waive, withdraw or lose the right to
appraisal under Section 262, or a court of competent jurisdiction
shall determine that such holder is not entitled to the relief
provided by Section 262, then the right of such holder to be paid
the fair value of such holder’s Appraisal Shares under
Section 262 shall cease and such Appraisal Shares shall be deemed
to be Converted Shares under Section 3.01(c). The Company shall
serve prompt notice to Parent of any demands for appraisal of any
shares of Company Stock, and Parent shall have the right to
participate in and direct all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company
shall not, without the prior written consent of Parent, voluntarily
make any payment with respect to, or settle or offer to settle, any
such demands, or agree to do any of the foregoing.
(e)
Certain Adjustments . Notwithstanding anything herein to the
contrary, if between the date of this Agreement and the Effective
Time, (i) the outstanding shares of Company Stock shall have been
changed into a different number of shares or a different class, by
reason of the occurrence or record date of any stock dividend,
subdivision, reclassification, recapitalization, split,
combination, exchange of shares or similar transaction, (ii) a
stock
dividend or dividend payable in any
other securities of the Company shall be declared with a record
date within such period, or (iii) any similar event shall have
occurred, then in any such case the Merger Consideration shall be
appropriately adjusted to reflect such action; provided, however
that nothing in this Section 3.01(e) shall be construed to permit
the Company to take any action with respect to its securities that
is prohibited by the terms of this Agreement.
Section
3.02
Exchange of Certificates .
(a)
Paying Agent . Prior to the Effective Time, Parent shall
designate and enter into an agreement with a bank or trust company
that is reasonably satisfactory to the Company to act as paying
agent (the “ Paying Agent ”) for the payment of
the Merger Consideration. Prior to the Effective Time, Parent shall
deposit, or cause the Surviving Corporation to deposit, with the
Paying Agent, for the benefit (from and after the Effective Time)
of the holders of Certificates, cash in an amount sufficient to pay
the aggregate Merger Consideration required to be paid pursuant to
Section 3.01(c). All cash deposited with the Paying Agent pursuant
to this Section 3.02(a) shall hereinafter be referred to as the
“ Exchange Fund .”
(b)
Exchange Procedures . As soon as reasonably practicable
after the Effective Time, Parent shall cause the Paying Agent to
mail to each holder of record of a Certificate (i) a form of letter
of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Paying
Agent, and which shall be in customary form and have such other
provisions as Parent may reasonably specify), and (ii) instructions
for effecting the surrender of the Certificates in exchange for the
Merger Consideration. Each holder of record of one or more
Certificates shall, upon surrender to the Paying Agent of such
Certificate or Certificates, together with such letter of
transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, be entitled to receive
in exchange therefor the amount of cash to which such holder is
entitled pursuant to Section 3.01(c), and the Certificates so
surrendered shall forthwith be canceled. In the event of a transfer
of ownership of Company Stock which is not registered in the
transfer records of the Company, payment of the Merger
Consideration in accordance with this Section 3.02(b) 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
accompanied by all documents required to evidence and effect such
transfer) and the Person requesting such payment shall pay any
transfer or other taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder
of such Certificate. No payment of Merger Consideration shall be
paid to any holder of a Certificate with respect to the Converted
Shares represented by such Certificate until the holder of such
Certificate shall have surrendered such Certificate in accordance
with this Article III. Until surrendered as contemplated by this
Section 3.02(b), each Certificate shall be deemed at any time after
the Effective Time to represent only the right to receive the
Merger Consideration to which such holder is entitled to receive in
respect of such Certificate pursuant to this Article III. Following
the surrender of any Certificate, there shall be paid to the record
holder of the Certificate representing whole shares of Company
Stock issued in exchange therefor, without interest, at the time of
such surrender, the Merger Consideration payable in respect
therefor in accordance with this Article III. No interest shall be
paid or will accrue on any payment to holders of Certificates
pursuant to the provisions of this Article III.
(c)
No Further Ownership Rights in Company Stock . The Merger
Consideration 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 of
Company Stock formerly represented by such Certificates. At the
close of business on the day on which the Effective Time occurs,
the share transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the share transfer
books of the Surviving Corporation of the Company Stock. If, after
the Effective Time, any Certificate is presented to the Surviving
Corporation or Parent for transfer, it shall be canceled against
delivery of the Merger Consideration as provided in this Article
III.
(d)
Termination of the Exchange Fund . Any portion of the
Exchange Fund which remains undistributed to the holders of the
Certificates for twelve (12) months after the Effective Time shall
be delivered to the Surviving Corporation, upon demand, and any
holders of the Certificates who have not theretofore complied with
this Article III shall thereafter look only to the Surviving
Corporation for payment of their claim for the Merger Consideration
in accordance with this Article III.
(e)
No Liability . None of Parent, the Company, the Surviving
Corporation or the Paying Agent or any of their respective
Affiliates shall be liable to any Person in respect of any Merger
Consideration properly delivered to a public official pursuant to
any applicable abandoned property, escheat or similar Law. If any
Certificate shall not have been surrendered immediately prior to
the date on which any Merger Consideration would otherwise escheat
to or become the property of any Governmental Entity, any such
Merger Consideration shall, to the extent permitted by applicable
Law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any Person previously entitled
thereto.
(f)
Investment of Exchange Fund . The Paying Agent shall invest
the cash included in the Exchange Fund as directed by Parent prior
to the Effective Time and by the Surviving Corporation after the
Effective Time. If for any reason (including losses) the cash in
the Exchange Fund shall be insufficient to fully satisfy all of the
payment obligations to be made in cash by the Paying Agent
hereunder, the Surviving Corporation shall promptly deposit or
cause to be deposited into the Exchange Fund an amount in cash
which is equal to such deficiency in order to fully satisfy such
cash payment obligations. Any interest and other income resulting
from such investments shall be payable to Parent prior to the
Effective Time and to the Surviving Corporation after the Effective
Time.
(g)
Lost Certificates . If any Certificate has been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Corporation or the Paying Agent,
the entering into of an indemnity or the posting of a bond as
indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall deliver in
exchange for such lost, stolen or destroyed Certificate the Merger
Consideration pursuant to this Article III.
(h)
Withholding Rights . The Surviving Corporation or the Paying
Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
holder of Certificates such amounts as the Surviving Corporation or
the Paying Agent is required to deduct and withhold 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 and paid over to the appropriate Taxing
Authority by the Surviving Corporation or the Paying Agent, such
withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Certificates in
respect of which such deduction and withholding was made by the
Surviving Corporation or the Paying Agent.
Section
3.03
Stock Options .
(a) Prior
to the Effective Time, the Company shall take such action as is
necessary to cause each unvested Company Stock Option that is
outstanding immediately prior to the Effective Time to become fully
vested and exercisable. Prior to the Closing Date, the Company
shall (i) cancel, immediately prior to the Effective Time, each
then-outstanding Company Stock Option (provided that, if required
under the Company Stock Plan and/or any Company Stock Option, the
Company shall obtain from the holder of such Company Stock Option
any consent, in writing, required to effect such cancellation) in
exchange for an amount in cash (less any applicable withholding
required by Law) payable at or as soon as practicable after the
Effective Time, equal to the product of (A) the total number of
shares of Company Stock underlying such Company Stock Option and
(B) the excess, if any, of the Merger Consideration over the per
share exercise price of such Company Stock Option, and (ii) make
any amendments to the Company Stock Plans that may be necessary or
desirable to implement the foregoing.
(b) For
purposes of this Agreement, “ Company Stock Option
” means any option or right to purchase Company Stock granted
under one or more of the Company Stock Plans. “ Company
Stock Plans ” mean the Company 1993 Stock Option Plan, as
amended; the Company 1994 Non-Employee Director Stock Option Plan,
as amended; the 2003 Stock Option Plan, as amended; and the 2004
Non-Employee Director Stock Option Plan.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES
Section
4.01
Representations and Warranties of the Company . Except (i)
as disclosed in, and clearly apparent from, the Company SEC
Documents filed by the Company and publicly available prior to the
date of this Agreement (“ Filed Company SEC Documents
”) and only as and to the extent disclosed therein (other
than any forward-looking disclosures set forth in any risk factor
section, any disclosures in any section relating to forward-looking
statements and any other disclosures included therein to the extent
they are primarily predictive, cautionary or forward-looking in
nature, and provided that, in no event shall any disclosure in any
Filed Company SEC Documents qualify or limit the representations
and warranties of the Company set forth in Sections 4.01(c) or
(d)), or (ii) as to any other information set forth in Section 4.01
that the Chief Executive Officer of the Company knows, or
reasonably should know in the performance of his duties as the
Chief Executive Officer of the Company, is not true, complete or
correct, the Company represents and warrants to Parent and Merger
Sub as follows:
(a)
Organization, Standing and Corporate Power . The Company and
each of its Subsidiaries is validly existing under the Laws of the
jurisdiction of its incorporation or formation, as the case may be.
The Company and each of its Subsidiaries has all requisite
corporate, partnership, limited liability company or similar power
and authority and possesses all governmental licenses, permits,
authorizations and approvals necessary to enable it to use its
corporate or other name and to own, lease or otherwise hold and
operate its properties and other assets and to carry on its
business as currently conducted, except where the failure to have
such power, authority, licenses, permits, authorizations and
approvals would not have a Material Adverse Effect. The Company and
each of its Subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of
its properties makes such qualification, licensing or good standing
necessary, other than in such other jurisdictions where the failure
to be so qualified, licensed or in good standing has not had and
would not have a Material Adverse Effect. The Company has made
available to Parent, prior to the execution of this Agreement,
true, complete and accurate copies of the Company’s
certificate of incorporation (as amended, the “ Company
Charter ”) and bylaws (as amended, the “ Company
Bylaws ”), and the comparable organizational documents of
each of its Subsidiaries, in each case as amended to, and in effect
on, the date of this Agreement.
(b)
Subsidiaries . All of the issued and outstanding capital
stock of, or other equity interests in, each Subsidiary of the
Company have been duly authorized, validly issued and are fully
paid and nonassessable and are directly or indirectly owned by the
Company, free and clear of all pledges, liens, charges,
encumbrances or security interests of any kind or nature whatsoever
(collectively, “ Liens ”), other than Liens
imposed by or arising under applicable Law or which are not
material, and free of any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other equity interests.
Except as set forth in the Filed Company SEC Documents and except
for the capital stock of, or voting securities or equity interests
in, its Subsidiaries, the Company does not own, directly or
indirectly, as of the date of this Agreement, any capital stock of,
or other voting securities or equity interests in, any corporation,
partnership, joint venture, association or other entity, or any
options, warrants, rights or securities convertible, exchangeable
or exercisable therefor. There are no bonds, debentures, notes or
other indebtedness of any of the Company’s Subsidiaries
having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters upon which such
Subsidiaries’ equityholders may vote. Except as set forth in
the Filed Company SEC Documents and except for capital stock held
by the Company or a wholly-owned Subsidiary of the Company, (i)
there are not issued, reserved for issuance or outstanding (A) any
shares of capital stock or other voting securities or equity
interests of any Subsidiary of the Company, (B) any securities of
any Subsidiary of the Company convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities
or equity interests of such Subsidiary, or (C) any warrants, calls,
options or other rights to acquire, and no obligation to issue, any
capital stock, voting securities, equity interests or securities
convertible into or exchangeable or exercisable for capital stock
or voting securities of any Subsidiary of the Company, and (ii)
there are not any outstanding obligations to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell,
or cause to be issued, delivered or sold, any such securities.
Neither the Company nor any of its Subsidiaries is a party to any
voting Contract with respect to the voting of such securities.
There are no outstanding obligations to repurchase, redeem or
otherwise
acquire any such outstanding
securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities.
(c)
Capital Structure . The authorized capital stock of the
Company consists of 20,000,000 shares of Class A Stock, par value
$0.01 per share, 3,000,000 shares of Class B Stock, par value $.01
per share, and 1,000,000 shares of preferred stock, par value $.01
per share (the “ Preferred Stock ”). At the
close of business on June 15, 2009 (the “ Capitalization
Date ”), (i) 9,083,065 shares of Class A Stock were
issued and outstanding, (ii) 400,018 shares of Class B Stock were
issued and outstanding, (iii) 1,683,000 shares of Class A Stock
were subject to outstanding Company Stock Options with a weighted
average exercise price of $1.62 per share, and (iv) no shares of
Preferred Stock were issued or outstanding. Except as set forth
above, at the close of business on the Capitalization Date, no
shares of capital stock or other voting securities or equity
interests of the Company were issued, reserved for issuance (other
than with respect to such shares reserved for issuance upon the
exercise of Company Stock Options) or outstanding. There are no
outstanding stock appreciation rights, “phantom” stock
rights, restricted stock units, performance units, rights to
receive shares of Company Stock on a deferred basis or other rights
(other than Company Stock Options) that are linked to the value of
Company Stock (collectively, “ Company Stock-Based
Awards ”). The Company has provided or made available to
Parent a true and complete list, as of the date of this Agreement,
of each outstanding Company Stock Option and the exercise price
thereof. All Company Stock Options are issued under the Company
Stock Plans or other award agreements, true and correct copies of
which were provided or made available to Parent prior to the date
of this Agreement. All outstanding shares of capital stock of the
Company are, and all shares which may be issued pursuant to the
Company Stock Options will be, when issued in accordance with the
terms thereof, 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 in
this Section 4.01(c) and except for issuances of shares of Company
Stock pursuant to the exercise of Company Stock Options, (A) there
are not issued, reserved for issuance or outstanding (1) any shares
of capital stock or other voting securities or equity interests of
the Company, (2) any securities of the Company convertible into or
exchangeable or exercisable for shares of capital stock or other
voting securities or equity interests of the Company, with the
exception of the Class B Stock that can be converted into Class A
Stock on the holder's request at any time, (3) any warrants, calls,
options or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting
securities, equity interests or securities convertible into or
exchangeable or exercisable for capital stock or voting securities
of the Company, or (4) any Company Stock-Based Awards, and (B)
there are not any outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any such shares of capital
stock, equity interests or other securities or to register, issue,
deliver or sell, or cause to be issued, delivered or sold, any such
shares of capital stock, equity interests or other securities.
Neither the Company nor any of its Subsidiaries is a party to any
voting Contract with respect to the voting of any such
securities.
(d)
Authority; Noncontravention .
(i) The
Company has all requisite corporate power and authority to execute
and deliver this Agreement and, subject to receipt of the
Stockholder Approval and the governmental filings and other matters
referred to in the last sentence of this Section 4.01(d), to
perform its obligations under this Agreement and to consummate the
Merger and the other transactions contemplated by this Agreement.
The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the Merger and the
other transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate
the Merger and the other transactions contemplated by this
Agreement, subject, in the case of the consummation of the Merger,
to the obtaining of the Stockholder Approval. This Agreement has
been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Parent and Merger Sub,
constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except that such enforceability (A) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating
to the enforcement of creditors’ rights generally, and (B) is
subject to general principles of equity.
(ii) Upon
the recommendation of the Special Committee, the board of directors
of the Company (the “ Company Board ”), at a
meeting duly called and held, duly adopted resolutions (A)
approving and declaring advisable this Agreement, the Merger and
the other transactions contemplated by this Agreement, and (B)
recommending that the Stockholders adopt this Agreement and approve
the Merger, which resolutions, as of the date of this Agreement,
have not been subsequently rescinded, modified or withdrawn in any
way (the “ Company Board Recommendation ”). The
unaffiliated members of the Company Board unanimously approved the
Merger as contemplated by Section 11.7 of the Company
By-Laws.
(iii) The
execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the Merger
and the other transactions contemplated by this Agreement and
compliance by the Company with the provisions of this Agreement
will not, conflict with, or result in any violation or breach of,
or default (with or without notice or lapse of time, or both)
under, require consent under, or give rise to a right of, or result
in, termination, cancellation, modification or acceleration of any
obligation or to the loss of a benefit under, or result in the
creation of any Lien in or upon any of the properties or other
assets of the Company or any of its Subsidiaries under, (A) subject
to the obtaining of the Stockholder Approval, the Company Charter
or the Company Bylaws or the comparable organizational documents of
any of the Company’s Subsidiaries, (B) subject to obtaining
the consent of Tajima Industries, Ltd. (“ Tajima
”) to the change of control that would result from the
Merger, any loan or credit agreement, bond, debenture, note,
mortgage, indenture, lease, supply agreement, license agreement,
development agreement or other contract, agreement, obligation,
commitment or instrument, whether written or oral, that is intended
by the Company or any of its Subsidiaries to be legally binding
(each, including all amendments thereto, a “ Contract
”) to which the Company or any of its Subsidiaries is a party
or any of their respective properties or other assets are subject,
or (C) subject to the obtaining of the Stockholder Approval and the
governmental filings and other matters referred to in the following
sentence, any (1) federal, state, local, provincial or foreign
statute, law, ordinance, rule or regulation of a Governmental
Entity (each, a “ Law ”) applicable to the
Company or any of its Subsidiaries or
their respective properties or other
assets, or (2) order, writ, injunction, decree, judgment or
stipulation (each, an “ Order ”) applicable to
the Company or any of its Subsidiaries or their respective
properties or other assets, other than, in the case of clauses (B)
and (C) above, any such conflicts, violations, breaches,
defaults, consents, rights of termination, cancellation,
modification or acceleration, losses or Liens that would not have a
Material Adverse Effect. No consent, approval, order or
authorization of, action by or in respect of, or registration,
declaration, notice to or filing with, any federal, state, local or
foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any organized
securities exchange (each, a “ Governmental Entity
”) is required by or with respect to the Company or any of
its Subsidiaries in connection with the execution and delivery of
this Agreement by the Company or the consummation of the Merger or
the other transactions contemplated by this Agreement, except for
(w) the filing with the Securities and Exchange Commission (the
“ SEC ”) of (1) a proxy statement relating to
the adoption by the Stockholders of this Agreement (as amended or
supplemented from time to time, the “ Proxy Statement
”) and a transaction statement on Schedule 13E-3 (as amended
or supplemented from time to time, the “ Schedule
13E-3 ”), and (2) such other filings or reports under the
Securities Exchange Act of 1934, as amended (including the rules
and regulations promulgated thereunder, the “ Exchange
Act ”), as may be required in connection with this
Agreement and the Merger and the other transactions contemplated by
this Agreement, (x) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which
the Company or any of its Subsidiaries is qualified to do business,
(y) any filings with and approvals of the Nasdaq Stock Market, and
(z) such other consents, approvals, orders, authorizations,
actions, registrations, declarations, notices and filings the
failure of which to be obtained or made, would not have a Material
Adverse Effect.
(e)
Company SEC Documents.
(i) The
Company has filed with or furnished to the SEC, on a timely basis,
all reports, schedules, forms, statements and other documents
(including exhibits and other information incorporated therein)
required to be filed or furnished by the Company since January 1,
2007 (such documents, together with any documents filed during such
period by the Company with the SEC on a voluntary basis on Current
Reports on Form 8-K, the “ Company SEC Documents
”). As of their respective filing dates, or, if revised,
amended, supplemented or superseded by a later-filed Company SEC
Document filed prior to the date of this Agreement, as of the date
of filing of the last such revision, amendment, supplement or
superseding filing, the Company SEC Documents complied in all
material respects with, to the extent in effect at the time of
filing, the requirements of the Securities Act of 1933, as amended
(including the rules and regulations promulgated thereunder, the
“ Securities Act ”), the Exchange Act and the
Sarbanes-Oxley Act of 2002 (including the rules and regulations
promulgated thereunder, “ SOX ”) applicable to
such Company SEC Documents, and none of the Company SEC Documents
contained any untrue statement of a material fact or omitted 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. None of the Company SEC
Documents (as revised, amended, supplemented or superseded by a
later-filed Company SEC Document) contains any untrue statement of
a material fact or omits 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, which individually or in the
aggregate would require an
amendment, supplement or corrective filing to such Company SEC
Documents. Each of the financial statements (including the related
notes) of the Company included in the Company SEC Documents
complied at the time it was filed in all material respects with the
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto in effect at the time
of filing, had been prepared in accordance with generally accepted
accounting principles in the United States (“ GAAP
”) (except as otherwise noted therein and, in the case of
unaudited statements, as permitted by the rules and regulations of
the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly
presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
Neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent
or otherwise) other than (A) liabilities or obligations reflected
or reserved against on the balance sheet of the Company and its
Subsidiaries as of March 31, 2009 included in the Filed Company SEC
Documents (including the notes thereto), (B) liabilities or
obligations incurred after March 31, 2009 in the ordinary course of
business, or (C) liabilities or obligations which would not have a
Material Adverse Effect. None of the Subsidiaries of the Company
are, or have at any time been, subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange
Act.
(ii) As
of the date of this Agreement, (A) there are no outstanding or
unresolved comments in comment letters received from the SEC staff
with respect to the Company SEC Documents, and (B) to the Knowledge
of the Company, none of the Company SEC Documents is the subject of
ongoing SEC review, outstanding SEC comment or outstanding SEC
investigation.
(f)
Voting Requirements . Assuming the accuracy of the
representations and warranties of the Parent and Merger Sub in
Section 4.02, the only vote of Stockholders required to approve
this Agreement and the Merger is the affirmative vote of holders of
at least a majority of the outstanding shares of Company Stock at
the Stockholders’ Meeting or any adjournment or postponement
thereof (the “ Stockholder Approval
”).
(g)
State Takeover Laws . The Company Board, upon the
recommendation of the Special Committee, has approved this
Agreement, the terms of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement,
and such approval represents all the actions necessary to render
inapplicable to this Agreement and the Merger and the other
transactions contemplated by this Agreement, the restrictions on
“business combinations” set forth in Section 203 of the
DGCL, to the extent such restrictions would otherwise be applicable
to this Agreement or the Merger and the other transactions
contemplated by this Agreement. No other state takeover statute or
similar statute or regulation applies to this Agreement or the
Merger or the other transactions contemplated by this
Agreement.
(h)
Brokers and Other Advisors . No broker, investment banker,
financial advisor or other Person (other than Burnham Securities,
Inc. for its opinion referenced in Section 4.01(i) below, the fees
and expenses of which will be paid by the Company), is entitled to
any
broker’s, finder’s or
financial advisor’s fees or commissions in connection with
the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has
delivered to Parent true, complete and accurate copies of all
written agreements entered into on or prior to the date of this
Agreement under which any such fees or expenses are payable and all
indemnification and contribution related to the engagement of the
Persons to whom such fees are payable.
(i)
Opinion of Financial Advisors . On July 1, 2009, the Special
Committee received the opinion of Burnham Securities, Inc. to the
effect that, as of such date, the Merger Consideration is fair,
from a financial point of view, to the holders of shares of Company
Stock, other than Parent, Merger Sub and Paul Gallagher.
(j)
Schedule 13E-3/Proxy Statement; Other Information . None of
the information provided by the Company for inclusion in the
Schedule 13E-3 or the Proxy Statement (the “ Company
Information ”) will, in the case of the Schedule 13E-3,
as of the date of its filing and of each amendment or supplement
thereto and, in the case of the Proxy Statement, (i) at the time of
the mailing of the Proxy Statement or any amendments or supplements
thereto, and (ii) 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 were made, not misleading. Notwithstanding the
foregoing, the Company makes no representation or warranty with
respect to any information that is contained or incorporated by
reference in the Schedule 13E-3 or the Proxy Statement other than
with respect to the Company Information as forth in this Section
4.01(j). The Proxy Statement will comply in all material respects
with the requirements of the Exchange Act.
Section
4.02
Representations and Warranties of Parent and Merger Sub .
Parent and Merger Sub represent and warrant to the Company as
follows:
(a)
Organization, Standing and Corporate Power.
Each of Parent and Merger Sub is
validly existing under the laws of the State of Delaware. Each of
Parent and Merger Sub has made available to the Company true,
complete and accurate copies of its respective certificate of
incorporation and bylaws. Each of Parent and Merger Sub has the
requisite corporate power and authority to own, operate or lease
its respective properties and to carry on its respective business
as it is now being conducted, and is duly qualified or licensed to
do business, and is in good standing, in each jurisdiction in which
the nature of its respective business or the properties owned,
operated or leased by it makes such qualification, licensing or
good standing necessary, except where the failure to have such
power, authority or to be so qualified, licensed or in good
standing, would not have a Parent Material Adverse
Effect.
(b)
Authority; Noncontravention.
(i) Each
of Parent and Merger Sub has all requisite power and authority to
execute and deliver this Agreement, to perform its obligations
under this Agreement and to consummate the transactions
contemplated by this Agreement. The execution, delivery and
performance of this Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions
contemplated by this Agreement have been duly authorized
by all necessary entity action on
the part of Parent and Merger Sub and no other proceedings on the
part of Parent or Merger Sub (other than approval by Parent as the
sole stockholder of Merger Sub, such approval to occur immediately
after the execution of this Agreement) are necessary to authorize
this Agreement or to consummate the Merger and the other
transactions contemplated by this Agreement. This Agreement has
been duly executed and delivered by Parent and Merger Sub and,
assuming the due authorization, execution and delivery of this
Agreement by the Company, constitutes the legal, valid and binding
obligation of Parent and Merger Sub, enforceable against Parent and
Merger Sub in accordance with its terms, except that such
enforceability (A) may be limited by bankruptcy, insolvency,
moratorium or other similar Laws affecting or relating to the
enforcement of creditors’ rights generally, and (B) is
subject to general principles of equity.
(ii) The
execution, delivery and performance of this Agreement by Parent and
Merger Sub do not, and the consummation by Parent and Merger Sub of
transaction
