AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DYNASIL CORPORATION OF AMERICA
RMD ACQUISITION SUB, INC.
RADIATION MONITORING DEVICES, INC.
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1988 FAMILY TRUST
▇▇▇▇▇ ▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇, HUSBAND AND WIFE
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
JULY 1, 2008
TABLE OF CONTENTS
Page
SECTION 1. THE MERGER. 1
1.1 MERGER OF THE COMPANY INTO MERGER SUB. 1
1.2 EFFECT OF THE MERGER. 1
1.3 CLOSING; EFFECTIVE TIME. 1
1.4 MERGER SUB CONSTITUTIVE DOCUMENT. 2
1.5 EFFECT OF THE MERGER. 2
1.6 CLOSING OF THE COMPANY'S TRANSFER BOOKS. 2
1.7 EXCHANGE OF CERTIFICATES. 3
1.8 FURTHER ACTION. 3
1.9 TAX CONSEQUENCES. 4
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 4
2.1 DUE ORGANIZATION; SUBSIDIARIES. 4
2.2 AUTHORITY; BINDING NATURE OF AGREEMENT. 4
2.3 CAPITALIZATION, ETC. 4
2.4 NON-CONTRAVENTION; CONSENTS. 5
2.5 FINANCIAL STATEMENTS. 6
2.6 ABSENCE OF CHANGES. 6
2.7 PROPRIETARY ASSETS. 7
2.8 CONTRACTS. 9
2.9 LIABILITIES. 11
2.10 COMPLIANCE WITH LEGAL REQUIREMENTS. 11
2.11 GOVERNMENTAL AUTHORIZATIONS. 12
2.12 TAX MATTERS. 12
2.13 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS. 13
2.14 ENVIRONMENTAL MATTERS. 16
2.15 LEGAL PROCEEDINGS; ORDERS. 17
2.16 VOTE REQUIRED. 17
2.17 FOREIGN CORRUPT PRACTICES ACT. 17
2.18 REAL PROPERTY. 18
2.19 INSURANCE POLICIES. 18
2.20 FINANCIAL ADVISOR. 18
2.21 AFFILIATE TRANSACTIONS. 18
2.22 CUSTOMERS. 19
2.23 DISCLOSURE. 19
SECTION 2A. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
19
SECTION 2A.1 AUTHORIZATION; TITLE. 19
SECTION 2A.2 INVESTMENT INTENT. 19
SECTION 3.REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
20
3.1 DUE ORGANIZATION; SUBSIDIARIES. 20
3.2 AUTHORITY; BINDING NATURE OF AGREEMENT. 21
3.3 CAPITALIZATION, ETC. 21
3.4 NON-CONTRAVENTION; CONSENTS. 22
3.5 SEC FILINGS; FINANCIAL STATEMENTS. 23
3.6 ABSENCE OF CHANGES. 24
3.7 CONTRACTS. 26
3.8 LIABILITIES. 26
3.9 LEGAL PROCEEDINGS; ORDERS. 26
3.10 FOREIGN CORRUPT PRACTICES ACT. 27
3.11 FINANCIAL ADVISOR. 27
3.12 PROPRIETARY ASSETS. 27
SECTION 4. [RESERVED] 28
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES 29
5.1 ADDITIONAL AGREEMENTS. 29
5.2 PUBLIC DISCLOSURE. 29
5.3 RESIGNATION OF DIRECTORS. 29
5.4 TAKEOVER LAWS. 29
5.5 SECTION 16. 30
5.6 LITIGATION. 30
5.7 STOCKHOLDERS' CAPITAL. 30
5.8 TAX-FREE REORGANIZATION. 31
SECTION 6. CONDITIONS TO THE MERGER 32
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION. 32
6.2 ADDITIONAL CONDITIONS TO PARENT'S AND MERGER SUB'S
OBLIGATIONS. 32
6.3 ADDITIONAL CONDITIONS TO THE COMPANY'S
OBLIGATIONS. 33
SECTION 7. EXPENSES. 34
7.1 EXPENSES. 34
SECTION 8. INDEMNIFICATION 34
8.1 SURVIVAL; INDEMNITY. 34
8.2 INDEMNIFICATION BY STOCKHOLDERS. 34
8.3 INDEMNIFICATION BY PARENT. 35
8.4 MISCELLANEOUS INDEMNITY PROVISIONS. 35
8.5 NOTIFICATION OF CLAIMS. 36
8.6 THIRD-PARTY CLAIMS. 36
SECTION 9. MISCELLANEOUS PROVISIONS 37
9.1 AMENDMENT. 37
9.2 WAIVER. 37
9.3 ENTIRE AGREEMENT; COUNTERPARTS. 37
9.4 APPLICABLE LAW; JURISDICTION. 38
9.5 ATTORNEYS' FEES. 38
9.6 ASSIGNABILITY; THIRD PARTY BENEFICIARIES. 38
9.7 NOTICES. 38
9.8 SEVERABILITY. 39
9.9 SPECIFIC PERFORMANCE. 40
9.10 CONSTRUCTION. 40
9.11 STOCKHOLDERS' AGENT. 40
EXHIBIT A - CERTAIN DEFINITIONS
EXHIBIT B - COMPANY'S CERTIFICATE
EXHIBIT C - PARENT'S CERTIFICATE
EXHIBIT D - RETAINED EARNINGS EXTRACTION
Appendix I - Lease
Agreement and Plan of Merger
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is
made and entered into on July 1, 2008, by and among DYNASIL
CORPORATION OF AMERICA, a Delaware corporation ("Parent"), RMD
ACQUISITION SUB, INC., a Delaware corporation and a direct,
wholly-owned subsidiary of Parent ("Merger Sub"), RADIATION
MONITORING DEVICES, INC., a Massachusetts corporation (the
"Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇ 1988 Family Trust, ▇▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇, husband and wife, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (collectively,
"Stockholders"). Certain capitalized terms used in this
Agreement are defined in Exhibit A.
Recitals
WHEREAS, Parent, Merger Sub and the Company intend to
effect a merger (the "Merger") of the Company with and into
Merger Sub in accordance with this Agreement and the General
Corporate Law of the State of Delaware (the "DGCL");
WHEREAS, it is intended that the Merger shall qualify
as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code") and this
Agreement shall constitute the plan of reorganization;
WHEREAS, concurrently with the execution of this
Agreement, and as a condition and inducement to Parent's
willingness to enter into this Agreement, Parent and RMD
Instruments, LLC are entering into that certain asset purchase
agreement (the "Asset Purchase Agreement").
WHEREAS, Parent, Merger Sub and the Company desire to
make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants and
agreements hereinafter set forth, the parties to this Agreement,
intending to be legally bound, agree as follows:
SECTION 1. THE MERGER.
1.1 MERGER OF THE COMPANY INTO MERGER SUB.
Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as defined in Section
1.3), the Company shall be merged with and into Merger Sub, and
the separate corporate existence of the Company shall cease.
Merger Sub will continue as the surviving entity in the Merger
(the "Surviving Entity") and will be a wholly-owned subsidiary of
Parent.
1.2 EFFECT OF THE MERGER.
The Merger shall have the effects set forth in this
Agreement and the applicable provisions of the DGCL and Chapter
156D of the Massachusetts General Laws (Massachusetts Business
Corporation Act).
1.3 CLOSING; EFFECTIVE TIME.
The consummation of the Merger (the "Closing") shall
take place at the offices of Capehard & Scatchard, P.A., ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ at
10:00 a.m. on a date to be mutually agreed upon by Parent and the
Company (the "Closing Date"), which date shall be no later than
the third business day after the conditions set forth in
Section 6 shall have been satisfied or waived (other than those
conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such
conditions), or such other time as Parent and the Company shall
mutually agree. Subject to the provisions of this Agreement, the
parties shall cause the Merger to become effective by causing
Merger Sub to execute and file in accordance with the DGCL a
certificate of merger with the Secretary of State of the State of
Delaware (the "Certificate of Merger"). The Merger shall become
effective upon such filing, or at such later date and time set
forth in the Certificate of Merger (the "Effective Time") and the
filing of Articles of Merger with the Secretary of the
Commonwealth of Massachusetts in accordance with Chapter 156D of
the Massachusetts General Laws (Massachusetts Business
Corporation Act).
1.4 MERGER SUB CONSTITUTIVE DOCUMENT.
(a) The Certificate of Incorporation and By-Laws of the Merger
Sub in effect as of immediately prior to the Effective Time will
be the Certificate of Incorporation and By-Laws of the Surviving
Entity following the Effective Time; provided, however, that the
Certificate of Incorporation shall be amended to change the name
of the Surviving Entity to "Radiation Monitoring Devices, Inc."
(b) The managers and officers of the Surviving Entity shall be
the respective individuals who are the managers and officers of
Merger Sub immediately prior to the Effective Time.
1.5 EFFECT OF THE MERGER.
(a) At the Effective Time, by virtue of the Merger and without
any further action on the part of Parent, Merger Sub, the Company
or any Company stockholder, subject to Section 1.5(b), Section
1.5(c), Section 1.5(d), and Section 1.9 each share of Company
Common Stock then issued and outstanding, shall be converted into
the right to receive 3,582,000 fully paid and nonassessable
shares of Parent Common Stock (the "Stock Merger Consideration").
(b) If, on or after the date of this Agreement and prior to the
Effective Time, the outstanding shares of Company Common Stock or
Parent Common Stock are changed into a different number or class
of shares by reason of any stock split, stock dividend, reverse
stock split, reclassification, recapitalization or other similar
transaction, including any such transaction with a record date
between the date of this Agreement and the Effective Time, then
the Merger Consideration shall be appropriately adjusted to the
extent the record date for any such event is between the date of
this Agreement and the Effective Time, so as to provide the
holders of Company Common Stock and Parent the same economic
effect as contemplated prior to such stock split, stock dividend,
reverse stock split, reclassification, recapitalization or other
similar transaction.
1.6 CLOSING OF THE COMPANY'S TRANSFER BOOKS.
At the Effective Time: (a) all shares of Company Common
Stock ("Shares") outstanding immediately prior to the Effective
Time shall automatically be canceled and shall cease to exist,
each share of Company Common Stock shall represent only the right
to receive the Merger Consideration and all holders of
certificates representing Shares that were outstanding
immediately prior to the Effective Time shall cease to have any
rights as stockholders of the Company; and (b) the stock transfer
books of the Company shall be closed with respect to all Shares
outstanding immediately prior to the Effective Time. No further
transfer of any such Shares shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a
valid certificate previously representing any Shares (a "Company
Stock Certificate") is presented to the Surviving Entity or
Parent, such Company Stock Certificate shall be canceled and
shall be exchanged as provided in this Section 1.
1.7 EXCHANGE OF CERTIFICATES.
(a) At the Closing, the Stockholders shall surrender all Company
Stock Certificates to the Parent, together with duly executed
stock powers, and the Parent shall instruct its transfer agent to
issue and deliver such Merger Consideration as such holder is
entitled to receive under this Article 1. The holder of such
Company Stock Certificate shall be entitled to receive in
exchange therefor the Merger Consideration, and the Company Stock
Certificate so surrendered shall be immediately canceled. Until
surrendered as contemplated by this Section 1.7, each Company
Stock Certificate shall be deemed, from and after the Effective
Time, to represent only the right to receive the Merger
Consideration and any distribution or dividend the record date
for which is after the Effective Time. If any Company Stock
Certificate shall have been lost, stolen or destroyed, the
Surviving Entity will issue in exchange for such lost, stolen or
destroyed Company Stock Certificates, the Merger Consideration;
provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance of any certificate
representing Parent Common Stock, require the owner of such lost,
stolen or destroyed Company Stock Certificate to provide an
appropriate affidavit and to deliver a bond (in such reasonable
sum as Parent may reasonably direct) as indemnity against any
claim that may be made against the Parent or the Surviving Entity
with respect to such Company Stock Certificate.
(b) No dividends or other distributions declared or made with
respect to Parent Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Company Stock Certificate with respect to the Merger
Consideration that such holder has the right to receive hereunder
until such holder surrenders such Company Stock Certificate in
accordance with this Section 1.7.
(c) Neither Parent nor the Surviving Entity shall be liable to
any holder or former holder of Company Common Stock or to any
other Person with respect to any shares of Parent Common Stock
(or dividends or distributions with respect thereto), or for any
cash amounts, properly delivered to any public official in
compliance with any applicable abandoned property law, escheat
law or similar Legal Requirement.
(d) Any and all certificates representing the Stock Merger
Consideration and any and all certificates issued in replacement
thereof or in exchange therefor shall bear the following legend
or one substantially similar thereto:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE ON EXEMPTIONS THEREFROM AND, THEREFORE,
MAY NOT BE RESOLD UNLESS REGISTERED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
1.8 FURTHER ACTION.
If, at any time after the Effective Time, any further
action is determined by Parent to be necessary or desirable to
carry out the purposes of this Agreement or to vest the Surviving
Entity with full right, title and possession of and to all rights
and property of Merger Sub and the Company, the officers and
directors of the Surviving Entity and Parent shall be fully
authorized (in the name of Merger Sub, in the name of the Company
and otherwise) to take such action.
1.9 TAX CONSEQUENCES.
For federal income tax purposes, the Merger is intended
to constitute a reorganization within the meaning of Section 368
of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations. Each of Parent and Merger Sub (as the Surviving
Entity) shall report the Merger for income tax purposes as a
reorganization and will take no position in any Tax Return or Tax
proceeding inconsistent with treatment of the Merger as a
reorganization.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as disclosed in the Disclosure Letter delivered
by the Company to Parent and Merger Sub prior to the execution
and delivery of this Agreement (the "Company Disclosure Letter")
and referred to in the section of the Company Disclosure Letter
corresponding to the section(s) of this Section 2 to which such
disclosure applies, the Company hereby represents and warrants to
Parent and Merger Sub as follows:
2.1 DUE ORGANIZATION; SUBSIDIARIES.
The Company is a corporation duly organized, validly
existing and in good standing under the Legal Requirements of the
jurisdiction of its incorporation. The Company has all necessary
power and authority: (a) to conduct its business in the manner in
which its business is currently being conducted; (b) to own and
use its assets in the manner in which its assets are currently
owned and used; and (c) to perform its material obligations under
all Company Material Contracts. The Company is qualified to do
business as a foreign corporation, and is in good standing, under
the Legal Requirements of all jurisdictions where the failure to
be so qualified would have a Material Adverse Effect on the
Company. The Company has delivered or made available to Parent
accurate and complete copies of the certificate of incorporation,
bylaws and other charter or organizational documents of the
Company, including all amendments thereto (collectively, the
"Company Organization Documents"). The Company has no
Subsidiaries.
2.2 AUTHORITY; BINDING NATURE OF AGREEMENT.
The Company has all requisite corporate power and
authority to enter into and to perform its obligations under
this Agreement, including unanimous Stockholder approval and
adoption of this Agreement. This Agreement constitutes the
legal, valid and binding obligation of the Stockholders and the
Company, enforceable against the Stockholders and the Company in
accordance with its terms, subject to (a) Legal Requirements of
general application relating to bankruptcy, insolvency and the
relief of debtors, (b) rules of law governing specific
performance, injunctive relief and other equitable remedies and
(c) the approval of stockholders of the Company. The Company
hereby represents that its Board of Directors, at a meeting duly
called and held on or prior to the date hereof, has by unanimous
vote (i) determined that the Merger is in the best interests of
the Company and its stockholders, (ii) approved, adopted and
declared advisable this Agreement, and (iii) approved the Merger
and the other transactions contemplated by this Agreement.
2.3 CAPITALIZATION, ETC.
(a) The authorized capital stock of the Company consists of
12,500 shares of Company Common Stock. The Company has not
authorized any other class of capital stock other than the
Company Common Stock and the Company Preferred Stock. As of July
1, 2008, 1,043 shares of Company Common Stock have been issued or
are outstanding. No shares of Company Common Stock are held in
the Company's treasury or are held by any of the Company's
Subsidiaries. All of the outstanding shares of Company Common
Stock have been duly authorized and validly issued, and are fully
paid and nonassessable. None of the outstanding shares of
Company Common Stock is entitled or subject to any preemptive
right, right of participation, right of maintenance or any
similar right or subject to any right of first refusal in favor
of the Company. There is no Contract to which the Company is a
party and there is no Contract between other Persons, relating to
the voting or registration of, or restricting any Person from
purchasing, selling, pledging or otherwise disposing of, any
shares of Company Common Stock. The Company is not under any
obligation, or is bound by any Contract pursuant to which it may
become obligated, to repurchase, redeem or otherwise acquire any
outstanding shares of Company Common Stock.
(b) Except as set forth in Schedule 2.3(b) of the Company
Disclosure Letter, there is no: (i) outstanding commitment,
subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock
or other securities of the Company; (ii) outstanding security,
instrument or obligation that is or may become convertible into
or exchangeable for any shares of the capital stock or other
securities of the Company; (iii) rights agreement, stockholder
rights plan or similar plan commonly referred to as a "poison
pill"; or (iv) Contract under which the Company is or may become
obligated to sell or otherwise issue any shares of its capital
stock or any other securities ("Company Rights Agreements")
(items (i) through (iv) above, collectively, "Company Stock
Rights").
(c) All outstanding shares of Company Common Stock and all
outstanding shares of capital stock of each Subsidiary of the
Company have been issued and granted in compliance with (i) all
applicable securities laws and other applicable Legal
Requirements, and (ii) all requirements set forth in Contracts
applicable to the issuance of Company Common Stock and/or the
issuance of shares of capital stock of any Company Subsidiary.
Schedule 2.3(c) of the Company Disclosure Letter sets forth all
entities (other than Subsidiaries) in which Company has any
ownership interest and the amount of such interest.
2.4 NON-CONTRAVENTION; CONSENTS.
Except as set forth in Schedule 2.4 of the Company
Disclosure Letter, neither the execution, delivery or performance
of this Agreement nor the consummation of the Merger, or any of
the other transactions contemplated by this Agreement, will
directly or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of any of
the provisions of the Company Organization Documents or any
resolution adopted by the Stockholders, the Board of Directors or
any committee of the Board of Directors;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body the right to challenge the Merger or
any of the other transactions contemplated by this Agreement or
to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Company, or any of the
material assets owned or used by the Company, is subject;
(c) contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate or modify,
any material Governmental Authorization that is held by the
Company or that is otherwise material to the business of Company
or to any of the assets owned or used by the Company; or
(d) contravene, conflict with or result in a violation or breach
of, or result in a default under, any provision of any Company
Material Contract (except for any such violation or breach which
by its terms can be cured and is so cured within the applicable
cure period or where the non-breaching party has no right to
accelerate or terminate as a result of such violation or breach).
Except as set forth in Schedule 2.4 of the Company
Disclosure Letter or otherwise provided or set forth in this
Agreement, the Company is not, and will not be required to make
any filing with or give any notice to, or obtain any Consent
from, any Person in connection with (x) the execution, delivery
or performance of this Agreement, or (y) the consummation of the
Merger or any of the other transactions contemplated by this
Agreement.
2.5 FINANCIAL STATEMENTS.
(a) Financial statements of the Company for the fiscal years
ended June 30, 2007, 2006 and 2005 and the financial statements
of the Company for the six (6) months ended December 31, 2007,
provided to Parent by the Company, are true and correct in all
material respects and accurately reflects the financial condition
of Company as of the end of the relevant periods. The financial
statements of the Company described in this Section 2.5 are
collectively referred to as the "Company Financial Statements".
For purposes of this Agreement, "Company Balance Sheet" means
that consolidated balance sheet of the Company and its
consolidated subsidiaries as of June 30, 2007 and the "Company
Balance Sheet Date" means June 30, 2007.
(b) The Company maintains a system of internal controls
sufficient to provide reasonable assurance that (i) transactions
are executed with management's authorization, (ii) access to
assets is permitted only in accordance with management's
authorization, and (iii) the recorded amount for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
There is no fraud in connection with the Company Financial
Statements, whether or not material, that involves management or
other employees who have a significant role in the Company's
internal controls.
2.6 ABSENCE OF CHANGES.
(a) Except as set forth in Schedule 2.6 of the Company
Disclosure Letter or otherwise provided or set forth in this
Agreement, since the Company Balance Sheet Date:
(i) the Company has not made any changes in its pricing polices
or payment or credit practices or failed to pay any creditor any
material amount owed to such creditor when due or granted any
extensions or credit other than in the ordinary course of
business consistent with prior practice;
(ii) the Company has not terminated or closed any material
facility, business or operation;
(iii) the Company has not written up or written down any of
its assets; and
(iv) there has been no material loss, destruction or damage to
any item of property of the Company, whether or not insured.
(b) Except as set forth in Schedule 2.6(b) of the Company
Disclosure Letter, since the Company Balance Sheet Date and
through the date of this Agreement:
(i) there has not been any event that has had a Material Adverse
Effect on the Company, and no fact, event, circumstance or
condition exists or has occurred that could reasonably be
expected to have a Material Adverse Effect on the Company;
(ii) the Company has operated its business in the ordinary course
consistent with prior practice;
(iii) the Company has not (A) declared, accrued, set aside or
paid any dividend or made any other distribution in respect of
any shares of capital stock; (B) repurchased, redeemed or
otherwise reacquired any shares of capital stock or other
securities; (C) made any capital expenditure which, when added to
all other capital expenditures made on behalf of the Company
since the Company Balance Sheet Date, exceeds $50,000, in the
aggregate; (D) made any material Tax election; (E) settled any
Legal Proceedings involving amounts in excess of $10,000; or (F)
entered into or consummated any transactions with any affiliate;
(iv) the Company has not (A) sold or otherwise disposed of, or
acquired, leased, licensed, waived or relinquished any material
right or other material asset to, from or for the benefit of, any
other Person except for rights or other assets sold, disposed of,
acquired, leased, licensed, waived or relinquished in the
ordinary course of business consistent with prior practice; (B)
mortgaged, pledged or subjected to any Encumbrance any of their
respective property, business or assets; (C) entered into or
amended any lease of real property (whether as lessor or lessee);
or (D) canceled or compromised any debt or claim other than
accounts receivable in the ordinary course of business consistent
with prior practice;
(v) the Company has not paid or promised to pay any bonus or
other incentive or equity compensation or made any profit-sharing
or similar payment to, or materially increased the amount of the
wages, salary, commissions, fringe benefits or other compensation
or remuneration payable to, any of its directors, officers or
consultants;
(vi) there has been no labor dispute (including any work
slowdown, stoppage or strike) involving the Company;
(vii) the Company has not made any change in its methods of
accounting or accounting practices;
(viii) the Company has not made any loan, advance or capital
contributions to, or any other investment in, any Person;
(ix) the Company has not terminated or amended, or suffered a
termination of, any Company Material Contract; and
(x) the Company has not entered into any contractual obligation
to do any of the things referred to elsewhere in this Section
2.6.
2.7 PROPRIETARY ASSETS.
(a) Schedule 2.7(a) of the Company Disclosure Letter sets forth
as of the date of this Agreement (i) all U.S. and foreign
patents, patent applications, registered trademarks, material
unregistered trademarks, trademark applications, copyright
registrations and copyright applications, Internet domain names,
computer software (other than third party software generally
available for sale to the public) and fictitious name and assumed
name registrations owned by Company; (ii) all patent applications
and other Proprietary Assets that are currently in the name of
inventors or other Persons and for which the Company has the
right to receive an assignment; and (iii) all material third
party licenses for Proprietary Assets to which the Company is the
licensee party. The Company has good, valid and marketable title
to, or has a valid right to use, license or otherwise exploit,
all of the material Company Proprietary Assets necessary for the
conduct of the Company's business as presently conducted, free
and clear of all Encumbrances. The Company has not developed
jointly with any other Person any material Proprietary Asset with
respect to which such other Person has any rights. There is no
Company Contract pursuant to which any Person has any right
(whether or not currently exercisable) to use, license or
otherwise exploit any Company Proprietary Asset owned or
exclusively licensed by the Company.
(b) Except as would not, individually or in the aggregate, have
a Material Adverse Effect on the Company, (i) to the knowledge of
the Company, all Company Proprietary Assets owned by Company are
subsisting and in effect and valid and enforceable; (ii) none of
the Company Proprietary Assets and no Proprietary Asset that is
currently being developed or reduced to practice or which is the
subject of a current invention disclosure by the Company (either
by itself or with any other Person) to the knowledge of the
Company infringes, misappropriates, conflicts with or otherwise
violates any Proprietary Asset owned or used by any other Person;
(iii) none of the products or services that is or has been
designed, created, developed, assembled, performed, manufactured,
sold, marketed or licensed by the Company is to the knowledge of
the Company infringing, misappropriating or making any unlawful
or unauthorized use of any Proprietary Asset owned or used by any
other Person, and, none of such products or services has at any
time infringed, misappropriated or made any unlawful or
unauthorized use of, and the Company has not received in the
past three (3) years any written, or to the Company's knowledge,
oral notice of any actual, alleged, possible or potential
infringement, misappropriation or unlawful or unauthorized use
of, any Proprietary Asset owned or used by any other Person; (iv)
the operation of the business of the Company as it currently is
conducted does not and will not when conducted by the Surviving
Entity in substantially the same manner following the Closing,
infringe or misappropriate or make any unlawful or unauthorized
use of any Proprietary Asset of any other Person; and (v) to the
Company's knowledge, no other Person is infringing,
misappropriating or making any unlawful or unauthorized use of,
and no Proprietary Asset owned or used by any other Person
infringes or conflicts with, any Company Proprietary Asset, and
no such claims have been asserted or threatened against any
Person by the Company or, to the knowledge of the Company, any
other Person, in the past three (3) years. The Company
Proprietary Assets constitute all the Proprietary Assets
necessary to enable the Company to conduct its business in the
manner in which such business is currently being conducted. Upon
the consummation of the Merger, the Surviving Entity shall have
good, valid, and enforceable title, or license (if the applicable
Company Proprietary Asset is licensed to the Company) to all
Company Proprietary Assets, free and clear of all Encumbrances
and on, and subject to, the same terms and conditions as in
effect immediately prior to the Closing. The Company has not
entered into any covenant not to compete or any Contract limiting
its ability to exploit fully any Company Proprietary Assets owned
or licensed by the Company or to transact business in any market
or geographical area or with any Person.
(c) The Company has taken all reasonable steps to protect its
rights in confidential information and trade secrets of the
Company or provided by any other Person to the Company.
(d) Neither this Agreement nor the transactions contemplated by
this Agreement, including any assignment to Parent by operation
of law as a result of the Merger of any Contracts to which the
Company is a party, will result in (i) Parent, any of its
affiliates or the Surviving Entity granting to any third party
any incremental right to or with respect to or non-assertion
under any Proprietary Assets owned by, or licensed to, any of
them; (ii) Parent, any of its affiliates or the Surviving Entity,
being bound by, or subject to, any incremental non-compete or
other incremental material restriction on the operation or scope
of their respective businesses; (iii) Parent, any of its
affiliates or the Surviving Entity being obligated to pay any
incremental royalties or other material amounts, or offer any
incremental discounts, to any third party; or (iv) the Company
being required under a Contract to procure or attempt to procure
from Parent or any of its subsidiaries a license grant to or
covenant not to assert in favor of any Person. As used in this
Section 2.7(d), an "incremental" right, non-compete, restriction,
royalty or discount refers to a right, non-compete, restriction,
royalty or discount, as applicable, in excess, whether in terms
of contractual term, contractual rate or scope, of those that
would have been required to be offered or granted, as applicable,
had the parties to this Agreement not entered into this Agreement
or consummated the transactions contemplated hereby.
(e) With respect to the use of software in the business of the
Company as such business is currently conducted, to the knowledge
of the Company, no such software contains defects in its
operation or any device or feature designed to disrupt, disable,
or otherwise impair the functioning of any software. Such
software has been validated for its use. There have been no
material security breaches in the Company's information
technology systems, and there have been no disruptions in the
Company's information technology systems that materially
adversely affected such Company's business or operations.
(f) All products of the Company ("Company Product") conform in
all material respects with all applicable contractual commitments
and all express and implied warranties, the Company's published
product specifications and with all regulations, certification
standards and other requirements of any applicable governmental
entity or third party. Except as set forth in the Company
Financial Statements, no claims against the Company are pending
or have been asserted for liability for replacement or
modification of any Company Product or other damages in
connection therewith other than in the ordinary course of
business. There are no known material defects in the design or
technology embodied in any Company Product which impair or are
likely to impair the intended use of such Company Product. There
is no presently pending, or, to the knowledge of the Company,
threatened, and, to the knowledge of the Company, there is no
basis for, any civil, criminal or administrative actions, suits,
demands, claims, hearings, notices of violation, investigations,
proceedings or demand letters relating to any alleged hazard or
alleged defect in design, manufacture, materials or workmanship,
including any failure to warn or alleged breach of express or
implied warranty or representation, relating to any Company
Product. The Company has not extended to any of its customers
any written product warranties, indemnifications or guarantees
that deviate in any material respect from the standard product
warranties, indemnification arrangements or guarantees of the
Company.
2.8 CONTRACTS.
(a) For purposes of this Agreement, each of the following shall
be deemed to constitute a "Company Material Contract", which
Company Material Contracts and all amendments thereto, in each
case as of the date of this Agreement are listed on Schedule 2.8
of the Company Disclosure Letter:
(i) any Company Contract relating to (A) the employment of any
employee or the services of any independent contractor or
consultant and pursuant to which any of the Company is or may
become obligated to make any severance or termination payment in
excess of $25,000 or (B) any bonus, relocation or other payment
in excess of a material amount to any current or former employee,
independent contractor, consultant, officer or director (other
than payments, in the case of (A) and (B) above, in respect of
salary or pursuant to standard severance policies, existing bonus
plans or standard relocation policies of the Company which are
listed on Schedule 2.8 or Schedule 2.13(a) of the Company
Disclosure Letter);
(ii) any Company Contract relating to the acquisition, transfer,
development, sharing or license of any material Proprietary Asset
(except for any Company Contract pursuant to which (A) any
Proprietary Asset is licensed to the Company under any third
party software license generally available for sale to the public
("Material Company IP Contract"), or (B) any material Proprietary
Asset is licensed by the Company to any customer in connection
with the sale of any product in the ordinary course of business
consistent with prior practice);
(iii) any Company Contract with any officer, director or
affiliate of the Company;
(iv) any Company Contract creating or relating to any partnership
or joint venture or any sharing of revenues, profits, losses,
costs or liabilities, under which the Company has continuing
material obligations;
(v) any Company Contract that involves the payment or
expenditure by the Company in excess of $25,000 that may not be
terminated by such the Company (without penalty) within 30 days
after the delivery of a termination notice by the Company,
without cost or other liability;
(vi) any Company Contract contemplating or involving the payment
or delivery of cash or other consideration to the Company in
excess of $25,000;
(vii) any Company Contract imposing any restriction on the
right or ability of the Company to (A) compete with any other
Person, (B) acquire any material product or other material asset
or any services from any other Person, sell any material product
or other material asset to or perform any services for any other
Person or transact business or deal in any other manner with any
other Person, or (C) develop or distribute any material
technology;
(viii) any Company Contract granting or receiving
manufacturing rights, "most favored" pricing provisions or
exclusive marketing or distribution rights relating to any
product, service or territory;
(ix) any lease or other Company Contract relating to real
property;
(x) any indenture, mortgage, promissory note, loan agreement,
guarantee or other agreement or commitment for the borrowing of
money, for a line of credit of for a leasing transaction of a
type required to be capitalized in accordance with Statement of
Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board; and
(xi) any other Company Contract, if a breach of such Company
Contract could reasonably be expected to have a Material Adverse
Effect on the Company.
(b) Each Company Material Contract is valid and in full force
and effect, and is enforceable in accordance with its terms
subject to (A) Legal Requirements of general application relating
to bankruptcy, insolvency and the relief of debtors, and (B)
rules of law governing specific performance, injunctive relief
and other equitable remedies, except to the extent they have
expired in accordance with their terms and except where the
failure to be in full force and effect, individually or in the
aggregate, would not reasonably be expected to be material to the
Company. The Company has delivered to or made available to
Parent true and complete copies of each Company Material
Contract, except in the case of a Company Material Contract which
is derived from a standard form agreement of the Company, the
Company has delivered to or made available to Parent a form or
forms of such agreement. In each case where a Company Material
Contract is derived from a standard form agreement, all of the
terms, conditions and provisions of such Company Material
Contract are substantially similar with respect to material terms
to the form agreement from which such agreement derived.
(c) The Company has not materially violated or breached, or
committed any material default under, any Company Material
Contract. To the Company's knowledge, no other Person has
materially violated or breached, or committed any material
default under, any Company Material Contract.
(d) To the Company's knowledge, no event has occurred, and no
circumstance or condition exists, including, without limitation,
the transactions and events contemplated hereby, that (with or
without notice or lapse of time) could reasonably be expected to
(i) result in a material violation or breach of any provision of
any Company Material Contract by the Company; (ii) give any
Person the right to declare a material default or exercise any
remedy under any Company Material Contract; (iii) give any Person
the right to accelerate the maturity or performance of any
Company Material Contract; or (iv) give any Person the right to
cancel or terminate, or modify in any material respect, any
Company Material Contract.
2.9 LIABILITIES.
Since the Company Balance Sheet Date, the Company has
not any accrued, contingent or other liabilities of any nature,
either matured or unmatured (whether due or to become due)
required to be reflected in financial statements prepared in
accordance with GAAP, except for: (a) normal and recurring
liabilities that have been incurred by the Company since the
Company Balance Sheet Date in the ordinary course of business
consistent with prior practice; and (b) liabilities incurred in
connection with the transactions contemplated by this Agreement.
2.10 COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) The Company is in compliance in all material respects with
all applicable Legal Requirements. Within the past three years,
the Company has not received any written notice or, to the
Company's knowledge, other communication from any Governmental
Body regarding any actual or possible material violation of, or
failure to comply in any material respect with, any Legal
Requirement.
(b) Except as would not, individually or in the aggregate, have
a Material Adverse Effect on the Company, the Company is in
possession of all franchises, grants, authorizations, licenses,
establishment registrations, product listings, permits,
easements, variances, exceptions, consents, certificates,
clearances, approvals and orders of any Government Body necessary
for the Company to own, lease and operate its properties or to
develop, produce, store, distribute, promote and sell Company
Products or otherwise to carry on its business as it is now being
conducted (collectively, the "Company Permits"), and, as of the
date of this Agreement, such Company Permits are in full force
and effect and no suspension or cancellation of any of the
Company Permits is pending or, to the knowledge of the Company,
threatened, except where the failure to have, or the suspension
or cancellation of, any of the Company Permits would not,
individually or in the aggregate, have a Material Adverse Effect
on the Company. Except for conflicts, defaults or violations
which, individually or in the aggregate, would not have a
Material Adverse Effect on the Company, the Company is not in
conflict with, or in violation or default of, (i) any law
applicable to the Company or by which any property, asset,
operation, or product of the Company is bound or affected, or
(ii) any Company Permit.
(c) Except as would not, individually or in the aggregate, have
a Material Adverse Effect on the Company:
(i) all necessary clearances or approvals from governmental
agencies for all Company Products have been obtained, and the
Company is in substantial compliance with the most current form
of each applicable clearance, approval, or regulatory standards
applicable to devices for which no clearance or approval is
required, with respect to the development, design, manufacture,
labeling, storage, distribution, promotion and sale by the
Company of such products; and
(ii) the Company has not received any written notice within the
past three years that any Governmental Body (including non-U.S.
regulatory agencies) has commenced, or threatened to initiate,
any action to withdraw its clearance or approval, or to request
the recall of, any product of the Company, or commenced, or
overtly threatened to initiate any action to enjoin production at
any facility of the Company.
2.11 GOVERNMENTAL AUTHORIZATIONS.
The Company holds all Governmental Authorization
necessary to enable it to conduct its business in the manner in
which such business is currently being conducted except where the
failure to hold such Governmental Authorizations would not be
reasonably likely to have a Material Adverse Effect on the
Company. All such Governmental Authorizations are valid and in
full force and effect subject to (A) Legal Requirements of
general application relating to bankruptcy, insolvency and the
relief of debtors, and (B) rules of law governing specific
performance, injunctive relief and other equitable remedies,
except to the extent they have expired in accordance with their
terms and except where the failure to be in full force and
effect, individually or in the aggregate, would not reasonably be
expected to be material to the Company. The Company is in
compliance in all material respects with the terms and
requirements of such Governmental Authorizations. Except as set
forth in Schedule 2.11 of the Company Disclosure Letter, the
consummation of the transactions contemplated by this Agreement
will not affect the validity of any Governmental Authorization
held by the Company. The Company has received any notice or
other communication from any Governmental Body regarding (a) any
actual or possible violation of or failure to comply in any
material respect with any term or requirement of any Governmental
Authorization; or (b) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or modification
of any Governmental Authorization.
2.12 TAX MATTERS.
(a) The Company has paid or provided adequate reserves for all
Taxes, due and payable for or with respect to all periods up to
and including the Effective Date, whether or not such Taxes were
shown on any Tax Return, and without regard to whether such Taxes
are or were disputed.
(b) The Company has filed on a timely basis (taking into account
any extensions of time granted) all Tax Returns that each was
required to file and all such returns are complete in all
respects. The Company is not currently the beneficiary of any
extension of time within which to file any Tax Return. No claim
has ever been made to the Company by an authority in a
jurisdiction where the Company does not file Tax Returns that s
or may be subject to taxation by that jurisdiction nor is there a
reasonable basis to expect such a claim. Schedule 2.12(b)
contains a list of all jurisdictions in which the Company files
Tax Returns. The Company has not given any currently effective
waiver of any statute of limitations in respect of Taxes or
agreed to any currently effective extension of time with respect
to a Tax assessment or deficiency. The Company has not granted
to any Person any power of attorney that is currently in force
with respect to any Tax matter. There are no Encumbrances for
Taxes on any of the assets of the Company (other than liens for
Taxes not yet due and payable).
(c) The Company has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or
other third party.
(d) There has been no dispute or claim concerning any liability
for Taxes of the Company (i) claimed or raised by any authority
for which notice has been given or (ii) as to which such Company,
or any of its directors or offices has knowledge, and there is no
reasonable basis to suspect any such claim or dispute might
arise. Schedule 2.12 to the Company Disclosure Letter sets forth
as of the date of this Agreement a complete and accurate list of
current open audits of Tax Returns filed by or on behalf of the
Company with any Governmental Body.
(e) The unpaid Taxes of the Company (i) did not, as of the date
of the most recent Company Financial Statements, exceed the
reserve for Tax Liability (as opposed to any reserve for deferred
Taxes established to reflect timing differences between book and
Tax income) set forth in the Company Balance Sheet and (ii) will
not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the past custom and
practice of the Company and in filing its Tax Returns.
The Company is not a party to any Tax allocation or sharing
agreement. The Company has not been a "distributing corporation"
or a "controlled corporation" as those terms are defined in
Section 355(a)(1) of the Code. The Company (i) has not been a
member of an "affiliated group."
2.13 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.
(a) Schedule 2.13(a) of the Company Disclosure Letter lists as
of the date of this Agreement (i) all employee pension benefit
plans (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), (ii) all
employee welfare benefit plans (as defined in Section 3(1) of
ERISA), (iii) all other pension, bonus, commission, stock option,
stock purchase, incentive, deferred compensation, supplemental
retirement, severance, fringe benefits and other similar benefit
plans (including any fringe benefit under Section 132 of the Code
and any foreign plans), programs, Contracts, arrangements or
policies, and (iv) any employment, executive compensation or
severance agreements, whether written or otherwise, as amended,
modified or supplemented, of the Company or any other Entity
(whether or not incorporated) which is a member of a controlled
group which includes Company or which is under common control
with Company within the meaning of Sections 414(b), (c), (m) or
(o) of the Code or Section 4001(a) (14) or (b) of ERISA (each a
"Company ERISA Affiliate") for the benefit of, or relating to,
any former or current employee, independent contractor, officer
or director (or any of their beneficiaries) of the Company or any
other Company ERISA Affiliate (all such plans, programs,
Contracts, agreements, arrangements or policies as described in
this Section 2.13(a) shall be collectively referred to as the
"Company Employee Plans"). The Company has made available to
Parent, true and complete copies of (i) each such written Company
Employee Plan (or a written description of any Company Employee
Plan which is not written) and all related trust agreements,
insurance and other contracts (including policies), summary plan
descriptions, summaries of material modifications, registration
statements (including all attachments), prospectuses and
communications distributed to plan participants, (ii) the three
most recent annual reports on Form 5500 series, with accompanying
schedules and attachments (including accountants' opinions, if
applicable), filed with respect to each Company Employee Plan
required to make such a filing, (iii) the most recent actuarial
valuation for each Company Employee Plan subject to Title IV of
ERISA, and (iv) the most recent favorable determination letters
issued for each Company Employee Plan and related trust which is
intended to be qualified under Section 401(a) of the Code (and,
if an application for such determination is pending, a copy of
the application for such determination).
(b) (i) None of the Company Employee Plans promises or provides
post-termination or retiree medical or other post-termination or
retiree welfare benefits to any person (other than continuation
coverage to the extent required by law, whether pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 or
otherwise); (ii) none of the Company Employee Plans is a
"Multiple Employer Welfare Arrangement" (as defined in Section
3(40) of ERISA), a "Multiple Employer Plan" (as defined in
Section 413(c) of the Code), or a "Multiemployer Plan" (as
defined in Section 3(37) of ERISA), and neither the Company nor
any Company ERISA Affiliate has ever contributed to, been
required to contribute to, or otherwise had any obligation or
liability in connection with a Multiple Employer Plan or a
Multiemployer Plan; (iii) no party in interest or disqualified
person (as defined in Section 3(14) of ERISA and Section 4975 of
the Code, respectively) has at any time engaged in a transaction
with respect to any Company Employee Plan which could subject
Company, directly or indirectly, to any material tax, material
penalty or other material liability for prohibited transactions
under ERISA or Section 4975 of the Code; (iv) no fiduciary of any
Company Employee Plan has breached any of the responsibilities or
obligations imposed upon fiduciaries under Title I of ERISA which
shall subject Company, directly or indirectly, to any material
penalty or liability for breach of fiduciary duty; (v) all
Company Employee Plans have been established, maintained and
operated in accordance with their terms and have been
established, maintained and operated in substantial compliance
with all applicable Legal Requirements, including good faith
compliance with Section 409A of the Code; (vi) all Company
Employee Plans may by their terms be amended and/or terminated at
any time without the consent of any other Person subject to
applicable Legal Requirements and the terms of each Company
Employee Plan; (vii) the Company has performed all obligations
required to be performed by them under, and are not in any
respect in default under or in violation of, the terms and
conditions of any Company Employee Plan; (viii) the Company has
no knowledge of any default or violation by any other Person with
respect to any of the Company Employee Plans; (ix) each Company
Employee Plan which is intended to be qualified under Section
401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code is the subject of a favorable
determination letter from the Internal Revenue Service as to its
qualified status under Section 401(a) of the Code (or comparable
letter, such as an opinion or notification letter as to the form
of plan adopted by the Company), or has time remaining under
applicable Treasury guidance to seek such a determination, and to
the Company's knowledge nothing has occurred prior to or since
the issuance of such letter (or could reasonably be expected to
occur) which might impair such favorable determination or
otherwise impair the qualified status of such plan; (x) the
Company is not currently subject to any penalty or tax with
respect to any Company Employee Plan under Section 502(i) of
ERISA or 4975 through 4980F of the Code or has any outstanding
liability for any penalty or tax which is not otherwise reserved
for or reflected in the Company Financial Statements; (xi) all
material contributions required to be made or reserved, and all
material premiums required to be paid by the Company, with
respect to any Company Employee Plan pursuant to the terms of the
Company Employee Plan, any Legal Requirements or any collective
bargaining agreement, have been made, paid or reserved on or
before their due dates (including any extensions thereof); (xii)
all Company Employee Plans required to be insured or funded are
either fully insured or funded by a related trust, and for each
Company Employee Plan that is funded by a related trust, the fair
market value of the assets of the related trust are at least
equal to the liabilities of such Company Employee Plan; (xiii)
there are no audits, inquiries or proceedings pending or
threatened by the Internal Revenue Service or the Department of
Labor with respect to any Company Employee Plan; and (xiv) no
Company Employee Plan other than a Company Employee Plan intended
to qualify under Section 401(a) of the Code provides for post-
employment or retiree benefits.
(c) Neither the Company nor any other Company ERISA Affiliate
currently maintains, sponsors or participates in, or has
maintained, sponsored or participated in, or has any liability,
contingent or otherwise, to, any "Employee Benefit Plan" (as
defined in Section 3(3) of ERISA) that is subject to Section 412
of the Code or Title IV of ERISA or that is or may be a "multi-
employer plan" (as defined in Section 3(37) of ERISA).
(d) There are no Legal Proceedings pending or, to the knowledge
of the Company, threatened in respect of or relating to any
Company Employee Plan. To the Company's knowledge, there are no
facts or circumstances which could reasonably be expected to give
rise to any such Legal Proceeding (other than routine benefit
claims) in respect of or relating to any Company Employee Plan.
(e) The Company has never maintained an employee stock ownership
plan (within the meaning of Section 4975(e)(7) of the Code) or
any other Company Employee Plan that invests in Company capital
stock. Since December 31, 2006, the Company has not proposed or
agreed to any increase in benefits under any Company Employee
Plan (or the creation of new benefits) or change in employee
coverage which would increase the expense of maintaining any
Company Employee Plan. Except for the anticipated acceleration
of vesting of Company Options as described in Schedule 2.3(b) of
the Company Disclosure Letter, no person will be entitled to any
severance benefits, acceleration of vesting of any the Company
Options or the extension of any period during which any Company
Options may be exercised, under the terms of any Company Employee
Plan as a result of the consummation of the transactions
contemplated by this Agreement (either solely as a result thereof
or as a result of such transactions in conjunction with another
event).
(f) There are no controversies pending or, to the knowledge of
the Company, threatened, between Company and any of their
respective foreign or domestic former or current employees,
officers, directors, independent contractors or consultants (or
any of their beneficiaries), (ii) there is no labor strike,
dispute, slowdown, work stoppage or lockout actually pending or,
to the knowledge of the Company, threatened against or affecting
the Company, (iii) the Company is not a party to or bound by any
collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of
the Company, (iv) none of the employees of the Company are
represented by a labor organization or group that was either
certified or voluntarily recognized by any labor relations board
and no union organizing campaign or other attempt to organize or
establish a labor union, employee organization or labor
organization involving employees of the Company has occurred, is
in progress or, to the knowledge of the Company, is threatened,
(v) the Company has at all times been in compliance in all
material respects with all applicable Legal Requirements
governing or concerning labor relations, conditions of
employment, employment discrimination or harassment, wages,
hours, or occupational safety and health, and with any collective
bargaining agreements (both foreign and domestic), (vi) there is
no unfair labor practice charge or complaint against Company
pending or, to the knowledge of the Company, threatened before
the National Labor Relations Board or any similar state or
foreign agency, (vii) there is no grievance or arbitration demand
or proceeding arising out of any collective bargaining agreement
or other grievance procedure relating to the Company pending, or
to the knowledge of the Company, threatened, against the Company,
(viii) the Company is not a federal or state contractor, (ix) to
the Company's knowledge, neither the Occupational Safety and
Health Administration nor any corresponding state or foreign
agency is threatening to file any citation or complaint, and
there are no pending citations or complaints, relating to the
Company, and (x) there are no complaints, charges or claims
against the Company pending or, to the knowledge of the Company,
threatened, which could be brought or filed with any Governmental
Body, court or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment of, termination of
employment of, or failure of the Company to employ any
individual. To the knowledge of the Company, there are no
pending, threatened or reasonably anticipated claims against
Company under any workers' compensation disability policy or long-
term policy.
(g) No amount required to be paid or payable to or with respect
to current or former employee of Company in connection with the
transactions contemplated hereby (either solely as a result
thereof or as a result of such transactions in conjunction with
any other event) will be an "excess parachute payment" within the
meaning of Section 280G of the Code or will not be deductible
under Sections 162(a)(1) or 404 of the Code.
(h) Set forth on Schedule 2.13(l) of the Company Disclosure
Letter is a list of all employees of the Company as of the date
of this Agreement together with respect to each such employee (i)
the employee's base salary and (ii) any severance that would be
due upon termination with or without cause of such employee
(other than pursuant to (A) severance or bonus policies or
employment or change of control agreements in each case as in
effect on the date of this Agreement and listed on Schedule
2.8(a) or Schedule 2.13(a) of the Company Disclosure Letter, or
(B) Legal Requirements applicable to the Company which is formed
or incorporated under the laws of a foreign jurisdiction).
Schedule 2.13(l) of the Company Disclosure Letter also sets forth
with respect to each Company employee accrued paid time off
payable to each such employee as of December 31, 2007.
(i) The Company has not taken any action that would
constitute a "mass layoff," "mass termination" or "plant closing"
within the meaning of the United States Worker Adjustment and
Retraining Notification Act ("WARN Act") or otherwise trigger
notice requirements or liability under any federal, local, state,
or foreign plant closing notice or collective dismissal law.
(j) The Company is in compliance with all immigration and
naturalization Legal Requirements relating to employment and
employees, the Company has properly completed and maintained in
all material respects all applicable forms (including I-9 forms),
there are no citations, investigations, enforcement proceedings
or formal complaints concerning immigration or naturalization
Legal Requirements pending or, to the knowledge of the Company,
threatened before the United States Citizenship and Immigration
Services or any related federal, state, foreign or administrative
agency or court, involving or against the Company, and the
Company has not received notice of any violation of any
immigration and naturalization Legal Requirement.
(k) The classification by the Company or a Company ERISA
Affiliate of individuals as employees or independent contractors
has been made in compliance with all applicable Legal
Requirements. Neither the Company nor any of its Company ERISA
Affiliates has (i) used the services or workers provided by third
party contract labor suppliers, temporary employees, "leased
employees" (as that term is defined in Section 414(n) of the
Code), or individuals who have provided services as independent
contractors to an extent that would reasonably be expected to
result in the disqualification of any of the Company Employee
Plans or the imposition of penalties or excise taxes with respect
to the Company Employee Plans by the IRS, the Department of
Labor, or the Pension Benefit Guaranty Corporation.
2.14 ENVIRONMENTAL MATTERS.
The Company is in compliance with all applicable
Environmental Laws, which compliance includes the possession by
the Company of all material permits and other Governmental
Authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof, except where
the failure to so comply would not result in a material liability
or clean up obligation on the Company. Except as set forth on
Schedule 2.14 of the Company Disclosure Letter, the consummation
of the transactions contemplated by this Agreement will not
affect the validity of such material permits and Governmental
Authorizations held by the Company, and will not require any
filing notice, or remediation under any Environmental Law. To
the knowledge of the Company (including as set forth in that
certain ASTM Screen/Limited Assessment of ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ Project #708-520 dated May 16, 2008, performed by
IES, Inc., a copy of which has been provided to Buyer (the "IES
Report")), there are no past or present events, conditions,
activities, or practices which would reasonably be expected to
prevent the Company's or the Surviving Entity's compliance in all
material respects with any Environmental Law, or which would
reasonably be expected to give rise to any material liability of
the Company under any Environmental Law. Other than as set forth
within the IES Report, within the past seven years, the Company
has not received any written notice, or to its knowledge, other
communication (in writing or otherwise) that alleges that the
Company is not in compliance with any Environmental Law, and the
Company has no knowledge of any circumstances that would
reasonably be expected to result in such claims or
communications. To the Company's knowledge, no current or prior
owner of any property owned, leased or controlled by the Company
has received any written notice or other communication (in
writing or otherwise) that alleges that such current or prior
owner or the Company is not in substantial compliance with any
Environmental Law in such a manner as would be reasonably likely
to result in a material liability or clean up obligation on the
Company. The Company has not assumed by contract, agreement or
otherwise any liabilities or obligations arising under any
Environmental Law, or is currently performing any required
investigation, response or other corrective action under any
Environmental Law. To the knowledge of the Company, there are no
underground storage tanks or related piping on any real property
leased or controlled by or used by the Company, and any former
such tanks and piping have been removed or closed in accordance
with applicable Environmental Laws. To the Company's knowledge,
all real property that is owned by, leased to, controlled by or
used by the Company is free of any friable asbestos or asbestos-
containing material.
2.15 LEGAL PROCEEDINGS; ORDERS.
Except as set forth in Schedule 2.15 of the Company
Disclosure Letter, there is no pending Legal Proceeding and
within the past 24 months no Person has threatened in writing to
commence any Legal Proceeding, that involves the Company or any
of the assets owned or used by the Company, in each case which
would be reasonably likely to be material to the Company; and
there is no Order to which the Company, or any of the material
assets owned or used by the Company, is subject.
2.16 VOTE REQUIRED.
The holders of the shares of Company Common Stock
outstanding as of the date hereof have voted unanimously to
approve this Agreement and otherwise approve and consummate the
Merger as set forth herein.
2.17 FOREIGN CORRUPT PRACTICES ACT.
Neither the Company, any of the Company's officers,
directors, nor, to the Company's knowledge, any employees or
agents, distributors, representatives or other persons acting on
the express, implied or apparent authority of the Company, have
paid, given or received or have offered or promised to pay, give
or receive, any bribe or other unlawful payment of money or other
thing of value, any unlawful discount, or any other unlawful
inducement, to or from any person or Governmental Body in the
United States or elsewhere in connection with or in furtherance
of the business of the Company (including any unlawful offer,
payment or promise to pay money or other thing of value (a) to
any foreign official, political party (or official thereof) or
candidate for political office for the purposes of influencing
any act, decision or omission in order to assist the Company in
obtaining business for or with, or directing business to, any
person, or (b) to any person, while knowing that all or a portion
of such money or other thing of value will be offered, given or
promised unlawfully to any such official or party for such
purposes). The business of the Company is not in any manner
dependent upon the making or receipt of such unlawful payments,
discounts or other inducements. The Company has not otherwise
taken any action that could cause the Company or the Company to
be in violation of the Foreign Corrupt Practices Act of 1977, as
amended, the regulations thereunder, or any applicable Legal
Requirements of similar effect.
2.18 REAL PROPERTY.
Except as set forth in Schedule 2.18 of the Company
Disclosure Letter, the Company has good and marketable title to,
or a valid leasehold interest in, all of its real properties, in
each case free and clear of all Encumbrances. Schedule 2.18 of
the Company Disclosure Letter sets forth a true, correct and
complete list of all real property owned by the Company at any
time during the past five years and a true and correct list of
all real property currently leased by the Company identifying,
with respect to each lease of such real property, the date of,
the parties to, and any amendments, modifications, extensions or
other supplements to such lease. The Company has not sent or
received any written notice of any default under any of the
leases of real property to which it is party. The Company is not
in material breach of, or in default in any material respect
under, any covenant, agreement, term or condition of or contained
in any lease of real property to which it is a party and there
has not occurred any event that with the lapse of time or the
giving of notice or both could constitute such a default or
breach.
2.19 INSURANCE POLICIES.
The Company has delivered to Parent prior to the date
hereof a complete and accurate list of all insurance policies in
force naming the Company or any director, officer or employee
thereof as an insured or beneficiary or as a loss payable payee
or for which the Company has paid or is obligated to pay all or
part of the premiums. The Company has not received notice of any
pending or threatened cancellation or premium increase
(retroactive or otherwise) with respect thereto, the Company is
in compliance in all material respects with all conditions
contained therein. There are no material pending claims against
such insurance policies by the Company as to which insurers are
defending under reservation of rights or have denied liability,
and there exists no material claim under such insurance policies
that has not been properly filed by the Company. Except for the
self-insurance retentions or deductibles set forth in the
policies contained in the aforementioned list, the policies are
adequate in scope and amount to cover all prudent and reasonably
foreseeable risks which may arise in the conduct of the business
of the Company that would reasonably be expected to have a
Material Adverse Effect on the Company.
2.20 FINANCIAL ADVISOR.
No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection
with the Merger or any of the other transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
the Company.
2.21 AFFILIATE TRANSACTIONS.
Schedule 2.21 of the Company Disclosure Letter contains
a complete and correct list, as of the date of this Agreement, of
all agreements, contracts, transfers of assets or liabilities or
other commitments or transactions, whether or not entered into in
the ordinary course of business, to or by which the Company, on
the one hand, and any of its respective officers or directors (or
any of their respective Affiliates, other than the Company) on
the other hand, are or have been a party or otherwise bound or
affected, and that (a) are currently pending, in effect or have
been in effect during the past 12 months, (b) involve continuing
liabilities and obligations that, individually or in the
aggregate, have been, are or will be material to the Company,
taken as a whole and (c) are not Company Employee Plans disclosed
in Schedule 2.13(a) of the Company Disclosure Letter.
2.22 CUSTOMERS.
Schedule 2.22 of the Company Disclosure Letter lists
the customers of the Company for the last completed fiscal year
(in decreasing order of gross sales). Except as disclosed in
Schedule 2.22, the Company has not received any written notice,
or to the knowledge of the Company, any verbal notice or threats
by such customers with respect to termination, cancellation or
limitation of, or adverse modification or change in, the business
relationship of the Company or any business with any customer or
customers whose purchases are individually or in the aggregate
material to the Company.
2.23 DISCLOSURE.
No representation or warranty made by the Company or
the Stockholder, nor any information or statement contained on
the Company Disclosure Letter or in any exhibit or schedule
hereto or in any certificate to be delivered by Stockholder or
the Company pursuant hereto, contains or will contain any untrue
statement of a material fact, or omits or will omit a material
fact necessary to make the statements of fact herein or therein
not misleading in light of the circumstances under which they
were made.
SECTION 2A. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Except as disclosed in the Company Disclosure Letter to
Parent and Merger Sub prior to the execution and delivery of this
Agreement, each Stockholder severally, but not jointly, hereby
represents and warrants to Parent and Merger Sub, as follows.
SECTION 2A.1 AUTHORIZATION; TITLE.
The Stockholder is authorized to enter into this
Agreement, to perform his obligations hereunder and to consummate
the transactions contemplated hereby, without violating any
agreement by which Stockholder or the Company is bound. The
Stockholder has good, marketable, unencumbered title to the
Company Common Stock that it owns, and will transfer such stock
free and clear of any Encumbrance.
SECTION 2A.2 INVESTMENT INTENT.
(a) The Stockholder is purchasing the Parent Common
Stock for the Stockholder's own account and with no intention of
distributing or reselling the Parent Common Stock in any
transaction which would be in violation of the securities laws of
the United States of America or any state thereof, or in any
transaction that would subject the issuance and sale of the
Parent Common Stock pursuant to this Agreement to the
registration requirements of the Securities Act and applicable
state securities laws. The Stockholder understands that the
Shares have not been registered under the Securities Act or the
securities laws of any state by reason of a specific exemption
from the registration or qualification provisions of the
Securities Act or said securities laws, the availability of which
depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the representations as
expressed herein. The Stockholder understands that the Company
has no obligation to register the Shares under the Securities Act
or any state securities laws.
(b) The Stockholder acknowledges that the Shares must
be held indefinitely unless the Shares are so registered or an
exemption from such registration is available.
(c) The Stockholder has had an opportunity to discuss
the business, management and financial affairs of the Parent and
the terms and conditions of an investment in the Parent Common
Stock with, and has had access to, the management of the Parent
and he has had the opportunity to review the information set
forth in the Parent's public filings and any other information
requested by the Stockholder.
(d) The Stockholder understands and acknowledges that
the Parent will be relying upon the Stockholder's representations
and warranties set forth herein in offering and selling the
Parent Common Stock to him.
(e) The Stockholder represents that the offering to
him of the Parent Common Stock was made only through direct,
personal communication between the undersigned Stockholder and a
representative of the Parent and not through public solicitation
or advertising.
(f) The Stockholder did not retain or consult any
"Purchaser Representative", as such term is defined in Rule 501
of Regulation D promulgated under the Securities Act.
(g) The Stockholder has such knowledge, experience and
skill in evaluating and investing in securities, based on actual
participation in financial, investment and business matters such
that he is capable of evaluating the merits and risks of an
investment in the Parent Common Stock, and has such knowledge,
experience and skill in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment in the Parent and the suitability of the Parent Common
Stock as an investment for himself.
(h) The Stockholder has not received, and is not
relying on, any representations or warranties from the Parent or
any other person, other than those contained in this Agreement.
(i) The Stockholder is able to bear the economic risk
of an investment in the Parent Common Stock and has an adequate
income independent of any income produced from an investment in
the Parent Common Stock and has sufficient net worth to sustain a
loss of all of his investment in the Parent Common Stock without
economic hardship if such a loss should occur. Other than ▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇▇, the Stockholder is an "accredited investor" as
defined in Rule 501(a) under the Securities Act.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
Except as disclosed in Parent SEC Documents filed prior
to the date hereof or the Disclosure Letter delivered by Parent
and Merger Sub to the Company prior to the execution and delivery
of this Agreement (the "Parent Disclosure Letter") and referred
to in the section of the Parent Disclosure Letter corresponding
to the section(s) of this Section 3 to which such disclosure
applies (unless it is reasonably apparent from the face of such
disclosure that the disclosure or statement in one section of the
Parent Disclosure Letter should apply to one or more sections
thereof), Parent and Merger Sub represent and warrant to the
Company as follows:
3.1 DUE ORGANIZATION; SUBSIDIARIES.
Parent is a corporation duly organized, validly
existing and in good standing under the Legal Requirements of the
jurisdiction of its incorporation, and each of the other Dynasil
Corporations which is a "significant subsidiary" (as defined in
Regulation S-X) of Parent is a corporation duly organized,
validly existing and in good standing under the Legal
Requirements of the jurisdiction of its incorporation or
formation. Each of the Dynasil Corporations has all necessary
power and authority: (a) to conduct its business in the manner
in which its business is currently being conducted; (b) to own
and use its assets in the manner in which its assets are
currently owned and used; and (c) to perform its material
obligations under all Parent Material Contracts. Each of the
Dynasil Corporations is qualified to do business as a foreign
corporation, and is in good standing, under the Legal
Requirements of all jurisdictions where the failure to be so
qualified would have a Material Adverse Effect on the Dynasil
Corporations. Parent has delivered or made available to the
Company accurate and complete copies of the certificate of
incorporation, bylaws and other charter or organizational
documents of each of the Dynasil Corporations, including all
amendments thereto (collectively, the "Parent Organization
Documents"). Parent has no Subsidiaries, except for the
corporations identified in Schedule 3.1 of the Parent Disclosure
Letter. Parent and each of its Subsidiaries are collectively
referred to herein as the "Dynasil Corporations". None of the
Dynasil Corporations has any equity interest or similar interest
in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any Entity,
other than the Dynasil Corporations' interests in their
Subsidiaries identified in Schedule 3.1 of the Parent Disclosure
Letter.
3.2 AUTHORITY; BINDING NATURE OF AGREEMENT.
Each of Parent and Merger Sub has all requisite
corporate power and authority to enter into and, subject to the
receipt of the stockholder approval contemplated by Section 5.2,
to perform its obligations under this Agreement. This Agreement
constitutes the legal, valid and binding obligation of Parent and
Merger Sub, enforceable against Parent and Merger Sub in
accordance with its terms, subject to (a) Legal Requirements of
general application relating to bankruptcy, insolvency and the
relief of debtors, (b) rules of law governing specific
performance, injunctive relief and other equitable remedies and
(c) the approval of the stockholders of Parent. Parent hereby
represents that its Board of Directors, at a meeting duly called
and held on or prior to the date hereof, has by unanimous vote
(i) determined that the Merger is in the best interests of Parent
and its stockholders, and (ii) approved, adopted and declared
advisable this Agreement, the Merger and the other transactions
contemplated by this Agreement. Merger Sub hereby represents
that its Board of Managers, by unanimous written consent,
approved and adopted this Agreement, declared it advisable and
approved the Merger and the other transactions contemplated by
this Agreement, and recommended that the Parent adopt this
Agreement. Parent hereby represents that it, as the sole member
of Merger Sub, will approve and adopt this Agreement, the Merger
and the other transactions contemplated by this Agreement
immediately after the execution and delivery of this Agreement by
the parties hereto.
3.3 CAPITALIZATION, ETC.
(a) The authorized capital stock of Parent consists of: (i)
25,000,000 shares of Parent Common Stock and (ii) 10,000,000
shares of Parent Preferred Stock. As of As of June 17, 2008,
6,478,507 shares of Parent Common Stock have been issued or are
outstanding (excluding 810,160 shares of treasury stock) and
710,000 shares of Series B Preferred Stock, par value $0.001 per
share (the "Parent Preferred Stock") are outstanding, convertible
into 944,300 shares of Parent Common Stock are outstanding.
810,160 shares of Parent Common Stock are held in Parent's
treasury and none are held by any of Parent's Subsidiaries. All
of the outstanding shares of Parent Common Stock have been duly
authorized and validly issued, and are fully paid and
nonassessable. None of the outstanding shares of Parent Common
Stock is entitled or subject to any preemptive right, right of
participation, right of maintenance or any similar right or
subject to any right of first refusal in favor of Parent. There
is no Contract to which Parent is a party and, to Parent's
knowledge, there is no Contract between other Persons, relating
to the voting or registration of, or restricting any Person from
purchasing, selling, pledging or otherwise disposing of, any
shares of Parent Common Stock. None of the Dynasil Corporations
is under any obligation, or is bound by any Contract pursuant to
which it may become obligated, to repurchase, redeem or otherwise
acquire any outstanding shares of Parent Common Stock, other than
those relating to the transactions contemplated hereby and the
sale of Series C Preferred Stock to provide funds.
(b) Parent has delivered or made available to Company accurate
and complete copies of the Parent ESPP, all stock option plans
pursuant to which Parent has granted Parent Options, and the
forms of all stock option agreements evidencing such options.
There have been no repricings of any Parent Options through
amendments, cancellation and reissuance or other means during the
current or prior two calendar years. None of the Parent Options
have been granted in contemplation of the Merger or the
transactions contemplated in this Agreement and no Parent Options
have been granted since June 11, 2008, after which grant there
were 411,459 Parent Options outstanding. Approximately 120,000
options are anticipated to be issued to ▇▇▇▇▇ ▇▇▇▇▇▇ as part of
the transactions contemplated hereby.. None of the Parent
Options were granted with exercise prices below or deemed to be
below fair market value on the date of grant. All grants of
Parent Options were validly made and properly approved by the
board of directors of Parent (or a duly authorized committee or
subcommittee thereof) in compliance with all applicable law and
recorded on the Parent Financial Statements in accordance with
GAAP, and no such grants involved any "back dating," "forward
dating" or similar practices with respect to such grants.
(c) Except as set forth in Section 3.3(a) or Section 3.3(b)
above, there is no: (i) outstanding commitment, subscription,
option, call, warrant or right (whether or not currently
exercisable) to acquire any shares of the capital stock or other
securities of any of the Dynasil Corporations; (ii) outstanding
security, instrument or obligation that is or may become
convertible into or exchangeable for any shares of the capital
stock or other securities of any of the Dynasil Corporations;
(iii) rights agreement, stockholder rights plan or similar plan
commonly referred to as a "poison pill"; or (iv) Contract under
which any of the Dynasil Corporations are or may become obligated
to sell or otherwise issue any shares of its capital stock or any
other securities ("Parent Rights Agreements") (items (i) through
(iv) above, collectively, "Parent Stock Rights").
(d) All outstanding shares of Parent Common Stock, all
outstanding Parent Options and all outstanding shares of capital
stock of each Subsidiary of Parent have been issued and granted
in compliance with (i) all applicable securities laws and other
applicable Legal Requirements, and (ii) all requirements set
forth in Contracts applicable to the issuance of Parent Common
Stock, granting Parent Options and/or the issuance of shares of
capital stock of any Parent Subsidiary. All of the outstanding
shares of capital stock of each of the Parent's Subsidiaries have
been duly authorized and are validly issued, are fully paid and
nonassessable and, except as required by Legal Requirements
applicable to each of the Dynasil Corporations which is formed or
incorporated under the laws of a foreign jurisdiction, are owned
beneficially and of record by Parent, free and clear of any
Encumbrances. Schedule 3.3(d) of the Parent Disclosure Letter
sets forth all entities (other than Subsidiaries) in which any of
the Dynasil Corporations has any ownership interest and the
amount of such interest.
(e) Parent directly owns all of the equity interests of Merger
Sub.
3.4 NON-CONTRAVENTION; CONSENTS.
Neither the execution, delivery or performance of this
Agreement nor the consummation of the Merger, or any of the other
transactions contemplated by this Agreement, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of any of
the provisions of the Parent Organization Documents or any
resolution adopted by the stockholders, the Board of Directors or
any committee of the Board of Directors of any of the Dynasil
Corporations;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body the right to challenge the Merger or
any of the other transactions contemplated by this Agreement or
to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which any of the Dynasil
Corporations, or any of the material assets owned or used by any
of the Dynasil Corporations, is subject;
(c) contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate or modify,
any material Governmental Authorization that is held by any of
the Dynasil Corporations or that is otherwise material to the
business of any of the Dynasil Corporations or to any of the
assets owned or used by any of the Dynasil Corporations; or
(d) contravene, conflict with or result in a violation or breach
of, or result in a default under, any provision of any Parent
Material Contract (except for any such violation or breach which
by its terms can be cured and is so cured within the applicable
cure period or where the non-breaching party has no right to
accelerate or terminate as a result of such violation or breach),
or give any Person the right to (i) declare a default or exercise
any remedy under any Parent Material Contract; (ii) accelerate
the maturity or performance of any Parent Material Contract; or
(iii) cancel, terminate or modify any term of any Parent Material
Contract.
Except as may be required by the Securities Act, the
Exchange Act, the DGCL and the rules and regulations of the
Nasdaq required under any Parent Material Contract, none of the
Dynasil Corporations was, is or will be required to make any
filing with or give any notice to, or obtain any Consent from,
any Person in connection with (x) the execution, delivery or
performance of this Agreement, or (y) the consummation of the
Merger or any of the other transactions contemplated by this
Agreement, except in the case of subsections (x) and (y), where
the failure to make such filing, give such notice or obtain any
such consent would not have a Material Adverse Effect on the
Dynasil Corporations.
3.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) All statements, reports, schedules, forms, exhibits and
other documents required to have been filed by Parent with the
SEC since October 1, 2004 (the "Parent SEC Documents") have been
so filed. As of their respective dates (or, if amended,
supplemented or superseded by a filing prior to the date of this
Agreement, then on the date of such amendment, supplement or
superseding filing): (i) each of the Parent SEC Documents
complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the
case may be); and (ii) none of the Parent SEC Documents contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) The Parent SEC Documents include all certifications and
statements required of it, if any, by (i) Rule 13a-14 or 15d-14
under the Exchange Act, and (ii) 18 U.S.C. Section 1350 (Section
906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002).
(c) The financial statements (including related notes, if any)
contained in the Parent SEC Documents (the "Parent Financial
Statements"): (i) complied as to form in all material respects
with the published rules and regulations of the SEC applicable
thereto; (ii) were prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered (except as may be
indicated in the notes to such financial statements or, in the
case of unaudited statements, as permitted by Form 10-QSB of the
SEC, and except that the unaudited financial statements may not
have contained footnotes and were subject to normal and recurring
year-end adjustments which were not, or are not reasonably
expected to be, individually or in the aggregate, material); and
(iii) fairly presented in all material respects the consolidated
financial position of Parent and its consolidated subsidiaries as
of the respective dates thereof and the consolidated results of
operations and cash flows of Parent and its consolidated
subsidiaries for the periods covered thereby. For purposes of
this Agreement, "Parent Balance Sheet" means that consolidated
balance sheet of Parent and its consolidated subsidiaries as of
September 30, 2007 set forth in the Parent's Annual Report on
Form 10-KSB filed with the SEC on December 20, 2007 (the "Parent
10-KSB") and the "Parent Balance Sheet Date" means September 30,
2007.
(d) Parent maintains a system of internal controls sufficient to
provide reasonable assurance that (i) transactions are executed
with management's authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
accordance with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with
management's authorization; (iv) the recorded amount for assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; (v)
all information (both financial and non-financial) required to be
disclosed by Parent in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the
SEC; and (vi) all such information is accumulated and
communicated to Parent's management as appropriate to allow
timely decisions regarding required disclosure and to make the
certifications of the Chief Executive Officer and Chief Financial
Officer of Parent required under the Exchange Act with respect to
such reports. There are no significant deficiencies or material
weaknesses in the design or operation of Parent's internal
controls, and Parent has not been informed by its independent
auditors, accountants, consultants or others involved in the
review of internal controls that any such significant
deficiencies or material weaknesses exist, which could adversely
affect Parent's ability to record, process, summarize and report
financial data. There is no fraud in connection with the Parent
Financial Statements, whether or not material, that involves
management or other employees who have a significant role in
Parent's internal controls.
3.6 ABSENCE OF CHANGES.
(a) Since the Parent Balance Sheet Date (except as disclosed in
the Parent SEC Documents),
(i) none of the Dynasil Corporations has made any material
changes in its pricing polices or payment or credit practices or
failed to pay any creditor any material amount owed to such
creditor when due or granted any extensions or credit other than
in the ordinary course of business consistent with prior
practice;
(ii) none of the Dynasil Corporations has terminated or closed
any material facility, business or operation;
(iii) none of the Dynasil Corporations has written up or
written down any of its material assets; and
(iv) there has been no material loss, destruction or damage to
any item of property of the Dynasil Corporations, whether or not
insured.
(b) Except as set forth in Schedule 3.6(b) of the Parent
Disclosure Letter or in the Parent SEC Documents, since the
Parent Balance Sheet Date and through the date of this Agreement:
(i) there has not been any event that has had a Material Adverse
Effect on the Dynasil Corporations, and no fact, event,
circumstance or condition exists or has occurred that could
reasonably be expected to have a Material Adverse Effect on the
Dynasil Corporations;
(ii) each of the Dynasil Corporations has operated its respective
business in the ordinary course consistent with prior practice;
(iii) none of the Dynasil Corporations has (A) declared,
accrued, set aside or paid any dividend or made any other
distribution in respect of any shares of capital stock (other
than in connection with the Parent Preferred Stock); (B)
repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities; (C) made any capital
expenditure which, when added to all other capital expenditures
made on behalf of the Dynasil Corporations since the Parent
Balance Sheet Date, exceeds $150,000, in the aggregate; (D) made
any material Tax election; (E) settled any Legal Proceedings
involving amounts in excess of $100,000; or (F) entered into or
consummated any transactions with any affiliate;
(iv) none of the Dynasil Corporations has (A) sold or otherwise
disposed of, or acquired, leased, licensed, waived or
relinquished any material right or other material asset to, from
or for the benefit of, any other Person except for rights or
other assets sold, disposed of, acquired, leased, licensed,
waived or relinquished in the ordinary course of business
consistent with prior practice; (B) mortgaged, pledged or
subjected to any Encumbrance any of their respective property,
business or assets; (C) entered into or amended any lease of
real property (whether as lessor or lessee); or (D) canceled or
compromised any debt or claim other than accounts receivable in
the ordinary course of business consistent with prior practice;
(v) none of the Dynasil Corporations has (A) amended or waived
any of its material rights under, or permitted the acceleration
of vesting under, any provision of any of the Parent Employee
Plans or any provision of any agreement or Parent Stock Option
Plan evidencing any outstanding Parent Option; (B) caused or
permitted any Parent Employee Plan to be amended in any material
respect; or (C) paid any bonus or other incentive or equity
compensation or made any profit-sharing or similar payment to, or
materially increased the amount of the wages, salary,
commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or
consultants;
(vi) there has been no material labor dispute (including any work
slowdown, stoppage or strike) involving the Dynasil Corporations;
(vii) none of the Dynasil Corporations has made any material
change in its methods of accounting or accounting practices;
(viii) none of the Dynasil Corporations has made any loan,
advance or capital contributions to, or any other investment in,
any Person;
(ix) none of the Dynasil Corporations has terminated or amended,
or suffered a termination of, any Parent Material Contract;
(x) none of the Dynasil Corporations has entered into any
contractual obligation to do any of the things referred to
elsewhere in this Section 3.6; and
(xi) there has been no material development in any Legal
Proceeding described in a Parent SEC Document.
3.7 CONTRACTS.
(a) Each Parent Material Contract is valid and in full force and
effect, and is enforceable in accordance with its terms subject
to (A) Legal Requirements of general application relating to
bankruptcy, insolvency and the relief of debtors, and (B) rules
of law governing specific performance, injunctive relief and
other equitable remedies, except to the extent they have expired
in accordance with their terms and except where the failure to be
in full force and effect, individually or in the aggregate, would
not reasonably be expected to be material to the Dynasil
Corporations. Parent has delivered to or made available to the
Company true and complete copies of each Parent Material
Contract, except in the case of a Parent Material Contract which
is derived from a standard form agreement of the Dynasil
Corporations, Parent has delivered to or made available to the
Company a form or forms of such agreement. In each case where a
Parent Material Contract is derived from a standard form
agreement, all of the terms, conditions and provisions of such
Parent Material Contract are substantially similar with respect
to material terms to the form agreement from which such agreement
derived.
(b) None of the Dynasil Corporations has materially violated or
breached, or committed any material default under, any Parent
Material Contract. To Parent's knowledge, no other Person has
materially violated or breached, or committed any material
default under, any Parent Material Contract.
(c) To Parent's knowledge, no event has occurred, and no
circumstance or condition exists, that (with or without notice or
lapse of time) could reasonably be expected to (i) result in a
material violation or breach of any provision of any Parent
Material Contract by any of the Dynasil Corporations; (ii) give
any Person the right to declare a material default or exercise
any remedy under any Parent Material Contract; (iii) give any
Person the right to accelerate the maturity or performance of any
Parent Material Contract; or (iv) give any Person the right to
cancel or terminate, or modify in any material respect, any
Parent Material Contract
3.8 LIABILITIES.
Except as disclosed in Parent SEC Documents, since the
Parent Balance Sheet Date, none of the Dynasil Corporations has
any accrued, contingent or other liabilities of any nature,
either matured or unmatured (whether due or to become due)
required to be reflected in financial statements prepared in
accordance with GAAP, except for: (a) liabilities that are
reflected in the "Liabilities" column of the Parent Balance Sheet
and the notes thereto; (b) normal and recurring liabilities that
have been incurred by the Dynasil Corporations since the Parent
Balance Sheet Date in the ordinary course of business consistent
with prior practice; and (c) liabilities incurred in connection
with the transactions contemplated by this Agreement.
3.9 LEGAL PROCEEDINGS; ORDERS.
Except as set forth in the Parent SEC Documents, there
is no pending Legal Proceeding and, to Parent's knowledge, within
the past 24 months no Person has threatened in writing to
commence any Legal Proceeding, that involves any of the Dynasil
Corporations or any of the assets owned or used by any of the
Dynasil Corporations, in each case which would be reasonably
likely to be material to the Dynasil Corporations; and there is
no Order to which any of the Dynasil Corporations, or any of the
material assets owned or used by any of the Dynasil Corporations,
is subject.
3.10 FOREIGN CORRUPT PRACTICES ACT.
Neither Parent, any other Dynasil Corporation, any of
the Dynasil Corporation's officers, directors, nor, to Parent's
knowledge, any employees or agents, distributors, representatives
or other persons acting on the express, implied or apparent
authority of any Dynasil Corporation, have paid, given or
received or have offered or promised to pay, give or receive, any
bribe or other unlawful payment of money or other thing of value,
any unlawful discount, or any other unlawful inducement, to or
from any person or Governmental Body in the United States or
elsewhere in connection with or in furtherance of the business of
any of the Dynasil Corporations (including any unlawful offer,
payment or promise to pay money or other thing of value (a) to
any foreign official, political party (or official thereof) or
candidate for political office for the purposes of influencing
any act, decision or omission in order to assist any Dynasil
Corporation in obtaining business for or with, or directing
business to, any person, or (b) to any person, while knowing that
all or a portion of such money or other thing of value will be
offered, given or promised unlawfully to any such official or
party for such purposes). Neither the business of Parent nor of
any other Dynasil Corporation is in any manner dependent upon the
making or receipt of such unlawful payments, discounts or other
inducements. Neither Parent nor any other Dynasil Corporation
has otherwise taken any action that could cause Parent or any
other Dynasil Corporation to be in violation of the Foreign
Corrupt Practices Act of 1977, as amended, the regulations
thereunder, or any applicable Legal Requirements of similar
effect.
3.11 FINANCIAL ADVISOR.
No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection
with the Merger or any of the other transactions contemplated by
this Agreement based upon arrangements made by or on behalf of
any of the Dynasil Corporations.
3.12 PROPRIETARY ASSETS.
(a) Schedule 3.12(a) of the Parent Disclosure Letter sets forth
as of the date of this Agreement (i) all U.S. and foreign
patents, patent applications, registered trademarks, material
unregistered trademarks, trademark applications, copyright
registrations and copyright applications, Internet domain names,
computer software (other than third party software generally
available for sale to the public) and fictitious name and assumed
name registrations owned by Parent; (ii) all patent applications
and other Proprietary Assets that are currently in the name of
inventors or other Persons and for which Parent has the right to
receive an assignment; and (iii) all material third party
licenses for Proprietary Assets to which Parent is the licensee
party. Parent has good, valid and marketable title to, or has a
valid right to use, license or otherwise exploit, all of the
material Parent Proprietary Assets necessary for the conduct of
the Parent's business as presently conducted, free and clear of
all Encumbrances. Parent has not developed jointly with any
other Person any material Proprietary Asset with respect to which
such other Person has any rights. There is no Parent Material
Contract pursuant to which any Person has any right (whether or
not currently exercisable) to use, license or otherwise exploit
any Parent Proprietary Asset owned or exclusively licensed by the
Parent.
(b) Except as would not, individually or in the aggregate, have
a Material Adverse Effect on the Parent, (i) to the knowledge of
the Parent, all Parent Proprietary Assets owned by Parent are
subsisting and in effect and valid and enforceable; (ii) none of
the Parent Proprietary Assets and no Proprietary Asset that is
currently being developed or reduced to practice or which is the
subject of a current invention disclosure by the Parent (either
by itself or with any other Person) to the knowledge of the
Parent infringes, misappropriates, conflicts with or otherwise
violates any Proprietary Asset owned or used by any other Person;
(iii) none of the products or services that is or has been
designed, created, developed, assembled, performed, manufactured,
sold, marketed or licensed by the Parent is to the knowledge of
the Parent infringing, misappropriating or making any unlawful or
unauthorized use of any Proprietary Asset owned or used by any
other Person, and, none of such products or services has at any
time infringed, misappropriated or made any unlawful or
unauthorized use of, and the Parent has not received in the past
three (3) years any written, or to the Parent's knowledge, oral
notice of any actual, alleged, possible or potential
infringement, misappropriation or unlawful or unauthorized use
of, any Proprietary Asset owned or used by any other Person; (iv)
the operation of the business of the Parent as it currently is
conducted does not and will not when conducted by the Surviving
Entity in substantially the same manner following the Closing,
infringe or misappropriate or make any unlawful or unauthorized
use of any Proprietary Asset of any other Person; and (v) to the
Parent's knowledge, no other Person is infringing,
misappropriating or making any unlawful or unauthorized use of,
and no Proprietary Asset owned or used by any other Person
infringes or conflicts with, any Parent Proprietary Asset, and no
such claims have been asserted or threatened against any Person
by the Parent or, to the knowledge of the Parent, any other
Person, in the past three (3) years. The Parent Proprietary
Assets constitute all the Proprietary Assets necessary to enable
the Parent to conduct its business in the manner in which such
business is currently being conducted.
(c) The Parent has taken all reasonable steps to protect its
rights in confidential information and trade secrets of the
Parent or provided by any other Person to the Parent.
(d) With respect to the use of software in the business of the
Parent as such business is currently conducted, to the knowledge
of the Parent, no such software contains defects in its operation
or any device or feature designed to disrupt, disable, or
otherwise impair the functioning of any software. Such software
has been validated for its use. There have been no material
security breaches in the Parent's information technology systems,
and there have been no disruptions in the Parent's information
technology systems that materially adversely affected such
Parent's business or operations.
(e) All products of the Parent ("Parent Product") conform in all
material respects with all applicable contractual commitments and
all express and implied warranties, the Parent's published
product specifications and with all regulations, certification
standards and other requirements of any applicable governmental
entity or third party. Except as set forth in the Parent's SEC
Documents, no claims against the Parent are pending or have been
asserted for liability for replacement or modification of any
Parent Product or other damages in connection therewith other
than in the ordinary course of business. There are no known
material defects in the design or technology embodied in any
Parent Product which impair or are likely to impair the intended
use of such Parent Product. There is no presently pending, or,
to the knowledge of the Parent, threatened, and, to the knowledge
of the Parent, there is no basis for, any civil, criminal or
administrative actions, suits, demands, claims, hearings, notices
of violation, investigations, proceedings or demand letters
relating to any alleged hazard or alleged defect in design,
manufacture, materials or workmanship, including any failure to
warn or alleged breach of express or implied warranty or
representation, relating to any Parent Product. The Parent has
not extended to any of its customers any written product
warranties, indemnifications or guarantees that deviate in any
material respect from the standard product warranties,
indemnification arrangements or guarantees of the Parent.
SECTION 4. [RESERVED]
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 ADDITIONAL AGREEMENTS.
Each of Parent and the Company shall use its
commercially reasonable efforts to take, or cause to be taken,
all actions necessary to carry out the intent and purposes of
this Agreement and to consummate the Merger and make effective
the other transactions contemplated by this Agreement. Without
limiting the generality of the foregoing, each party to this
Agreement (i) shall cooperate fully with the other party, shall
execute and deliver such further documents, certificates,
agreements and instruments and shall take such other actions as
may be reasonably requested by the other party to evidence or
reflect the transactions contemplated by this Agreement
(including the execution and delivery of all documents,
certificates, agreements and instruments reasonably necessary for
all filings hereunder), (ii) give all notices (if any) required
to be made and given by such party in connection with the Merger
and the other transactions contemplated by this Agreement; (iii)
shall use its commercially reasonable efforts to obtain each
Consent (if any) required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) by such
party in connection with the Merger or any of the other
transactions contemplated by this Agreement; and (iv) shall use
its commercially reasonable efforts to lift any restraint,
injunction or other legal bar to the Merger; provided, however,
that Parent or the Company shall not be required to sell, divest
or otherwise dispose of any material assets of the Company or
Company or any assets of Parent or any of the Dynasil
Corporations. Each of the Company and Parent shall promptly
deliver to the other party a copy of each such filing made, each
such notice given and each such Consent obtained by it during the
Pre-Closing Period.
5.2 PUBLIC DISCLOSURE.
The initial press release relating to this Agreement
shall be a joint press release and thereafter Parent and the
Company shall consult with each other and shall agree upon the
text of any press release or public statement before issuing any
press release or otherwise making any public statements with
respect to the transactions contemplated hereunder and shall not
issue any such press release or make any such public statement
prior to such consultation and agreement, except as may be
required by Legal Requirements or any listing agreement with, or
the rules of the NASD, in which case commercially reasonable
efforts to consult with the other party shall be made prior to
such release or public statement.
5.3 RESIGNATION OF DIRECTORS.
To the extent requested by Parent, the Company shall
deliver to Parent upon the execution and delivery of this
Agreement the resignations of the directors of the Company from
the board of directors of the Company, effective as of the
Effective Time.
5.4 TAKEOVER LAWS.
If any Takeover Law may become, or may purport to be,
applicable to the transactions contemplated in this Agreement,
each of Parent and the Company and the members of their
respective Boards of Directors, to the extent permissible under
applicable Legal Requirements, will grant such approvals and take
such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as
practicable, and in any event prior to the Termination Date, on
the terms and conditions contemplated hereby and otherwise, to
the extent permissible under applicable Legal Requirements, act
to eliminate the effect of any Takeover Law on any of the
transactions contemplated by this Agreement.
5.5 SECTION 16.
(a) Parent shall, prior to the Effective Time, cause Parent's
Board of Directors to approve the issuance of Parent equity
securities (including derivative securities) in connection with
the Merger with respect to any employees of the Company who, as a
result of their relationship with Dynasil as of or following the
Effective Time, are subject or will become subject to the
reporting requirements of Section 16 of the Exchange Act to the
extent necessary for such issuance to be an exempt acquisition
pursuant to SEC Rule 16b-3. Prior to the Effective Time, the
Board of Directors of the Company shall approve the disposition
of Company equity securities (including derivative securities) in
connection with the Merger by those directors and officers of the
Company subject to the reporting requirements of Section 16 of
the Exchange Act to the extent necessary for such disposition to
be an exempt disposition pursuant to SEC Rule 16b-3. Such
actions shall be consistent with all current applicable rules,
interpretation and guidance of the SEC, including the No-Action
Letter, dated January 12, 1999, issued by the SEC to Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ llp and SEC Rule 16b-3(d) and (e).
5.6 LITIGATION.
The Company shall give Parent the opportunity to
participate in the defense of any stockholder litigation against
the Company and/or its directors relating to the transactions
contemplated by this Agreement. Parent shall give the Company
the opportunity to participate in the defense of any stockholder
litigation against Parent and/or its directors relating to the
transactions contemplated by this Agreement, provided, however,
that the Company shall not enter into any settlement or
compromise any such stockholder litigation without Parent's prior
written consent.
5.7 STOCKHOLDERS' CAPITAL.
(a) As per the methodology in Exhibit D, immediately prior to
Closing the Seller shall be entitled to extract a net amount of
assets less liabilities (retained by the Seller) which equals the
retained earnings as of the date of Closing less the net book
value of fixed assets and inventory (the "Retained Earnings
Extraction"). The Retained Earnings Extraction shall be
estimated as of the Closing date with assets and liabilities
divided at that time between Buyer and Seller using the Exhibit D
methodology. In the extraction of assets and liabilities, Seller
shall retain all tax related items excluding sales tax. Seventy
five (75) days following Closing as per Section 5.9(c) and
5.9(d), Parent and Stockholders' Agent shall calculate the final
Retained Earnings Extraction and any balance owed by one of the
parties will be paid in cash by wire transfer within five (5)
days except as outlined in the balance of this section. Seller
shall be responsible for payment of all purchases and debts
(collectively, the "Business Debts") which were incurred prior to
the Closing Date which are not reflected in the balance sheet
liabilities assumed by the Buyer, whether or not the invoice was
received prior to the purchase date and the final retained
earnings calculation shall incorporate the impact of these.
Seller shall be responsible to pay any costs which are required
to wrap up the Seller's business activities such as the A-133
audit.
(b) During the seventy five day period, with oversight from the
Stockholders' Agent, Parent shall set-up separate accounts to
administer extracted assets and liabilities on behalf of the
Company (collectively, "Company Extraction Account"). If
accounts receivable and/or Progress ▇▇▇▇▇▇▇▇ must be divided
between Surviving Entity and Company, specific receivables shall
be identified for Company Extraction Account and Parent shall
have the right to allocate any questionable or undesirable
receivables to Company Extraction Account. Surviving Company
shall credit payments received for Company's retained assets such
as accounts receivable and Progress ▇▇▇▇▇▇▇▇ to Company
Extraction Account as well as to pay Company's Business Debts
from Company Extraction Account as presented from available
Company funds. Stockholders shall be entitled to withdraw funds
from Company Extraction Account so long as the net value of the
account remains at a minimum value of $1 million with a minimum
of $500,000 of cash in aggregate, for the combination of this
Agreement and the Asset Purchase Agreement. The Company
Extraction Account shall contain and be applied toward amounts
relating to this Agreement and the Asset Purchase Agreement. At
the end of the seventy five day period, Stockholders can withdraw
all remaining cash in the Company Extraction Account if only cash
remains in such account. If non-cash assets and liabilities
remain open in the Company Extraction Account at the end of the
seventy five day period, Stockholders retain responsibility for
such items and Parent and/or Surviving Entity may require a
reasonable balance to be maintained in the Company Extraction
Account and will assist in the administration as reasonably
requested by Stockholders.
(c) Within seventy five (75) days after the Closing Date, Parent
shall prepare and deliver to the Stockholders' Agent a
calculation of the Company's retained earnings, less the net book
value of inventory and equipment as of the Closing Date using the
same methodology applied in calculating the Retained Earnings
Extraction Estimate. The Parent shall make available to the
Stockholders' Agent the work papers and materials used to
determine the final amount.
(d) If Parent or Stockholders' Agent has any objections to the
final Retained Earnings Extraction amount, Parent or
Stockholders' Agent, as appropriate, will deliver a detailed
statement describing such objections to the other party, within
ten (10) business days after receiving the Retained Earnings
Extraction computation. If Parent or Stockholders' Agent, as
appropriate, fails to deliver objections to the final Retained
Earnings Extraction calculation within such period, the party
failing to deliver such objections will be deemed to have
accepted the calculation. The Parent and Stockholders' Agent
will attempt in good faith to resolve any objections. If Parent
and Stockholders' Agent do not reach a resolution of all
objections within thirty (30) days after the recipient has
received the statement of objections, Parent and Stockholders'
Agent will select a mutually acceptable accounting firm to
resolve any remaining objections. If Parent and Stockholders'
Agent are unable to agree on the choice of an accounting firm,
they will select a nationally recognized accounting firm by lot.
The accounting firm will resolve any such objections and
determine, in accordance with the methodology used to calculate
the Retained Earnings Extraction amount. The parties will
provide the accounting firm, within ten (10) days of its
selection, with a definitive statement of the position of each
party with respect to each unresolved objection and will advise
the accounting firm that the parties accept the accounting firm
as the appropriate Person to calculate the Retained Earnings
Extraction amount for all purposes relevant to the resolution of
the unresolved objections. Parent will provide the accounting
firm access to the books and records of the Surviving Entity.
The accounting firm will have thirty (30) days to carry out a
review of the unresolved objections and prepare a written
statement of its determination regarding each unresolved
objection. The determination of any accounting firm so selected
will be set forth in writing and will be conclusive and binding
upon the parties. The cost of the accounting firm will be split
equally between the parties.
5.8 TAX-FREE REORGANIZATION.
Neither Parent nor Merger Sub will take any action or
refrain from taking any action which would cause the Merger to
fail to qualify as a tax-free reorganization under Section 368
(a)(1)(A) of the Code, unless such action is typically taken or
not taken by a surviving corporation in a tax-free merger or its
parent. Neither Parent nor Merger Sub shall be liable to the
Company or the Stockholders if the Merger does not qualify as a
tax-free reorganization, except to the extent Parent or Merger
Sub violate the covenants in the previous sentence.
SECTION 6. CONDITIONS TO THE MERGER
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION.
The respective obligations of the Company, Parent and
Merger Sub to consummate the Merger are subject to the
satisfaction or, to the extent permitted by Legal Requirements,
the waiver by each party on or prior to the Effective Time of
each of the following conditions:
(a) No provision of any applicable Legal Requirements and no
Order shall be in effect that prohibits the consummation of the
Merger or the other transactions contemplated by this Agreement,
provided, however, that each of Parent, Merger Sub and the
Company shall have used its commercially reasonable efforts to
(i) prevent the application of any Legal Requirement; and (ii)
prevent the entry of any Order that prohibits the consummation of
the Merger or the other transactions contemplated by this
Agreement; and
(b) The Parent and Stockholders' Agent shall have agreed to a
Stockholders' Capital amount.
6.2 ADDITIONAL CONDITIONS TO PARENT'S AND MERGER SUB'S
OBLIGATIONS.
The respective obligations of Parent and Merger Sub to
consummate the Merger are subject to the satisfaction or, to the
extent permitted by Legal Requirements, the waiver by Parent and
Merger Sub on or prior to the Effective Time of each of the
following conditions:
(a) The Company shall have performed or complied in all material
respects with all of its covenants, obligations or agreements
required to be performed or complied with under the Agreement
prior to the Effective Time;
(b) The representations and warranties of the Company contained
in this Agreement shall be accurate, as of the date of this
Agreement, and on and as of the Effective Time, except, for those
representations and warranties which address matters only as of a
particular date (which shall remain true and correct on and as of
such particular date), with the same force and effect as if made
on and as of the Effective Time;
(c) Parent shall have received a certificate from an executive
officer of the Company certifying as to the matters set forth in
paragraphs (a) and (b) of this Section 6.2 in substantially the
form attached hereto as Exhibit B;
(d) Since the Company Balance Sheet Date, there shall not have
been a Material Adverse Effect on the Company;
(e) Parent shall have secured financing, on terms reasonably
acceptable to it, for the Asset Purchase Agreement no later than
July 1, 2008;
(f) Parent shall have completed its due diligence to its
satisfaction;
(g) The Stockholders shall have surrendered certificates
representing all Shares;
(h) ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ shall have agreed to
employment agreements with the Surviving Entity on mutually
agreeable terms;
(i) ▇▇▇▇▇▇▇ River Realty LLC, d/b/a "▇▇▇▇▇▇▇▇, Inc." shall have
executed and delivered the Lease, in substantially the form
attached hereto as Appendix I; and
(j) The consummation of the Asset Purchase Agreement
and the transactions contemplated thereby.
6.3 ADDITIONAL CONDITIONS TO THE COMPANY'S OBLIGATIONS.
The obligations of the Company to consummate the Merger
are subject to the satisfaction or, to the extent permitted by
Legal Requirements, the waiver by the Company on or prior to the
Effective Time of each of the following conditions:
(a) Parent or Merger Sub shall have performed or complied in all
material respects with all of their respective covenants,
obligations or agreements required to be performed or complied
with under the Agreement prior to the Effective Time;
(b) The representations and warranties of Parent contained in
this Agreement not qualified by Material Adverse Effect shall be
accurate, except where the failure to be accurate would not, in
the aggregate, reasonably be expected to have a Material Adverse
Effect and the representations and warranties of Parent contained
in this Agreement which are qualified by Material Adverse Effect
shall be accurate, in the case of each, as of the date of this
Agreement, and on and as of the Effective Time, except, in each
case, for those representations and warranties which address
matters only as of a particular date (which (i) if not qualified
by Material Adverse Effect shall remain true and correct on and
as of such particular date, except where the failure to be
accurate would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect and (ii) if qualified by Material
Adverse Effect shall remain true and correct on and as of such
particular date), with the same force and effect as if made on
and as of the Effective Time;
(c) Since the Parent Balance Sheet Date, there shall not have
been a Material Adverse Effect on the Dynasil Corporations;
(d) The Company shall have received a certificate from an
executive officer of Parent certifying as to the matters set
forth in paragraphs (a), (b) and (c) of this Section 6.3 in
substantially the form attached hereto as Exhibit C;
(e) The Surviving Entity shall have executed and delivered the
Lease, in substantially the form attached hereto as Appendix I;
and
(f) The consummation of the Asset Purchase Agreement and the
transactions contemplated thereby.
The foregoing conditions are for the sole benefit of
the Company and may, subject to the terms of the Agreement, be
waived by the Company, in whole or in part at any time and from
time to time, in the sole discretion of the Company. The failure
by the Company at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted
at any time and from time to time prior to the Effective Time.
SECTION 7. EXPENSES.
7.1 EXPENSES.
(a) Expenses. Except as set forth in this Section, fees and
expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement ("Transaction
Expenses") shall be paid by the party incurring such expenses,
whether or not the Merger is consummated.
(b) Transfer Taxes. Any transfer fee, real estate or otherwise,
incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the Company
and/or its Subsidiaries.
SECTION 8. INDEMNIFICATION
8.1 SURVIVAL; INDEMNITY.
The representations and warranties of the parties shall
survive the Closing for a period of two (2) years; provided,
however, that (i) representations and warranties contained in
Section 2.12 shall survive until the expiration of the applicable
statute of limitations under the Code; (ii) all representations
and warranties relating to claims on SBIR contracts shall survive
until the expiration of the respective periods of government
audit and/or adjustment thereunder, plus ninety (90) days; and
(iii) the representations and warranties in Sections 2.1, 2.2,
2.3, 2.13, 2.14 and Section 2A.1 shall survive until the
expiration of the applicable statutes of limitations (as
applicable, the "Survival Date"). Nothing contained in the
foregoing sentence shall prevent recovery under this Section 8
(A) in the event of fraud or intentional misrepresentation or (B)
after the applicable Survival Date so long as the party making a
claim or seeking recovery complies with the provisions of clause
(1) and (2) of the following sentence. No party shall have any
claim or right of recovery for any breach of a representation,
warranty, covenant or agreement unless (1) written notice is
given in good faith by that party to the other party of the
representation, warranty, covenant or agreement pursuant to which
the claim is made or right of recovery is sought, setting forth
in reasonable detail the breach of the representation, warranty,
covenant or agreement, the amount or nature of the claim being
made, if then ascertainable, and the general basis therefor and
(2) such notice is given prior to the Survival Date. For any
claim relating to Taxes, Environmental Matters and/or SBIR
contracts, the representations and warranties contained in this
Agreement, in the Company Disclosure Letter, the Parent
Disclosure Letter, any exhibit or schedule to this Agreement or
any certificate delivered pursuant to this Agreement shall
survive any audit or investigation by any party hereto and shall
not be affected or deemed waived by reason of the fact that any
such party or his or its representatives knew or should have
known that any such representation or warranty is or might be
inaccurate in any respect. The covenants and agreements set
forth in this Agreement shall survive until performed in full.
8.2 INDEMNIFICATION BY STOCKHOLDERS.
Subject to the other provisions of this Section 8, each
Stockholder agrees, severally and not jointly (based on such
Stockholder's Pro Rata Share), to defend, indemnify Parent and
Merger Sub and their respective officers, directors,
stockholders, employees, affiliates (including without limitation
the Surviving Corporation), attorneys, accountants and agents
(the "Parent Parties"), and hold them harmless from and against,
any and all damages, losses, liabilities, costs and expenses
(including, without limitation, reasonable expenses of investiga
tion and reasonable attorneys' fees and expenses in connection
with any action, suit or proceeding) (collectively, "Damages")
incurred or suffered by any of the Parent Parties arising out of
(i) any breach or alleged breach of any representation, warranty,
covenant or agreement of Company contained in this Agreement, the
Company Disclosure Letter or any exhibit or schedule to this
Agreement or any certificate delivered by Company pursuant to
this Agreement, and (ii) any breach of any representation,
warranty, covenant or agreement of any of the Stockholders
contained herein. From and after the Effective Time, Company and
Stockholder indemnification obligations under this Section 8.2
shall be satisfied pursuant to the limits set forth in the Asset
Purchase Agreement.
8.3 INDEMNIFICATION BY PARENT.
Subject to the other provisions of this Section 8,
Parent agrees to indemnify, and to hold the Stockholders and the
Company harmless from and against, any and all Damages incurred
or suffered by the Company arising out of any breach or alleged
breach of any representation, warranty, covenant or agreement of
Parent. From and after the Effective Time, Parent
indemnification obligations under this Section 8.3 shall be
satisfied pursuant to the limits set forth in the Asset Purchase
Agreement.
8.4 MISCELLANEOUS INDEMNITY PROVISIONS.
Notwithstanding anything to the contrary contained in
this Agreement, from and after the Effective Time:
(a) To the extent that any of the Parent Parties has any claim
for Damages arising out of this Agreement, the sole and exclusive
remedy for such Parent Party shall be to make a claim for
indemnification under, from the consideration, and pursuant to
the limits set forth in, the Asset Purchase Agreement.
(b) To the extent that the Stockholder or the Company has any
claim against Parent for Damages arising out of this Agreement,
the sole and exclusive remedy for such Stockholder shall be to
make a claim for indemnification under, from the consideration,
and pursuant to the limits set forth in, the Asset Purchase
Agreement.
(c) For purposes of determining the amount of any Damages under
Section 8.2 or 8.3, (A) such amount shall be reduced by the
amount of any insurance proceeds received by the Indemnified
Party in respect of the Damages; and (B) such amount shall
exclude all consequential or special damages suffered by the
Indemnified Party and all punitive damages awarded against the
Indemnifying Party.
(d) Notwithstanding anything in this Agreement or any statute or
the common law to the contrary, the parties acknowledge and agree
that the indemnification rights set forth in this Article 8 shall
be the sole and exclusive remedy of the Indemnified Parties for
Damages of any kind or nature arising under this Agreement, any
statute or the common law.
(e) Each party agrees to use commercially reasonable efforts to
mitigate any Damages or potential Damages for which the other
party or parties is or may be obligated to indemnify such party
under this Article 8.
(f) Other than as set forth in Section 8.1, no
Stockholder shall be liable to any Parent Party for Damages with
respect to or in connection with any breach of any representation
or warranty of the Company and/or the Stockholders for which any
of the Parent Parties had actual knowledge, based on a writing
delivered by or on behalf of the Company, on and/or before the
Closing Date.
8.5 NOTIFICATION OF CLAIMS.
Upon any party (the "Indemnified Party") becoming aware
of a fact, condition or event that constitutes a basis for a
claim for Damages in respect thereof against any other party (the
"Indemnifying Party") under Section 8.2 or 8.3, if such a claim
is to be made, the Indemnified Party will with reasonable
promptness notify the Indemnifying Party or Parties in writing of
such fact, condition or event, but in any event within sufficient
time to permit the Indemnifying Party or Parties to respond
timely to any complaint or other process served on the
Indemnified Party. The failure to notify the Indemnifying Party
or Parties under this Section 8.5 shall not relieve any
Indemnifying Party of any liability that it may have to the
Indemnified Party except to the extent that such failure to
notify shall have resulted in a waiver of any lawful and valid
affirmative defense to any third-party claim or otherwise
materially prejudices the Indemnifying Party or Parties in
connection with the administration or defense of such third-party
claim.
8.6 THIRD-PARTY CLAIMS.
(a) Upon receipt by the Indemnifying Party or Parties
of any notice of claim for indemnification hereunder arising from
a third-party claim, the Indemnifying Party or Parties shall
assume the administration and defense of such third-party claim
with counsel that is reasonably satisfactory to the Indemnified
Party and shall proceed with the administration and defense of
such third-party claim diligently and in good faith; provided,
however, that any Indemnifying Party shall be entitled to assume
the administration and defense of such third-party claim only if
it agrees in writing with the Indemnified Party that it is
obligated to indemnify the Indemnified Party pursuant to this
Section 8 with respect to such third-party claim; and provided,
further that no Indemnifying Party shall be entitled to assume
the administration and defense of any third-party claim that (i)
seeks an injunction or other equitable relief that might
materially and adversely affect any Parent Party, or (ii)
involves any criminal action or any claim that could reasonably
be expected to result in a criminal action against any Parent
Party. The Indemnified Party shall be fully consulted by the
Indemnifying Party or Parties and shall have the right to
participate, at its own expense, in the investigation,
administration and defense of such third-party claim. Any party
hereto receiving notice of any proposed settlement of any such
third-party claim shall promptly provide a copy of such notice to
the other parties hereto. The Indemnifying Party or Parties
shall not have the right to settle or compromise any third-party
claim for which indemnification is being sought hereunder without
the consent of the Indemnified Party unless as a result of such
settlement or compromise the Indemnified Party is fully
discharged and released from any and all liability with respect
to such third-party claim. The Indemnified Party shall make
available to the Indemnifying Party or Parties and its counsel
all books, records, documents and other information relating to
any third-party claim for which indemnification is sought
hereunder, and the parties to this Agreement shall render to each
other reasonable assistance in the defense of any such third-
party claim.
(b) In the event more than one party is an
Indemnifying Party, a majority in interest of such Indemnifying
Parties shall assume the administration and defense of such third-
party claim and appoint counsel reasonably satisfactory to the
Indemnified Party and proceed with the administration and defense
of such third-party claim diligently and in good faith. All
decisions and other actions that are taken by such majority in
interest of the Indemnifying Parties in connection with the
appointment of such counsel and the administration and defense of
such third-party claim shall be final, binding and conclusive on
all other Indemnifying Parties, and none of such other
Indemnifying Parties obligations under this Section 8 shall be
diminished as a result of such administration and defense of such
third-party claim.
(c) Notwithstanding any other provision of this
Agreement, the Indemnified Party shall have the absolute right,
at its election (to be exercised in its sole discretion by
written notice to the Indemnifying Party or Parties) to assume
from the Indemnifying Party or Parties the administration and
defense of any third-party claim against the Indemnified Party;
provided, however, in the event of an Internal Revenue Service or
state income tax audit of the Company (and/or the Merger Sub)
which involves any tax years and income tax returns of the
Company for which the Company filed income tax returns as an S
corporation, the Merger Sub agrees (i) to fully cooperate with
the Indemnifying Party(ies) in connection with such audit,
provided for purposes of this Agreement, all reasonable costs and
expenses (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) associated with
such cooperation and/or any amounts paid and/or liability
incurred by the Company or Merger Sub in connection with, related
to or otherwise arising out of, such audit shall be considered
Damages, (ii) to not take any action contrary to the instructions
of the Indemnifying Party(ies) and (iii) to permit the Indemnify
Party(ies) to have full control of the audit process. In the
event the Indemnified Party exercises the right provided by this
Subsection, the Indemnifying Party or Parties shall be
responsible for the costs and expenses of the administration and
defense of such claim incurred prior to the Indemnified Party or
Parties' assumption of the administration and defense of such
claim and shall not be responsible for costs and expenses
incurred after such assumption.
SECTION 9. MISCELLANEOUS PROVISIONS
9.1 AMENDMENT.
This Agreement may be amended with the approval of the
respective Boards of Directors of the Company, Merger Sub and
Parent at any time (whether before or after any required
approvals by the stockholders of the Company or Parent);
provided, however, that after any such required stockholder
approval has been obtained, no amendment shall be made which by
applicable Legal Requirements requires further approval of the
stockholders of either the Company or Parent without the further
approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of
the parties hereto.
9.2 WAIVER.
(a) No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on
the part of any party in exercising any power, right, privilege
or remedy under this Agreement, shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No party shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy
under this Agreement, unless the waiver of such claim, power,
right, privilege or remedy is expressly set forth in a written
instrument duly executed and delivered on behalf of such party;
and any such waiver shall not be applicable or have any effect
except in the specific instance in which it is given.
9.3 ENTIRE AGREEMENT; COUNTERPARTS.
This Agreement (and the exhibits and schedules hereto)
constitutes the entire agreement among the parties hereto and
supercedes all other prior agreements and understandings, both
written and oral, among or between any of the parties hereto with
respect to the subject matter hereof. This Agreement may be
executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same
instrument.
9.4 APPLICABLE LAW; JURISDICTION.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard
to principles of conflict of laws. The parties hereto hereby
declare that it is their intention that this Agreement shall be
regarded as made under the laws of the State of Delaware and that
the laws of said State shall be applied in interpreting its
provisions in all cases where legal interpretation shall be
required. Each of the parties hereto agrees that any action,
suit or proceeding arising out of the transactions contemplated
by this Agreement (a "Proceeding") shall be commenced and
conducted exclusively in the federal or state courts of the State
of Delaware, and each of the parties hereby irrevocably and
unconditionally: (i) consents to submit to the exclusive
jurisdiction of the federal and state courts in the State of
Delaware for any Proceeding (and each party agrees not to
commence any Proceeding, except in such courts); (ii) waives any
objection to the laying of venue of any Proceeding in the federal
or state courts of the State of Delaware; (iii) waives, and
agrees not to plead or to make, any claim that any Proceeding
brought in any federal or state court of the State of Delaware
has been brought in an improper or otherwise inconvenient forum;
and (iv) waives, and agrees not to plead or to make, any claim
that any Proceeding shall be transferred or removed to any other
forum. Each of the parties hereto hereby irrevocably and
unconditionally agrees: (1) to the extent such party is not
otherwise subject to service of process in the State of Delaware,
to appoint and maintain an agent in the State of Delaware as such
party's agent for acceptance of legal process, and (2) that
service of process may also be made on such party by prepaid
certified mail with a proof of mailing receipt validated by the
United States Postal Service constituting evidence of valid
service, and that service made pursuant to clause (1) or (2)
above shall have the same legal force and effect as if served
upon such party personally within the State of Delaware.
9.5 ATTORNEYS' FEES.
In any action at law or suit in equity to enforce this
Agreement or the rights of any of the parties hereunder, the
prevailing party in such action or suit shall be entitled to
reasonable attorneys' fees and all other reasonable costs and
expenses incurred in such action or suit.
9.6 ASSIGNABILITY; THIRD PARTY BENEFICIARIES.
This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties
hereto and their respective successors and permitted assigns;
provided, however, that neither this Agreement nor any of the
Stockholder's, Company's or Parent's rights hereunder may be
assigned without the prior written consent of the other parties,
as the case may be, and any attempted assignment of this
Agreement or any of such rights without such consent shall be
void and of no effect; provided, further, however, that, except
for assignments by Merger Sub to a wholly-owned Subsidiary of
Parent, neither this Agreement nor any of Parent's or Merger
Sub's rights hereunder may be assigned by Parent or Merger Sub
without the prior written consent of the Company, and any
attempted assignment of this Agreement or any of such rights by
Parent or Merger Sub without such consent shall be void and of no
effect. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any Person (other than the
parties hereto) any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement except for (i)
the rights, benefits and remedies granted to the Indemnified
Persons under Section 8.6; and (ii) the rights of the Stockholder
to receive Merger Consideration in accordance with the provisions
of this Agreement.
9.7 NOTICES.
Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and
received (i) on the date of delivery if delivered personally,
(ii) on the date of confirmation of receipt (or the first
business day following such receipt if the date is not a business
day) if delivered by a nationally recognized overnight courier
service. All notices hereunder shall be delivered to the address
or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone
number as such party shall have specified in a written notice
given to the other parties hereto):
If to Parent or Merger Sub:
Dynasil Corporation of America
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to (which copy shall not constitute notice
hereunder):
Bond, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Company:
Radiation Monitoring Devices, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to (which copy shall not constitute notice
hereunder):
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Stockholders' Agent:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
9.8 SEVERABILITY.
If any provision of this Agreement or any part of any
such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or
part thereof shall, with respect to such circumstances and in
such jurisdiction, be deemed amended to conform to applicable
Legal Requirements so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability
of such provision or part thereof under such circumstances and in
such jurisdiction shall not affect the validity or enforceability
of such provision or part thereof under any other circumstances
or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such
provision or the validity or enforceability of any other
provision of this Agreement; provided, however, that the economic
or legal substance of the transactions contemplated hereby is not
affected in a materially adverse manner to any party. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith in general fashion to modify this
Agreement so as to effect the original interest of the parties as
closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the maximum
extent possible.
9.9 SPECIFIC PERFORMANCE.
The parties agree that irreparable damage would occur
in the event that any provision of this Agreement is not
performed in accordance with its specific terms or is otherwise
breached. The parties agree that, in the event of any breach by
the other party of any covenant or obligation contained in this
Agreement, the other party shall be entitled (in addition to any
other remedy that may be available to it, including monetary
damages) to seek (a) a decree or order of specific performance to
enforce the observance and performance of such covenant or
obligation, and (b) an injunction restraining such breach. The
parties further agree that no party to this Agreement shall be
required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any
remedy referred to in this Section 9.9, and each party waives any
objection to the imposition of such relief or any right it may
have to require the obtaining, furnishing or posting of any such
bond or similar instrument.
9.10 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter
genders; the feminine gender shall include the masculine and
neuter genders; and the neuter gender shall include masculine and
feminine genders.
(b) The parties hereto agree that any rule of construction to
the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or
interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be
terms of limitation, but rather shall be deemed to be followed by
the words "without limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to
Sections of this Agreement and Exhibits to this Agreement.
9.11 STOCKHOLDERS' AGENT.
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇ is hereby appointed as agent and attorney-in-
fact for each Stockholder, for and on behalf of each of them, to
act as the Stockholders' Agent for the Stockholders as provided
for in this Agreement, to give and receive notices, instructions
and communications pursuant to this Agreement or such other
agreement(s) contemplated hereby, to agree to, negotiate, enter
into settlements and compromises of, and demand arbitration and
comply with orders of courts and awards of arbitrators with
respect to claims and to take all actions necessary or
appropriate in the judgment of the Stockholders' Agent for the
accomplishment of the foregoing in accordance with the terms and
provisions of this Agreement or such other agreement(s)
contemplated hereby. Any vacancy in the position of the
Stockholders' Agent due to death, disability or incapacity shall
be promptly filled by Stockholders who owned a majority of the
Shares prior to the Closing. No bond shall be required of the
Stockholders' Agent, and the Stockholders' Agent shall not
receive compensation for his services. Notices, communications
or instructions to or from the Stockholders' Agent hereunder or
under such other agreement(s) contemplated hereby shall
constitute notice to or from each of the Stockholders. The
Stockholders hereby agree that the appointment of the
Stockholders' Agent pursuant to this Section 9.11 shall be
irrevocable except as otherwise provided herein or by applicable
law.
(b) The Stockholders' Agent shall not be liable for any act done
or omitted hereunder as Stockholders' Agent while acting in good
faith and in the exercise of reasonable judgment. The
Stockholders shall jointly indemnify the Stockholders' Agent and
hold the Stockholders' Agent harmless against any loss, liability
or expense incurred without gross negligence or bad faith on the
part of the Stockholders' Agent and arising out of or in
connection with the acceptance or administration of the
Stockholders' Agent's duties hereunder.
(c) A decision, act, consent or instruction of the Stockholders'
Agent relating to this Agreement or such other agreement(s)
contemplated hereby shall constitute a decision of all the
Stockholders and shall be final, binding and conclusive upon each
of them, and the Parent may rely upon any such written decision,
consent or instruction of the Stockholders' Agent as being the
decision, consent or instruction of every Stockholder. The
Parent, Merger Sub and Surviving Entity are hereby relieved from
any liability to any person for any acts done by it in accordance
with such decision, consent or instruction of the Stockholders'
Agent.
[Signatures on Following Page]
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the date first above written.
DYNASIL CORPORATION OF AMERICA
By
:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
RMD ACQUISITION SUB, INC.
By
:
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
RADIATION MONITORING DEVICES, INC.
By
:
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
STOCKHOLDER
By _______________________________
: __________
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee of
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1988 Family Trust
By _______________________________
: _______
▇▇▇▇▇ ▇▇▇▇
_______________________________
_______
▇▇▇▇▇ ▇▇▇▇
By _______________________________
: _______
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page to Agreement and Plan of Merger]
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit
A):
"Agreement" is defined in the Preamble to this
Agreement.
"Asset Purchase Agreement" is defined in the Recitals
of this Agreement.
"Certificate of Merger" is defined in Section 1.3 to
this Agreement.
"Claim" shall mean any and all claims, demands,
actions, causes of action, suits, proceedings and administrative
proceedings.
"Closing" is defined in Section 1.3 to this Agreement.
"Closing Date" is defined in Section 1.3 to this
Agreement.
"Code" is defined in the Recitals to this Agreement.
"Company" is defined in the Preamble to this Agreement.
"Company Balance Sheet" is defined in Section 2.5(d) of
this Agreement.
"Company Balance Sheet Date" is defined in Section
2.5(d) of this Agreement.
"Company Common Stock" shall mean the Common Stock,
$0.001 par value, of the Company.
"Company Contract" shall mean any Contract: (a)
currently in force to which the Company is a party or (b) by
which the Company or any asset of the Company is bound or has any
continuing obligations or rights.
"Company Disclosure Letter" is defined in Section 2 of
this Agreement.
"Company Extraction Account" is defined in Section
5.9(b) of this Agreement
"Company Employee Plans" is defined in Section 2.13(a)
of this Agreement.
"Company ERISA Affiliate" is defined in Section 2.13(a)
of this Agreement.
"Company Financial Statements" is defined in Section
2.5(a) of this Agreement.
"Company Material Contract" is defined in Section
2.8(a) of this Agreement.
"Company Options" is defined in Section 2.3(b) of this
Agreement.
"Company Organization Documents" is defined in Section
2.1 of this Agreement.
"Company Permits" is defined in Section 2.10(b) of this
Agreement.
"Company Product" is defined in Section 2.7(f) of this
Agreement.
"Company Proprietary Asset" shall mean any Proprietary
Asset owned by or licensed to the Company or otherwise used by
the Company.
"Company Stockholders" shall mean the holders of
Company Common Stock.
"Company Stock Certificate" is defined in Section 1.6
of this Agreement.
"Company Stock Rights" is defined in Section 2.3(b) of
this Agreement.
"Company 401(k) Plan" shall mean the RADIATION
MONITORING DEVICES, INC. 401(k) Plan.
"Consent" shall mean any approval, consent,
ratification, permission, waiver or authorization (including any
Governmental Authorization).
"Contract" shall mean any legally binding written or
oral agreement, contract, subcontract, lease, understanding,
instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan or commitment or
undertaking of any nature.
"Damages" is defined in Section 8.3 of this Agreement.
"Dynasil Corporation Contract" shall mean any Contract:
(a) to which any of the Dynasil Corporations is a party; (b) by
which any of the Dynasil Corporations or any asset of any of the
Dynasil Corporations is or may become bound or under which any of
the Dynasil Corporations has, or may become subject to, any
obligation; or (c) under which [Company] has or may acquire any
right or interest.
"Dynasil Corporations" is defined in Section 3.1 of
this Agreement.
"Effective Time" is defined in Section 1.3 of this
Agreement.
"Encumbrance" shall mean any lien, pledge,
hypothecation, charge, mortgage, security interest, encumbrance,
claim, infringement, interference, option, right of first
refusal, preemptive right or community property interest
(including any restriction on the voting of any security, any
restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset,
any restriction on the use of any asset and any restriction on
the possession, exercise or transfer of any other attribute of
ownership of any asset); provided that the term Encumbrance shall
not be deemed to include (a) liens for current Taxes or income
Taxes not yet due and payable or that are being contested in good
faith, in each case, and for which adequate reserves have been
recorded, (b) liens for assessments or other governmental charges
or liens of landlords, carriers, warehousemen, mechanics or
materialmen securing obligations incurred in the ordinary course
of business consistent with prior practice that are not yet due
and payable or due but not delinquent or being contested in good
faith, (c) liens incurred in the ordinary course of business
consistent with prior practice in connection with workers'
compensation, unemployment insurance and other types of social
security or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return of money bonds and similar
obligations, (d) purchase money or similar security interests
granted in connection with the purchase of equipment or supplies
in the ordinary course of business consistent with prior practice
in an amount not to exceed $10,000 in the aggregate, (e) liens,
security interests, encumbrances or restrictions which secure
indebtedness which are properly reflected in the Parent 10-KSB,
as the case may be, (f) liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred
after December 31, 2003, provided that the obligations secured by
such liens are not delinquent, (g) such title defects and liens,
if any, as individually or in the aggregate are not reasonably
likely to have a Material Adverse Effect on the Company or the
Dynasil Corporations, as the case may be, and (h) licenses or
other agreements relating to Proprietary Assets which are not
intended to secure an obligation.
"Entity" shall mean any corporation (including any non-
profit corporation), general partnership, limited partnership,
limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization or
entity.
"Environmental Law" shall mean any foreign, federal,
state or local statute, law, rule, regulation, ordinance, treaty,
code, policy or rule of common law now or from time to time in
effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the
environment, natural resources, health, safety or Hazardous
Materials, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Resource
Conservation and Recovery Act, as amended; the Hazardous
Materials Transportation Act, as amended; the Clean Water Act, as
amended; the Toxic Substances Control Act, as amended; the Clean
Air Act, as amended; the Safe Drinking Water Act, as amended; the
Atomic Energy Act, as amended; the Federal Insecticide, Fungicide
and Rodenticide Act, as amended; and the Occupational Safety and
Health Act, as amended; and
"ERISA" is defined in Section 2.13(a) of this
Agreement.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the regulations promulgated thereunder.
"Exchange Agent" is defined in Section 1.7(a) of this
Agreement.
"Exchange Fund" is defined in Section 1.7(a) of this
Agreement.
"GAAP" is defined in Section 2.3(b) of this Agreement.
"Governmental Authorization" shall mean any: (a)
permit, license, certificate, franchise, permission, variance,
clearance, registration, qualification or authorization issued,
granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal
Requirement; or (b) right under any Contract with any
Governmental Body.
"Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district
or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or quasi-
governmental authority of any nature (including any governmental
division, department, agency, commission, instrumentality,
official, organization, unit or body and any court or other
tribunal); or (d) the National Association of Securities Dealers,
Inc. (including the rules and regulations of the Nasdaq).
"Government Contract" shall mean any prime contract,
subcontract, letter contract, purchase order or delivery order,
task order, or other agreement of any kind executed or submitted
to or on behalf of any Governmental Body or any prime contractor
or higher-tier subcontractor, or under which any Governmental
Body or any such prime contractor otherwise has or may acquire
any right or interest.
"Hazardous Materials" shall mean (A) petroleum or
petroleum products (including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, or
synthetic gas useable for fuel, or any mixture thereof),
polychlorinated biphenyls (PCBs), asbestos or asbestos containing
materials, urea formaldehyde foam insulation, and radon gas; (B)
any substance defined as or included in the definition of
"hazardous substance," "hazardous waste," "hazardous material,"
"extremely hazardous waste," "restricted hazardous waste,"
"waste," "special waste," "toxic substance," "toxic pollutant,"
"contaminant" or "pollutant," or words of similar import, under
any applicable Environmental Law (as defined below); (C)
infectious materials and other regulated medical wastes; (D) any
substance which is toxic, explosive, corrosive, flammable,
radioactive, carcinogenic, mutagenic or otherwise hazardous and
is or becomes regulated by any governmental agency; and (E) any
other substance, material or waste the presence of which requires
investigation or remediation under any Environmental Law.
"Indemnified Party" is defined in Section 8.5 of this
Agreement.
"IES Report" is defined in Section 2.14 of this
Agreement.
"knowledge" with respect to any party hereto shall mean
the actual knowledge, after due inquiry of such party, such
party's directors and/or executive officers.
"Lease" shall mean the Lease for ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in substantially the form set
forth in Appendix I hereto.
"Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil,
criminal, administrative, investigative or appellate proceeding),
hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving,
any court or other Governmental Body or any arbitrator or
arbitration panel.
"Legal Requirement" shall mean any applicable federal,
state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance,
code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental
Body (or under the authority of NASD or the Nasdaq), including
any Environmental Law.
"Liability" shall mean any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any
liability for Taxes.
"Material Company IP Contract" is defined in
Section 2.8(a) to this Agreement.
An event, violation, inaccuracy, circumstance or other
matter will be deemed to have a "Material Adverse Effect" on, or
shall be deemed to be "material" to, the Company, if such event,
violation, inaccuracy, circumstance or other matter had or could
reasonably be expected to have a material adverse effect on the
business, condition, assets, operations or financial performance
of the Company taken as a whole or prevent or materially impede
consummation of the Merger; provided, however, that no one or
more of the following shall be deemed to constitute, in and of
itself, or be taken into account in determining, the occurrence
of a Material Adverse Effect: (A) changes in national or
international economic, political or business conditions
generally or the outbreak or escalation of hostilities, including
acts of war or terrorism (which changes do not disproportionately
affect the Company in any material respect); (B) changes in
factors generally affecting the industries or markets in which
the Company operates or participates (which changes do not
disproportionately affect the Company in any material respect);
(C) changes in any law, rule or regulation or GAAP or the
interpretation thereof (which changes do not disproportionately
affect the Company in any material respect); (D) any action
required to be taken pursuant to or in accordance with this
Agreement or taken by or at the request of Parent or its
affiliates; (E) changes resulting from the public announcement of
the execution of this Agreement or the consummation of the
transactions contemplated hereby; or (F) changes or disruptions
in financial, banking or securities markets generally. An event,
violation, inaccuracy, circumstance or other matter will be
deemed to have a "Material Adverse Effect" on, or shall be deemed
to be "material" to, the Dynasil Corporations, taken as a whole,
if such event, violation, inaccuracy, circumstance or other
matter had or could reasonably be expected to have a material
adverse effect on the business, condition, assets, operations or
financial performance of the Dynasil Corporations taken as a
whole or prevent or materially impede consummation of the Merger;
provided, however, that no one or more of the following shall be
deemed to constitute, in and of itself, or be taken into account
in determining, the occurrence of a Material Adverse Effect: (A)
changes in national or international economic, political or
business conditions generally or the outbreak or escalation of
hostilities, including acts of war or terrorism (which changes do
not disproportionately affect the Dynasil Corporations in any
material respect); (B) changes in factors generally affecting the
industries or markets in which the Dynasil Corporations operate
or participate (which changes do not disproportionately affect
the Dynasil Corporations in any material respect); (C) changes in
any law, rule or regulation or GAAP or the interpretation thereof
(which changes do not disproportionately affect the Dynasil
Corporations in any material respect); (D) any action required to
be taken pursuant to or in accordance with this Agreement or
taken by or at the request of the Company or its affiliates; (E)
any failure by Parent to meet any published estimates of revenues
or earnings for any period ending on or after the date of this
Agreement and prior to the Closing Date; (F) a decline in the
price or trading volume of the Parent Common Stock (for the
avoidance of doubt, clauses (E) and (F) shall not preclude
Company from asserting that the underlying cause of any such (i)
failure to meet any published estimates or (ii) decline in price
or trading volume, is a Material Adverse Effect); (G) changes
resulting from the public announcement of the execution of this
Agreement or the consummation of the transactions contemplated
hereby; or (H) changes or disruptions in financial, banking or
securities markets generally.
"Merger" is defined in the Recitals of this Agreement.
"Merger Consideration" means the Stock Merger
Consideration actually issuable in respect of each Share issued
and outstanding as of the Effective Time.
"Merger Sub" is defined in the Preamble of this
Agreement.
"Multiemployer Plan" is defined in Section 2.13(b) of
this Agreement.
"Multiple Employer Plan" is defined in Section 2.13(b)
of this Agreement.
"Multiple Employer Welfare Arrangement" is defined in
Section 2.13(b) of this Agreement.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"Order" shall mean any: (a) order, judgment,
injunction, edict, decree, ruling, pronouncement, determination,
decision, opinion, verdict, sentence, subpoena, writ or award
issued, made, entered, rendered or otherwise put into effect by
or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel;
or (b) Contract with any Governmental Body entered into in
connection with any Legal Proceeding.
"Parent" is defined in the Preamble of this Agreement.
"Parent Balance Sheet" is defined in Section 3.5(c) of
this Agreement.
"Parent Balance Sheet Date" is defined in Section
3.5(c) of this Agreement.
"Parent Common Stock" shall mean the Common Stock,
$0.005 par value per share, of Parent.
"Parent Disclosure Letter" is defined in Section 3 of
this Agreement.
"Parent Financial Statements" is defined in Section
3.5(c) of this Agreement.
"Parent Material Contract" means a Dynasil Corporation
Contract required by the rules and regulations of the SEC to be
filed as an exhibit to the Parent SEC Documents.
"Parent Organization Documents" is defined in Section
3.1 of this Agreement.
"Parent Preferred Stock" is defined in Section 3.3 of
this Agreement.
"Parent Parties" is defined in Section 8.2 of this
Agreement.
"Parent Rights Agreements" is defined in Section 3.3(c)
of this Agreement.
"Parent SEC Documents" is defined in Section 3.5(a) of
this Agreement.
"Parent Stockholders" shall mean the holders of Parent
Common Stock.
"Parent Stock Rights" is defined in Section 3.3(c) of
this Agreement.
"Parent 10-KSB" is defined in Section 3.5(c) of this
Agreement.
"Person" shall mean any individual, Entity or
Governmental Body.
"Proceeding" is defined is Section 9.4 of this
Agreement.
"Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered),
trademark application, trade name, fictitious business name,
service ▇▇▇▇ (whether registered or unregistered), service ▇▇▇▇
application, copyright (whether registered or unregistered),
database rights, design rights, moral rights, domain name,
assumed and fictitious name registrations, copyright application,
copyright registration, mask work right, mask work right
application, trade secret, or any other intellectual or
industrial or intangible property right, know-how, customer
lists, computer software, source code, algorithm, invention,
engineering drawing, and technology; and (b) right to use or
exploit any of the foregoing.
"Pro Rata Share" means the pro rata share of each of
Stockholders based on their relative ownership of the Company
immediately prior to the consummation of the Merger, equal to
95.8733 for ▇▇▇▇▇▇ ▇▇▇▇▇▇ 1988 Family Trust, 1.9175% for ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ owning and 2.2052% for ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ under this
Agreement and the pro rata share of each Principal Member based
on their relative ownership of the Seller immediately prior to
the Closing under the Asset Purchase Agreement, equal to 92.8773%
for ▇▇▇▇▇▇ ▇▇▇▇▇▇ 1988 Family Trust, 4.9175 for ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and 2.2052% for ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇.
"Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors, consultants
and representatives of the Person and its Subsidiaries.
"Securities Act" shall mean the Securities Act of 1933,
as amended and the regulations promulgated thereunder.
"Shares" is defined in Section 1.6 of this Agreement.
An entity shall be deemed to be a "Subsidiary" of
another Person if such Person directly or indirectly owns,
beneficially or of record, (a) an amount of voting securities of
other interests in such Entity that is sufficient to enable such
Person to elect at least a majority of the members of such
Entity's Board of Directors or other governing body, or (b) at
least 50% of the outstanding equity or financial interests of
such Entity.
"Stock Merger Consideration" is defined in Section
1.5(a) of this Agreement.
"Stockholders Agent" is defined in Section 9.11 of this
Agreement.
"Survival Date" is defined in Section 8.1 of this
Agreement.
"Surviving Entity" is defined in Section 1.1 of this
Agreement.
"Takeover Laws" shall mean any "Moratorium," "Control
Share Acquisition," "Fair Price," "Supermajority," "Affiliate
Transactions," or "Business Combination Statute or Regulation" or
other similar state antitakeover laws and regulations.
"Tax" shall mean all taxes, assessments, charges,
duties, fees, levies or other governmental charges, including,
without limitation, all Federal, state, local, foreign and other
income, franchise, profits, gross receipts, capital gains,
capital stock, transfer, net proceeds, alternative or add-on
minimum, ad valorem, turnover, personal property (tangible and
intangible), leasing, lease, user, employment, fuel, excess
profits, interest equalization, property, sales, use, value-
added, occupation, property, excise, severance, windfall profits,
stamp, license, payroll, social security, withholding and other
taxes, assessments, charges, duties, fees, levies or other
governmental charges of any kind whatsoever (whether payable
directly or by withholding and whether or not requiring the
filing of a Tax return), all estimated taxes, deficiency
assessments, additions to tax, penalties and interest and shall
include any liability for such amounts as a result either of
being a member of a combined, consolidated, unitary or affiliated
group or of a contractual obligation to indemnify any person or
other entity.
"Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate,
schedule, notice, notification, form, election, certificate or
other document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental Body
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.
"Transaction Expenses" is defined in Section 7.3(a) of
this Agreement.
"WARN Act" is defined Section 2.13(m) of this
Agreement.
* * *
EXHIBIT B
COMPANY CERTIFICATE
EXHIBIT C
PARENT CERTIFICATE
EXHIBIT D
RETAINED EARNINGS EXTRACTION
APPENDIX I
LEASE
