AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of the 18th day of September, 1999,
by and among Micro Component Technology, Inc., a Minnesota corporation
("Parent"), MCT Acquisition, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), and Aseco Corporation, a Delaware
corporation (the "Company").
WHEREAS, the Board of Directors of the Parent and the Company deem it
advisable and in the best interests of their respective stockholders to
consummate, and have approved, the business combination transaction provided for
herein in which Merger Sub would merge (the "Merger") with and into the Company,
and the Company would become a wholly-owned subsidiary of Parent.
WHEREAS, the parties hereto intend that (i) the issuance of the Parent
Common Stock (as defined below) to the shareholders of the Company in connection
with the Merger shall be on a tax-free basis to the shareholders of the Company
and (ii) this transaction shall qualify for federal income tax purposes as a
reorganization within the meaning of (section) 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, articles of merger (the "Articles of Merger") shall be properly
executed and thereafter duly filed with the Secretary of State of Delaware as
provided in the Delaware General Corporation Law (the "Delaware Law"), as soon
as practicable on or after the Closing (as defined in Section 1.2). The Merger
shall become effective upon the filing of the Articles of Merger with the
Secretary of State of Delaware or at such other time as the parties may agree
upon in writing pursuant to applicable law (the "Effective Time").
Section 1.2 CLOSING. The closing of the Merger (the "Closing") will take
place as set forth in Section 6.4 hereof at the offices of Best & Flanagan LLP,
4000 U.S. Bank Place, 601 Second Avenue South, Minneapolis, Minnesota, or at
such other place and time as is agreed to in writing by the parties hereto.
Section 1.3 EFFECTS OF THE MERGER.
(a) At the Effective Time (i) Merger Sub shall be merged with and into
the Company which shall be the surviving corporation (the "Surviving
Corporation";
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Merger Sub and the Company are sometimes referred to herein as the
"Constituent Corporations") and the separate existence of Merger Sub shall
cease, (ii) the Certificate of Incorporation of Merger Sub shall be the
Certificate of Incorporation of the Surviving Corporation, and (iii) the
Bylaws of the Merger Sub as in effect immediately prior to the Effective
Time shall be the Bylaws of the Surviving Corporation.
(b) Upon the effectiveness of the Merger, all of the estate, property,
rights, privileges, powers and franchises of the Constituent Corporations
and all of their property, real, personal and mixed, and all the debts due
on whatever account to either of them, as well as all stock subscriptions
and other chooses in action belonging to either of them shall be
transferred to and vested in the Surviving Corporation; and all claims,
demands, property and other interests shall be the property of the
Surviving Corporation, and the title to all real estate vested in either of
the Constituent Corporations shall not revert or be in any way impaired by
reason of the Merger, but shall be vested in the Surviving Corporation all
as provided in Section 251 and 259 and other applicable provisions of
Delaware Law.
The Merger is intended to constitute a tax-free reorganization under
Section 368(a) of the Code. The parties hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Section 368(a) of the Code
and the regulations thereunder.
Section 1.4 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION.
(a) The directors of Merger Sub at the Effective Time shall be the
initial directors of the Surviving Corporation and shall hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation, or as otherwise
provided by law.
(b) The officers of the Merger Sub at the Effective Time shall be the
initial officers of the Surviving Corporation and shall hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation, or as otherwise
provided by law.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof:
(a) Each issued and outstanding share of the Company's Common Stock,
$.01 par value (the "Shares") not owned by Parent, Merger Sub or any other
direct or indirect subsidiary of Parent (other than those Shares held by
stockholders
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of the Company who properly exercise any dissenters' rights available under
applicable law) immediately prior to the Effective Time shall be converted
into the right to receive its pro rata share of the Shareholder
Consideration (as defined below).
(b) Each then outstanding Share owned by Parent, Merger Sub or any
other direct or indirect subsidiary of Parent shall be cancelled.
(c) Each share of the common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into
one share of the common stock of the Surviving Corporation.
(d) All Shares that are owned by the Company as treasury stock or by
any wholly owned Subsidiary (as hereinafter defined) of the Company shall
be cancelled and retired for no value and shall cease to exist and no
consideration shall be delivered in exchange therefor. As used in this
Agreement, the word "Subsidiary" means, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated,
of which (i) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such party or (ii) such party or any other Subsidiary of such
party is a general partner (excluding partnerships, the general partnership
interests of which held by such party or any Subsidiary of such party do
not have a majority of the voting interest in such partnership).
Section 2.2 CONSIDERATION. The total consideration to be paid in connection
with the Merger shall be $16,300,000, subject to any adjustment pursuant to in
Section 6.6 and the effect of the maximum and minimum prices set forth below
(the "Acquisition Consideration"). Except as provided in Section 2.3(b), the
Acquisition Consideration, shall be paid solely in shares of the Parent's Common
Stock, $.01 par value per share (the "Parent Common Stock"). The Shareholder
Consideration shall be the aggregate number of shares of Parent Common Stock,
subject to Section 2.3(b), to be issued upon conversion pursuant to Section
2.1(a), determined as follows:
(a) The Acquisition Consideration, subject to Section 6.6, shall be
divided by the average closing sale price per share of the Parent Common
Stock over the last twenty trading days prior to the day of the Closing, as
reported by Nasdaq, provided that if such average closing price is less
than $3.565 per share, the divisor shall be $3.565, and if such average
closing price is more than $5.563, the divisor shall be $5.563 as so
adjusted (the "Parent Stock Price"). The result shall be the "Total Share
Consideration".
(b) The Total Share Consideration shall be divided by the actual
number of Shares outstanding immediately prior to the Closing (plus 709,152
shares to
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reflect shares reserved to options (which was calculated on the treasury
stock method as of the execution of this Agreement). The result shall be
the "Exchange Ratio".
(c) The number of shares of Parent Common Stock determined by
multiplying the Exchange Ratio by the number of issued and outstanding
shares of Shares immediately prior to the Closing shall be the "Shareholder
Consideration".
Section 2.3 PAYMENT OF THE ACQUISITION CONSIDERATION.
(a) EXCHANGE AGENT. As of the Effective Time, the Parent shall deposit
with Norwest Bank Minnesota, N.A. (the "Exchange Agent"), the Shareholder
Consideration. The Exchange Agent shall hold such shares in a separate
account for exchange pursuant to the terms of this Agreement (the "Exchange
Fund").
Promptly after the Effective Time, the Exchange Agent shall mail to
each holder of record of Shares immediately prior to the Effective Time (i)
a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Shares shall pass, only upon
proper delivery of certificates for the Shares (the "Certificates") to the
Exchange Agent and shall be in customary form) and (ii) instructions for
use in effecting the surrender of the Certificates (or affidavits in lieu
thereof) in exchange for certificates representing shares of Parent Common
Stock. Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal, duly executed, and such
other documents as may be required pursuant to such instructions, the
holder of such Certificate shall receive in exchange therefore a new
certificate representing that number of whole shares of Parent Common Stock
determined by multiplying the number of Shares represented by such
Certificate by the Exchange Ratio, and subtracting any resulting fractional
Shares. The holder shall also receive cash in lieu of any fractional
shares, and the Certificate so surrendered shall forthwith be cancelled.
In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company, a certificate
representing the proper number of shares of Parent Common Stock may be
issued to a transferee if the certificate representing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this
Section 2.4, each Certificate shall be deemed at any time after the
Effective Time to represent the shares of Parent Common Stock (and cash in
lieu of fractional shares) into which the Shares previously represented by
such Certificate were converted at the Effective Time. All shares of Parent
Common Stock issued upon conversion of the Shares (including any cash paid
in lieu of fractional shares) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares.
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(b) NO FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender
for exchange of Certificates for the Shares and the owner of such
fractional share interests will not be entitled to vote or to any rights of
a stockholder of the Parent. Each holder of Certificates who otherwise
would be entitled to receive a fractional share of Parent Common Stock
shall receive, in lieu of such fractional share interest, an amount of cash
(without interest) determined by multiplying (i) the Parent Stock Price, by
(ii) the fractional share interest to which such holder would otherwise be
entitled. The Parent shall transfer to the Exchange Agent on a timely basis
the cash necessary to make payments under this paragraph (b).
(c) LOST, STOLEN OR DESTROYED CERTIFICATES. If any Certificate has
been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person or entity that claims such Certificate to be lost,
stolen or destroyed, Parent will issue in exchange for such lost, stolen or
destroyed Certificate such pro rata share of the Shareholder Consideration
deliverable in respect thereof as determined in accordance with this
Agreement; provided that Parent may require that the owner of such lost,
stolen or destroyed Certificate deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Company or the Exchange Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
Section 2.4 TERMINATION OF EXCHANGE FUND.
(a) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of Shares for two years after
the Effective Time shall be delivered to the Parent, upon demand, and any
holders of Shares who have not theretofore complied with this Article II
shall thereafter look only to the Parent for the shares of the Parent
Common Stock and any cash in lieu of fractional shares to which they are
entitled.
(b) NO LIABILITY. Neither the Parent nor the Company shall be liable
to any holder of Shares for any such shares of the Parent Common Stock or
cash delivered to a public official pursuant to any abandoned property,
escheat or similar Law. For the purposes of this Agreement, "Law" shall
mean any federal, state or local law, statute, ordinance, rule, regulation,
order, judgment or decree.
(c) STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further
registration of transfers of Shares thereafter on the records of the
Company. From and after the Effective Time, the holders of certificates
representing Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares except as
otherwise provided in this Agreement or by Law. On or after the Effective
Time, any Certificates presented to the Exchange Agent or Parent for any
reason shall be converted into shares of the Parent Common
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Stock and any cash in lieu of fractional shares of the Parent Common Stock to
which the holders of the Certificates are entitled pursuant to this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to Parent and Merger Sub as follows:
Section 3.1 ORGANIZATION; SUBSIDIARIES. Each of the Company and its
respective Subsidiaries is a corporation or other organization duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and has all requisite corporate power and corporate
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as now being conducted, except where the
failure to have such power, authority, and governmental approvals would not have
a Material Adverse Effect (as defined herein) on or of the Company and its
Subsidiaries. In this Agreement, the term "Material Adverse Effect" used in
reference to the Company means any event, change or effect, which either alone
or in the aggregate with all other such events, changes or effects, is, or is
reasonably likely to be, materially adverse to the business, financial
condition, properties, assets, capitalization, stockholders' equity, liabilities
(including contingent liabilities), results of operations, licenses or
franchises of the Company and its Subsidiaries on consolidated basis. Each of
Company and its Subsidiaries is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not have a Material Adverse
Effect. Section 3.1 of the disclosure schedule delivered by the Company to
Parent on the date hereof (the "Company Disclosure Schedule") sets forth a
complete and accurate list of all jurisdictions in which Company or its
Subsidiaries is qualified to do business as a foreign corporation and sets forth
a complete and accurate list of all of its Subsidiaries (including jurisdiction
of incorporation or formation and the capitalization of each Subsidiary). All of
the outstanding shares of capital stock of Company's Subsidiaries are duly
authorized, validly issued, fully paid and non-assessable and are owned,
directly or indirectly, by the Company. Except as disclosed in Section 3.1 of
the Company Disclosure Schedule, Company does not have any Subsidiaries or,
directly or indirectly, own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity. The copies of the Certificate of Incorporation and Bylaws
of Company, and of the comparable organizational documents of each of its
Subsidiaries, provided to Parent, are true and complete copies of all such
documents, in each case as amended to the date hereof and shall be as of the
Effective Time. Except as disclosed in Section 3.1, neither the Company nor any
of its Subsidiaries is in violation of its Certificate of Incorporation, Bylaws
or comparable organizational documents.
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Section 3.2 CAPITALIZATION. The authorized capital stock of Company
consists of: 15,000,000 shares of common stock, no par value (the "Company
Common Stock"), of which 3,887,543 shares are issued and outstanding, and
1,000,000 shares of preferred stock, par value $.01 per share, of which none are
issued and outstanding. All of the outstanding shares of Company Common Stock
are, and immediately prior to the Effective Time the outstanding shares of the
Company Common Stock shall be, duly authorized, validly issued, fully paid and
non-assessable and free of any preemptive rights in respect thereto. Except as
set forth on Section 3.2 of the Company Disclosure Schedule, no bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into securities having the right to vote) ("Voting Debt") of Company are issued
or outstanding. Except as set forth above or in Section 3.2 of the Company
Disclosure Schedule, there are no existing options, warrants, calls,
subscriptions or other rights or other agreements or commitments of any
character relating to the issued or unissued capital stock or Voting Debt of
Company or any of its Subsidiaries or obligating Company or any of its
Subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of the respective capital stock or Voting Debt or securities
convertible into or exchangeable for such shares or equity interests or
obligating Company or any of its Subsidiaries to grant, extend or enter into any
such option, warrant, call, subscription or other right, agreement or
commitment. Company is not a party to any voting trust or other arrangement or
understanding with respect to the voting of Company Common Stock. There are no
contractual obligations of Company or its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Company or any of its
Subsidiaries.
Section 3.3 AUTHORITY. Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Company, and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated hereby (other than, with respect to the Merger, the
adoption of this Agreement by the stockholders of the Company as set forth in
Section 7.1 (d)). The Board of Directors of Company has duly approved this
Agreement, determined that the Merger is fair to, and in the best interest of,
its stockholders and resolved to recommend that such stockholders approve this
Agreement and the Merger, and such resolutions are in full force and effect.
Duly certified, true and correct copies of such resolutions adopted will be
provided to Parent. This Agreement has been duly executed and delivered by
Company, and this Agreement constitutes a valid and binding obligation of
Company, enforceable against Company in accordance with its terms.
Section 3.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as disclosed in
the Company's filings pursuant to the Securities Exchange Act of 1934 (the
"Exchange
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Act") or as set forth in Section 3.4 of the Company Disclosure Schedule, and
except for filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the Exchange Act
and Delaware Law, neither the execution, delivery or performance of this
Agreement nor the consummation by Company of the transactions contemplated
hereby nor compliance by Company with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the Articles of
Incorporation or Bylaws of Company or of the comparable organizational documents
of any of its Subsidiaries, (ii) require any filing with, or permit,
authorization, consent or approval of, any court, arbitral tribunal, legislative
body, administrative agency or commission or other governmental or other
regulatory authority or agency (a "Governmental Entity"), (iii) result in a
violation or breach of, or constitute (with notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) or require any authorization, consent or approval under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Company or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Company or any of
its Subsidiaries or any of their properties or assets, except in the case of
(ii) or (iii) for violations, breaches or defaults which would not, and except
for failures to obtain such permits, authorizations, consents or approvals or to
make such filings which would not, individually or in the aggregate, have a
Material Adverse Effect.
Section 3.5 SEC REPORTS. The Company has furnished to Parent a true and
complete copy of each prospectus, definitive proxy statement and report filed by
the Company with the SEC since the date of the Company's year end for fiscal
year 1996 (the "SEC Reports"), including the Company's Annual Report on Form
10-K, for the fiscal year ended March 28, 1999 (the "Form 10-K"). None of the
SEC Reports (as of their respective filing dates) contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements made therein not
misleading. The consolidated balance sheet of the Company, as of March 28, 1999,
included in SEC Reports (including the related notes and schedules), presents
fairly, in all material respects, the consolidated financial position of the
Company as of its date and the related consolidated statements of operations,
cash flows and changes in stockholders' equity included in the SEC Reports
(including any related notes and schedules) present fairly, in all material
respects, the consolidated results of operations and cash flows of the Company
for the periods set forth therein, in each case, in accordance with generally
accepted accounting principles ("GAAP"), except as otherwise specified therein
(including in the related notes).
Section 3.6 PROXY STATEMENT/PROSPECTUS. The combined proxy statement and
Form S-4 registration statement to be prepared jointly by the parties and filed
with
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the Securities and Exchange Commission for the purpose of soliciting shareholder
votes for the Merger and registering shares of the Parent to be issued to the
Company's shareholders in the Merger, respectively, is referred to herein as the
"Proxy Statement/Prospectus". The information provided by the Company for
inclusion in the Proxy Statement/Prospectus shall be true and complete, shall
not contain any untrue statement of a material fact and shall not omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein not misleading.
Section 3.7 EMPLOYEE BENEFITS. All employment contracts, all termination
agreements with executive officers and all bonus, deferred compensation,
pension, retirement, profit sharing, severance pay, stock option, stock purchase
and other material employee benefit plans (other than medical and other similar
welfare plans made generally available to all employees of the Company or a
subsidiary of the Company) to which the Company or any of its subsidiaries is a
party are listed, summarized or otherwise described or incorporated by reference
in the SEC Reports or in Section 3.7 of the Company Disclosure Schedule.
Section 3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 28, 1999, (i)
Company and Company's Subsidiaries have conducted their respective businesses
only in the ordinary and usual course of such businesses and (ii) there has not
been (A) any change, or any development of which management of Company has
knowledge, which has had or is reasonably likely to have a Material Adverse
Effect; (B) any declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of Company other than regular
quarterly cash dividends; (C) any material change by Company in accounting
principles, practices or methods; or (D) any increase of more than $40,000 in
aggregate in the compensation payable or which could become payable by Company
and Company's Subsidiaries to their officers or key employees, or any material
amendment of any Company Benefit Plans.
Section 3.9 ERISA COMPLIANCE.
(a) Company Disclosure Schedule 3.09(a) attached hereto contains a
list and brief description of all "employee pension benefit plans" (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (sometimes referred to herein as "Pension
Plans"), all "employee welfare benefit plans" (as defined in Section 3(1)
of ERISA) and all other bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, stock bonus, phantom stock, retirement, vacation, severance,
disability, death benefit, welfare, Christmas bonus, hospitalization,
medical or other plan, arrangement or understanding, whether or not legally
binding, providing benefits to any current or former employee, officer or
director of Company, or maintained or contributed to by Company for the
benefit of any employee, officer or director of Company currently or within
the last five years (collectively, "Benefit Plans").
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(b) On or prior to the date of this Agreement, Company has delivered
to Parent true and complete copies of (i) each Benefit Plan or, in the case
of any unwritten Benefit Plans, descriptions thereof (ii) the most recent
annual report on Form 5500 filed with the IRS with respect to each Benefit
Plan, if any such report was required, (iii) the most recent summary plan
description for each Benefit Plan for which such summary plan description
is required, (iv) each trust agreement and group annuity contract relating
to any Benefit Plan, (v) the most recent actuarial report relating to any
Benefit Plan, and (vi) the most recent IRS determination letter or opinion
letter for each Benefit Plan.
(c) Except as disclosed in Company Disclosure Schedule 3.09(c)
attached hereto, all Pension Plans have been the subject of determination
letters from the IRS to the effect that such Pension Plans are qualified
and exempt from federal income taxes, and no such determination letter has
been revoked nor has revocation been threatened, nor has any such Pension
Plan been amended since the date of its most recent determination letter or
application therefor in any respect that could adversely affect its
qualification or increase its costs.
(d) Except as disclosed on Company Disclosure Schedule 3.09(d)
attached hereto, no Pension Plan that Company maintains, or to which
Company is or was previously obligated to contribute, had, as of the
respective last annual valuation date for each Pension Plan, any unfunded
"benefit liabilities," (as defined in Section 4001(a)(16) of ERISA) based
on actuarial assumptions which have been furnished to Parent. None of the
Pension Plans has an "accumulated funding deficiency," (as defined in
Section 412(a) of the Code) whether or not waived. None of Company, any
officer of Company or any of the Benefit Plans which are subject to ERISA,
including, without limitation, the Pension Plans, or any trusts created
thereunder, or, to the best knowledge of the Company, any trustee or
administrator thereof, has engaged in a "prohibited transaction" (as
defined in Section 406 of ERISA in Section 4975(c) of the Code) or any
other breach of fiduciary responsibility that could subject Company or any
officer of Company to a material amount of tax or penalty on prohibited
transactions or to any material liability under ERISA. Except as disclosed
on Company Disclosure Schedule 3.09(d) attached hereto, neither any of such
Pension Plans nor any of such trusts have been terminated, nor has there
been any "reportable event" (as defined in Section 4043(c) of ERISA) with
respect to which the 30-day notice requirement has not been waived and
Company is not aware of any other reportable events with respect thereto
during the last five years. Company has never had an obligation to
contribute to a "multi-employer plan" as defined in Section 3(37) of ERISA.
No liability to the Pension Benefit Guaranty Corporation (the "PBGC") has
been or is expected to be incurred with respect to any Benefit Plan by
reason of a Benefit Plan termination. The PBGC has not instituted
proceedings to terminate any Benefit Plan. Except as noted on Company
Disclosure Schedule 3.09(d), there is no Benefit Plan to which Title IV of
ERISA applies which has terminated and whose "date
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of termination" (as defined in Section 4048 of ERISA) occurred after
September 1, 1974 or any such Benefit Plan to which Title IV of ERISA
applies which has partially terminated. No event has occurred, and there
exists no condition or set of circumstance which presents a material risk
of the termination or partial termination of any such Benefit Plan, which
could result in a liability on the part of Company to the PBGC.
(e) With respect to any Benefit Plan that is an employee welfare
benefit plan, except as disclosed in Company Disclosure Schedule 3.09(e)
attached hereto, (i) no such Benefit Plan is a "welfare benefit fund", (as
defined in Section 419(e) of the Code), (ii) each such Benefit Plan that is
a group health plan complies in all material respects with the applicable
requirements of the Code and the Social Security Act and (iii) each such
Benefit Plan, including, without limitation, any such Plan covering
retirees or other former employees, may be amended or terminated without
liability to Parent or Company on or at any time after the Effective Date
of the Merger.
(f) Each Benefit Plan and all related trust or other agreements
conform in form and operation to, and comply with, all applicable laws and
regulations, including, without limitation, ERISA and the Code, and all
reports or information relating to each such Benefit Plan required to be
filed with any Governmental Entity or disclosed to participants have been
timely filed and disclosed.
(g) Company has not announced a plan to create or amend, or noes it
have any legally binding commitment to create or amend, any Benefit Plan or
to create any new arrangement which would be a Benefit Plan.
(h) All insurance premiums with respect to any Benefit Plan,
including, without limitation, premiums to the PBGC, have been paid in
full. Except as disclosed on Company Disclosure Schedule 3.09(h) attached
hereto, there are no retrospective adjustments provided for under any
insurance contracts maintained pursuant to any Benefit Plan with regard to
policy years or other periods ending on or before the Effective Date of the
Merger.
(i) No Benefit Plan, or the deduction of any contributions thereto by
Company, has been the subject of audit by the IRS or the Department of
Labor, and no litigation or asserted claims exist against Company or any
Benefit Plan or fiduciary with respect thereto, other than such benefit
claims as are made in the normal operation of a Benefit Plan. There are no
known facts which could give rise to any action, suit, grievance,
arbitration or other claim in connection with any Benefit Plan.
(j) With respect to any Benefit Plan which covers current or former
employees, officers or directors who are not residents of the United States
of America, any references in this Company Disclosure Schedule 3.09(j) to
ERISA, the Code or any other applicable law will be read to mean any
applicable law of similar import for the jurisdiction in which such
individuals reside.
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Section 3.10 LITIGATION. Section 3.10 of the Company Disclosure Schedule
sets forth a complete and accurate list and description of all suits, claims,
actions, proceedings and investigations which are pending or threatened against
the Company or any of its Subsidiaries, judicial, administrative or otherwise.
Section 3.11 ENVIRONMENTAL MATTERS.
(a) As used in this Agreement:
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries, or penalties) arising out of, based on or resulting from (i)
the presence, or release into the environment, of any Materials of
Environmental Concern (as hereinafter defined) at any location,
whether or not owned or operated by Company or its Subsidiaries or
(ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Laws (as hereinafter defined).
"Environmental Laws" means all federal, state, local and foreign
laws and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata),
including, without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern.
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, hazardous wastes, toxic substances, petroleum and
petroleum products.
(b) Except as set forth in Section 3.11 of the Company Disclosure
Schedule, Company and its Subsidiaries for their respective businesses as
previously or now being conducted are in material compliance with all
applicable Environmental Laws, which compliance includes, but is not
limited to, the possession by Company and its Subsidiaries of all permits
and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof.
Except as set forth in Section 3.11(b) of the Company Disclosure Schedule,
neither Company nor its Subsidiaries have received any communication
(written or oral), whether from a governmental authority, citizens group,
employee or otherwise, that alleges that Company or its Subsidiaries are
not in such full compliance and, to Company's best knowledge, there are no
circumstances that may prevent or interfere with such full compliance in
the future. All material permits and other governmental authorizations
currently held by Company and its Subsidiaries pursuant to the
Environmental Laws are identified in Section 3. 11 of the Company
Disclosure Schedule.
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(c) Except as set forth in Section 3.11 of the Company Disclosure
Schedule, there is no Environmental Claim pending or threatened against
Company or its Subsidiaries or, to Company's best knowledge, against any
person or entity whose liability for any Environmental Claim Company or its
Subsidiaries have or may have retained or assumed either contractually or
by operation of law.
(d) Except as set forth in Section 3.11 of the Company Disclosure
Schedule, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that could form the basis of any Environmental Claim
against Company or its Subsidiaries or, to Company's best knowledge,
against any person or entity whose liability for any Environmental Claim
Company or its subsidiaries have or may have retained or assumed either
contractually or by operation of law.
(e) Without in any way limiting the generality of the foregoing to the
knowledge of the Company, (i) all on-site and off-site locations where
Company or its Subsidiaries have stored, disposed or arranged for the
disposal of Materials of Environmental Concern are identified in Section
3.11 of the Company Disclosure Schedule, (ii) to the best knowledge of
Company without having made any inquiries to third parties with respect
thereto, all underground storage tanks, and the capacity and contents of
such tanks, located on property owned or leased by Company or its
Subsidiaries are identified in Section 3.11 of the Company Disclosure
Schedule, (iii) except as set forth in Section 3.11 of the Company
Disclosure Schedule, there is no asbestos contained in or forming part of
any building, building component, structure or office space owned or leased
by Company or its Subsidiaries, and (iv) except as set forth in Section
3.11 of the Company Disclosure Schedule, to the best knowledge of Company
without having made any inquiries to third parties with respect thereto, no
polychlorinated biphenyls (PCBIs) are used or stored at any property owned
or on or within any premises leased by Company or its Subsidiaries.
Section 3.12 ABSENCE OF CERTAIN PRACTICES. Neither Company nor any of its
Subsidiaries nor, to the best knowledge of Company, any director, officer,
agent, employee, or other person acting on behalf of Company or any of its
Subsidiaries, has used or received any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to, or on behalf of, government
officials or others.
Section 3.13 INTELLECTUAL PROPERTY. Section 3.13 of the Company Disclosure
Schedule contains a complete and accurate list of (i) all patents, registered
trademarks, trade names and copyrights owned by Company, used or proposed to be
used by Company or any of its Subsidiaries and all applications therefor
(indicating whether or not such patent, trademark, trade name, or copyright is
owned by Company) and (ii) all agreements relating to technology, know-how or
processes which Company or any of its Subsidiaries is licensed or authorized to
use by others.
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Except as set forth in Section 3.13 of the Company Disclosure Schedule, no
claims have been asserted by any person challenging or questioning the use by
Company or any of its Subsidiaries of any such patents, trademarks, trade names,
copyrights, technology, or processes (the "Intellectual Property"), with respect
to Intellectual Property by Company or its subsidiaries, challenging or
questioning said ownership, or the Company's use of any know-how owned by or
used by Company or any of its Subsidiaries or challenging or questioning the
validity or effectiveness of any such license or agreement and, to the knowledge
of Company, there exists no valid basis for any such claim, except for such
claim or claims an adverse determination of which, individually or in the
aggregate, would not have a Material Adverse Effect; and to the knowledge of the
Company, the use of such Intellectual Property by Company or any of its
Subsidiaries does not infringe on the rights of any person, except for such
infringement or infringements which, individually or in the aggregate, would not
have a Material Adverse Effect on Company. For the purposes of this Agreement,
"knowledge of the Company" shall mean the actual knowledge of any of its
directors, officers, employees, investment bankers, attorneys or accountants,
and shall include any information which any of such persons could have
discovered through reasonable investigation in the ordinary course of their
duties. Except as set forth on Section 3.13 of the Company Disclosure Schedule,
the Intellectual Property registrations and patents owned by Company or any of
its Subsidiaries, and any applications therefore, are to the knowledge of the
Company subsisting and enforceable, and none has lapsed, expired, or been
abandoned, and all such registrations, patents and applications therefore are
currently standing in the name of Company or its Subsidiaries, except where any
of the aforementioned defects in such registrations, patents or applications
would not have a Material Adverse Effect. Company and each of its Subsidiaries
owns (free and clear of any lien, encumbrance or other restriction), or is
otherwise licensed or has the right to use, all Intellectual Property used in or
necessary for the conduct of its business, except where any failure to own, be
licensed to use or have the right to use would not, individually or in the
aggregate, have a Material Adverse Effect, and the consummation of the
transactions contemplated by this Agreement will not alter or impair any such
rights.
Section 3.14 TAXES. Except as disclosed in Section 3.14 of the Company
Disclosure Schedule, the Company has filed all federal, state and local tax
returns required to be filed by it and paid all taxes due thereon.
Section 3.15 NO UNDISCLOSED LIABILITIES. Except as and to the extent set
forth in the audited consolidated balance sheets of Company as of March 28, 1999
included in the Company Financial Statements, none of Company or Company's
Subsidiaries had as of that date any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to be reflected on a consolidated balance sheet of Company and Company's
Subsidiaries (including the notes thereto) which constituted a Material Adverse
Effect. Except as and to the extent set forth in the interim balance sheets,
since March 28, 1999,
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neither Company, nor any of Company's Subsidiaries has incurred any liabilities
of any nature, whether or not accrued, contingent or otherwise, which would
have, individually or in the aggregate, a Material Adverse Effect.
Section 3.16 REAL PROPERTIES. Neither the Company nor its Subsidiaries own
any real property. The Company leases real estate under the leases listed on
Section 3.16 of the Company Disclosure Schedule, all of which are in full force
and there exists no event of default under said leases by any party thereto.
Section 3.17 COMPLIANCE WITH APPLICABLE LAW. Company and Company's
Subsidiaries hold and are in compliance with all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for the
lawful conduct of their respective businesses (the "Company Permits"), except
for failures to hold or comply with such permits, licenses, variances,
exemptions, orders and approvals which do not, individually or in the aggregate,
have a Material Adverse Effect. To the knowledge of the Company, the businesses
of Company and Company's Subsidiaries are not being conducted in violation of
any order, writ, injunction, decree, statute, rule or regulation of any
Governmental Entity applicable to Company or any of Company's Subsidiaries.
Section 3.18 EMPLOYEE MATTERS. Section 3.18 of the Company Disclosure
Schedule sets forth a complete and accurate list of the titles and annual
compensation (including any bonuses) of all directors and officers of Company,
and all employees of Company or any of Company's Subsidiaries whose annual base
income exceeds $50,000 (excluding any bonuses). Except as set forth in Section
3.18 of the Company Disclosure Schedule, none of Company or any of Company's
Subsidiaries is a party to or bound by any contract, agreement or arrangement
regarding the employment, services, consulting or severance from or termination
of employment, of any director, officer or employee (past or present) (each an
"Employment Agreement").
Company and its Subsidiaries have paid in full to, or accrued on behalf of,
all of their respective employees, wages, salaries, commissions, bonuses and
other direct compensation for all services performed by them to the date hereof
and all amounts required to be reimbursed to such employees except those which
in the aggregate total less than $35,000. Company and its Subsidiaries are in
material compliance with all applicable laws and regulations respecting
employment and employment practices; there is no unfair labor practice complaint
against Company or any of its Subsidiaries pending before any Government Entity;
there is no labor strike, dispute, slowdown or stoppage pending or, to the
knowledge of the Company, threatened against or involving Company or any of its
Subsidiaries; no representation question or to the knowledge of the Company any
pending organization attempt by any collective bargaining representative exists
respecting the employees of Company or any of its Subsidiaries. There are no
collective bargaining agreements or other employee representation agreements
which exist or are currently being negotiated by Company or any of Company's
Subsidiaries.
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Section 3.19 INSURANCE POLICIES. Section 3.19 of the Company Disclosure
Schedule contains a complete and accurate list of all insurance policies
providing coverage in favor of Company and Company's Subsidiaries, or relating
to real property, whether leased or owned by Company or Company's Subsidiaries,
specifying the insurer, amount of coverage and type of insurance under each and
indicating which of such policies provide for retrospective premium adjustments.
Each such policy is in full force and effect and all premiums are currently paid
or accruals provided for and no notice of cancellation or termination has been
received with respect to any such policy. Such policies are sufficient for
compliance with all material requirements of law.
Section 3.20 CONTRACTS.
(a) Section 3.20(a)(i) of the Company Disclosure Schedule sets forth a
complete and accurate list of all contracts, agreements and other
arrangements to which Company or any of Company's Subsidiaries is a party
or by which Company, any of Company's Subsidiaries or any of their
respective assets are bound (excluding plans referred to in Sections 3.9
and 6.5 and leases referred to in Section 3.16) pursuant to which (i) any
party thereto is entitled prospectively to receive in excess of $35,000,
(ii) any party thereto has the right or option prospectively to order
products or services the consideration for which would exceed $35,000, or
(iii) payments are based on the profits or revenues of Company or any of
Company's Subsidiaries (hereinafter referred to collectively as (the
"Contracts"). Each of the Contracts is in full force and effect and
enforceable in accordance with its terms. Neither Company nor Company's
Subsidiaries have received any formal or official notice (written or oral)
of cancellation or termination of, or intent to cancel or terminate, any of
the Contracts. With respect to each Contract which by its terms will
terminate within one year of the date hereof (or unless an option to extend
such Contract is exercised), neither Company nor any of Company's
Subsidiaries has received any formal or official notice (written or oral)
that any such Contract will not be so renewed or that any such extension
option will not be exercised. Except as set forth in Section 3.20(a)(ii) of
the Company Disclosure Schedule, there exists no event of default or
occurrence, condition or act on the part of Company or any of Company's
Subsidiaries or, to the best knowledge of Company, on the part of the other
parties to such Contracts which constitutes or would constitute (with
notice or lapse of time or both) a breach of or default under any of the
Contracts, or cause or permit acceleration of any obligation of Company or
any of Company's Subsidiaries thereunder, which individually or in the
aggregate would have a Material Adverse Effect. Except as set forth in
Section 3.20(a) of the Company Disclosure Statement, no consent of any
other party to the Contracts is required in connection with the execution,
delivery and performance of this Agreement or in order for the Contracts to
remain in full force and effect following the Merger.
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(b) None of Company nor any of Company's Subsidiaries is a party to
any agreement which materially limits the freedom of Company or any of
Company's Subsidiaries to compete in any line of business or with any
person.
Section 3.21 BILLED ACCOUNTS RECEIVABLE. All notes and billed accounts
receivable of Company and Company's Subsidiaries, represent sales or services
made or rendered in the ordinary course of business and represent the legal,
valid and binding obligations of the obligors thereon. The Company has reviewed
customer receivables and has established adequate reserves to provide for
doubtful accounts of, any valid counterclaims by, and allowances to, its
customers.
Section 3.22 DISCLOSURE. No representation, warranty or statement made by
Company in this Agreement or the Company Disclosure Schedules contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact required to be stated herein or therein, or necessary in order
to make, in light of the circumstances under which such statements were made,
not misleading.
Section 3.23 VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of the Company Common Stock is the only vote
of the holders of any class or series of the Company's capital stock necessary
to approve this Agreement and the transactions contemplated hereby.
Section 3.24 BANKS; POWERS OF ATTORNEY. Section 3.24 of the Company
Disclosure Schedule sets forth (a) the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which Company or any of Company's Subsidiaries maintain safe deposit boxes or
accounts of any nature and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto, and (b) the names of all
persons to whom Company or any of Company's Subsidiaries have granted a power of
attorney, together with a description thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to Company as follows:
Section 4.1 ORGANIZATION: PARENT AND SUBSIDIARIES. Each of Parent, Merger
Sub and each of the respective Subsidiaries of the Parent, is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
corporate authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as now being conducted
except where the failure to be so organized, existing and in good standing or to
have such power, authority, and governmental approvals would not have a Material
Adverse Effect on or of Parent and its Subsidiaries. In this Agreement, the term
"Material Adverse Effect" used in
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reference to the Parent means any event, change or effect, which either alone or
in the aggregate with all other such events, changes or effects, is, or is
reasonably likely to be, materially adverse to the business, financial
condition, properties, assets, capitalization, stockholders' equity, liabilities
(including contingent liabilities), results of operations, licenses or
franchises of the Parent and its Subsidiaries on consolidated basis. Each of
Parent and Merger Sub is duly qualified or licensed to do business and in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not have a Material Adverse Effect.
Section 4.2 CAPITALIZATION. The authorized capital stock of Parent consists
of: (i) 20,000,000 shares of Parent Common Stock, of which, as of the date
hereof 7,476,922 shares are issued and outstanding and (ii) 1,000,000 shares of
preferred stock, of which, as of the date hereof no shares are issued and
outstanding. As of the date hereof, there are outstanding pursuant to Parent's
incentive and stock option plans, and other rights to purchase shares other than
under its ESPP (the "Parent Stock Plans") to purchase 1,396,000 shares of Parent
Common Stock, and warrants to purchase 268,307 shares of Parent Common Stock.
All issued shares of Parent Common Stock are duly authorized, validly issued,
fully paid and non-assessable and free of any preemptive rights in respect
thereto. As of the date hereof, the authorized capital stock of Merger Sub
consists of 1,000 shares of Common Stock, par value $1.00 per share, all of
which are validly issued, fully paid and non-assessable and are owned directly
by Parent.
Section 4.3 PARENT AUTHORITY. Parent has the requisite corporate power and
authority to execute and deliver this Agreement. The execution, delivery and
performance of this Agreement and the consummation of the Merger and of the
other transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Parent and no other corporate
proceedings on the part of Parent shall be necessary to authorize this Agreement
or to consummate the transactions so contemplated other than obtaining the
requisite approval of its Shareholders. This Agreement has been duly executed
and delivered by Parent and constitutes a valid and binding obligation of Parent
enforceable against it in accordance with its terms.
Section 4.4 MERGER SUB AUTHORITY. Merger Sub has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Merger Sub and no other corporate proceedings on the part of
Merger Sub are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by Merger Sub and constitutes a valid and binding obligation of Merger
Sub, enforceable against it in accordance with its terms.
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Section 4.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of the Securities Act of 1933, the Exchange Act,
the HSR Act, any applicable "Blue Sky" laws and the Minnesota Law, neither the
execution, delivery or performance of this Agreement by Parent and Merger Sub
nor the consummation by Parent and Merger Sub of the transactions contemplated
hereby nor compliance by Parent and Merger Sub with any of the provisions hereof
will (i) conflict with or result in any breach of any provision of the Articles
of Incorporation or Bylaws of Parent and Merger Sub, (ii) require any filing
with, or permit, authorization, consent or approval of, any Governmental Entity,
(iii) result in a violation or breach of, or constitute (with notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) or require any authorization, consent or approval under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, lease, contract, agreement or other instrument or obligation to which
Parent or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (iv) violate any-order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any of its
Subsidiaries or any of their properties or assets, except in the case of (ii)
and (iii) for violations, breaches or defaults which would not, and except for
failures to obtain such permits, authorizations, consents or approvals or to
make such filings which would not, individually or in the aggregate, have a
Material Adverse Effect.
Section 4.6 SEC REPORTS AND FINANCIAL STATEMENTS. Parent has filed with the
SEC, and has heretofore furnished to the Company, true and complete copies of
all forms, reports, schedules, statements and other documents required to be
filed by it and actually filed under the Exchange Act or the Securities Act of
1933, as amended (the "Securities Act"), (as such documents have been amended
since the time of such filing for the periods since Fiscal Year 1996,
collectively, the "Parent SEC Documents"). The Parent SEC Documents, including
without limitation any financial statements or schedules included therein, at
the time filed, (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (b) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities Act, as the
case may be, and the applicable rules and regulations of the SEC thereunder. The
financial statements of Parent included in the Parent SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC), and fairly present (subject, in the case of the unaudited
statements, to normal year-end audit adjustments) the
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consolidated financial position of Parent and its consolidated subsidiaries as
at the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended.
Section 4.7 PROXY STATEMENT/PROSPECTUS. The information provided by Parent
and Merger Sub for inclusion in the Proxy Statement/Prospectus shall be true and
complete, shall not contain any untrue statement of a material fact and shall
not omit to state any material fact required to be stated therein or necessary
in order to make the statements made therein not misleading.
Section 4.8 ISSUANCE OF SHARES. Upon issuance of Parent's shares to the
Company's shareholders pursuant to the Merger, such shares shall be duly
authorized, validly issued, fully paid, and non-assessable shares of Parent's
Common Stock.
Section 4.9 OPERATION OF MERGER SUB. Merger Sub is a direct, wholly-owned
subsidiary of Parent, was formed solely for the purpose of engaging in the
transactions contemplated hereby and has not engaged in any business activities
or conducted any operations other than in connection with the transactions
contemplated hereby.
Section 4.10 LITIGATION. There are no suits, claims, actions, proceedings
and investigations which are pending or threatened against the Parent or any of
its Subsidiaries, judicial, administrative or otherwise.
Section 4.11 NO UNDISCLOSED LIABILITIES. Except as and to the extent set
forth in the audited consolidated balance sheets of Parent as of June 28, 1999
included in the Parent Financial Statements, none of Parent or Parent's
Subsidiaries had as of that date any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to be reflected on a consolidated balance sheet of Parent and Parent's
Subsidiaries (including the notes thereto) which constituted a Material Adverse
Effect. Since June 28, 1999, neither Parent, nor any of Parent's Subsidiaries
has incurred any liabilities of any nature, whether or not accrued, contingent
or otherwise, which would have, individually or in the aggregate, a Material
Adverse Effect.
Section 4.12 COMPLIANCE WITH APPLICABLE LAW. Parent and Parent's
Subsidiaries hold and are in compliance with all permits, lic
