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Title: |
Agreement and Plan of Merger |
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Date: |
2002 |
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Preview shows 20KB of 258KB total |
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Price: |
$99 |
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ID: |
#1113587 |
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AGREEMENT AND PLAN OF MERGER
dated as of September 14, 2001
among
FARO TECHNOLOGIES, INC.,
FARO ACQUISITION LLC,
and
SPATIALMETRIX CORPORATION
TABLE OF CONTENTS
ARTICLE I THE MERGER...........................................................3
1.1 THE MERGER; FILING AND EFFECTIVE TIME OF THE MERGER...................3
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1.2 THE CLOSING...........................................................3
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1.3 EFFECTS OF THE MERGER.................................................3
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1.4 ACTIONS AT THE CLOSING AND FOLLOWING THE CLOSING......................4
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1.5 ADDITIONAL ACTION.....................................................4
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1.6 CONVERSION OF SECURITIES..............................................4
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1.7 CALCULATION OF BUYER'S CLOSING PAYMENT................................6
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1.8 DETERMINATION OF BUYER'S CLOSING PAYMENT..............................7
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1.9 EXCHANGE AGENT........................................................9
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1.10 ESCROW AGENT..........................................................9
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1.11 CERTIFICATE OF FORMATION, LIMITED LIABILITY COMPANY AGREEMENT,
MANAGERS, AND OFFICERS...............................................10
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1.12 NO FURTHER RIGHTS.....................................................
-----------------
1.13 CLOSING OF TRANSFER BOOKS.............................................
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1.14 APPOINTMENT OF STOCKHOLDER REPRESENTATIVE.............................
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1.15 OPTIONS...............................................................
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1.16 APPRAISAL RIGHTS......................................................
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1.17 REPAYMENT OF FIRST UNION DEBT.........................................
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ARTICLE II REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY...............12
2.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER......................12
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2.2 CAPITALIZATION.......................................................13
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2.3 AUTHORIZATION OF TRANSACTION.........................................13
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2.4 NONCONTRAVENTION.....................................................13
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2.5 SUBSIDIARIES.........................................................14
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2.6 FINANCIAL STATEMENTS.................................................14
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2.7 ACCOUNTS RECEIVABLE..................................................14
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2.8 CONSENTS.............................................................14
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2.9 ABSENCE OF CERTAIN CHANGES...........................................15
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2.10 UNDISCLOSED LIABILITIES............................................15
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2.11 CUSTOMERS AND SUPPLIERS............................................15
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2.12 TAXES..............................................................15
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2.13 ASSETS.............................................................16
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2.14 OWNED REAL PROPERTY................................................17
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2.15 REAL PROPERTY LEASES...............................................17
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2.16 INTELLECTUAL PROPERTY..............................................17
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2.17 CONTRACTS..........................................................18
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2.18 INSURANCE..........................................................19
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2.19 LITIGATION.........................................................20
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2.20 LABOR MATTERS......................................................20
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2.21 EMPLOYEE BENEFITS..................................................20
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2.22 ENVIRONMENTAL MATTERS..............................................22
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2.23 LEGAL COMPLIANCE...................................................22
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2.24 PERMITS............................................................22
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2.25 INVENTORY..........................................................22
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2.26 BROKERS' FEES......................................................23
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2.27 DISCLOSURE.........................................................23
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ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING BUYER AND NEWCO..........23
3.1 ORGANIZATION.........................................................23
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3.2 AUTHORIZATION OF TRANSACTION.........................................23
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3.3 NONCONTRAVENTION.....................................................23
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3.4 BROKER'S FEES........................................................24
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3.5 SEC DOCUMENTS........................................................24
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3.6 ABSENCE OF CERTAIN CHANGES...........................................24
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3.7 ENVIRONMENTAL MATTERS................................................24
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3.8 BUYER COMMON STOCK...................................................24
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3.9 DISCLOSURE...........................................................24
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ARTICLE IV COVENANTS..........................................................25
4.1 CONSENTS.............................................................25
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4.2 OPERATION OF BUSINESS................................................25
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4.3 ACCESS TO INFORMATION................................................26
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4.4 NOTIFICATION.........................................................27
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4.5 COLLECTION OF ACCOUNTS RECEIVABLE....................................28
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ARTICLE V OTHER AGREEMENTS....................................................28
5.1 REGISTRATION RIGHTS AGREEMENT AND RESTRICTIONS ON BUYER COMMON STOCK.28
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5.2 EMPLOYMENT AGREEMENTS................................................28
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5.3 RETENTION OF KEY EMPLOYEES...........................................28
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5.4 DELIVERY READY STATUS................................................29
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5.5 BOARD REPRESENTATIVES................................................29
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5.6 EXCLUSIVITY..........................................................29
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5.7 RIGHT OF FIRST REFUSAL...............................................30
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5.8 SALES OF INFRINGING PRODUCT..........................................32
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5.9 EMPLOYEE PAYMENTS....................................................32
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5.10 ISSUANCE OF RESTRICTED COMPANY COMMON STOCK........................32
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ARTICLE VI CONDITIONS TO CONSUMMATION OF MERGER...............................32
6.1 CONDITIONS TO OBLIGATIONS OF BUYER AND NEWCO.........................32
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6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY.............................34
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ARTICLE VII TERMINATION.......................................................34
7.1 TERMINATION OF AGREEMENT.............................................34
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7.2 EFFECT OF TERMINATION................................................35
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ARTICLE VIII INDEMNIFICATION..................................................35
8.1 INDEMNIFICATION AND RELATED MATTERS..................................35
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8.2 INDEMNIFICATION PROCEDURE............................................37
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8.3 PAYMENT..............................................................38
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8.4 NO WAIVER............................................................39
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ARTICLE IX DEFINITIONS........................................................39
9.1 DEFINED TERMS........................................................39
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9.2 CERTAIN SUPPLEMENTAL DEFINED TERMS...................................40
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ARTICLE X RESOLUTION OF DISPUTES..............................................44
10.1 ARBITRATION........................................................44
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10.2 ARBITRATORS........................................................44
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10.3 PROCEDURES; NO APPEAL..............................................44
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10.4 AUTHORITY..........................................................45
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10.5 ENTRY OF JUDGMENT..................................................45
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10.6 CONFIDENTIALITY....................................................45
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10.7 TOLLING............................................................45
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10.8 ESCROW AGENT UNNECESSARY...........................................45
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2
ARTICLE XI MISCELLANEOUS......................................................45
11.1 PRESS RELEASES AND CONFIDENTIALITY.................................45
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11.2 NO THIRD PARTY BENEFICIARIES.......................................45
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11.3 ENTIRE AGREEMENT...................................................46
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11.4 SUCCESSION AND ASSIGNMENT..........................................46
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11.5 COUNTERPARTS.......................................................46
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11.6 HEADINGS...........................................................46
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11.7 NOTICES............................................................46
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11.8 GOVERNING LAW AND VENUE............................................47
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11.9 WAIVER OF JURY TRIAL...............................................47
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11.10 AMENDMENTS AND WAIVERS.............................................47
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11.11 SEVERABILITY.......................................................47
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11.12 EXPENSES...........................................................48
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11.13 FINDERS' FEES......................................................48
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3
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is
entered into as of September 14, 2001, among FARO TECHNOLOGIES, INC., a Florida
corporation ("Buyer"), FARO ACQUISITION LLC, a Delaware limited liability
company and a wholly-owned subsidiary of Buyer ("NewCo"), SPATIALMETRIX
CORPORATION, a Delaware corporation (the "Company"), and the stockholders of the
Company set forth hereto on Schedule A (the "Stockholders"). Buyer, NewCo, the
Company, and the Stockholders are referred to collectively as the "Parties" and
individually as a "Party."
BACKGROUND
WHEREAS, the Company is engaged in the business of designing,
manufacturing, marketing, and servicing laser tracker measurement devices and
licensing associated software (the "Business");
WHEREAS, this Agreement contemplates a merger of the Company
with and into NewCo with NewCo being the surviving entity (the "Merger"),
pursuant to which the Shares outstanding at the Effective Time will be converted
into the right to receive the Merger Consideration;
WHEREAS, the Parties intend that the Merger constitute a
taxable transaction that will be treated as a sale of assets under the Internal
Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Board of Directors of Buyer and the managers of
NewCo have reviewed this Agreement and have authorized its execution and the
consummation of the Merger pursuant to the terms and conditions contained
herein;
WHEREAS, the Board of Directors of the Company has (i)
reviewed this Agreement and has approved its execution by the Company and the
consummation of the Merger pursuant to the terms and conditions contained herein
and (ii) recommended to the holders of a majority of the outstanding voting
stock of the Company to adopt the Merger pursuant to the terms and conditions of
this Agreement;
WHEREAS, pursuant to Section 228 of the DGCL, the holders of a
majority of the outstanding voting stock of the Company have executed a written
consent in lieu of a meeting adopting this Agreement and authorizing the Merger
pursuant to the terms and conditions contained herein;
WHEREAS, following the Closing, pursuant to the terms of this
Agreement and the Company's Restated and Amended Certificate of Incorporation,
the Merger Consideration is to be distributed among the holders of the Company's
capital stock as follows: (i) 80% of the Merger Consideration is to be
distributed to the holders of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, and Series E-1 Preferred (less the amounts to be
held in escrow under the Escrow Agreement), (ii) 7% of the Merger Consideration
is to be distributed to the holders of Common Stock other than holders of
Restricted Company Common Stock (less the amounts to be held in escrow under the
Escrow Agreement, and (iii) 13% of the Merger Consideration is to be distributed
to the holders of Restricted Company Common Stock;
WHEREAS, an aggregate of 10% of the Buyer's Closing Payment
(as defined below) shall be held in escrow under the Escrow Agreement, which
constitutes 11.4943% of the portion of the
Buyer's Closing Payment distributable to the holders of the Company's preferred
stock and Company Common Stock other than holders of Restricted Company Common
Stock;
WHEREAS, shares of Restricted Company Common Stock are subject
to the same vesting restrictions as contained in the Stock Restriction Agreement
attached hereto as Exhibit H, and following the Closing, holders of Restricted
Company Common Stock will receive as Merger Consideration shares of Buyer Common
Stock that are subject to the Stock Restriction Agreement attached hereto as
Exhibit H, pursuant to which the holder of such shares must remain employed
(except in limited circumstances) by the Surviving Entity for a period two years
following the consummation of the Merger for such shares to vest;
WHEREAS, pursuant to a Loan Agreement dated January 28, 1998
and related agreements, instruments and documents, all as amended from time to
time (collectively, the "Credit Documents"), PNC Bank, National Association (the
"Senior Lender") has made loans, advances, and extensions of credit ("Line of
Credit") to the Company up to a maximum principal outstanding amount of
$2,300,000 as of April 13, 2001;
WHEREAS, pursuant to a Participation Agreement between Buyer
and the Senior Lender dated April 13, 2001 (the "Participation Agreement"),
Buyer provided $1,500,000 to the Senior Lender to increase the maximum principal
amount under the Line of Credit from $2,300,000 to $3,800,000 pursuant to the
Credit Documents;
WHEREAS, Buyer entered into an Agreement with Company dated
April 13, 2001 (the "Lending Agreement") pursuant to which the Company made
various representations, warranties, and covenants as an inducement to Buyer
providing to the Company the $1,500,000 of additional financing under the Line
of Credit made available by Buyer entering into the Participation Agreement;
WHEREAS, following the execution of this Agreement, Buyer and
the Company expect to enter into an Agreement Regarding Additional Advances (the
"Supplemental Lending Agreement") to provide that, under certain circumstances
(which shall include the Company's satisfaction of certain product related
hurdles), Buyer will provide up to an additional $1,500,000 in financing under
the Line of Credit pursuant to the Participation Agreement;
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