AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXXX COMMUNICATIONS CORPORATION
MCC MERGER SUB CORPORATION
AND
POLAR MOLECULAR CORPORATION
DATED AS OF DECEMBER 19, 2001
Table of Contents
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Page
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INTRODUCTORY STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. The Merger. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Effective Time. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.03. Effect of the Merger. . . . . . . . . . . . . . . . . 2
SECTION 1.04. Articles of Incorporation . . . . . . . . . . . . . . 2
SECTION 1.05. Bylaws. . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.06. Directors and Officers of the Surviving Corporation . 2
SECTION 1.07. Additional Actions. . . . . . . . . . . . . . . . . . 2
SECTION 1.08. Conversion of Securities. . . . . . . . . . . . . . . 2
SECTION 1.09. Dissenting Shares . . . . . . . . . . . . . . . . . . 4
SECTION 1.10. Surrender of Shares, Stock Transfer Books . . . . . . 5
ARTICLE II CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.01. Closing . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Deliveries by Polar . . . . . . . . . . . . . . . . . 7
SECTION 2.03. Deliveries by Merger Sub and Xxxxxxx. . . . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF POLAR . . . . . . . . . 7
SECTION 3.01. Organization and Qualification of Polar . . . . . . . 7
SECTION 3.02. Power and Capacity; Charter Documents of Polar. . . . 8
SECTION 3.03. Polar Subsidiaries. . . . . . . . . . . . . . . . . . 8
SECTION 3.04. Capitalization and Ownership of Polar . . . . . . . . 8
SECTION 3.05. No Polar Conflicts. . . . . . . . . . . . . . . . . . 8
SECTION 3.06. Polar Consents and Approvals. . . . . . . . . . . . . 9
SECTION 3.07. Financial and Operating Statements of Polar . . . . . 9
SECTION 3.08. No Undisclosed or Contingent Liabilities of Polar . . 9
SECTION 3.09. Assets of Polar . . . . . . . . . . . . . . . . . . . 10
SECTION 3.10. Absence of Certain Changes for Polar. . . . . . . . . 10
SECTION 3.11. Real Property of Polar. . . . . . . . . . . . . . . . 12
SECTION 3.12. Polar Contracts and Commitments . . . . . . . . . . . 13
SECTION 3.13. Polar Intellectual Property . . . . . . . . . . . . . 14
SECTION 3.14. Pension and Other Employee Plans and Agreements of
Polar . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.15. Polar Litigation. . . . . . . . . . . . . . . . . . . 17
SECTION 3.16. Polar Insurance . . . . . . . . . . . . . . . . . . . 17
SECTION 3.17. Polar Collective Bargaining Agreements; Compensation;
Employee Agreements . . . . . . . . . . . . . . . . 17
SECTION 3.18. Polar Labor Matters . . . . . . . . . . . . . . . . . 18
SECTION 3.19. Compliance with Law by Polar. . . . . . . . . . . . . 19
SECTION 3.20. Polar Permits . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.21. Polar Environmental Matters . . . . . . . . . . . . . 19
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SECTION 3.22. Polar Tax Matters . . . . . . . . . . . . . . . . . . 20
SECTION 3.23. Title to Polar Assets . . . . . . . . . . . . . . . . 22
SECTION 3.24. Redemptions of Capital Stock by Polar . . . . . . . . 22
SECTION 3.25. Accuracy of Polar's Disclosure. . . . . . . . . . . . 22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND XXXXXXX . 22
SECTION 4.01. Organization and Qualification - Merger Sub . . . . . 22
SECTION 4.02. Organization and Qualification - Xxxxxxx. . . . . . . 23
SECTION 4.03. Power and Capacity; Charter Documents of Merger Sub . 23
SECTION 4.04. Power and Capacity; Charter Documents of Xxxxxxx. . . 23
SECTION 4.05. Capitalization of Xxxxxxx; Xxxxxxx Subsidiaries . . . 24
SECTION 4.06. No Acquiror Conflicts . . . . . . . . . . . . . . . . 25
SECTION 4.07. Acquiror Consents and Approvals . . . . . . . . . . . 25
SECTION 4.08. Financial and Operating Statements of Acquiror. . . . 26
SECTION 4.09. No Undisclosed or Contingent Liabilities of Acquiror. 26
SECTION 4.10. Assets of the Acquiror. . . . . . . . . . . . . . . . 26
SECTION 4.11. Absence of Certain Acquiror Changes . . . . . . . . . 27
SECTION 4.12. Real Property of Acquiror . . . . . . . . . . . . . . 29
SECTION 4.13. Acquiror Contracts and Commitments. . . . . . . . . . 30
SECTION 4.14. Acquiror Intellectual Property. . . . . . . . . . . . 31
SECTION 4.15. Pension and Other Employee Plans and Agreements of
Acquiror. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.16. Acquiror Litigation . . . . . . . . . . . . . . . . . 34
SECTION 4.17. Acquiror Insurance. . . . . . . . . . . . . . . . . . 34
SECTION 4.18. Acquiror Collective Bargaining Agreements;
Compensation; Employee Agreements . . . . . . . . . 34
SECTION 4.19. Acquiror Labor Matters. . . . . . . . . . . . . . . . 35
SECTION 4.20. Compliance with Law by Acquiror . . . . . . . . . . . 36
SECTION 4.21. Acquiror Permits. . . . . . . . . . . . . . . . . . . 36
SECTION 4.22. Acquiror Environmental Matters. . . . . . . . . . . . 37
SECTION 4.23. Acquiror Tax Matters. . . . . . . . . . . . . . . . . 37
SECTION 4.24. Title to Acquiror Assets. . . . . . . . . . . . . . . 38
SECTION 4.25. Redemptions of Capital Stock by Acquiror. . . . . . . 38
SECTION 4.26. SEC Reports and Financial Statements. . . . . . . . . 38
SECTION 4.27. Accuracy of Acquiror Disclosure . . . . . . . . . . . 39
ARTICLE V OTHER OBLIGATIONS OF THE PARTIES. . . . . . . . . . . . . . 39
SECTION 5.01. Conduct of Polar Business . . . . . . . . . . . . . . 39
SECTION 5.02. Conduct of Xxxxxxx Business . . . . . . . . . . . . . 42
SECTION 5.03. Xxxxxxx'x Access to Books and Records . . . . . . . . 44
SECTION 5.04. Polar's Access to Books and Records . . . . . . . . . 44
SECTION 5.05. Consents. . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.06. Disclosure Schedule . . . . . . . . . . . . . . . . . 44
SECTION 5.07. Governmental Filings. . . . . . . . . . . . . . . . . 45
SECTION 5.08. Covenant to Satisfy Conditions. . . . . . . . . . . . 45
SECTION 5.09. Confidentiality . . . . . . . . . . . . . . . . . . . 45
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SECTION 5.10. Registration Statement and Proxy Statement. . . . . . 45
SECTION 5.11. Xxxxxxx Stockholder Approval. . . . . . . . . . . . . 46
SECTION 5.12. Polar Stockholder Approval. . . . . . . . . . . . . . 47
SECTION 5.13. Resignation of Officers and Directors . . . . . . . . 47
SECTION 5.14. Provision of Polar's Audited Financial Statements . . 47
SECTION 5.15. Financial Condition of Xxxxxxx. . . . . . . . . . . . 47
ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . 48
SECTION 6.01. Conditions to the Obligations of Each Party . . . . . 48
SECTION 6.02. Conditions to Obligations of Xxxxxxx and Merger Sub . 48
SECTION 6.03. Conditions to Obligation of Polar . . . . . . . . . . 50
ARTICLE VII TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.01. Termination by Mutual Consent . . . . . . . . . . . . 51
SECTION 7.02. Termination by Either Xxxxxxx or Polar. . . . . . . . 51
SECTION 7.03. Termination by Xxxxxxx. . . . . . . . . . . . . . . . 52
SECTION 7.04. Termination by Polar. . . . . . . . . . . . . . . . . 52
SECTION 7.05. Effect of Termination . . . . . . . . . . . . . . . . 52
ARTICLE VIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.01. Survival of Representations and Warranties. . . . . . 53
SECTION 8.02. Commissions . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.03. Definition of Knowledge . . . . . . . . . . . . . . . 53
SECTION 8.04. Definition of Material Adverse Effect and Material
Adverse Change. . . . . . . . . . . . . . . . . . . 53
SECTION 8.05. Expenses, Taxes, Etc. . . . . . . . . . . . . . . . . 53
SECTION 8.06. Successors and Assigns. . . . . . . . . . . . . . . . 53
SECTION 8.07. No Third-Party Benefit. . . . . . . . . . . . . . . . 53
SECTION 8.08. Entire Agreement; Amendment . . . . . . . . . . . . . 54
SECTION 8.09. Reformation and Severability. . . . . . . . . . . . . 54
SECTION 8.10. Notices . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.11. Governing Law . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.12. Arbitration . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.13. Counterparts. . . . . . . . . . . . . . . . . . . . . 56
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of December
19, 2001, is by and among Xxxxxxx Communications Corporation, an Iowa
corporation ("XXXXXXX"), MCC Merger Sub Corporation, a Delaware corporation and
a wholly owned subsidiary of Xxxxxxx ("MERGER SUB"), and Polar Molecular
Corporation, a Delaware corporation ("POLAR" and sometimes the "SURVIVING
CORPORATION").
INTRODUCTORY STATEMENTS
Polar, Merger Sub and Xxxxxxx desire to effect the merger of Merger Sub
with and into Polar, with Polar remaining as the surviving corporation, pursuant
to the terms hereof (the "MERGER").
For purposes of this Agreement, Xxxxxxx and its Subsidiaries (as defined
herein), including without limitation Merger Sub, shall collectively be termed
the "ACQUIROR"; when such collective term is used in connection with financial
issues, it shall refer to Xxxxxxx and its Subsidiaries as a consolidated whole.
For example, when references are made to officers, directors and employees of
the Acquiror, it shall mean all officers, directors and shareholders of Xxxxxxx
and its Subsidiaries.
Accordingly, for and in consideration of the foregoing and the mutual
agreements, representations, warranties, covenants and conditions herein set
forth, and other good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions
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hereof, the Merger shall be consummated in accordance with the Delaware General
Corporation Law (the "DELAWARE LAW") as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VI hereof. At the
Effective Time (as hereinafter defined) and subject to and upon the terms and
conditions of this Agreement and the Delaware Law, Merger Sub shall be merged
with and into Polar, the separate corporate existence of Merger Sub shall cease,
and Polar shall continue as the Surviving Corporation.
SECTION 1.02. Effective Time. As promptly as practicable after the
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satisfaction or waiver of the conditions set forth in Article VI hereof, the
parties hereto shall cause the Merger to be consummated by filing a certificate
of merger with the Secretary of State of the State of Delaware in such form as
required by, and executed in accordance with the relevant provisions of the
Delaware Law. The Merger shall become effective upon the filing of such
certificate of merger with the Secretary of State of the State of Delaware (the
"EFFECTIVE TIME").
SECTION 1.03. Effect of the Merger. At the Effective Time, the effect of
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the Merger in Delaware shall be as provided in Section 259 of the Delaware Law.
SECTION 1.04. Articles of Incorporation. At the Effective Time, the
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Certificate of Incorporation of Polar shall become the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by Law (as defined herein).
SECTION 1.05. Bylaws. The Bylaws of Polar, as in effect immediately prior
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to the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by Law.
SECTION 1.06. Directors and Officers of the Surviving Corporation. The
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directors and officers of Polar at the Effective Time shall become the directors
and officers of the Surviving Corporation.
SECTION 1.07. Additional Actions. If, at any time after the Effective
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Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances, or any other actions or things are
necessary or desirable to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, properties or assets of Polar or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of Polar and Merger Sub, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of
Polar and Merger Sub or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
SECTION 1.08. Conversion of Securities. At the Effective Time, by virtue
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of the Merger and without any action on the part of Polar, Xxxxxxx, Merger Sub
or the holder of any of the following securities:
(a) Each share (individually, a "COMMON SHARE" and, collectively,
the "COMMON SHARES") of common stock, par value $.0001 per share (the "COMMON
STOCK"), of Polar issued and outstanding immediately prior to the Effective
Time, other than any Dissenting Shares (as defined herein), shall be converted
into the right to receive the number of shares of common stock, no par value per
share, of Xxxxxxx (the "XXXXXXX COMMON STOCK") per Common Share equal to the
Common Share Amount, subject to any adjustment provided by Section 1.10(c), and
issuable by Xxxxxxx to the holders of Common Shares of Polar; provided, that
such conversion shall be effected in accordance with the provisions of this
Article I upon surrender of the certificate representing any such Common Shares.
For purposes hereof, the
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"COMMON SHARE AMOUNT" shall mean the number of shares of Xxxxxxx Common Stock
equal to (i) four times the number of shares of Xxxxxxx Common Stock outstanding
at the Effective Time (but excluding the effect of this Section 1.08) divided by
(ii) the number of Common Shares. The certificates representing the shares of
Xxxxxxx Stock to be issued to the holders of the Common Shares of Polar (the
"CERTIFICATES") shall be in a form to be mutually agreed upon by Xxxxxxx and
Polar. Each share of the Common Stock held in the treasury of Polar shall be
canceled and extinguished and no payment or other consideration shall be made
with respect thereto. The aggregate number of shares of Xxxxxxx Common Stock
issuable by Xxxxxxx as merger consideration hereunder shall be termed the
"MERGER CONSIDERATION".
(b) If, between the date hereof and the Effective Time, the
outstanding shares of Common Stock of Polar shall have been changed into a
different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, or if any extraordinary dividend or distribution is made
with respect to the Common Stock of Polar, then the Common Share Amount shall be
correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
extraordinary dividend or distribution or other similar event.
(c) Each share of common stock, par value $.01 per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and thereafter represent one share, validly issued, fully paid
and nonassessable, of common stock of the Surviving Corporation. Immediately
following the Effective Time, the common stock of the Surviving Corporation held
by Xxxxxxx shall represent all of the issued and outstanding capital stock of
the Surviving Corporation.
(d) From and after the Effective Time, holders of certificates
evidencing Common Stock that were issued prior to the Merger shall cease to have
any rights as shareholders of Polar or the Surviving Corporation, except as
provided otherwise by Law.
(e) (1) Each option to purchase shares of the Common Stock
that is outstanding immediately prior to the Effective Time (a "POLAR STOCK
OPTION") shall be assumed by Xxxxxxx on the terms set forth below in Section
1.08(e)(2) and shall automatically be converted into an option to purchase
shares of Xxxxxxx Common Stock, either pursuant to the terms of the Polar Stock
Option or express agreement of the holder of the Polar Stock Option. Each
warrant to purchase shares of the Common Stock of Polar that is outstanding
immediately prior to the Effective Time (a "POLAR WARRANT") shall be assumed by
Xxxxxxx on the terms set forth below in Section 1.08(e)(2) and shall
automaticallybe converted into a warrant to purchase shares of Xxxxxxx Common
Stock, either pursuant to the terms of the Polar Warrant or express agreement of
the holder of the Polar Warrant.
(2) Each Polar Stock Option that is outstanding at the
Effective Time shall be assumed by Xxxxxxx and shall be deemed to constitute an
option to acquire, and each Polar Warrant that is outstanding at the Effective
Time shall be assumed by Xxxxxxx and shall be deemed to constitute a warrant to
acquire, on the same terms and conditions as were applicable under such Polar
Stock Option or Polar Warrant immediately prior to the Effective Time, the
number of shares of Xxxxxxx Common Stock as the holder of such Polar Stock
Option
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or Polar Warrant would have been entitled to receive had such holder exercised
such Polar Stock Option or such Polar Warrant in full immediately prior to the
Effective Time (assuming only for this purpose that such Polar Stock Option was
in fact vested and exercisable) at an exercise price per share equal to (a) the
aggregate exercise price for Common Shares otherwise purchasable pursuant to
such Polar Stock Option or Polar Warrant divided by (b) the aggregate number of
shares of Xxxxxxx Common Stock for which such assumed Polar Stock Option or
Polar Warrant is exercisable immediately following the Effective Time; provided
however, that in all events the number of shares covered by, and the exercise
price for, each assumed Polar Stock Option that is an "incentive stock option"
(within the meaning of Section 422 of the Code) shall be determined according to
Section 424 of the Code and the regulations promulgated thereunder, and provided
further, that the number of shares of Xxxxxxx Common Stock that may be purchased
upon exercise of the assumed Polar Stock Options and Polar Warrants shall not
include any fractional share. An assumed Polar Stock Option or Polar Warrant
that includes a fractional share shall be rounded up to the nearest whole share.
At and after the Effective Time, each assumed Polar Stock Option that had not
vested in full in accordance with its terms shall continue to vest according to
the terms of such option in effect immediately prior to the Effective Time.
From and after the Effective Time, Xxxxxxx shall assume and comply with the
terms of the warrant agreements pursuant to which the Polar Warrants were issued
(the "POLAR WARRANT AGREEMENTS") and the Polar stock option plans pursuant to
which the Polar Stock Options were granted. At or prior to the Effective Time,
Xxxxxxx shall cause to be taken all corporate action to reserve for issuance a
sufficient number of shares of Xxxxxxx Common Stock for delivery upon exercise
of the assumed Polar Stock Options and Polar Warrants.
(f) If, between the date hereof and the Effective Time, the
outstanding shares of Xxxxxxx Common Stock shall have been changed into a
different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, or if any extraordinary dividend or distribution is made
with respect to the Xxxxxxx Common Stock, then the number of shares represented
by the Common Share Amount shall be correspondingly adjusted to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, extraordinary dividend or distribution or
other similar event.
SECTION 1.09. Dissenting Shares.
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(a) Any Common Shares held by a holder who has not voted such
shares in favor of the approval and adoption of this Agreement and who has
properly demanded and perfected such demand for appraisal of such shares in
accordance with Section 262 of the Delaware Law and as of the Effective Time has
neither effectively withdrawn nor lost such right to such appraisal ("DISSENTING
SHARES"), shall not be converted into or represent a right to receive the Common
Share Amount but the holder thereof shall only be entitled to such rights as are
granted by Section 262 of the Delaware Law.
(b) Notwithstanding the provisions of subsection (a) of this
Section, if any holder of Common Shares who demands appraisal of such shares
under the Delaware Law shall effectively withdraw or lose (through failure to
perfect or otherwise) such right to appraisal, then
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as of the Effective Time or the occurrence of such event, whichever occurs
later, such holder's shares shall automatically be converted into and represent
only the right to receive the Common Share Amount per Common Share as provided
in Section 1.08 without interest thereon, upon surrender of the certificate or
certificates representing such shares and such shares shall no longer be
Dissenting Shares. Furthermore, upon the surrender of Dissenting Shares in
accordance with the provisions of Section 1.10 hereof, the holder thereof shall
be deemed to have waived his or her appraisal rights under the Delaware Law with
respect to such Common Shares.
(c) Polar shall give Merger Sub and, after the Merger, the
Surviving Corporation shall give Xxxxxxx (i) prompt notice of any written
demands for appraisal or payment of the fair value of any Common Shares,
withdrawals of such demands, and any other instruments served pursuant to the
Delaware Law received by Polar or the Surviving Corporation and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the Delaware Law. Prior to the Merger, Polar shall not
voluntarily make any payment with respect to any demands for appraisal or,
except with the prior written consent of Merger Sub, settle or offer to settle
any such demands.
SECTION 1.10. Surrender of Shares, Stock Transfer Books.
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(a) Following the Effective Time, Xxxxxxx shall distribute to the
holders of the Common Shares the Certificates to be issued to such holders under
Section 1.08(a) upon the terms and conditions specified in this Section 1.10.
(b) Each holder of a certificate or certificates representing any
Common Shares canceled upon the effectiveness of the Merger pursuant to Section
1.08 may thereafter surrender such certificate or certificates to Xxxxxxx (or
its transfer agent). Xxxxxxx agrees that prior to the Effective Time it shall
distribute or shall cause to be distributed to each holder of record of Common
Shares as of the Effective Time a form letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to such
certificates shall pass, only upon proper delivery thereof to Xxxxxxx or its
transfer agent) and instructions for use in effecting the surrender of such
certificates for payment therefor. (Any holders of Common Shares who have lost
or destroyed the certificates representing their Common Shares shall be required
to execute an affidavit regarding such matters in a form to be distributed by
Xxxxxxx to indemnify the Surviving Corporation and Xxxxxxx against any other
claimants of such Common Shares, but no bond or other security shall be required
for such indemnity.) Upon surrender by such holder to Xxxxxxx of a certificate
(or such executed affidavit and indemnity), together with such letter of
transmittal duly executed, the holder of such certificate shall be entitled to
receive in exchange therefor Certificates representing the number of shares of
Xxxxxxx Common Stock in an amount equal to the product of the number of Common
Shares represented by such certificate and the Common Share Amount. Each
certificate surrendered hereunder shall forthwith be canceled. Notwithstanding
anything in this Agreement to the contrary, no Certificates shall be released or
distributed to any holder of Common Shares until Xxxxxxx or the Surviving
Corporation has received written confirmation of the effectiveness of the Merger
under the Delaware Law from the Secretary of State of the State of Delaware.
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(c) No fractional shares of Xxxxxxx Common Stock shall be issued
in the Merger. All shares of Xxxxxxx Common Stock to which a holder of shares
of the Common Stock of Polar is entitled as a result of the Merger shall be
aggregated and if a fractional share of Xxxxxxx Common Stock results even after
such aggregation, such fractional share shall be rounded up to the nearest whole
share of Xxxxxxx Common Stock, in lieu of the fractional share.
(d) If payment in respect of Common Shares is to be made to a
Person (as defined herein) other than the Person in whose name a surrendered
certificate or instrument is registered, it shall be a condition to such payment
that the certificate or instrument so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the Person requesting
such payment shall have paid any transfer and other taxes required by reason of
such payment in a name other than that of the registered holder of the
certificate or instrument surrendered or shall have established to the
satisfaction of the Surviving Corporation or Xxxxxxx that such tax either has
been paid or is not payable. The registered holder of each certificate
surrendered in accordance with the preceding sentence shall indemnify and hold
Xxxxxxx and the other parties hereto harmless against any claims by third
parties (and any direct or indirect damages relating thereto) as to the title of
such certificate or the Common Shares evidenced thereby. Until surrendered in
accordance with the provisions of this Section 1.10, each certificate (other
than certificates representing Dissenting Shares in respect of which appraisal
rights are perfected, which shall be treated in accordance with applicable
provisions of the Delaware Law) shall represent for all purposes whatsoever only
the right to receive the Common Share Amount multiplied by the number of the
applicable Common Shares evidenced by such certificate, except as otherwise
provided in subsection (b) above.
(e) At the Effective Time, the stock transfer books of Polar shall
be closed and there shall be no further registration of transfers of Common
Shares or other equity issued prior to the Merger on the records of Polar or the
Surviving Corporation. If, after the Effective Time, certificates for Common
Stock or other equity securities of Polar are presented to the Surviving
Corporation, they shall be entitled only to be canceled and exchanged for the
amounts provided for such shares or other equity securities in Sections 1.08 and
1.10 hereof.
ARTICLE II
CLOSING
SECTION 2.01. Closing. The Closing of the transactions contemplated
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hereby (the "CLOSING") shall, subject to the provisions of Article VI hereof,
take place at the offices of Holme Xxxxxxx & Xxxx LLP in Denver Colorado, on the
later to occur of May 1, 2002 and the date that is two business days after each
of the conditions set forth in Article VI has been met or waived in writing, or
at such other date, time and place as Polar and Xxxxxxx mutually agree. The
date on which the Closing actually occurs is referred to herein as the "CLOSING
DATE".
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SECTION 2.02. Deliveries by Polar. At the Closing, Polar shall deliver,
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or cause to be delivered, to Merger Sub and Xxxxxxx (unless delivered
previously) the following:
(a) the Officers' Certificate referred to in Section 6.02(d)
hereof;
(b) executed counterparts of any consents required to be obtained
by Polar pursuant to Section 6.02(c) hereof; and
(c) all other previously undelivered documents, instruments and
writings required to be delivered by Polar to Merger Sub or Xxxxxxx at or prior
to the Closing pursuant to this Agreement or otherwise required in connection
herewith.
SECTION 2.03. Deliveries by Merger Sub and Xxxxxxx. At the Closing,
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Merger Sub and Xxxxxxx shall deliver, or cause to be delivered, to Polar (unless
delivered previously) the following:
(a) the Officers' Certificates referred to in Section 6.03(d)
hereof;
(b) executed counterparts of any consents required to be obtained
by Xxxxxxx pursuant to Section 6.03(c) hereof; and
(c) all other previously undelivered documents, instruments and
writings required to be delivered by Merger Sub or Xxxxxxx to Polar at or prior
to the Closing pursuant to this Agreement or otherwise required in connection
herewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF POLAR
Polar hereby represents and warrants to Merger Sub and Xxxxxxx as follows,
except as otherwise set forth in the relevant section of the Disclosure Schedule
to be delivered to Xxxxxxx pursuant to Section 5.06 hereof:
SECTION 3.01. Organization and Qualification of Polar. Polar is (a) a
-------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and (b) duly qualified to do business as a foreign
corporation and in good standing in each jurisdiction in which the character of
the properties and assets now owned or leased by it or the nature of the
business transacted by it requires it to be so qualified, except where the
failure to be so qualified, individually or in the aggregate, would not be
reasonably expected to have a Material Adverse Effect (as defined herein) upon
Polar or the consummation of the transactions contemplated hereby. Each
jurisdiction in which Polar is qualified to do business is listed in Section
3.01 of
7
the Disclosure Schedule. No jurisdiction in which Polar is not qualified or
licensed has claimed, in writing or otherwise, that Polar is required to qualify
or be licensed therein.
SECTION 3.02. Power and Capacity; Charter Documents of Polar.
----------------------------------------------------
(a) Subject to the approval of the stockholders of Polar in
accordance with the terms of Delaware Law and this Agreement, Polar has all
requisite power and authority (corporate and otherwise) to enter into, execute
and deliver this Agreement and perform its obligations hereunder. Polar has the
corporate power and authority to carry on its business as now being conducted
and to own and lease its properties. This Agreement has been duly executed and
delivered by Polar and is a valid and binding obligation of Polar, enforceable
against Polar in accordance with its terms. The Board of Directors of Polar has
approved resolutions, a copy of which has been delivered to Xxxxxxx, approving
the terms of this Agreement and, with respect to Polar, each of the transactions
contemplated by the terms of this Agreement.
(b) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Polar will not
result in a violation or breach of or constitute a default under any term or
provision of the Certificate of Incorporation or Bylaws of Polar. Polar has
delivered to Merger Sub true and complete copies of the Certificate of
Incorporation and the Bylaws of Polar, as in effect on the date hereof.
SECTION 3.03. Polar Subsidiaries. Polar has no subsidiaries.
-------------------
SECTION 3.04. Capitalization and Ownership of Polar. Section 3.04 of the
-------------------------------------
Disclosure Schedule lists, for Polar, its authorized capitalization, the number
of shares of its capital stock (or other equity interests) issued and
outstanding, and the number of shares of its capital stock (or other equity
interests) owned of record by each stockholder. All of the outstanding shares
of the capital stock of Polar are validly issued, fully paid and non-assessable
and were not issued in violation of any preemptive rights or any applicable Law.
All such shares are owned free and clear of any lien, claim or encumbrance of
any type whatsoever imposed by Polar. There are no outstanding options,
warrants or other rights to acquire any share of capital stock of Polar, there
are no outstanding securities authorized, granted or issued by Polar that are
convertible into or exchangeable for shares of its capital stock and there are
no phantom stock rights, stock appreciation rights or similar rights regarding
Polar. There are no rights of any Person to have Polar repurchase any capital
stock of Polar.
SECTION 3.05. No Polar Conflicts. The execution, delivery and performance
------------------
of this Agreement by Polar and the consummation of the transactions contemplated
hereby will not:
8
(a) result in the creation or imposition of any security interest,
lien, charge or other encumbrance against the Polar Assets (as defined herein),
with or without the giving of notice and/or the passage of time, or
(b) violate, conflict with, affect acceleration of, or result in
termination, cancellation or modification of, or constitute a default under (i)
any contract, agreement or other instrument to which Polar is a party or by
which Polar or its assets is bound or (ii) any note, bond, mortgage, indenture,
deed of trust, license, lease, contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which Polar is a party or
by which Polar may be bound or affected, or to which any of the Polar Assets may
be subject, or
(c) violate any statute or Law or any judgment, decree, order,
writ, injunction, regulation or rule of any court or any local, state or federal
governmental or regulatory authority, which violation, conflict, acceleration,
requirement, termination, modification or default described in (a), (b), or (c)
above could reasonably be expected to result in a Material Adverse Effect on
Polar or the transactions contemplated by this Agreement.
SECTION 3.06. Polar Consents and Approvals. Polar is not required to
-------------------------------
obtain, transfer or cause to be transferred any consent, approval, license,
permit or authorization of, or make any declaration, filing or registration
with, any third party or any public body or authority in connection with (a) the
execution and delivery by Polar of this Agreement, or (b) the consummation of
the Merger and the other transactions contemplated hereby or (c) the future
conduct by the Surviving Corporation of the business of Polar (the "POLAR
BUSINESS") other than those that may be required solely by reason of Merger
Sub's or Xxxxxxx'x participation in the transactions contemplated hereby.
SECTION 3.07. Financial and Operating Statements of Polar. Attached
------------------------------------------------
hereto as Appendix I is a true and complete copy of the audited balance sheet of
Polar as of March 31, 2000 and the unaudited balance sheet of Polar as of March
31, 2001, together with related statements of operations, equity and cash flow
of Polar for each of such periods (collectively, the "POLAR YEAR END FINANCIAL
STATEMENTS"). The Polar Year End Financial Statements fairly present the
financial position and the results of operations of Polar for the periods
therein identified. Attached hereto as Appendix II is a true and complete copy
of the unaudited balance sheet of Polar as of October 31, 2001 (the "POLAR
INTERIM BALANCE SHEET"), together with the related statement of operations for
the seven-month period then ended (the "POLAR INTERIM FINANCIAL STATEMENTS").
The Polar Interim Financial Statements fairly present the financial position and
results of operations of Polar for such seven-month period.
SECTION 3.08. No Undisclosed or Contingent Liabilities of Polar. Except
--------------------------------------------------
for liabilities or obligations incurred by Polar in the ordinary course of
business since the date of the Polar Interim Balance Sheet (none of which could
reasonably be expected to cause a Material Adverse Effect on Polar), to the
knowledge of Polar, there is no basis for the assertion against Polar of any
liability or obligation of any nature whatsoever (whether absolute, accrued,
contingent or
9
otherwise) exceeding $25,000 in individual amount that may reasonably be
expected to encumber or affect Polar or the transactions contemplated hereby
which is not fully reflected or reserved against on the Polar Interim Balance
Sheet.
SECTION 3.09. Assets of Polar. The assets of Polar (collectively, the
-----------------
"POLAR ASSETS") include, without limitation, the assets referenced below:
(a) Intellectual Property. All patents, trade or service names
----------------------
and marks, assumed names and copyrights and all applications therefor relating
in which Polar has an interest (collectively, "POLAR INTELLECTUAL PROPERTY"),
including without limitation those listed in Section 3.09(a) of the Disclosure
Schedule;
(b) Receivables. All accounts receivable, bills and notes
-----------
receivable, commercial paper and acceptances or any other evidences of
indebtedness to Polar, including without limitation those listed in Section
3.09(b) of the Disclosure Schedule;
(c) Polar Equipment. All furniture, fixtures and equipment of
----------------
Polar (the "POLAR EQUIPMENT"), including without limitation those items listed
in Section 3.09(c) of the Disclosure Schedule, whether or not such items are in
any way attached or affixed to real property;
(d) Vehicles. All automobiles, trucks, trailers and other
--------
vehicles owned or leased by Polar, including without limitation those listed in
Section 3.09(d) of the Disclosure Schedule;
(e) Insurance. All insurance policies covering Polar and its
---------
directors, officers, employees and agents (and all rights and claims thereunder
for damage to, or otherwise relating to, the Polar Assets), including without
limitation those listed in Section 3.09(e) of the Disclosure Schedule; and
(f) Polar Permits. All licenses, permits and authorizations
--------------
issued by any federal, state, local or foreign governmental authority (the
"POLAR PERMITS") relating to Polar, the Polar Assets or the conduct of the Polar
Business, including without limitation those listed in Section 3.09(f) of the
Disclosure Schedule.
SECTION 3.10. Absence of Certain Changes for Polar. Since October 31,
---------------------------------------
2001, Polar has not:
(a) suffered any Material Adverse Effect and there has not been
any event, whether occurring before or after October 31, 2001, that could
reasonably be expected to have a Material Adverse Effect on Polar; or
(b) incurred any liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise and whether due or to become due,
except (i) liabilities or
10
obligations for rent under its shared office lease, and (ii) liabilities or
obligations for other items incurred in the ordinary course of business of Polar
and consistent with past practice, none of which other items exceeds $25,000,
considering liabilities or obligations arising from one transaction or a series
of similar transactions, and all periodic installments or payments under any
lease (other than the Leases) or other agreement providing for periodic
installments or payments, as a single obligation or liability; or
(c) increased (other than increases resulting from the calculation
of reserves in the ordinary course of business and in a manner consistent with
past practice), or experienced any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves; or
(d) paid, discharged or satisfied any claims, encumbrances,
liabilities or obligations (whether absolute, accrued, contingent or otherwise
and whether due or to become due) other than the timely payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practice of liabilities and obligations reflected or reserved against in the
Polar Fiscal 2001 Balance Sheet or incurred in the ordinary course of business
and consistent with past practice since the date thereof; or
(e) permitted, allowed or suffered any of the Polar Assets,
including, without limitation, real property, personal property or any leasehold
interest, to be subjected to any mortgage, pledge, lien, encumbrance,
restriction or charge of any kind, except for liens for Taxes (as defined
herein) not yet owing; or
(f) canceled any material amount of indebtedness or waived any
material claims or rights; or
(g) sold, transferred or otherwise disposed of any Polar Assets
except in the ordinary course of business and consistent with past practice; or
(h) disposed of or permitted to lapse any right to the use of any
patent, trademark, assumed name, service xxxx, trade name, copyright, license or
application therefor or disposed of or disclosed to any corporation,
association, partnership, organization, business, individual, government or
political subdivision thereof or government agency (each, a "PERSON") other than
representatives of Merger Sub and Xxxxxxx any trade secret, formula, process or
know-how not theretofore a matter of public knowledge; or
(i) granted any increase in the salary, compensation, rate of
compensation, commissions or bonuses payable to or to become payable by Polar to
any officer or director of Polar (including, without limitation, any increase or
change pursuant to any bonus, pension, profit-sharing, retirement or other plan
or commitment); or
(j) granted any increase in the salary, compensation, rate of
compensation, commissions or bonuses payable to or to become payable by Polar to
any employee of Polar (including, without limitation, any increase or change
pursuant to any bonus, pension, profit-
11
sharing, retirement or other plan or commitment), except in the ordinary course
of business and consistent with past practice; or
(k) paid, loaned or advanced any amount to any officer, director,
employee or stockholder of Polar except for amounts advanced to employees of
Polar in the ordinary course of business consistent with past practice (none of
which advances were loans for personal purposes), or sold, transferred or leased
any Polar Assets to, or entered into any agreement (other than this Agreement)
or arrangement with, any officer, director, employee or stockholder of Polar
(except for agreements or arrangements made in the ordinary course of business
and consistent with past practice); or
(l) entered into any collective bargaining or labor agreement, or
experienced any labor dispute or difficulty; or
(m) made any single capital expenditure or commitment in excess of
$10,000 for additions to property, plant, equipment or for any other purpose or
made aggregate capital expenditures or commitments in excess of $25,000 for
additions to property, plant, equipment or for any other purpose; or
(n) made any material change in any method of accounting or
accounting practice or policy; or
(o) suffered any casualty loss in excess of $10,000 (whether or
not insured against) or suffered aggregate casualty losses in excess of $15,000
(whether or not insured against); or
(p) issued any additional shares of capital stock of Polar or any
option, warrant, right or other security exercisable for, convertible into or
exchangeable for shares of capital stock of Polar; or
(q) paid dividends on or made other distributions or payments in
respect of the capital stock of Polar; or
(r) taken any other action not either in the ordinary course of
business and consistent with past practice or provided for in this Agreement; or
(s) entered into or agreed to any transaction not in the ordinary
course of business; or
(t) agreed, whether in writing or otherwise, to take any of the
actions set forth in this Section 3.10.
SECTION 3.11. Real Property of Polar. Polar owns no interest in real
-------------------------
property, other than its lease for shared office space.
12
SECTION 3.12. Polar Contracts and Commitments.
----------------------------------
(a) All of the material agreements, contracts and commitments to
which Polar is a party or is bound, whether individually or when aggregated with
all related agreements, contracts or commitments, are material to the business,
operations, condition (financial or otherwise), liabilities, assets, earnings or
working capital of Polar are described in Section 3.12(a) of the Disclosure
Schedule.
(b) Polar is not a party to or bound by any agreements, contracts
or commitments which individually or when aggregated with all related
agreements, contracts or commitments, provide for the grant of any preferential
rights to purchase or lease any of the Polar Assets, except as described in
Section 3.12(b) of the Disclosure Schedule.
(c) Polar has delivered or made available to Merger Sub or Xxxxxxx
true and complete copies of each written agreement, contract or commitment
listed in Section 3.12(a) of the Disclosure Schedule, as well as true and
accurate summaries of any oral agreement listed thereon.
(d) The enforceability of the agreements, contracts and
commitments referred to in this Section 3.12 will not be affected in any respect
by the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(e) Polar is not a party to or bound by any outstanding
agreements, arrangements or contracts with any of its officers, employees,
agents, consultants, advisors, salesmen or sales representatives that (i) are
not cancelable by it on notice of not longer than 30 days and without the
imposition of any liability, penalty or premium, (ii) require non-cancelable
payment by Polar of over $5,000, or (iii) provide for any bonus or other payment
based on the sale of Polar or any portion thereof.
(f) Polar is not a party to or bound by any employment agreement,
consulting agreement or any other agreements that contains any provision for
severance or termination pay liabilities or obligations.
(g) Polar is not a party to or bound by:
(i) any mortgage, indenture, note, installment obligation or
other instrument, agreement or arrangement for or relating to any borrowing of
money by Polar;
(ii) any guaranty, direct or indirect, by Polar of any
obligation for borrowings or otherwise, excluding endorsements made for
collection in the ordinary course of business;
(iii) any obligation to make payments, contingent or
otherwise, of over $5,000 arising out of any prior acquisition of the business,
assets or stock of other persons;
13
(iv) any collective bargaining agreement with any labor
union;
(v) any lease or similar arrangement for the use by Polar of
personal property requiring payments by Polar, on an annual basis, of over
$10,000;
(vi) any agreement containing noncompetition or other
limitations restricting the conduct of the business of Polar; and
(vii) any partnership, joint venture or similar agreement.
(h) Neither Polar nor any of its officers, directors, stockholders
or affiliates is a party to or bound by any agreement (other than this
Agreement) or arrangement for the sale of any of the assets or capital stock of
Polar or for the grant of any preferential rights to purchase any of the assets
or capital stock of Polar.
(i) Polar is not bound by any agreement to redeem the Common
Shares held by any stockholder, which agreement will not be effectively and
properly terminated by the consummation of the Merger.
(j) With respect to each contract and agreement listed in Section
3.12 of the Disclosure Schedule, except as set forth therein, to the knowledge
of Polar, (i) each of such contracts and agreements is valid, binding and in
full force and effect and is enforceable by Polar in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and other Laws and judicial
decisions of general applicability relating to or affecting creditors' rights
and to general principles of equity; (ii) there have been no cancellations or
threatened cancellations thereof nor are there any outstanding disputes
thereunder; (iii) neither Polar nor any other party is in breach of any material
provision thereof; and (iv) there does not exist any default under, or any event
or condition which with the giving of notice or passage of time or both would
become a breach or default under, the terms of any such contract or agreement on
the part of Polar or on the part of any other party thereto.
SECTION 3.13. Polar Intellectual Property.
-----------------------------
(a) Section 3.13 of the Disclosure Schedule contains an accurate
and complete list of (i) all patents, trademarks (registered or unregistered),
trade names, assumed names, copyrights, and all applications therefor, owned or
filed by Polar and used in the conduct of the Polar Business and, with respect
to registered trademarks, contains a list of all jurisdictions in which such
trademarks are registered and all registration numbers; (ii) all licenses,
permits and other agreements relating thereto; and (iii) all agreements relating
to technology, know-how or processes used in or necessary for the conduct of the
Polar Business which Polar is licensed or authorized to use by others
(including, without limitation, licenses for the use of software of all types).
14
(b) Such patents, trademarks (registered or unregistered),
copyrights, licenses and permits are (i) valid, subsisting and enforceable, and
(ii) duly recorded in the names of the Persons set forth in Section 3.13 of the
Disclosure Schedule.
(c) No claims have been asserted in writing by any Person against
Polar with respect to the ownership, validity, enforceability, misappropriation
or use of any product or service of the Polar Business or such patents,
trademarks (registered or unregistered, or of any confusingly similar or
dilative trademarks), trade names, assumed names, copyrights, applications
therefor, technology, know-how, processes or trade secrets or challenging or
questioning the validity or effectiveness of any such license, permits or
agreement and there is no valid basis for any such claim.
(d) To the knowledge of Polar, no other Person is infringing the
rights of Polar with respect to the patents, trademarks (registered or
unregistered), trade names, assumed names, copyrights, and applications
therefor, technology, know-how, inventions, works, processes or trade secrets
described in this Section 3.13.
SECTION 3.14. Pension and Other Employee Plans and Agreements of Polar.
----------------------------------------------------------
(a) Section 3.14 of the Disclosure Schedule sets forth, as of the
date of this Agreement, all of the pension, profit sharing, stock option, stock
purchase, stock bonus, employee stock ownership, incentive, bonus, life, health,
disability or accident plans, deferred compensation plans, and other employee
compensation or benefit plans, agreements, practices, policies, customs,
contracts, arrangements or commitments, including, without limitation, changes
in control or severance agreements, holiday, vacation or other similar plans,
programs or arrangements, employee benefit plans (within the meaning of section
3(3) of ERISA), and labor union agreements under or with respect to which Polar
or any Person (a "POLAR ERISA AFFILIATE") who would be treated as being a
"single employer" with Polar under section 414 of the Internal Revenue Code of
1986, as amended (the "CODE"), has any liability or obligation, whether current,
contingent, secondary or otherwise (collectively, the "POLAR PLANS" and
individually, a "POLAR PLAN"), and Polar has furnished to Merger Sub and Xxxxxxx
complete copies of all of the foregoing as amended and in effect on the date
hereof, including, where applicable, any trust agreements, insurance contracts
or other funding mediums related to any Polar Plan and Summary Plan
Descriptions. Polar has heretofore delivered to Merger Sub and Xxxxxxx the most
recent liability valuation report with respect to each Polar Plan for which a
report or estimate has been prepared, the most recent assets valuation report
provided to Polar with respect to each Polar Plan for which such report must be
filed, and the most recent favorable IRS determination letter received with
respect to each Polar Plan that is intended to be qualified under section 401(a)
of the Code or trust intended to be exempt under section 501(a) or section
501(c)(9) of the Code. Section 3.14 of the Disclosure Schedule also sets forth
any other plans or arrangements which would be required to be listed pursuant to
the preceding provisions of this section but for the fact that they were
terminated within three years of the date of this Agreement (collectively,
"POLAR TERMINATED PLANS" and individually, a "POLAR TERMINATED PLAN").
15
(b) With respect to each Polar Plan and each Polar Terminated
Plan, Polar and its Polar ERISA Affiliates have complied in all material
respects with, and each Polar Plan and each Polar Terminated Plan conforms in
all respects to and has from its inception been operated in all material
respects with, all applicable laws and regulations, including but not limited to
ERISA and the Code, and each Polar Plan and each Polar Terminated Plan has been
administered in all material respects in accordance with its terms. Each Polar
Plan and each Polar Terminated Plan intended to be qualified under section
401(a) of the Code or trust intended to be exempt under section 501(a) or
section 501(c)(9) of the Code is, or with respect to a Polar Terminated Plan was
at the time it terminated, and for each prior year for which any applicable
statute of limitations has not expired, was, qualified or exempt, as the case
may be, and each such Polar Plan and Polar Terminated Plan is (or was) a single
plan, as defined in section 414(1) of the Code and the regulations thereunder,
in which Polar is the sole employer. Neither Polar nor any Polar ERISA
Affiliate has ever had an obligation or liability, to or with respect to, a
multiemployer plan, as defined in section 4001(a)(3) of ERISA. Neither Polar
nor any Polar ERISA Affiliate has any commitment and has not taken any action to
adopt or establish any additional Polar Plans or to materially increase the
benefits under any Polar Plan; no event or condition has occurred or exists with
respect to any Polar Plan or Polar Terminated Plan, whether or not terminated
prior to the date of this Agreement and whether or not maintained or contributed
to by Polar or any Polar ERISA Affiliate, which individually or collectively
could result in a material liability to Polar or any Polar ERISA Affiliate; all
contributions required to any Polar Plan and each Polar Terminated Plan and all
premiums for insurance coverage for each fiscal year of each Polar Plan and each
Polar Terminated Plan ended before the date of this Agreement and for any
portion of a fiscal year ending on the Closing Date have been timely paid and
payments to be made but not yet due properly accrued and recorded in the Polar
Year End Financial Statements and Polar Interim Financial Statements through
their relevant dates; no Polar Plan or Polar Terminated Plan has incurred any
"accumulated funding deficiency" (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived; there is no pending or, to the
knowledge of Polar, threatened or anticipated litigation, arbitration,
proceeding, claim (other than an undisputed claim for payment of benefits in
accordance with the terms thereof or a pending or final qualified domestic
relations order), demand, grievance, or allegation of unfair labor practice (or
any basis therefor) involving any of the Polar Plans or Polar Terminated Plans
or any investigation, proceeding, administrative review or other administrative
agency process which could result in imposition on Polar or any Polar ERISA
Affiliate of any penalty, assessment or liability in connection with any of the
Polar Plans or Polar Terminated Plans, individually or collectively; no Polar
Plan or Polar Terminated Plan has engaged or is about to engage in a prohibited
transaction as defined in section 406 of ERISA or section 4975 of the Code; and
no "reportable event," as defined in section 4043 of ERISA, has occurred or, to
the knowledge of Polar, is about to occur that could result in a material
liability to Polar or any Polar ERISA Affiliate.
(c) No Polar Plan provides (or has any commitment to provide)
health benefits with respect to any current or former employees or independent
contractors (or beneficiary thereof) of Polar or any Polar ERISA Affiliate
beyond their retirement or other termination of service (other than coverage
mandated by COBRA). Each Polar Plan can be unilaterally terminated at any time
by Polar without material liability.
16
SECTION 3.15. Polar Litigation. There are no open and unresolved claims,
----------------
actions, suits, proceedings, investigations or inquiries that have been made or
served against Polar or, to the knowledge of Polar, that are pending against
(without having been so served), threatened by or against, or otherwise
affecting or that would adversely affect, the transactions contemplated hereby
at law or in equity or before or by any federal, state, local, foreign or other
governmental department, commission, board, agency, or authority ("GOVERNMENTAL
AUTHORITY"). No claim, action, suit, proceeding, inquiry or investigation set
forth in Section 3.15 of the Disclosure Schedule would, if adversely decided, be
reasonably expected to have a Material Adverse Effect on Polar or the
transactions contemplated hereby. Polar is not a party to or a recipient of
service of process regarding (and has not otherwise been named and noticed in)
any judgment, order or decree entered in any lawsuit or proceeding which has had
or may be reasonably expected to have a Material Adverse Effect on Polar or on
its ability to acquire any property or conduct its business in any way.
SECTION 3.16. Polar Insurance.
----------------
(a) All policies of fire, liability, product liability, workmen's
compensation, health and other forms of insurance relating to the Polar Business
(the "POLAR INSURANCE POLICIES") are in full force and effect.
(b) All billed premiums with respect to the Polar Insurance
Policies covering all periods up to and including the Closing Date have been
paid or will be paid prior to the Closing Date.
(c) The coverage provided by the Polar Insurance Policies, with
respect to any insured act or event occurring on or prior to the Closing Date,
will not in any way be adversely affected by or terminate or lapse by reason of
the transactions contemplated hereby.
SECTION 3.17. Polar Collective Bargaining Agreements; Compensation;
---------------------------------------------------------
Employee Agreements.
--------------
(a) Polar does not have in effect any collective bargaining
agreement and is not currently engaged in any bargaining with any labor union.
(b) To the knowledge of Polar, no petition is on file with the
National Labor Relations Board submitted by a labor union seeking to represent
any of the employees of Polar and Polar is not aware of any attempts to organize
the employees of Polar by any labor union.
(c) Section 3.17 of the Disclosure Schedule sets forth a complete
and accurate list showing the names, the rate of compensation and the portions
thereof attributable to salary and bonuses, respectively, as well as the
location of all officers of Polar and of all employees of or consultants to
Polar that received annual base salary and cash bonus totaling in excess of
$100,000 for the fiscal year ended March, 31, 2001.
17
(d) There are no covenants, agreements or restrictions to which
Polar is a party, including but not limited to employee noncompete agreements,
prohibiting, limiting or in any way restricting any employee listed in Section
3.17 of the Disclosure Schedule from engaging in any type of business activity
in any location.
SECTION 3.18. Polar Labor Matters.
---------------------
(a) Polar has complied and is presently complying in all material
respects with all applicable Laws respecting employment and employment
practices, terms and conditions of employment, and wages and hours, and is not
engaged in any unfair labor practice or unlawful employment practice which has
had, or could reasonably be expected to produce, a Material Adverse Effect on
Polar.
(b) There is no open and unresolved unfair labor practice charge
or complaint against Polar for which Polar has received service of process or
other appropriate notice or, to the knowledge of Polar, pending (without having
been so served or noticed) being considered or threatened before the National
Labor Relations Board.
(c) There is no open and unresolved grievance or any open and
unresolved arbitration proceeding arising out of or under collective bargaining
agreements for which Polar has received service of process or other appropriate
notice and, to the knowledge of Polar, no such grievance or arbitration
proceeding is pending (without having been so served or noticed) or is being
considered or threatened.
(d) There is no basis for any charge, complaint or grievance
described in this Section 3.19, and, to the knowledge of Polar, none is being
considered or threatened.
(e) There is no labor strike, slowdown or work stoppage for which
Polar has received service of process or other appropriate notice or, to the
knowledge of Polar, pending (without having been so served or noticed) or
threatened against Polar.
(f) Polar has not experienced any significant work stoppages or
been a party within the past two years to any proceedings before the National
Labor Relations Board, and is not a party to any arbitration proceeding arising
out of or under collective bargaining agreements.
(g) There is no open and unresolved charge or complaint for which
Polar has received service of process or other appropriate notice or, to the
knowledge of Polar, which is being considered or threatened against Polar before
the Equal Employment Opportunity Commission or any state, local, federal or
foreign agency responsible for the prevention of unlawful employment practices.
(h) Polar has not received notice of the intent of any federal,
state, local or foreign agency responsible for the enforcement of labor or
employment laws to conduct an
18
investigation of or relating to Polar, and, to the knowledge of Polar, no such
investigation is in progress.
(i) The employees of Polar are not represented by any labor union
and there are no any collective bargaining agreements otherwise in effect with
respect to such employees.
(j) There are no citations against Polar from the Occupational
Safety and Health Administration for which Polar has been provided service of
process or other appropriate notice, and, to the knowledge of Polar, no such
citations are pending.
SECTION 3.19. Compliance with Law by Polar.
--------------------------------
(a) To the knowledge of Polar, Polar is in compliance with all
federal, state, foreign and local laws (whether statutory or otherwise),
ordinances, rules, regulations, orders, judgments, decrees, writs and
injunctions of any governmental authority (collectively, "LAWS") applicable to
the Polar Business, except for noncompliance which in the aggregate will not
reasonably be expected to result in a Material Adverse Effect.
(b) Polar has not received written notification from any
governmental or regulatory authority within the past five years of any asserted
present or past failure to so comply, which failure has not been appropriately
and completely resolved.
(c) Polar has not been notified by any governmental or regulatory
authority that Polar is in violation or alleged violation of any Law applicable
to the Polar Business which violation has not been appropriately and completely
resolved, or that any governmental or regulatory authority contemplates any
investigation or proceeding with respect to any such violation or alleged
violation which has not been appropriately and completely resolved which, in
either case, could reasonably be expected to have a Material Adverse Effect.
SECTION 3.20. Polar Permits. Polar has all Polar Permits necessary for
--------------
the ownership or leasing of its properties and the conduct of the Polar Business
as now being conducted. All such Polar Permits are in full force and effect. To
the knowledge of Polar, no violations of the Polar Permits have been reported.
No notice of any proceeding has been served or otherwise given to Polar or, to
the knowledge of Polar, is pending (without service or other notice) or
threatened seeking the revocation or limitation of any of such Polar Permits.
SECTION 3.21. Polar Environmental Matters.
-----------------------------
(a) All Polar Permits that are required for the current operation
of the Polar Business under all Environmental Laws have been obtained. No
notice to, approval of, authorization or consent from any Person is necessary
for the transfer of any such Permit, and the consummation of the transactions
contemplated by this Agreement will not violate, alter, impair or invalidate, in
any respect, such Polar Permits.
19
(b) To the knowledge of Polar, Polar is in material compliance
with all terms and conditions of all applicable Environmental Laws (as defined
below). Further, to the knowledge of Polar, Polar is in substantial compliance
with all applicable covenants running with any leases that relate to the
protection of health or the environment. Polar has not received any written
communication from any Person that alleges that Polar is not in compliance with
any applicable Environmental Law, which allegation has not been appropriately
and completely resolved.
(d) Polar has not prepared or caused the preparation of any
environmental reports, audits, investigations or assessments of Polar or any
real or personal property or operations which are now, or have been previously
owned, leased, operated or managed, in whole or in part, by Polar (collectively,
"POLAR ENVIRONMENTAL REPORTS"). To the knowledge of Polar, no Environmental
Reports exist.
(e) For purposes of this Agreement, the following terms shall be
given the following meanings:
(i) "ENVIRONMENTAL LAWS" shall mean any Law relating to or
applicable to the regulation or protection of human health, safety or the
environment (including, without limitation, ambient air, soil, surface water,
groundwater, wetlands, land or subsurface), including without limitation, Laws
and regulations relating to the Release or threatened Release of Hazardous
Material, or manufacture, processing, distribution, use, treatment, storage,
disposal, transport, recycling or handling of Hazardous Material.
(ii) "HAZARDOUS MATERIAL" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, and compressors or other equipment that contain polychlorinated
biphenyls; and (b) any chemicals, materials or substances which are now defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "pollutants," "contaminants" or
words of similar import, under any Environmental Law; and (c) any other
chemical, material, substance or waste, exposure to which is now prohibited,
limited or regulated under any Environmental Law.
(iii) "RELEASE" shall mean any release, spill, emission,
leaking, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the atmosphere, soil, surface water, groundwater or property.
SECTION 3.22. Polar Tax Matters.
-------------------
(a) For purposes of this Agreement, (i) "TAX RETURN" means any
report, statement, form, return or other document or information required to be
supplied to a taxing authority in connection with Taxes and (ii) "TAX" or
"TAXES" means any United States or foreign, federal, state, or local tax,
including without limitation income tax, ad valorem tax,
20
excise tax, sales tax, use tax, franchise tax, gross receipts tax, withholding
tax, social security tax, occupation tax, service tax, license tax, payroll tax,
transfer and recording tax, severance tax, customs tax, import tax, export tax,
employment tax, or any similar or other tax, assessment, duty, fee, levy or
other governmental charge, together with and including, without limitation, any
and all interest, fines, penalties, assessments and additions to tax resulting
from, relating to, or incurred in connection with any such tax or any contest or
dispute thereof.
(b) All Tax Returns required to be filed on or before the Closing
Date by Polar have been or will be filed within the time prescribed by Law
(including extensions of time approved by the appropriate taxing authority).
The Tax Returns so filed are complete, correct and accurate representations of
the Tax liabilities of Polar and such Tax Returns accurately set forth or will
accurately set forth all items to the extent required to be reflected or
included in such returns.
(c) Polar has timely paid or has made adequate provision in the
Polar Fiscal 2001 Balance Sheet for the payment of all Taxes due on such Tax
Returns that have been filed or will be filed for periods ending on or before
the date of the Polar Fiscal 2001 Balance Sheet.
(d) There is no action, suit, investigation, proceeding, audit or
claim that has been served against or otherwise properly noticed to Polar, or,
to the knowledge of Polar, pending or proposed against or with respect to Polar
in respect of any Tax. There are no material liens for Taxes upon any of the
Polar Assets.
(e) Polar has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other Person.
(f) Polar has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.
(g) Polar does not have in effect a consent under Section 341(f)
of the Code concerning collapsible corporations.
(h) Polar has not made any payment, and is not obligated to make
any payment, and is not a party to any agreement that could obligate it to make
any payment that will not be deductible under section 280G of the Code or will
be subject to Tax under section 4999 of the Code.
(i) There has never been a Tax sharing or allocation agreement in
place between Polar and any other Person other than those, if any, with respect
to which the applicable statute of limitations has run.
(j) Polar is not liable for a Tax incurred by any other
corporation that was a member of a consolidated group of corporations (within
the meaning of Treasury regulation section 1.1502) that included Polar.
21
(k) Polar has delivered or made available to Merger Sub and
Xxxxxxx correct and complete copies of all Tax Returns filed by Polar for 2000,
1999 and 1998, all examination reports, and any statements of deficiencies
assessed against or agreed to by Polar.
SECTION 3.23. Title to Polar Assets. Polar has good and valid title to
-----------------------
the Polar Assets, including without limitation those assets set forth on the
Polar Interim Balance Sheet. At the Closing the Polar Assets will be free and
clear of all mortgages, liens, claims, charges, pledges, security interests or
encumbrances of any nature whatsoever.
SECTION 3.24. Redemptions of Capital Stock by Polar. To the knowledge of
-------------------------------------
Polar, all redemptions of its capital stock by Polar in the past ten years have
been effected in accordance with all applicable federal and state securities
(and other) Laws and agreements between Polar and its stockholders. There
exists no continuing claim by any former or current stockholder, for money or
otherwise, against Polar regarding any such redemptions.
SECTION 3.25. Accuracy of Polar's Disclosure. There is no information
---------------------------------
contained in this Agreement (whether in this Article III, any other portion of
this Agreement pertaining to Polar, the Disclosure Schedule, the Appendices, the
Exhibits or any other documents or certificates delivered pursuant to this
Agreement) that contains an untrue statement of material fact or omits to state
any material fact required to be stated in order to make the statements made
herein and therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
MERGER SUB AND XXXXXXX
Xxxxxxx hereby represents and warrants to Polar as follows, except as
otherwise set forth in the relevant section of the Disclosure Schedule:
SECTION 4.01. Organization and Qualification - Merger Sub. Merger Sub is
-------------------------------------------
(a) a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and (b) duly qualified to do business as a
foreign corporation and in good standing in each jurisdiction in which the
character of the properties and assets now owned or leased by it or the nature
of the business transacted by it requires it to be so qualified, except where
the failure to be so qualified, individually or in the aggregate, would not be
reasonably expected to have a Material Adverse Effect on Merger Sub or the
consummation of the transactions contemplated hereby. Each jurisdiction in
which Merger Sub is qualified to do business is listed in Section 4.01 of the
Disclosure Schedule. No jurisdiction in which Merger Sub is not qualified or
licensed has claimed, in writing or otherwise, that Merger Sub is required to
qualify or be licensed therein.
22
SECTION 4.02. Organization and Qualification - Xxxxxxx. Xxxxxxx is (a) a
----------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Iowa and (b) duly qualified to do business as a foreign
corporation and in good standing in each jurisdiction in which the character of
the properties and assets now owned or leased by it or the nature of the
business transacted by it requires it to be so qualified, except where the
failure to be so qualified, individually or in the aggregate, would not be
reasonably expected to have a Material Adverse Effect on Xxxxxxx or the
consummation of the transactions contemplated hereby. Each jurisdiction in
which Xxxxxxx is qualified to do business is listed on Section 4.02 of the
Disclosure Schedule. No jurisdiction in which Xxxxxxx is not qualified or
licensed has claimed, in writing or otherwise, that Xxxxxxx is required to
qualify or be licensed therein.
SECTION 4.03. Power and Capacity; Charter Documents of Merger Sub.
----------------------------------------------------------
(a) Merger Sub has all requisite power and authority (corporate
and otherwise) to enter into, execute and deliver this Agreement and perform its
obligations hereunder. Merger Sub has the corporate power and authority to
carry on its business as now being conducted and to own and lease its
properties. This Agreement has been duly executed and delivered by Merger Sub
and is a valid and binding obligation of Merger Sub, enforceable against Merger
Sub in accordance with its terms. The Board of Directors of Merger Sub has
approved resolutions, a copy of which has been delivered to Polar, approving the
terms of this Agreement and, with respect to Merger Sub, each of the
transactions contemplated by the terms of this Agreement.
(b) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Merger Sub will not
result in a violation or breach of or constitute a default under any term or
provision of the Certificate of Incorporation or Bylaws of Merger Sub. Merger
Sub has delivered to Polar true and complete copies of the Certificate of
Incorporation and the Bylaws of Merger Sub, as in effect on the date hereof.
SECTION 4.04. Power and Capacity; Charter Documents of Xxxxxxx.
------------------------------------------------------
(a) Subject to the approval of the stockholders of Xxxxxxx in
accordance with the terms of applicable law and this Agreement, Xxxxxxx has all
requisite power and authority (corporate and otherwise) to enter into, execute
and deliver this Agreement and perform its obligations hereunder. Xxxxxxx has
the corporate power and authority to carry on its business as now being
conducted and to own and lease its properties. This Agreement has been duly
executed and delivered by Xxxxxxx and is a valid and binding obligation of
Xxxxxxx, enforceable against Xxxxxxx in accordance with its terms. The Board of
Directors of Xxxxxxx has approved resolutions, a copy of which has been
delivered to Polar, approving the terms of this Agreement and, on behalf of
Xxxxxxx, each of the transactions contemplated by the terms of this Agreement.
23
(b) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Xxxxxxx will not
result in a violation or breach of or constitute a default under any term or
provision of the Articles of Incorporation or Bylaws of Xxxxxxx. Xxxxxxx has
delivered to Polar true and complete copies of the Articles of Incorporation and
the Bylaws of Xxxxxxx, as in effect on the date hereof.
SECTION 4.05. Capitalization of Xxxxxxx; Xxxxxxx Subsidiaries.
---------------------------------------------------
(a) Section 4.05(a) of the Disclosure Schedule lists, for Xxxxxxx,
its authorized capitalization, the number of shares of its capital stock (or
other equity interests) issued and outstanding, and the number of shares of its
capital stock (or other equity interests) owned of record by each stockholder.
All of the outstanding shares of the capital stock of Xxxxxxx are validly
issued, fully paid and non-assessable and were not issued in violation of any
preemptive rights or any applicable Law. All such shares are owned free and
clear of any lien, claim or encumbrance of any type whatsoever imposed by
Xxxxxxx. There are no outstanding options, warrants or other rights to acquire
any share of capital stock of Xxxxxxx, there are no outstanding securities
authorized, granted or issued by Xxxxxxx that are convertible into or
exchangeable for shares of its capital stock and there are no phantom stock
rights, stock appreciation rights or similar rights regarding Xxxxxxx. There
are no rights of any Person to have Xxxxxxx repurchase any capital stock of
Xxxxxxx.
(b) Section 4.05(b) of the Disclosure Schedule sets forth for each
subsidiary, direct or indirect, of Xxxxxxx (all such downstream subsidiaries are
referred to herein collectively, as "SUBSIDIARIES" and individually, as a
"SUBSIDIARY") its capital structure, its place of organization and the other
jurisdictions in which it is qualified to do business. Each of the Subsidiaries
has been duly organized and is validly existing and in good standing under the
laws of its respective state of incorporation, has all requisite corporate power
and authority to own or lease and operate its properties and conduct its
business as now conducted and is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties owned or leased by it makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Acquiror or the consummation of the transactions contemplated
hereby. No jurisdiction in which any Subsidiary is not qualified or licensed
has claimed, in writing or otherwise, that such Subsidiary is required to
qualify or be licensed therein.
(c) Except as set forth in Section 4.05(c) of the Disclosure
Schedule, Xxxxxxx owns, free and clear of all liens, claims and encumbrances of
any type whatsoever, and has the unrestricted power to dispose of and vote, all
of the outstanding capital stock of each of its Subsidiaries. There are no
outstanding or authorized options, warrants, subscriptions, calls, conversions
or other rights, contracts, agreements, commitments or understandings of any
kind obligating any Subsidiary to issue, sell, purchase, return or redeem any
shares of its capital stock or any other securities convertible into,
exchangeable for or evidencing the right to subscribe for
24
any shares of capital stock of, or other ownership interest in, any Subsidiary.
All of the outstanding shares of the capital stock of each class of each
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive rights or any
applicable Law (as defined herein).
(d) Except for its interest in any Subsidiary, Xxxxxxx does not
(i) own, beneficially or of record, any shares of any other corporation or
entity or any interests in any partnerships or limited liability companies or
(ii) participate in any manner in any joint ventures, corporate alliance
agreements or corporate partnering agreements. Except for Xxxxxxx'x interest in
any Subsidiary, neither Xxxxxxx nor any Subsidiary has an interest in, or is
subject to, any agreement, obligation or commitment to make any equity
investment in or loan or advance to, any other Person (as defined herein).
SECTION 4.06. No Acquiror Conflicts. The execution, delivery and
-----------------------
performance of this Agreement by Merger Sub and Xxxxxxx and the consummation of
the transactions contemplated hereby will not:
(a) result in the creation or imposition of any security interest,
lien, charge or other encumbrance against Merger Sub's assets or Xxxxxxx'x
assets, with or without the giving of notice and/or the passage of time, or
(b) violate, conflict with, affect acceleration of, or result in
termination, cancellation or modification of, or constitute a default under (i)
any contract, agreement or other instrument to which Merger Sub or Xxxxxxx is a
party or by which Merger Sub or Xxxxxxx or their respective assets is bound or
(ii) any note, bond, mortgage, indenture, deed of trust, license, lease,
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Merger Sub or Xxxxxxx is a party or by which
Merger Sub or Xxxxxxx may be bound or affected or to which any of their
respective assets may be subject, or
(c) violate any statute or law or any judgment, decree, order,
writ, injunction, regulation or rule of any court or any local, state or federal
governmental or regulatory authority, which violation, conflict, acceleration,
requirement, termination, modification or default described in (a), (b), or (c)
above could reasonably be expected to result in a Material Adverse Effect on
Merger Sub or Xxxxxxx or the transactions contemplated by this Agreement.
SECTION 4.07. Acquiror Consents and Approvals. Neither Merger Sub nor
----------------------------------
Xxxxxxx is required to obtain, transfer or cause to be transferred any consent,
approval, license, permit or authorization of, or make any declaration, filing
or registration with, any third party or any public body or authority in
connection with (a) the execution and delivery by Merger Sub and Xxxxxxx of this
Agreement, or (b) the consummation of the Merger and the other transactions
contemplated hereby or (c) the future conduct by the Surviving Corporation of
the Polar Business, other than those that may be required solely by reason of
Polar's (as opposed to any other third party's) participation in the
transactions contemplated hereby.
25
SECTION 4.08. Financial and Operating Statements of Acquiror. Attached
------------------------------------------------
hereto as Appendix II is a true and complete copy of the audited consolidated
balance sheets of the Acquiror as of December 31, 1999 and December 31, 2000
(such latter balance sheet being termed the "ACQUIROR 2000 BALANCE SHEET"),
together with the related consolidated statement of operations, stockholders'
equity (deficit) and cash flow for the year ended (collectively, the "ACQUIROR
YEAR END FINANCIAL STATEMENTS"). The Acquiror Year End Financial Statements
fairly present the consolidated financial position and the results of operations
of the Acquiror for the year then ended in conformity with generally accepted
accounting principles ("GAAP") consistently applied.
SECTION 4.09. No Undisclosed or Contingent Liabilities of Acquiror.
----------------------------------------------------------
Except for liabilities or obligations incurred by the Acquiror in the ordinary
course of business since the date of the Acquiror 2000 Balance Sheet (none of
which could reasonably be expected to cause a Material Adverse Effect on the
Acquiror), to the knowledge of Acquiror, there is no basis for the assertion
against the Acquiror of any liability or obligation of any nature whatsoever
(whether absolute, accrued, contingent or otherwise) exceeding $25,000 in
individual amount that may reasonably be expected to encumber or affect the
Acquiror or the transactions contemplated hereby which is not fully reflected or
reserved against on the Acquiror 2000 Balance Sheet.
SECTION 4.10. Assets of the Acquiror. The assets of the Acquiror
-------------------------
(collectively, the "ACQUIROR ASSETS") include, without limitation, the assets
referenced below:
(a) Intellectual Property. All patents, trade or service names
----------------------
and marks, assumed names and copyrights and all applications therefor relating
in which the Acquiror has an interest (collectively, "ACQUIROR INTELLECTUAL
PROPERTY"), including without limitation those listed in Section 4.10(a) of the
Disclosure Schedule;
(b) Receivables. All accounts receivable, bills and notes
-----------
receivable, commercial paper and acceptances or any other evidences of
indebtedness to the Acquiror, including without limitation those listed in
Section 4.10(b) of the Disclosure Schedule;
(c) Acquiror Equipment. All furniture, fixtures and equipment of
-------------------
the Acquiror (the "ACQUIROR EQUIPMENT"), including without limitation those
items listed in Section 4.10(c) of the Disclosure Schedule, whether or not such
items are in any way attached or affixed to real property;
(d) Vehicles. All automobiles, trucks, trailers and other
--------
vehicles owned or leased by the Acquiror, including without limitation those
listed in Section 4.10(d) of the Disclosure Schedule;
(e) Insurance. All insurance policies covering the Acquiror and
---------
its directors, officers, employees and agents (and all rights and claims
thereunder for damage to, or otherwise
26
relating to, the Acquiror Assets), including without limitation those listed in
Section 4.10(e) of the Disclosure Schedule; and
(f) Permits. All licenses, permits and authorizations issued by
-------
any federal, state, local or foreign governmental authority (the "ACQUIROR
PERMITS") relating to the Acquiror, the Acquiror Assets or the conduct of the
business of the Acquiror (the "ACQUIROR BUSINESS"), including without limitation
those listed in Section 4.10(f) of the Disclosure Schedule.
SECTION 4.11. Absence of Certain Acquiror Changes. Since December 31,
--------------------------------------
2000, the Acquiror has not:
(a) suffered any Material Adverse Effect and there has not been
any event, whether occurring before or after December 31, 2000, that could
reasonably be expected to have a Material Adverse Effect on the Acquiror; or
(b) incurred any liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise and whether due or to become due,
except (i) liabilities or obligations for rent under the Leases (as defined
herein) and (ii) liabilities or obligations for other items incurred in the
ordinary course of business of the Acquiror and consistent with past practice,
none of which other items exceeds $25,000, considering liabilities or
obligations arising from one transaction or a series of similar transactions,
and all periodic installments or payments under any lease (other than the
Leases) or other agreement providing for periodic installments or payments, as a
single obligation or liability; or
(c) increased (other than increases resulting from the calculation
of reserves in the ordinary course of business and in a manner consistent with
past practice), or experienced any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves; or
(d) paid, discharged or satisfied any claims, encumbrances,
liabilities or obligations (whether absolute, accrued, contingent or otherwise
and whether due or to become due) other than the timely payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practice of liabilities and obligations reflected or reserved against in the
Acquiror 2000 Balance Sheet or incurred in the ordinary course of business and
consistent with past practice since the date thereof; or
(e) permitted, allowed or suffered any of the Acquiror Assets,
including, without limitation, real property, personal property or any leasehold
interest, to be subjected to any mortgage, pledge, lien, encumbrance,
restriction or charge of any kind, except for liens for Taxes (as defined
herein) not yet owing; or
(f) canceled any material amount of indebtedness or waived any
material claims or rights; or
27
(g) sold, transferred or otherwise disposed of any Acquiror
Assets except in the ordinary course of business and consistent with past
practice; or
(h) disposed of or permitted to lapse any right to the use of any
patent, trademark, assumed name, service xxxx, trade name, copyright, license or
application therefor or disposed of or disclosed to any Person other than
representatives of Polar any trade secret, formula, process or know-how not
theretofore a matter of public knowledge; or
(i) granted any increase in the salary, compensation, rate of
compensation, commissions or bonuses payable to or to become payable by the
Acquiror to any officer or director of the Acquiror (including, without
limitation, any increase or change pursuant to any bonus, pension,
profit-sharing, retirement or other plan or commitment); or
(j) granted any increase in the salary, compensation, rate of
compensation, commissions of bonuses payable to or to become payable by the
Acquiror to any employee of the Acquiror (including, without limitation, any
increase or change pursuant to any bonus, pension, profit-sharing, retirement or
other plan or commitment), except in the ordinary course of business and
consistent with past practice; or
(k) paid, loaned or advanced any amount to any officer, director,
employee or stockholder of the Acquiror except for amounts advanced to employees
of the Acquiror in the ordinary course of business consistent with past practice
(none of which advances were loans for personal purposes), or sold, transferred
or leased any Acquiror Assets to, or entered into any agreement (other than this
Agreement) or arrangement with, any officer, director, employee or stockholder
of the Acquiror (except for agreements or arrangements made in the ordinary
course of business and consistent with past practice); or
(l) entered into any collective bargaining or labor agreement, or
experienced any labor dispute or difficulty; or
(m) made any single capital expenditure or commitment in excess of
$10,000 for additions to property, plant, equipment or for any other purpose or
made aggregate capital expenditures or commitments in excess of $25,000 for
additions to property, plant, equipment or for any other purpose; or
(n) made any material change in any method of accounting or
accounting practice or policy; or
(o) suffered any casualty loss in excess of $10,000 (whether or
not insured against) or suffered aggregate casualty losses in excess of $15,000
(whether or not insured against); or
(p) issued any additional shares of capital stock of Xxxxxxx or
the Subsidiaries or any option, warrant, right or other security exercisable
for, convertible into or exchangeable for shares of capital stock of Xxxxxxx or
the Subsidiaries; or
28
(q) paid dividends on or made other distributions or payments in
respect of the capital stock of Xxxxxxx or the Subsidiaries; or
(r) taken any other action not either in the ordinary course of
business and consistent with past practice or provided for in this Agreement; or
(s) entered into or agreed to any transaction not in the ordinary
course of business; or
(t) agreed, whether in writing or otherwise, to take any of the
actions set forth in this Section 4.11.
SECTION 4.12. Real Property of Acquiror.
----------------------------
(a) Set forth in Section 4.12 of the Disclosure Schedule is a
complete list of all real property that the Acquiror currently owns or has owned
in the past ten years. The Acquiror has good and marketable title in fee simple
to such currently owned real property and to all plants, buildings and
improvements thereon, free and clear of any mortgages, liens, claims, charges,
pledges, security interests or other encumbrances of any nature whatsoever.
(b) With respect to any deeds, title insurance policies, surveys,
mortgages, agreements and other documents granting to the Acquiror title to or
an interest in or otherwise affecting any such real property, (i) no breach or
event of default on the part of the Acquiror, (ii) no material breach or event
of default, to the knowledge of the Acquiror, on the part of any other party
thereto, and (iii) no event that, with the giving of notice or lapse of time or
both, would constitute such breach or event of default on the part of the
Acquiror or, to the knowledge of the Acquiror, on the part of any other party
thereto, has occurred and is continuing.
(c) Section 4.12 of the Disclosure Schedule contains a complete
and accurate list of all real property leases to which the Acquiror is a party
in any capacity (including all amendments thereof and modifications thereto)
(the "LEASES"). The Acquiror's interests in and to all Leases listed on Section
4.12 of the Disclosure Schedule are free and clear of all mortgages, liens,
claims, charges, pledges, security interests or other encumbrances of any nature
whatsoever including without limitation subleases, chattel mortgages, mechanics'
and materialmen's liens, conditional sales contracts, collateral security
arrangements and other interest retention arrangements. The Acquiror has not
received notice of any default by the Acquiror under any of the Leases, and
there are no facts or conditions that would, with notice or lapse of time or
both, constitute a default by the Acquiror under any of the Leases. None of the
landlords under any of the Leases is in default.
(d) The buildings and improvements owned or leased by the Acquiror
on any real property owned by the Acquiror and on any Lease, and the operation
and maintenance thereof as operated and maintained, do not (i) contravene any
zoning or building Law or ordinance or other administrative regulation or (ii)
violate any restrictive covenant or any applicable Law. All of the plants,
buildings and structures located on any real property owned
29
by the Acquiror or on any Lease are in a state of good maintenance and repair
(normal wear and tear excepted) suitable in all respects for the operation of
the Acquiror Business.
(e) There is no pending or threatened condemnation, eminent domain
or similar proceeding with respect to, or that could affect, any real property
owned by the Acquiror or any Lease.
SECTION 4.13. Acquiror Contracts and Commitments.
-------------------------------------
(a) All of the agreements, contracts and commitments to which the
Acquiror is a party or is bound, whether individually or when aggregated with
all related agreements, contracts or commitments, are material to the business,
operations, condition (financial or otherwise), liabilities, assets, earnings or
working capital of the Acquiror are described in Section 4.13(a) of the
Disclosure Schedule.
(b) The Acquiror is not a party to or bound by any agreements,
contracts or commitments which individually or when aggregated with all related
agreements, contracts or commitments, provide for the grant of any preferential
rights to purchase or lease any of the Acquiror Assets, except as described in
Section 4.13(b) of the Disclosure Schedule.
(c) The Acquiror has delivered or made available to Polar true and
complete copies of each written agreement, contract or commitment listed in
Section 4.13(a) of the Disclosure Schedule, as well as true and accurate
summaries of any oral agreement listed thereon.
(d) The enforceability of the agreements, contracts and
commitments referred to in this Section 4.13 will not be affected in any respect
by the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(e) The Acquiror is not a party to or bound by any outstanding
agreements, arrangements or contracts with any of its officers, employees,
agents, consultants, advisors, salesmen or sales representatives that (i) are
not cancelable by it on notice of not longer than 30 days and without the
imposition of any liability, penalty or premium, (ii) require non-cancelable
payment by the Acquiror of over $5,000, or (iii) provide for any bonus or other
payment based on the sale of the Acquiror or any portion thereof.
(f) The Acquiror is not a party to or bound by any employment
agreement, consulting agreement or any other agreements that contains any
provision for severance or termination pay liabilities or obligations.
(g) The Acquiror is not a party to or bound by:
(i) any mortgage, indenture, note, installment obligation or
other instrument, agreement or arrangement for or relating to any borrowing of
money by the Acquiror;
30
(ii) any guaranty, direct or indirect, by the Acquiror of any
obligation for borrowings or otherwise, excluding endorsements made for
collection in the ordinary course of business;
(iii) any obligation to make payments, contingent or
otherwise, of over $5,000 arising out of any prior acquisition of the business,
assets or stock of other persons;
(iv) any collective bargaining agreement with any labor
union;
(v) any lease or similar arrangement for the use by the
Acquiror of personal property requiring payments by the Acquiror, on an annual
basis, of over $10,000;
(vi) any agreement containing noncompetition or other
limitations restricting the conduct of the business of the Acquiror; and
(vii) any partnership, joint venture or similar agreement.
(h) Neither the Acquiror nor any of its officers, directors,
stockholders or affiliates is a party to or bound by any agreement (other than
this Agreement) or arrangement for the sale of any of the assets or capital
stock of the Acquiror or the Subsidiaries or for the grant of any preferential
rights to purchase any of the assets or capital stock of the Acquiror or the
Subsidiaries.
(i) Acquiror is not bound by any agreement to redeem any shares of
the MurdockCommon Stock held by any stockholder, which agreement will not be
effectively and properly terminated by the consummation of the Merger.
(j) With respect to each contract and agreement listed in Section
4.13 of the Disclosure Schedule, except as set forth therein, to the knowledge
of Xxxxxxx, (i) each of such contracts and agreements is valid, binding and in
full force and effect and is enforceable by the Acquiror in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other Laws and
judicial decisions of general applicability relating to or affecting creditors'
rights and to general principles of equity; (ii) there have been no
cancellations or threatened cancellations thereof nor are there any outstanding
disputes thereunder; (iii) neither the Acquiror, nor any other party is in
breach of any material provision thereof; and (iv) there does not exist any
default under, or any event or condition which with the giving of notice or
passage of time or both would become a breach or default under, the terms of any
such contract or agreement on the part of the Acquiror or on the part of any
other party thereto.
SECTION 4.14. Acquiror Intellectual Property.
--------------------------------
(a) Section 4.14 of the Disclosure Schedule contains an accurate
and complete list of (i) all patents, trademarks (registered or unregistered),
trade names, assumed names, copyrights, and all applications therefor, owned or
filed by the Acquiror and used in or necessary
31
for the conduct of the Acquiror Business and, with respect to registered
trademarks, contains a list of all jurisdictions in which such trademarks are
registered and all registration numbers; (ii) all licenses, permits and other
agreements relating thereto; and (iii) all agreements relating to technology,
know-how or processes used in or necessary for the conduct of the Acquiror
Business which the Acquiror is licensed or authorized to use by others
(including, without limitation, licenses for the use of software of all types).
(b) Such patents, trademarks (registered or unregistered),
copyrights, licenses and permits are (i) valid, subsisting and enforceable, and
(ii) duly recorded in the names of the Persons set forth in Section 4.14 of the
Disclosure Schedule.
(c) No claims have been asserted in writing by any Person against
the Acquiror with respect to the ownership, validity, enforceability,
misappropriation or use of any product or service of the Acquiror Business or
such patents, trademarks (registered or unregistered, or of any confusingly
similar or dilative trademarks), trade names, assumed names, copyrights,
applications therefor, technology, know-how, processes or trade secrets or
challenging or questioning the validity or effectiveness of any such license,
permits or agreement and there is no valid basis for any such claim.
(d) To the knowledge of the Acquiror, no other Person is
infringing the rights of the Acquiror with respect to the patents, trademarks
(registered or unregistered), trade names, assumed names, copyrights, and
applications therefor, technology, know-how, inventions, works, processes or
trade secrets described in this Section 4.14.
SECTION 4.15. Pension and Other Employee Plans and Agreements of Acquiror.
-----------------------------------------------------------
(a) Section 4.15 of the Disclosure Schedule sets forth, as of the
date of this Agreement, all of the pension, profit sharing, stock option, stock
purchase, stock bonus, employee stock ownership, incentive, bonus, life, health,
disability or accident plans, deferred compensation plans, and other employee
compensation or benefit plans, agreements, practices, policies, customs,
contracts, arrangements or commitments, including, without limitation, changes
in control or severance agreements, holiday, vacation or other similar plans,
programs or arrangements, employee benefit plans (within the meaning of section
3(3) of ERISA), and labor union agreements under or with respect to which the
Acquiror or any Person (an "ACQUIROR ERISA AFFILIATE") who would be treated as
being a "single employer" with the Acquiror under section 414 of the Code, has
any liability or obligation, whether current, contingent, secondary or otherwise
(collectively, the "ACQUIROR PLANS" and individually, an "ACQUIROR PLAN"), and
the Acquiror has furnished to Polar complete copies of all of the foregoing as
amended and in effect on the date hereof, including, where applicable, any trust
agreements, insurance contracts or other funding mediums related to any Acquiror
Plan and Summary Plan Descriptions. The Acquiror has heretofore delivered to
Polar the most recent liability valuation report with respect to each Acquiror
Plan for which a report or estimate has been prepared, the most recent assets
valuation report provided to the Acquiror with respect to each Acquiror Plan for
which such report must be filed, and the most recent favorable IRS determination
letter received with respect
32
to each Acquiror Plan that is intended to be qualified under section 401(a) of
the Code or trust intended to be exempt under section 501(a) or section
501(c)(9) of the Code. Section 4.15 of the Disclosure Schedule also sets forth
any other plans or arrangements which would be required to be listed pursuant to
the preceding provisions of this section but for the fact that they were
terminated within three years of the date of this Agreement (collectively, the
"ACQUIROR TERMINATED PLANS" and individually, an "ACQUIROR TERMINATED PLAN").
(b) With respect to each Acquiror Plan and each Acquiror
Terminated Plan, the Acquiror and its Acquiror ERISA Affiliates have complied in
all material respects with, and each Acquiror Plan and each Acquiror Terminated
Plan conforms in all respects to and has from its inception been operated in all
material respects with, all applicable laws and regulations, including but not
limited to ERISA and the Code, and each Acquiror Plan and each Acquiror
Terminated Plan has been administered in all material respects in accordance
with its terms. Each Acquiror Plan and each Acquiror Terminated Plan intended
to be qualified under section 401(a) of the Code or trust intended to be exempt
under section 501(a) or section 501(c)(9) of the Code is, or with respect to an
Acquiror Terminated Plan was at the time it terminated, and for each prior year
for which any applicable statute of limitations has not expired, was, qualified
or exempt, as the case may be, and each such Acquiror Plan and Acquiror
Terminated Plan is (or was) a single plan, as defined in section 414(1) of the
Code and the regulations thereunder, in which the Acquiror is the sole employer.
Neither the Acquiror nor any Acquiror ERISA Affiliate has ever had an obligation
or liability, to or with respect to, a multiemployer plan, as defined in section
4001(a)(3) of ERISA. Neither the Acquiror nor any Acquiror ERISA Affiliate has
any commitment and has not taken any action to adopt or establish any additional
Acquiror Plans or to materially increase the benefits under any Acquiror Plan;
no event or condition has occurred or exists with respect to any Acquiror Plan
or Acquiror Terminated Plan, whether or not terminated prior to the date of this
Agreement and whether or not maintained or contributed to by the Acquiror or any
Acquiror ERISA Affiliate, which individually or collectively could result in a
material liability to the Acquiror or any Acquiror ERISA Affiliate; all
contributions required to any Acquiror Plan and each Acquiror Terminated Plan
and all premiums for insurance coverage for each fiscal year of each Acquiror
Plan and each Acquiror Terminated Plan ended before the date of this Agreement
and for any portion of a fiscal year ending on the Closing Date have been timely
paid and payments to be made but not yet due properly accrued and recorded in
the Acquiror Year End Financial Statements through their relevant dates; no
Acquiror Plan or Acquiror Terminated Plan has incurred any "accumulated funding
deficiency" (as defined in section 302 of ERISA and section 412 of the Code),
whether or not waived; there is no pending or, to the knowledge of the Acquiror,
threatened or anticipated litigation, arbitration, proceeding, claim (other than
an undisputed claim for payment of benefits in accordance with the terms thereof
or a pending or final qualified domestic relations order), demand, grievance, or
allegation of unfair labor practice (or any basis therefor) involving any of the
Acquiror Plans or Acquiror Terminated Plans or any investigation, proceeding,
administrative review or other administrative agency process which could result
in imposition on the Acquiror or any Acquiror ERISA Affiliate of any penalty,
assessment or liability in connection with any of the Plans or Terminated Plans,
individually or collectively; no Acquiror Plan or Acquiror Terminated Plan has
engaged or is about to engage in a prohibited transaction as defined in section
406 of ERISA or section 4975 of the Code; and no "reportable event," as defined
in section 4043 of ERISA, has
33
occurred or, to the knowledge of the Acquiror, is about to occur that could
result in a material liability to the Acquiror or any Acquiror ERISA Affiliate.
(c) No Acquiror Plan provides (or has any commitment to provide)
health benefits with respect to any current or former employees or independent
contractors (or beneficiary thereof) of the Acquiror or any Acquiror ERISA
Affiliate beyond their retirement or other termination of service (other than
coverage mandated by COBRA). Each Acquiror Plan can be unilaterally terminated
at any time by the Acquiror without material liability.
SECTION 4.16. Acquiror Litigation. There are no open and unresolved
--------------------
claims, actions, suits, proceedings, investigations or inquiries that have been
made or served against the Acquiror or, to the knowledge of the Acquiror, that
are pending against (without having been so served), threatened by or against,
or otherwise affecting or that would adversely affect, the transactions
contemplated hereby at law or in equity or before or by any Governmental
Authority. No claim, action, suit, proceeding, inquiry or investigation set
forth in Section 4.16 of the Disclosure Schedule would, if adversely decided, be
reasonably expected to have a Material Adverse Effect on the Acquiror or the
transactions contemplated hereby. The Acquiror is not a party to or a recipient
of service of process regarding (and has not otherwise been named and noticed
in) any judgment, order or decree entered in any lawsuit or proceeding which has
had or may be reasonably expected to have a Material Adverse Effect on the
Acquiror or on its ability to acquire any property or conduct its business in
any way.
SECTION 4.17. Acquiror Insurance.
-------------------
(a) All policies of fire, liability, product liability, workmen's
compensation, health and other forms of insurance relating to the Acquiror
Business (the "ACQUIROR INSURANCE POLICIES") are in full force and effect.
(b) All billed premiums with respect to the Acquiror Insurance
Policies covering all periods up to and including the Closing Date have been
paid or will be paid prior to the Closing Date.
(c) The coverage provided by the Acquiror Insurance Policies, with
respect to any insured act or event occurring on or prior to the Closing Date,
will not in any way be adversely affected by or terminate or lapse by reason of
the transactions contemplated hereby.
SECTION 4.18. Acquiror Collective Bargaining Agreements; Compensation;
-----------------------------------------------------------
Employee Agreements.
-----------------
(a) The Acquiror does not have in effect any collective bargaining
agreement and is not currently engaged in any bargaining with any labor union.
34
(b) To the knowledge of the Acquiror, no petition is on file with
the National Labor Relations Board submitted by a labor union seeking to
represent any of the employees of the Acquiror and the Acquiror is not aware of
any attempts to organize the employees of the Acquiror by any labor union.
(c) Section 4.18 of the Disclosure Schedule sets forth a complete
and accurate list showing the names, the rate of compensation and the portions
thereof attributable to salary and bonuses, respectively, as well as the
location of all officers of the Acquiror and of all employees of or consultants
to the Acquiror that received annual base salary and cash bonus totaling in
excess of $100,000 for the fiscal year ended March 31, 2001.
(d) There are no covenants, agreements or restrictions to which
the Acquiror is a party, including but not limited to employee noncompete
agreements, prohibiting, limiting or in any way restricting any employee listed
in Section 4.18 of the Disclosure Schedule from engaging in any type of business
activity in any location.
SECTION 4.19. Acquiror Labor Matters.
------------------------
(a) The Acquiror has complied and is presently complying in all
material respects with all applicable Laws respecting employment and employment
practices, terms and conditions of employment, and wages and hours, and is not
engaged in any unfair labor practice or unlawful employment practice which has
had, or could reasonably be expected to produce, a Material Adverse Effect on
the Acquiror.
(b) There is no open and unresolved unfair labor practice charge
or complaint against the Acquiror for which the Acquiror has received service of
process or other appropriate notice or, to the knowledge of the Acquiror,
pending (without having been so served or noticed) being considered or
threatened before the National Labor Relations Board.
(c) There is no open and unresolved grievance or any open and
unresolved arbitration proceeding arising out of or under collective bargaining
agreements for which the Acquiror has received service of process or other
appropriate notice and, to the knowledge of the Acquiror, no such grievance or
arbitration proceeding is pending (without having been so served or noticed) or
is being considered or threatened.
(d) There is no basis for any charge, complaint or grievance
described in this Section 4.19, and, to the knowledge of the Acquiror, none is
being considered or threatened.
(e) There is no labor strike, slowdown or work stoppage for which
the Acquiror has received service of process or other appropriate notice or, to
the knowledge of the Acquiror, pending (without having been so served or
noticed) or threatened against the Acquiror.
(f) The Acquiror has not experienced any significant work
stoppages or been a party within the past two years to any proceedings before
the National Labor Relations Board,
35
and is not a party to any arbitration proceeding arising out of or under
collective bargaining agreements.
(g) There is no open and unresolved charge or complaint for which
the Acquiror has received service of process or other appropriate notice or, to
the knowledge of the Acquiror, which is being considered or threatened against
the Acquiror before the Equal Employment Opportunity Commission or any state,
local, federal or foreign agency responsible for the prevention of unlawful
employment practices.
(h) The Acquiror has not received notice of the intent of any
federal, state, local or foreign agency responsible for the enforcement of labor
or employment laws to conduct an investigation of or relating to the Acquiror,
and, to the knowledge of the Acquiror, no such investigation is in progress.
(i) The employees of the Acquiror are not represented by any labor
union and there are no any collective bargaining agreements otherwise in effect
with respect to such employees.
(j) There are no citations against the Acquiror from the
Occupational Safety and Health Administration for which the Acquiror has been
provided service of process or other appropriate notice, and, to the knowledge
of the Acquiror, no such citations are pending.
SECTION 4.20. Compliance with Law by Acquiror.
-----------------------------------
(a) To the knowledge of the Acquiror, the Acquiror is in
compliance with all Laws applicable to the Acquiror Business, except for
noncompliance which in the aggregate will not reasonably be expected to result
in a Material Adverse Effect.
(b) The Acquiror has not received written notification from any
governmental or regulatory authority within the past five years of any asserted
present or past failure to so comply, which failure has not been appropriately
and completely resolved.
(c) The Acquiror has not been notified by any governmental or
regulatory authority that the Acquiror is in violation or alleged violation of
any Law applicable to the Acquiror Business which violation has not been
appropriately and completely resolved, or that any governmental or regulatory
authority contemplates any investigation or proceeding with respect to any such
violation or alleged violation which has not been appropriately and completely
resolved which, in either case, could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.21. Acquiror Permits. The Acquiror has all Acquiror Permits
-----------------
necessary for the ownership or leasing of its properties and the conduct of the
Acquiror Business as now being conducted. All such Acquiror Permits are in full
force and effect. To the knowledge of the Acquiror, no violations of the
Acquiror Permits have been reported. No notice of any proceeding has been
served or otherwise given to
36
the Acquiror or, to the knowledge of the Acquiror, is pending (without service
or other notice) or threatened seeking the revocation or limitation of any of
such Acquiror Permits.
SECTION 4.22. Acquiror Environmental Matters.
--------------------------------
(a) All Acquiror Permits that are required for the current
operation of the Acquiror Business under all Environmental Laws have been
obtained. No notice to, approval of, authorization or consent from any Person
is necessary for the transfer of any such Acquiror Permit, and the consummation
of the transactions contemplated by this Agreement will not violate, alter,
impair or invalidate, in any respect, such Acquiror Permits.
(b) To the knowledge of the Acquiror, the Acquiror is in material
compliance with all terms and conditions of all applicable Environmental Laws.
Further, to the knowledge of the Acquiror, the Acquiror is in substantial
compliance with all applicable covenants running with any leases that relate to
the protection of health or the environment. The Acquiror has not received any
written communication from any Person that alleges that the Acquiror is not in
compliance with any applicable Environmental Law, which allegation has not been
appropriately and completely resolved.
(c) The Acquiror has not prepared or caused the preparation of any
environmental reports, audits, investigations or assessments of the Acquiror or
any real or personal property or operations which are now, or have been
previously owned, leased, operated or managed, in whole or in part, by the
(collectively, "ACQUIROR ENVIRONMENTAL REPORTS"). To the knowledge of the
Acquiror, no Environmental Reports exist.
SECTION 4.23. Acquiror Tax Matters.
----------------------
(a) All Tax Returns required to be filed on or before the Closing
Date by the Acquiror have been or will be filed within the time prescribed by
Law (including extensions of time approved by the appropriate taxing authority).
The Tax Returns so filed are complete, correct and accurate representations of
the Tax liabilities of the Acquiror and such Tax Returns accurately set forth or
will accurately set forth all items to the extent required to be reflected or
included in such returns.
(b) The Acquiror has timely paid or has made adequate provision in
the Acquiror 2000 Balance Sheet for the payment of all Taxes due on such Tax
Returns that have been filed or will be filed for periods ending on or before
the date of the Acquiror 2000 Balance Sheet.
(c) There is no action, suit, investigation, proceeding, audit or
claim that has been served against or otherwise properly noticed to the
Acquiror, or, to the knowledge of the Acquiror, pending or proposed against or
with respect to the Acquiror in respect of any Tax. There are no material liens
for Taxes upon any of the Acquiror Assets.
37
(d) The Acquiror has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other Person.
(e) The Acquiror has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(f) The Acquiror does not have in effect a consent under Section
341(f) of the Code concerning collapsible corporations.
(g) The Acquiror has not made any payment, and is not obligated to
make any payment, and is not a party to any agreement that could obligate it to
make any payment that will not be deductible under section 280G of the Code or
will be subject to Tax under section 4999 of the Code.
(h) There has never been a Tax sharing or allocation agreement in
place between the Acquiror and any other Person other than those, if any, with
respect to which the applicable statute of limitations has run.
(i) The Acquiror is not liable for a Tax incurred by any other
corporation that was a member of a consolidated group of corporations (within
the meaning of Treasury regulation section 1.1502) that included the Acquiror.
(j) The Acquiror has delivered or made available to Polar correct
and complete copies of all Tax Returns filed by the Acquiror for 2000, 1999 and
1998, all examination reports, and any statements of deficiencies assessed
against or agreed to by the Acquiror.
SECTION 4.24. Title to Acquiror Assets. The Acquiror has good, valid and
------------------------
marketable title to the Acquiror Assets, including without limitation those
assets set forth on the Acquiror 2000 Balance Sheet. At the Closing the
Acquiror Assets will be free and clear of all mortgages, liens, claims, charges,
pledges, security interests or encumbrances of any nature whatsoever.
SECTION 4.25. Redemptions of Capital Stock by Acquiror. To the knowledge
----------------------------------------
of Xxxxxxx, all redemptions of its capital stock by the Acquiror in the past ten
years have been effected in accordance with all applicable federal and state
securities (and other) Laws and agreements between the Acquiror and its
stockholders. There exists no continuing claim by any former or current
stockholder, for money or otherwise, against the Acquiror regarding any such
redemptions.
SECTION 4.26. SEC Reports and Financial Statements.
----------------------------------------
38
(a) Xxxxxxx has filed all forms, reports, statements, schedules
and other documents with the United States Securities and Exchange Commission
(the "SEC") required to be filed by it since and including March 31, 2000
pursuant to the federal securities laws and the SEC rules and regulations
thereunder (the "SEC REPORTS"). Xxxxxxx has delivered or made available to
Polar copies of all such SEC Reports. The SEC Reports, as well as all forms,
reports, statements, schedules and other documents to be filed by Xxxxxxx with
the SEC after the date hereof and prior to the Effective Time (the "FUTURE SEC
REPORTS"), (i) were and will be prepared in all material respects in accordance
with the requirements of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and
the published rules and regulations of the SEC thereunder, each as applicable to
such SEC Reports and such later filed Future SEC Reports and (ii) did not and
will not as of the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were and will be made, not misleading. No Subsidiary of Xxxxxxx
is subject to the periodic reporting requirements of the Exchange Act. As of
the date hereof, there are no material unresolved comments issued by the staff
of the SEC with respect to any of the SEC Reports.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) of Xxxxxxx included in the SEC Reports or any
Future SEC Report has been, and in the case of any Future SEC Report will be,
prepared in all material respects in accordance with the published rules and
regulations of the SEC (including Regulation S-X) and in accordance with United
States generally accepted accounting principles applied on a consistent basis
throughout the periods indicated (except as otherwise stated in such financial
statements, including the related notes) and each fairly presents, in all
material respects, the consolidated financial position, results of operations
and cash flows of Xxxxxxx and its consolidated subsidiaries as of the respective
dates thereof and for the respective periods indicated therein, except as
otherwise set forth in the notes thereto (subject, in the case of unaudited
statements, to the inclusion of full notes thereto and to normal and recurring
year-end adjustments).
SECTION 4.27. Accuracy of Acquiror Disclosure. There is no information
---------------------------------
contained in this Agreement (whether in this Article IV, any other portion of
this Agreement pertaining to the Acquiror, the Disclosure Schedule, the
Appendices, the Exhibits or any other documents or certificates delivered
pursuant to this Agreement) that contains an untrue statement of material fact
or omits to state any material fact required to be stated in order to make the
statements made herein and therein not misleading.
ARTICLE V
OTHER OBLIGATIONS OF THE PARTIES
SECTION 5.01. Conduct of Polar Business. From the date hereof to the
----------------------------
Closing, except as otherwise expressly set forth in this Agreement, Polar shall
conduct the business, operations, activities and practices of
39
Polar only in the ordinary course, in accordance with prudent practice and
consistent with past practice. Without limiting the generality of the
foregoing, from the date hereof to the Closing, without the prior written
consent of Xxxxxxx, Polar shall not:
(a) incur any liabilities or obligations of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due), except for liabilities or obligations for (i) rent under the Leases, (ii)
up to $600,000 in convertible debt securities in replacement of currently
outstanding convertible debt securities and up to $700,000 in new convertible
debt securities (collectively, the "CONVERTIBLE DEBT") and (iii) other items
incurred in the ordinary course of business and consistent with past practice,
none of which other items shall exceed $10,000 (considering liabilities or
obligations arising from one transaction or a series of similar transactions,
and all periodic installments or payments under any lease (other than the
Leases) or other agreement providing for periodic installments or payments, as a
single obligation or liability);
(b) pay, discharge or satisfy any claim, encumbrance, liability or
obligation (whether absolute, accrued, contingent or otherwise and whether due
or to become due), other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of liabilities and
obligations which are reflected or reserved against in the Polar Fiscal 2001
Balance Sheet or which have been incurred since the date thereof in the ordinary
course of business and consistent with past practice, or prepay any liability or
obligation having a fixed maturity of more than 90 days from the date such
liability or obligation was issued or incurred;
(c) permit, allow or suffer any of the Polar Assets to be
subjected to any new or additional mortgage, pledge, lien, encumbrance,
restriction or charge of any kind (except for liens arising as a result of Taxes
not yet owing) except for capital equipment leases not to exceed $15,000 in the
aggregate and except for liens incurred in connection with the Convertible Debt;
(d) cancel any amount of indebtedness in excess of $5,000 or waive
any claims or rights of value in excess of $5,000;
(e) sell, transfer or otherwise dispose of any of the Polar Assets
with an aggregate value of more than $5,000;
(f) dispose of or permit to lapse any right to use any patent,
trademark, assumed name, service xxxx, trade name, copyright, license or
application therefor or dispose of or disclose to any Person other than
representatives of Merger Sub or Xxxxxxx any trade secret, formula, process or
know-how not theretofore a matter of public knowledge (other than disclosures in
the ordinary course of business and consistent with past practice that would not
materially diminish the value of such trade secrets, formulae, processes or
know-how to Polar);
(g) grant any increase in the compensation payable to or to become
payable to those individuals identified in Section 3.17 of the Disclosure
Schedule, grant, other than in the ordinary course of business, any increase in
the compensation payable to or to become payable to any other employees (of
whatever nature) of Polar (including, without limitation, any increase or
40
change pursuant to any bonus, pension, profit-sharing, retirement or other plan
or commitment), grant any general increase in the compensation payable to or to
become payable to employees of Polar or, except in the ordinary course of
business and consistent with past practice, grant any increase in the
compensation payable or to become payable to individual employees;
(h) pay, loan or advance any amount (except for advances in the
ordinary course of business and consistent with past practice that do not in the
aggregate exceed $5,000 and are not made as advances for personal loans and
except for loans or advances, if any, made to Xxxxxxx) to, or sell, transfer or
lease any of the Polar Assets to, or enter into any agreement or arrangements
with, any of the officers, directors, shareholders or employees of Polar or any
of their respective affiliates;
(i) enter into any collective bargaining or labor agreement;
(j) make any single capital expenditure or commitment in excess of
$5,000 for additions to property, plant, equipment or intangible capital assets
or for any other purpose or make aggregate capital expenditures or commitments
in excess of $15,000 for additions to property, plant, equipment or for any
other purpose;
(k) make any change in any method of accounting or accounting
practice or policy;
(l) enter into any agreement or contract or commitment of the type
required to be disclosed pursuant to Section 3.10 hereof or outside the ordinary
course of business;
(m) terminate or amend in any material respect any material
contract, lease, license, or other agreement to which Polar is a party;
(n) permit any option to renew any Lease or any option to purchase
any property to expire or exercise any such option;
(o) other than the Convertible Debt and with respect to presently
existing convertible securities, issue any additional shares of capital stock of
Polar or options, warrants, rights (including, without limitation, stock
appreciation rights and phantom stock rights) or other securities exercisable
for, convertible into or exchangeable for shares of capital stock of Polar;
(p) omit to do any act, or permit any act or omission to act,
which may cause a breach of any contract, commitment or obligation of Polar, or
any breach of any representation, warranty, covenant or agreement made by Polar
herein;
(q) pay its suppliers and other vendors in a manner and time not
consistent with past practice;
(r) take any other action not in the ordinary course of business
and consistent with past practice and prudent business practice or provided for
in this Agreement; or
41
(s) agree, whether in writing or otherwise, to do any of the
foregoing.
SECTION 5.02. Conduct of Xxxxxxx Business. From the date hereof to the
-----------------------------
Closing, except as otherwise expressly set forth in this Agreement, Xxxxxxx
shall conduct the business, operations, activities and practices of Xxxxxxx only
in the ordinary course, in accordance with prudent practice and consistent with
past practice. Without limiting the generality of the foregoing, from the date
hereof to the Closing, without the prior written consent of Polar, Xxxxxxx shall
not (and shall cause its Subsidiaries to not):
(a) incur any liabilities or obligations of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due), except for loans or advances from Polar or liabilities or obligations for
(i) rent under the Leases and (ii) other items incurred in the ordinary course
of business and consistent with past practice, none of which other items shall
exceed $10,000 (considering liabilities or obligations arising from one
transaction or a series of similar transactions, and all periodic installments
or payments under any lease (other than the Leases) or other agreement providing
for periodic installments or payments, as a single obligation or liability);
(b) pay, discharge or satisfy any claim, encumbrance, liability or
obligation (whether absolute, accrued, contingent or otherwise and whether due
or to become due), other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of liabilities and
obligations which are reflected or reserved against in the Acquiror 2000 Balance
Sheet or which have been incurred since the date thereof in the ordinary course
of business and consistent with past practice, or prepay any liability or
obligation having a fixed maturity of more than 90 days from the date such
liability or obligation was issued or incurred;
(c) permit, allow or suffer any of the Xxxxxxx Assets to be
subjected to any new or additional mortgage, pledge, lien, encumbrance,
restriction or charge of any kind (except for liens arising as a result of Taxes
not yet owing) except for capital equipment leases not to exceed $15,000 in the
aggregate;
(d) cancel any amount of indebtedness in excess of $5,000 or waive
any claims or rights of value in excess of $5,000;
(e) sell, transfer or otherwise dispose of any of the Xxxxxxx
Assets with an aggregate value of more than $5,000;
(f) dispose of or permit to lapse any right to use any patent,
trademark, assumed name, service xxxx, trade name, copyright, license or
application therefor or dispose of or disclose to any Person other than
representatives of Polar any trade secret, formula, process or know-how not
theretofore a matter of public knowledge (other than disclosures in the ordinary
course of business and consistent with past practice that would not materially
diminish the value of such trade secrets, formulae, processes or know-how to
Xxxxxxx);
42
(g) grant any increase in the compensation payable to or to become
payable to those individuals identified in Section 4.18 of the Disclosure
Schedule, grant, other than in the ordinary course of business, any increase in
the compensation payable to or to become payable to any other employees (of
whatever nature) of Xxxxxxx (including, without limitation, any increase or
change pursuant to any bonus, pension, profit-sharing, retirement or other plan
or commitment), grant any general increase in the compensation payable to or to
become payable to employees of Xxxxxxx or, except in the ordinary course of
business and consistent with past practice, grant any increase in the
compensation payable or to become payable to individual employees;
(h) pay, loan or advance any amount (except for advances in the
ordinary course of business and consistent with past practice that do not in the
aggregate exceed $5,000 and are not made as advances for personal loans) to, or
sell, transfer or lease any of the Xxxxxxx Assets to, or enter into any
agreement or arrangements with, any of the officers, directors, shareholders or
employees of Xxxxxxx or any of their respective affiliates;
(i) enter into any collective bargaining or labor agreement;
(j) make any single capital expenditure or commitment in excess of
$5,000 for additions to property, plant, equipment or intangible capital assets
or for any other purpose or make aggregate capital expenditures or commitments
in excess of $15,000 for additions to property, plant, equipment or for any
other purpose;
(k) make any change in any method of accounting or accounting
practice or policy;
(l) enter into any agreement or contract or commitment of the type
required to be disclosed pursuant to Section 4.11 hereof or outside the ordinary
course of business;
(m) terminate or amend in any material respect any material
contract, lease, license, or other agreement to which Xxxxxxx is a party;
(n) permit any option to renew any Lease or any option to purchase
any property to expire or exercise any such option;
(o) other than with respect to presently existing convertible
securities, issue any additional shares of capital stock of Xxxxxxx or options,
warrants, rights (including, without limitation, stock appreciation rights and
phantom stock rights) or other securities exercisable for, convertible into or
exchangeable for shares of capital stock of Xxxxxxx;
(p) omit to do any act, or permit any act or omission to act,
which may cause a breach of any contract, commitment or obligation of Xxxxxxx,
or any breach of any representation, warranty, covenant or agreement made by
Xxxxxxx herein;
(q) pay its suppliers and other vendors in a manner and time not
consistent with past practice;
43
(r) take any other action not in the ordinary course of business
and consistent with past practice and prudent business practice or provided for
in this Agreement; or
(s) agree, whether in writing or otherwise, to do any of the
foregoing.
SECTION 5.03. Xxxxxxx'x Access to Books and Records. In order that Merger
-------------------------------------
Sub and Xxxxxxx may have full opportunity to make investigations of Polar in
connection with the actions contemplated by this Agreement, Polar shall permit
Merger Sub and Xxxxxxx and their counsel, accountants, auditors, lenders,
environmental consultants and other representatives reasonable access, upon
reasonable notice during normal business hours, to all of the plants, offices,
properties, books and records, contracts and commitments of Polar from the date
hereof through the Closing Date.
SECTION 5.04. Polar's Access to Books and Records. In order that Polar
-------------------------------------
may have full opportunity to make investigations of Xxxxxxx and Merger Sub in
connection with the actions contemplated by this Agreement, Xxxxxxx and Merger
Sub shall permit Polar and its counsel, accountants, auditors, lenders,
environmental consultants and other representatives reasonable access, upon
reasonable notice during normal business hours, to all of the plants, offices,
properties, books and records, contracts and commitments of Xxxxxxx and Merger
Sub from the date hereof through the Closing Date.
SECTION 5.05. Consents. Each party agrees to use its reasonable efforts
--------
to obtain prior to the Closing all consents necessary, in the reasonable
determination of the other party or parties (as the case may be), to consummate
the transactions contemplated hereby, including without limitation each of the
consents, approvals, licenses, permits and authorizations (and the declarations,
filings and registrations) listed or referred to in Section 3.06 (with respect
to Polar) and Section 4.07 (with respect to Xxxxxxx and Merger Sub) of the
parties' respective Disclosure Schedules. All such consents shall be in writing
and in form and substance reasonably satisfactory to the other party or parties
(as the case may be), and executed counterparts thereof shall be delivered to
the other party or parties (as the case may be) promptly after receipt thereof
by the responsible party but in no event later than the Closing.
SECTION 5.06. Disclosure Schedule.
--------------------
(a) Each party shall be responsible for preparing a Disclosure
Schedule that, if necessary, contains qualifications and exceptions to such
party's representations and warranties and provides information required by such
representations and warranties. The portion of the Disclosure Schedule prepared
by Polar (Section 3.01 through Section 3.25) shall be considered to be part of
the representations and warranties of Polar. The portion of the Disclosure
Schedule prepared by Xxxxxxx (Section 4.01 through Section 4.27) shall be
considered to be part of the representations and warranties of Xxxxxxx. An item
shall be deemed properly disclosed only if
44
it is set forth in the appropriate sections or subsections of the Disclosure
Schedule. A reference in one section or subsection of the Disclosure Schedule
will not suffice as proper disclosure if such item shall be required to be set
forth in another section or subsection. Improper disclosure shall not give rise
to constructive notice of an item to the party to whom disclosure is given.
Each party shall deliver its portion of the Disclosure Schedule to the other
party no later than January 22, 2002.
(b) Following such delivery, until the Closing, each party shall
have the continuing obligation to promptly supplement or amend its portion of
the Disclosure Schedule with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in such Sections of the Disclosure
Schedule ("SUPPLEMENTAL DISCLOSURES").
(c) Each party acknowledges that the Disclosure Schedule is an
important and integral part of this Agreement and that the other party or
parties (as the case may be) shall be entitled to treat any such supplementation
or amendment as a breach of the appropriate representation or warranty, whether
or not the event or condition giving rise to such supplementation or amendment
occurred on or prior to the date hereof except to the extent that such
supplementation or amendment is a result of any of the activities permitted by
Section 5.01 or 5.02, as the case may be ("SECTION 5.01 ITEMS" and "SECTION 5.02
ITEMS", respectively), which supplementation or amendment shall not be deemed to
be a breach by the disclosing party of any obligation hereunder or be deemed to
be the non-fulfillment of a condition hereunder.
SECTION 5.07. Governmental Filings. As soon as practicable, Polar, Merger
--------------------
Sub and Xxxxxxx shall make any and all filings and submissions to any
Governmental Authority that are required to be made in connection with the
transactions contemplated hereby. Polar shall furnish to Merger Sub and
Xxxxxxx, and Merger Sub and Xxxxxxx shall furnish to Polar, such information and
assistance as the other party or parties may reasonably request in connection
with the preparation of any such filings or submissions.
SECTION 5.08. Covenant to Satisfy Conditions. Polar, Merger Sub and
---------------------------------
Xxxxxxx shall each use their reasonable efforts to insure that the conditions
set forth in Article VI hereof are satisfied, insofar as such matters are within
their respective control.
SECTION 5.09. Confidentiality. The parties acknowledge and affirm their
---------------
obligations regarding confidentiality set forth in their mutual confidentiality
letters dated December, 2001. No party shall release any information regarding
this Agreement or the transactions contemplated hereby without the prior written
consent of each other party hereto, unless disclosure is required by applicable
Law (in which case the disclosing party shall give reasonable advance notice of
any disclosure to be made by it to the non-disclosing party).
SECTION 5.10 Registration Statement and Proxy Statement. As soon as
----------------------------------------------
practicable
45
following the execution of this Agreement, Xxxxxxx shall (i) file with the SEC
and (ii) use its reasonable best efforts to have cleared and declared effective,
as soon as possible, by the SEC a Proxy Statement and Registration Statement on
Form S-4 (or similar or successor form) (the "FILING") to (x) register, for
purposes of issuance in the Merger, the shares of Xxxxxxx Common Stock to be
issued as Merger Consideration and (y) be delivered to the stockholders of
Xxxxxxx for the purpose of seeking their approval for this Agreement, the Merger
and such other matters as may be necessary to effectuate the other transactions
contemplated hereby (collectively, the "TRANSACTIONS"). Xxxxxxx shall (1)
notify Polar of the receipt of any comments (written or oral) of the SEC with
respect to the Filing and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall promptly provide to
Polar copies of all correspondence between Xxxxxxx or any representative of
Xxxxxxx and the SEC, (2) give Polar and its counsel the opportunity to review
and comment (which review and comment shall be completed within three business
days) upon the Filing prior to its being filed with the SEC and shall give Polar
and its counsel the opportunity to review and comment (which review and comment
shall be completed within three business days) upon all amendments and
supplements to the Filing and all responses to requests for additional
information and replies to comments prior to their being filed with, or sent to,
the SEC, (3) use its reasonable best efforts otherwise to comply with all legal
requirements applicable to the Filing. Included also as part of the
Transactions in the Filing shall be the proposal to the stockholders of Xxxxxxx
of (i) the election of a slate of seven directors (six of whom shall be selected
by Polar (three of whom shall not be employees, consultants or ten percent
stockholders of Xxxxxxx or Polar) and one of whom shall be selected by Xxxxxxx)
(the "DIRECTOR SLATE"), which election shall be effective at the Effective Time,
(ii) the reincorporation of Xxxxxxx in the State of Delaware under the name
"Polar Holding Corporation" (or similar name), effective as of the Effective
Time, and (iii) the approval of a new equity incentive plan mutually
satisfactory to the parties. Polar shall cooperate in all reasonable respects
with Xxxxxxx in preparing the Filing. Xxxxxxx shall indemnify and hold harmless
Polar and its directors, officers, employees and control persons in connection
with the Filing, except to the extent that any information contained in the
Filing was false or misleading or contained material omissions and was prepared
by Polar and provided by Polar to Xxxxxxx specifically for inclusion in the
Filing.
SECTION 5.11 Xxxxxxx Stockholder Approval. Immediately following the
------------------------------
SEC's declaration of effectiveness of the Filing, Xxxxxxx shall take all action
necessary in accordance with applicable Law and its Articles of Incorporation
and Bylaws to duly call, give notice of and convene a meeting of its
stockholders (the "XXXXXXX STOCKHOLDERS MEETING") for the purpose of considering
and voting upon the approval and adoption of this Agreement, the Merger and the
Transactions, and to submit this Agreement to the stockholders of Xxxxxxx for
their approval. The Board of Directors shall (i) recommend to the stockholders
of Xxxxxxx the approval and adoption of this Agreement, the Merger and the
Transactions, (ii) include in the Proxy Statement such favorable recommendation
of the Board of Directors of Xxxxxxx that the stockholders of Xxxxxxx vote in
favor of the approval and adoption of this Agreement, the Merger and the
Transactions, (iii) take all lawful action to solicit such approval from the
stockholders of Xxxxxxx and (iv) not withdraw, amend or modify such favorable
recommendation (or announce publicly its intention to do so), unless the Board
of Directors of Xxxxxxx, after consultation with independent outside legal
counsel, determines in good faith that failing to take such action is
46
necessary for the Board of Directors of Xxxxxxx to comply with its fiduciary
duties to the stockholders of Xxxxxxx under applicable Law.
SECTION 5.12 Polar Stockholder Approval. Immediately following the SEC's
--------------------------
declaration of effectiveness of the Filing, Polar shall take all action
necessary in accordance with applicable Law and its Certificate of Incorporation
and Bylaws to duly call, give notice of and convene a meeting of its
stockholders (the "POLAR STOCKHOLDERS MEETING") for the purpose of considering
and voting upon the approval and adoption of this Agreement, the Merger and the
Transactions, and to submit this Agreement to the stockholders of Polar for
their approval. The Board of Directors shall (i) recommend to the stockholders
of Polar the approval and adoption of this Agreement, the Merger and the
Transactions, (ii) include in Polar's proxy statement such favorable
recommendation of the Board of Directors of Polar that the stockholders of Polar
vote in favor of the approval and adoption of this Agreement, the Merger and the
Transactions, (iii) take all lawful action to solicit such approval from the
stockholders of Polar and (iv) not withdraw, amend or modify such favorable
recommendation (or announce publicly its intention to do so), unless the Board
of Directors of Polar, after consultation with independent outside legal
counsel, determines in good faith that failing to take such action is necessary
for the Board of Directors of Polar to comply with its fiduciary duties to the
stockholders of Polar under applicable Law. Polar shall (1) give Xxxxxxx and
its counsel the opportunity to review and comment (which review and comment
shall be completed within three business days) upon Polar's proxy statement
prior to its being sent to the stockholders of Polar and (2) use its reasonable
best efforts to comply with all legal requirements applicable to the proxy
statement.
SECTION 5.13. Resignation of Officers and Directors; Corporate Governance.
-----------------------------------------------------------
On or prior to the Closing, Xxxxxxx shall deliver, or cause to be delivered, to
Polar the resignation of each officer and director of Xxxxxxx and the
Subsidiaries, effective at the Effective Time (unless agreed otherwise in
writing by Polar). Immediately following the Merger, the Board of Directors of
Xxxxxxx shall establish committees of the Board of Directors of the Surviving
Corporation, customary for the governance of a public company, including but not
limited to an audit committee and a compensation committee.
SECTION 5.14. Provision of Polar's Audited Financial Statements. As soon
-------------------------------------------------
as practicable, Polar shall engage an independent public accountant reasonably
acceptable to Xxxxxxx to prepare an audit of Polar's financial statements for
the nine months ending December 31, 2001 and for any other periods required to
comply with applicable Law in connection with their inclusion in the Filing.
SECTION 5.15. Financial Condition of Xxxxxxx. Xxxxxxx shall use all of
---------------------------------
its reasonable efforts to cause its creditors to forgive and/or convert into
equity Xxxxxxx'x liabilities, such that Xxxxxxx'x liabilities will, as of
Closing, not exceed its assets (each as determined in accordance with GAAP,
consistent with past practice, but excluding from liabilities the amounts, if
any, of loans extended by Polar to Xxxxxxx or Merger Sub) (the "NET WORTH
TEST").
47
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 6.01. Conditions to the Obligations of Each Party. The respective
-------------------------------------------
obligations of Xxxxxxx, Merger Sub and Polar to consummate the Merger are
subject to the satisfaction, at or before the Effective Time, of each of the
following conditions:
(a) Polar Stockholder Approval. This Agreement shall have been
----------------------------
adopted by the stockholders of Polar in accordance with the Delaware Law and
Polar's Certificate of Incorporation and its Bylaws.
(b) Xxxxxxx Stockholder Approval. This Agreement shall have been
-----------------------------
adopted by the stockholders of Xxxxxxx in accordance with applicable Law and
Xxxxxxx'x Articlesof Incorporation and its Bylaws.
(c) No Orders and Injunctions. No Governmental Authority shall
----------------------------
have enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order or decree, judgment, injunction, ruling or other
order, whether temporary, preliminary or permanent (collectively, "ORDER"), that
is then in effect and has the effect of preventing or prohibiting consummation
of the Merger or otherwise imposing material limitations on the ability of the
Surviving Corporation effectively to acquire or hold Polar's business; provided
--------
that Xxxxxxx, Merger Sub and Polar shall each use its reasonable best efforts to
----
have any such Order vacated.
(d) Effectiveness of the Filing. The Filing shall have been
------------------------------
declared effective by the SEC and no stop order shall be in place relating
thereto.
(e) Convertible Debt of Polar. Since the date of this Agreement,
--------------------------
Polar shall have received disbursements of at least $1,500,000 in gross proceeds
from the sale of its convertible debt securities or its other securities.
SECTION 6.02. Conditions to Obligations of Xxxxxxx and Merger Sub. The
------------------------------------------------------
obligations of Xxxxxxx and Merger Sub to consummate the Merger are subject to
the satisfaction, at or before the Effective Time, of each of the following
additional conditions, unless waived by Xxxxxxx in writing prior to the
Effective Time:
(a) Representations and Warranties. The Polar Net Adverse Effects
------------------------------
(as defined below) resulting from any breaches of the representations and
warranties of Polar set forth in this Agreement (which representations and
warranties shall be deemed given (i) as of the date of this Agreement (but
taking into effect the Disclosure Schedule) and (ii) as of the Closing Date as
though then made on and as of the Closing Date (taking into effect the
Disclosure
48
Schedule and excluding any Section 5.01 Items) except for (A) changes
specifically contemplated by this Agreement and (B) those representations and
warranties that address matters only as of a particular date (which shall remain
true and correct only as of such date)) shall not exceed $500,000, provided,
however, that (x) the representations and warranties set forth in the officers'
certificate required by Section 6.02(d) as to the performance by Polar of its
obligations under this Agreement and (y) the representations and warranties set
forth in Sections 3.01 through 3.05 and Section 3.23 and 3.25, shall, in each
such case, be true and correct in all respects. "POLAR NET ADVERSE EFFECTS"
shall mean the net aggregate adverse effects on the reasonably determined
valuation by Xxxxxxx of the business, operations, assets, liabilities (actual or
contingent), properties, financial and other condition or results of operations
of Polar.
(b) Covenants and Agreements. Polar shall have performed all
--------------------------
obligations and complied with all agreements and covenants required to be
performed by it or complied with by it under this Agreement at or prior to the
Effective Time, other than any failure of performance or compliance which (i)
cannot be (or has not already been) cured within 20 calendar days after written
notice of such breach is delivered to Polar or (ii) in reasonably determined
probability, would not materially adversely affect the ability of the parties
hereto to consummate the Transactions.
(c) Consents. Xxxxxxx shall have received evidence, in form and
---------
substance reasonably satisfactory to it, that all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities
and other third parties (i) necessary for the consummation of the Transactions
and (ii) as otherwise set forth in Section 3.06 of the Disclosure Schedule have
been obtained, all on terms and conditions reasonably satisfactory to Xxxxxxx.
(d) Officers' Certificate. Polar shall have delivered an
----------------------
Officers' Certificate, duly executed by Polar's Chief Executive Officer and
Chief Financial Officer and dated as of the Closing Date, stating that the
conditions to Closing set forth in Sections 6.02(a) and (b) above have been
satisfied.
(e) Existing Bridge Loan. PMC shall have repaid or extended until
--------------------
at least December 31, 2002, the bridge financing arrangement in the principal
amount of $600,000 with Affiliated Investments, L.L.C.
(f) Polar Lock-up Agreements. Polar shall have delivered lock-up
-------------------------
agreements in the form attached hereto as Exhibit "A" (the "Lock-up Agreement")
from holders covering at least 60% of its capital stock outstanding as of the
Closing.
(g) Certified Copies. Polar shall have delivered certified copies
----------------
of (i) the resolutions duly adopted by the Board of Directors authorizing the
execution, delivery and performance of this Agreement and the Transactions, (ii)
resolutions duly adopted by the stockholders of Polar duly approving the Merger,
this Agreement and the Transactions, and (iii) the Certificate of Incorporation
and the Bylaws of Polar as then in effect immediately prior to the Effective
Time.
49
SECTION 6.03. Conditions to Obligation of Polar. The obligations of Polar
---------------------------------
to consummate the Merger are subject to the satisfaction, at or before the
Effective Time, of each of the following additional conditions, unless waived by
Polar in writing prior to the Effective Time:
(a) Representations and Warranties. The Xxxxxxx Net Adverse
--------------------------------
Effects (as defined below) resulting from any breaches of the representations
and warranties of Xxxxxxx set forth in this Agreement (which representations and
warranties shall be deemed given (i) as of the date of this Agreement (but
taking into effect the Disclosure Schedule) and (ii) as of the Closing Date as
though then made on and as of the Closing Date (taking into effect the
Disclosure Schedule and excluding any Section 5.02 Items) except for (A) changes
specifically contemplated by this Agreement and (B) those representations and
warranties that address matters only as of a particular date (which shall remain
true and correct only as of such date)) shall not exceed $500,000, provided,
however, that (x) the representations and warranties set forth in the officers'
certificate required by Section 6.03(d) as to the performance by Xxxxxxx of its
obligations under this Agreement and (y) the representations and warranties set
forth in Sections 4.01 through 4.07 and Section 4.24, 4.26 and 4.27, shall, in
each such case, be true and correct in all respects. "XXXXXXX NET ADVERSE
EFFECTS" shall mean the net aggregate adverse effects on the reasonably
determined valuation by Polar of the business, operations, assets, liabilities
(actual or contingent), properties, financial and other condition or results of
operations of Xxxxxxx and its Subsidiaries taken as a whole.
(b) Covenants and Agreements. Xxxxxxx shall have performed all
--------------------------
obligations and complied with all agreements and covenants required to be
performed by it or complied with by it under this Agreement at or prior to the
Effective Time, other than any failure of performance or compliance which (i)
cannot be (or has not already been) cured within 20 calendar days after written
notice of such breach is delivered to Xxxxxxx or (ii) in reasonably determined
probability, would not materially adversely affect the ability of the parties
hereto to consummate the Transactions.
(c) Consents. Polar shall have received evidence, in form and
---------
substance reasonably satisfactory to it, that all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities
and other third parties (i) necessary for the consummation of the Transactions
and (ii) as otherwise set forth in Section 4.07 of the Disclosure Schedule have
been obtained, all on terms and conditions reasonably satisfactory to Polar.
(d) Officers' Certificate. Xxxxxxx shall have delivered an
----------------------
Officers' Certificate, duly executed by Xxxxxxx'x Chief Executive Officer and
Chief Financial Officer and dated as of the Closing Date, stating that the
conditions to Closing set forth in Sections 6.03(a) and (b) above have been
satisfied.
(e) Election of Slate of Directors. The stockholders of Xxxxxxx
--------------------------------
shall have duly elected the Director Slate, effective as of the Effective Time,
and there shall be no other directors of Xxxxxxx.
50
(f) Xxxxxxx Financial Status. Xxxxxxx shall have met the Net
--------------------------
Worth Test, as set forth in Section 5.15 hereof.
(g) Xxxxxxx Lock-up Agreements. Xxxxxxx shall have delivered
-----------------------------
Lock-up Agreements from holders covering at least 60% of all of its capital
stock outstanding as of the Closing.
(h) Certified Copies. Xxxxxxx shall have delivered certified
-----------------
copies of (i) the resolutions duly adopted by Xxxxxxx'x and Merger Sub's Board
of Directors authorizing the execution, delivery and performance of this
Agreement and the Transactions, (ii) the resolutions duly adopted by the
stockholders of Xxxxxxx adopting this Agreement, the Merger and the Transactions
and (iii) the Articles of Incorporation and Bylaws of Xxxxxxx and the
Certificate of Incorporation and the Bylaws of the Merger Sub as then in effect
immediately prior to the Effective Time.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination by Mutual Consent. This Agreement may be
--------------------------------
terminated and the Merger and other Transactions may be abandoned at any time
prior to the Effective Time, before or after the adoption of this Agreement by
the stockholders of Polar and/or Xxxxxxx, by the mutual written consent of
Polar, Xxxxxxx and Merger Sub.
SECTION 7.02. Termination by Either Xxxxxxx or Polar. This Agreement may
--------------------------------------
be terminated and the Merger and other Transactions may be abandoned at any time
prior to the Effective Time, before or after the adoption of this Agreement by
the stockholders of Polar and/or Xxxxxxx, by either Xxxxxxx or Polar, if:
(a) any Governmental Authority shall have issued an Order (which
has not been vacated, withdrawn or overturned) permanently restraining,
enjoining or otherwise prohibiting the acceptance for payment of, or payment
for, the Common Shares pursuant to the Merger and such Order shall have become
final and nonappealable; provided that the right to terminate this Agreement
-------- ----
pursuant to this Section 7.02(a) shall not be available to any party that has
failed to perform its obligations under Section 5.08 or the proviso contained in
Section 6.01(c); or
(b) the Merger shall not have been consummated on or before August
31, 2002 (the "EXPIRATION DATE") (provided, that the Expiration Date shall be
automatically extended to (i) September 30, 2002 if the Merger shall not have
been consummated on or prior to August 31, 2002 due solely to the failure of the
SEC to clear and declare effective the Filing for mailing to Xxxxxxx'x
stockholders on or prior to July 31, 2002) or if events have occurred which have
made it impossible to satisfy on or before the Expiration Date a condition
precedent to the terminating party's obligations to consummate the Transactions;
provided that the right to
-------- ----
51
terminate this Agreement under this Section 7.02(b) shall not be available to
any party whose failure to perform any covenant or obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before the Expiration Date.
SECTION 7.03. Termination by Xxxxxxx. This Agreement may be terminated
------------------------
and the Merger and other Transactions may be abandoned by Xxxxxxx at any time
prior to the Effective Time, before or after the adoption of this Agreement by
the stockholders of Polar and/or Xxxxxxx, if:
(a) Polar shall have breached (which breach materially and adversely
affects the ability of the parties hereto to consummate the Transactions) any of
its covenants or other agreements set forth in this Agreement (a "TERMINATING
POLAR BREACH") and such Terminating Polar Breach is not cured within 20 days
after notice thereof is received by Polar; or
(b) Polar's portion of the Disclosure Schedule (i) is not delivered in
accordance with Section 5.06 on or prior to January 22, 2002 or (ii) contains
information which evidences the occurrence of a Material Adverse Effect
regarding Polar since October 31, 2001 (provided that any termination under this
clause (b) may only be effected on or prior to February 15, 2002).
SECTION 7.04. Termination by Polar. This Agreement may be terminated by
---------------------
Polar and the Merger and other Transactions may be abandoned at any time prior
to the Effective Time, before or after the adoption of this Agreement by the
stockholders of Polar and/or Xxxxxxx, if:
(a) Xxxxxxx shall have breached (which breach materially and adversely
affects the ability of the parties hereto to consummate the Transactions) any of
its covenants or other agreements set forth in this Agreement (a "TERMINATING
XXXXXXX BREACH") and such Terminating Xxxxxxx Breach is not cured within 20 days
after notice thereof is received by Xxxxxxx; or
(b) Xxxxxxx'x portion of the Disclosure Schedule (i) is not delivered
in accordance with Section 5.06 on or prior to January 22, 2002 or (ii) contains
information which evidences the occurrence of a Material Adverse Effect
regarding Acquiror since September 30, 2001 (provided that any termination under
this clause (b) may only be effected on or prior to February 15, 2002).
SECTION 7.05. Effect of Termination. In the event of the termination of
----------------------
this Agreement and abandonment of the Merger and other Transactions pursuant to
this Article VII, this Agreement shall forthwith become null and void and have
no effect, without any liability on the part of any party's officers, directors,
stockholders, affiliates and agents; provided, that nothing contained in this
Section 7.05 shall relieve any party from liability for any breach of this
Agreement.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Survival of Representations and Warranties. None of the
----------------------------------------------
representations and warranties made hereunder shall survive the Closing
(provided, however, that any representations or warranties made fraudulently or
willfully inaccurate shall survive for the duration of the applicable statute of
limitations).
SECTION 8.02. Commissions. Except for Xxxxxxxx Xxxxx & Company, Inc. (with
-----------
respect to Polar) and Xxxxxxx Xxxxxx & Company (with respect to Xxxxxxx), no
party hereto has employed any investment banker, broker, finder or similar agent
in connection with any transaction contemplated by this Agreement.
SECTION 8.03. Definition of Knowledge. For the purpose of this Agreement,
-----------------------
the Exhibits and Appendices to this Agreement and the Disclosure Schedule, the
phrases "to the knowledge" of any party and "known" and words of like effect
shall mean to the actual knowledge of such party and any executive officer or
director of any such party, which knowledge shall also include information
existing in the records and files of such party.
SECTION 8.04. Definition of Material Adverse Effect and Material Adverse
-----------------------------------------------------------
Change. "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means, with
-----
respect to any party, any materially adverse change, occurrence or effect
(direct or indirect) on the business, operations, properties (including tangible
properties), condition (financial or otherwise), assets, prospects, obligations
or liabilities (whether absolute, contingent or otherwise and whether due or to
become due) of such party and its subsidiaries taken as a whole (but excluding
any such items affecting the general economy or such party's industry as a
whole).
SECTION 8.05. Expenses, Taxes, Etc. Except as otherwise provided herein,
--------------------
each of the parties hereto shall pay all fees and expenses incurred by it or any
of its affiliates in connection with the transactions contemplated by this
Agreement.
SECTION 8.06. Successors and Assigns. No party shall have the right to
------------------------
assign all or any part of its interest in this Agreement without the prior
written consent of the other parties, and any attempted transfer without such
consent shall be null and void.
SECTION 8.07. No Third-Party Benefit. Nothing in this Agreement shall be
----------------------
deemed to create any right or obligation in any Person not a party hereto
(except with respect to Polar's shareholders' right to receive Merger
Consideration) and this Agreement shall not be construed otherwise in any
53
respect to be a contract or agreement in whole or in part for the benefit of or
binding upon any Person not a party hereto.
SECTION 8.08. Entire Agreement; Amendment. This Agreement, the Exhibits,
---------------------------
the Appendices and the Disclosure Schedule hereto constitute the entire
agreement among the parties hereto with respect to the transactions contemplated
herein and supersede all prior oral and written agreements, memoranda,
understandings and undertakings between the parties hereto relating to the
subject matter hereof. This Agreement may not be modified, amended, altered or
supplemented except by a written instrument executed and delivered by each of
the parties hereto.
SECTION 8.09. Reformation and Severability. If any provision of this
------------------------------
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof and such illegality, invalidity or
unenforceability does not result in a material failure of consideration, then;
(a) in lieu of such illegal, invalid or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable; and
(b) the legality, validity and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.
SECTION 8.10. Notices. All notices, claims, certificates, requests,
-------
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed (registered or
certified mail, postage prepaid, return receipt requested) as follows:
If to Merger Sub or Xxxxxxx:
Xxxxxxx Communications Corporation
0000 Xxxxx Xxxx X.X.
Xxxxx Xxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Xxxxxxx & Xxxxxxxxx PLC
The American Building
000 Xxxxxx Xxxxxx X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
54
If to Polar:
Polar Molecular Corporation
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
with a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx and J. Xxxxxxx Xxxxxxxx
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
SECTION 8.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO ITS CONFLICTS OF LAW RULES.
SECTION 8.12 Arbitration.
-----------
(a) Any controversy or claim (including, without limitation,
whether any controversy or claim is subject to arbitration) arising out of or
relating to this Agreement, or the breach thereof (whether, in any case,
involving (x) a party hereto, (y) their transferees or (z) such party's or
transferee's directors, officers, partners, members, managers, employees,
representatives or agents) that has not been resolved by negotiation among the
parties, shall be settled by binding arbitration administered by the American
Arbitration Association (the "AAA") under its Commercial Arbitration Rules
("RULES"), and shall be held in Denver, Colorado.
(b) The Delaware rules of evidence shall control the admission of
evidence into the arbitration proceeding.
(c) Any dispute submitted for arbitration shall be referred to a
single arbitrator mutually selected by the parties. If the parties cannot agree
upon a mutually agreeable arbitrator within 30 days of having submitted the
dispute to the AAA, a neutral arbitrator shall be appointed by the AAA in
accordance with the Rules. The parties agree that they shall consent to an
expedited proceeding under the Rules, to the fullest extent that the AAA can
accommodate such a request.
(d) The ruling of the arbitrator shall be binding and conclusive
upon all parties hereto and any other person, entity or trust with an interest
in the matter.
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(e) The arbitration provision set forth in this Section 8.12 shall
be a complete defense to any suit, action or other proceeding instituted in any
court regarding any controversy or claim (including, without limitation, whether
any controversy or claim is subject to arbitration) arising out of or relating
to this Agreement, or the breach thereof (whether, in any case, involving (x) a
party hereto, (y) their transferees or (z) such party's or transferee's
directors, officers, partners, members, managers, employees, representatives or
agents); provided, however, that (i) any of the parties to the arbitration may
request a Delaware State District Court, to provide interim injunctive relief in
aid of arbitration hereunder or to prevent a violation of this Agreement pending
arbitration hereunder (and any such request shall not be deemed a waiver of the
obligations to arbitrate set forth in this Section 8.12), (ii) any ruling on the
award rendered by the arbitrator may be entered as a final judgment in (and only
in) a Delaware State District Court (and each of the parties hereto irrevocably
submits to the jurisdiction of such court for such purposes) and (iii)
application may be made by a party to any court of competent jurisdiction
wherever situated for enforcement of any such final judgment and the entry of
whatever orders are necessary for such enforcement. In any proceeding with
respect hereto, all direct, reasonable costs and expenses (including, without
limitation, AAA administration fees and arbitrator fees) incurred by the parties
to the proceeding shall, at the conclusion of the proceeding, be paid by the
party incurring the same.
SECTION 8.13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
The remainder of this page is intentionally left blank.
56
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the date first above written.
POLAR MOLECULAR CORPORATION
By: ____________________________
Name: ____________________________
Title: ____________________________
XXXXXXX COMMUNICATIONS CORPORATION
By: ____________________________
Name: ____________________________
Title: ____________________________
MCC MERGER SUB CORPORATION
By: ____________________________
Name: ____________________________
Title: ____________________________
57
Exhibit "A"
Form of Lock-up Agreement
A-1
Appendix I
Polar Year End Financial Statements
I-1
Appendix II
Polar Interim Financial Statements
II-1
Appendix III
Acquiror Year End Financial Statements
III-1
