1
Exhibit (d)(1)
GRC INTERNATIONAL, INC.,
AT&T CORP.
and
LMN CORPORATION
AGREEMENT AND PLAN OF MERGER
Dated as of February 14, 2000
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TABLE OF CONTENTS
Page No.
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ARTICLE I. THE TENDER OFFER ............................................... 2
SECTION 1.1. The Offer ............................................. 2
SECTION 1.2. Company Action ........................................ 4
SECTION 1.3. Directors ............................................. 5
ARTICLE II. THE MERGER ..................................................... 7
SECTION 2.1. The Merger ............................................ 7
SECTION 2.2. Closing; Effective Time................................ 7
SECTION 2.3. Effect of the Merger................................... 7
SECTION 2.4. Subsequent Actions..................................... 8
SECTION 2.5. Certificate of Incorporation; By-Laws;
Directors and Officers ............................. 8
SECTION 2.6. Conversion of Securities............................... 9
SECTION 2.7. Dissenting Shares...................................... 9
SECTION 2.8. Surrender of Shares; Stock Transfer Books ............. 10
SECTION 2.9. Stock Plans ........................................... 12
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER ...................................................... 14
SECTION 3.1. Corporate Organization................................. 14
SECTION 3.2. Authority Relative to this Agreement................... 14
SECTION 3.3. No Conflict; Required Filings and Consents............. 15
SECTION 3.4. Financing Arrangements................................. 16
SECTION 3.5. Brokers ............................................... 16
SECTION 3.6. Offer Documents; Proxy Statement....................... 16
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................... 16
SECTION 4.1. Organization and Qualification; Subsidiaries........... 16
SECTION 4.2. Capitalization ........................................ 17
SECTION 4.3. Authority Relative to this Agreement................... 19
SECTION 4.4. No Conflict; Required Filings and Consents............. 20
SECTION 4.5. SEC Filings; Financial Statements...................... 21
SECTION 4.6. Absence of Certain Changes or Events................... 22
SECTION 4.7. Litigation ............................................ 24
SECTION 4.8. Employee Benefit Plans................................. 24
SECTION 4.9. Labor and Employment................................... 27
SECTION 4.10. Properties ............................................ 28
SECTION 4.11. Intellectual Property.................................. 29
SECTION 4.12. Insurance ............................................. 30
SECTION 4.13. Environmental Matters.................................. 31
SECTION 4.14. Government Contracts................................... 32
SECTION 4.15. Licenses and Permits; Compliance with Laws ............ 32
SECTION 4.16. Material Contracts.................................... 33
SECTION 4.17. Taxes ................................................ 35
SECTION 4.18. Offer Documents; Proxy Statement...................... 37
(i)
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SECTION 4.19. Brokers................................................ 38
SECTION 4.20. Takeover Statutes...................................... 38
SECTION 4.21. Rights Plan............................................ 38
ARTICLE V. CONDUCT OF BUSINESS PENDING THE MERGER............................. 38
SECTION 5.1. Conduct of Business by the Company
Pending the Closing..................................... 38
SECTION 5.2. No Solicitation......................................... 42
ARTICLE VI. ADDITIONAL AGREEMENTS............................................. 43
SECTION 6.1. Proxy Statement......................................... 43
SECTION 6.2. Meeting of Stockholders of the Company.................. 44
SECTION 6.3. Compliance with Law..................................... 44
SECTION 6.4. Notification of Certain Matters......................... 44
SECTION 6.5. Access to Information................................... 45
SECTION 6.6. Public Announcements.................................... 45
SECTION 6.7. Reasonable Best Efforts; Cooperation.................... 45
SECTION 6.8. Agreement to Defend and Indemnify....................... 46
SECTION 6.9. Takeover Statutes....................................... 47
SECTION 6.10. Employment Matters..................................... 47
SECTION 6.11. Company Employee Benefit Plans......................... 48
ARTICLE VII. CONDITIONS OF MERGER............................................. 50
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER............................... 50
SECTION 8.1. Termination............................................. 50
SECTION 8.2. Effect of Termination................................... 53
ARTICLE IX. GENERAL PROVISIONS................................................ 54
SECTION 9.1. Non-Survival of Representations,
Warranties and Agreements........................... 54
SECTION 9.2. Notices................................................. 54
SECTION 9.3. Expenses................................................ 55
SECTION 9.4. Certain Definitions..................................... 55
SECTION 9.5. Headings................................................ 56
SECTION 9.6. Severability............................................ 56
SECTION 9.7. Schedules............................................... 56
SECTION 9.8. Entire Agreement; No Third-Party Beneficiaries.......... 56
SECTION 9.9. Assignment.............................................. 56
SECTION 9.10. Governing Law.......................................... 57
SECTION 9.11. Amendment.............................................. 57
SECTION 9.12. Waiver................................................. 57
SECTION 9.13. Counterparts........................................... 57
(ii)
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SCHEDULES
2.9(b) Stock Plans
4.1 Subsidiaries
4.2(a) Options, Warrants, Etc.
4.2(b) Joint Ventures, Etc.
4.4(a) Conflicts
4.4(b) Company Consents
4.5(c) Undisclosed Liabilities
4.5(d) Amendments to Filed Documents
4.6 Changes, Events, Etc.
4.7 Litigation
4.8 ERISA
4.8(a)(ii) Options
4.9 Labor and Employment
4.10 Properties
4.11 Intellectual Property
4.12 Insurance
4.13 Environmental Matters
4.14 Government Contracts
4.15 Compliance with Laws
4.16 Material Contracts
4.17 Tax
5.1(i) Settlement of Proceedings
5.2(f) Indemnification Agreements
6.8 Indemnification Insurance
6.10 Executive Compensation
6.11 Employee Benefit Matters
Annex I - Conditions to the Offer
Index of Defined Terms
Exhibit A - Form of Stockholders Agreement
Exhibit B - Form of Stockholders Agreement
(iii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 14, 2000
(the "Agreement"), among GRC INTERNATIONAL, INC., a Delaware corporation (the
"Company"), AT&T CORP., a New York corporation ("Parent"), and LMN CORPORATION,
a Delaware corporation and an indirect wholly owned subsidiary of Parent
("Purchaser").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Company and
Purchaser have each determined that it is in the best interests of their
respective stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein; and
WHEREAS, in furtherance thereof, it is proposed that Purchaser
will make a cash tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to acquire all of the issued and
outstanding shares (the "Shares") of the common stock, $.10 par value, of the
Company (the "Company Common Stock") at a purchase price of fifteen dollars
($15) per Share (such price or such higher price as may be paid in the Offer,
the "Per Share Amount"), net to the seller in cash; and
WHEREAS, the respective Boards of Directors of the Company,
Purchaser and Parent have each approved this Agreement and the merger (the
"Merger") of Purchaser with and into the Company following the consummation of
the Offer and upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") has determined that the consideration to be paid for each Share in
the Offer and the Merger is fair to the holders of such Shares and to recommend
that the holders of such Shares accept the Offer and approve this Agreement and
the transactions contemplated hereby; and
WHEREAS, the Board of Directors has approved the terms of the
Stockholders Agreements attached hereto as Exhibits A and B (the "Stockholders
Agreements") to be entered into among Parent, Purchaser and certain holders of
Shares (the "Stockholders") simultaneously herewith, pursuant to which such
Stockholders have, among other things, agreed to tender their Shares pursuant to
the Offer.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the Company, Parent and Purchaser hereby agree as follows:
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ARTICLE I.
THE TENDER OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.1 hereof and none of the events set
forth in Annex I hereto shall have occurred and be existing, Purchaser shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) the Offer as promptly as reasonably
practicable, but in no event later than seven business days following the public
announcement by Parent and the Company of the execution of this Agreement. The
obligation of Purchaser to accept for payment and pay for any Shares tendered
pursuant to the Offer shall be subject to the satisfaction of the conditions set
forth in Annex I. Purchaser expressly reserves the right from time to time,
subject to Sections 1.1(b) and 1.1(d) hereof, without the consent of the Company
to waive any such condition, to increase the Per Share Amount, or to make any
other changes in the terms and conditions of the Offer. The Per Share Amount
shall be net to the seller in cash, without interest, subject to reduction only
for any applicable withholding taxes or stock transfer taxes payable by the
seller. The Company agrees that no Shares held by the Company or any Subsidiary
(as hereinafter defined) will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company,
Purchaser shall not (i) decrease the Per Share Amount or change the form of
consideration payable in the Offer, (ii) seek to purchase less than all
outstanding Shares, (iii) amend or waive satisfaction of the Minimum Condition
(as defined in Annex I) or (iv) impose conditions to the Offer in addition to
those set forth in Annex I hereto, or amend any other term or condition of the
Offer in any manner materially adverse to the holders of Shares. Upon the terms
and subject to the conditions of the Offer and this Agreement, Purchaser will
accept for payment and purchase, as soon as permitted under the terms of the
Offer and applicable law (subject to the first proviso to Section 8.1(c)(i))
(the "Share Purchase Date") all Shares validly tendered and not withdrawn prior
to the expiration of the Offer. On or prior to the Share Purchase Date, Parent
shall provide or cause to be provided to Purchaser the funds necessary to pay
for Shares that Purchaser becomes obligated to accept for payment, and pay for,
pursuant to the Offer. Purchaser shall not provide for a subsequent offering
period in accordance with Rule 14d-11 under the Exchange Act.
(c) The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") having only the conditions set forth in Annex I
hereto. As soon as reasonably practicable on the date the Offer is commenced,
Purchaser shall file with the Securities and Exchange Commission (the "SEC") a
Tender Offer
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Statement on Schedule TO (together with all amendments and supplements thereto,
the "Schedule TO") with respect to the Offer that will comply in all material
respects with the provisions of all applicable Federal securities laws, and will
contain (including as an exhibit) or incorporate by reference the Offer to
Purchase and forms of the related letter of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, are referred to collectively herein as the "Offer Documents"). Parent
and Purchaser agree promptly to correct the Schedule TO or the Offer Documents
if and to the extent that it or they shall have become false or misleading in
any material respect (and the Company, with respect to written information
supplied by it specifically for use in the Schedule TO or the Offer Documents,
shall promptly notify Parent of any required corrections of such information and
shall cooperate with Parent and Purchaser with respect to correcting such
information) and to supplement the Schedule TO or the Offer Documents to include
any information that shall become necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (and the Company shall supplement the information provided by it
specifically for use in the Schedule TO or the Offer Documents to include any
information that shall become necessary in order to make the statements therein
that are based on such provided information, in light of the circumstances under
which they were made, not misleading), and Parent and Purchaser further agree to
take all steps necessary to cause the Schedule TO, as so corrected or
supplemented, to be filed with the SEC and the Offer Documents, as so corrected
or supplemented, to be disseminated to holders of Shares, in each case to the
extent required by applicable Federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Schedule TO and any Offer Documents before they are filed with the SEC.
(d) The Offer to Purchase shall provide (i) for an initial
expiration date of 20 business days (as defined in Rule 14d-1 under the Exchange
Act) from and including the date of commencement of the Offer (the "Initial
Expiration Date"). Purchaser shall extend the expiration date of the Offer until
5:00 p.m., Eastern time, on the earlier of (i) the thirtieth (30th) business day
following the public announcement by Parent and the Company of the execution of
this Agreement (which thirty business days shall for this purpose include the
date of such public announcement) and (ii) if a tender offer (other than the
Offer) shall have been commenced for all or a portion of the Shares, the
business day immediately preceding the initial expiration date of such tender
offer (such earlier date, the "Extended Expiration Date"). Unless this Agreement
shall have been terminated pursuant to Section 8.1 hereof, Purchaser agrees that
it shall not, without the consent of the Company, terminate or withdraw the
Offer or (except as provided in this Section 1.1(d)) extend the expiration date
of the Offer; provided, however, that, subject to the immediately following
sentence,
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without the consent of the Company, Purchaser shall have the right to terminate
or withdraw the Offer or extend the Offer from time to time if at the
then-scheduled expiration date of the Offer the conditions to the Offer
described in Annex I hereto shall not have been satisfied or earlier waived.
Unless this Agreement shall have been terminated pursuant to Section 8.1, if at
the then-scheduled expiration date of the Offer, the conditions to the Offer
described in Annex I hereto (other than the Minimum Condition) shall not have
been satisfied or earlier waived, upon the request of the Company, Purchaser
shall from time to time extend the expiration date of the Offer for up to a
maximum of 20 business days in the aggregate (it being understood and agreed
that the period from the Initial Expiration Date to and including the Extended
Expiration Date shall be counted in such 20-business-day period) for all such
extensions (the period of each such extension to be determined by Purchaser),
provided that at the time of such extension any such condition is reasonably
capable of being satisfied and provided further that the failure of any such
condition to be satisfied shall not result from a willful breach by the Company
of any of its covenants and agreements contained in this Agreement, until the
date Purchaser becomes obligated, pursuant to the terms of the Offer and this
Agreement, to accept for payment and pay for Shares tendered pursuant to the
Offer. Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, extend the expiration date of the Offer (as it may be extended) for any
period required by applicable rules, regulations, interpretations or positions
of the SEC or the staff thereof applicable to the Offer or for any period
required by applicable law.
SECTION 1.2. Company Action.
(a) The Company hereby approves of and consents to the Offer
and represents and warrants that the Board of Directors, at a meeting duly
called and held on February 14, 2000, acting by the unanimous vote of those
present: (i) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and the Stockholders
Agreements; (ii) recommended that the stockholders of the Company accept the
Offer, tender their Shares pursuant to the Offer and approve this Agreement and
the transactions contemplated hereby, including the Merger; and (iii) determined
that this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, are advisable, fair to and in the best interests of the
stockholders of the Company.
(b) The Company hereby agrees to file with the SEC, as
promptly as practicable after the filing by Purchaser of the Schedule TO with
respect to the Offer but in any event on the date such Schedule TO is filed with
the SEC, a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9
(together with any amendments or supplements thereto, the "Schedule 14D-9") that
(i) will comply in all material respects with the provisions
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of all applicable Federal securities laws and (ii) will include the opinion of
the Company Financial Advisor referred to in Section 4.3(c) hereof. The Company
agrees to mail such Schedule 14D-9 to the stockholders of the Company along with
the Offer Documents promptly after the commencement of the Offer. The Company
agrees that the Schedule 14D-9 and the Offer Documents shall contain the
recommendations of the Board of Directors described in Section 1.2(a) hereof.
The Company agrees promptly to correct the Schedule 14D-9 if and to the extent
that it shall become false or misleading in any material respect (and each of
Parent and Purchaser, with respect to written information supplied by it
specifically for use in the Schedule 14D-9, shall promptly notify the Company of
any required corrections of such information and cooperate with the Company with
respect to correcting such information) and to supplement the information
contained in the Schedule 14D-9 to include any information that shall become
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (and each of Parent and Purchaser
shall supplement the information provided by it specifically for use in the
Schedule 14D-9 to include any information that shall become necessary in order
to make the statements therein that are based on such provided information, in
light of the circumstances under which they were made, not misleading), and the
Company shall take all steps necessary to cause the Schedule 14D-9, as so
corrected or supplemented, to be filed with the SEC and disseminated to the
Company's stockholders, in each case to the extent required by applicable
Federal securities laws. Parent and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 before it is filed with
the SEC.
(c) In connection with the Offer, the Company shall promptly
upon execution of this Agreement furnish Parent with mailing labels containing
the names and addresses of all record holders of Shares, non-objecting
beneficial owners list and security position listings of Shares held in stock
depositories, each as of a recent date, and shall promptly furnish Parent with
such additional information, including updated lists of stockholders, mailing
labels and security position listings, and such other information and assistance
as Parent or its agents may reasonably request for the purpose of communicating
the Offer to the record and beneficial holders of Shares.
SECTION 1.3. Directors. Promptly upon the purchase by
Purchaser of any Shares pursuant to the Offer, Parent shall be entitled to
designate up to such number of directors, rounded to the nearest whole number,
on the Board of Directors as will give Parent, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Board of Directors
equal to that number of directors which equals the product of the total number
of directors on the Board of Directors (giving effect to the directors appointed
or elected pursuant to this sentence and including current directors serving as
officers of the Company) multiplied by the percentage that the aggregate number
of Shares
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beneficially owned by Parent or any affiliate of Parent (including for purposes
of this Section 1.3 such Shares as are accepted for payment pursuant to the
Offer, but excluding Shares held by the Company or any Subsidiary) bears to the
number of Shares outstanding. At such time, the Company will also cause, if
requested by Parent, (i) each committee of the Board of Directors, (ii) the
board of directors of each of the Subsidiaries and (iii) if requested by Parent,
each committee of such board to include persons designated by Parent
constituting up to the same percentage of each such committee or board as
Parent's designees constitute on the Board of Directors. The Company shall, upon
request by Parent, promptly take all actions necessary to cause Parent's
designees to be elected or appointed to the Board of Directors in accordance
with the terms of this Section 1.3, including, without limitation, increasing
the size of the Board of Directors and/or securing the resignations of such
number of directors as is necessary to enable Parent's designees to be elected
to the Board of Directors in accordance with the terms of this Section 1.3;
provided, however, that, in the event that Parent's designees are appointed or
elected to the Board of Directors, until the Effective Time (as defined in
Section 2.2(b) hereof) the Board of Directors shall have at least two directors
who are directors on the date hereof and who are neither officers of the Company
nor designees, affiliates or associates (within the meaning of the Federal
securities laws) of Parent (two or more of such directors, the "Independent
Directors"); provided further, that if no Independent Directors remain, the
other directors shall designate one person to fill one of the vacancies who
shall be neither an officer of the Company nor a designee, affiliate or
associate of Parent, and such person shall be deemed to be an Independent
Director for purposes of this Agreement. The Company represents and warrants to
Parent and Purchaser that nothing contained in the Stipulation and Settlement
Agreement dated December 15, 1999 settling Corcoran v. GRC International, Inc.
(C.A. No.: 17239) and Corcoran x. Xxxxxx, et al. (C.A. No.: 17490) in the
Delaware Court of Chancery, New Castle County (the "Settlement Agreement")
prohibits the Company from complying with its obligations under this Section 1.3
(it being understood that the Settlement Agreement restricts the manner in which
the Company may comply with this Section 1.3 by (i) limiting the size of the
Board of Directors to 13 directors and (ii) prescribing the classes into which
certain directors must be placed). Subject to applicable law, the Company shall
promptly take all action necessary pursuant to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under
this Section 1.3 and shall include in the Schedule 14D-9 mailed to stockholders
promptly after the commencement of the Offer (or an amendment thereof or an
information statement pursuant to Rule 14f-1 if Parent has not theretofore
designated directors or timely provided the requisite information) such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section 1.3. Parent will supply the
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Company any information with respect to itself and its nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1.
Notwithstanding anything in this Agreement to the contrary, following the time
directors designated by Parent constitute a majority of the Board of Directors
and prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors shall be required to (i) amend or terminate this Agreement
on behalf of the Company, (ii) exercise or waive any of the Company's rights or
remedies hereunder, (iii) extend the time for performance of Parent's
obligations hereunder or (iv) take any other action by the Company in connection
with this Agreement required to be taken by the Board of Directors, and such
affirmative majority vote shall be sufficient to take any such action.
ARTICLE II.
THE MERGER
SECTION 2.1. The Merger. At the Effective Time (as defined in
Section 2.2) and upon the terms and subject to the conditions of this Agreement
and the Delaware General Corporation Law (the "DGCL"), Purchaser shall be merged
with and into the Company, the separate corporate existence of Purchaser shall
cease, and the Company shall continue as the surviving corporation. The Company
as the surviving corporation after the Merger hereinafter sometimes is referred
to as the "Surviving Corporation."
SECTION 2.2. Closing; Effective Time. (a) The closing of the
Merger (the "Closing") will take place at 10:00 a.m. on the second business day
after satisfaction or waiver of the conditions set forth in Article VII, at the
offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, unless another date, time or place is agreed to in writing between
Parent and the Company. The date on which the Closing occurs is referred to in
this Agreement as the "Closing Date."
(b) On the Closing Date or as promptly as practicable
thereafter, the parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger, in accordance with Section 251, or a Certificate
of Ownership and Merger, in accordance with Section 253 of the DGCL, with the
Secretary of State of the State of Delaware, in such form as required by, and
executed in accordance with the relevant provisions of, the DGCL (the time of
such filing (or such later time as is specified in such Certificate of Merger or
Certificate of Merger and Ownership, as applicable, as agreed between Parent and
the Company) being the "Effective Time").
SECTION 2.3. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of the
DGCL. Without limiting the
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generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and Purchaser
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Purchaser shall become the debts, liabilities and duties of
the Surviving Corporation.
SECTION 2.4. Subsequent Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Purchaser acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either the Company or Purchaser, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out this Agreement.
SECTION 2.5. Certificate of Incorporation; By-Laws; Directors
and Officers.
(a) At the Effective Time, the Certificate of Incorporation of
the Surviving Corporation shall be amended in its entirety to read as the
Certificate of Incorporation of Purchaser, as in effect immediately before the
Effective Time, until thereafter amended as provided by law and such Certificate
of Incorporation; provided, however, that the Certificate of Incorporation of
the Surviving Corporation shall provide that the Surviving Corporation shall be
named "GRC International, Inc."
(b) Subject to Section 6.8, the By-Laws of Purchaser, as in
effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws.
(c) The directors of Purchaser immediately prior to the
Effective Time will be the initial directors of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time will be the
initial officers of the Surviving Corporation, in each case until their
successors are elected or appointed and qualified. If, at the Effective Time, a
vacancy shall exist on the Board of Directors or in any office of the Surviving
Corporation, such vacancy may thereafter be filled in the manner provided by
law.
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SECTION 2.6. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to Section 2.6(b)
and any Dissenting Shares (as defined in Section 2.7(a)) shall be canceled and
be converted into the right to receive the Per Share Amount in cash payable to
the holder thereof, without interest, upon surrender of the certificate
representing such Share. Each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Per Share Amount, without interest, upon the surrender of such
certificate in accordance with Section 2.8 hereof.
(b) Each Share held in the treasury of the Company or owned by
any Subsidiary and each Share owned by Parent or any direct or indirect wholly
owned subsidiary of Parent immediately prior to the Effective Time shall be
canceled and no payment or other consideration shall be made with respect
thereto.
(c) Each share of common stock, $.0l par value, of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and thereafter represent one validly issued, fully paid and
nonassessable share of common stock, $.0l par value, of the Surviving
Corporation.
SECTION 2.7. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, Shares that are outstanding immediately prior to the Effective Time
and that are held by any stockholder who has not voted in favor of or consented
to the Merger and who duly demands appraisal of his Shares pursuant to the DGCL
and complies with all the provisions of the DGCL concerning the right of holders
of Shares to demand appraisal of their Shares in connection with the Merger
(collectively, the "Dissenting Shares") shall not be converted into the right to
receive cash pursuant to Section 2.6, but shall become the right to receive such
cash consideration as may be determined to be due to such stockholder as
provided in the DGCL. If, however, such stockholder withdraws his demand for
appraisal or fails to perfect or otherwise loses his right of appraisal, in any
case pursuant to the DGCL, his Shares shall be deemed to be converted as of the
Effective Time into the right to receive cash pursuant to Section 2.6(a) hereof,
without any interest thereon, upon surrender of the certificate or certificates
representing such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal of Shares received by the Company and (ii) the opportunity
to participate in and direct all
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negotiations and proceedings with respect to any such demands. The Company shall
not, without the prior written consent of Parent, make any payment with respect
to, or settle, offer to settle or otherwise negotiate, any such demands.
(c) Each Dissenting Share, if any, shall be canceled after
payment in respect thereof has been made to the holder thereof pursuant to the
DGCL.
SECTION 2.8. Surrender of Shares; Stock Transfer Books.
(a) Before the Effective Time, Parent shall designate a bank
or trust company who shall be reasonably satisfactory to the Company to act as
paying agent in the Merger (the "Exchange Agent") to receive the funds necessary
to make the payments contemplated by Section 2.6. Parent shall, from time to
time, make available or cause to be made available to the Exchange Agent funds
in amounts and at times necessary for the payments under Section 2.8(b) to which
holders of Shares shall be entitled at the Effective Time pursuant to Section
2.6. Such funds shall be invested by the Exchange Agent as directed by Parent.
Any net profits resulting from, or interest or income produced by, such
investments shall be payable as directed by Parent.
(b) As soon as reasonably practicable after the Effective
Time, the Surviving Corporation shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates that immediately prior to the
Effective Time represented Shares (the "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in a form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
consideration as provided in Section 2.6(a). Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange therefor
the amount of cash, without interest, into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to Section
2.6(a), and the Certificate so surrendered shall forthwith be canceled. Until so
surrendered, each such Certificate (other than Certificates representing
Dissenting Shares and Certificates representing Shares to be canceled pursuant
to Section 2.6(b)) shall represent solely the right to receive the aggregate Per
Share Amount, without interest, relating thereto.
(c) If payment of cash in respect of canceled Shares is to be
made to a Person other than the Person in whose name a
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surrendered Certificate is registered, it shall be a condition to such payment
that the Certificate so surrendered shall be properly endorsed or shall be
otherwise in proper form for transfer and that the Person requesting such
payment shall have paid any transfer and other taxes required by reason of such
payment in a name other than that of the registered holder of the Certificate
surrendered or shall have established to the satisfaction of Parent or the
Exchange Agent that such tax either has been paid or is not payable. If a
mutilated Certificate is surrendered to the Exchange Agent or if the holder of a
Certificate submits an affidavit to the Exchange Agent stating that the
Certificate has been lost, destroyed or wrongfully taken, such holder shall, if
required by the Surviving Corporation, furnish an indemnity bond sufficient in
the reasonable judgment of the Surviving Corporation to protect Parent, the
Surviving Corporation and the Exchange Agent from any loss that any of them may
suffer.
(d) All cash paid upon the surrender of Certificates in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the Shares theretofore
represented by such Certificates. At the Effective Time, the stock transfer
books of the Company shall be closed and thereafter there shall not be any
further registration of transfers of Shares that were outstanding immediately
prior to the Effective Time on the records of the Surviving Corporation. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for cash as provided in
Section 2.6(a) and this Section 2.8. No interest shall accrue or be paid on any
cash payable upon the surrender of a Certificate or Certificates.
(e) Promptly following the date which is six months after the
Effective Time, the Exchange Agent shall deliver to Parent all cash,
certificates and other documents in its possession relating to the transactions
contemplated hereby, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a Certificate (other than Certificates representing
Dissenting Shares and Certificates representing Shares to be canceled pursuant
to Section 2.6(b)) shall look only to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) and only as general creditors
thereof, with respect to any Merger consideration that may be payable upon due
surrender of the Certificates held by such holder. Notwithstanding the
foregoing, none of Parent, Purchaser, the Company or the Exchange Agent shall be
liable to any Person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(f) Parent or the Exchange Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of Shares such amounts as Parent or the Exchange Agent is required
to deduct and
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withhold with respect to the making of such payment under the Internal Revenue
Code of 1986, as amended (the "Code") or under any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by Parent or the
Exchange Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by the Parent or the Exchange Agent.
SECTION 2.9. Stock Plans. (a) Options Outstanding. The Company
currently maintains the GRC International, Inc. 1985 Employee Stock Option Plan,
the GRC International, Inc. 1994 Employee Stock Option Plan, the GRC
International, Inc. 1998 Employee Stock Option Plan, the GRC International, Inc.
Cash Compensation Replacement Plan, and the GRC International, Inc. Directors
Fee Replacement Plan (collectively referred to as the "Stock Plans"), more
specifically described in Section 4.2, which provide for the granting of options
to purchase and awards of Company Common Stock, and the GRC International, Inc.
1985 Employee Stock Purchase Plan ("ESPP"), which permits employees to purchase
Company Common Stock. As of the date of this Agreement, the Company has taken
all actions necessary to amend each Stock Plan and the ESPP to provide that no
further options, awards or rights to receive equity shall be granted, offered or
elected under any Stock Plan after the date hereof. As of the date of this
Agreement, the Company has taken all actions necessary to cause the GRC
International, Inc. Cash Compensation Replacement Plan, the GRC International,
Inc. Directors Fee Replacement Plan, and the ESPP to terminate, and all
participant contributions and deferral amounts credited on behalf of the
participants under such plans at the time of such termination shall be paid to
them in cash by the Company as soon as administratively practicable thereafter.
(b) Conversion of Options. The Board of Directors of the
Company has adopted an amendment to provide that the Stock Plans are amended so
that upon the consummation of the Offer each then outstanding and unexercised
option to purchase shares of Company Common Stock granted under any of the Stock
Plans (the "Options"), whether or not then exercisable or vested, shall be
converted into an obligation of the Company to pay, and a right of the holder
thereof to receive in full satisfaction of such Option, cash in an amount in
respect thereof equal to the product of (A) the excess, if any, of the Per Share
Amount over the exercise price thereof and (B) the number of shares of Company
Common Stock subject to such Option, less any income or employment tax
withholding required under the Code or any provision of foreign, state or local
law.
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(c) Option Payments.
(i) With respect to each Option granted pursuant to the
terms of the GRC International, Inc. 1985 Employee Stock Option Plan,
the GRC International, Inc. 1994 Employee Stock Option Plan or the GRC
International, Inc. 1998 Stock Option Plan (the "Option Plans") that is
fully vested and exercisable as of the consummation of the Offer, the
Company shall make the payment of the amount determined pursuant to
Section 2.9(b) above as soon as reasonably practicable following the
consummation of the Offer.
(ii) With respect to each Option granted pursuant to the
terms of an Option Plan that is not vested and exercisable as of the
consummation of the Offer, the Company or the Surviving Corporation, as
applicable, shall make the payment of the amount determined pursuant to
Section 2.9(b) above at the time each such unvested Option would
otherwise have become vested and exercisable subject to the
satisfaction of the terms and conditions set forth in the applicable
option award agreement and the Option Plan pursuant to which such
Option was granted, or at such earlier date as may be determined by
Parent in its sole and absolute discretion; provided, however, if such
holder's employment or service with the Company or any Subsidiary is
involuntarily terminated by the Company or any Subsidiary for reasons
other than Cause (as defined in Section 9.4), all of such holder's
Options shall become vested upon such termination of employment or
service, and the Company or the Surviving Corporation, as applicable,
shall make the payment of the amount determined pursuant to Section
2.9(b) as soon as reasonably practicable following such termination.
For purposes of this Section 2.9(c)(ii), a termination of employment by
an Option holder, after the consummation of the Offer, following (A) a
material decrease in such holder's base salary, (B) a relocation of
such holder's principal place of employment to a location that
increases his or her commute by more than 30 miles from such holder's
commute to his or her principal place of employment prior to the
consummation of the Offer or (C) a non-employee director's cessation of
service on the Board of Directors upon the request of the Company or
the Surviving Corporation, as applicable, shall be deemed to be an
involuntary termination.
(iii) With respect to each Option granted pursuant to the
terms of the GRC International, Inc. Cash Compensation Replacement Plan
or the GRC International, Inc. Directors Fee Replacement Plan, whether
or not such Option is vested and exercisable as of the consummation of
the Offer, the Company shall make the payment of the amount determined
pursuant to Section 2.9(b) above as soon as reasonably practicable
following the consummation of the Offer.
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(iv) Parent shall from time to time provide the Company or
the Surviving Corporation, as applicable, with sufficient funds to
satisfy the obligations of the Company or the Surviving Corporation, as
applicable, under this Section 2.9.
(d) Directors Retirement Plan. The Company has recently
terminated the GRC International, Inc. Directors Retirement Plan (the "Director
Retirement Plan"). In exchange for their benefits under such plan, certain
directors of the Company received the right to receive shares of Company Common
Stock ("Deferred Stock Units") subsequent to their resignation from the Board of
Directors. Immediately following the consummation of the Offer, each Deferred
Stock Unit shall be converted into the right to receive cash in an amount equal
to the product of (A) the Per Share Amount and (B) the number of Deferred Stock
Units held by each such director, which cash amount shall be payable as soon as
practicable following the director's cessation of service on the Board of
Directors.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as
follows:
SECTION 3.1. Corporate Organization. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority to carry on its business as it is now being
conducted.
SECTION 3.2. Authority Relative to this Agreement. Parent and
Purchaser have the necessary corporate power and authority to enter into this
Agreement and to carry out their obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Purchaser and the consummation by Parent and Purchaser of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Purchaser and no other corporate
proceeding is necessary for the execution and delivery of this Agreement by
Parent or Purchaser, the performance by Parent or Purchaser of their respective
obligations hereunder and the consummation by Parent or Purchaser of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and Purchaser and, assuming due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each such corporation, enforceable against each of them in accordance with its
terms.
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SECTION 3.3. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, (i) assuming all notices, reports or other filings described in
clauses (i) through (vi) of Section 3.3(b) have been given or made, conflict
with or violate any law, regulation, court order, judgment or decree applicable
to Parent or Purchaser or by which any of their property is bound or affected,
(ii) violate or conflict with either the Certificate of Incorporation or By-Laws
of either Parent or Purchaser, or (iii) result in any violation or breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment or cancellation of, or result in the creation of a lien or encumbrance
on any of the property or assets of Parent or Purchaser pursuant to, any note,
bond, mortgage, indenture, agreement, contract, instrument, permit, license,
franchise or other obligation to which Parent or Purchaser is a party or by
which Parent or Purchaser or any of them or their property is bound or affected,
except for, in the case of clauses (i) and (iii), conflicts, violations,
breaches or defaults which would not prevent or materially delay the
consummation of the Offer and the Merger.
(b) Except for (i) applicable requirements, if any, of the
Exchange Act, (ii) the pre-merger notification requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) the filing and recordation of appropriate merger documents as
required by the DGCL, (iv) filings as may be required by any applicable "blue
sky" laws, (v) any filings required under applicable foreign antitrust or
competition laws, (vi) any required notifications or filings with any national
or international securities exchange on which Parent's securities are listed and
(vii) as would not prevent or materially delay the consummation of the Offer and
the Merger, neither Parent nor Purchaser is required to submit any notice,
report or other filing with any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), in
connection with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby. No waiver, consent,
approval or authorization of any Governmental Entity, is required to be obtained
or made by either Parent or Purchaser in connection with its execution, delivery
or performance of this Agreement or the consummation of the transactions
contemplated hereby, except (i) where the failure to obtain such waivers,
consents, approvals or authorizations would not prevent or materially delay the
performance by Parent or Purchaser of their respective obligations under this
Agreement or (ii) in connection with any submission required above.
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SECTION 3.4. Financing Arrangements. Parent has or will have
funds available to it sufficient to consummate the Offer and the Merger in
accordance with the terms of this Agreement.
SECTION 3.5. Brokers. No broker, finder or investment banker
(other than Xxxxxx Brothers Inc.) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of Parent or Purchaser.
Any amounts due to Xxxxxx Brothers Inc. in connection with the transactions
contemplated by this Agreement shall be paid by Parent.
SECTION 3.6. Offer Documents; Proxy Statement. None of the
information supplied by or on behalf of Parent or Purchaser (the "Parent
Information"), for inclusion in the Proxy Statement (as defined in Section
4.18), will, on the date the Proxy Statement is first mailed to stockholders or
at the time of the Company Stockholders' Meeting (as defined in Section 4.18),
contain any untrue statement of a material fact or omit to state any 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. The Offer Documents will not, at the respective times the Offer
Documents are filed with the SEC or first published, sent or given to the
Company's stockholders, contain any untrue statement of a material fact or omit
to state any 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. Notwithstanding the foregoing, Parent and Purchaser
do not make any representation or warranty with respect to statements made or
incorporated by reference in any of the foregoing documents based upon
information that has been supplied by the Company or its accountants, counsel or
other authorized representatives for use in any of the foregoing documents. The
Offer Documents will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Purchaser as follows:
SECTION 4.1. Organization and Qualification; Subsidiaries. (a)
Each of the Company and the Subsidiaries (defined below in Section 4.1(d)) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and any necessary governmental authority and approvals to own,
operate or lease the properties
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that it purports to own, operate or lease and to carry on its business as it is
now being conducted, and is duly qualified or licensed as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned, operated or leased or the nature of its
activities makes such qualification or licensing necessary, except for any such
failures which, when taken together with all other such failures, would not have
a Material Adverse Effect or prevent or materially delay the consummation of the
Offer or the Merger. For purposes of this Agreement, "Material Adverse Effect"
means any condition, change or effect that is or is reasonably likely to be
materially adverse to the business, results of operations, properties (including
intangible properties), condition (financial or otherwise), assets or
liabilities of the Company and the Subsidiaries taken as a whole.
(b) A true and complete list of all the Subsidiaries, together
with the jurisdiction of incorporation or organization of each Subsidiary and
the percentage of each Subsidiary's outstanding capital stock owned by the
Company or another Subsidiary, is set forth in Schedule 4.1 hereto.
(c) The Company has heretofore furnished to Parent a complete
and correct copy of the Certificate of Incorporation (the "Company Certificate
of Incorporation") and the By-laws (the "Company By-laws") of the Company as
currently in effect. No other similar organizational documents are applicable to
or binding upon the Company. The Company is not in violation of any of the
provisions of the Company Certificate of Incorporation or Company By-laws.
(d) For purposes of this Agreement, "Subsidiary" means any
corporation or other legal entity of which the Company (either alone or through
or together with any other Subsidiary) (i) owns, directly or indirectly, more
than 50% of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity, or (ii) in the case of
partnerships, serves as a general partner, or (iii) in the case of a limited
liability company, serves as managing member or (iv) otherwise has the ability
to elect a majority of the directors, trustees or managing members thereof.
SECTION 4.2. Capitalization. (a) The authorized capital stock
of the Company consists of: (i) 30,000,000 shares of Company Common Stock and
(ii) 300,000 shares of preferred stock, $1.00 par value per share, of the
Company (the "Company Preferred Stock"). As of December 31, 1999, (A) 12,442,607
shares of Company Common Stock were issued and outstanding, all of which were
duly authorized, validly issued, fully paid and nonassessable and not subject to
preemptive (or similar) rights, (B) no shares of Company Preferred Stock were
issued and outstanding, (C) 32,721 shares of Company Common Stock were reserved
for issuance upon the exercise of outstanding Options
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under the Company's 1985 Employee Stock Option Plan and Options with respect to
32,721 shares of Company Common Stock were outstanding thereunder, (D) 598,114
shares of Company Common Stock were reserved for issuance upon the exercise of
outstanding Options under the Company's 1994 Employee Stock Plan and Options
with respect to 546,573 shares of Company Common Stock were outstanding
thereunder, (E) 1,512,126 shares of Company Common Stock were reserved for
issuance under the Company's 1998 Employee Stock Option Plan and Options with
respect to 1,290,092 shares of Company Common Stock were outstanding thereunder,
(F) 160,853 shares of Company Common Stock were reserved for issuance under the
Company's Cash Compensation Replacement Plan and Options with respect to 43,897
shares of Company Common Stock were outstanding thereunder, (G) 218,938 shares
of Company Common Stock were reserved for issuance under the Company's Directors
Fee Replacement Plan and Options with respect to 98,440 shares of Company Common
Stock were outstanding thereunder, (H) 219,328 shares of Company Common Stock
were reserved for issuance under the Company's Employee Stock Purchase Plan, (I)
300,000 shares of Company Common Stock were held in the treasury of the Company
and (J) 445,000 shares of Company Common Stock were reserved for issuance upon
exercise of warrants to purchase shares of Company Common Stock described on
Schedule 4.2(a) hereto (the "Warrants"). Since December 31, 1999, (i) no Options
have been granted, (ii) no shares of Company Common Stock have been issued
except for shares issued pursuant to the exercise of Options outstanding as of
December 31, 1999, and (iii) no shares of Preferred Stock have been issued.
Except as set forth in Schedule 4.2(a) or in this Section 4.2(a): (x) there are
no shares of capital stock or other voting securities of the Company, options,
calls, warrants or rights, agreements, arrangements or commitments of any
character obligating the Company or any of its Subsidiaries to issue, deliver or
sell or cause to be issued, delivered or sold any shares of capital stock or
other voting securities or securities convertible into or exchangeable for
capital stock or voting securities of or other equity interests in the Company
or any of the Subsidiaries or equity equivalents, interests in the ownership or
earnings of the Company or other similar rights (collectively, "Company
Securities"); (y) there are no bonds, debentures, notes or other indebtedness of
the Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which stockholders of the
Company may vote ("Company Voting Debt"); and (z) there are no stockholders
agreements, voting trusts or other agreements or understandings to which the
Company or any Subsidiary is a party or by which it is bound relating to the
issued or unissued capital stock of the Company (including any such agreements
or understandings that may limit in any way the solicitation of proxies by or on
behalf of the Company from, or the casting of votes by, the stockholders of the
Company with respect to the Merger) or granting to any person or group of
persons the right to elect, or to designate or nominate for election, a director
to the Board of Directors. Except as set forth in Schedule 4.2(a),
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there are no programs in place or outstanding obligations of the Company or any
of the Subsidiaries (1) to repurchase, redeem or otherwise acquire any Company
Securities or (2) to vote or to dispose of any shares of the capital stock of
any of the Subsidiaries. All shares of Company Common Stock subject to issuance
as aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable and free of preemptive (or similar)
rights and registration rights. Upon consummation of the Merger, each holder of
Warrants shall be entitled to receive, pursuant to the terms thereof, upon
payment of the aggregate Purchase Price (as defined in the Warrants) then in
effect, the Per Share Amount for each share of Company Common Stock that would
otherwise have been issuable upon the exercise of such Warrants immediately
prior to consummation of the Merger. No event has occurred since the issuance of
the Warrants that has resulted in an adjustment to the Purchase Price in effect
on the date of their issuance.
(b) All the shares of outstanding capital stock of each of the
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive (or similar) rights and, except as set forth in
Schedule 4.1, are owned by the Company or a wholly owned Subsidiary and are
owned free and clear of any liens, security interests, pledges, agreements,
claims, charges or encumbrances of any nature whatsoever. There are no existing
options, calls, warrants or other rights, agreements arrangements or commitments
of any character relating to the issued or unissued capital stock or other
equity interests or securities of any Subsidiary. Except for the Subsidiaries
and except as set forth in Schedule 4.2(b), 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 equity or similar interest in any
other corporation, partnership, joint venture or other business association or
entity. Except as set forth in Schedule 4.2(b), neither the Company nor any
Subsidiary is under any current or prospective obligation to provide funds to,
make a capital contribution or investment in or loan to, or to assume any
liability or obligation of, any corporation, partnership, joint venture or the
business association or entity.
SECTION 4.3. Authority Relative to this Agreement.
(a) The Company has the necessary corporate power and
authority to enter into this Agreement and, subject to obtaining any necessary
stockholder approval of the Merger, to carry out its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to the approval of the
Merger by the Company's stockholders in accordance with the DGCL. This Agreement
has
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been duly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against it in accordance with
its terms. The affirmative vote of the holders of a majority of the shares of
Company Common Stock entitled to vote approving this Agreement 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; provided,
however, that no such vote shall be required if the Merger is subject to Section
253 of the DGCL.
(b) At a Board of Directors' meeting duly called and held on
February 14, 2000, the Board of Directors (i) determined that this Agreement and
the transactions contemplated hereby are advisable, fair to and in the best
interests of the stockholders and that the Per Share Amount to be paid for each
Share in the Offer and the Merger is fair to the holders of such Shares, (ii)
declared advisable and in all respects approved and adopted this Agreement, the
Offer, the Merger and the other transactions contemplated hereby, and (iii)
resolved to recommend the approval and adoption of this Agreement and the Merger
by the stockholders of the Company.
(c) Banc of America Securities LLC (the "Company Financial
Advisor") has delivered to the Board of Directors its written opinion, dated
prior to or as of the date of this Agreement, that based on the assumptions,
qualifications and limitations contained therein, the Per Share Amount to be
received by the Company's stockholders in the Offer and the Merger is fair from
a financial point of view to such stockholders. The Company has provided a copy
of such opinion to Parent.
SECTION 4.4. No Conflict; Required Filings and Consents.
(a) Except as set forth in Schedule 4.4(a) hereto, the
execution and delivery of this Agreement by the Company does not, and the
performance hereof by the Company will not, (i) conflict with or violate any
law, regulation, court order, judgment or decree applicable to the Company or
any of the Subsidiaries or by which its or any of their property is bound or
affected, (ii) violate or conflict with the Certificate of Incorporation or
By-Laws or equivalent organizational documents of the Company or any Subsidiary,
or (iii) result in any violation or breach of or constitute a default (or an
event which with notice or lapse of time of both would become a default) under,
or result in any, or give rise to any rights of termination, amendment,
cancellation or acceleration of any obligations or any loss of any material
benefit under or, result in the creation of a lien or encumbrance on any of the
properties or assets of the Company or any of the Subsidiaries pursuant to, any
note, bond, mortgage, indenture, agreement, contract, instrument, permit,
license, franchise or other obligation to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries or
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its or any of them or their property is bound or affected, except for, in the
case of clauses (i) and (iii), conflicts, violations, breaches or defaults
which, individually or in the aggregate, would not (x) have a Material Adverse
Effect, (y) impair, in any material respect, the ability of the Company to
perform its obligations under this Agreement or (z) be reasonably likely to
prevent or materially delay the consummation of the Offer and the Merger.
(b) Except for (i) applicable requirements, if any, of the
Exchange Act, (ii) the pre-merger notification requirements of the HSR Act,
(iii) the filing and recordation of appropriate merger or other documents as
required by the DGCL, (iv) filings as may be required by any "blue sky" laws of
various states and/or the rules of the National Association of Securities
Dealers, Inc., (v) any required notifications or filings with the New York Stock
Exchange, Inc. and (vi) as set forth in Schedule 4.4(b) hereto, the Company and
each of the Subsidiaries are not required to submit any notice, report or other
filing with any Governmental Entity, in connection with the execution, delivery
or performance of this Agreement or the consummation of the transactions
contemplated hereby, except where the failure to make such submission would not
prevent or materially delay the performance by the Company of its obligations
under this Agreement. No waivers, consents, approvals or authorizations of any
Governmental Entity are required to be obtained or made by the Company in
connection with its execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby, except (i) where the
failure to obtain such waivers, consents, approvals or authorizations would not
prevent or materially delay the performance by the Company of its obligations
under this Agreement, (ii) in connection with any submission required above or
(iii) as set forth in Schedule 4.4(b) hereto.
SECTION 4.5. SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents
(including all exhibits thereto) required to be filed with the SEC since July 1,
1998, including its (i) Annual Reports on Form 10-K for the fiscal years ended
June 30, 1999 and June 30, 1998, respectively, (ii) the Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1999, (iii) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
held since July 1, 1998 and (iv) all other reports or registration statements
filed by the Company with the SEC since July 1, 1998 (collectively, including
the exhibits thereto, the "SEC Reports"). The SEC Reports (including but not
limited to any financial statements or schedules included or incorporated by
reference therein) (i) at the time they became effective, in the case of
registration statements, or when filed, in the case of any other SEC Report,
complied as to form in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as
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26
the case may be, and the rules and regulations promulgated thereunder and (ii)
do not (except to the extent revised or superseded by a subsequent filing with
the SEC), and did not at the time they were filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. None of the
Subsidiaries is required to file any statements or reports with the SEC pursuant
to Sections 13(a) or 15(d) of the Exchange Act.
(b) The consolidated financial statements contained in the SEC
Reports were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its Subsidiaries as at the respective
dates thereof and the consolidated results of operations and changes in
financial position of the Company and its Subsidiaries for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments (which in the aggregate are
not material in amount).
(c) Except (i) as set forth in Schedule 4.5(c) or (ii) as and
to the extent disclosed or reflected in the audited consolidated financial
statements of the Company and the Subsidiaries at June 30, 1999, including the
notes thereto, contained in the Annual Report on Form 10-K of the Company for
the fiscal year ended June 30, 1999 (the "Company 1999 10-K") and except for (x)
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since June 30, 1999 and (y) liabilities and
obligations that have not had and would not have, individually or in the
aggregate, a Material Adverse Effect (without taking into account the effects of
the Offer and the Merger), the Company and the Subsidiaries have no liabilities
of any nature (whether accrued, absolute, contingent or otherwise).
(d) The Company has heretofore furnished to Parent a complete
and correct copy of any material amendments or modifications which have not yet
been filed with the SEC to agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the Securities
Act and the rules and regulations promulgated thereunder or the Exchange Act and
the rules and regulations promulgated thereunder other than with respect to any
such agreement, document or other instrument that has been heretofore
terminated.
SECTION 4.6. Absence of Certain Changes or Events. Except as
expressly contemplated by this Agreement or as set forth in Schedule 4.6 hereto
or in any SEC Report filed and publicly available prior to the date of this
Agreement, since June 30, 1999, the business of the Company and the Subsidiaries
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has been conducted in the ordinary course consistent with past practice and
there has not been:
(a) any Material Adverse Effect;
(b) any damage, destruction or loss (whether or not covered by
insurance) with respect to any of the assets of the Company or any of its
Subsidiaries, except as would not, individually or in the aggregate, have a
Material Adverse Effect;
(c) any redemption or other acquisition of Shares by the
Company or any of the Subsidiaries or any declaration, setting aside or payment
of any dividend or other distribution in cash, stock or property with respect to
the Company Common Stock, except for purchases heretofore made pursuant to the
terms of the Company Employee Benefit Plans (as defined in Section 4.8(a));
(d) any material change by the Company in accounting methods,
principles or practices;
(e) any material revaluation by the Company of any material
asset (including, without limitation, any writing down of the value of inventory
or writing off of notes or accounts receivable), other than in the ordinary
course of business consistent with past practice;
(f) any entry by the Company or any Subsidiary into any
commitment or transaction material to the Company and the Subsidiaries taken as
a whole, other than commitments or transactions entered into in the ordinary
course of business consistent with past practice;
(g) any increase in or amendment to (in the case of directors
and executive officers of the Company) or any material increase in or material
amendment to (in the case of other officers and Key Management Personnel) or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards, or the acceleration of vesting of
any such options, rights or awards) stock purchase or other employee benefit
plan or agreement or arrangement, or any other increase in the compensation
payable or to become payable to any present or former directors, officers or Key
Management Personnel of the Company or any Subsidiary, except for increases in
base compensation and bonuses in the ordinary course of business consistent with
past practice;
(h) any entry by the Company or any Subsidiary into any
employment, consulting, severance, termination or indemnification agreement or
arrangement with any director, officer or key employee of the Company or any
Subsidiary or any entry into any such material agreement with any other person;
or
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(i) any agreement, in writing or otherwise, by the Company or
any Subsidiary to take any of the actions described in this Section 4.6, except
as expressly contemplated by this Agreement.
SECTION 4.7. Litigation. Except as disclosed in the Company 1999
10-K or in Schedule 4.7 hereto, there are no claims, actions, suits, proceedings
or investigations pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, or any properties
or rights of the Company or any of its Subsidiaries, before any Governmental
Entity or arbitrator, except as would not, individually or in the aggregate,
have a Material Adverse Effect. Except as disclosed in the Company 1999 10-K or
in Schedule 4.7 hereto, neither the Company nor any of its Subsidiaries nor any
of their property is subject to any material order, judgment, injunction or
decree.
SECTION 4.8. Employee Benefit Plans.
(a) (i) Schedule 4.8 sets forth a list of all "employee
benefit plans", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other employee benefit or
executive compensation arrangements, perquisite programs or payroll practices,
including, without limitation, any such arrangements or payroll practices
providing severance pay, sick leave, vacation pay, salary continuation for
disability, retirement benefits, deferred compensation, bonus pay, incentive
pay, stock options (including those held by directors, employees, and
consultants), hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, that are maintained by the Company, any
Subsidiary or any entity within the same "controlled group" as the Company or
Subsidiary, within the meaning of Section 4001(a)(14) of ERISA (a "Company ERISA
Affiliate") or to which the Company, any Subsidiary or Company ERISA Affiliate
is obligated to contribute thereunder for current or former employees or
directors of the Company, any Subsidiary or Company ERISA Affiliate (the
"Company Employee Benefit Plans").
(ii) Schedule 4.8(a)(ii) sets forth, with respect to each
Option that is outstanding under the Option Plans as of January 31,
2000, the name of the holder of such Option, the number of shares of
Company Common Stock subject to such Option, the exercise price per
share of such Option and the date on which such Options vest or become
exercisable (it being understood that Schedule 4.8(a)(ii) does not
include information concerning the Warrants).
(b) None of the Company Employee Benefit Plans is a
"multiemployer plan", as defined in Section 4001(a)(3) of ERISA (the "Company
Multiemployer Plan") or a plan that has two or more contributing sponsors at
least two of whom are not under common
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29
control, within the meaning of Section 4063 of ERISA. Neither the Company, any
Subsidiary nor any Company ERISA Affiliate has withdrawn in a complete or
partial withdrawal from any Company Multiemployer Plan, nor has any of them
incurred any liability due to the termination or reorganization of a Company
Multiemployer Plan. The aggregate withdrawal liability from each of such Company
Multiemployer Plan would not exceed $0.
(c) None of the Company Employee Benefit Plans is a "single
employer plan", as defined in Section 4001(a)(15) of ERISA, that is subject to
Title IV of ERISA. Neither the Company, any Subsidiary nor any Company ERISA
Affiliate has incurred any outstanding liability under Section 4062 of ERISA to
the Pension Benefit Guaranty Corporation or to a trustee appointed under Section
4042 of ERISA. Neither the Company, any Subsidiary nor any Company ERISA
Affiliate has engaged in any transaction described in Section 4069 of ERISA.
Except as set forth on Schedule 4.8 hereto, neither the Company nor any
Subsidiary maintains, or is required, either currently or in the future, to
provide life, health, medical or other welfare benefits to employees, directors,
former employees, former directors, or retirees after their termination of
employment or service, other than pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985. The Company and each Subsidiary have reserved the
right to amend, terminate or modify at any time all plans or arrangements
providing for retiree health or life insurance coverage.
(d) Except as set forth in Schedule 4.8, each Company Employee
Benefit Plan that is intended to qualify under Section 401 of Internal Revenue
Code of 1986, as amended (the "Code"), and each trust maintained pursuant
thereto, has been determined to be exempt from federal income taxation under
Section 501 of the Code by the IRS, and, to the Company's knowledge, nothing
material has occurred with respect to the operation of any such Company Employee
Benefit Plan that is reasonably likely to cause the loss of such qualification
or exemption or the imposition of any material liability, penalty or tax under
ERISA or the Code, or the assertion of material claims by participants (as that
term is defined in section 3(7) of ERISA) other than routine benefit claims.
(e) All contributions (including all employer contributions
and employee salary reduction contributions) required to have been made under
any of the Company Employee Benefit Plans to any funds or trusts established
thereunder or in connection therewith have been made by the due date thereof.
(f) There has been no material violation of ERISA or the Code
with respect to the filing of applicable reports, documents and notices
regarding the Company Employee Benefit Plans with the Secretary of Labor or the
Secretary of the Treasury or the furnishing of required reports, documents or
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30
notices to the participants or beneficiaries of the Company Employee Benefit
Plans.
(g) None of the Company, the Subsidiaries, the officers or
directors of the Company or any of the Subsidiaries or the Company Employee
Benefits Plans which are subject to ERISA, any trusts created thereunder or any
trustee or administrator thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the Code) or any
other breach of fiduciary responsibility that could subject the Company, any of
the Subsidiaries or any officer or director of the Company or any of the
Subsidiaries to any material tax or penalty on prohibited transactions imposed
by such Section 4975 or to any material liability under Section 502(i) or (1) of
ERISA.
(h) The Company has no Company-owned life insurance policies
currently in force.
(i) True, correct and complete copies of the following
documents, with respect to each of the Company Employee Benefit Plans, have been
delivered or made available to Parent by the Company: (i) all Company Employee
Benefit Plans and related trust documents, and amendments thereto; (ii) the most
recent Forms 5500 (iii) summary plan descriptions; and (iv) any other documents,
records or materials as may be reasonably requested by the Parent.
(j) There are no pending actions, claims or lawsuits which
have been asserted, instituted or, to the Company's knowledge, threatened,
against the Company Employee Benefit Plans, the assets of any of the trusts in
their capacity as such under such plans or the plan sponsor or the plan
administrator, or against any fiduciary of the Company Employee Benefit Plans
with respect to the operation of such plans (other than routine benefit claims).
(k) All Company Employee Benefit Plans subject to ERISA or the
Code have been maintained and administered, in all material respects, in
accordance with their terms and with all provisions of ERISA and the Code,
respectively, (including rules and regulations thereunder) and other applicable
federal and state laws and regulations.
(l) Except as set forth and excepted in Schedule 4.8(l) and
Sections 2.9, 6.10 and 6.11, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby (either
alone or in conjunction with any other event) will (i) result in any payment
(including, without limitation, severance, unemployment compensation, "excess
parachute payment" (within the meaning of Section 280G of the Code), forgiveness
of indebtedness or otherwise) becoming due to any director or any employee of
the Company or any Subsidiary under any Company Employee Benefit Plan or
otherwise; (ii)
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31
materially increase any benefits otherwise payable under any Company Employee
Benefit Plan; (iii) result in any acceleration of the time of payment or vesting
of any such benefits; (iv) limit or prohibit the ability to amend or terminate
any Company Employee Benefit Plan; (v) require the funding of any trust or other
funding vehicle; or (vi) renew or extend the term of any agreement in respect of
compensation for an employee of the Company which would create any liability to
the Company or Purchaser or their respective affiliates after consummation of
the Offer.
SECTION 4.9. Labor and Employment. (a) Except as disclosed in
Schedule 4.9(a) of this Agreement, (i) there is no unfair labor practice charge
pending or, to the Company's knowledge, threatened against the Company or any
Subsidiary; (ii) there is no labor strike, slowdown, stoppage or other similar
labor activity actually pending or, to the Company's knowledge, threatened
against or involving the Company or any Subsidiary; (iii) no material labor
grievance is pending or, to the Company's knowledge, threatened; (iv) to the
Company's knowledge, for the 12 month period ending on the date of this
Agreement, neither the Company nor any Subsidiary has been the subject of any
union organizational campaign; (v) neither the Company nor any Subsidiary has
any material labor negotiations in process with any labor union or other labor
organization; (vi) neither the Company nor any Subsidiary is presently, nor has
any of them in the past been a party to or bound by any collective bargaining
agreement or union contract; and (vii) to the Company's knowledge, there are no
efforts in process by labor unions to organize any employees who are not now
represented by recognized collective bargaining agents; and (viii) neither the
Company nor any Subsidiary has closed any plant or facility or implemented any
early retirement, or window program within the past six (6) months, nor has the
Company or any Subsidiary planned or announced any such action or program for
the future.
(b) Except as set forth in Schedule 4.9(b) of this
Agreement, neither the Company nor any of its Subsidiaries is a party to any
written, oral or implied contract or agreement with any current or former
officer or director of the Company or any Subsidiary, or any independent
contractor relating to the employment or service of any such person which to the
Company's knowledge is reasonably likely to result in any material liability to
or obligation of the Company after the Closing Date. The Company has delivered
to Parent true and complete copies of all such contracts or agreements or
detailed descriptions of individual agreements (or, in the case of any contract
or agreement that is not in writing, a description of the terms and conditions
of such contract or agreement), and the Company and its Subsidiaries have been
in compliance in all material respects with the terms and conditions of all such
written, oral and implied contracts and agreements.
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(c) Except as disclosed in Schedule 4.9(c), or except to the
extent any undisclosed non-compliance would not result in any material liability
to the Company after the Closing Date, the Company and its Subsidiaries have
policies in place to address compliance in all material respects with all
federal, state and local laws and regulations relating to employment and
employment practices such as wages and hours and the payment and withholding of
taxes, the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act, state and local human rights laws, the
National Labor Relations Act, state labor laws, the Rehabilitation Act of 1974,
the Occupational Safety and Health Act, the Worker Adjustment and Retraining
Notification Act of 1988 state worker's compensation laws, state disability
laws, state unemployment laws, the Immigration Reform and Control Act of 1986,
the Polygraph Protection Act of 1988, the Equal Pay Act, and the Americans with
Disabilities Act, with respect to each current employee or director of the
Company or any Subsidiary.
(d) Except as disclosed in Schedule 4.9(d), or except to the
extent any undisclosed non-compliance would not result in any material liability
to the Company or any of its Subsidiaries after the Closing Date, there are no
such claims, causes of action, charges, suits, complaints, administrative
proceedings, government investigations or proceedings, arbitrations or other
proceedings pending or to the Company's knowledge threatened against the Company
or any of its affiliates relating to employment or employment practices with
respect to any employee or former employee or director of the Company, and the
Company has no notice of, nor has knowledge of any matter that could reasonably
be the basis for any claim or assertion of liability against the Company or any
of its affiliates relating to any federal, state or local law relating to
employment or employment practices with respect to any such person.
Section 4.10. Properties. Schedule 4.10(a) hereto lists all
real property owned or leased by the Company or any of its Subsidiaries. Except
as set forth on Schedule 4.10(b) hereto, each of the Company and its
Subsidiaries has good, valid and, in the case of real property, marketable fee
simple, title to all the material assets and properties that it owns and that
are reflected on the Company's consolidated balance sheet as of June 30, 1999,
or that were thereafter acquired (except for assets and properties sold,
consumed or otherwise disposed of in the ordinary course of business by them
since such date), and such assets and properties are owned free and clear of all
liens, claims and encumbrances, except for (a) liens for taxes and assessments
not yet due and payable or for taxes the validity of which is being contested in
good faith, (b) liens, claims and encumbrances to secure indebtedness reflected
on the Company's consolidated balance sheet as of June 30, 1999, or indebtedness
(including purchase money indebtedness) incurred in the ordinary course of
business and consistent with past practice after the date thereof, (c)
mechanic's, materialmen's, and other liens,
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33
claims and encumbrances that have arisen in the ordinary course of business and
(d) imperfections of title and liens, claims and encumbrances the existence of
which do not, individually or in the aggregate, have a Material Adverse Effect.
Except as set forth on Schedule 4.10(c), neither the Company nor any of the
Subsidiaries is, nor to the knowledge of the Company is any other party, in
material breach of any lease agreement to which the Company or any Subsidiary is
a party (the "Company Leases"). The execution and delivery of this Agreement and
the performance of the Company's obligations under this Agreement and the
consummation of the transactions contemplated hereby will not (i) constitute a
breach by the Company or any Subsidiary under any Company Leases (ii) give rise
to any right of any third party to terminate any Company Lease, or (iii) cause a
loss or impairment of rights under any Company Lease, except for any such
breaches, terminations, losses or impairments as would not, individually or in
the aggregate, have a Material Adverse Effect. All the material buildings,
structures, equipment and other tangible assets of the Company and its
Subsidiaries (whether owned or leased) are in normal operating condition (normal
wear and tear excepted) and are fit for use in the ordinary course of business
of the Company. Notwithstanding anything to the contrary, no representations or
warranties set forth in this Section 4.10 shall apply to any personal property
of the Company or any Subsidiary that is surplus to the operating needs of the
business of the Company or any Subsidiary as presently conducted.
SECTION 4.11. Intellectual Property.
(a) Except as set forth on Schedule 4.11, the Company and its
Subsidiaries have good title to or, with respect to items not owned by the
Company or its Subsidiaries, sufficient rights to use all patents, trademarks
and service marks (registered or unregistered), trade names, domain names,
computer software and copyrights, and applications and registrations therefor
(collectively, "Intellectual Property"), owned or licensed by the Company or any
Subsidiary or utilized by the Company or any Subsidiary in the conduct of its
and their businesses and good title to or, with respect to items not owned by
the Company or its Subsidiaries, sufficient rights to use all material
inventions, processes, designs, formulae, trade secrets and know-how utilized in
the conduct of the businesses of the Company and its Subsidiaries, as presently
conducted (all of the foregoing items, including the items of Intellectual
Property, collectively referred to as the "Company Intellectual Property"). The
Company has no knowledge of any infringement by others of Intellectual Property
owned by the Company or any Subsidiary nor the misappropriation of any trade
secrets owned by the Company or any Subsidiary, except where such infringement
or misappropriation would not, individually or in the aggregate, have a Material
Adverse Effect. To the Company's knowledge, the conduct of the businesses of the
Company and the Subsidiaries does not infringe on any Intellectual Property
rights of others nor does it involve the misappropriation of any trade secrets
of others, except where
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34
such infringement or misappropriation would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 4.11 and except as would
not, individually or in the aggregate, have a Material Adverse Effect, with
respect to each item of Company Intellectual Property: (i) if the Company or any
Subsidiary has held itself out as the owner thereof or otherwise developed or
caused the development of the item, the Company or its Subsidiaries exclusively
possess all rights, title and interest in and to the item; and (ii) no charge,
complaint, action, suit, proceeding, hearing, investigation, claim, demand or
assertion is pending or, to the knowledge of the Company, is threatened that
challenges the legality, validity, enforceability, use or ownership of the item
or that concerns the infringement of the item.
(c) The Company and each Subsidiary have taken reasonable
steps to protect the Company's and each Subsidiary's rights in all inventions,
processes, designs, formulae, know-how, trade secrets and other confidential
information of the Company and each Subsidiary, and have taken reasonable steps
to enforce rights in Intellectual Property owned by the Company or any
Subsidiary against known infringement by third parties. The Company and each
Subsidiary have taken reasonable steps, including all steps that the Company or
any Subsidiary may be contractually obligated to undertake, to protect
confidential information or trade secrets provided by another Person to the
Company or any Subsidiary.
(d) Except as set forth on Schedule 4.11, neither this
Agreement nor the assignment to Parent or the Surviving Corporation, by
operation of law or otherwise, of title to or the rights to use any or all of
the Company Intellectual Property will to the Company's knowledge after the
Effective Time (a) cause or result in an infringement or misappropriation of any
Intellectual Property right of any Person; (b) prevent the Surviving Corporation
or its assignee (provided that such assignee has the necessary national security
clearance and is allowed access to and use of such Company Intellectual Property
by the U.S. Government) from using the Company Intellectual Property in
substantially the same manner as it is used by the Company and each Subsidiary
prior to the Effective Time (other than by virtue of agreements, relationships
or the status of Parent and its affiliates); or (c) subject Parent or the
Surviving Corporation to any obligation to pay royalties or other amounts to any
third party in excess of those payable by the Company or any Subsidiary,
respectively, prior to the Effective Time.
SECTION 4.12. Insurance. Schedule 4.12 sets forth a true and
complete list of all insurance policies carried by, or covering the Company and
the Subsidiaries with respect to their businesses, assets and properties,
together with, in respect of
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35
each such policy, the name of the insurer, the policy number, the type of
policy, the amount of coverage and the deductible. True and complete copies of
each such policy have previously been provided to Parent. All such policies are
in full force and effect, and no notice of cancellation has been received by the
Company with respect to any such policy. All premiums due on such policies have
been paid in a timely manner, and the Company and the Subsidiaries have complied
in all material respects with the terms and provisions of such policies. The
insurance coverage provided by such policies is adequate and customary for the
industry in which the Company and the Subsidiaries operate.
SECTION 4.13. Environmental Matters.
(a) For purposes of this Agreement, the following terms shall
have the following meanings: (i) "Hazardous Substances" means any pollutant or
contaminant or any hazardous or toxic substance, waste, chemical, or material,
including as those terms are defined in any Environmental Law, and including
without limitation (A) petroleum and petroleum products including crude oil and
any fractions thereof; (B) natural gas, synthetic gas, and mixtures thereof; (C)
radon; (D) asbestos and asbestos-containing materials; (ii) "Environmental Law"
means any Law relating to regulation of pollution or the protection of human
health or the environment, including without limitation the following federal
statutes and their state counterparts, as each may be amended from time to time,
and any regulations promulgated thereunder: the Atomic Energy Act, the Clean Air
Act, the Clean Water Act, the Comprehensive Environmental Response,
Compensation, and Liability Act, the Federal Insecticide, Fungicide, and
Rodenticide Act, the Hazardous Materials Transportation Act, the Occupational
Safety and Health Act, the Resource Conservation and Recovery Act, and the Safe
Drinking Water Act.
(b) Except as set forth on Schedule 4.13 hereto: (i) neither
the Company nor any Subsidiary is in material violation or has in the last three
(3) years been in material violation of any Environmental Law; (ii) none of the
properties currently owned or leased by the Company or any Subsidiary is
contaminated with any Hazardous Substance to an extent that may require cleanup
or other remediation or give rise to any material liability under any
Environmental Law; (iii) none of the properties formerly owned or leased by the
Company or by any current or former Subsidiary is contaminated with any
Hazardous Substance to an extent that may require cleanup or other remediation
or give rise to any material liability under any Environmental Law; (iv) no
operations of the Company or of any present or former Subsidiary have given rise
to any off-site contamination that may require cleanup or other remediation or
give rise to any material liability under any Environmental Law; (v) the
material Company and each Subsidiary has all material permits, licenses and
other authorizations required under any Environmental Law ("Environmental
Permits"); (vi) the Company and
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36
each Subsidiary is in material compliance with its Environmental Permits; and
(vii) there are no pending or, to the Company's knowledge, threatened claims
against the Company or any Subsidiary relating to any Environmental Law or
Hazardous Substance.
SECTION 4.14. Government Contracts.
(a) Except as disclosed in Schedule 4.14, with respect to
Government Contracts, or teaming agreements or arrangements in respect of
Government Contracts, held by the Company or any Subsidiary or any joint venture
in which the Company participates as a venturer, there is no (i) material civil,
criminal or other investigation of which the Company has knowledge by any
Governmental Entity, (ii) suspension or debarment proceeding (or equivalent
proceeding) against the Company or any Subsidiary or, to the Company's
knowledge, any basis therefor, (iii) as of the date hereof, request for a
contract price adjustment based on a claimed disallowance by Defense Contract
Audit Agency or any other Governmental Entity or claim of defective pricing or
mischarging of any kind, (iv) as of the date hereof, claim or request for
equitable adjustment or other demand by the Company or any Subsidiary against
the U.S. Government or any third party or, to the Company's knowledge, any basis
therefor, (v) written notice challenging, questioning or disallowing any cost(s)
or, to the Company's knowledge, any basis therefor, (vi) as of the date hereof,
notice of contract termination or absence or reduction in funding; or (vii)
material cure notice or show cause notice or any material claim or demand by any
Person relating to or arising under a Government Contract or, to the Company's
knowledge, any basis therefor.
(b) For the purposes of this Agreement, with respect to any
party, "Government Contract" means any prime contract, subcontract, option,
basic ordering agreement, forward pricing rate agreement, letter contract,
purchase order, delivery order, change order, task order, Bid or other
arrangement of any kind between such party or any of its subsidiaries and (i)
the U.S. Government (acting on its own behalf or on behalf of another country or
international organization), (ii) any prime contractor of the U.S. Government or
(iii) any subcontractor with respect to any contract of a type described in
clauses (i) or (ii) above. For the purposes of this Agreement, with respect to
any party, "Bid" means any quotation, bid or proposal made by such party or any
of its subsidiaries that if accepted or awarded would lead to a Contract with
the U.S. Government or any other person for the design, manufacture and sale of
products or the provision of services.
SECTION 4.15. Licenses and Permits; Compliance with Laws.
Except as set forth on Schedule 4.15, the Company and the Subsidiaries hold, and
at all applicable times hereunder held, all material permits, licenses,
variances, exemptions, franchises, authorizations and approvals from all
Governmental
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37
Entities that are required for the operation of the businesses of the Company
and the Subsidiaries as presently conducted and the ownership, operation, lease
and holding by the Company and the Subsidiaries of their respective properties
and assets (the "Company Permits"). No suspension or cancellation of any of the
Company Permits is pending or, to the knowledge of the Company, threatened,
except where the failure to have, or suspension or cancellation of, any of the
Company Permits would not, individually or in the aggregate, have a Material
Adverse Effect. Except where individually or in the aggregate the existence of a
conflict with, a violation of, or a default under would not have a Material
Adverse Effect, none of the Company or any Subsidiary is in conflict with, or in
default under or violation of and the Company and the Subsidiaries have not
received any notices of violations with respect to, (i) any federal, state,
local or foreign statutes, laws, ordinances, rules, regulations, judgments,
decrees, orders, concessions, grants, franchises, permits, licenses and other
governmental authorizations and approvals ("Laws") applicable to the Company or
any Subsidiary or by which any asset of the Company or any Subsidiary is bound
or affected, (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
or its or any of their respective properties are bound or affected or (iii) any
Company Permits.
SECTION 4.16. Material Contracts.
(a) Except for any contract filed as an exhibit to any SEC
Report or as set forth on Schedule 4.16(a) hereto (collectively, the "Company
Material Contracts") and except for classified contracts, neither the Company
nor any of the Subsidiaries is a party to or bound by:
(i) any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC);
(ii) any contract or agreement for the purchase of materials
or personal property from any supplier or for the furnishing of
services to the Company or any Subsidiary that requires future
aggregate payments by the Company or any of the Subsidiaries of
$150,000 or more;
(iii) any U.S. Government prime contract (including teaming
agreements in respect thereof), U.S. Government subcontract (other than
any subcontract requiring future aggregate payments of less than
$100,000) or any commercial contract for the sale of the Company's
services or licensed software;
(iv) (A) any contract, agreement or instrument relating to or
evidencing purchase money indebtedness in excess of $100,000 or
indebtedness for borrowed money of the
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Company or any Subsidiary, (B) any guarantee or assumption of an
obligation for purchase money indebtedness in excess of $100,000 or
borrowed money or other obligations of reimbursement of any maker of a
letter of credit or any guaranty of minimum equity or capital or
make-whole or similar agreement or (C) extension of credit by the
Company or any Subsidiary in excess of $100,000 or loan by the Company
or any Subsidiary;
(v) except for teaming and other agreements entered into in
the ordinary course of business, any non-competition agreement or any
other agreement or obligation which purports to limit in any respect
the manner in which, or the localities in which, the business of the
Company or the Subsidiaries may be conducted;
(vi) any partnership, joint venture, strategic alliance or
cooperation agreement (or any agreement similar to any of the
foregoing);
(vii) any voting or other agreement governing how any Shares
shall be voted;
(viii) any contract or other agreement which would prohibit or
materially delay the consummation of the Merger or any of the
transactions contemplated by this Agreement;
(ix) any licenses, whether as licensor or licensee, of
Intellectual Property other than commercial-off-the-shelf software
licenses; or
(x) any brokerage or finders fee agreements other than
agreements for normal brokerage commissions or finders fees payable in
the ordinary course of business.
(b) Except as set forth on Schedule 4.16(b) hereto, each
Company Material Contract is valid and binding on the Company (or, to the extent
a Subsidiary is a party, such Subsidiary) and, to the Company's knowledge, each
other party thereto, and each is in full force and effect, and the Company and
each Subsidiary and, to the Company's knowledge, each other party thereto have
performed all obligations required to be performed by them to date under each
Company Material Contract, except where such noncompliance, individually or in
the aggregate, would not have a Material Adverse Effect. Neither the Company nor
any Subsidiary knows of, or has given or received notice of, any violation or
default under (nor, to the knowledge of the Company, has there occurred any
event or does there exist any condition which with the passage of time or the
giving of notice or both would result in such a violation or default under) any
Company Material Contract, except where any such violations or defaults,
individually or in the aggregate, would not have a Material Adverse Effect.
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(c) Except as disclosed in the Company's proxy statement for
the 1999 annual meeting of stockholders or in Schedule 4.16 or as expressly
provided for in this Agreement, neither the Company nor any of the Subsidiaries
is a party to any oral or written (i) employment or consulting or similar
agreement that (A) cannot be terminated on eight weeks' or less notice without
any material additional expense other than the payment of accrued compensation
and/or expenses or (B) requires payments of compensation to any one Person in
excess of $125,000 (exclusive of bonuses, to the extent such bonuses do not
exceed 50% of such Person's other compensation) per year or aggregate payments
of compensation to any one Person in excess of $200,000 or (ii) agreement or
arrangement, with any director, officer or other key employee of the Company or
any Subsidiary the benefits of which are contingent or vest or accelerate, or
the terms of which are altered, upon the occurrence of a transaction of the
nature contemplated by this Agreement.
SECTION 4.17. Taxes.
(a) Except as set forth in Schedule 4.17, all material Tax
Returns (as defined below) by or on behalf of the Company or any Subsidiary or
any affiliated, combined or unitary group of which the Company or any Subsidiary
is or was a member have been duly and timely filed with the appropriate taxing
authorities. All such Tax Returns were correct and complete in all material
respects. All Taxes shown as due thereon have been paid, and the most recent
financial statements contained in the SEC Reports provide an adequate accrual
for the payment of Taxes for the periods covered by such reports.
(b) Except as set forth in Schedule 4.17, neither the Company
nor any Subsidiary has requested any extension of time within which to file any
Tax Return in respect of any taxable year, which Tax Return has not since been
filed.
(c) Except as set forth in Schedule 4.17, there are no
outstanding waivers or comparable consents that have been given by the Company
or any Subsidiary or with respect to any Tax Return of the Company or any
Subsidiary regarding the application of any statute of limitations with respect
to any Taxes or Tax Returns of the Company or any such Subsidiary.
(d) Except as set forth in Schedule 4.17, no United States
federal, state, local or foreign audits, investigations, other administrative
proceedings or court proceedings are presently pending against the Company or
any Subsidiary that could materially affect the liability for Taxes of the
Company or any Subsidiary or against the Company or any Subsidiary with regard
to any Taxes or Tax Returns of the Company or any Subsidiary and no notification
has been received by the Company or any Subsidiary that such an audit,
investigation or other proceeding is pending or threatened. No issue has been
raised by a Tax authority in any audit of the Company or any Subsidiary
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that if raised with respect to any other period not so audited could be expected
to result in a proposed deficiency for any period not so audited. No claim has
ever been made by an authority in a jurisdiction where any of the Company and
its Subsidiaries does not file Tax Returns that it is or may be subject to
taxation in that jurisdiction.
(e) No deficiency or adjustment for any Taxes has been
threatened, proposed, assessed or asserted against the Company or any
Subsidiary. Except as set forth in Schedule 4.17, there are no encumbrances for
Taxes upon the assets or properties of the Company or any Subsidiary except for
statutory encumbrances for Taxes not yet due for which adequate reserves have
been established in accordance with generally accepted accounting principles.
(f) Neither the Company nor any Subsidiary is a party to, or
is bound by, any Tax sharing, Tax indemnity, cost sharing, or similar agreement,
policy or practice relating to Taxes. Except as set forth in Schedule 4.17, no
closing agreement pursuant to section 7121 of the Code (or any predecessor
provision) or any similar provision of any state, local or foreign law has been
entered into by or on behalf of the Company or any Subsidiary.
(g) The Company has made available to Parent true and complete
copies of all federal, state, local and foreign income Tax Returns, and state
and local property and sales Tax Returns and any other Tax Returns filed by the
Company or any Subsidiary for any of the taxable periods that remains open, as
of the date hereof, for examination or assessment of Tax.
(h) Except as disclosed on Schedule 4.17, neither the Company
nor any Subsidiary: (i) has been a member of an affiliated group filing a
consolidated federal income Tax Return (other than a group the common parent of
which is the Company) or (ii) has any liability for the Taxes of any person
(other than the Company and its Subsidiaries) under Section 1.1502-6 of the
Treasury Regulations (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract or otherwise.
(i) Neither the Company nor any of its Subsidiaries has filed
a consent under Section 341(f) of the Code.
(j) The net operating loss carryforwards ("NOLs") of the
Company and its Subsidiaries as of June 30, 1999 equal the amount of the NOLs
set forth in Notes to Consolidated Financial Statements contained in the Company
1999 10-K and, except for limitations that may apply by reason of the Merger or
related transactions contemplated by this Agreement, such NOLs are not subject
to limitation under Section 382 of the Code, Section 1.1502-15 or -21 of the
Treasury Regulations or otherwise.
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(k) For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, goods and services, capital, transfer, franchise, profits, license,
withholding, payroll, employment, employer health, excise, severance, stamp,
occupation, real and personal property, social security, estimated, recording,
gift, value assessed, windfall profits or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, whether computed on a separate,
consolidated, unitary, combined or other basis, together with any interest,
fines, penalties, additions to tax or other additional amounts imposed by any
taxing authority (domestic or foreign). For purposes of this Agreement, "Tax
Return" shall mean any return, declaration, report, estimate, information or
other document (including any documents, statements or schedules attached
thereto) required to be filed with any federal, state, local or foreign tax
authority with respect to Taxes.
SECTION 4.18. Offer Documents; Proxy Statement. The Schedule
14D-9, when filed with the SEC and first published, sent or given to
stockholders of the Company, will comply in all material respects with the
Exchange Act and the rules and regulations thereunder. Neither the Schedule
14D-9 nor any of the information provided by or on behalf of the Company
specifically for inclusion in the Schedule TO or the Offer Documents will, at
the respective times the Schedule 14D-9, the Schedule TO and the Offer Documents
or any amendments or supplements thereto are filed with the SEC or first
published, sent or given to stockholders of the Company, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. No
representation is made by the Company with respect to written information
supplied by Parent or Purchaser specifically for inclusion in the Schedule
14D-9. Any proxy statement to be sent to the stockholders of the Company in
connection with a meeting of the Company's stockholders to consider the Merger
(the "Company Stockholders' Meeting") or the information statement to be sent to
such stockholders, as appropriate (such proxy statement or information
statement, as amended or supplemented, is herein referred to as the "Proxy
Statement"), will comply in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is being made by the Company with
respect to Parent Information. The Proxy Statement will not, at the time the
Proxy Statement (or any amendment or supplement thereto) is filed with the SEC
or first sent to stockholders, at the time of the Company Stockholders Meeting
or at the Effective Time, contain any untrue statement of a material fact or
omit to state any 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.
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SECTION 4.19. Brokers. No broker, finder or investment banker
(other than the Company Financial Advisor) is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
the Company. The Company has heretofore furnished to Parent true and complete
copies of all agreements and other arrangements between the Company and the
Company Financial Advisor.
SECTION 4.20. Takeover Statutes. The Board of Directors has
approved the Offer, the Merger and this Agreement, and such approval is
sufficient to render inapplicable to the Offer, the Merger, this Agreement the
limitations on business combinations contained in any restrictive provision of
any "fair price," "moratorium," "control share acquisition," "interested
stockholder" or other similar anti-takeover statute or regulation (including,
without limitation, Section 203 of the DGCL) or restrictive provision of any
applicable anti-takeover provision in the Company's Certificate of Incorporation
(including Article 9 thereof) or By-Laws. No other state takeover statute or
similar statute or regulation or other comparable takeover provision of the
Company's Certificate of Incorporation or By-Laws applies to the Offer, the
Merger, this Agreement or any of the transactions contemplated by this
Agreement.
SECTION 4.21. Rights Plan. All rights ("Rights") to acquire
Company Common Stock, other securities or other consideration in lieu thereof
issued under the Amended and Restated Rights Agreement dated December 13, 1999
between the Company and The American Stock Transfer & Trust Company (the "Rights
Agreement") expired immediately prior to the execution and delivery of this
Agreement and the Stockholders Agreements, and no holder of Rights has any right
thereunder to acquire shares of Company Common Stock or any other securities or
any other consideration in lieu thereof.
Article V.
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Conduct of Business by the Company Pending the
Closing. From the date of this Agreement to the Effective Time, except as
expressly contemplated by this Agreement (including as specified on the
Schedules hereto), the Company shall, and shall cause each of the Subsidiaries,
to (i) (other than inactive Subsidiaries) carry on its respective businesses in
the ordinary course consistent with past practice, (ii) use reasonable efforts
to preserve intact its current business organizations and keep available the
services of its current officers and employees, (iii) use all reasonable efforts
to preserve its relationships with principal customers, suppliers and other
Persons with which it has business dealings, (iv) comply in all material
respects with all laws and regulations
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43
applicable to it or any of its properties, assets or business and (v) maintain
in full force and effect all the Company Permits necessary for such business. By
way of amplification and not limitation of the foregoing, the Company shall not,
and it shall cause the Subsidiaries not to, between the date of this Agreement
and the Effective Time, except as permitted by this Agreement (including as
specified on the Schedules hereto), directly or indirectly, do, or commit to do,
any of the following without the prior written consent of Parent:
(a) Amend or otherwise change its certificate of incorporation
or bylaws or the equivalent organizational documents;
(b) Issue, grant, deliver, sell, pledge, dispose of or
encumber any shares of capital stock of any class, any Company Voting Debt or
any options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital stock, or any Company Voting Debt or any other
ownership interest (including but not limited to stock appreciation rights,
phantom stock or stock-based performance units) of the Company or any Subsidiary
(except for the issuance of shares of Company Common Stock required to be issued
pursuant to the terms of the Warrants or Options outstanding as of the date
hereof;
(c) Declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (other than dividends or distributions by any wholly owned
Subsidiary of the Company to its parent);
(d) Reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any shares of capital stock of the
Company or any Subsidiary or any securities convertible into or exercisable for
any such shares of its capital stock or securities, other than pursuant to
Options and Stock Plans in accordance with their terms as in effect on the date
hereof;
(e) (i) Acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof, or any assets that are material, individually or in the
aggregate, to the Company and the Subsidiaries, taken as a whole; (ii) incur any
indebtedness for borrowed money (including by issuance of debt securities) other
than borrowings in the ordinary course of business under the Company's existing
credit facility or issue any debt securities or warrants or other rights to
acquire any debt securities of the Company or any Subsidiary, or assume,
guarantee or endorse (other than for collection or deposit in the ordinary
course of business), or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans or advances or make any capital
contributions to, or investments in, any other Person; (iii) enter into any
material
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contract or agreement other than in the ordinary course of business; or (iv) (A)
authorize or make capital expenditures in excess of $1,600,000 in the aggregate
for the license of or in connection with Xxxxxx Associates, Inc. enterprise
management software, (B) for the period commencing on the date hereof and ending
on March 31, 2000, authorize or make capital expenditures (other than as set
forth in clause (A) above) in excess of $75,000 individually or $500,000 in the
aggregate and (C) for the period commencing on April 1, 2000 and ending on June
30, 2000, authorize or make capital expenditures (other than as set forth in
clause (A) above) in excess of $75,000 individually or, when taken together with
all capital expenditures authorized or made pursuant to subclause (B) above,
$1,200,000 in the aggregate.
(f) (i) Increase the compensation or fringe benefits of any of
its directors, officers or employees, except as required by contractual
obligations existing as of the date hereof and except for increases in salary or
wages in connection with a promotion or change in position granted in the
ordinary course to employees of the Company or a Subsidiary who are not one of
the Key Management Personnel, in the ordinary course of business in accordance
with past practice, (ii) grant any increase in severance or termination pay not
currently required to be paid under existing severance plans or contracts to any
director, officer or other employee of the Company or any Subsidiary, including
without limitation any increase as a result of promotion, (iii) enter into any
employment, consulting or severance agreement or arrangement, including any
arrangement to provide post-retirement medical or life insurance benefits, with
any present or former director, officer or other employee of the Company or any
Subsidiary or (iv) except as set forth on Schedule 5.2(f) hereto and except as
is required by law, establish, adopt, enter into or amend or terminate, or take
any action to accelerate any rights or benefits under, or make any material
determination not in the ordinary course of business consistent with past
practice under, any collective bargaining agreement, Company Employee Benefit
Plan or employee benefit arrangement that would have been Company Employee
Benefit Plans if they were in effect as of the date hereof, including, but not
limited to, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or employees;
(g) Except as may be required as a result of a change in law
or in generally accepted accounting principles, change any of the accounting
methods, practices or principles used by it;
(h) Except as may be required to comply with a change in law,
make any material tax election, make or change any method of accounting with
respect to Taxes, file any amended Tax Returns that may have a material adverse
effect on the tax position of the Company or any Subsidiary or settle or
compromise any
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xxxxxxxx xxxxxxx, xxxxx, local or foreign Tax liability or refund;
(i) Except for the settlement of any suit, action or claim
disclosed on Schedule 5.1(i) hereto, settle or compromise any pending suit,
action, audit or claim (A) against the Company or any Subsidiary by any
Governmental Entity, including, but not limited to, DCAA, or (B) which is
material to the Company and the Subsidiaries, taken as a whole, or which relates
to the transactions contemplated hereby;
(j) Adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any Subsidiary (other than the Merger);
(k) (i) Pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction (A) in the
ordinary course of business and consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in the most
recent consolidated financial statements of the Company included in the SEC
Reports filed prior to the date of this Agreement or (B) of liabilities incurred
in the ordinary course of business and consistent with past practice, (ii)
cancel any material indebtedness (individually or in the aggregate) or waive any
claims (except in connection with the settlement of any suit, action or claim
disclosed on Schedule 5.1(i) hereto) or rights of substantial value or (iii)
waive the benefits of, or agree to modify in any manner, any confidentiality,
standstill or similar agreement to which the Company or any Subsidiary is a
party;
(l) Sell, lease (as lessor), license or otherwise dispose of
or subject to any lien or encumbrance any properties or assets, except sales of
excess or obsolete assets or real property in the ordinary course consistent
with past practice;
(m) (i) Except for teaming agreements entered into in the
ordinary course of business, enter into any "non-compete" or similar agreement
or (ii) knowingly execute any new Information Technology (IT) design or study
contract, excluding acceptance of individual Task Orders or Delivery Orders
under existing contracts, that creates an actual organizational conflict of
interest (under Federal Acquisition Regulation Subpart 9.5) with an existing
unclassified contract of Parent; provided, however, that in order to protect the
U.S. Government interest against the creation of an actual conflict of interest
in the execution of new contracts, designated representatives of the Company and
Parent will meet or communicate weekly or as otherwise required, and to the
extent permitted by applicable laws and regulation, to take reasonable actions
to avoid such conflicts; or
(n) Take, or propose to take, or agree to take in
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46
writing or otherwise, any of the actions described in Sections 5.1(a) through
5.1(m) or any action which would result in any of the conditions set forth in
Annex I not being satisfied.
SECTION 5.2. No Solicitation.
(a) Except as set forth in this Section 5.2, neither the
Company nor any of its affiliates controlled by it shall (and each shall use its
best efforts to cause its respective officers, directors, employees,
representatives and agents, including, but not limited to, investment bankers,
attorneys and accountants (collectively, "Agents"), not to), directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any Person (other than Parent,
any of its affiliates or Agents) concerning any proposal or offer (in each case,
whether or not in writing and whether or not delivered to the stockholders of
the Company generally) to acquire in any manner, directly or indirectly, all or
a substantial part of the assets or business and properties of the Company or
any of its Subsidiaries or any capital stock of or other equity interest in the
Company or any of its Subsidiaries, whether by merger, tender offer, exchange
offer, sale of assets or similar transactions involving the Company or any
Subsidiary, division or operating or principal business unit of the Company,
other than pursuant to the transactions contemplated by this Agreement
(collectively, an "Acquisition Proposal"). Except as provided in this Section
5.2, the Company shall not have any activities, discussions or negotiations with
any Person with respect to any of the foregoing. A "Superior Proposal" is an
Acquisition Proposal that involves payment of consideration to the Company's
stockholders that is financially superior to that payable in the Offer and the
Merger. The Company, its affiliates and their respective Agents shall
immediately cease any existing discussions or negotiations, if any, with any
Persons conducted heretofore with respect to any Acquisition Proposal.
(b) Prior to the Share Purchase Date, the Company may furnish
information concerning its business, properties or assets to any Person in
response to a request for such information made after the date of this Agreement
which was not encouraged, solicited or initiated, directly or indirectly, by the
Company or any of its affiliates or their respective Agents after the date of
this Agreement, and may participate in discussions and negotiations with such
Person concerning an Acquisition Proposal, in each case if and only to the
extent that (x) such Person has submitted a written Acquisition Proposal to the
Board of Directors relating to such transaction, (y) the Board of Directors
determines in good faith (i) after consulting with its independent financial
advisors, (A) that such Person is reasonably capable of consummating such
Acquisition Proposal, taking into account the legal, financial, regulatory and
other aspects of such Acquisition Proposal and the Person making such
Acquisition Proposal and (B) such Acquisition Proposal is reasonably likely to
be a Superior Proposal and (ii) after
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receipt of advice from outside legal counsel to the Company, that failure to
take such action would be inconsistent with its fiduciary duties under
applicable law, and (z) such Person has signed a confidentiality agreement
substantially identical to the Confidentiality Agreement. The Company will
promptly provide to Parent any written material information regarding the
Company provided to such Person which was not previously provided or otherwise
made available to Parent.
(c) The Company will promptly following receipt of an
Acquisition Proposal (and in any event not later than 24 hours after receipt
thereof) notify Parent of the receipt of the Acquisition Proposal and shall in
such notice indicate in reasonable detail the identity of the offeror and the
material terms and conditions of any proposal and shall keep Parent promptly
advised of the status and material terms of any such inquiry, offer or proposal.
(d) The Board of Directors may withdraw or modify its approval
or recommendation of the Offer and/or the Merger, provided (i) the Board of
Directors determines in good faith, after receipt of advice from outside legal
counsel to the Company, that the failure to do so would be inconsistent with its
fiduciary duties to the Company's stockholders under applicable law, and (ii)
the Company notifies Parent of any such withdrawal or modification prior to its
release to the public.
(e) Nothing contained in this Section 5.2 or any other
provision hereof shall prohibit the Company or the Board of Directors from (i)
taking and disclosing to the Company's stockholders a position with respect to a
tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act, or (ii) making such disclosure to the
Company's stockholders as, in the good faith judgment of the Board of Directors,
after receiving advice from outside counsel, is required under applicable law,
provided that the Board of Directors may not, except as permitted by Section
5.2(d), withdraw or modify its approval or recommendation of the Offer or the
Merger.
(f) Nothing contained in this Section 5.2 shall prohibit
Purchaser from purchasing Shares pursuant to the Offer or consummating the
Merger.
Article VI.
ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement. As promptly as practicable after
the consummation of the Offer and if required by the Exchange Act, the Company
shall prepare and file with the SEC, and shall use all reasonable efforts to
have cleared by the SEC, and promptly thereafter shall mail to stockholders, the
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48
Proxy Statement. The Proxy Statement shall contain the recommendation of the
Board of Directors that the Company's stockholders approve this Agreement and
the Merger.
SECTION 6.2. Meeting of Stockholders of the Company. Following
the consummation of the Offer, the Company shall promptly take all action
necessary in accordance with the DGCL and its Certificate of Incorporation and
By-Laws to convene the Company Stockholders' Meeting, if such meeting is
required. The stockholder vote required for approval of the Merger will be no
greater than that set forth in the DGCL. The Company shall use its reasonable
efforts to solicit from stockholders of the Company proxies in favor of the
Merger and shall take all other action necessary or, in the reasonable opinion
of Parent, advisable to secure any vote of stockholders required by the DGCL to
effect the Merger. Notwithstanding the foregoing, if Purchaser or any other
subsidiary of Parent shall acquire at least 90 percent of the outstanding
Shares, and provided that the conditions set forth in Article VII shall have
been satisfied or waived, the Company shall, at the request of Parent, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without the approval of the stockholders
of the Company, in accordance with Section 253 of the DGCL.
SECTION 6.3. Compliance with Law. Each of the Company, Parent
and Purchaser will comply in all material respects with all applicable laws and
with all applicable rules and regulations of any Governmental Entity in
connection with its execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
SECTION 6.4. Notification of Certain Matters. The Company
shall give prompt notice to Parent (A) of the occurrence, or non-occurrence of
any event whose occurrence, or non-occurrence would be likely to cause (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any respect at any time from the date hereof to the Effective
Time, (ii) any condition set forth in Annex I to be unsatisfied in any material
respect at any time from the date hereof to the date Parent purchases Shares
pursuant to the Offer or (iii) any covenant, condition or agreement contained in
this Agreement not to be complied with or satisfied in all material respects;
and (B) any failure by the Company to comply with in all material respects any
of its covenants or agreements hereunder; provided, however, that the delivery
of any notice pursuant to this Section 6.4 shall not limit or otherwise affect
the remedies available to Parent hereunder. The Company shall give prompt notice
to Parent of any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement.
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SECTION 6.5. Access to Information. Except as may be
prohibited by applicable law, from the date hereof to the Effective Time, the
Company shall, and shall cause its Subsidiaries, officers, directors, employees,
auditors and agents to, afford the Agents of Parent and Purchaser reasonable
access at all reasonable times to their respective Agents, properties, offices
and other facilities and to all books, records and contracts, and shall promptly
furnish Parent and Purchaser with (a) all financial, operating and other data
and information as Parent or Purchaser, through its Agents, may reasonably
request and (b) a copy of each report, schedule and other document filed or
received by the Company or any of the Subsidiaries during such period pursuant
to the requirements of applicable securities or federal Tax laws.
SECTION 6.6. Public Announcements. So long as this Agreement
is in effect, Parent and the Company shall consult with each other before
issuing, and provide each other a reasonable opportunity to review and comment
upon, any press release or other public statements with respect to the Offer or
the Merger and shall not issue, or permit their affiliates to issue, any such
press release or make any such public statement prior to such consultation,
except as may be required by law or in accordance with any listing agreement
with any securities exchange on which such party's securities are listed.
SECTION 6.7. Reasonable Best Efforts; Cooperation. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
its reasonable best efforts to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to use all reasonable best efforts to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, including, without limitation, (i)
cooperating in responding to inquiries from, and making presentations to,
regulatory authorities and customers, (ii) defending against and responding to
any action, suit, proceeding, or investigation, whether judicial or
administrative, challenging or relating to this Agreement or the transactions
contemplated hereby, including seeking to have any stay or temporary restraining
order entered, by any court or other Governmental Entity vacated or reversed
(iii) cooperating in the preparation and filing of the Offer Documents, the
Schedule 14D-9 and the Proxy Statement and (iv) promptly making all regulatory
filings and applications, including without limitation any required filings
under the HSR Act, and any amendments thereto as are necessary for the
consummation of the transactions contemplated by this Agreement. Notwithstanding
anything herein to the contrary, in connection with any filing or submission or
other action required to be made or taken by any party to effect the Merger and
all other transactions contemplated hereby, the Company shall not, without the
prior written consent of Parent, commit to any divestiture
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transaction, and Parent shall not be required to divest or hold separate or
otherwise take or commence to take any action that, in the reasonable discretion
of Parent, limits its freedom of action with respect to, or its ability to
retain, the Company or any of the Company's affiliates or any material portion
of the Company's assets or businesses.
SECTION 6.8. Agreement to Defend and Indemnify.
(a) It is understood and agreed that, subject to the
limitations on indemnification contained in the DGCL, the Company shall, to the
fullest extent permitted under applicable law and regardless of whether the
Merger becomes effective, indemnify and hold harmless, and after the Effective
Time, the Surviving Corporation shall for a period of six years following the
Effective Time, to the fullest extent permitted under applicable law, and Parent
shall, for such six-year period, but only to the extent the Company or the
Surviving Corporation would be required or permitted under applicable law,
indemnify and hold harmless, each director and officer of the Company
(collectively, the "Indemnified Parties") from and against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation arising out of or pertaining to
matters relating to their duties or actions in their capacity as officers and
directors in connection with any of the transactions contemplated hereby and
existing at the Effective Time, including without limitation liabilities arising
under the Securities Act or the Exchange Act in connection with the Offer or the
Merger, and in the event of any such claim, action, suit, proceeding or
investigation (whether arising prior to or after the Effective Time), (i) the
Company or the Surviving Corporation shall advance the reasonable fees and
expenses of counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to the Company or the Surviving Corporation, promptly as
statements therefor are received (provided the person to whom such expenses are
advanced provides a customary undertaking complying with applicable law to repay
such advances if it is ultimately determined that such person is not entitled to
indemnification), and (ii) the Company, Parent (but only after the consummation
of the Offer) and the Surviving Corporation will cooperate in the defense of any
such matter; provided, however, that none of the Company, Parent nor the
Surviving Corporation shall be liable for any settlement effected without its
prior written consent; and provided further that none of the Company, Parent nor
the Surviving Corporation shall be obliged pursuant to this Section 6.8 to pay
the fees and disbursements of more than one counsel for all Indemnified Parties
in any single action except to the extent that, in the opinion of counsel for
the Indemnified Parties, two or more of such Indemnified Parties have
conflicting interests in the outcome of such action. For six years after the
Effective Time, Parent shall cause to be maintained or obtained officers' and
directors' liability
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51
insurance covering the Indemnified Parties who are currently covered by the
Company's officers and directors liability insurance policy with respect to
matters or events occurring prior to the Effective Time on terms not less
favorable than those in effect on the date hereof in terms of coverage and
amounts to the extent available; provided, however, that if the aggregate annual
premiums for such insurance at any time during such period exceed 150% of the
per annum rate of premium paid by the Company for such insurance as of the date
of this Agreement (which amounts under current policies are set forth on
Schedule 6.8), then Parent shall be required to provide the maximum coverage
that will then be available at an annual premium equal to 150% of such per annum
rate as of the date of this Agreement. The Surviving Corporation shall continue
in effect, without amendment, repeal or modification in any manner that would
adversely affect the rights of the persons entitled to the protections and
privileges thereof, the indemnification provisions provided on the date hereof
by the Company By-Laws for a period of not less than six years following the
Effective Time. This Section 6.8 shall survive the consummation of the Merger or
any termination of this Agreement pursuant to Section 8.1 hereof.
Notwithstanding anything in this Section 6.8 to the contrary, neither the
Company nor the Surviving Corporation shall have any obligation under this
Section 6.8 to indemnify any Indemnified Party against any cost, expense,
judgment, fine, loss, claim, damage, liability or settlement amount found to
have resulted solely from such Indemnified Person's own gross negligence or
willful misconduct. Notwithstanding Section 9.8 hereof, this Section 6.8 is
intended to be for the benefit of and to grant third-party rights to Indemnified
Parties whether or not parties to this Agreement, and each of the Indemnified
Parties shall be entitled to enforce the covenants contained in this Section
6.8.
(b) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any Person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 6.8.
SECTION 6.9. Takeover Statutes. If any state takeover statute
or other similar statute or regulation becomes or is deemed to become applicable
to the Offer, the Merger, this Agreement or any of the transactions contemplated
hereby, the Company shall promptly take all action necessary to render such
statute or regulation inapplicable to all of the foregoing.
SECTION 6.10. Employment Matters. The Company will, and will
cause its Subsidiaries to, and from and after the Effective Time the Surviving
Corporation will, honor, in accordance with their terms all existing employment
and severance agreements between the Company or any of its Subsidiaries and any
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52
officer, director or employee of the Company or any of its Subsidiaries
specified in Schedule 6.10 hereto, including the obligation of the Company to
make any payment to any officer, director or employee on a date that is prior to
the Effective Time pursuant to the terms of any such employment agreement or
severance agreement. Notwithstanding anything contained herein to the contrary,
no such payments shall be made pursuant to the terms of the agreements with the
employees listed on Schedule 4.8(l) hereto without the prior consent of Parent,
which consent shall not be unreasonably withheld.
SECTION 6.11. Company Employee Benefit Plans. (a) For the
period commencing at the consummation of the Offer until the first anniversary
thereof, the Company or the Surviving Corporation, as applicable, shall provide
medical, dental, vision care, life and disability insurance, severance, vacation
and "section 125" benefits for the employees of the Company and any Subsidiary
as of the consummation of the Offer (the "Employees") and their eligible
dependents that are substantially similar in the aggregate to those provided as
of the date of this Agreement under the Company Employee Benefit Plans listed on
Schedule 6.11 hereto. Subject to the eligibility requirements thereof, as soon
as reasonably practicable following the Effective Time the Employees will become
eligible to participate in the Parent Employee Stock Purchase Plan and an
Employee's service with the Company and any Subsidiary prior to the Effective
Time will be recognized for purposes of determining eligibility to participate
in such plan.
(b) For the period commencing at the consummation of the Offer
until the first anniversary thereof, the Company or the Surviving Corporation,
as applicable, shall provide benefits to the Employees under a defined
contribution plan with a cash-or-deferred arrangement providing benefits to the
Employees, including Company contributions, which are comparable to the benefits
provided to the Employees under the GRC International, Inc. Employees' Deferred
Income Plan as of the date of this Agreement (the "401(k) Plan"); provided that
nothing herein shall require the Company or the Surviving Corporation to provide
or permit investment in the securities of Parent or to continue to make
available the specific investment options currently available under the 401(k)
Plan, including without limitation any investment in Company Common Stock.
(c) In the event the Company or any Subsidiary becomes a
participating company in the employee benefit plans of Parent, or an Employee
otherwise becomes employed by a company that participates in the employee
benefit plans of Parent (a "Participating Company"), Parent shall recognize, or
shall cause the Participating Company to recognize, each Employee's service with
or recognized by the Company and any Subsidiary as follows:
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53
(i) service prior to the Effective Time shall be recognized
for purposes of determining eligibility to participate in the defined
contribution plan and health and welfare plans then made available to
the Employees generally, and for eligibility to receive matching
contributions and vesting in matching contributions under any such
defined contribution plan, but not for purposes of determining levels
or amounts of benefits under any of Parent's disability or severance
plans, or for vesting or benefit accruals under any of Parent's defined
benefit plans, or for eligibility for post-employment medical, dental,
life insurance or toll discount plans or programs;
(ii)service after the Effective Time but prior to the date on
which an Employee becomes employed by a Participating Company shall be
recognized for purposes of determining levels or amounts of benefits
under Parent's disability or severance plans in which such employee is
then eligible to participate, and for vesting under Parent's defined
benefit pension plan in which such employee is then eligible to
participate, but not for purposes of benefit accruals under any defined
benefit pension plan and not for eligibility for post-employment
medical, dental, life insurance or toll discount plans or programs; and
(iii) service after the date on which an Employee becomes
employed by a Participating Company shall be recognized for all
purposes under the employee benefit plans of Parent in which such
employee is then eligible to participate.
(d) Nothing contained in this Agreement shall be interpreted
as (i) preventing the Company, Parent or the Surviving Corporation from
amending, modifying or terminating any Company Employee Benefit Plan or other
related contract, arrangement, commitment or understanding in accordance with
their terms and applicable law or (ii) interfering with the Company's or the
Surviving Corporation's right or obligation to make such changes as are
necessary to comply with applicable law.
(e) From and after the date hereof, all communications
relating to the Company Employee Benefit Plans, including, without limitation,
the Stock Plans, shall be subject to Parent's comment and approval prior to
distribution, which shall not be unreasonably withheld or delayed, and the
Company shall cooperate with and assist Parent in providing necessary or
desirable communications to the employees and directors of the Company regarding
the transactions contemplated hereby.
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ARTICLE VII.
CONDITIONS OF MERGER
The respective obligations of each party to effect the Merger
shall be subject to the satisfaction on or prior to the Effective Time of the
following conditions:
(a) Purchaser shall have made, or caused to be made, the Offer
and shall have purchased, or caused to be purchased, Shares pursuant to the
Offer;
(b) The Merger and this Agreement shall have been approved and
adopted by the requisite vote of the stockholders of the Company, if required by
the DGCL; and
(c) No statute, rule, regulation, judgment, writ, decree,
order or injunction shall have been promulgated, enacted, entered or enforced,
and no other action shall have been taken, by any Governmental Entity that in
any of the foregoing cases has the effect of making illegal or directly or
indirectly restraining, prohibiting or restricting the consummation of the
Merger.
Article VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
prior to or after approval of matters presented in connection with the Merger by
the stockholders of the Company:
(a) Subject to Section 1.3, by the mutual written consent of
Parent and the Company; or
(b) By either of Parent or the Company if any Governmental
Entity of competent jurisdiction shall have issued an order, decree or ruling or
taken any other action (which order, decree or ruling or other action each party
hereto shall use its reasonable best efforts to have vacated or reversed in
accordance with Section 6.7), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
non-appealable.
(c) By the Company:
(i) if any Person shall have made a bona fide written offer to
acquire the Company which was not encouraged, solicited or initiated,
directly or indirectly, by the Company or any of its affiliates or
their respective Agents after the date hereof (A) that the Board of
Directors
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55
determines in its good faith judgment is a Superior Proposal and (B) as
a result of which the Board of Directors determines in good faith,
after receiving advice from outside counsel to the Company, that
failure to take such action would be inconsistent with its fiduciary
duties under applicable law; provided, however, that not less than five
business days prior to such termination, the Company shall notify
Parent of its intention to terminate this Agreement pursuant to this
Section 8.1(c)(i) and shall cause its respective financial and legal
advisers to negotiate during such five-business-day period with Parent
in an effort to make such adjustments in the terms and conditions of
this Agreement as would enable the Company to proceed with the
transactions contemplated herein on such adjusted terms (during which
period Purchaser shall not accept for payment or purchase Shares
pursuant to the Offer), and notwithstanding such negotiations and
adjustments, the Board of Directors reasonably concludes, in its good
faith judgment, that the transactions contemplated herein on such terms
as adjusted, are not at least as favorable to the stockholders of the
Company as such offer and provided that the Company shall have complied
with the notice provisions of Section 5.2(b); and provided, further,
that such termination under this clause (i) shall not be effective
until the Company has made payment of the full Termination Fee required
by Section 8.2(b); or
(ii) if as the result of the failure to be satisfied of any of
the conditions set forth in Annex I, Parent or Purchaser shall have
terminated the Offer or the Offer shall have expired without Purchaser
having purchased any Shares pursuant thereto; provided, however, that
the Company may not terminate this Agreement pursuant to this Section
8.1(c)(ii) if the failure of any such condition to be satisfied at the
time of such termination results from (A) the Company's failure to
perform any of its obligations under this Agreement or (B) facts or
circumstances that constitute a breach of any representation or
warranty of the Company under this Agreement; or
(iii) if Parent, Purchaser or any of their affiliates shall
have failed to commence the Offer in accordance with the first sentence
of Section 1.1(a); provided, however, that the Company may not
terminate this Agreement pursuant to this Section 8.1(c)(iii) if such
failure to have commenced the Offer shall have been caused by (A) the
Company's failure to perform any of its obligations under this
Agreement or (B) facts or circumstances that constitute a breach of any
representation or warranty of the Company under this Agreement; or
(iv) if Parent or Purchaser shall have breached in any
material respect any of its representations, warranties, covenants or
other agreements contained in this
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56
Agreement which breach or failure to perform is incapable of being
cured or has not been cured by the date that is 15 business days
following written notice thereof to Parent from the Company.
(d) By Parent or Purchaser:
(i) if prior to the purchase of any Shares pursuant to the
Offer, the Board of Directors or any committee thereof shall have
withdrawn, or modified or changed, or publicly proposed to withdraw,
modify or change, in a manner adverse to Parent or Purchaser (including
by amendment of the Schedule 14D-9) its approval or recommendation of
the Offer, this Agreement or the Merger or shall have approved or
recommended or publicly proposed to approve or recommend an Acquisition
Proposal, or if the Board of Directors or any committee thereof fails
to reaffirm publicly and unconditionally its recommendation to the
Company's stockholders that they tender their Shares in the Offer,
which public reaffirmation must be made within ten days after Parent's
written request to do so (which request may be made at any time that an
Acquisition Proposal is pending and not withdrawn) and must also
include the unconditional rejection of such Acquisition Proposal (to
the extent not previously withdrawn); or
(ii) if Parent or Purchaser shall have withdrawn or terminated
the Offer or the Offer shall have expired in accordance with its terms
and the terms of this Agreement without Parent or Purchaser having
purchased any Shares thereunder; provided that Parent or Purchaser may
not terminate this Agreement pursuant to this Section 8.1(d)(ii) if
Parent or Purchaser is in material breach of its obligations under this
Agreement; or
(iii) any Person or "group" (as defined in Section 13(d)(3) of
the Exchange Act), other than Parent, Purchaser, or their affiliates or
any group of which any of them is a member, shall have acquired
beneficial ownership (as determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the Shares; provided that for
purposes of this Section 8.1(d)(iii), none of Xxxxxxxx Associates,
L.P., Xxxxxx XxXxxxxxx or their respective affiliates or any group of
which any of them is a member shall be deemed to have acquired 25% or
more of the Shares solely by virtue of the execution, delivery or
performance of the Stockholders Agreements; or
(iv) if the Company shall have breached any of its
representations or warranties which breach would give rise to the
failure of the condition set forth in clause (d) of Annex I hereto to
be satisfied or if, prior to consummation of the Offer, the Company
shall have failed to perform its covenants or other agreements
contained in this
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Agreement which failure to perform would give rise to the failure of
the condition set forth in clause (e) of Annex I hereto to be
satisfied, which breach or failure to perform is incapable of being
cured or has not been cured by the date that is 15 business days
following written notice thereof to the Company from Parent.
SECTION 8.2. Effect of Termination.
(a) In the event of termination of this Agreement by either
the Company or Parent or Purchaser as provided in Section 8.1, (A) this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Purchaser or the Company, other than as
provided in Section 9.1 and except that nothing herein shall relieve any party
for breach of any of its representations, warranties, covenants or agreements
set forth in this Agreement and (B) unless this Agreement has been terminated
pursuant to Section 8.1(c)(ii) or Section 8.1(d)(ii), Purchaser shall terminate
the Offer without the purchase of Shares thereunder.
(b) If (A) Parent or Purchaser terminates this Agreement under
Section 8.1(d)(i), or the Company terminates this Agreement pursuant to Section
8.1(c)(i) or (B) the Company terminates this Agreement pursuant to Section
8.1(c)(ii) or Parent or Purchaser terminates this Agreement pursuant to Section
8.1(d)(ii) or 8.1(d)(iii) and in the case of a termination under Section
8.1(c)(ii), 8.1(d)(ii) or 8.1(d)(iii) (x) at any time after the date of this
Agreement and prior to such termination an Acquisition Proposal shall have been
publicly announced or otherwise publicly communicated to the stockholders of the
Company generally and (y) prior to the first anniversary of such termination,
the Company shall enter into a definitive agreement with respect to an
Acquisition Proposal or an Acquisition Proposal is consummated, then the Company
shall pay to Parent, or cause to be paid, (1) in the case of a termination of
this Agreement by Parent or Purchaser pursuant to Section 8.1(d)(i), not later
than one business day following such termination, (2) in the case of a
termination of this Agreement by the Company pursuant to Section 8.1(c)(i),
prior to such termination, or (3) in the case of a termination of this Agreement
by the Company pursuant to Section 8.1(c)(ii) or by Parent or Purchaser pursuant
to Section 8.1(d)(ii) or 8.1(d)(iii), not later than one business day following
the entering into of a definitive agreement with respect to, or the consummation
of, an Acquisition Proposal prior to the first anniversary of such termination,
as applicable, a termination fee, in cash, by wire transfer of immediately
available funds to an account designated by Parent, in an amount equal to the
sum of (x) $6 million plus (y) out-of-pocket expenses incurred by Parent or
Purchaser exclusively in connection with the transactions contemplated by this
Agreement not to exceed $500,000 in the aggregate (such sum is referred to
herein as the "Termination Fee").
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Article IX.
GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.1, as the case may be, except that the agreements set
forth in Article II, Section 6.8, Section 6.10 and Article IX shall survive the
Effective Time indefinitely and those set forth in Section 8.2 and Article IX
shall survive termination indefinitely.
SECTION 9.2. Notices. All notices and other communications
given or made pursuant hereto shall be in writing (and shall be deemed to have
been duly given or made when received) by delivery in person, by facsimile,
cable, telecopy, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested)), in each case to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Purchaser:
AT&T Government Markets
0000 X Xxxxxx X.X.
Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxx XxXxxxxx, President
Facsimile: (000) 000-0000
With a copy to:
Vice President
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx Xxxx 0000X0
Xxxxxxx Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to the Company:
GRC International, Inc.
000 Xxxxxxx Xxxx
- 00 -
00
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Chief
Executive Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
SECTION 9.3. Expenses. Except as expressly set forth in
Section 8.2(b), all fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees, costs and expenses.
SECTION 9.4. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person;
(b) "Cause" means (i) conviction (including a plea of guilty
or nolo contendere) of a crime involving theft, fraud, dishonesty or moral
turpitude; (ii) intentional or grossly negligent disclosure of confidential or
trade secret information of the Company or Surviving Corporation, as applicable,
or any of their affiliates, to anyone who is not entitled to receive such
information; (iii)gross omission or gross dereliction of any statutory or common
law duty of loyalty to the Company or Surviving Corporation, as applicable, or
any of their affiliates; (iv) willful and knowing violation of the Company's or
Surviving Corporation's, as applicable, Code of Conduct or other written
policies or procedures; or (v) repeated failure to carry out the duties of the
employee's position despite specific instruction to do so.
(c) "control" (including the terms "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of stock, as trustee or executor, by contract or
credit arrangement or otherwise;
(d) "Key Management Personnel" means those employees of the
Company or any Subsidiary who are identified on Schedule 9.4(d).
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(e) "knowledge" of the Company means the actual knowledge,
after reasonable inquiry, of the Company's executive officers, including
reasonable inquiry of the Company's counsel; and
(f) "Person" means an individual, corporation, partnership,
association, trust, any unincorporated organization or group (within the meaning
of Section 13(d)(3) of the Exchange Act).
SECTION 9.5. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.6. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the maximum
extent possible.
SECTION 9.7. Schedules. The Schedules to this Agreement shall
be construed with and as an integral part of this Agreement and any matter
disclosed on any particular Schedule shall be deemed to be disclosed on any
other Schedule (or in another part of the same Schedule) if the facts and
circumstances relating to such matter, as disclosed on the particular Schedule,
would fairly apprise the party to which the representation and warranty is being
made of facts and circumstances that such party should fairly anticipate would
be applicable to such other Schedule (or part of such other Schedule).
SECTION 9.8. Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the Non-Disclosure Agreement dated December 21, 1999 between
the Company and Parent (the "Confidentiality Agreement"), constitute the entire
agreement and supersede any and all other prior agreements, undertakings,
statements, information and materials, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof and, except as
otherwise expressly provided in Section 6.8 hereof, this Agreement is not
intended to confer upon any other Person any rights or remedies hereunder.
SECTION 9.9. Assignment. This Agreement shall not be assigned
by operation of law or otherwise, except that Parent and Purchaser may assign
all or any of their rights hereunder to any
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61
affiliate of Parent, provided that no such assignment shall relieve the
assigning party of its obligations hereunder.
SECTION 9.10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State.
SECTION 9.11. Amendment. This Agreement may be amended by the
parties hereto by action taken by Parent and Purchaser, and by action taken by
the Board of Directors at any time prior to the Effective Time; provided,
however, that, after approval of the Merger by the stockholders of the Company,
no amendment may be made which would not otherwise be permitted pursuant to
Section 251(d) of the DGCL. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 9.12. Waiver. Subject to Section 1.3, at any time
prior to the Effective Time, any party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties of the other
parties hereto contained herein or in any document delivered pursuant hereto and
(c) waive compliance by the other parties hereto with any of their agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only as against such party and only if
set forth in an instrument in writing signed by such party. The failure of any
party hereto to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
SECTION 9.13. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
GRC INTERNATIONAL, INC.
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President and CEO
AT&T CORP.
By:/s/ Xxxx Xxxx XxXxxxxx
Name: Xxxx Xxxx XxXxxxxx
Title: Vice President
LMN CORPORATION
By:/s/ Xxxx Xxxx XxXxxxxx
Name: Xxxx Xxxx XxXxxxxx
Title: President
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ANNEX I
Conditions to the Offer. Notwithstanding any other provision of the Offer,
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and (subject to any such rules or regulations) may delay the acceptance for
payment of any tendered Shares and (except as provided in this Agreement) amend
or terminate the Offer as to any Shares not then paid for if (i) there shall not
have been validly tendered and not withdrawn prior to the expiration of the
Offer such number of shares of Company Common Stock which represents at least a
majority of the number of shares of Company Common Stock (assuming the exercise
of all Options and Warrants and the conversion or exchange of all securities
convertible or exchangeable into shares of Company Common Stock) (the "Minimum
Condition") or (ii) any applicable waiting period under the HSR Act shall not
have expired or been terminated prior to the expiration of the Offer or (iii) at
any time after the date of this Agreement and prior to the time of payment for
any such Shares (whether or not any Shares have theretofore been accepted for
payment or paid for pursuant to the Offer), any of the following events shall
occur and be continuing or conditions exists:
(a) (x) there shall have been any action taken by a Governmental
Entity, or any statute, rule, regulation, legislation, interpretation,
judgment, order or injunction, proposed, sought, promulgated, enacted,
entered, enforced, issued, amended or deemed applicable by a Governmental
Entity to Parent, Purchaser, the Company, any other affiliate of Parent or
the Company, the Offer or the Merger, that would or is reasonably likely,
directly or indirectly, to (i) make the acceptance for payment of, or
payment for or purchase of all or a substantial number of the Shares
pursuant to the Offer illegal, or otherwise restrict or prohibit the making
of the Offer or the consummation of the Offer or the Merger, (ii) result in
a significant delay in or restrict the ability of Purchaser to accept for
payment, pay for or purchase all or a substantial number of the Shares
pursuant to the Offer or to effect the Merger, (iii) render Purchaser
unable to accept for payment or pay for or purchase all or a substantial
number of the Shares pursuant to the Offer, (iv) impose material
limitations on the ability of Parent, Purchaser or any of their respective
Subsidiaries or affiliates to acquire or hold, transfer or dispose of, or
effectively to exercise all rights of ownership of, all or a substantial
number of the Shares including without limitation the right to vote the
Shares purchased by it pursuant to the Offer on an equal basis with all
other Shares on all matters properly presented to the stockholders of the
Company, (v) require the divestiture by
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Parent, Purchaser or any of their respective Subsidiaries or affiliates of
any Shares, or require Purchaser, Parent, the Company, or any of their
respective Subsidiaries or affiliates to dispose of or hold separate all or
any material portion of their respective businesses, assets or properties
or impose any material limitations on the ability of any of such entities
to conduct their respective businesses or own such assets, properties or
Shares or on the ability of Parent or Purchaser to conduct the business of
the Company and its Subsidiaries and own the assets and properties of the
Company and its Subsidiaries, (vi) impose any material limitations on the
ability of Parent, Purchaser or any of their respective Subsidiaries or
affiliates effectively to control the business or operations of the
Company, Parent, Purchaser or any of their respective Subsidiaries or
affiliates, or (vii) otherwise materially adversely affect Parent,
Purchaser, the Company or any of their respective Subsidiaries or
affiliates, or their business, assets, liabilities, condition (financial or
otherwise) or results of operations, or the value of the Shares; or
(y) there shall have been instituted or pending any action, proceeding
or counterclaim by any Governmental Entity, challenging the making of the
Offer or the acquisition by Purchaser of the Shares pursuant to the Offer
or the consummation of the Merger, or seeking to, directly or indirectly,
result in any of the consequences referred to in clauses (i) through (vii)
in subclause (x) above; or
(z) or there shall have been threatened any action, proceeding or
counterclaim by any Governmental Entity, challenging the making of the
Offer or the acquisition by Purchaser of the Shares pursuant to the Offer
or the consummation of the Merger, or seeking to, directly or indirectly,
result in any of the consequences referred to in clauses (i) through (vii)
in subclause (x) above that, in the good faith judgment of Parent, has a
reasonable probability of success.
(b) this Agreement shall have been terminated in accordance with its terms
or any event shall have occurred which gives Parent or Purchaser the right to
terminate this Agreement or not consummate the Merger; or
(c) since the date of this Agreement there shall have occurred any event,
change, effect or development that, individually or when considered together
with any other event, change, effect or development, has had or would have a
Material Adverse Effect; or
(d) (i) the representations and warranties of the Company set forth in
Sections 4.2, 4.3, 4.4(a)(ii), 4.20 or 4.21 shall not be true and correct in all
material respects both when
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made and as of the date of determination, as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case any of
such representations or warranties shall not be true and correct in all material
respects as of such earlier date) or (ii) any of the other representations and
warranties of the Company set forth in this Agreement (without giving effect to
any explicit limitation as to "materiality" or "Material Adverse Effect" set
forth therein) shall not be true and correct both when made and as of the date
of determination, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date),
except where the failure of any such representation or warranty to be so true
and correct does not have, and would not have, individually or when taken
together with all such failures to be so true and correct, a Material Adverse
Effect; or
(e) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or covenant
of the Company to be performed or complied with by it under this Agreement; or
(f) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation (whether or not mandatory) by any
Governmental Entity on, or other event that materially and adversely affects,
the extension of credit by banks or other lending institutions or (iv) in the
case of any of the foregoing existing at the time of the execution of this
Agreement, a material acceleration or worsening thereof; or
(g) the Board of Directors or any committee thereof (i) shall have
withdrawn, or modified or changed in a manner adverse to Parent or Purchaser
(including by amendment of the Schedule 14D-9) its approval or recommendation of
this Agreement or the transactions contemplated hereby, including the Offer or
the Merger, (ii) recommended or approved an Acquisition Proposal, (iii) shall
have adopted any resolution to effect any of the foregoing, or (iv) upon request
of Purchaser, shall fail to reaffirm publicly and unconditionally its approval
or recommendation of the Offer, this Agreement or the Merger within ten days
after Parent's written request to do so under the circumstances described in
Section 8.1(d)(i) of this Agreement; or
(h) any Person or "group" (as defined in Section 13(d)(3) of the Exchange
Act), other than Parent, Purchaser, or their affiliates or any group of which
any of them is a member, shall have acquired beneficial ownership (as determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the
Shares; provided that for purposes of this condition, none of Xxxxxxxx
Associates, L.P., Xxxxxx XxXxxxxxx, or their
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respective affiliates or any group of which any of them is a member, shall be
deemed to have acquired 25% or more of the Shares solely by virtue of the
execution, delivery or performance of the Stockholders Agreements;
which, in the judgment of Parent or Purchaser with respect to each and every
matter referred to above and regardless of the circumstances giving rise to any
such condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment of or payment for Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances (including any action or
inaction by Parent or Purchaser) giving rise to any such conditions and may be
waived by Purchaser in whole or in part at any time and from time to time, in
their sole discretion subject to the terms of this Agreement. The failure by
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time. Terms used but
not defined herein shall have the meanings assigned to such terms in the
Agreement to which this Annex I is a part.
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INDEX OF DEFINED TERMS
Section
Term Containing Definition
Acquisition Proposal 5.2(a)
Affiliate 9.4(a)
Agents 5.2(a)
Agreement 1st Paragraph
Bid 4.14(b)
Board of Directors 5th Paragraph
Cause 9.4(b)
Certificates 2.8(b)
Closing 2.2(a)
Closing Date 2.2(a)
Code 4.8(d). 2.8(f)
Company 1st Paragraph
Company 1999 10-K 4.5(c)
Company By-laws 4.1(c)
Company Certificate of Incorporation 4.1(c)
Company Common Stock 3rd Paragraph
Company Employee Benefit Plans 4.8(a)
Company ERISA Affiliate 4.8(a)
Company Financial Advisor 4.3(c)
Company Intellectual Property 4.11(a)
Company Leases 4.10
Company Material Contracts 4.16(a)
Company Multiemployer Plan 4.8(b)
Company Permits 4.15
Company Preferred Stock 4.2(a)
Company Securities 4.2(a)
Company Stockholders' Meeting 4.18
Company Voting Debt 4.2(a)
Confidentiality Agreement 9.8
Control 9.4(b)
Deferred Stock Units 2.9(d)
DGCL 2.1
Director Retirement Plan 2.9(d)
Dissenting Shares 2.7(a)
Effective Time 2.2(b)
Environmental Law 4.13(a)
Environmental Permits 4.13(b)
ERISA 4.8(a)
ESPP 2.9(a)
Exchange Act 1.1(a)
Exchange Agent 2.8(a)
Extended Expiration Date 1.1(d)
Government Contract 4.14(b)
Governmental Entity 3.3(b)
Hazardous Substances 4.13(a)
HSR Act 3.3(b)
Indemnified Parties 6.8(a)
Independent Directors 1.3
Initial Expiration Date 1.1(d)
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Intellectual Property 4.11(a)
Key Management Personnel 9.4(e)
Knowledge 9.4(d)
Laws 4.15
Material Adverse Effect 4.1
Merger 4th Paragraph
Minimum Condition Annex I
NOLs 4.17(j)
Offer 3rd Paragraph
Offer Documents 1.1(c)
Offer to Purchase 1.1(c)
Option Plans 2.9(c)
Options 2.9(b)
Parent 1st Paragraph
Parent Information 3.6
Per Share Amount 3rd Paragraph
Person 9.4(c)
Proxy Statement 4.18
Purchaser 1st Paragraph
Rights 4.21
Rights Agreement 4.21
Schedule 14D-9 1.2(b)
Schedule TO 1.1(c)
SEC 1.1(c)
SEC Reports 4.5(a)
Securities Act 4.5(a)
Settlement Agreement 1.3
Share Purchase Date 1.1(b)
Shares 3rd Paragraph
Stock Plans 2.9(a)
Stockholders 6th Paragraph
Stockholders Agreements 6th Paragraph
Subsidiary 4.1(d)
Superior Proposal 5.2(a)
Surviving Corporation 2.1
Tax Return 4.17(k)
Taxes 4.17(k)
Termination Fee 8.2(b)
Warrants 4.2(a)
