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Agreement and Plan of Merger

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Title:

Agreement and Plan of Merger

Entities:

Standard Management Corp.; U.S. Bank, NA

Date:

2006

Size:

Preview shows 83KB of 264KB total

Price:

$52

ID:

#2639852

► Plans ► Agreements ► Agreements & Plans of Merger
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The attached copy of the merger agreement has been included to provide the reader with information regarding its terms. It is not intended to provide any other factual information about SunPower or PowerLight. The merger agreement contains representations and warranties that SunPower and PowerLight made to one another in the context and at the time of the signing of the merger agreement. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure letters that SunPower and PowerLight exchanged in connection with signing the merger agreement. The disclosure letters do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached merger agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since they are modified by the underlying disclosure letters and were made as of the time the merger agreement was signed. Information concerning the subject matter of the representations and warranties may have changed since the date of the agreement.

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

SUNPOWER CORPORATION,

PLUTO ACQUISITION COMPANY LLC,

POWERLIGHT CORPORATION

AND

THOMAS L. DINWOODIE,

AS SHAREHOLDERS REPRESENTATIVE

NOVEMBER 15, 2006

TABLE OF CONTENTS


		Page
ARTICLE 1	THE MERGER	1

1.1	The Merger	1

1.2	The Closing	2

1.3	Effects of the Merger	2

1.4	Effects on Capital Stock	2

1.5	Exchange of Certificates	5

1.6	Fractional Shares	6

1.7	Dissenting Shares	7

ARTICLE 2	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	7

2.1	Organization, Standing and Power	7

2.2	Capital Structure	8

2.3	Authority; Noncontravention	9

2.4	Financial Statements	10

2.5	Absence of Certain Changes; Undisclosed Liabilities	10

2.6	Litigation	11

2.7	Restrictions on Business Activities	11

2.8	Intellectual Property	11

2.9	Taxes	14

2.10	Employee Benefit Plans	17

2.11	Employee Matters	19

2.12	Related Party Transactions	20

2.13	Insurance	20

2.14	Compliance With Laws	21

2.15	Minute Books	21

2.16	Brokers and Finders Fees	21

2.17	Vote Required	21

2.18	Board Approval	21

2.19	Customers	22

2.20	Suppliers	22

2.21	Material Contracts	22

TABLE OF CONTENTS

(continued)


		Page
2.22	Title of Properties; Absence of Encumbrances	24

2.23	Warranties; Defects, Returns, Recalls, Indemnities	24

2.24	Environmental	25

2.25	Licenses and Permits	26

2.26	Inventories	26

2.27	Disclosure	26

ARTICLE 3	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB	27

3.1	Organization, Standing and Power	27

3.2	Capital Structure	27

3.3	Authority; Noncontravention	28

3.4	SEC Documents; Financial Statements	29

3.5	No Material Adverse Change	29

3.6	Litigation	30

3.7	Available Funds	30

3.8	Board Approval	30

3.9	Brokers and Finders Fees	30

3.10	Reorganization	30

3.11	Intellectual Property	30

3.12	Disclosure	31

ARTICLE 4	COVENANTS AND OTHER AGREEMENTS	31

4.1	Conduct of Business of the Company and its Subsidiaries	31

4.2	Restrictions on Conduct of Business of the Company and its Subsidiaries	32

4.3	Conduct of Business of Parent and its Subsidiaries	35

4.4	No Solicitation	35

4.5	Securities Laws Matters	37

4.6	Solicitation of Shareholders	39

4.7	Access to Information	39

4.8	Confidentiality	39

4.9	Public Disclosure	39

TABLE OF CONTENTS

(continued)


		Page
4.10	Consents; Cooperation	40

4.11	Legal Requirements	41

4.12	Treatment as Reorganization	41

4.13	Bonus Plan	41

4.14	Assumption of Options	42

4.15	Spreadsheet	44

4.16	Expenses	44

4.17	Section 280G Matters	45

4.18	Affiliate Agreements	45

4.19	D&O Insurance	46

4.20	Obligations of Merger Sub	46

4.21	Further Assurances	46

4.22	Employee Benefits Matters	46

4.23	SAS 100 Review and Year-End Audit	46

ARTICLE 5	CONDITIONS TO THE MERGER	47

5.1	Conditions to Obligations of Each Party to Effect the Merger	47

5.2	Additional Conditions to Obligations of the Company	47

5.3	Additional Conditions to the Obligations of Parent and Merger Sub	48

ARTICLE 6	TERMINATION, AMENDMENT AND WAIVER	50

6.1	Termination	50

6.2	Effect of Termination	50

6.3	Amendment	51

6.4	Extension; Waiver	51

ARTICLE 7	ESCROW FUND AND INDEMNIFICATION	52

7.1	Indemnification by Indemnifying Shareholders	52

7.2	Limitations on Indemnification	52

7.3	Claims Procedure	54

7.4	Objections to Claims	54

7.5	Resolution of Objections to Claims	55

7.6	Payment of Claims	55

TABLE OF CONTENTS

(continued)


		Page
7.7	Escrow Fund Releases	57

7.8	Third-Party Claims	57

7.9	Shareholders Representative	59

7.10	Actions of the Shareholders Representative	60

ARTICLE 8	GENERAL PROVISIONS	63

8.1	Survival of Representations and Warranties	63

8.2	Notices	64

8.3	Interpretation	65

8.4	Definitions	66

8.5	Counterparts	70

8.6	Entire Agreement; No Third Party Beneficiaries	70

8.7	Assignment	71

8.8	Severability	71

8.9	Failure or Indulgence Not Waiver; Remedies Cumulative	71

8.10	GOVERNING LAW	71

8.11	Binding Arbitration	71

8.12	Jurisdiction; Venue	72

8.13	Enforcement	72

	* * * * *

Exhibit A	Form of Support Agreement	A-1
Exhibit B	Form of Noncompetition Agreement	B-1
Exhibit C	Form of Equity Restriction Agreement	C-1
Exhibit D	Form of Supply Agreement	D-1
Exhibit E-1	Form of Cash Escrow Agreement	E-1-1
Exhibit E-2	Form of Stock Escrow Agreement	E-2-1
Exhibit F-1	Form of Letter of Transmittal	F-1-1
Exhibit F-2	Form of Option Letter of Transmittal	F-2-1
Exhibit G-1	Tax Representations of the Company	G-1-1
Exhibit G-2	Tax Representations of Parent and Merger Sub	G-2-1
Exhibit H	Form of Excess Parachute Payment Waiver	H-1
Exhibit I	Form of Affiliate Agreement	I-1
Exhibit J	Closing Deliveries	J-1
Exhibit K	Matters to be Covered in Jones Day Opinion	K-1
Exhibit L	Matters to be Covered in Shearman Opinion	L-1

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER, dated as of November 15, 2006 (this Agreement), is by and among SunPower Corporation, a Delaware corporation (Parent), Pluto Acquisition Company LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent (Merger Sub), PowerLight Corporation, a California corporation (the Company), and Thomas L. Dinwoodie, as a representative of the Company Shareholders (as defined in Section 8.4) (the Shareholders Representative).

BACKGROUND

A. The board of directors of each of the Company and Parent and the sole member of Merger Sub have determined that it would be advisable and in the best interests of their respective stockholders or members, as applicable, for Parent to acquire the Company by means of the merger of the Company with and into Merger Sub (the Merger), all on the terms and subject to the conditions set forth in this Agreement, and, in furtherance thereof, have approved this Agreement and the transactions contemplated by this Agreement.

B. In order to induce Parent to enter into this Agreement, concurrently with the execution and delivery of this Agreement, certain Company Shareholders are executing and delivering Support Agreements in the form attached hereto as Exhibit A (each, a Support Agreement), and certain key employees of the Company are executing and delivering binding Noncompetition Agreements in the form attached hereto as Exhibit B.

D. In order to induce Parent to enter into this Agreement, concurrently with the execution and delivery of this Agreement, certain employees of the Company are executing and delivering Equity Restriction Agreements in substantially the form attached hereto as Exhibit C (each, an Equity Restriction Agreement).

E. In order to induce the Company to enter into this Agreement, concurrently with the execution and delivery of this Agreement, Parent is executing and delivering a binding Supply Agreement in the form attached hereto as Exhibit D (the Supply Agreement).

F. The Company and Parent intend that the Merger will qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code).

AGREEMENT

In consideration of the representations, warranties, covenants and other agreements in this Agreement, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

THE MERGER

1.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Limited Liability Company Act of the State of Delaware (the DLLCA) and the General Corporation Law of the State of California (the

CGCL), the Company shall be merged with and into Merger Sub at the effective time of the Merger (the Effective Time), which shall be the time of Closing (as defined in Section 1.2) unless otherwise agreed by both parties as set forth in the certificate of merger, in a form reasonably acceptable to Parent and the Company (the Certificate of Merger), to be filed with the Secretary of State of the State of Delaware (the Delaware Secretary), the agreement of merger, in a form reasonably acceptable to Parent and the Company (the Agreement of Merger), to be filed with the Secretary of State of the State of California (the California Secretary) and the certificate of merger, in a form reasonably acceptable to Parent and the Company (the CA Certificate of Merger), to be filed with the California Secretary if, as and when the Closing occurs. Merger Sub shall be the surviving company (sometimes referred to as the Surviving Company) in the Merger and shall succeed to and assume all the rights and obligations of the Company in accordance with the DLLCA and the CGCL.

1.2 The Closing. The closing of the transactions contemplated by this Agreement (the Closing) shall take place as soon as practicable after the satisfaction or waiver of each of the conditions set forth in ARTICLE 5 or at such other time as the parties agree in writing. The Closing shall take place at the offices of Jones Day, 1755 Embarcadero Road, Palo Alto, California, or at such other location as the parties agree. The date on which the Closing actually occurs is herein referred to as the Closing Date.

1.3 Effects of the Merger.

(a) At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger, the Agreement of Merger, the CA Certificate of Merger and the applicable provisions of the DLLCA and the CGCL.

(b) At the Effective Time, the certificate of formation of Merger Sub, as in effect immediately prior to the Effective Time, shall be the certificate of formation of the Surviving Company until thereafter amended as provided by the DLLCA and such certificate of formation; provided, however, that, at the Effective Time, the certificate of formation of the Surviving Company shall be amended so that the name of the Surviving Company shall be PowerLight LLC.

(c) At the Effective Time, the operating agreement of Merger Sub, as in effect immediately prior to the Effective Time, shall be the operating agreement of the Surviving Company until thereafter amended as provided by the DLLCA, the certificate of formation of the Surviving Company and such operating agreement.

(d) At the Effective Time, the officers of Merger Sub, as constituted immediately prior to the Effective Time, shall be the officers of the Surviving Company, for so long as provided under the DLLCA, the certificate of formation of the Surviving Company and the operating agreement of the Surviving Company.

1.4 Effects on Capital Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, Parent, the Company or the holders of any of the following securities, the following shall occur:

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