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Agreement and Plan of Merger |
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2003 |
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered into
this 26th day of December, 2003, by and among ON-SITE SOURCING, INC., a Delaware
corporation, (the "COMPANY"); DOCUFORCE, LLC, a Georgia limited liability
company ("ACQUIRER"); and DOCUFORCE ACQUISITION CORP., a Delaware corporation
and a wholly-owned subsidiary of Acquirer ("MERGER SUB"). The Company, Acquirer,
and Merger Sub are referred to individually herein as a "PARTY" and collectively
as the "PARTIES."
RECITALS
WHEREAS, the Company is in the business of providing digital imaging,
reprographics, and color and digital printing to law firms and other
organizations throughout the United States (the "BUSINESS");
WHEREAS, upon the terms and subject to the conditions set forth herein, the
Boards of Directors of the Company, Acquirer and Merger Sub have each determined
that it is in the best interests of their respective stockholders for Merger Sub
to be merged with and into the Company, with the surviving corporation becoming
a wholly-owned subsidiary of Acquirer, which transaction is intended to be
treated for federal income tax purposes as a taxable acquisition of the stock of
the Company by Acquirer; and
WHEREAS, in furtherance of such acquisition, the Board of Directors and
stockholders of each of Merger Sub and the Company have approved the merger of
Merger Sub with and into the Company in accordance with the Delaware General
Corporation Law and upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Parties hereby agree as follows:
1. DEFINITIONS.
"ACQUIRER" has the meaning set forth in the preface above.
"ALTERNATIVE TRANSACTION" has the meaning set forth in Section 6.4(iv)
below.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"ASSETS" has the meaning set forth in Section 4.4 below.
"BUSINESS" has the meaning set forth in the Recitals above.
"BUSINESS EMPLOYEES" has the meaning set forth in Section 4.16(a) below.
<PAGE>
"CAUSE" means, where an employee of the Company (i) is convicted of or
pleads guilty or nolo contendere to any misdemeanor (other than for minor
infractions) involving fraud, breach of trust, misappropriation, or other
similar activity, or any felony, or (ii) willfully commits an act of fraud,
material dishonesty, or gross negligence with respect to the Company, or (iii)
otherwise acts with willful disregard for the Company's best interests, and such
action does or is likely to result in material harm to the Company or its
business prospects.
"CERTIFICATE" and "CERTIFICATES" have the meanings set forth in Section
3.5(a) below.
"CERTIFICATE OF MERGER" has the meaning set forth in Section 2.3 below.
"CFO" has the meaning set forth in Section 7.2(d)(vii) below.
"CLOSING" has the meaning set forth in Section 2.2 below.
"CLOSING DATE" has the meaning set forth in Section 2.2 below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the preface above.
"COMPANY BOARD" has the meaning set forth in Section 2.5 below.
"COMPANY RECOMMENDATIONS" has the meaning set forth in Section 2.5(c)
below.
"COMPANY SHARE" means any share of the Common Stock, $.01 par value per
share, of the Company.
"COMPANY STOCKHOLDER" means any Person who or which holds any Company
Shares.
"CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section 6.8 below.
"CONSTITUENT CORPORATIONS" has the meaning set forth in Section 2.7 below.
"CONTRACT" has the meaning set forth in Section 4.18 below.
"DELAWARE GENERAL CORPORATION LAW" means the General Corporation Law of the
State of Delaware, Title 8, Delaware Code 1953, as amended.
"DISSENTING SHARES" has the meaning set forth in Section 3.2 below.
"DOL" has the meaning set forth in Section 4.16(b) below.
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<PAGE>
"EFFECTIVE TIME" has the meaning set forth in Section 2.4(a) below.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.17 below.
"EXERCISABLE OPTIONS" has the meaning set forth in Section 3.3 below.
"ERISA AFFILIATE" has the meaning set forth in Section 4.16(a) below.
"EMPLOYEE BENEFIT PLAN" has the meaning set forth in Section 4.16 below.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" means Continental Stock Transfer.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"GOVERNMENTAL AUTHORITY" has the meaning set forth in Section 4.5 below.
"HAZARDOUS MATERIAL" has the meaning set forth in Section 4.17 below.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 4.19 below.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means, as to the Company, the actual knowledge after reasonable
inquiry of its CFO or Chief Executive Officer.
"LAWS" has the meaning set forth in Section 4.5 below.
"LICENSES AND PERMITS" has the meaning set forth in Section 4.7 below.
"MATERIAL ADVERSE EFFECT" means any effect that is or may reasonably be
expected to be materially adverse to the business operations, financial
condition, or Assets of the Company, taken as a whole, provided that such term
shall not include effects that are resulting (i) from economic or financial
market conditions generally, or (ii) from any matter or facts previously
disclosed in Public Reports or this Agreement (other than those matters or facts
contained in a Revised Schedule that were not contained in the initial Schedule
to this Agreement that was superceded by such Revised Schedule).
"MERGER" has the meaning set forth in Section 2.1 below.
"MERGER CONSIDERATION" means the amount to be received by Company
Stockholders or the holders of Exercisable Options in exchange for their Company
Shares and Stock Options, as the case may be, pursuant to the provisions of
Sections 3.2 and 3.3 below.
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"MERGER PRICE" has the meaning set forth in Section 3.2 below.
"MERGER SUB" has the meaning set forth in the preface above.
"MOST RECENT 10-Q" means the Company's quarterly report on Form 10-Q for
the fiscal quarter ended September 30, 2003, including all notes and
disclosures.
"OPTION PLANS" has the meaning set forth in Section 3.3 below.
"OPTION PURCHASE PRICE" has the meaning set forth in Section 3.3 below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" or "PARTIES" has the meaning set forth in the preface above.
"PBGC" has the meaning set forth in Section 4.16(b) below.
"PERMITTED LIENS" means (i) liens for Taxes not yet due or payable, or for
Taxes being contested in good faith in appropriate proceedings, (ii) liens that
do not materially detract from or interfere with the use of the assets subject
thereto or affected thereby or otherwise materially impair business operations
involving such assets, (iii) liens securing debt that is reflected in the Public
Reports, and (iv) with respect to Real Property, (A) mechanics and similar
statutory liens, (B) zoning, building, and other land use laws imposed by any
Governmental Authority, and (C) easements, covenants, conditions, restrictions
and other matters of record affecting title to such property.
"PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or any other business association or entity or a governmental entity (or any
department, agency, or political subdivision thereof).
"PROPERTIES" has the meaning set forth in Section 4.17(i) below.
"PROPERTY TRANSACTION" has the meaning set forth in Section 6.13 below.
"PROXY STATEMENT" has the meaning set forth in Section 2.5(b) below.
"PUBLIC REPORTS" has the meaning set forth in Section 4.8 below.
"REAL PROPERTY" means all real property currently leased by the Company.
"REQUISITE COMPANY STOCKHOLDER APPROVAL" means, with respect to the
Company, the affirmative vote of the holders of a majority of the outstanding
Company Shares in favor of this Agreement and the Merger.
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"REVISED SCHEDULES" has the meaning set forth in Section 7.2(f) below.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL STOCKHOLDER MEETING" has the meaning set forth in Section 2.5(a)
below.
"STOCK OPTIONS" has the meaning set forth in Section 3.3 below.
"SUBSIDIARY" means any corporation or other organization, whether
incorporated or unincorporated, with respect to which a specified Person (or a
Subsidiary thereof) owns a majority of the common stock or has the power to vote
or direct the voting of sufficient securities to elect a majority of the
directors or others performing similar functions.
"SUPERIOR PROPOSAL" has the meaning set forth in Section 6.4(iv) below.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.1 below.
"TAX" or "TAXES" has the meaning set forth in Section 4.14(m)(i).
"TAX RETURN" has the meaning set forth in Section 4.14(m)(ii).
"TAX RULING" has the meaning set forth in Section 4.14(m)(iii).
"THIRD PARTY" means a Person other than a Party hereto.
2. MERGER.
2.1 THE MERGER. At the Effective Time, upon the terms and subject to the
conditions of this Agreement, Merger Sub will merge with and into the Company
(the "MERGER"). Following the Effective Time, the separate existence of Merger
Sub shall cease, and the Company shall be the corporation surviving the Merger
(the "SURVIVING CORPORATION") and shall be governed by the laws of the State of
Delaware.
2.2 CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") shall take place at the offices of Wilmer Cutler & Pickering,
1600 Tysons Boulevard, 10th Floor, McLean, Virginia, commencing at 10:00 a.m.
local time on the second business day following the satisfaction or waiver of
the conditions set forth in Article 7 (other than conditions with respect to
actions the respective Parties will take at the Closing itself) or at such
location and on such other date as the Parties may mutually determine (the
"CLOSING DATE").
2.3 ACTIONS AT THE CLOSING. At the Closing, (i) the Company will deliver to
Acquirer and Merger Sub the various certificates, instruments, and documents
referred to in
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Section 7.2 below, (ii) Acquirer and Merger Sub will deliver to the Company the
various certificates, instruments, and documents referred to in Section 7.3
below, (iii) Merger Sub and the Company will file with the Secretary of State of
the State of Delaware a certificate of merger in such form as required by, and
executed and certified in accordance with, the relevant provisions of the
Delaware General Corporation Law (the "CERTIFICATE OF MERGER"), and (iv)
Acquirer will deliver to Exchange Agent, in the manner provided in Section 3.5
below, the aggregate Merger Consideration.
2.4 EFFECT OF MERGER.
(a) GENERAL. The Merger shall become effective at such time as Merger Sub
and the Company file the Certificate of Merger with the Secretary of State of
the State of Delaware, which filing shall be as early as practicable on the
Closing Date, or at such subsequent date or time as Acquirer and the Company
shall agree and specify in the Certificate of Merger (the "EFFECTIVE TIME"). The
Merger shall have the effect set forth in the Delaware General Corporation Law.
The Surviving Corporation may, at any time after the Effective Time, take any
action (including executing and delivering any document) in the name and on
behalf of either Merger Sub or the Company in order to carry out and effectuate
the transactions contemplated by this Agreement.
(b) CERTIFICATE OF INCORPORATION. The certificate of incorporation of
Merger Sub in effect at and as of the Effective Time will be the certificate of
incorporation of the Surviving Corporation upon and following the Merger.
(c) BYLAWS. The bylaws of Merger Sub in effect at and as of the Effective
Time will be the bylaws of the Surviving Corporation upon and following the
Merger.
(d) DIRECTORS AND OFFICERS. The directors and officers of Merger Sub in
office at and as of the Effective Time will be the directors and officers of the
Surviving Corporation upon and following the Merger, in each case until their
respective successors are duly elected or appointed and qualified.
2.5 SPECIAL STOCKHOLDER MEETING. The Company, acting through the board of
directors of the Company (the "COMPANY BOARD"), shall, in accordance with all
applicable Laws:
(a) duly call, give notice of, convene and hold a special meeting of the
Company Stockholders (the "SPECIAL STOCKHOLDER MEETING") as promptly as
practicable for the purpose of considering and taking action upon the approval
of the Merger and the adoption of this Agreement;
(b) (i) as soon as practicable after the date hereof, but in no event later
than twenty (20) days from the date hereof, prepare and file with the SEC a
preliminary proxy statement relating to the Merger and this Agreement (provided,
however, that the Company shall submit a draft of such preliminary proxy
statement to Acquirer for its review and approval as soon as practicable, but in
no event less than five (5) business days, prior to filing such proxy statement
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<PAGE>
with the SEC), (ii) obtain and furnish the information required to be included
by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Acquirer, respond promptly to any comments made by the SEC
with respect to the preliminary proxy statement, and (iii) cause a definitive
proxy statement, including any amendment or supplement thereto (the "PROXY
STATEMENT"), to be mailed to the Company Stockholders, provided that no
amendment or supplement to the Proxy Statement will be made by the Company
without consultation with Acquirer and its counsel. The Company will advise
Acquirer, promptly after it receives notice thereof, of any request by the SEC
for the amendment of the Proxy Statement or comments thereon and responses
thereto or requests by the SEC for additional information. If at any time prior
to the Effective Time any information relating to the Company or Acquirer, or
any of their respective Affiliates, officers or directors, should be discovered
by the Parties which should be set forth in an amendment or supplement to the
Proxy Statement, so that such document would not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the Party which discovers such information shall promptly notify
the other Parties and an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent required by
law, disseminated to the Company Stockholders;
(c) include in the Proxy Statement the recommendation of the Company Board
that the Company Stockholders vote in favor of the approval of the Merger and
the adoption of this Agreement (the "COMPANY RECOMMENDATIONS") at the Special
Stockholder Meeting; and
(d) use its commercially reasonable efforts to solicit from holders of
Company Shares proxies in favor of the Merger and shall take all other
reasonable and lawful action necessary or, advisable to secure any vote or
consent of the Company Stockholders required by the Delaware General Corporation
Law to effect the Merger.
Acquirer agrees that it will provide the Company with all of the
information concerning Acquirer and Merger Sub required to be included in the
Proxy Statement.
2.6 CLOSING OF TRANSFER RECORDS. As of and after the Effective Time,
transfers of Company Shares outstanding prior to the Effective Time shall not be
made on the stock transfer books of the Surviving Corporation.
2.7 TAKING OF NECESSARY ACTION; FUTURE ACTION. Each of the Parties will
take all such reasonable and lawful action as may be necessary or appropriate in
order to effectuate the Merger as promptly as possible subject to the
satisfaction of the closing conditions set forth in Article 7 hereof. If at any
time after the Effective Time, the Surviving Corporation will 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 either the Company or
Merger Sub (collectively, the "CONSTITUENT CORPORATIONS") 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
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<PAGE>
of the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either of the Constituent Corporations, all such deeds,
bills of sale, instruments of conveyance, assignments and assurances and to take
and do, in the name and on behalf of each of such Constituent Corporation or
otherwise, all such other lawful 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.
3. CONVERSION OF SECURITIES.
3.1 CONVERSION OF MERGER SUB SHARES. At and as of the Effective Time, by
virtue of the Merger and without further action on the part of Merger Sub or
Acquirer (the sole holder of the capital stock of Merger Sub), each share of
capital stock of Merger Sub that is issued and outstanding immediately prior to
the Effective Time shall be cancelled and retired and shall be converted into
and become one fully paid and non-assessable share of Common Stock, $0.001 par
value per share, of the Surviving Corporation.
3.2 CONVERSION OF COMPANY SHARES. Subject any adjustments pursuant to
Section 3.4 below, at and as of the Effective Time, by virtue of the Merger and
without further action on the part of the Company or the holders of Company
Shares, each Company Share that is issued and outstanding immediately prior to
the Effective Time (other than Company Shares if any, held by Persons who have
not voted such shares for approval of the Merger and with respect to which such
Persons shall become entitled to exercise dissenters' rights in accordance with
Section 262 of the Delaware General Corporation Law ("DISSENTING SHARES")) shall
automatically be cancelled and extinguished and converted into the right to
receive cash equal to $2.87 per share (the "MERGER PRICE"). After the Effective
Time, no Company Share shall be deemed to be outstanding or to have any rights
other than those set forth in this Section 3.2 or Section 3.6 hereof.
Immediately prior to the Closing, all Company Shares, if any, that are held by
the Company as treasury stock shall be cancelled and retired and shall cease to
exist and no consideration shall be delivered therefor.
3.3 COMPANY STOCK OPTIONS. Subject to any adjustments pursuant to Section
3.4 below, at and as of the Effective Time, by virtue of the Merger and without
further action on the part of the Company or the holders of Stock Options, all
stock options issued by the Company outstanding on the date thereof to purchase
Company Shares (collectively, "STOCK OPTIONS") pursuant to all Stock Option
Plans (collectively, the "OPTION PLANS") or other contractual rights of the
Company shall be automatically accelerated with respect to vesting and then
cancelled and extinguished. Each holder of those Stock Options listed on
Schedule 3.3 ("Exercisable Options") shall receive, in exchange for such
cancellation, the right to receive an amount equal to (i) the Merger Price minus
the exercise price per share (the "OPTION PURCHASE PRICE"), multiplied by (ii)
the number of Company Shares underlying the Exercisable Options held by such
holder as of the Effective Time. Schedule 3.3 lists all Exercisable Options and
states the holder of such options, the number of Company Shares underlying such
options as of the date hereof, the option grant dates, and the exercise price
per share of such options. For the avoidance of doubt, all Stock Options that
have an exercise price per share that is less than the Merger Price as of the
Effective Time, shall be Exercisable
8
<PAGE>
Options, whether or not currently exercisable and all Stock Options that have an
exercise price per share that is equal to or greater than the Merger Price shall
not be Exercisable Options. No consideration hereunder or otherwise shall be
payable in respect of Stock Options that are not Exercisable Options as of the
Effective Time, except where any such Exercisable Options are exercised on or
after the date hereof and prior to the Effective Time.
3.4 ADJUSTMENTS. If, between the date of this Agreement and the Effective
Time, (a) the outstanding Company Shares shall have been changed into a
different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares,
or readjustment or a stock dividend thereon shall be declared with a record date
within such period, or (b) the Company shall have issued additional Company
Shares or granted additional options, warrants or convertible rights thereto,
then the Merger Price shall be adjusted accordingly to assure that the aggregate
consideration to be paid by Acquirer hereunder will not change as a result of
such issuances, grants, reclassification, recapitalization, split-up,
combination, exchange or dividend (it being acknowledged that the Company
elsewhere herein covenants not to take any of the actions described in (a) or
(b) above), provided that no adjustment shall be made as a result of an issuance
by the Company of Company Shares upon exercise of outstanding Stock Options.
3.5 PROCEDURE FOR PAYMENT.
(a) MERGER CONSIDERATION. Except as set forth herein, from and after the
Effective Time, each holder of a certificate or certificates that immediately
prior to the Effective Time represented outstanding Company Shares
("CERTIFICATE" or "CERTIFICATES") shall be entitled to receive in exchange
therefor, upon surrender thereof to the Exchange Agent, the Merger Consideration
for each Company Share so represented by the Certificate or Certificates
surrendered by such holder thereof. Each holder of an Exercisable Option shall
be identified by the Company in writing provided to the Exchange Agent prior to
the Effective Time and will not be required to surrender any other evidence of
such interest prior to receiving the Merger Consideration.
(b) EXCHANGE AGENT. At or simultaneous with the Closing:
(i) Subject to Section 3.5(g), Acquirer will furnish the Exchange Agent an
amount equal to the aggregate Merger Consideration, and irrevocable
instructions to deliver to each record holder of outstanding Company Shares
or Exercisable Options an amount equal to (A) with regard to Company Shares
converted pursuant to Section 3.2, the product of (1) the Merger Price
multiplied by (2) the number of outstanding Company Shares held by such
Person, and (B) with regard to Exercisable Options cancelled pursuant to
Section 3.3, the product of (1) the Option Purchase Price multiplied by (2)
the number of Company Shares underlying all Exercisable Options held by
such Person; and
(ii) Acquirer will cause the Exchange Agent to mail a letter of transmittal
(with instructions for its use) to each such record holder of outstanding
Company Shares for the holder to use in surrendering the Certificates that
represented the holder's Company Shares in exchange for the Merger
Consideration to which the holder is entitled. Such letter of transmittal
shall specify that delivery shall be effected, and risk of
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loss and title to the Certificate or Certificates shall pass only upon
proper delivery of the Certificate or Certificates to the Exchange Agent,
and the Exchange Agent shall advise such holder of the effectiveness of the
Merger and the procedures to be used in effecting the surrender of the
Certificate or Certificates in exchange for the appropriate Merger
Consideration. Upon surrender to the Exchange Agent of a Certificate or
Certificate, together with such letter of transmittal duly executed and
completed in accordance with the instructions thereon, and such other
documents as may be reasonably requested, the Exchange Agent shall,
pursuant to the Merger, promptly deliver the appropriate Merger
Consideration to the Person entitled to the Merger Consideration for each
Company Share so represented by the Certificate or Certificates surrendered
by such holder thereof, and such Certificate or Certificates shall
forthwith be cancelled.
(c) TRANSFER OF CERTIFICATES. If delivery of all or part of the Merger
Consideration is to be made to a Person other than the Person in whose name a
surrendered Certificate is registered, it shall be a condition of such delivery
or exchange that the Certificate so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the Person requesting
such delivery or exchange shall have paid any transfer and other taxes required
by reason of such delivery or exchange in a name other than that of the
registered holder of the Certificate surrendered or shall have established to
the reasonable satisfaction of the Exchange Agent that such tax either has been
paid or is not payable.
(d) RIGHT TO MERGER CONSIDERATION. Until surrendered and exchanged in
accordance with this Section 3.5, each Certificate shall, after the Effective
Time, represent solely the right to receive the Merger Consideration for such
Certificate, and any holder thereof shall have no ownership or other rights with
respect to such Company Shares represented by a Certificate. No interest shall
accrue or be payable on any Merger Consideration. None of the Exchange Agent,
Acquirer, or the Company shall be liable to any holder of Company Shares or
Exercisable Options for any Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) TERMINATION OF EXCHANGE AGENT. Acquirer may cause the Exchange Agent to
return any Merger Consideration remaining unclaimed 180 days after the Effective
Time to Acquirer, and thereafter each remaining record holder of outstanding
Company Shares or Exercisable Options shall be entitled to look to Acquirer
(subject to abandoned property, escheat, and other similar laws) as a general
creditor thereof with respect to the Merger Consideration to which such Person
is entitled upon surrender of such Person's Certificates or in respect of
Exercisable Options, as the case may be.
(f) FEES OF EXCHANGE AGENT. The Company, or the Surviving Corporation from
and after the Effective Time, shall pay all charges and expenses of the Exchange
Agent.
(g) WITHHOLDING RIGHTS. Each of the Exchange Agent, Acquirer and the
Company shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Company Shares or
Exercisable Options such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign tax law. To the extent that amounts
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are so withheld by the Company or Acquirer, as the case may be, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of Company Shares or Exercisable Options, as the case may be, in
respect of which such deduction and withholding was made by the Company or
Acquirer.
(h) LOST CERTIFICATES. Subject to Section 3.5(e) hereof, if any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by the Surviving Corporation, the posting by such
Person of a bond in such reasonable amount as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration deliverable in respect
thereof pursuant to this Agreement.
3.6 DISSENTING SHARES
(a) Notwithstanding any other provisions of this Agreement to the contrary,
any Dissenting Shares shall not be converted into the right to receive the
Merger Consideration but shall instead be converted into the right to receive
such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to Delaware General Corporation Law. The Company
agrees that, except with the prior written consent of Acquirer, or as required
under Delaware General Corporation Law, it will not voluntarily make any payment
with respect to, or settle or offer to settle, any such purchase demand. Each
holder of Dissenting Shares who, pursuant to the provisions of Delaware General
Corporation Law, becomes entitled to payment of the fair value for Company
Shares shall receive payment therefore (but only after such value shall have
been agreed upon or finally determined pursuant to such applicable law
provisions). If, after the Effective Time, any Dissenting Shares shall lose
their status as Dissenting Shares, the Exchange Agent shall issue and deliver
upon surrender by such holder of certificate or certificates representing
Company Shares, the Merger Consideration to which such holder would otherwise be
entitled under this Agreement.
(b) The provisions of this Article 3 shall also apply to Dissenting Shares
that lose their status as such, except that the obligations of Acquirer under
this Article 3 shall commence on the date of loss of such status and the holder
of such shares shall be entitled to receive in exchange for such share the
Merger Consideration to which such holder is entitled pursuant to this Article
3.
4. REPRESENTATIONS AND WARRANTIES OF COMPANY.
In order to induce Acquirer and Merger Sub to enter into this Agreement and
consummate the transactions contemplated hereby, the Company hereby makes the
following representations and warranties to Acquirer and Merger Sub, each of
which representations and warranties is relied upon by Acquirer and Merger Sub:
4.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized to
conduct business and
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is in good standing under the laws of each jurisdiction where such qualification
is required, except for such failures to be so qualified and in good standing
that would not, individually or in the aggregate, have a Material Adverse
Effect. Except as set forth in Schedule 4.1, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any corporation, partnership, joint
venture, or other business association or entity. The Company has full corporate
power and authority to carry on the businesses in which it is engaged and to own
and use the properties owned and used by it. The Company beneficially owns all
of the outstanding capital stock or other form of equity of its Subsidiary.
4.2 CAPITALIZATION. The authorized capital stock of the Company consists of
20,000,000 Company Shares, of which, as of the date hereof, 5,599,225 Company
Shares are issued and outstanding, 113,590 Company Shares are held in the
treasury of the Company and 627,333 Company Shares are issuable in respect of
Exercisable Options. All of the issued and outstanding Company Shares have been
duly authorized and are validly issued, fully paid, and nonassessable. No
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