EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
AMONG
VEECO INSTRUMENTS INC.,
VEECO ACQUISITION CORP.,
APPLIED EPI, INC.
AND
CERTAIN OF
ITS SECURITYHOLDERS
SEPTEMBER 6, 2001
TABLE OF CONTENTS
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I. DEFINITIONS................................................................1
1.01 Certain Definitions...............................................1
1.02 ...............................................9
II. THE MERGER.................................................................9
2.01 The Merger........................................................9
2.02 Effective Time of the Merger......................................9
2.03 Closing of the Merger.............................................9
2.04 Effects of the Merger.............................................9
2.05 Conversion of Shares; Payment for Certain Options................10
2.06 Escrow...........................................................12
2.07 Subsequent Action................................................12
2.08 Stockholders' Representative.....................................12
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
COMPANY STOCKHOLDERS......................................................13
3.01 Due Organization; Subsidiaries; Etc..............................13
3.02 Capitalization...................................................14
3.03 Authorization....................................................15
3.04 Financial Statements.............................................15
3.05 No Undisclosed Liabilities.......................................15
3.06 Compliance with Law; Governmental Authorizations.................15
3.07 No Conflicts.....................................................16
3.08 Contracts........................................................16
3.09 Litigation.......................................................19
3.10 Taxes............................................................19
3.11 Absence of Certain Changes.......................................21
3.12 Employee Benefit Plans...........................................21
3.13 Intellectual Property............................................24
3.14 Environmental Matters............................................27
3.15 Labor Relations..................................................28
3.16 Brokers and Finders..............................................28
3.17 Condition and Sufficiency of Assets..............................29
3.18 Accounts Receivable..............................................29
3.19 Inventory........................................................29
3.20 Certain Payments.................................................29
3.21 Product Liability................................................29
3.22 Product Warranty.................................................30
3.23 Books and Records................................................30
3.24 Real Property....................................................30
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3.25 Tangible Property................................................31
3.26 Officers and Employees...........................................31
3.27 Insurance........................................................32
3.28 Banking Relationships............................................32
3.29 Transactions with Stockholders and Affiliates....................32
3.30 Solvency.........................................................32
IV. REPRESENTATIONS AND WARRANTIES OF VEECO AND
ACQUISITION...............................................................33
4.01 Organization of Veeco and Acquisition............................33
4.02 Capitalization...................................................34
4.03 Non-Contravention................................................34
4.04 Reports..........................................................34
4.05 Absence of Certain Changes.......................................35
4.06 No Undisclosed Liabilities.......................................36
4.07 Litigation.......................................................36
4.08 Restrictions on Business Activities..............................36
4.09 Governmental Authorization.......................................36
4.10 Compliance With Laws.............................................36
4.11 Brokers and Finders..............................................37
4.12 Accuracy of Representations and Warranties.......................37
V. COVENANTS.................................................................37
5.01 Access...........................................................37
5.02 Conduct of the Businesses of the Target Corporations Pending
the Closing Date.................................................37
5.03 Conduct of Business of the Company and Veeco.....................37
5.04 Consents.........................................................38
5.05 Environmental Transfer Laws......................................39
5.06 Tax Matters......................................................39
5.07 Notice of Breach; Disclosure.....................................39
5.08 Payment of Indebtedness by and to Affiliates.....................40
5.09 No Negotiation...................................................40
5.10 FIRPTA...........................................................40
5.11 Blue Sky Laws....................................................40
5.12 Listing of Additional Shares.....................................40
5.13 Additional Agreements............................................41
5.14 HSR Act Compliance...............................................41
5.15 Stock Options....................................................41
5.16 Competition and Solicitation.....................................42
5.17 Employment Matters...............................................43
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5.18 Location of Surviving Corporation................................43
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF VEECO AND
ACQUISITION...............................................................44
6.01 Representations and Warranties...................................44
6.02 Performance of Covenants.........................................44
6.03 Litigation.......................................................44
6.04 Consents and Approvals; HSR Act Compliance.......................44
6.05 Material Changes.................................................44
6.06 Delivery of Documents............................................44
6.07 Legal Opinion....................................................45
6.08 Articles of Merger...............................................46
6.09 Stockholder Approval.............................................46
6.10 Option Plan Interpretations......................................46
VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY........................46
7.01 Representations and Warranties...................................46
7.02 Performance of Covenants.........................................46
7.03 Litigation.......................................................47
7.04 Consents and Approvals; HSR Act Compliance.......................47
7.05 Delivery of Documents............................................47
7.06 Material Changes.................................................48
7.07 Legal Opinion....................................................48
7.08 Articles of Merger...............................................48
7.09 Stockholder Approval.............................................48
VIII. INDEMNIFICATION; REMEDIES.................................................48
8.01 Survival.........................................................48
8.02 Indemnification by the Company and the Stockholders..............49
8.03 Tax Indemnification by Company Stockholders......................49
8.04 Indemnification by Veeco.........................................50
8.05 Procedure for Indemnification--Third Party Claims................51
8.06 Exclusive Remedy.................................................52
IX. TERMINATION...............................................................52
9.01 Termination Events...............................................52
9.02 Effect of Termination............................................52
9.03 Amendment........................................................53
X. MISCELLANEOUS.............................................................53
10.01 Confidentiality..................................................53
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10.02 Expenses.........................................................53
10.03 Public Announcements.............................................54
10.04 Successors.......................................................54
10.05 Further Assurances...............................................54
10.06 Waiver...........................................................54
10.07 Entire Agreement.................................................54
10.08 Governing Law....................................................54
10.09 Assignment.......................................................54
10.10 Notices..........................................................54
10.11 Headings.........................................................56
10.12 Counterparts.....................................................56
10.13 Exhibits and Schedules...........................................56
10.14 Severability.....................................................56
10.15 No Third-Party Beneficiaries.....................................56
EXHIBITS
--------
Exhibit A Articles of Merger to be filed with the Secretary of State of the
State of Minnesota
Exhibit B Amended and Restated Articles of Incorporation of the Company
Exhibit C Amended and Restated By-Laws of the Company
Exhibit D Escrow Agreement
Exhibit E Irrevocable Proxy
Exhibit F FIRPTA Notification Letter; Form of Notice to Internal Revenue
Service together with written authorization from the Company
Exhibit G Employment Agreement of Xxxxx X. Xxxxxx
Exhibit H Investment Agreement
Exhibit I Opinion of Robins, Kaplan, Xxxxxx & Xxxxxx L.L.P.
Exhibit J Registration Rights Agreement
Exhibit K Opinion of Xxxx Xxxxxxx LLP
Exhibit L Consulting Agreement of Xxxx X. Xxxxxxx
Exhibit M Second Amendment to Xxxxx Xxxxx Xxxxxx Employment Agreement
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "MERGER AGREEMENT"), is made as of
September 6, 2001, by and among Veeco Instruments Inc., a Delaware corporation
("VEECO"), Veeco Acquisition Corp., a Minnesota corporation and a wholly-owned
subsidiary of Veeco ("ACQUISITION"), Applied Epi, Inc., a Minnesota corporation
(the "COMPANY"), the shareholders of the Company listed on the signature pages
hereto (the "COMPANY STOCKHOLDERS") and Xxxx X. Xxxxxxx, as Stockholders'
Representative (as defined below).
The Boards of Directors of the Company, Acquisition and Veeco have
determined that it is advisable and in the best interests of their respective
stockholders for Acquisition to merge with and into the Company with the result
that the Company shall be the surviving corporation and shall become a
wholly-owned subsidiary of Veeco (the "MERGER"), upon the terms and conditions
set forth herein and in accordance with the provisions of the Minnesota Business
Corporation Act (the "MBCA").
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
it is agreed as follows:
I. DEFINITIONS.
1.01 CERTAIN DEFINITIONS. For purposes of this Merger Agreement, the
following terms shall have the following meanings:
"ACQUISITION" shall have the meaning set forth in the first paragraph of
this Merger Agreement.
"AFFILIATE" of any Person shall mean a Person which directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person.
"ARTICLES OF MERGER" shall have the meaning set forth in Section 2.02.
"BALANCE SHEET" shall have the meaning set forth in Section 3.04.
"BENEFIT PLANS" shall have the meaning set forth in Section 3.12(a).
"CASH ELECTION" shall have the meaning set forth in Section 2.05(a).
"CASH ELECTION CERTIFICATE" shall have the meaning set forth in
Section 6.06(ii).
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 X.X.X.xx. 9601 et seq., as amended and in effect
as of the Closing Date.
"CLOSING" shall have the meaning set forth in Section 2.03.
"CLOSING DATE" shall have the meaning set forth in Section 2.03.
"COBRA" shall have the meaning set forth in Section 3.12(f).
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"COMPANY" shall have the meaning set forth in the first paragraph of this
Merger Agreement.
"COMPANY AGENT" shall have the meaning set forth in Section 3.13(g).
"COMPANY COMMON STOCK" shall mean the common stock of the Company, $0.01
par value.
"COMPANY EMPLOYEES" shall have the meaning set forth in Section 5.18 (a).
"COMPANY OPTION PLANS" shall have the meaning set forth in Section 6.10.
"COMPANY OPTIONS" shall have the meaning set forth in Section 5.15(a).
"COMPANY-OWNED IP" shall have the meaning set forth in Section 3.13(f).
"COMPANY-OWNED IP REGISTRATIONS" shall have the meaning set forth in
Section 3.13(d).
"COMPANY STOCKHOLDERS" shall have the meaning set forth in the first
paragraph of this Merger Agreement.
"COMPANY WARRANTS" shall have the meaning set forth in Section 5.15(a).
"CONFIDENTIAL IP INFORMATION" shall have the meaning set forth in
Section 3.13(i).
"CONSTITUENT CORPORATIONS" shall have the meaning set forth in
Section 2.01.
"CONTRACT" shall mean any agreement, arrangement, commitment, indemnity,
indenture, instrument or lease, including any and all amendments, supplements,
and modifications (whether oral or written) thereto, whether or not in writing.
"DAMAGES" shall have the meaning set forth in Section 8.02.
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"DEVELOP" and "DEVELOPMENT" shall mean (i) the construction,
reconstruction, refurbishment, renovation, substantial modification,
restoration, conversion, structural alteration, relocation or enlargement of any
building or structure or any clearing, grading or other movement of land that,
in any case, disturbs the surface or subsurface, surface water or groundwater,
or otherwise affects Hazardous Substances or (ii) any change in zoning or
government land use approval.
"DISCLOSURE SCHEDULE" shall mean, collectively, the disclosure schedules
delivered by the Company to Veeco concurrently with the execution and delivery
of this Merger Agreement.
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.02.
"ENVIRONMENT" shall have the meaning assigned to that term under CERCLA.
"ENVIRONMENTAL LAWS" shall mean any state, federal or local laws,
ordinances, codes, regulations, statutes, orders, judgments, decrees, permits or
licenses relating to pollution, natural resources, protection of the Environment
or public health and safety, including, without limitation, laws and regulations
relating to the use, treatment, storage, release, disposal or transportation of
Hazardous Substances or the handling and disposal of medical and biological
waste.
"ENVIRONMENTAL LIABILITIES" shall mean any liability arising under
Environmental Law consisting of or relating to:
(1) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and
health, and regulation of chemical substances or products);
(2) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(3) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including
any investigation, cleanup, removal, containment, or other remediation or
response actions ("CLEANUP") required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or any other Person) and
for any natural resource damages; or
(4) any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety and
Health Law.
The terms "removal," "remedial action," and "response" shall have the
meanings assigned under CERCLA.
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"EQUITY SECURITIES" shall mean any (i) capital stock or any securities
representing any other equity interest or (ii) any securities convertible into
or exchangeable for capital stock or any other rights, warrants or options to
acquire any of the foregoing securities.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" shall mean with respect to any person (i) any
corporation which is a member of a controlled group of corporations, within the
meaning of Section 414(b) of the Code, of which that person is a member, (ii)
any trade or business (whether or not incorporated) which is a member of a group
of trades or businesses under common control, within the meaning of Section
414(c) of the Code, of which that person is a member and (iii) any member of an
affiliated service group, within the meaning of Section 414(m) and (o) of the
Code, of which that person or any entity described in clause (i) or (ii) is a
member.
"ESCROW AGREEMENT" shall have the meaning set forth in Section 2.06.
"ESCROW PERIOD" shall mean the period commencing on the Closing Date and
ending on June 30, 2003.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" shall mean American Stock Transfer Company.
"FACILITIES" shall mean any real property or leasehold or other interests
in real property currently or formerly owned, occupied or operated by any Target
Corporation and any buildings, plants or structures currently or formerly owned,
occupied or operated by any Target Corporation.
"FIRPTA" shall mean the Foreign Investment in Real Property Tax Act of
1980.
"FOREIGN PLANS" shall have the meaning set forth in Section 3.12(a).
"GAAP" shall mean United States generally accepted accounting principles.
"GOVERNMENTAL AUTHORITY" shall mean any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"HAZARDOUS SUBSTANCES" shall mean (i) any hazardous or toxic waste,
substance or material defined in any Environmental Law, (ii) asbestos-containing
material, (iii) medical and biological waste, (iv) polychlorinated biphenyls,
(v) petroleum products, including gasoline, fuel oil, crude oil and constituents
of such petroleum products and (vi) any other chemicals, materials or
substances, exposure to which is prohibited, limited, or regulated by any
Environmental Laws.
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"HIPAA" shall have the meaning set forth in Section 3.12(f).
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INFORMATION TECHNOLOGY" shall mean computer software, computer firmware,
computer hardware (whether general or specific purpose) and other similar or
related items of automated, computerized and/or software systems developed by or
for the Company.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in
Section 3.13(a).
"INTERIM FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 3.04.
"IRS" shall mean the Internal Revenue Service of the United States or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
"KNOWLEDGE" shall mean, (i) with respect to an individual, the actual
knowledge, after reasonable inquiry, of such individual, and (ii) with respect
to any Person other than an individual, the actual knowledge, after reasonable
inquiry, of the executive officers and directors of a corporate entity or other
persons performing similar functions for any other type of entity.
"LAW" shall mean any constitutional provision or any statute or other law,
rule or regulation of any Governmental Authority and any decree, injunction,
judgment, order, ruling, assessment or writ.
"LEASED REAL PROPERTY" shall have the meaning set forth in
Section 3.24(b).
"LEASED TANGIBLE PROPERTY" shall have the meaning set forth in
Section 3.25(b).
"LEASES" shall have the meaning set forth in Section 3.24(b).
"LICENSED-IN AGREEMENTS" shall have the meaning set forth in
Section 3.13(e).
"LICENSES" shall have the meaning set forth in Section 3.06(b).
"LIEN" shall mean any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, encroachment or other survey defect, transfer restriction or other
encumbrance of any nature whatsoever.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any entity or group
of entities, any event, change or effect that is materially adverse to the
condition (financial or otherwise), properties, assets, liabilities, business,
operations or results of operations of such entity and its Subsidiaries, taken
as a whole.
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"MATERIAL CONTRACT" shall mean any Contract required to be listed on
SECTION 3.08(a) of the Disclosure Schedule.
"MBCA" shall have the meaning set forth in the second paragraph of this
Merger Agreement.
"MERGER" shall have the meaning set forth in the second paragraph of this
Merger Agreement.
"MERGER AGREEMENT" shall mean this Agreement and Plan of Merger.
"MERGER CONSIDERATION" shall have the meaning set forth in
Section 2.05(a).
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section 3.12(a).
"NASDAQ" shall mean The NASDAQ Stock Market, Inc.
"NEW PLANS" shall have the meaning set forth in Section 5.18(c).
"NON-COMPANY STOCKHOLDERS" shall mean the shareholders of the Company
identified on Section 3.02(a) of the Disclosure Schedule other than the Company
Stockholders.
"NON-QUALIFIED OPTION AGREEMENTS" shall have the meaning set forth in
Section 6.10.
"OCCUPATIONAL SAFETY AND HEALTH LAW" shall mean any applicable Law
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards.
"OWNED REAL PROPERTY" shall have the meaning set forth in Section 3.24(a).
"OWNED TANGIBLE PROPERTY" shall have the meaning set forth in
Section 3.25(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"PERMITTED LIENS" shall mean:
(i) Liens for Taxes not yet due and payable or which are being contested
in good faith by appropriate proceedings diligently pursued, PROVIDED that
provision for the payment of all such Taxes has been made on the books of the
Company to the extent required by GAAP;
(ii) mechanics', processor's, materialmen's, carriers', warehousemen's,
repairmen's, landlord's and similar Liens arising by operation of law and
arising in the ordinary course of business and securing obligations of the
Company that are not overdue for a period of more than 60 days or are being
6
contested in good faith by appropriate proceedings diligently pursued, PROVIDED
that provision for the payment of such Liens has been made on the books of the
Company to the extent required by GAAP;
(iii) Liens arising in connection with worker's compensation, unemployment
insurance, old age pensions and social security benefits, PROVIDED that
provision for the payment of such Liens has been made on the books of the
Company to the extent required by GAAP;
(iv) Customary rights of set off, revocation, refund or chargeback under
deposit agreements or under the Uniform Commercial Code as in effect in the
State of Minnesota of banks or other financial institutions where the Company
maintains deposits in the ordinary course of business and similar rights of
sellers under Article 2 of the Uniform Commercial Code as in effect in the State
of Minnesota; and
(v) Liens securing indebtedness disclosed in the Balance Sheet or on any
Schedule to this Merger Agreement.
"PERSON" shall mean any individual, corporation, limited liability
company, partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, or other organization, whether or not a
legal entity, and any Governmental Authority.
"RELEASE" shall have the meaning assigned to that term under CERCLA.
"SEC" shall mean the United States Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"STOCKHOLDER INDEMNITEES" shall have the meaning set forth in
Section 8.04.
"STOCKHOLDERS" shall mean, collectively, the Company Stockholders and the
Non-Company Stockholders.
"STOCKHOLDERS' REPRESENTATIVE" shall have the meaning set forth in
Section 2.08.
"SUBSIDIARY" shall mean the following: an entity shall be deemed to be a
"Subsidiary" of another Person if such Person directly or indirectly owns,
beneficially or of record (i) an amount of voting securities of other equity
interests in such Person that is sufficient to enable such Person to elect at
least a majority of the members of such Person's board of directors or other
governing body, or (ii) at least 50% of the outstanding equity interests of such
Person.
"SURVIVING CORPORATION" shall have the meaning set forth in Section 2.01.
"TANGIBLE PROPERTY" shall have the meaning set forth in Section 3.25(c).
"TANGIBLE PROPERTY LEASES" shall have the meaning set forth in Section
3.25(b).
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"TARGET CORPORATIONS" shall mean the Company, together with its
Subsidiaries.
"TAX" or "TAXES" shall mean any and all taxes (whether Federal, state,
local or foreign), including, without limitation, income, profits, franchise,
gross receipts, payroll, sales, employment, use, property, withholding, excise,
occupation, value added, ad valorem, transfer and other taxes, duties or
assessments of any nature whatsoever, together with any interest, penalties or
additions to tax imposed with respect thereto, imposed, assessed or collected by
or under the authority of any Governmental Authority or payable pursuant to any
tax-sharing agreement or any other contract relating to the sharing or payment
of any such tax.
"TAX RETURNS" shall mean any returns, (including any information returns),
reports, statements, notices, forms or other documents or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Authority in connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration, implementation or
enforcement of, or compliance with, any legal requirement relating to any Tax.
"THIRD PARTY INTELLECTUAL PROPERTY" shall mean all (i) inventions,
discoveries and ideas, whether patentable or not, in any jurisdiction, (ii)
letters patent (including, but not limited to, all reissues, extensions,
renewals, divisions and continuations thereof and thereto (including
continuations-in-part)) and all applications therefor, (iii) all copyrights,
mask works, trademarks and service marks and all registrations and applications
for registration thereof, (iv) all trade secrets, know-how, inventory,
algorithms, methods, processes, protocols, methodologies, computer software
(including, but not limited to, source code in object code and source code
form), design, functional, technical and other specifications (for computer
software and other properties) and (v) all other tangible and intangible
proprietary materials owned by a third party.
"THREATENED" shall mean the following: a claim, proceeding, dispute,
action, or other matter will be deemed to have been "Threatened" if any demand
or statement has been made or any notice has been given that would lead a
prudent Person to conclude that such a claim, proceeding, dispute, action or
other matter is reasonably likely to be asserted, commenced, taken or otherwise
pursued in the future.
"VEECO" shall have the meaning set forth in the first paragraph of this
Merger Agreement.
"VEECO AUTHORIZATIONS" shall have the meaning set forth in Section 4.09.
"VEECO BALANCE SHEET" shall have the meaning set forth in Section 4.06.
"VEECO BALANCE SHEET DATE" shall have the meaning set forth in
Section 4.05.
"VEECO FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 4.04.
"VEECO INDEMNITEES" shall have the meaning set forth in Section 8.02.
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"VEECO OPTIONS" shall have the meaning set forth in Section 4.02(b).
"VEECO SEC DOCUMENTS" shall have the meaning set forth in Section 4.04.
"VEECO SHARES" shall mean the common stock, $.01 par value per share, of
Veeco.
"VEECO'S BROKERS" shall have the meaning set forth in Section 4.11.
1.02 The words "hereof," "herein," "hereby" and "hereunder," and words of
like import, refer to this Merger Agreement as a whole and not to any particular
Section hereof. References herein to any Section, Schedule or Exhibit refer to
such Section of, or such Schedule or Exhibit to, this Merger Agreement, unless
the context otherwise requires. All pronouns and any variations thereof refer to
the masculine, feminine or neuter gender, singular or plural, as the context may
require.
II. THE MERGER.
2.01 THE MERGER. At the Effective Time of the Merger, Acquisition shall be
merged with and into the Company. The separate existence of Acquisition shall
thereupon cease and the Company shall continue its corporate existence as the
surviving corporation (the "SURVIVING CORPORATION") under the laws of the State
of Minnesota under its present name. The Company and Acquisition are sometimes
referred to collectively herein as the "CONSTITUENT CORPORATIONS".
2.02 EFFECTIVE TIME OF THE MERGER. At the Closing, the parties hereto
shall cause (i) articles of merger substantially in the form of EXHIBIT A
annexed hereto to be executed and filed with the Secretary of State of the State
of Minnesota, as provided in Section 302A.615 of the MBCA (the "ARTICLES OF
MERGER"), and shall take all such other and further actions as may be required
by law to make the Merger effective. The Merger shall become effective as of the
date and time of the filing of such Articles of Merger, or otherwise as provided
therein. The date and time of such effectiveness are referred to herein as the
"EFFECTIVE TIME".
2.03 CLOSING OF THE MERGER. Unless this Merger Agreement shall theretofore
have been terminated pursuant to the provisions of Section 9.01 hereof, the
closing of the Merger (the "CLOSING") shall take place on September 17, 2001, or
on such later date that is two business days following the date on which the
last of the conditions set forth in Articles VI and VII hereof are fulfilled or
waived, subject to applicable laws (the "CLOSING DATE"), at the offices of
Robins, Kaplan, Xxxxxx & Xxxxxx L.L.P., 0000 XxXxxxx Xxxxx, 000 XxXxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000 unless another time, date or place is agreed to in
writing by the parties hereto.
2.04 EFFECTS OF THE MERGER. At the Effective Time of the Merger:
(a) the separate existence of Acquisition shall cease and
Acquisition shall be merged with and into the Company, which shall be the
Surviving Corporation;
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(b) the Amended and Restated Articles of Incorporation in the form
attached hereto as EXHIBIT B, and the Amended and Restated By-Laws of the
Company in the form attached hereto as EXHIBIT C, shall be the Articles of
Incorporation and By-Laws of the Surviving Corporation until each shall
thereafter be amended in accordance with each of their terms and as provided by
law;
(c) Xxxxxx X. Xxxxx and Xxxx X. Xxxx, Xx. shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Amended and Restated Articles of Incorporation and Amended and Restated
By-Laws of the Surviving Corporation, in each case until their respective
successors are duly elected and qualified;
(d) the Surviving Corporation shall possess all the rights,
privileges, immunities and franchises, of a public as well as of a private
nature, of each of the Constituent Corporations, and all property, real,
personal, and mixed, and all debts due on whatever account, and all other choses
in action, and all and every other interest of or belonging to or due to each of
the Constituent Corporations shall be taken and deemed to be transferred to and
vested in the Surviving Corporation without further act or deed; and
(e) the Surviving Corporation shall thenceforth be responsible and
liable for all liabilities and obligations of each of the Constituent
Corporations, and any claim or action or proceeding by or against either of the
Constituent Corporations may be prosecuted as if such Merger had not taken place
or the Surviving Corporation may be substituted in its place. Neither the rights
of creditors nor liens upon the property of either of the Constituent
Corporations shall be impaired by the Merger.
2.05 CONVERSION OF SHARES; PAYMENT FOR CERTAIN OPTIONS. As of the
Effective Time, by virtue of the Merger and without any further action on the
part of Veeco, Acquisition, the Company or any holder of any Equity Securities
of the Constituent Corporations:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive 0.184 Veeco Shares (the "MERGER CONSIDERATION"), upon surrender of the
certificates to Veeco representing such shares of Company Common Stock. Subject
to the provisions below, each Stockholder who owns shares of issued and
outstanding Company Common Stock immediately prior to the Effective Time shall
have the right to elect to receive all or any portion of such Merger
Consideration in the form of cash in lieu of Veeco Shares at the rate of $27.46
per each Veeco Share such Stockholder was entitled to receive as Merger
Consideration (a "CASH ELECTION"); provided, however, that in no event shall the
aggregate cash portion of the Merger Consideration payable by Veeco to all
Stockholders exceed $29,800,000. In the event the aggregate amount of Cash
Elections exceeds $29,800,000, then the portion of Merger Consideration in the
form of cash payable to each such Stockholder shall be reduced pro rata on the
basis of the amount of cash each such Stockholder elected to receive, such that
the total cash portion of the Merger Consideration payable by Veeco shall equal
$29,800,000. In the event the aggregate amount of Cash Elections is less than
$29,800,000, then the portion of the Merger Consideration in the form of cash
payable to each such stockholder shall be increased pro rata on the basis of the
aggregate amount of
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Merger Consideration each such Stockholder is entitled to receive, such that
the total cash protion of the Merger Consideration payable by Veeco shall
equal $29,800,000.
(b) Each share of common stock, par value $0.01 per share, of
Acquisition issued and outstanding immediately prior to the Effective Time shall
be converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(c) The stock portion of the Merger Consideration shall be adjusted
to reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Veeco
Shares or Company Common Stock), reorganization, recapitalization or other like
change with respect to Veeco Shares or Company Common Stock occurring after the
date hereof and prior to the Effective Time.
(d) No fraction of a Veeco Share will be issued, but in lieu thereof
each Stockholder who would otherwise be entitled to a fraction of a Veeco Share
(after aggregating all fractional shares of Veeco Shares to be received by such
holder) shall receive from Veeco an amount of cash (rounded to the nearest whole
cent) equal to the product of (i) such fraction, multiplied by (ii) $27.46.
(e) All Company Common Stock, by virtue of the Merger and without
any action on the part of the holders thereof, shall no longer be outstanding
and shall be canceled and retired and shall cease to exist, and each holder of a
certificate representing any Company Common Stock shall thereafter cease to have
any rights with respect to such Company Common Stock, except the right to
receive the Merger Consideration for the Company Common Stock upon the surrender
of such certificate in accordance with this Section.
(f) Promptly after the Effective Time, Veeco shall make available to
the Exchange Agent such number of Veeco Shares constituting the stock portion of
the Merger Consideration and cash in an amount sufficient for payment of the
cash portion of the Merger Consideration and for payments to be made in lieu of
issuing fractional shares pursuant to Section 2.05(d) as shall be set forth in
the Cash Election Certificate, subject to a portion of the aggregate Merger
Consideration issuable to the Company Stockholders to be delivered by Veeco to
the escrow agent pursuant to Section 2.06.
(g) Promptly following proper delivery of a certificate or agreement
evidencing Company Common Stock by the holder thereof to the Exchange Agent, the
Exchange Agent shall deliver to such holder, subject to Section 2.06, a
certificate representing the stock portion of the Merger Consideration and the
cash portion of the Merger Consideration, if any, for the shares of Company
Common Stock represented by the certificate so delivered by such holder, as
shall be set forth in the Cash Election Certificate.
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2.06 ESCROW. Veeco shall deposit 246,000 Veeco Shares with The Bank of
Cherry Creek, N.A., as escrow agent on the Closing Date, in accordance with the
terms of an escrow agreement substantially in the form and on the terms of
EXHIBIT D hereto (the "ESCROW AGREEMENT"). The Veeco Shares deposited in escrow
shall be allocated to each Company Stockholder as more particularly described in
SCHEDULE 2.06 and the Escrow Agreement. The Escrow Agreement shall automatically
terminate on June 30, 2003 and any Veeco Shares held by the escrow agent on such
date shall be distributed on such date in accordance with the terms of the
Escrow Agreement.
2.07 SUBSEQUENT ACTION. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances and any other actions or things are necessary,
desirable or proper 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, properties or assets of the Constituent Corporations as a result of, or
in connection with, the Merger, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of the Constituent Corporations or otherwise, all such deeds, bills of
sale, assignments and assurances and to take and do, in the name and on behalf
of the Constituent Corporations or otherwise, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Merger Agreement.
2.08 STOCKHOLDERS' REPRESENTATIVE. (a) In order to efficiently administer
(i) the defense or settlement of any claims for which any of the Veeco
Indemnitees may be entitled to indemnification pursuant to Article VIII hereof
and (ii) any other matter arising under or relating to the Escrow Agreement
after the Closing, Xxxx X. Xxxxxxx is hereby appointed to represent the
interests of the Company Stockholders after the Effective Date (the
"STOCKHOLDERS' REPRESENTATIVE").
(b) The Stockholders' Representative shall be authorized to take all
actions which he deems appropriate in connection with the matters described in
Section 2.08(a), including, without limitation, to execute and deliver the
Escrow Agreement on behalf of the Stockholders and to perform the transactions
contemplated thereby.
(c) In the event that the Stockholders' Representative dies, becomes
unable to perform his responsibilities hereunder or resigns from such position,
then the remaining Stockholders who held not less than a majority of the
outstanding Company Common Stock held by all such remaining Stockholders as of
the Effective Time, calculated on a fully-diluted basis, shall designate a
replacement within 10 days of such death, inability to perform or resignation,
and shall notify all Stockholders in writing of such replacement within 10 days
from the designation of such individual.
(d) All decisions and actions by the Stockholders' Representative
shall be binding upon all of the Stockholders, and no Stockholder shall have the
right to object, dissent, protest or otherwise contest the same.
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(e) (i) Each of the Veeco Indemnitees shall be entitled to rely
conclusively on the instructions and decisions of the Stockholders'
Representative as to any matter described in Section 2.08(a), and no party
hereto shall have any cause of action against any of the Veeco Indemnitees for
any action taken by any such Veeco Indemnitee in reliance upon the instructions
or decisions of the Stockholders' Representative.
(ii) No Stockholder shall have any cause of action against the
Stockholders' Representative for any action taken, decision made or instruction
given by the Stockholders' Representative under this Merger Agreement, except
for fraud.
(iii) The provisions of this Section 2.08 are independent and
severable, are irrevocable and coupled with an interest and shall be enforceable
notwithstanding any rights or remedies that any Stockholder may have in
connection with the transactions contemplated by this Merger Agreement.
(iv) The provisions of this Section 2.08 shall be binding upon
the executors, heirs, legal representatives, successors and assigns of each of
the Stockholders, and any references in this Merger Agreement to a Stockholder
or the Stockholders shall mean and include the successors to the rights of each
of the Stockholders hereunder.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE COMPANY STOCKHOLDERS.
(A) The Company and each of the Company Stockholders, jointly and severally,
represent and warrant to Veeco and Acquisition as follows; provided, that any
representations and warranties relating to Foreign Plans contained in Section
3.12 shall be deemed to be made only as of the Closing Date:
3.01 DUE ORGANIZATION; SUBSIDIARIES; ETC. (a) The Company has no
Subsidiaries, except for the entities identified in SECTION 3.01(a) of the
Disclosure Schedule, and neither the Company nor any of the other corporations
identified in SECTION 3.01(a) of the Disclosure Schedule owns any capital stock
or Equity Securities of any other Person, other than the Persons identified in
SECTION 3.01(a) of the Disclosure Schedule. None of the Target Corporations has
agreed or is obligated to make, or is bound by any Contract under which it may
become obligated to make, any future investment in or capital contribution to
any other Person. None of the Target Corporations has, at any time, been a
general partner of any general partnership, limited partnership or other Person.
(b) Each of the Target Corporations is a corporation duly
organized, validly existing and in good standing (in jurisdictions that
recognize such concept) under the laws of the jurisdiction of its incorporation
and has all necessary corporate or other power and authority: (i) to conduct its
business in the manner in which its business is currently being conducted; (ii)
to own and use its assets in the manner in which its assets are currently owned
and used; and (iii) to perform its obligations under all Contracts by which it
is bound except where the failure of (i), (ii) or (iii) would not individually
or in the aggregate reasonably be expected to have a Material Adverse Effect on
the Company.
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(c) Each of the Target Corporations is qualified or licensed
to do business as a foreign corporation, and is in good standing (in
jurisdictions that recognize such concept), under the laws of all jurisdictions
where the nature of its business requires such qualification, other than such
failures to be so qualified as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on the Company.
3.02 CAPITALIZATION. (a) The authorized capital stock of the Company
consists of 120,000,000 shares of Company Common Stock, 27,003,725 shares of
which are issued and outstanding as of the date hereof, and 25,000,000 shares of
Company preferred stock, no shares of which are issued and outstanding as of the
date hereof and no shares of which will be issued and outstanding immediately
prior to the Closing. A complete list of the record owners of all the issued and
outstanding shares of Company Common Stock as of the date hereof and the
holdings of each such record owner are set forth in SECTION 3.02(a) of the
Disclosure Schedule (which schedule will be updated as of the time immediately
prior to the Closing), and such shares are or immediately prior to the Closing
will be owned of record by such Persons. All of the outstanding shares of
Company Common Stock have been or immediately prior to the Closing will be duly
authorized and validly issued and are or immediately prior to the Closing will
be fully paid and nonassessable and were or immediately prior to the Closing
will have been issued in conformity with applicable laws. No other shares of
capital stock of the Company are or will be outstanding or held as treasury
shares. Except as set forth in SECTION 3.02(a) of the Disclosure Schedule, no
legend or other reference to any purported Lien has been placed by the Company
upon any certificate representing shares of the Company Common Stock.
(b) Except as set forth in SECTION 3.02(b) of the Disclosure
Schedule, there are no outstanding Equity Securities, or other obligations to
issue or grant any rights to acquire any Equity Securities, of any Target
Corporation, or any Contracts to restructure or recapitalize any Target
Corporation. There are no outstanding Contracts of any Target Corporation to
repurchase, redeem or otherwise acquire any Equity Securities of such Target
Corporation. All outstanding Equity Securities of each Target Corporation have
been duly authorized and validly issued and are fully paid and nonassessable and
were issued in conformity with applicable laws. Except as set forth in SECTION
3.02(b) of the Disclosure Schedule, as of the Closing, no options, warrants,
convertible securities or rights will be exercisable or exchangeable for,
convertible into, or otherwise give its holder any right to acquire shares of
capital stock of any Target Corporation.
(c) Contemporaneously with the execution and delivery of this
Merger Agreement, the Company Stockholders have each executed and delivered an
Irrevocable Proxy with respect to his shares of Company Common Stock in the form
attached as EXHIBIT E.
3.03 AUTHORIZATION. The Company has full corporate power and authority to
execute, deliver and perform this Merger Agreement and the Articles of Merger,
and as of the Closing Date will have full corporate power and authority to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Merger Agreement, the Articles of Merger and all other
documents and agreements to be delivered pursuant hereto and the consummation of
the transactions
14
contemplated hereby have been duly and validly authorized by the board of
directors, and as of the Closing Date, will be authorized by the affirmative
vote of Stockholders holding not less than 90% of the outstanding Company Common
Stock. No other corporate proceedings on the part of the Company are necessary
to authorize this Merger Agreement or to consummate the transactions
contemplated hereby. This Merger Agreement has been duly and validly executed
and delivered by the Company and the Articles of Merger, when executed at the
Closing, will be duly and validly executed and delivered by the Company. This
Merger Agreement constitutes a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, and the Articles of Merger,
when executed at the Closing, will be a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms.
3.04 FINANCIAL STATEMENTS. The Company has delivered to Veeco consolidated
balance sheets of the Target Corporations as at December 31, 2000, 1999 and 1998
(the balance sheet as at December 31, 2000 hereinafter the "BALANCE SHEET"), and
the related consolidated statements of income, changes in stockholders' equity,
and cash flow for each of the fiscal years then ended, together with the audit
reports thereon of Deloitte & Touche LLP. In addition, the Company has delivered
to Veeco unaudited consolidated balance sheets of the Target Corporations as at
the end of June 30, 2001 and the related consolidated statements of income,
changes in stockholders' equity, and cash flow for the period then ended
(collectively, the "INTERIM FINANCIAL STATEMENTS"). All such financial
statements fairly present the financial condition and the results of operations,
changes in stockholders' equity, and cash flow of the Target Corporations as at
the respective dates of and for the periods referred to in such financial
statements, all in accordance with GAAP consistently applied (subject, in the
case of the Interim Financial Statements, to normal, recurring year-end
adjustments and additional footnote disclosures). There has been no material
change in any Target Corporation's accounting policies since January 1, 1998,
except as described in the notes to the such financial statements.
3.05 NO UNDISCLOSED LIABILITIES. Except as set forth on SECTION 3.05 of
the Disclosure Schedule, to the Knowledge of the Company and the Company
Stockholders no Target Corporation has any obligation or liability of any nature
(matured or unmatured, fixed or contingent) other than those (i) set forth or
adequately provided for in the Balance Sheet, (ii) not required to be set forth
on such Balance Sheet under GAAP consistently applied with the Target
Corporations' past practices, or (iii) incurred in the ordinary course of
business since the date of the Balance Sheet and consistent with past practice.
3.06 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. (a) Each of the
Target Corporations has complied in all respects with, is not in violation of,
and has not received any currently outstanding written notices of violation with
respect to, any Law with respect to the conduct of its business, or the
ownership or operation of its business except for such violations or failures to
comply as would not be reasonably expected to have a Material Adverse Effect on
the Company.
(b) Each of the Target Corporations has obtained all licenses,
permits, certificates and approvals from Governmental Authorities (the
"LICENSES") that are required for its business and operations as currently
conducted, except where the failure to obtain such License would not be
reasonably expected to have a Material Adverse Effect on the Company. All such
Licenses are in full force and effect, except where the failure to be in full
force and effect would not be reasonably expected to have
15
a Material Adverse Effect on the Company, and no notice of any material
violation has been received by any Target Corporation in respect of any such
License. Except as set forth in SECTION 3.06(c) of the Disclosure Schedule, the
consummation of the transactions contemplated hereunder and the operation of the
business of the Target Corporations by the Surviving Corporation in the manner
in which it is currently operated will not require the transfer of any such
License that may not be transferred to the Surviving Corporation without the
consent or approval of any Governmental Authority or other Person.
3.07 NO CONFLICTS. (a) No filing or registration with, or permit,
authorization, consent or approval of, or notification to, any Governmental
Authority is required by any Target Corporation in connection with the
execution, delivery and performance by the Company of this Merger Agreement and
the consummation of the transactions contemplated hereby except for filings and
authorizations required by the HSR Act and the filing of the Articles of Merger
with the Secretary of State of the State of Minnesota.
(b) Except as set forth in SECTION 3.07 of the Disclosure
Schedule, the execution, delivery and performance by the Company of this Merger
Agreement and the consummation of the transactions contemplated hereby will not
(i) violate any provision of the articles of incorporation or by-laws or other
organizational documents of any Target Corporation, (ii) violate, or be in
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in, or provide the
basis for, the termination of, or accelerate the performance required by, or
excuse performance by any Person of any of its obligations under, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any Lien upon any property or assets of any Target
Corporation under, any Material Contract to which any Target Corporation or any
material contract to which any Company Stockholder is a party or by which any of
their properties or assets are bound, or to which any of the properties or
assets of any Target Corporation or Company Stockholder are subject, (iii)
violate any Law applicable to any Target Corporation or Company Stockholder or
(iv) violate or result in the revocation or suspension of any License.
3.08 CONTRACTS. (a) SECTION 3.08(a) of the Disclosure Schedule contains a
complete and accurate list, and the Company has delivered or made available to
Veeco true and complete copies, of the following Contracts to which any Target
Corporation is a party (each, a "MATERIAL CONTRACT"):
(i) each Contract that is executory in whole or in part and
involves (x) delivery of goods or materials the remaining unpaid
balance of which is in excess of $75,000 or (y) performance of
services by any Target Corporation the remaining unpaid balance of
which is in excess of $50,000, other than in each case (x) and (y)
such Contracts that are cancellable by the applicable Target
Corporation, without penalty, upon 60 days or shorter notice;
PROVIDED, HOWEVER, that, with respect to any Contract with a
cancellation period defined by specific dates, no part of the
cancellation period of any such cancellable Contract shall have
commenced as of the date of this Merger Agreement;
16
(ii) each Contract that is executory in whole or in part and
was not entered into in the ordinary course of business and that
involves future expenditures or receipts of any Target Corporation
in excess of $50,000;
(iii) each lease, rental or occupancy agreement, license
agreement, installment and conditional sale agreement, and any other
similar Contract, in each case, affecting the
ownership of, leasing of, title to, use of, or any leasehold or
other similar interest in, any real or personal property (except for
any personal property lease and installment or conditional sale
agreement having a value per item or annual payments of less than
$50,000);
(iv) other than licensing agreements entered into in
connection with product sales or purchases in the ordinary course of
the Company's or any other Target Corporation's business, each
material licensing agreement or any other material Contract with
respect to the ownership or use of patents, trademarks, copyrights
or other Intellectual Property, including material Contracts with
current or former employees, consultants or contractors regarding
the appropriation or the non-disclosure of any of the Intellectual
Property;
(v) each collective bargaining agreement and any other
Contract to or with any labor union or other similar employee
representative of a group of employees of any Target Corporation;
(vi) each joint venture or partnership agreement and any other
similar material Contract (however named) involving a sharing of
profits or losses by a Target Corporation with any other Person;
(vii) each Contract containing covenants that in any material
way purport to restrict the business activity of a Target
Corporation or limit the freedom of a Target Corporation to engage
in any line of business or to compete with any Person;
(viii) each Contract providing for payments in the aggregate
in excess of $50,000 to or by any Target Corporation based on sales,
purchases or profits, or, in the case of Contracts providing for
payments to or by any Target Corporation based on a percentage of
sales, purchases or profits, which would be reasonably likely to
result in payments in the aggregate in excess of $50,000, other than
payments for goods or services and other than distribution
agreements or sales commission plans;
(ix) each Contract during the last two years providing for the
distribution of products that have not yet been delivered having an
aggregate value in excess of $250,000 by or for any Target
Corporation;
(x) each power of attorney that is currently effective and
outstanding granted by any Target Corporation other than to customs
agents and auditors;
17
(xi) each Contract that is executory in whole or in part and
requires capital expenditures after the date hereof in excess of
$100,000 by any Target Corporation;
(xii) each written warranty, guaranty and/or other similar
undertaking with respect to contractual performance valued in excess
of $100,000 extended by any Target Corporation, other than in the
ordinary course of business;
(xiii) each Contract (other than Benefit Plans) with any
current or former employee, director or officer of any Target
Corporation, or pursuant to which any Target Corporation has or
would reasonably be expected to have liability to any current or
former employee in excess of $100,000; and
(xiv) each amendment, supplement or modification (whether oral
or written) in respect of any of the foregoing Contracts;
PROVIDED, HOWEVER, that no Contract or agreement referred to in clauses (i)
through (xv) need be disclosed unless the applicable Target Corporation
currently has, or in the future may have, any rights or obligations thereunder.
There are no legally enforceable oral agreements to which any Target Corporation
is a party which, if in writing, would be required to be disclosed pursuant to
this Section 3.08(a).
(b) Except as set forth in SECTION 3.08(b) of the Disclosure
Schedule, each Material Contract is enforceable against the applicable Target
Corporation and, to the Company's and the Company Stockholders' Knowledge,
against the other party thereto in accordance with its terms (subject to
bankruptcy, insolvency and other proceedings at law or in equity relating to the
rights of creditors generally and by general equitable principles, including,
without limitation, those limiting the availability of specific performance,
injunctive relief and other equitable remedies and those providing for equitable
defenses).
(c) Except as set forth in SECTION 3.08(c) of the Disclosure
Schedule, no Target Corporation has received any written notice of default under
any Material Contract, no material default (beyond any applicable grace or cure
period) has occurred under any Material Contract on the part of a Target
Corporation or, to the Company's and the Company Stockholders' Knowledge, on the
part of any other party thereto, nor has any event occurred which with the
giving of notice or the lapse of time, or both, would constitute any material
default on the part of a Target Corporation under any Material Contract nor, to
the Company's and the Company Stockholders' Knowledge, has any event occurred
which with the giving of notice or lapse of time, or both, would constitute any
default on the part of any other party to any Material Contract.
(d) Except as set forth in SECTION 3.08(d) of the Disclosure
Schedule, to the Company's and the Company Stockholders' Knowledge, no officer
or employee of any Target Corporation is bound by any Contract that purports to
limit the ability of such officer or employee to (i) engage in or continue any
conduct, activity or practice relating to the businesses of the Target
Corporations as currently conducted, or (ii) assign to such Target Corporation
any rights to any invention,
18
improvement or discovery made by such officer or employee during the course of
his or her employment with such Target Corporation and relating to the business
of such Target Corporation or made, written, developed or conceived with the use
or assistance of such Target Corporation's facilities or resources.
3.09 LITIGATION. Except as set forth in SECTION 3.09 of the Disclosure
Schedule, there are no legal proceedings pending or, to the Company's and the
Company Stockholders' Knowledge, Threatened against any Target Corporation
before or by any Governmental Authority, except for such as would not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect on the Company. No Target Corporation is a party to or subject to
any unsatisfied or pending judgment, order, writ, injunction, decree or award of
any Governmental Authority that is reasonably likely to have a Material Adverse
Effect on the Company.
3.10 TAXES. Except as set forth in SECTION 3.10 of the Disclosure
Schedule, the Company and each of the other Target Corporations is an "S
corporation" or a "qualified subchapter S subsidiary," within the meaning of
Section 1361 of the Code, for federal and state income tax purposes and each of
the Target Corporations and the Stockholders have timely and properly made all
necessary elections, and taken all other necessary action, under applicable
federal, state and local tax laws to qualify the Company and each of the other
Target Corporations as an "S corporation" or a "qualified subchapter S
subsidiary" in every jurisdiction in which it is subject to Tax since January 1,
1997, except where the failure to do so has had no Material Adverse Effect on
the Company. The Company and each of the other Target Corporations will continue
to qualify and be treated as an "S corporation" or a "qualified subchapter S
subsidiary" for federal, state and local income tax purposes until the Closing
Date. The Target Corporations and the Company Stockholders have filed or caused
to be filed on a timely basis all Tax Returns that include or relate to the
assets or operations of the Target Corporations that are or were required to be
filed by the Target Corporations, either separately or as a member of an
affiliated group of corporations, pursuant to the Laws of each Governmental
Authority with taxing power over the Target Corporations and their assets and
businesses, and all such Tax Returns are true, correct, complete and in
compliance with all applicable Laws, except for such instances which do not have
a Material Adverse Effect on the Company. The Target Corporations have paid all
Taxes that include or relate to the assets or operations of the Target
Corporations that have become due pursuant to such Tax Returns, or otherwise, or
pursuant to any written assessment received by the Company Stockholders or the
Target Corporations, except such Taxes, if any, as are being contested in good
faith and for which adequate reserves for such Taxes have been provided in the
Balance Sheet or the Interim Financial Statements. The amount of the Target
Corporations' liability for unpaid Taxes for all periods ending on or before the
Closing Date does not, in the aggregate, exceed the amount of the current
liability accruals for Taxes (excluding reserves for deferred Taxes) reflected
on the Balance Sheet. All Taxes that the Target Corporations are, or were,
required by Law to withhold and collect have been duly withheld and collected
and, to the extent required, have been paid to the appropriate Governmental
Authority, and each of the Target Corporations has complied with all information
reporting and back-up withholding requirements, including maintenance of
required records with respect thereto, in connection with amounts paid or owing
to any employee, creditor, independent contractor, or other third party except
where failure to so comply has had no Material Adverse Effect on the Company.
The Target Corporations and the Company Stockholders have not given, or been
requested to give, waivers or extensions (or is or would be subject to a waiver
or extension given
19
by any other entity) of any statute of limitations relating to the payment of
Taxes for which any of the Target Corporations may be liable. There are no Liens
other than Permitted Liens with respect to Taxes upon any of the properties or
assets, real or personal, tangible or intangible, of the Target Corporations. No
deficiencies for any Tax are currently assessed or, to the Company's and the
Company Stockholders' Knowledge, are proposed for assessment against any of the
Target Corporations. No claim has ever been asserted by any authority in a
jurisdiction where any of the Target Corporations does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. Except as set forth on
SECTION 3.10 to the Disclosure Schedule, neither the Company nor any of the
other Target Corporations has (i) applied for any tax ruling, (ii) entered into
a closing agreement with any taxing authority, (iii) filed an election under
Section 338(g) or Section 338(h)(10) of the Code, or (iv) been a party to any
agreement or arrangement that would result in the payment of any "excess
parachute payment" within the meaning of Section 280G of the Code, or the
payment of any compensation that is not deductible under Section 162(m) of the
Code. Except as set forth on SECTION 3.10 to the Disclosure Schedule, neither
the Company nor any of the other Target Corporations owns an interest in any (i)
domestic international sales corporation, (ii) foreign sales corporation, (iii)
controlled foreign corporation or (iv) passive foreign investment company.
During the previous two years, neither the Company nor any of the other Target
Corporations has engaged in any exchange under which the gain realized on such
exchange was not recognized due to Section 1031 of the Code. None of the
property owned or used by the Company or any of the other Target Corporations is
subject to a lease other than a "true" lease for federal income tax purposes.
Neither the Company nor any of the other Target Corporations has been informed
or notified that any of its income, business, assets, operations or activities
is subject to Tax by a Governmental Authority where the required Tax Return(s)
have not been filed by the Company or the appropriate Target Corporation. The
Target Corporations have disclosed on their federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of the Code Section 6662. No Target
Corporation has filed a consent under Section 341(f) of the Code concerning
collapsible corporations, or agreed to have Section 341(f)(2) apply to any
disposition of an asset owned by any of the Target Corporations. None of the
Target Corporations is a "U.S. real property holding corporation," as defined in
Section 897(c)(2) of the Code. There is no tax sharing agreement that will
require any payment by the Target Corporations after the date of this Merger
Agreement. None of the Target Corporations has any liability for the Taxes of
any person under Treasury Regulations Section 1.1502-6 (or any similar provision
of state, local or foreign law) as a transferee or successor by contract, tax
sharing agreement, indemnification, guaranty or otherwise. None of the Target
Corporations has agreed, and none of them is required, to make an adjustment
under Section 481 of the Code (or any comparable provisions of state, local or
foreign law) by reason of a change in accounting method, including on account of
the transactions contemplated herein or in related agreements. For federal
income Tax purposes, none of the Target Corporations is a partner, nor is it
treated as a partner, in any partnership, joint venture or any other entity
treated as a partnership for federal income Tax purposes. None of the Target
Corporations has been the "distributing corporation" (within the meaning of
Section 355(c)(2) of the Code) with respect to a transaction described in
Section 355 of the Code within the 3-year period ending as of the date of this
Merger Agreement.
20
3.11 ABSENCE OF CERTAIN CHANGES. Since the date of the Balance Sheet,
except as set forth on SECTION 3.11 to the Disclosure Schedule, there has not
occurred any: (i) adverse change, event or condition (whether or not covered by
insurance) that has resulted in, or might reasonably be expected to result in, a
Material Adverse Effect to the Company; (ii) acquisition, sale or transfer of
any material asset of the Target Corporations, taken as a whole, other than in
the ordinary course of business and consistent with past practice; (iii)
material change, other than any required change, in accounting methods or
practices (including any change in depreciation or amortization policies or
rates) by any Target Corporation or any material revaluation by any Target
Corporation of any of its assets; (iv) change in any Target Corporation's
authorized or issued capital stock; grant of any stock option or right to
purchase shares of capital stock of any Target Corporation; issuance of any
security convertible into such capital stock; grant of any registration rights;
purchase, redemption, retirement, or other acquisition by any Target Corporation
of any shares of any such capital stock; or declaration or payment of any
dividend or other distribution or payment in respect of shares of capital stock;
(v) payment or increase by any Target Corporation of any bonuses, salaries, or
other compensation to any director, non-employee officer or, except in the
ordinary course of business consistent with past practice, employee (including
employee-officers), or entry into any employment, severance, or similar Contract
with any director, non-employee officer, or, except in the ordinary course of
business consistent with past practice, employee; (vi) adoption of, or material
increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees of any Target Corporation,
except in the ordinary course of business consistent with past practice; or
(vii) legally binding agreement by any Target Corporation to do any of the
things described in the preceding clauses (i) through (vi) (other than
negotiations with Veeco and its representatives regarding the Merger).
3.12 EMPLOYEE BENEFIT PLANS. (a) SECTION 3.12(a) of the Disclosure
Schedule sets forth each bonus, deferred compensation, severance pay, pension,
profit-sharing, retirement, insurance, stock purchase, stock option or other
fringe benefit plan, arrangement or practice, or any other "employee benefit
plan," as defined in Section 3(3) of ERISA, whether formal or informal
maintained by or contributed to by any of the Target Corporations with respect
to any current or former employees of any of the Target Corporations
(collectively, the "BENEFIT PLANS"), and identifies each of the Benefit Plans
which is maintained for non-U.S. employees and is subject to the laws of a
foreign country (collectively, the "Foreign Plans"). None of the Benefit Plans
is, and none of the Target Corporations has ever maintained or had an obligation
to contribute to, or incurred any other obligation with respect to (i) a plan
subject to Title IV of ERISA or Section 412 of the Code or Title I, Subtitle B,
Part 3 of ERISA, (ii) a "multiemployer plan," as defined in Section 3(37) of
ERISA (a "MULTIEMPLOYER PLAN"), (iii) a "multiple employer plan," as defined in
ERISA or the Code or (iv) a funded welfare benefit plan, as defined in Section
419 of the Code. None of the Target Corporations has any agreement or commitment
to create any additional "employee benefit plan", or to modify or change any
existing Benefit Plan except with respect to changes required by Law.
(b) With respect to each Benefit Plan (other than the Foreign
Plans), the Company has heretofore delivered or caused to be delivered or made
available to Veeco true, correct and complete copies of (i) all documents which
comprise the most current version of each of such Benefit Plan, including any
related trust agreements, insurance contracts, or other funding or investment
agreements and any amendments thereto, and (ii) with respect to each Benefit
Plan that is an "employee benefit plan," as
21
defined in Section 3(3) of ERISA, (v) the three most recent Annual Reports (Form
5500 Series) and accompanying schedules for each of the Benefit Plans for which
such a report is required, (w) the most current summary plan description (and
any summary of material modifications), (x) the three most recent certified
financial statements for each of the Benefit Plans for which such a statement is
required or was prepared, (y) for each Benefit Plan intended to be "qualified"
within the meaning of Section 401(a) of the Code, all IRS determination letters
issued with respect to such Benefit Plan and (z) all material communications
with any Governmental Authority. Since the date of the documents delivered or
otherwise made available, there has not been any material change in the assets
or liabilities of any of the Benefit Plans or any change in their terms and
operations which would reasonably be expected to materially and adversely affect
or alter the tax status or materially and adversely affect the cost of
maintaining such Benefit Plan. With respect to each Foreign Plan, the Company
has heretofore delivered or caused to be delivered to Veeco a true and correct
summary of the terms of such plan and the annual cost thereof. Except as
required by Law, none of the Benefit Plans will be amended during the period
from the date of this Merger Agreement and continuing until the earlier of the
termination of this Merger Agreement and the Effective Time. Each of the Benefit
Plans (other than the Foreign Plans), can be amended, modified or terminated by
the relevant Target Corporation within a period of thirty (30) days, without
payment of any additional compensation or amount or the additional vesting or
acceleration of any such benefits, except to the extent that such vesting is
required under the Code upon the complete or partial termination of any Benefit
Plan intended to be qualified within the meaning of Section 401(a) of the Code.
(c) The Target Corporations have performed and complied with
all of their obligations under and with respect to the Benefit Plans in all
material respects and each of the Benefit Plans has, at all times, in form,
operation and administration complied in all material respects with its terms,
and, where applicable, the requirements of the Code, ERISA and all other
applicable Laws. Each Benefit Plan which is intended to be "qualified" within
the meaning of Section 401(a) of the Code has been determined by the IRS to be
so qualified and nothing has occurred which would reasonably be expected to
adversely affect such qualified status.
(d) There are no unpaid contributions due prior to the date
hereof with respect to any Benefit Plan that are required to have been made
under its terms and provisions, any related insurance contract or any applicable
law. There are no trusts or similar funding vehicles, reserve assets, surpluses
or prepaid premiums with respect to any Benefit Plan that is a welfare plan,
other than the Company's cafeteria plan.
(e) None of the Target Corporations nor any ERISA Affiliate
thereof has incurred any liability or taken any action, and neither the Company
nor any Company Stockholder has Knowledge of any action or event, that would be
reasonably likely to cause any of the Target Corporations or any ERISA Affiliate
thereof to incur any liability (i) under Section 412 of the Code or Title IV or
ERISA with respect to any "single-employer plan," as defined in Section
4001(a)(15) of ERISA, that is not a Benefit Plan, or (ii) on account of a
partial or complete withdrawal, as defined in Sections 4203 and 4205 of ERISA,
respectively, with respect to any Multiemployer Plan or on account of unpaid
contributions to any Multiemployer Plan.
22
(f) To the extent applicable, all group health plans covering
employees of the Target Corporations have been operated in compliance with the
continuation coverage requirements of Section 4980B of the Code (and any
predecessor provisions) and Part 6 of Title I of ERISA ("COBRA"), the provisions
of law enacted by the Health Insurance Portability and Accountability Act of
1996 ("HIPAA") and any similar state law, except for such non-compliance
that would not reasonably be expected to have a Material Adverse Effect on the
Company. None of the Target Corporations has any obligation to provide health
benefits or other non-pension benefits to retired or other former employees (or
their beneficiaries), except as specifically required by COBRA, HIPAA or any
similar state law.
(g) None of the Target Corporations nor any other
"disqualified person" or "party in interest," as defined in Section 4975 of the
Code and Section 3(14) of ERISA, respec tively, has engaged in any "prohibited
transaction," as defined in Section 4975 of the Code or Section 406 of ERISA,
with respect to any Benefit Plan, nor to the Company's and the Company
Stockholders' Knowledge have there been any fiduciary violations under ERISA
which would reasonably be expected to subject any of the Target Corporations (or
any officer, director or employee thereof) or any Company Stockholder to any
penalty or Tax under Section 502(i) of ERISA or Sections 4971 and 4975 of the
Code.
(h) With respect to any Benefit Plan or any Foreign Plan: (i)
no filing, application or other matter is pending with the IRS, the PBGC, the
United States Department of Labor or any other governmental body, (ii) there is
no action, suit or claim pending or, to the Company's and the Company
Stockholders' Knowledge, Threatened, other than routine claims for benefits,
(iii) there are no outstanding liabilities for Taxes, penalties or fees and (iv)
none of the Target Corporations has incurred any liability, taken any action or
failed to take any action, with respect to the establishment, maintenance,
administration and/or termination of any Benefit Plan (or any similar plan,
program or arrangement terminated prior to the date hereof) or any Foreign Plan
that would reasonably be expected to cause any of the Target Corporations,
Acquisition or Veeco or any of its Subsidiaries (or any officer, director or
employee thereof) to incur any material liability (including, without
limitation, any fines, penalties or voluntary compliance fees).
(i) Except as set forth in SECTION 3.12(i) of the Disclosure
Schedule, neither the execution and delivery by the Company or the Company
Stockholders of this Merger Agreement nor the consummation of any or all of the
transactions contemplated by this Merger Agreement will: (i) entitle any current
or former employee of any of the Target Corporations to severance pay,
unemployment compensation or any similar payment, (ii) accelerate the time of
payment or vesting or increase the amount of any compensation due to any such
employee or former employee or (iii) directly or indirectly result in any
payment made or to be made to or on behalf of any person to constitute a
"parachute payment" within the meaning of Section 280G of the Code.
3.13 INTELLECTUAL PROPERTY. (a) Except as set forth in SECTION 3.13(a) of
the Disclosure Schedule, to the Knowledge of the Company, the Company
Stockholders and the Target Corporations own or have the right to: (i) make,
have made, use, sell and license all products of the Target Corporations that
have been or currently are being sold or are under development and has the right
to license all letters patent (including, but not limited to, all reissues,
extensions, renewals, divisions and continuations thereof
23
and thereto (including continuations-in-part)) and all applications therefor
owned by any of the Target Corporations; (ii) Use (as such term is defined
below), sell and license all copyrights, mask works, trademarks and service
marks and all registrations and applications for registration thereof owned or
licensed by the Target Corporations; and (iii) Use, sell and license all trade
secrets, know-how, inventory, algorithms, methods, processes, protocols,
methodologies, computer software (including, but not limited to, source code in
object code and source code form), design, functional, technical and other
specifications (for computer software and other properties) and all other
tangible and intangible proprietary materials and information required for the
conduct of the businesses of the Target Corporations and owned or licensed by
the Target Corporations ("INTELLECTUAL PROPERTY"). For the purposes of this
Section 3.13, "USE" (and, as the context requires, "USED") means the right to
use, execute, distribute, publish, reproduce, perform, display, transmit, make
available, make modifications and prepare derivative works.
(b) SECTION 3.13(b) of the Disclosure Schedule sets forth a
complete and accurate list (i) in subsection 1, of all letters patent owned by
any Target Corporation; (ii) in subsection 2, of all U.S. federal trademark and
service xxxx registrations and all trademark and service xxxx registrations in
jurisdictions other than the United States owned by any Target Corporation;
(iii) in subsection 3, of all material U.S. common law trademarks and service
marks for which any Target Corporation claims ownership; (iv) in subsection 4,
of all U.S. letters patent owned by any Target Corporation which are, as of the
date hereof, subject to a reissue proceeding in the U.S. Patent and Trademark
Office (the "PTO"); (v) in subsection 5, of all applications for U.S. letters
patent filed by and subject to ongoing prosecution by any Target Corporation;
(vi) in subsection 6, of all applications for letters patent in jurisdictions
other than the United States filed by and subject to ongoing prosecution by any
Target Corporation; (vii) in subsection 7, of all applications for U.S. federal
trademark or service xxxx registrations filed by and subject to ongoing
prosecution by any Target Corporation; (viii) in subsection 8, of all
applications for trademark or service xxxx registrations in jurisdictions other
than the United States filed by and subject to ongoing prosecution by any Target
Corporation; and (ix) in subsection 9, of all patent interference and similar
proceedings in which any Target Corporation is involved, including, but not
limited to, interferences and the like asserted against any Target Corporation
and interferences and the like which any Target Corporation has provoked.
(c) Except as set forth in SECTION 3.13(c) of the Disclosure
Schedule, (i) all authorship in the computer software, documentation, software
design, technical and functional software specifications created by any Target
Corporation and used in products or services created, currently offered for sale
or currently contemplated to be offered for sale by any Target Corporation is
original and (ii) all computer software and related documentation manuals
contained or Used in products of (including documentation and product and user
manuals) or services currently offered for sale or currently contemplated to be
offered for sale by any Target Corporation are owned by or licensed to such
Target Corporation, and any such licenses provide such Target Corporation with
the right to sublicense or otherwise authorize use of the licensed subject
matter to their customers and authorized third party users in the manner
currently being sublicensed or used, except, in the case of (ii), for such
failures that do not individually or in the aggregate have a Material Adverse
Effect on the Company.
24
(d) Except for third parties which have rights pursuant to the
agreements set forth in SECTION 3.13(e) of the Disclosure Schedule and except
for rights granted to the customers of any Target Corporation, each Target
Corporation has the sole and exclusive right to Use, sell and license each of
the material copyrights owned by such Target Corporation and to make, Use, sell
and license each item of Intellectual Property listed in subsections 1 and 2 to
SECTION 3.13(b) of the Disclosure Schedule, (the foregoing collectively referred
to as "COMPANY-OWNED IP REGISTRATIONS") and (ii) except as set forth in SECTION
3.13(d) of the Disclosure Schedule, the Company and the Company Stockholders
have no Knowledge that any of the Company-Owned IP Registrations are invalid,
unenforceable or not subsisting. With the exception of copyright rights, all
Company- Owned IP Registrations have been and currently remain duly registered
with or issued by the appropriate Governmental Authority of the United States or
of foreign countries as indicated in SECTION 3.13(b) of the Disclosure Schedule,
subsections 1 and 2 thereto, and all required maintenance and annuity fees due
to date have been paid in full to and all declarations required pursuant to 15
U.S.C. Sections 1058 and 1065 (and foreign counterparts to the same) to date
have been accepted by the proper Governmental Authority.
(e) (i) SECTION 3.13(e) of the Disclosure Schedule sets forth
a complete and accurate list of the agreements, including, but not limited to,
license agreements, and of all parties thereto under which any Target
Corporation obtains or is the beneficiary of any license or right to use any
Third Party Intellectual Property (singularly or collectively, a "LICENSED-IN
AGREEMENT" or the "LICENSED-IN AGREEMENTS") other than generally available
computer software, and (ii) SECTION 3.13(e) of the Disclosure Schedule sets
forth a complete and accurate list of the material agreements, including, but
not limited to, license agreements, to which any Target Corporation is a party
and pursuant to which a third party is authorized to Use any of the Intellectual
Property rights of any Target Corporation.
(f) Except as set forth in SECTION 3.13(f) of the Disclosure
Schedule, each of the material copyrights owned by any Target Corporation and
each item of Intellectual Property listed in Section 3.13(b) hereto (the
"COMPANY-OWNED IP") (i) is free and clear of any Liens other than Permitted
Liens; (ii) is not subject to any outstanding judicial order, decree, judgment
or stipulation restricting the scope of any Target Corporation's use thereof;
and (iii) together with each item of Intellectual Property which such Target
Corporation has a right to Use or practice pursuant to one or more Licensed-In
Agreements, is not subject to any suits, actions, claims or demands asserted
against any Target Corporation in writing by any third party and no action or
proceeding has been instituted, is pending or, to the Company's or any Company
Stockholder's Knowledge, Threatened which challenges or affects the rights of
such Target Corporation in the same except in each case as would not reasonably
be expected to have a Material Adverse Effect on the Company.
(g) Except as set forth in SECTION 3.13(g) of the
Disclosure Schedule (i) no Target Corporation has received any written claim or
any cease and desist or equivalent letter regarding, or any other written notice
of any allegation to the effect that any of their products, software, apparatus,
methods or services which such Target Corporation makes, Uses, sells, offers or
provides infringes upon, misappropriates or otherwise violates any Third Party
Intellectual Property; (ii) neither the Company nor any of the Company
Stockholders has Knowledge of any unauthorized Use by, unauthorized disclosure
to or by or infringement, misappropriation or other violation of any of a Target
Corporation's Company-
25
Owned IP by any third party or any current or former officer, employee,
independent contractor or consultant of any Target Corporation (a "COMPANY
AGENT" or the "COMPANY AGENTS"); (iii) no Target Corporation has entered into
any agreement to indemnify any third party against any claim of infringement,
misappropriation or other violation of Intellectual Property rights other than
indemnification provisions contained in purchase orders, customer agreements,
Licensed-In Agreements or software licenses arising in the ordinary course of
business; and (iv) since January 1, 1998, no Target Corporation has been charged
in any suit, action or proceeding with, or has charged others with, unfair
competition, infringement, misappropriation, wrongful use of or any other
violation or improper or illegal activity with respect to or affecting
Intellectual Property or with claims contesting the validity, ownership or right
to make, Use, sell, license or dispose of Intellectual Property.
(h) (i) All computer software created by employees of
the Target Corporations within the scope of their employment by any such Target
Corporation and used in the products or services currently offered by any Target
Corporation and all original copyrightable authorship therein is owned by a
Target Corporation; (ii) all rights in all inventions and discoveries made,
developed or conceived by Company Agents during the course of their employment
(or other retention) by a Target Corporation or made, written, developed or
conceived with the use or assistance of a Target Corporation's facilities or
resources, and which are material to the business of a Target Corporation as
presently conducted, and which are the subject of one or more issued letters
patent or applications for letters patent, have been assigned in writing to a
Target Corporation; (iii) the policy of the Target Corporations requires each
employee of a Target Corporation to sign documents confirming that he or she
assign to a Target Corporation all Intellectual Property rights made, written,
developed or conceived by him or her during the course of his or her employment
by a Target Corporation and relating to the business of a Target Corporation or
made, written, developed or conceived with the use or assistance of a Target
Corporation's facilities or resources to the extent that ownership of any such
Intellectual Property rights does not vest in a Target Corporation by operation
of law except where the failure to obtain such signed documents would not
reasonably be expected to materially limit the Company's rights in and to such
Intellectual Property; and (iv) all Intellectual Property rights made, written,
developed or conceived by each Company Agent during the course of his or her
retention by a Target Corporation and material to the business of a Target
Corporation as presently conducted have been assigned or licensed to such Target
Corporation except where the failure to obtain such assignments or licenses
would not reasonably be expected to materially limit the Company's rights in and
to such Intellectual Property.
(i) The Target Corporations have taken all reasonable
and practicable steps to protect and preserve the confidentiality of all
Intellectual Property (including, without limitation, trade secrets and source
codes, but excluding letters patent, inventory, copyrights, trademarks and
service marks and registrations and applications for registration thereof)
("CONFIDENTIAL IP INFORMATION"). Except as set forth in SECTION 3.13(i) of the
Disclosure Schedule, to the Knowledge of the Company and the Company
Stockholders all Use by the Target Corporations of Confidential IP Information
not owned by the Target Corporations has been and is pursuant to the terms of a
written agreement between a Target Corporation and the owner of such
Confidential IP Information, or is otherwise lawful.
26
3.14 ENVIRONMENTAL MATTERS. Except as set forth in SECTION 3.14 of the
Disclosure Schedule:
(a) The Target Corporations have obtained all material
permits and approvals required under applicable Environmental Laws for the
ownership and operation of their business, all such permits and approvals are in
effect, the Target Corporations have not received written notice of any action
to revoke or modify any of such permits or approvals, and the ownership and
operation of the Target Corporations' businesses is and has been in compliance
in all material respects with all terms and conditions thereof. No Target
Corporation has received written notice of any pending or Threatened claim or
investigation by any Governmental Authority or any other Person concerning
potential liability of any of the Target Corporations under Environmental Laws
in connection with the ownership or operation of its business. There has not
been a Release to the Environment of any Hazardous Substance at, upon, in, from
or under any Facilities or properties upon which its assets are or were located
at any time during a Target Corporation's ownership and/or occupancy thereof, or
at any location to which a Target Corporation has transported or arranged for
the transportation of Hazardous Substances from a Facility. No Facility is
currently, and, to the Company's and the Company Stockholders' Knowledge, no
such Facility has been, used as a treatment, storage or disposal facility for
Hazardous Waste, as such term is defined in the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss. 6901 et seq. and no Hazardous Substances
are present on any such Facility other than in compliance in all material
respects with all applicable Environmental Laws and as are used in the operation
of the Target Corporations' businesses.
(b) The Company has provided or made available to Veeco all
correspondence, test results, records, notices, disclosures and reports in any
Target Corporation's possession or control with respect to the Target
Corporations or any Facility, including all material correspondence with any
Governmental Authority, concerning any and all past and/or present health,
safety and/or environmental issues or concerns.
(c) To the Knowledge of the Company, the Company Stockholders,
and Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx and Xxxxx Antezak, there has not been
(i) any violation of any Environmental Laws existing as of the Closing Date in
respect of any of the Facilities, (ii) any emission, migration, Release,
indirect or direct discharge from any of the Facilities to any adjacent property
occurring prior to the Closing Date regardless of where such activities occurred
or had their effect or from offsite locations to which Hazardous Substances were
transported from any of the Facilities, (iii) any disposal, dumping, burial of,
or the hauling, transportation, treatment or removal of any Hazardous Substances
from any of the Facilities prior to the Closing Date, (iv) any claim or demand
by any Governmental Authority for any response actions at any of the Facilities
or such offsite locations, including, without limitation, remediation of any
such premises, required by applicable Environmental Laws relating to Hazardous
Substances present at any of the Facilities or such offsite locations prior to
the Closing Date in soil, surface waters, sediment, wetlands or ground waters or
for injury or damage or claim of injury or damage to natural resources caused by
such Hazardous Substances and (v) any injury or damage or claim of injury or
damage to any Person or property, including, but not limited to, claims for
medical surveillance, emotional distress, increased risk of illness or disease
or diminution in the value of property related to such Hazardous Substances
present at any such premises prior to the Closing Date.
27
3.15 LABOR RELATIONS. The Target Corporations are conducting their
businesses in compliance with all applicable Laws relating to employment or
labor, including, without limitation, those Laws relating to wages, hours,
collective bargaining, unemployment insurance, workers' compensation, equal
employment opportunity and the payment and withholding of Taxes except where the
failure to so comply has had no Material Adverse Effect on the Company. Except
as set forth in SECTION 3.15 of the Disclosure Schedule, no union or other
collective bargaining unit has been certified as representing any of the
employees of any Target Corporation, nor has any Target Corporation agreed to
recognize any union or other collective bargaining unit. There are no material
labor disputes pending or, to the Company's or any Company Stockholder's
Knowledge, Threatened involving strikes, work stoppages, slowdowns or lockouts.
There are no currently pending grievance proceedings or claims of unfair labor
practices filed or, to the Company's or any Company Stockholder's Knowledge,
Threatened to be filed with the National Labor Relations Board against any
Target Corporation. There is no union representation or organizing effort
pending or, to the Company's or any Company Stockholder's Knowledge, Threatened
against any Target Corporation.
3.16 BROKERS AND FINDERS. No broker, finder, agent or similar intermediary
has acted on the Company's or any Company Stockholder's behalf in connection
with this Merger Agreement or any of the transactions contemplated by this
Merger Agreement, and there are no brokerage commissions, finders' fees or
similar fees or commissions payable in connection therewith based on any
Contract with the Company or any Company Stockholder or any action taken by the
Company or any Company Stockholder.
3.17 CONDITION AND SUFFICIENCY OF ASSETS. The buildings, plants and
equipment of the Target Corporations are, in all material respects, in good
condition and repair, normal wear and tear excepted, and are adequate for the
uses to which they are currently being put. The building, plants and equipment
of the Target Corporations are sufficient for the continued conduct of the
Target Corporations' businesses after the Closing in substantially the same
manner as conducted prior to the Closing.
3.18 ACCOUNTS RECEIVABLE. All accounts receivable of the Target
Corporations that are reflected on the Balance Sheet or on the accounting
records of the Target Corporations as of the Closing Date (collectively, the
"ACCOUNTS RECEIVABLE") represent or will represent valid obligations arising
from sales actually made or services actually performed in the ordinary course
of business consistent with past practice. Unless paid prior to the Closing
Date, the Accounts Receivable are or will be as of the Closing Date current net
of the respective reserves shown on the Balance Sheets (which reserves are
adequate and calculated consistent with past practice and will not represent a
material adverse change in the composition of such Accounts Receivable in terms
of aging). There is no contest, claim, or right of set-off, other than returns
in the ordinary course of business consistent with past practice, under any
Contract with any obligor of an Account Receivable relating to the amount or
validity of such Account Receivable. No written notice has been received by any
Target Corporation from any account debtor that any Accounts Receivable are
subject to any contest, claim or right of set-off, other than returns in the
ordinary course of business consistent with past practices.
28
3.19 INVENTORY. All inventory of the Target Corporations, whether or not
reflected in the Balance Sheet, consists of a quality and quantity usable and
salable in the ordinary course of business consistent with past practice, except
for obsolete items and items of below-standard quality. All inventory of the
Target Corporations shown on the Balance Sheet was fairly stated and valued in
accordance with GAAP as of the date of the Balance Sheet. The quantities of each
item of inventory (whether raw materials, work-in-process, or finished goods)
are reasonable in the present circumstances of the Target Corporations.
3.20 CERTAIN PAYMENTS. To the Company's and the Company Stockholders'
Knowledge, no Target Corporation or director, officer, agent, or employee of any
Target Corporation, or any other Person associated with or acting for or on
behalf of any Target Corporation, has directly or indirectly made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form, whether in money,
property, or services in violation of any applicable Law.
3.21 PRODUCT LIABILITY. No Target Corporation has incurred since January
1, 1998 (and, to the Company's and the Company Stockholders' Knowledge, there
has been no occurrence since such date that would reasonably be expected to give
rise to) any liability arising out of any physical injury to individuals or
property as a result of the ownership, possession, or use of any products
manufactured, sold, leased, or delivered by any Target Corporation.
3.22 PRODUCT WARRANTY. Except as set forth in SECTION 3.22 of the
Disclosure Schedule, each product manufactured, sold, leased, or delivered by
any Target Corporation conforms in all material respects with all applicable
contractual commitments and all express and implied warranties, and such Target
Corporation has no material liability (and, to the Company's and the Company
Stockholders' Knowledge, there is no basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against any Target Corporation giving rise to any liability) for replacement or
repair thereof or other damages in connection therewith.
3.23 BOOKS AND RECORDS. The books and records of the Target Corporations,
all of which have been made available to Veeco, set forth all material
transactions affecting the Target Corporations, and such books and records are
complete and correct in all material respects and have been properly kept and
maintained.
3.24 REAL PROPERTY. (a) SECTION 3.24(a) of the Disclosure Schedule
describes all real property owned by the Company (the "OWNED REAL PROPERTY").
True and complete copies of all owners policies of title insurance obtained for
the benefit of the Company have been delivered or made available to Veeco.
Except as set forth in SECTION 3.24(a) of the Disclosure Schedule, the Company
has good and marketable title to all of the Owned Real Property together with
all buildings, improvements, fixtures (including, without limitation, all
heating, plumbing, air conditioning, ventilation and electrical equipment),
rights of way, easements and appurtenances thereto, free and clear of all Liens
other than (i) municipal and zoning ordinances; (ii) recorded easements for
public utilities serving the Real Property; and (iii) Permitted Liens, none of
which materially interfere with the use or occupancy of any of the Real
Property; and (iv) the
29
liens disclosed in SECTION 3.24(a) of the Disclosure Schedule. Except as set
forth in SECTION 3.24(a) of the Disclosure Schedule, all Owned Real Property is
legally occupied by the Company and not by any tenants or other occupants.
Except as set forth in SECTION 3.24(a) of the Disclosure Schedule, no Owned Real
Property shall be subject to any lease or sublease at or immediately after the
Closing.
(b) SECTION 3.24(b) of the Disclosure Schedule contains a list
of all leases (collectively, the "LEASES") pursuant to which any Target
Corporation leases any real property (the "LEASED REAL PROPERTY"). True and
correct copies of the Leases have been delivered or made available to Veeco. All
of the Leases are valid, binding and enforceable in accordance with their terms
(subject to bankruptcy, insolvency and other proceedings at law or in equity
relating to the rights of creditors generally), and are in full force and
effect; no Target Corporation has received notice, and neither the Company nor
any Company Stockholder has any Knowledge, of any default by any Target
Corporation (beyond any applicable grace or cure period) under any of the
Leases, and to the Company's and the Company Stockholders' Knowledge, no other
party to any of the Leases is in breach or default thereunder; and all lessors
under the Leases have, or by the Closing Date will have, consented to the
consummation of the transactions contemplated hereby, to the extent that the
applicable Lease requires such consent, without requiring modification in the
rights or obligations of the tenant under such Leases. No sublease by any Target
Corporation of any Leased Real Property is currently in effect. The Target
Corporations' leasehold interests are subject to no Lien or other encumbrance
created by a Target Corporation other than Permitted Liens.
3.25 TANGIBLE PROPERTY. (a) SECTION 3.25(a) of the Disclosure Schedule
contains the Target Corporations' depreciation ledger of all material machinery,
equipment, fixtures, motor vehicles and other tangible personal property owned
by any of the Target Corporations (collectively, the "OWNED TANGIBLE PROPERTY").
Except as set forth in SECTION 3.25(a) of the Disclosure Schedule, the Target
Corporations have good title to all Owned Tangible Property free and clear of
all Liens (other than Permitted Liens).
(b) SECTION 3.25(b) of the Disclosure Schedule contains a list
as of the date indicated in such schedule of (i) all material machinery,
equipment, fixtures and other tangible personal property owned by another Person
subject to any capital lease or rental agreement that constitutes a Material
Contract to which any Target Corporation is a party (collectively, the "LEASED
TANGIBLE PROPERTY") and (ii) a list of the leases of the Leased Tangible
Property (the "TANGIBLE PROPERTY LEASES"). Each of the Tangible Property Leases
is in full force and effect and constitutes a valid and binding obligation of
the applicable Target Corporation and the other party thereto, enforceable in
accordance with its terms (subject to bankruptcy, insolvency and other
proceedings at law or in equity relating to the rights of creditors generally).
No Target Corporation has received notice, and neither the Company nor any
Company Stockholder has Knowledge, of any default by any Target Corporation
(beyond any applicable grace or cure period) under any of the Tangible Property
Leases, and, to the Company's and the Company Stockholders' Knowledge, no other
party to any of the Tangible Property Leases is in breach or default thereunder.
(c) Except as set forth in SECTION 3.25(c) of the Disclosure
Schedule, all Owned Tangible Property and all Leased Tangible Property
(collectively, the "TANGIBLE PROPERTY") is in
30
good and usable working condition, normal wear and tear excepted, and is
suitable for the purposes for which it is used or is being replaced according to
the Target Corporations' replacement policy.
3.26 OFFICERS AND EMPLOYEES. The Company has previously delivered or made
available to Veeco a true and complete list of the names and current salaries of
all the employees of each Target Corporation. Except as disclosed in SECTION
3.26 of the Disclosure Schedule, there is no employment agreement, employee
benefit or incentive compensation plan or program, severance policy or program
or any other plan or program to which any Target Corporation is a party (i) that
is or would be reasonably likely to be, pursuant to its terms, triggered or
accelerated by reason of or in connection with the execution of this Merger
Agreement or the consummation of the transactions contemplated by this Merger
Agreement or (ii) which contains "change in control" provisions pursuant to
which the payment, vesting or funding of compensation or benefits is triggered
or accelerated by reason of or in connection with the execution of or
consummation of the transactions contemplated by this Merger Agreement. Except
as set forth in SECTION 3.26 of the Disclosure Schedule, no employee whose
annual salary is in excess of $50,000 (exclusive of bonuses) has given notice to
the Company to cancel or otherwise terminate such person's relationship with the
Company.
3.27 INSURANCE. SECTION 3.27 of the Disclosure Schedule contains a
complete list of all of the Target Corporations' policies of insurance in effect
as of the date hereof. All of such policies are in full force and effect, and
there is no default (beyond any applicable grace or cure period) with respect to
any provision contained in any such policy, nor has there been any failure to
give any notice or present any claim under any liability policy in a timely
fashion or in the manner or detail required by such liability policy, except for
such defaults or failures that have had no Material Adverse Effect on the
Company. The Company has delivered or made available copies of all such policies
to Veeco. Except as set forth in SECTION 3.27 of the Disclosure Schedule, there
are no outstanding unpaid premiums or claims, and no retroactive or
retrospective premium adjustments with respect to such policies, and no notice
of cancellation or nonrenewal has been received by any Target Corporation with
respect to, or disallowance of any claim under, any such policy.
3.28 BANKING RELATIONSHIPS. SECTION 3.28 of the Disclosure Schedule sets
forth the names and locations of all banks, trust companies, savings and loan
associations and other financial institutions at which any Target Corporation
has a banking relationship. At the Closing, the Company shall provide to Veeco
copies of all banking records in the Target Corporations' possession, including,
without limitation, bank statements for the 12 months prior to the date hereof,
keys to safe deposit boxes and all signature or authorization cards pertaining
to such safe deposit boxes and bank accounts.
3.29 TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES. Except as set forth in
SECTION 3.29 of the Disclosure Schedule and except for salary, benefits, other
compensation and expense reimbursements payable in the ordinary course and
consistent with past practices, there are no amounts in excess of $5,000 owing
from any Target Corporation to any present or former shareholder or Affiliate of
any Target Corporation, nor are there any amounts in excess of $5,000 owing from
any such Person to any Target Corporation, nor are there currently pending any
transactions between any Target
31
Corporation and any such Person, nor since December 31, 2000, have there been
any transactions between any Target Corporation and any such Person.
3.30 SOLVENCY. No Target Corporation is under the jurisdiction of a court
in a Title 11 or similar case within the meaning of Section 368(a)(3)(a) of the
Code and the fair market value of the assets of the Company will, as of the
Effective Time, exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which the assets are subject.
(B) Each of the Company Stockholders, severally but not jointly,
represents and warrants to Veeco and Acquisition as follows:
(1) STOCK OWNERSHIP. Each of the Company Stockholders, as applicable, is
the record and beneficial owner of the shares of Company Common Stock set forth
opposite such Company Stockholder's name in SECTION 3.02(a) of the Disclosure
Schedule as of the date hereof, and will be the record and beneficial owner of
such shares immediately prior to the Closing, free and clear of all Liens. No
legend or other reference to any purported Lien appears upon any certificate
representing shares of the Company Common Stock identified on SECTION 3.02(a) of
the Disclosure Schedule as being owned by such Company Stockholder.
(2) AUTHORIZATION. Each of the Company Stockholders, as applicable, has
the right, capacity and all requisite authority to execute, deliver and perform
this Merger Agreement and to consummate the transactions contemplated hereby.
This Merger Agreement has been duly and validly executed and delivered by such
Company Stockholder. This Merger Agreement constitutes a legal, valid and
binding agreement of such Company Stockholder, enforceable in accordance with
its terms.
IV. REPRESENTATIONS AND WARRANTIES OF VEECO AND ACQUISITION.
Veeco and Acquisition, jointly and severally, hereby represent and warrant
to the Company and the Company Stockholders as follows:
4.01 ORGANIZATION OF VEECO AND ACQUISITION. (a) Each of Veeco and
Acquisition is a corporation duly organized, validly existing and in good
standing (in jurisdictions recognizing such concept) under the laws of its
jurisdiction of incorporation, and is qualified or licensed to do business as a
foreign corporation, and is in good standing (in such jurisdictions recognizing
such concept) under the laws of all jurisdictions where the nature of its
business requires such qualification, other than such failures to be so
qualified as would not individually or in the aggregate reasonably be expected
to have a Material Adverse Effect upon Veeco or Acquisition. Each of Veeco and
Acquisition has all necessary corporate or other power and authority: (i) to
conduct its business in the manner in which its business is currently being
conducted; (ii) to own and use its assets in the manner in which its assets are
currently owned and used; and (iii) to perform its obligations under all
Contracts by which it is bound except where the failure of (i), (ii) or (iii)
wound not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect on Veeco or Acquisition.
32
(b) Each of Veeco and Acquisition has full corporate power and
authority to execute, deliver and perform this Merger Agreement and, in the case
of Acquisition, the Articles of Merger, and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Merger
Agreement, the Articles of Merger and all other documents and agreements to be
delivered pursuant hereto and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the boards of directors of Veeco
and Acquisition. Prior to the Closing, the execution, delivery and performance
of this Merger Agreement, the Articles of Merger and all other documents and
agreements to be delivered pursuant hereto and the consummation of the
transactions contemplated hereby will be duly and validly authorized by the
stockholder of Acquisition, and no other corporate proceedings on the part of
Veeco or Acquisition are necessary to authorize this Merger Agreement, the
Articles of Merger and any related documents or agreements or to consummate the
transactions contemplated hereby. As of the Closing, no stockholder of Veeco or
Acquisition will have any rights to dissent under applicable law. This Merger
Agreement has been duly and validly executed and delivered by Veeco and
Acquisition, and the Articles of Merger, when executed at the Closing, will be
duly and validly executed and delivered by Acquisition. This Merger Agreement
constitutes a legal, valid and binding agreement of both Veeco and Acquisition,
enforceable in accordance with its terms, and the Articles of Merger, when
executed at the Closing, will be a legal, valid and binding agreement of
Acquisition, enforceable in accordance with its terms.
4.02 CAPITALIZATION. (a) The authorized capital stock of Veeco consists of
40,000,000 Veeco Shares, of which 24,809,617 shares were issued and outstanding
as of July 31, 2001, and 500,000 shares of preferred stock, none of which are
outstanding. All of the outstanding Veeco Shares have been duly authorized and
validly issued and are fully paid and nonassessable and were issued in
conformity with applicable laws. No Veeco Shares have been issued since July 31,
2001 other than pursuant to Veeco Options.
(b) As of July 31, 2001, 4,282,963 Veeco Shares were issuable
upon the exercise of options granted under Veeco's stock option plans ("VEECO
OPTION PLANS") (including those assumed by Veeco in connection with prior
acquisitions) (collectively, the "VEECO OPTIONS") and 240,230 Veeco Shares were
reserved under the Veeco Option Plans although not subject to options granted
under those plans. Except for the outstanding Veeco Shares described in (a), the
Veeco Options, Veeco Shares issuable under Veeco's Employee Stock Purchase Plan
and Veeco Shares issuable under Veeco's Shareholder Rights Plan there are no
outstanding Equity Securities, or other obligations to issue or grant any rights
to acquire any Equity Securities, of Veeco, or any Contracts to restructure or
recapitalize Veeco. There are no outstanding Contracts of Veeco to repurchase,
redeem or otherwise acquire any Equity Securities of Veeco. All outstanding
Equity Securities of Veeco have been duly authorized and validly issued in
conformity with applicable laws.
4.03 NON-CONTRAVENTION. Except as set forth on SCHEDULE 4.03, the
execution, delivery and performance by Veeco and Acquisition of this Merger
Agreement and the consummation of the transactions contemplated hereby will not
(a) violate any provision of the certificate or articles of incorporation or
by-laws of Veeco or Acquisition, (b) violate, or be in conflict with, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in, or
33
provide the basis for, the termination of, or accelerate the performance
required by, or excuse performance by any Person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any Lien upon any
property or assets of Veeco or Acquisition under, any material Contract to which
Veeco or Acquisition is a party or by which any of their respective property or
assets are bound, or to which any of the property or assets of Veeco or
Acquisition is subject, except for Contracts wherein the other party thereto has
consented to the consummation of this transaction as set forth on SCHEDULE 4.03
hereto, (c) subject to compliance with the HSR Act, violate any Law applicable
to Veeco or Acquisition or (d) violate or result in the revocation or suspension
of any material license, permit, certificate, consent or approval from a
Governmental Authority that is necessary for the business and operations of
Veeco or Acquisition.
4.04 REPORTS. Veeco has furnished or otherwise made available to the
Company a true and complete copy of each statement, report, registration
statement (with the prospectus in the form filed pursuant to Rule 424(b) of the
Securities Act), definitive proxy statement and other filings filed with the SEC
by Veeco since January 1, 2000, and, prior to the Effective Time, Veeco will
have furnished the Company with true and complete copies of any additional
statements, reports and documents filed with the SEC by Veeco after the date
hereof and prior to the Effective Time (collectively, the "VEECO SEC
DOCUMENTS"). All documents required to be filed as exhibits to the Veeco SEC
Documents have been so filed. All Veeco SEC Documents were filed as and when
required by the Exchange Act or the Securities Act, as applicable. The Veeco SEC
Documents include all statements, reports and documents required to be filed by
Veeco pursuant to the Exchange Act and the Securities Act. As of their
respective filing dates, the Veeco SEC Documents complied in all material
respects with the requirements of the Exchange Act and the Securities Act, as
applicable, and none of the Veeco SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent
corrected by a subsequently filed Veeco SEC Document. None of Veeco's
Subsidiaries is required to file any statements, reports or documents with the
SEC. The financial statements of Veeco and its Subsidiaries, including the notes
thereto, included in the Veeco SEC Documents (the "VEECO FINANCIAL STATEMENTS"),
complied in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto as of
their respective dates (except as may be indicated in the notes thereto or, in
the case of unaudited statements included in Quarterly Reports on Form 10-Q, as
permitted by Form 10-Q of the SEC). The Veeco Financial Statements fairly
present the consolidated financial condition, operating results, changes in
stockholders' equity and cash flows of Veeco and its Subsidiaries at the dates
and during the periods indicated therein in accordance with GAAP consistently
applied (subject, in the case of unaudited statements, to normal, recurring
year-end adjustments and additional footnote disclosures). There has been no
material change in Veeco's accounting policies except as described in the notes
to the Veeco Financial Statements.
4.05 ABSENCE OF CERTAIN CHANGES. Except as listed on SCHEDULE 4.05, since
December 31, 2000 (the "VEECO BALANCE SHEET DATE"), Veeco and its Subsidiaries
have conducted their business in the ordinary course consistent with past
practice and there has not occurred: (i) any change, event or condition (whether
or not covered by insurance) that has resulted in, or might reasonably be
expected to result in, a Material Adverse Effect to Veeco; (ii) any acquisition,
sale or transfer of any
34
material asset of Veeco or any of its Subsidiaries other than in the ordinary
course of business and consistent with past practice; (iii) any change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) by Veeco or any revaluation by Veeco of any of
its assets; (iv) any declaration, setting aside, or payment of a dividend or
other distribution with respect to the shares of Veeco, or any direct or
indirect redemption, purchase or other acquisition by Veeco of any of its shares
of capital stock; (v) any material Contract entered into by Veeco or any of its
Subsidiaries, other than in the ordinary course of business, or any material
amendment or termination of, or default under, any material Contract to which
Veeco or any of its Subsidiaries is a party or by which it or any of them is
bound; or (vi) any agreement by Veeco or any of its Subsidiaries to do any of
the things described in the preceding clauses (i) through (v) (other than
negotiations with the Company and its representatives regarding the transactions
contemplated by this Merger Agreement).
4.06 NO UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE 4.06,
neither Veeco nor any of its Subsidiaries has any obligations or liabilities of
any nature (matured or unmatured, fixed or contingent) which are material to
Veeco and its Subsidiaries, taken as a whole, other than those (i) set forth or
adequately provided for in the Balance Sheet of Veeco and its Subsidiaries
included in Veeco's Annual Report on Form 10-K for the period ended December 31,
2000 (the "VEECO BALANCE SHEET"), (ii) not required to be set forth on the Veeco
Balance Sheet under GAAP consistently applied with Veeco's past practices, or
(iii) incurred in the ordinary course of business since the Veeco Balance Sheet
Date and consistent with past practice.
4.07 LITIGATION. Except as disclosed in Veeco's Quarterly Report on Form
10-Q for the period ended June 30, 2001 and as set forth on SCHEDULE 4.07, (i)
there is no private or governmental action, suit, proceeding, claim, arbitration
or investigation pending before any agency, court or tribunal, foreign or
domestic, or, to the Knowledge of Veeco or any of its Subsidiaries, Threatened
against Veeco or any of its Subsidiaries or any of their respective properties
or any of their respective officers or directors (in their capacities as such)
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on Veeco, and (ii) there is no judgment, decree or order
against Veeco or any of its Subsidiaries or, to the Knowledge of Veeco or any of
its Subsidiaries, any of their respective directors or officers (in their
capacities as such) that could prevent, enjoin, alter or materially delay any of
the transactions contemplated by this Merger Agreement, or that could reasonably
be expected to have a Material Adverse Effect on Veeco.
4.08 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material Contract,
agreement, judgment, injunction, order or decree binding upon Veeco or any of
its Subsidiaries which has or reasonably could be expected to have the effect of
prohibiting or materially impairing any current or future business practice of
Veeco or any of its Subsidiaries, any acquisition of property by Veeco or any of
its Subsidiaries or the conduct of business by Veeco or any of its Subsidiaries
as currently conducted or as proposed to be conducted by Veeco or any of its
Subsidiaries.
35
4.09 GOVERNMENTAL AUTHORIZATION. Veeco and each of its Subsidiaries have
obtained each federal, state, county, local or foreign governmental consent,
license, permit, certificate, approval, grant, or other authorization of a
Governmental Authority that is required for the operation of Veeco's or any of
its Subsidiaries' business or the holding of any interest in its properties
(collectively, the "VEECO AUTHORIZATIONS"), and all of such Veeco Authorizations
are in full force and effect, except where the failure to obtain or have any of
such Veeco Authorizations could not reasonably be expected to have a Material
Adverse Effect on Veeco.
4.10 COMPLIANCE WITH LAWS. Each of Veeco and its Subsidiaries has complied
with, are not in violation of, and have not received any notices of violation
with respect to, any federal, state, local or foreign statute, Law or regulation
with respect to the conduct of its business, or the ownership or operation of
its business, except for such violations or failures to comply as could not be
reasonably expected to have a Material Adverse Effect on Veeco.
4.11 BROKERS AND FINDERS. Except for those Persons ("VEECO'S BROKERS")
previously disclosed to the Company or its agents or representatives, no broker,
finder, agent or similar intermediary has acted on Veeco's or Acquisition's
behalf in connection with this Merger Agreement or the transactions contemplated
hereby, and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection therewith based on any Contract with Veeco or
Acquisition or any action taken by Veeco or Acquisition. Veeco shall pay all
fees and disbursements of Veeco's Brokers.
4.12 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
war ranties of Veeco and Acquisition set forth in this Merger Agreement and in
any agreement, certificate or other document required to be delivered or given
to the Company by Veeco or Acquisition pursuant to this Merger Agreement will be
true and correct at the Closing Date with the same force and effect as if made
on that date.
V. COVENANTS.
5.01 ACCESS. Between the date hereof and the Closing Date, the Company
shall, and shall cause its Subsidiaries to, provide Veeco, Acquisition and each
of their authorized employees, agents, officers and representatives with
reasonable access to the properties, books, records, Tax Returns, contracts,
information, documents and personnel of the Target Corporations as they relate
to the Target Corporations' businesses as Veeco or Acquisition may reasonably
request for the purpose of making such investigation of the business,
properties, financial condition and results of operations of the Target
Corporations' businesses as it may deem appropriate or necessary. Between the
date hereof and the Closing Date, Veeco shall, and shall cause its Subsidiaries
to, provide the Company and each of its authorized employees, agents, officers
and representatives with reasonable access to the properties, books, records,
Tax Returns, contracts, information, documents and personnel of Veeco and its
Subsidiaries as they relate to Veeco's and its Subsidiaries' businesses as the
Company may reasonably request for the purpose of making such investigation of
the business, properties, financial condition and results of operations of
Veeco's and its Subsidiaries' businesses as they may deem appropriate or
necessary.
36
5.02 CONDUCT OF THE BUSINESSES OF THE TARGET CORPORATIONS PENDING THE
CLOSING DATE. Except as otherwise expressly permitted by this Merger Agreement,
between the date hereof and the Closing Date, the Company shall not, without the
prior consent of Veeco, take, or cause or permit any other Target Corporation to
take, any affirmative action, or fail to take any reasonable action within its
control, as a result of which any of the changes or events listed in Section
3.11 is reasonably likely to occur.
5.03 CONDUCT OF BUSINESS OF THE COMPANY AND VEECO. During the period from
the date of this Merger Agreement and continuing until the earlier of the
termination of this Merger Agreement and the Effective Time, each of the Company
and Veeco agrees (except to the extent expressly contemplated by this Merger
Agreement or as consented to in writing by the other), to carry on its and its
Subsidiaries' businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, to pay and to cause its
Subsidiaries to pay debts and Taxes when due (subject to good faith disputes
over such debts or Taxes), to pay or perform other obligations when due (subject
to good faith disputes over such obligations), and to use all reasonable efforts
consistent with past practice and policies to preserve intact its and its
Subsidiaries' present business organizations, use its reasonable efforts
consistent with past practice to keep available the services of its and its
Subsidiaries' present officers and key employees and agents and use its
reasonable efforts consistent with past practice to preserve its and its
Subsidiaries' relationships and good will with customers, suppliers,
distributors, licensors, licensees, landlords, creditors, employees, agents and
others having business dealings with it or its Subsidiaries, provided that
immediately prior to the Closing the Company may make special bonus payments to
its employees in an aggregate amount not to exceed $200,000. Each of the Company
and Veeco shall, and shall cause each of its Subsidiaries to, confer with the
other concerning operational matters of a material nature. Without limiting the
foregoing, except as expressly contemplated by this Merger Agreement, neither
the Company nor Veeco shall do, cause or permit any of the following, or allow,
cause or permit any of its Subsidiaries to do, cause or permit any of the
following, without the prior written consent of the other:
(a) CHARTER DOCUMENTS. Cause or permit any amendments to its
certificate or articles of incorporation or bylaws;
(b) DIVIDENDS; CHANGES IN CAPITAL STOCK. Declare or pay any
dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock; issue any shares of its
capital stock other than, in the case of the Company, pursuant to the exercise
of Company Options and Company Warrants outstanding as of the date hereof and,
in the case of Veeco, pursuant to the exercise of Veeco Options outstanding as
of the date hereof; split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock; or repurchase or
otherwise acquire, directly or indirectly, any shares of its capital stock
except from former employees, directors and consultants in accordance with
agreements providing for the repurchase of shares in connection with any
termination of service to it or its Subsidiaries (except that, consistent with
past practice and immediately prior to Closing, the Company shall be entitled to
make a cash distribution to the Stockholders in an amount estimated to cover tax
obligations relating to their status as shareholders of an S corporation); or
37
(c) OTHER. Take, or agree in writing or otherwise to take, any
of the actions described in Sections 5.03(a) or (b) above, or any action which
would make any of its representations or warranties contained in this Merger
Agreement untrue or incorrect in any material respect or prevent it from
performing or cause it not to perform its covenants hereunder in any material
respect.
5.04 CONSENTS. The Company, Veeco and Acquisition shall cooperate and use
their respective commercially reasonable efforts to obtain, prior to the
Effective Time, all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to the
Material Contracts as are necessary for consummation of the transactions
contemplated by this Merger Agreement and for the Surviving Corporation to enjoy
all rights under such Material Contracts after the consummation of the
transactions contemplated by this Merger Agreement.
5.05 ENVIRONMENTAL TRANSFER LAWS. Between the date hereof and the Closing
Date, the Company shall, and shall cause the other Target Corporations to,
comply in a timely fashion and in all material respects with the requirements of
all Environmental Laws applicable to the transfer of the Target Corporations and
their businesses and of any permits, approvals and licenses associated with the
operation of such businesses except where the failure to so comply would not
reasonably be expected to result in a material liability of any Target
Corporation, Veeco or Acquisition. The Company shall, and shall cause the other
Target Corporations to, complete all necessary disclosure statements required by
Environmental Laws applicable to the transfer of the Target Corporations'
businesses and provide the statements to Veeco prior to Closing, all in proper
form for appropriate recordation and filing except where the failure to prepare
and file such statements would not reasonably be expected to result in a
material liability of any Target Corporation, Veeco or Acquisition.
5.06 TAX MATTERS. Between the date hereof and the Closing Date, the
Company shall file or cause to be filed on a timely basis all Tax Returns that
are required to be filed by it and the other Target Corporations pursuant to the
Laws of each Governmental Authority with taxing power over it, any of the other
Target Corporations or their assets and businesses. Each of such Tax Returns
will be true, correct and complete in all material respects when filed. The
Company shall not make, nor shall cause any other Target Corporation to make,
any election, file any amended Tax Return, enter into any closing agreement,
settle any Tax claim or assessment or take (or omit to take) any other action
reflecting any position that is reasonably likely to result in a Material
Adverse Effect with respect to Taxes on Veeco, Acquisition or any of the Target
Corporations for any period beginning on or after the Effective Time. All
transfer, documentary, gross receipts, sales, use and property gains Taxes, and
liabilities similar in nature, imposed or payable on the sale or transfer of the
Target Corporations' businesses pursuant to this Merger Agreement or the
consummation of any of the transactions contemplated hereby shall be paid by the
Company. The Company shall timely file, and shall cause the other Target
Corporations to file, all required transfer Tax Returns and/or notices of the
transfer of the Target Corporations' businesses with the appropriate
Governmental Authority. Veeco shall cooperate with the Company, which
cooperation shall include, without limitation, providing information and
executing and delivering documents, in connection with the Company's obligations
under this Section.
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5.07 NOTICE OF BREACH; DISCLOSURE. Each party shall promptly notify the
other of (i) any event, condition or circumstance of which such party becomes
aware after the date hereof and prior to the Closing Date that would constitute
a violation or breach of this Merger Agreement (or a breach of any
representation or warranty contained herein) or, if the same were to continue to
exist as of the Closing Date, is reasonably likely to constitute the
non-satisfaction of any of the conditions set forth in Article VI or VII, as the
case may be or (ii) any event, occurrence, transaction, or other item of which
such party becomes aware which would have been required to have been disclosed
on any schedule or statement delivered hereunder had such event, occurrence,
transaction or item existed as of the date hereof. The disclosure of any matter
as provided in this Section shall not affect the right of any party to terminate
this Merger Agreement under Section 9.01(c) or (d) on the basis thereof, but,
absent fraud, neither party shall have any right of recovery against the other
on account of the matters so disclosed and, for purposes of Article VIII, the
matters so disclosed shall be deemed to be set forth on the Schedules to this
Merger Agreement and to be exceptions to the representations, warranties and
covenants of the parties hereunder.
5.08 PAYMENT OF INDEBTEDNESS BY AND TO AFFILIATES. Except as set forth in
SCHEDULE 5.08, the Company shall cause all indebtedness owed to the Company by
any Affiliate of the Company to be paid in full prior to Closing. At the
Closing, Veeco shall pay and cause to be fully discharged all indebtedness owed
by the Company to any Affiliate of the Company which is listed on SCHEDULE 5.08.
5.09 NO NEGOTIATION. Until such time, if any, as this Merger Agreement is
terminated pursuant to Section 9.01, the Company shall not, nor shall it permit
the other Target Corporations to, solicit or entertain offers from, negotiate
with, or in any manner discuss, encourage, consider or agree to any proposal of
any other potential buyer or buyers of all or any substantial portion of the
Target Corporations' businesses or any equity interest in any of the Target
Corporations. The Company shall inform Veeco within two business days of
receiving any inquiry from any third party relating to the subject matter set
forth above.
5.10 FIRPTA. The Company shall, on or prior to the Closing Date, provide
Veeco with a properly executed FIRPTA Notification Letter, substantially in the
form of EXHIBIT F attached hereto, which states that shares of capital stock of
the Company do not constitute "United States real property interest" under
Section 897(c) of the Code, for purposes of satisfying Veeco's obligations under
Treasury Regulation Section 1.1445-2(c)(3). In addition, simultaneously with
delivery of such Notification Letter, the Company shall have provided to Veeco,
as agent for the Company, a form of notice to the IRS in accordance with the
requirements of Treasury Regulation Section 1.897- 2(h)(2) and substantially in
the form of EXHIBIT F annexed hereto along with written authorization for Veeco
to deliver such form of notice to the IRS on behalf of the Company upon the
Closing of the Merger.
5.11 BLUE SKY LAWS. Veeco shall take, at its cost, such steps as may be
necessary to comply with the securities and blue sky Laws of all jurisdictions
which are applicable to the issuance of Veeco Shares in connection with the
Merger. The Company shall use its reasonable efforts to assist Veeco as may be
necessary to comply with the securities and blue sky Laws of all jurisdictions
which are applicable in connection with the issuance of Veeco Shares in
connection with the Merger.
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5.12 LISTING OF ADDITIONAL SHARES. Prior to the Effective Time, Veeco
shall file with NASDAQ a Notification Form for Listing of Additional Shares with
respect to the Veeco Shares issuable as Merger Consideration and pursuant to
Section 5.15.
5.13 ADDITIONAL AGREEMENTS. Subject to the terms and conditions provided
in this Merger Agreement, each of Veeco, Acquisition and the Company shall use
its reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
Laws and regulations to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated by this Merger Agreement (including
the satisfaction of the conditions contained in Articles VI and VII hereof as
required thereby).
5.14 HSR ACT COMPLIANCE. The parties have filed Pre-Merger Notification
and Report Forms in accordance with the HSR Act with respect to the transactions
contemplated by this Merger Agreement. The parties shall (i) promptly file any
other required filings under the HSR Act, and (ii) respond in good faith, in
cooperation with each other, to all requests for information, documentary or
otherwise, by any Governmental Body pursuant to the HSR Act.
5.15 STOCK OPTIONS. (a) At the Effective Time, all rights with respect to
shares of Company Common Stock that were issuable upon the exercise of options
granted under the stock option plans and other options set forth on SECTION
3.02(b) of the Disclosure Schedule (collectively, the "COMPANY OPTIONS") and
warrants set forth on SECTION 3.02(b) of the Disclosure Schedule (collectively,
the "COMPANY WARRANTS") then outstanding, shall be converted into and become
rights with respect to Veeco Shares, and Veeco shall assume each such Company
Option and Company Warrant in accordance with the terms (as in effect as of the
date of this Merger Agreement) of the stock option plan, warrant instrument or
other arrangement under which it was issued and the terms of the stock option
agreement or other document by which it is evidenced. From and after the
Effective Time, (i) each Company Option and Company Warrant assumed by Veeco may
be exercised by the holder thereof solely for Veeco Shares, (ii) the number of
Veeco Shares subject to each such Company Option or Company Warrant shall be
equal to the product of (a) the number of shares of Company Common Stock subject
to such Company Option or Company Warrant immediately prior to the Effective
Time multiplied by (b) 0.184, rounding to the nearest whole share, (iii) the per
share exercise price under each such Company Option or Company Warrant shall be
adjusted by dividing (x) the per share exercise price under such Company Option
or Company Warrant by (y) 0.184 and rounding to the nearest cent and (iv) any
restriction on the exercise or transfer of any such Company Option or Company
Warrant shall continue in full force and effect in accordance with its terms and
the term, exercisability, vesting schedule and other provisions of or relating
to such Company Option or Company Warrant shall otherwise remain unchanged;
PROVIDED, HOWEVER, that each Company Option and Company Warrant assumed by Veeco
in accordance with this Section 5.15(a) shall, in accordance with its terms, be
subject to further adjustment as appropriate to reflect any stock split, stock
dividend, reverse stock split, reclassification, recapitalization or other
similar transaction subsequent to the Effective Time. Veeco shall file with the
SEC, no later than the date on which the Merger becomes effective, a
registration statement on Form S-8 relating to the Veeco Shares issuable with
respect to the Company Options assumed by Veeco in accordance with this Section
5.15(a).
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(b) Prior to the Effective Time, the Company shall take all
action that may be necessary (under the plans and instruments pursuant to which
Company Options and Company Warrants are outstanding and otherwise) to
effectuate the provisions of this Section 5.15 and to ensure that, from and
after the Effective Time, holders of Company Options and Company Warrants have
no rights with respect thereto other than those specifically provided in this
Section 5.15.
5.16 COMPETITION AND SOLICITATION. (a) In consideration of Veeco's
obligations hereunder, for the period set forth in Section 5.16(c) below, each
of the Company Stockholders agrees that he:
(i) shall not, in any capacity (a) own, operate, manage or
control, or (b) serve as a partner, agent, consultant, advisor or
developer or in any similar capacity to or (c) have any financial
interest in, or aid or assist anyone else in the conduct of, any
Person or enterprise which designs, manufactures, markets, services
and/or sells (1) molecular beam epitaxy equipment, (2) metal organic
chemical vapor deposition equipment, (3) organic light emitting
display equipment or (4) parts or components for any of the
foregoing;
(ii) shall not call upon, solicit, divert, take away or
attempt to solicit any of the customers of Veeco or any of its
Subsidiaries with respect to either the sale of products or the
provision of services related to the design, manufacturing,
marketing, service and/or sale of (1) molecular beam epitaxy
equipment, (2) metal organic chemical vapor deposition equipment,
(3) organic light emitting display equipment or (4) parts or
components for any of the foregoing;
(iii) shall not, directly or indirectly, solicit or attempt to
solicit any employee of Veeco or any of its Subsidiaries involved in
the design, manufacturing, marketing, service and/or sale of (1)
molecular beam epitaxy equipment, (2) metal organic chemical vapor
deposition equipment, (3) organic light emitting display equipment
or (4) parts or components for any of the foregoing with a view to
inducing or encouraging such employee to leave the employ of Veeco
or any of its Subsidiaries for the purpose of being hired by such
Company Stockholder, an employer affiliated with such Company
Stockholder or any competitor of Veeco or any of its Subsidiaries;
provided, however, that general purpose advertisements shall not be
considered a solicitation in violation of this Section 5.16(a)(iii).
(b) Notwithstanding anything in this Merger Agreement to the
contrary, a Company Stockholder shall be entitled to directly or indirectly
invest in up to 5% of the Equity Securities of any publicly traded company and
up to 3% of the Equity Securities of any privately- held company, regardless of
its business, provided that such Company Stockholder does not take an active
role in the administration of the business and does not appoint a representative
on the board of directors of such company.
(c) For purposes of this Section 5.16, the duration of the
covenant of each Company Stockholder under Sections 5.16(a)(i) and (ii) shall
begin on the Closing Date and shall terminate on the third anniversary of the
Closing Date. The duration of the covenant of each Company Stockholder
41
under Section 5.16(a)(iii) shall begin on the Closing Date and shall terminate
on the second anniversary of the Closing Date.
5.17 EMPLOYMENT MATTERS. (a) From and after the Effective Time, Veeco
shall cause the Surviving Corporation to continue to employ all employees of the
Target Corporations on the Closing Date ("COMPANY EMPLOYEES") at no less than
their base salary on the date hereof; provided, that in the absence of an
employment agreement, this provision shall not alter the at-will status of any
such Company Employee.
(b) For a period of not less than one year following the
Effective Time, Veeco shall provide, or shall cause to be provided, to the
Company Employees compensation and benefit plans, programs and policies and
fringe benefits, that, in the aggregate, are at least as favorable to the
Company Employees as that provided to them by the Target Corporations as of the
date hereof as described in SECTION 3.12(a) of the Disclosure Schedule;
provided, however, Veeco shall not be required to grant Company Options.
(c) For all purposes under the employee benefit plans of Veeco
and its Subsidiaries providing benefits to any Company Employee after the
Effective Time, each Company Employee shall be credited with his or her years of
service with the Target Corporations before the Effective Time for eligibility
and vesting purposes, to the same extent as such Company Employee was entitled
before the Effective Time to credit for such service under any similar plans of
the Target Corporations except to the extent other similarly situated employees
of Veeco and its Subsidiaries are not credited with past services under such
plans. In addition, and without limiting the generality of the foregoing, if any
plan of the Target Corporations providing medical, dental, pharmaceutical and/or
vision benefits to any Company Employee is replaced by a new plan (or by a plan
otherwise sponsored by Veeco or any of its Subsidiaries) (a "NEW PLAN"), Veeco
shall, to the extent possible, cause all "preexisting condition" exclusions of
such New Plan to be waived for all Company Employees covered thereby and his or
her covered dependents, and Veeco shall cause any eligible expenses incurred by
such employee and his or her covered dependents during the portion of the plan
year ending on the date such employee's participation in the New Plan begins, to
be taken into account under such New Plan for purposes of satisfying all
deductible, coinsurance and maximum out of pocket requirements applicable to
such employee and his or her covered dependents for the applicable plan year as
if such amounts had been paid in accordance with such New Plan.
(d) Nothing herein expressed or implied shall confer upon any
of the Company Employees any right to employment, or continued employment for
any specified period, or any right to any specific kind of compensation or
benefits.
5.18 LOCATION OF SURVIVING CORPORATION. Veeco agrees that for a period of
two (2) years from the Closing Date it will cause the Surviving Corporation to
maintain its operations and physical locations within a ten-mile radius of 0000
Xxxxxxxxxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx.
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VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF VEECO AND ACQUISITION.
The obligations of Veeco and Acquisition to enter into and complete the
Closing is conditioned upon the satisfaction or waiver in writing by Veeco (on
behalf of Veeco and Acquisition), on or before the Closing Date, of the
following conditions:
6.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Company and the Company Stockholders contained in this Merger
Agreement, the Schedules or Exhibits hereto or in any certificate or document
delivered to Veeco and Acquisition by the Company in connection with the
transactions contemplated by this Merger Agreement shall be true in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties were made on such date.
6.02 PERFORMANCE OF COVENANTS. The Company and each of the Company
Stockholders shall have performed and complied in all material respects with all
of the agreements, covenants and conditions required by this Merger Agreement to
be performed and complied with by them prior to or on the Closing Date.
6.03 LITIGATION. No investigation, suit, action or other proceeding, or
injunction or final judgment relating thereto shall be Threatened or pending on
the Closing Date before any court or Governmental Authority in which it is
sought to restrain or prohibit or to obtain Damages or other relief in
connection with this Merger Agreement or the consummation of the transactions
contemplated hereby.
6.04 CONSENTS AND APPROVALS; HSR ACT COMPLIANCE. All licenses and other
con sents or approvals of Governmental Authorities and the consents of the
parties to any Material Contracts listed on SCHEDULE 6.04 shall have been
obtained. The requirements of the HSR Act applicable to the transactions
contemplated by this Merger Agreement shall have been complied with, and the
waiting period thereunder shall have expired or been terminated.
6.05 MATERIAL CHANGES. There shall not have been any material adverse
change in the assets, properties, condition (financial or otherwise), prospects
or results of operations of the Target Corporations taken as a whole from the
date hereof to the Closing Date, nor shall there exist any condition which could
reasonably be expected to result in such a material adverse change.
6.06 DELIVERY OF DOCUMENTS. There shall have been delivered to Veeco and
Acquisition the following:
(i) a certificate of the Company, dated the Closing Date,
signed by an officer of the Company, to the effect that the
conditions specified in Sections 6.01 and 6.02 have been fulfilled;
(ii) a certificate of the Company, dated the Closing Date,
signed by an officer of the Company, setting forth a schedule of (i)
the number of shares of Company Common Stock held
43
by each Stockholder as of the Closing Date, (ii) the Cash Elections
made by each Stockholder and (iii) the amount of cash and number of
Veeco Shares which shall be issuable as Merger Consideration to each
Stockholder (subject to Section 2.06) in accordance with Sections
2.05(a), (c) and (d) hereof (the "CASH ELECTION CERTIFICATE");
(iii) a certificate of the Company, dated the Closing Date,
signed by an officer of the Company, identifying the amount of any
cash distributions made or declared by the Company to the
Stockholders during the period commencing on the date hereof and
continuing until the Effective Time to cover the estimated tax
obligations relating to the Stockholders' status as shareholders of
an S corporation together with supporting documents for any
calculations made in determining such amounts;
(iv) a certificate of the Secretary of the Company certifying
copies of (x) the articles of incorporation and by-laws of the
Company; (y) all requisite corporate resolutions of the Company
approving the execution and delivery of this Merger Agreement and
the consummation of the transactions contemplated herein; and (z)
the identification and signature of each officer of the Company
executing this Merger Agreement;
(v) the employment agreement for Xxxxx X. Xxxxxx substantially
in the form of EXHIBIT G annexed hereto, duly executed by Xxxxx X.
Xxxxxx;
(vi) the consulting agreement for Xxxx X. Xxxxxxx
substantially in the form of EXHIBIT L annexed hereto, duly executed
by Xxxx X. Xxxxxxx;
(vii) the Escrow Agreement, duly executed by the Company
Stockholders and the Stockholders' Representative;
(viii) an investment agreement, substantially in the form of
EXHIBIT H annexed hereto, duly executed by the Stockholders; and
(ix) the second amendment to the employment and noncompetition
agreement for Xxxxx Xxxxx Xxxxxx, substantially in the form of
EXHIBIT M annexed hereto, duly executed by Xxxxx Xxxxx Xxxxxx.
6.07 LEGAL OPINION. Veeco and Acquisition shall have received an opinion
of Robins, Kaplan, Xxxxxx & Xxxxxx L.L.P., counsel to the Company and the
Company Stockholders, addressed to Veeco and Acquisition and dated the Closing
Date, substantially in the form of EXHIBIT I hereto.
6.08 ARTICLES OF MERGER. Prior to the Effective Time, the Articles of
Merger shall be accepted for filing with the Secretary of State of the State of
Minnesota.
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6.09 STOCKHOLDER APPROVAL. This Merger Agreement and the Merger
contemplated hereby shall have been affirmatively approved and adopted by
Stockholders holding not less than 90% of the outstanding Company Common Stock.
6.10 OPTION PLAN INTERPRETATIONS. The board of directors of the Company
shall have adopted interpretations under each of (a) the Company's 2000 Stock
Option Plan and the Company's 1993 Stock Option Plan (collectively, the "COMPANY
OPTION PLANS"), (b) each of the Non-Qualified Restricted Stock Option Agreements
granted in January 2, 2001 (the "Non-Qualified Option Agreements") and (c) each
of the Company Warrants in its capacity as the administrator of each such plan,
Non-Qualified Option Agreements and Company Warrants, which shall be reasonably
satisfactory in form and substance to Veeco, to the effect that (i) none of the
vesting provisions applicable to any Company Option issued under the Company
Option Plans will accelerate as a result of the Merger and the transactions
contemplated by this Merger Agreement and (ii) the issuance of Veeco Shares upon
the exercise of the Company Options and Company Warrants assumed by Veeco in
accordance with Section 5.15 hereof constitutes an appropriate adjustment to the
shares issuable under each of the Company Option Plans, each of the
Non-Qualified Option Agreements and each Company Warrant a result of the Merger
and transactions contemplated by this Merger Agreement.
VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.
The Company's obligation to enter into and complete the Closing is
conditioned upon the satisfaction or waiver in writing by the Company, on or
before the Closing Date, of all of the following conditions:
7.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Veeco and Acquisition contained in this Merger Agreement, the Schedules
or Exhibits hereto or in any certificate or document delivered to the Company by
Veeco and Acquisition in connection with the transactions contemplated by this
Merger Agreement shall be true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties were
made on such date.
7.02 PERFORMANCE OF COVENANTS. Each of Veeco and Acquisition shall have
performed and complied in all material respects with all of the agreements,
covenants and conditions required by this Merger Agreement to be performed and
complied with by them prior to or on the Closing Date.
7.03 LITIGATION. No investigation, suit, action or other proceeding, or
injunction or final judgment relating thereto directly or indirectly shall be
Threatened or pending on the Closing Date before any court or Governmental
Authority in which it is sought to restrain or prohibit or to obtain Damages or
other relief in connection with this Merger Agreement or the consummation of the
transactions contemplated hereby.
45
7.04 CONSENTS AND APPROVALS; HSR ACT COMPLIANCE. All licenses and other
consents or approvals of Governmental Authorities and the consents of the
parties to any Material Contracts referred to in Section 5.04 shall have been
obtained. The requirements of the HSR Act applicable to the transactions
contemplated by this Merger Agreement shall have been complied with, and the
waiting period thereunder shall have expired or been terminated.
7.05 DELIVERY OF DOCUMENTS. There shall have been delivered to the Company
the following:
(i) a certificate of each of Veeco and Acquisition, signed by
an officer of each such entity, dated the Closing Date, to the
effect that the conditions specified in Sections 7.01 and 7.02 have
been fulfilled;
(ii) a certificate of the Secretary or Assistant Secretary of
each of Veeco and Acquisition certifying copies of (x) the
certificate or articles of incorporation and by-laws of Veeco and
Acquisition; (y) all requisite corporate resolutions of Veeco and
Acquisition approving the execution and delivery of this Merger
Agreement and the consummation of the transactions contemplated
herein; and (z) the identification and signature of each officer of
Veeco and Acquisition executing this Merger Agreement;
(iii) a registration rights agreement substantially in the
form of EXHIBIT J annexed hereto, duly executed by Veeco for the
benefit of the Stockholders;
(iv) the Escrow Agreement, duly executed by Veeco;
(v) the employment agreement for Xxxxx X. Xxxxxx substantially
in the form of EXHIBIT G annexed hereto, duly executed by Veeco;
(vi) the consulting agreement for Xxxx X. Xxxxxxx
substantially in the form of EXHIBIT L annexed hereto, duly executed
by Veeco; and
(vii) the second amendment to the employment and
noncompetition agreement for Xxxxx Xxxxx Xxxxxx, substantially in
the form of EXHIBIT M annexed hereto, duly executed by Veeco.
7.06 MATERIAL CHANGES. There shall not have been any material adverse
change in the assets, properties, condition (financial or otherwise), prospects
or results of operations of Veeco and its Subsidiaries taken as a whole from the
date hereof to the Closing Date, nor shall there exist any condition which could
reasonably be expected to result in such a material adverse change.
7.07 LEGAL OPINION. The Company shall have received an opinion of Xxxx
Xxxxxxx LLP, counsel to Veeco and Acquisition, addressed to the Company and the
Company Stockholders and dated the Closing Date, substantially in the form of
EXHIBIT K hereto.
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7.08 ARTICLES OF MERGER. Prior to the Effective Time, the Articles of
Merger shall be accepted for filing with the Secretary of State of the State of
Minnesota.
7.09 STOCKHOLDER APPROVAL. This Merger Agreement and the Merger
contemplated hereby shall have been approved and adopted by the requisite vote
of the Stockholders as set forth in Section 6.09.
VIII. INDEMNIFICATION; REMEDIES.
8.01 SURVIVAL. All representations, warranties and agreements contained in
this Merger Agreement or in any certificate or other document delivered pursuant
to this Merger Agreement shall survive the Closing or any termination of this
Merger Agreement for the time periods set forth in this Section 8.01. Following
the Closing (a) the Company and the Company Stockholders will have no liability
(for indemnification or otherwise) with respect to any representation or
warranty, or covenant or obligation to be performed and complied with prior to
the Closing Date, unless on or before June 30, 2003, Veeco notifies the Company
and the Company Stockholders in writing pursuant to Section 8.02, 8.03 or 8.05
of a claim specifying the factual basis of that claim in reasonable detail to
the extent then known by Veeco, except that (i) claims with respect to breaches
of representations and warranties set forth in Section 3.12, 3.14(a) or 3.14(b)
may be made against the Company and the Company Stockholders at any time prior
to expiration of the fourth anniversary of the Closing Date and (ii) claims with
respect to breaches of representations and warranties set forth in Section 3.02,
3.10, 3.12(h), 3.14(c) or III(b)(1) claims for indemnification under Section
8.03 or claims for breaches of covenants without a specified period of duration
may be made against the Company and the Company Stockholders at any time prior
to expiration of the applicable statute of limitations and (b) Veeco will have
no liability (for indemnification or otherwise) with respect to any
representation or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, unless on or before June 30, 2003, the
Company and the Company Stockholders notify Veeco in writing pursuant to Section
8.04 or 8.05 of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by the Company and the Company Stockholders,
except that claims with respect to breaches of representations and warranties
set forth in Section 4.01 or breaches of covenants without a specified period of
duration may be made against Veeco at any time prior to the expiration of the
applicable statute of limitations.
8.02 INDEMNIFICATION BY THE COMPANY AND THE STOCKHOLDERS. The Company and
each of the Company Stockholders shall jointly and severally indemnify and hold
harmless Veeco, Acquisition and each of their respective agents,
representatives, employees, officers, directors, stockholders, controlling
persons and Affiliates (collectively, the "VEECO INDEMNITEES"), and shall
reimburse the Veeco Indemnitees for, any loss, liability, claim, damage, expense
(including, but not limited to, costs of investigation and defense and
reasonable attorneys' fees), whether or not involving a third-party claim
(collectively, "DAMAGES") arising from or in connection with (a) any inaccuracy
in any of the representations and warranties of any Company Stockholder or the
Company in this Merger Agreement or in any certificate or other document
required to be delivered by any Company Stockholder or the Company pursuant to
this Merger Agreement, (b) any failure of any Company Stockholder or the Company
to perform or comply with any agreement to be performed or complied with by it
in this Merger Agreement, (c) any claim by any
47
Person for brokerage or finder's fees or similar payments in connection with any
of the transactions contemplated hereunder as the result of brokers, finders or
investment bankers retained by any Stockholder or the Company, (d) any claim by
any direct or indirect holder or former holder of capital stock or warrants or
other securities of the Company in his or her capacity as such, (e) any Damages
resulting from the election by any Stockholder, pursuant to the MBCA, to demand
appraisal of their Company Common Stock in excess of the aggregate amount of
Merger Consideration such Stockholder would have been entitled to receive
pursuant to this Merger Agreement, or (f) Veeco's enforcement of the
indemnification provisions contained herein. Notwithstanding the foregoing, the
Company and the indemnifying Company Stockholders shall have no liability to
Veeco or Acquisition under clause (a), (b) (other than any failure to comply
with the covenant contained in Section 5.03(b)) or (d) of this Section 8.02,
until the aggregate amount of all Damages under such clauses exceeds $850,000,
and then for all such Damages in excess of such amount. Notwithstanding the
foregoing, during the Escrow Period, the maximum liability of the Company
Stockholders pursuant to this Section 8.02 shall not exceed the Veeco Shares
placed in escrow pursuant to the Escrow Agreement plus $7.3 million, and
subsequent to the expiration of the Escrow Period, the maximum liability of the
Company Stockholders pursuant to this Section 8.02 shall not exceed $7.3
million; PROVIDED that the limitations set forth in this Section 8.02 shall not
apply to the extent of Damages arising from actual fraud. Notwithstanding the
foregoing, from and after the Effective Time, the obligation to indemnify the
Veeco Indemnitees under this Section 8.02 shall be solely the joint and several
obligation of the Company Stockholders and shall be satisfied (i) during the
Escrow Period out of the Veeco Shares deposited under the Escrow Agreement (or
by the payment by the Company Stockholders of cash in lieu thereof, as more
particularly described in the Escrow Agreement) or, if the Veeco Shares so
deposited are not adequate to satisfy any claim by a Veeco Indemnitee directly
by the Company Stockholders in accordance with this Article VIII and (ii)
subsequent to the expiration of the Escrow Period, directly by the Company
Stockholders in accordance with this Article VIII.
8.03 TAX INDEMNIFICATION BY COMPANY STOCKHOLDERS. (a) Each Company
Stockholder shall pay, indemnify and hold harmless (jointly and severally)
Veeco, Acquisition, the Company and each of the other Target Corporations and
their successors, from and against all liabilities for Taxes of the Company and
each of the other Target Corporations attributable to taxable periods ending on
or before the Closing Date, including, without limitation, Taxes attributable to
the income, business, assets, operations, activities and status of each of the
Company and the other Target Corporations. For purposes of this Section, in the
case of any Taxes that are imposed on a periodic basis and are payable for a
taxable period that includes (but does not end on) the Closing Date, the portion
of such Tax which relates to the portion of such taxable period ending on the
Closing Date shall (i) in the case of any Taxes other than Taxes based upon or
related to income or receipts, be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in the entire taxable period, and
(ii) in the case of any Tax based upon or related to income of receipts be
deemed equal to the amount which would be payable if the relevant taxable period
ended on the Closing Date. Any credits relating to a taxable period that begins
before and ends after the Closing Date shall be taken into account as though the
relevant taxable period ended on the Closing Date. All determinations necessary
to give effect to the foregoing allocations shall be made in a manner consistent
with prior practice of the Company and the other Target Corporations. Each
Company Stockholder and Veeco shall bear its own costs in determining the
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amount, if any, due under this Section 8.03. For purposes of this Section 8.03
(and the calculation of any indemnity), any interest, penalties or additions to
tax accruing after the Closing Date with respect to a liability for Taxes for
which each Company Stockholder indemnifies Veeco, the Company or any of the
other Target Corporations shall be deemed to be attributable to a taxable period
ending on or before the Closing Date.
(b) (i) Veeco, the Company and the other Target Corporations
shall include in their notice of any claim for indemnification pursuant to this
Section 8.03 a calculation of the amount of the requested indemnity payment. If
a Company Stockholder disagrees with the calculation of the indemnity payment,
such Company Stockholder and Veeco shall attempt to resolve such disagreement
within a period of 45 days from the date such Company Stockholder receives the
notice of claim for indemnification. If the parties fail to reach an agreement
at the end of such period, such disagreement shall be submitted to a
nationally-recognized firm of independent certified public accountants mutually
selected by the Company Stockholder and Veeco, whose determination shall be
final and binding on all parties. The cost of such nationally-recognized firm of
independent certified public accountants shall be borne equally by the Company
Stockholder and Veeco.
(ii) Within ten days after the indemnity calculation has
been resolved or determined, the Company Stockholders shall pay to Veeco, the
Company or the relevant Target Corporation (and their successors) such amounts
as have been determined to be due Veeco, the Company or the relevant Target
Corporation (and their successors) as a result of the indemnification provided
in Section 8.03.
8.04 INDEMNIFICATION BY VEECO. Veeco shall indemnify and hold harmless
Company and the Company Stockholders (the "STOCKHOLDER INDEMNITEES") and shall
reimburse the Stockholder Indemnitees for any Damages arising from or in
connection with (a) any inaccuracy in any of the representations and warranties
of Veeco or Acquisition in this Merger Agreement or in any certificate or other
document required to be delivered by Veeco or Acquisition pursuant to this
Merger Agreement, (b) any failure by Veeco or Acquisition to perform or comply
with any agreement to be performed or complied with by Veeco or Acquisition in
this Merger Agreement, (c) any claim by any Person for brokerage or finder's
fees or similar payments in connection with any of the transactions contemplated
hereunder as the result of brokers, finders or investment bankers retained by
Veeco or Acquisition or (d) the Stockholder Indemnitees' enforcement of the
indemnification provisions contained herein. Notwithstanding the foregoing,
Veeco shall have no liability under clause (a) or (b) of this Section 8.04 until
the aggregate amount of all Damages under such clauses exceeds $850,000, and
then for all such Damages in excess of such amount. Notwithstanding the
foregoing, during the Escrow Period, the maximum liability of Veeco pursuant to
this Section 8.04 shall not exceed $14,055,160 and subsequent to the expiration
of the Escrow Period, the maximum liability of Veeco pursuant to this Section
8.04 shall not exceed $7.3 million; PROVIDED that the limitations set forth in
this Section 8.04 shall not apply to the extent of Damages arising from actual
fraud.
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8.05 PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS. Promptly after
receipt by an indemnified party under Section 8.02, 8.03 or 8.04 of oral or
written notice of a claim or the commencement of any proceeding against it, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability that it may have to any indemnified
party except to the extent the indemnifying party demonstrates that the defense
of such action is prejudiced thereby. In case any such proceeding shall be
brought against an indemnified party and it shall give notice to the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish (unless
the indemnifying party is also a party to such proceeding and the indemnified
party determines in good faith that joint representation would create a conflict
of interest) to assume the defense thereof with counsel reasonably satisfactory
to such indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
Section for any fees of other counsel or any other expenses with respect to the
defense of such proceeding, in each case, subsequently incurred by such
indemnified party in connection with the defense thereof. If an indemnifying
party assumes the defense of such proceeding, (a) no compromise or settlement
thereof may be effected by the indemnifying party without the indemnified
party's consent (which consent may not be unreasonably withheld or delayed)
unless (i) there is no finding or admission of any violation of law or any
violation of the rights of any Person and no effect on any other claims that may
be made against the indemnified party and (ii) the sole relief provided is
monetary damages that are paid in full by the indemnifying party and (b) the
indemnifying party shall have no liability with respect to any compromise or
settlement thereof effected without its consent. If notice is given to an
indemnifying party of the commencement of any proceeding and it does not, within
fifteen (15) business days after the indemnified party's notice is given, give
notice to the indemnified party of its election to assume the defense thereof,
the indemnifying party shall be bound by any determination made in such action
or any compromise or settlement thereof effected by the indemnified party. All
indemnification obligations of the parties hereto shall survive any termination
of this Merger Agreement pursuant to Article IX hereof. After the Closing, in
the case of a claim as to which Veeco or Acquisition is the indemnified party,
references in this Section 8.05 to the indemnifying party shall be deemed to
refer to the Stockholders' Representative to the extent that any amounts payable
by the indemnifying party shall be payable from the Veeco Shares held pursuant
to the Escrow Agreement.
8.06 EXCLUSIVE REMEDY. The rights of the Veeco Indemnitees and the
Stockholder Indemnitees to be indemnified under this Article VIII shall be their
exclusive remedy in respect of any matter against which indemnification is
provided herein or would be provided but for the application of any temporal,
monetary or other limitation established in this Article VIII. All other
remedies that might otherwise be available under this Merger Agreement, at law
or in equity, are hereby waived. Nothing in this Section 8.06 shall limit the
right of a party to recover for actual fraud.
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IX. TERMINATION.
9.01 TERMINATION EVENTS. This Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time without
prejudice to any other rights or remedies either party may have:
(a) by mutual written consent, duly authorized by the boards
of directors of Veeco, Acquisition and the Company;
(b) by either Veeco and Acquisition or the Company if any
Governmental Authority shall have issued an order, decree, injunction or
judgment or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order or other action shall have
become final and nonappealable;
(c) by either Veeco and Acquisition or the Company if the
Effective Time shall not have occurred on or before 5:00 p.m., Eastern Time, on
November 30, 2001; PROVIDED that the right to terminate this Merger Agreement
under this Section 9.01(c) shall not be available to any party whose failure to
fulfill any obligation under this Merger Agreement has been the cause of, or
results in, the failure of the Effective Time to have occurred within such
period; or
(d) by either Veeco and Acquisition or the Company by notice
to the other if the satisfaction of any condition to the obligations of the
terminating party has been rendered impossible.
9.02 EFFECT OF TERMINATION. In the event this Merger Agreement is
terminated pursuant to Section 9.01, all further obligations of the parties
hereunder shall terminate, except that the obligations set forth in Article VIII
and Sections 10.01, 10.02 and 10.03 shall survive. Each party's right of
termination hereunder is in addition to any other rights it may have hereunder
or otherwise and the exercise of a right of termination shall not be an election
of remedies.
9.03 AMENDMENT. To the extent permitted by applicable law, this Merger
Agreement may be amended by action taken by or on behalf of the respective
boards of directors of the Company, Acquisition and Veeco, at any time;
PROVIDED, HOWEVER, that no amendment shall be made which under the MBCA would
require the further approval of the shareholders of the Company without
obtaining such approval. This Merger Agreement may not be amended except by an
instrument in writing signed on behalf of all of the parties hereto.
X. MISCELLANEOUS.
10.01 CONFIDENTIALITY. Between the date of this Merger Agreement and the
Closing Date, each party hereto (a "RECEIVING PARTY") will maintain in
confidence, and cause its directors, officers, employees, agents and advisors to
maintain in strict confidence, all written, oral or other information obtained
from another party (a "DISCLOSING PARTY") in connection with this Merger
Agreement or the
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transactions contemplated hereby, including, without limitation, sources of
supply, vendors, customers, costs, pricing practices, trade secrets and other
Intellectual Property, salaries and wages, employee benefits, financial
information, business plans, budgets, marketing plans and projections and all
other proprietary information (collectively, the "CONFIDENTIAL INFORMATION"),
unless (i) the use of such information is necessary or appropriate in making any
filing or obtaining any consent or approval required for the consummation of the
transactions contemplated hereby and the disclosing party consents in advance to
such disclosure, (ii) the furnishing or use of such information is required by
law and the disclosing party has, to the extent practicable, received reasonable
prior notice of such disclosure,(iii) the Confidential Information becomes
generally available to the public other than as a result of disclosure by the
receiving party or by its directors, officers, employees, agents or advisors, or
(iv) the Confidential Information becomes available to the receiving party on a
non-confidential basis from a source other than the disclosing party or its
directors, officers, employees, agents or advisors. If the transactions
contemplated by this Merger Agreement are not consummated, each party receiving
another party's Confidential Information will return or, at the disclosing
party's option, destroy all of such Confidential Information, including, but not
limited to, all copies thereof and extracts therefrom and shall not use such
Confidential Information in any manner which may be detrimental to the
disclosing party or its Affiliates. Notwithstanding the foregoing, the Company
may inform employees of the Company as they deem necessary or desirable of the
existence of this Merger Agreement.
10.02 EXPENSES. Except as expressly otherwise provided herein, each party
shall bear its own expenses incurred in connection with the preparation,
execution and performance of this Merger Agreement and the transactions
contemplated hereby and thereby, including all fees and expenses of agents,
representatives, counsel, accountants and investment banks; PROVIDED, that the
Company shall pay for up to an aggregate of $350,000 of its own such expenses
and the expenses of the Company Stockholders, and any such expenses incurred by
the Company and/or the Company Stockholders in excess of $350,000 shall be paid
by the Company Stockholders; PROVIDED FURTHER that, Veeco shall pay (i) the HSR
filing fees for all parties to this Merger Agreement, (ii) all amounts required
to be paid by Veeco pursuant to Section 5.08 hereof and (iii) any mortgage
transfer fees required as a result of the transactions contemplated herein.
10.03 PUBLIC ANNOUNCEMENTS. Subject to any requirement of applicable law,
all public announcements or similar publicity with respect to this Merger
Agreement or the transactions contemplated hereby shall be issued only with the
consent of Veeco and the Company. Unless consented to by each party hereto in
advance prior to the Closing, all parties hereto shall keep the existence of and
provisions of this Merger Agreement strictly confidential and make no disclosure
thereof to any Person, other than such party's respective legal and financial
advisors, subject to the requirements of applicable law or securities exchange
regulations so long as the other party has received reasonable prior notice of
such disclosure.
10.04 SUCCESSORS. This Merger Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
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10.05 FURTHER ASSURANCES. Each of the parties hereto agrees that it will,
from time to time after the date of this Merger Agreement, execute and deliver
such other certificates, documents and instruments and take such other action as
may be reasonably requested by the other party to carry out the actions and
transactions contemplated by this Merger Agreement.
10.06 WAIVER. Any provision of this Merger Agreement may be waived at any
time by the party which is entitled to the benefits thereof. No such waiver
shall be effective unless in writing and signed by the Company, Veeco and
Acquisition.
10.07 ENTIRE AGREEMENT. This Merger Agreement (together with the
certificates, agreements, Exhibits, Schedules, instruments and other documents
referred to herein) constitutes the entire agreement among the parties with
respect to the subject matter hereof and thereof and super sedes all prior
agreements, both written and oral, with respect to such subject matter.
10.08 GOVERNING LAW. THIS MERGER AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO
AGREEMENTS MADE AND PERFORMED IN SUCH STATE AND WITHOUT REGARD TO CONFLICTS OF
LAW DOCTRINES EXCEPT TO THE EXTENT THAT CERTAIN MATTERS ARE PREEMPTED BY FEDERAL
LAW OR ARE GOVERNED BY THE LAW OF THE JURISDICTION OF ORGANIZATION OF THE
RESPECTIVE PARTIES.
10.09 ASSIGNMENT. Neither Veeco, Acquisition nor the Company may assign
this Merger Agreement to any other Person without the prior written consent of
the other parties hereto.
10.10 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, (b) when transmitted by telecopy (transmission confirmed), (c) on
the fifth business day following mailing by registered or certified mail (return
receipt requested), or (d) on the next business day following deposit with an
overnight delivery service of national reputation, to the parties at the
following addresses and telecopy numbers (or at such other address or telecopy
number for a party as may be specified by like notice):
If to Veeco or Acquisition:
000 Xxxxxxxxx Xxxx.
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
53
If to the Company:
Applied Epi, Inc.
0000 Xxxxxxxxxxxxx Xxxxx
Xx. Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Robins, Kaplan, Xxxxxx & Xxxxxx L.L.P.
0000 XxXxxxx Xxxxx
000 XxXxxxx Xxxxxx
Attention: Xxxx X. Xxxxxxx, Esq.
Xxxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Stockholders Representative:
Xxxx X. Xxxxxxx
0000 Xxxxxxxxxxxxx Xxxxx
Xx. Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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With a copy to:
Robins, Kaplan, Xxxxxx & Xxxxxx L.L.P.
0000 XxXxxxx Xxxxx
000 XxXxxxx Xxxxxx
Attention: Xxxx X. Xxxxxxx, Esq.
Xxxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
10.11 HEADINGS. The headings contained in this Merger Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Merger Agreement.
10.12 COUNTERPARTS. This Merger Agreement may be executed in multiple
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to each of the other parties, it being understood that
all parties need not sign the same counterpart.
10.13 EXHIBITS AND SCHEDULES. The Exhibits and Schedules to this Merger
Agreement are incorporated by reference herein and are made a part hereof as if
they were fully set forth herein.
10.14 SEVERABILITY. The invalidity of any term or terms of this Merger
Agreement shall not affect any other term of this Merger Agreement, which shall
remain in full force and effect.
10.15 NO THIRD-PARTY BENEFICIARIES. There are no third party beneficiaries
of this Merger Agreement or of the transactions contemplated hereby and nothing
contained herein shall be deemed to confer upon any one other than the parties
hereto (and their permitted successors and assigns) any right to insist upon or
to enforce the performance of any of the obligations contained herein.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties have executed this Merger Agreement as of
the date first above written.
VEECO INSTRUMENTS INC.
By:
---------------------------------
Name:
Title:
APPLIED EPI, INC.
By:
---------------------------------
Name:
Title:
VEECO ACQUISITION CORP.
By:
---------------------------------
Name:
Title:
COMPANY STOCKHOLDERS
------------------------------------
Xxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxx
STOCKHOLDERS' REPRESENTATIVE
------------------------------------
Xxxx X. Xxxxxxx