EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of March 8, 2001, is by and
among Smiths Industries Aerospace & Defense Systems Inc., a Delaware corporation
("Purchaser"), Bloodhound Acquisition, Inc., a Delaware corporation and wholly
owned subsidiary of Purchaser ("Merger Sub"), and Xxxxxxxxx Technologies Inc., a
Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Purchaser, Merger Sub and
the Company have each determined that it is advisable and in the best interests
of their respective companies and their stockholders to effect the merger of
Merger Sub with and into the Company pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound, Purchaser, Merger Sub and
the Company hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below:
"Acquisition Transaction Proposal" has the meaning ascribed to such term in
Section 9.3.
"Affiliate" means, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative thereto.
"Agent" has the meaning ascribed to such term in Section 2.7.
"Agreement" means this Agreement and Plan of Merger.
"Alternate Transaction" has the meaning ascribed to such term in Section
9.3.
"Benefit Plan" has the meaning ascribed to such term in Section 4.10.
"Business Day" means a day, other than a Saturday or Sunday, on which
commercial banks in New York City are open for the general transaction of
business.
"Certificate" means an outstanding certificate or an uncertificated share
which immediately prior to the Effective Time represented Shares.
"Certificate of Merger" has the meaning ascribed to such term in Section
2.3.
"CFIUS" means the Committee on Foreign Investment in the United States
under the Exon-Xxxxxx Provision.
"Claim" has the meaning ascribed to such term in Section 7.5.
"Class A Shares" means the shares of Class A Convertible Preferred Stock,
$2.00 par value per share, of the Company.
"Class B Shares" means the shares of Class B Convertible Preferred Stock,
$2.00 par value per share, of the Company.
"Closing" has the meaning ascribed to such term in Section 2.11.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Shares" means the shares of Common Stock, $0.01 par value per
share, of the Company.
"Company" has the meaning ascribed to such term in the heading of this
Agreement.
"Company Balance Sheet" has the meaning ascribed to such term in Section
4.5.
"Company Employees" has the meaning ascribed to such term in Section 7.8.
"Company Stock Option" has the meaning ascribed to such term in Section
2.6.
"Confidentiality Agreement" means the Confidentiality Agreement, dated as
of September 25, 2000, entered into between Purchaser and Xxxxxxx Xxxxx &
Company L.L.C., as agent for the Company.
"Contracts" has the meaning ascribed to such term in Section 4.16.
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"Credit Agreement" means the Revolving Credit Loan Agreement, dated as of
March 13, 1998, by and among the Company, certain of its Subsidiaries and Fleet
Bank, N.A., as amended.
"DGCL" means the Delaware General Corporation Law.
"Disclosure Letter" has the meaning ascribed to such term in Section 3.2.
"Dissenting Shares" has the meaning ascribed to such term in Section 2.6.
"Effective Time" has the meaning ascribed to such term in Section 2.3.
"Environment" shall mean and refer to all conditions of soil (surface and
subsurface), geologic strata and formations, streams, rivers, bays, ponds,
impoundment, estuaries, or other surface water, ground water, occasional or
perched water in or on the surface or subsurface, marshes and other wetlands,
flood plains, sediments, sludges, air, waste, and all materials applied to or
associated with any physical improvement or structure, whose use, removal, or
disposal is subject to any Environmental Law, including without limitation, any
Regulated Substances.
"Environmental Authority" shall mean any Governmental Authority having
jurisdiction over Environmental Matters, including without limitation, the New
Jersey Department of Environmental Protection (NJDEP), the United States
Environmental Protection Agency (EPA), Environment Canada, and any successor
agency.
"Environmental Claim" shall mean any and all administrative or judicial
actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
communication (written or oral), whether criminal or civil, pursuant to or
relating to any applicable Environmental Law by any person (including, but not
limited to, any Governmental Authority, private person and citizens group) based
upon, alleging, asserting, or claiming any actual or potential (i) violation of
or liability under any Environmental Law, (ii) violation of any Permit, or (iii)
liability for investigatory costs, cleanup costs, removal costs, remedial costs,
response costs, natural resource damages, property damage, personal injury,
fines, or penalties arising out of, based on, resulting from, or related to the
presence, release, or threatened release into the Environment, of any Regulated
Substances at any location, including, but not limited to, any off-site location
to which any Regulated Substances or materials containing any Regulated
Substances were sent for handling, storage, treatment, or disposal.
"Environmental Laws" means any and all applicable common law, statutes,
regulations, bylaws, rules, orders, ordinances, protocols, codes, guidelines,
treaties, policies, notices, directions and judicial, arbitral, administrative,
ministerial or departmental judgments, awards or other requirements and
regulations, of the United States of America (including all federal and state
laws), the State of New Jersey, the County of Somerset, the Township of Xxxxxx,
Canada, the Province of Ontario and all other Environmental Authorities, dealing
with Environmental Matters, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C.ss.9601 et
seq., (CERCLA), the Hazardous Material
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Transportation Act, 49 U.S.C.ss.1801 et seq., the Solid Waste Disposal Act
including the Resource Conservation and Recovery Act of 1976, 42 U.S.C.ss.6901
et seq. (RCRA), the Clean Water Act, 33 U.S.C.ss.1251 et seq., the Clean Air
Act, 42 U.S.C.ss.7401 et seq., the Toxic Substances Control Act, 15
U.S.C.ss.2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act,
7 U.S.C.ss.136 et seq., the Emergency Planning and Right-To-Know Act of 1986, 42
U.S.C.ss.11001 et seq., ISRA; the New Jersey Spill Compensation and Control Act,
N.J.S.A. 58:10A-23.11, et seq. (Spill Act); the New Jersey Water Pollution
Control Act, N.J.S.A. 58: 10A-1 et seq.; the New Jersey Air Pollution Control
Act, N.J.S.A. 26:2C-1, et seq. as in effect and amended, and all other
applicable federal, state, municipal, county, local, Canadian, provincial and
other foreign laws and ordinances, and the rules and regulations promulgated
thereunder, and any applicable provisions of common law and civil law providing
for any remedy or right of recovery or right of injunctive relief with respect
to Environmental Matters, as these laws, ordinances, rules and regulations were
in the past or will be prior to the Effective Time in effect.
"Environmental Matters" means all matters, conditions, liabilities,
obligations, damages, losses, claims, requirements, prohibitions, and
restrictions arising out of or relating to the Environment, human health,
safety, or sanitation, or the production, storage, handling, use, emission,
release, discharge, dispersal, or disposal of any substance, product or waste
which is hazardous or toxic or which is regulated by any Environmental Authority
whatsoever.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exon-Xxxxxx Provision" means the Exon-Xxxxxx amendment to the Omnibus
Trade and Competitiveness Act of 1988 as amended by the Defense Authorization
Act for Fiscal Year 1993, as amended.
"GAAP" means generally accepted accounting principles as in effect in the
United States on the date of this Agreement.
"Governmental Authority" means any national, federal, state, provincial,
county, municipal or local government, foreign or domestic, or the government of
any political subdivision of any of the foregoing, or any entity, authority,
agency, ministry or other similar body exercising executive, legislative,
judicial, regulatory or administrative authority or functions of or pertaining
to government, including any authority or other quasi-governmental entity
established to perform any of such functions.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as
amended.
"Indemnitees" has the meaning ascribed to such term in Section 7.5.
"ISRA" has the meaning ascribed to such term in Section 8.3.
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"ISRA Clearance" has the meaning ascribed to such term in Section 8.3.
"Loan Obligor" has the meaning ascribed to such term in Section 7.12.
"Loan Reduction Amounts" has the meaning ascribed to such term in Section
7.12.
"Loans" has the meaning ascribed to such term in Section 7.12.
"Material Adverse Effect" means a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries, taken as
a whole, and shall exclude changes (a) that generally affect the industries and
markets in which the Company and its Subsidiaries operate, or resulting from
general political, economic or market conditions (including changes in interest
rates), changes in accounting principles or changes in laws, regulations or
regulatory policies of general applicability (or interpretations thereof); and
(b) resulting from or arising out of adverse changes in relationships with
customers, suppliers and employees resulting from the proposed acquisition of
the Company by the Purchaser and any of the transactions contemplated hereby.
"Merger" has the meaning ascribed to such term in Section 2.1.
"Merger Consideration" means $87,641,003.26 in cash.
"Merger Sub" has the meaning ascribed to such term in the heading of this
Agreement.
"NJDEP" has the meaning ascribed to such term in Section 8.3.
"Payment Fund" has the meaning ascribed to such term in Section 2.7.
"Pension Plan" has the meaning ascribed to such term in Section 4.10.
"Permitted Investments" has the meaning ascribed to such term in Section
2.7.
"Per Share Class A Merger Consideration" has the meaning ascribed to such
term in Section 2.6.
"Per Share Class B Merger Consideration" has the meaning ascribed to such
term in Section 2.6.
"Per Share Common Merger Consideration" means the amount determined by
dividing (A) the Merger Consideration by (B) the sum of (i) the total number of
the Common Shares issued and outstanding as of the Effective Time, (ii) the
total number of Common Shares which would be issuable upon conversion of the
Class A Shares, (iii) the total number of Common Shares which would be issuable
upon conversion of the Class B Shares, (iv) the total number of
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Common Shares that are issuable upon exercise of the Company Stock Options, and
(v) the total number of Common Shares that are issuable upon exercise of the
Warrants.
"Per Share Merger Consideration" means, as applicable, the Per Share Common
Merger Consideration, the Per Share Class A Merger Consideration or the Per
Share Class B Merger Consideration.
"Person" means an individual, partnership, corporation, limited liability
company, joint stock company, unincorporated organization or association, trust
or joint venture, or a governmental agency or political subdivision thereof.
"Proxy Statement" has the meaning ascribed to such term in Section 4.24.
"Proprietary Rights" has the meaning ascribed to such term in Section 4.12.
"Purchaser" has the meaning ascribed to such term in the heading of this
Agreement.
"Purchaser Benefit Plans" has the meaning ascribed to such term in Section
7.8.
"Regulated Substances" means pollutants, contaminants, hazardous or toxic
substances, compounds or related materials or chemicals, hazardous materials,
hazardous waste, flammable explosives, radon, radioactive materials, asbestos,
urea formaldehyde foam insulation, lead paint, polychlorinated biphenyls,
petroleum and petroleum products (including, but not limited to, waste petroleum
and petroleum products) as regulated under applicable Environmental Laws.
"Rights Agreement" means the Stockholder Protection Rights Agreement, dated
as of August 26, 1998, between the Company and American Stock Transfer and Trust
Company, as rights agent.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning ascribed to such term in Section 4.6.
"Shares" means the Common Shares, the Class A Shares and the Class B
Shares.
"Stock Option Plan" means the Company's Amended and Restated 1997 Stock
Compensation Program.
"Stockholders Meeting" has the meaning ascribed to such term in Section
4.24.
"Subsidiary" has the meaning ascribed to such term in Rule 1-02 of SEC
Regulation S-X and refers only to a Subsidiary of the Company.
"Superior Proposal" has the meaning ascribed to such term in Section 7.3.
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"Surviving Corporation" has the meaning ascribed to such term in Section
2.1.
"Tail Policy" has the meaning ascribed to such term in Section 7.5(b).
"Taxes" shall include any of the following imposed by or payable to any
Governmental Authority: any income, gross receipts, license, payroll,
employment, excise, severance, stamp, business, occupation, premium, windfall
profits, environmental (including taxes under Section 59A of the Code), capital
stock, franchise, profits, withholding, employer health, payroll, employment,
health, social services, education and social security (or similar),
unemployment, disability, real property, personal property, capital, sales, use,
transfer, land transfer, registration, goods and services, harmonized sales or
value added tax, any alternative or add-on minimum tax, any surtax, any
estimated tax, and any levy, impost, duty, assessment or charge or withholding,
all customs duties and import and export taxes, all license and other fees,
premiums and all employment insurance, health insurance and Canada, Quebec and
other government pension plan premiums or contributions, and any other taxes, in
each case including any interest, penalties, fines, additions to tax or other
additional amounts imposed in respect thereof or addition thereto.
"Tax Return" means any return, declaration, report, claim for refund,
information return, election, notice, filing or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof, to be filed (whether on a mandatory or elective basis) with any
Governmental Authority.
"Third Party" has the meaning ascribed to such term in Section 4.24.
"Warrants" means outstanding warrants to purchase Common Shares.
1.2 Interpretation. Unless otherwise indicated to the contrary herein by
the context or use thereof: (i) the words, "herein," "hereto," "hereof" and
words of similar import refer to this Agreement as a whole and not to any
particular Section or paragraph hereof; (ii) the word "including" means
"including, but not limited to"; (iii) masculine gender shall also include the
feminine and neutral genders, and vice versa; (iv) words importing the singular
shall also include the plural, and vice versa; (v) the word "and" includes the
word "or"; and (vi) the word "or" is disjunctive but not necessarily exclusive.
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.
Statements made to the knowledge of the Company, and statements made regarding
the awareness of the Company, shall refer to the actual knowledge and actual
awareness of the individuals identified in Section 1.2 of the Disclosure Letter
or those individuals who are successors to the positions listed thereon.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions of this
Agreement, at the Effective Time, Merger Sub shall be merged with and into the
Company (the "Merger"), the
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separate existence of Merger Sub (except as may be continued by operation of
law) shall thereupon cease, and the Company shall continue as the surviving
corporation (the "Surviving Corporation").
2.2 Effect of the Merger. The Merger shall have the effects specified in
the DGCL.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver of the conditions hereinafter set forth, the parties
hereto will cause the Merger to be consummated by filing a certificate of merger
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
"Certificate of Merger"). The time of the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware (or such later time as
specified in the Certificate of Merger as the Merger is to be effective) is
referred to herein as the "Effective Time."
2.4 Certificate of Incorporation; By Laws. The Certificate of Incorporation
and By-Laws of Merger Sub, as in effect immediately prior to the Effective Time,
shall be the Certificate of Incorporation and By-Laws of the Surviving
Corporation, and thereafter shall continue to be its Certificate of
Incorporation and By-Laws until amended as provided therein and under the DGCL.
2.5 Directors and Officers of Surviving Corporation.
(a) The directors of Merger Sub shall be the initial directors of the
Surviving Corporation and shall hold office from the Effective Time until their
respective successors are duly elected or appointed and qualify in the manner
provided in the Certificate of Incorporation and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
(b) The officers of Merger Sub at the Effective Time shall be the initial
officers of the Surviving Corporation and shall hold office from the Effective
Time until their respective successors are duly elected or appointed and qualify
in the manner provided in the Certificate of Incorporation and By-Laws of the
Surviving Corporation, or as otherwise provided by law.
2.6 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, Merger Sub, the Company
or the holder of any Shares:
(a) Each Common Share issued and outstanding immediately prior to the
Effective Time (other than Common Shares to be canceled pursuant to Section
2.6(e) hereof), shall be canceled and extinguished and be converted into and
represent the right to receive from Purchaser an amount equal to the Per Share
Common Merger Consideration in cash, without interest.
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(b) Each Class A Share issued and outstanding immediately prior to the
Effective Time (other than Class A Shares to be canceled pursuant to Section
2.6(e) hereof) shall be canceled and extinguished and converted into and
represent the right to receive from Purchaser an amount (the "Per Share Class A
Merger Consideration") equal to (i) the Per Share Common Merger Consideration in
cash, without interest, multiplied by (ii) the number of, or fraction of one,
Common Share(s) into which a Class A Share would be convertible at the Effective
Time.
(c) Each Class B Share issued and outstanding immediately prior to the
Effective Time (other than Class B Shares to be canceled pursuant to Section
2.6(e) hereof) shall be canceled and extinguished and be converted into and
represent the right to receive from Purchaser an amount (the "Per Share Class B
Merger Consideration") equal to (i) the Per Share Common Merger Consideration in
cash, without interest, multiplied by (ii) the number of, or fraction of one,
Common Share(s) into which a Class B Share would be convertible at the Effective
Time.
(d) All Shares, by virtue of the Merger and without any action on the part
of the holders of the Merger, shall no longer be outstanding and shall be
canceled and retired and shall cease to exist, and each holder of a Certificate
representing any such Shares shall thereafter cease to have any rights with
respect to such Shares, except the right to receive the applicable Per Share
Merger Consideration for each such Share upon the surrender of such Certificate
in accordance with Section 2.8.
(e) Each Share issued and outstanding immediately prior to the Effective
Time that is (i) held in the treasury of the Company or (ii) owned by Purchaser
or any direct or indirect subsidiary of Purchaser (including Merger Sub) shall
be canceled and retired and no payment shall be made with respect thereto.
(f) Each share of common stock, $0.01 par value per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and non-assessable
share of common stock, $0.01 par value per share, of the Surviving Corporation.
(g) Notwithstanding anything in this Agreement to the contrary, any Shares
that are issued and outstanding as of the Effective Time and that are held by a
holder who has not voted in favor of the Merger or consented thereto in writing
and who has properly exercised such holder's appraisal rights (the "Dissenting
Shares") under the DGCL, shall not be converted into the right to receive the
applicable Per Share Merger Consideration, unless and until such holder shall
have failed to perfect, or shall have effectively withdrawn or lost, such
holder's right to dissent from the Merger under the DGCL and to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to and subject to the requirements of the DGCL. If, after the
Effective Time, any such holder shall have failed to perfect or shall have
effectively withdrawn or lost such right, each of such holder's Shares shall
thereupon be deemed to have been converted into and to have become, as of the
Effective Time, the right to receive, without interest or dividends thereon, the
applicable Per Share Merger
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Consideration. The Company shall give Merger Sub and Purchaser (i) prompt notice
of any notices or demands for appraisal or payment for Shares received by the
Company and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demands or notices. The Company shall
not, without prior written consent of Merger Sub and Purchaser, make any
payments with respect to, or settle, offer to settle or otherwise negotiate,
with respect to any such demands. Dissenting Shares, if any, after payments of
fair value in respect thereto have been made to the holders thereof pursuant to
the DGCL, shall be canceled.
(h) Immediately prior to the Effective Time, each outstanding option to
purchase Common Shares (each, a "Company Stock Option"), whether or not then
exercisable or vested, shall become fully exercisable and vested. At the
Effective Time (i) each Company Stock Option which is then outstanding shall be
canceled and (ii) in consideration of such cancellation, and except to the
extent that Purchaser and the holder of any such Company Stock Option shall
otherwise agree, at the Effective Time, the Purchaser shall pay to such holders
of Company Stock Options an amount in respect thereof equal to the product of
(x) the excess of the Per Share Common Consideration over the exercise price
thereof, if any, and (y) the number of Common Shares subject thereto (such
payment to be net of taxes required by law to be withheld with respect thereto).
No payment shall be made with respect to any Company Stock Option having a per
share exercise price, as in effect at the Effective Time, equal to or greater
than the Per Share Common Merger Consideration.
(i) At the Effective Time, by virtue of the Merger and without any action
on the part of the holders of Warrants, each Warrant that is unexpired and
unexercised immediately prior thereto shall thereafter constitute, upon
conversion by the holder thereof, the right to receive from Purchaser an amount
in respect thereof, pursuant to the terms and conditions thereof, equal to the
product of (x) the Per Share Common Merger Consideration less the per share
conversion price of the Warrant and (y) the number of Common Shares subject
thereto. No payment shall be made with respect to any Warrant having a per share
exercise price, as in effect at the Effective Time, equal to or greater than the
Per Share Merger Consideration. Prior to the Effective Time, the Company and
Purchaser shall take all such actions as may be necessary (including the giving
of notice to the holders of the Warrants) to make the adjustments contemplated
by this subsection (i) of this Section 2.6.
2.7 Payment Fund. Prior to the Effective Time, Purchaser shall designate a
bank or trust company reasonably acceptable to the Company to act as paying
agent in the Merger (the "Agent"). All fees and expenses of the Agent shall be
borne by the Surviving Corporation. Immediately prior to the Effective Time,
Purchaser shall deposit or shall cause to be deposited with the Agent in a
separate fund established for the benefit of the holders of Shares, an amount
equal to those amounts to be paid in accordance with this Article II (other than
payments to the Company, any subsidiary of the Company, Purchaser, Merger Sub or
any other subsidiary of Purchaser) less any Loan Reduction Amounts (the "Payment
Fund"), in immediately available funds. The Agent shall, pursuant to irrevocable
instructions, pay the Merger Consideration out of the Payment Fund.
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The Agent shall invest portions of the Payment Fund as Purchaser directs in
obligations of or guaranteed by the United States of America, in commercial
paper obligations receiving the highest investment grade rating from both
Xxxxx'x Investors Services, Inc. and Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or banker's acceptances of
commercial banks with capital exceeding $1,000,000,000 (collectively, "Permitted
Investments"); provided, however, that the maturities of Permitted Investments
shall be such as to permit the Agent to make prompt payment to former holders of
Shares entitled thereto as contemplated by this Article II. Purchaser shall
cause the Payment Fund to be promptly replenished to the extent of any losses
incurred as a result of Permitted Investments. All earnings of Permitted
Investments shall be paid to Purchaser. If, for any reason (including losses
incurred as a result of Permitted Investments), the Payment Fund is inadequate
to pay the amounts to which holders of Shares shall be entitled under this
Article II, Purchaser shall in any event be liable for payment thereof. The
Payment Fund shall not be used for any purpose except as expressly provided in
this Agreement.
2.8 Payment of Cash for Shares. The Purchaser agrees that promptly after
the Effective Time it shall distribute to each holder of a Certificate a form of
letter of transmittal and instructions (in the form and substance of a letter of
transmittal and instructions to be approved by the Company prior to the
Effective Time, such approval not to be unreasonably withheld) for use in
effecting the surrender of the Certificates. Each such holder shall be entitled
upon surrender of one or more Certificates, together with a letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, to receive in exchange therefor a check representing the amount to
which such holder is entitled in respect of the canceled Shares represented by
such Certificates after giving effect to any required tax withholding. Until so
surrendered and exchanged, each such Certificate shall, after the Effective
Time, be deemed to represent only the right to receive such amount. If payment
is to be made to a Person other than the Person in whose name a surrendered
Certificate is registered, it shall be a condition to such payment that the
Certificate so surrendered shall be endorsed or shall be otherwise in proper
form for transfer, with the registered owner's signature guaranteed by a firm
which is a member of a registered national securities exchange or of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States, 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 Purchaser or the Agent that such tax either has been paid or is
not payable. Promptly following the date which is one year after the Effective
Time, the Agent shall deliver to the Surviving Corporation all cash,
certificates and other documents in its possession relating to the transactions
contemplated hereby, and the Agent's duties shall terminate. Thereafter, each
holder of a certificate representing Shares (other than certificates
representing Dissenting Shares and certificates representing Shares held
directly or indirectly by Purchaser or in the treasury of the Company) may
surrender such certificate to the Surviving Corporation and (subject to any
applicable abandoned property, escheat or similar law) receive in consideration
therefor the applicable Per Share Merger Consideration relating thereto, without
any interest thereon. None of the Company, Purchaser, the Surviving Corporation
or the Agent shall be liable to any holder of Shares for any cash delivered to a
public official pursuant to any abandoned property, escheat or similar law,
rule, regulation, statute,
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order, judgment or decree. From and after the Effective Time, the holders of
Certificates shall cease to have any rights with respect to the Shares
represented thereby except as otherwise provided herein or by law.
2.9 Lost, Stolen or Destroyed Certificates. In the event any certificates
representing shares of Company Stock shall have been lost, stolen or destroyed,
the Agent shall make such payment in exchange for such lost, stolen or destroyed
certificates upon the making of an affidavit of that fact by the holder thereof;
provided, however, that Purchaser may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Purchaser, the Surviving
Corporation, or the Agent with respect to the certificates alleged to have been
lost, stolen or destroyed.
2.10 Taking of Necessary Action; Further Action. Each of Purchaser, Merger
Sub and the Company will take all such reasonable and lawful actions as may be
necessary or appropriate in order to effectuate the Merger and the other
transactions contemplated by this Agreement in accordance with this Agreement as
promptly as possible, unless, in the case of action to be taken by the Company,
the Company's Board of Directors determines, in good faith and following
consultation with its outside counsel as to legal matters, that its fiduciary
duties require that it not take such action. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purposes of
this Agreement and to vest the Surviving Corporation with full rights, title and
possession to all assets, properties, rights, privileges, immunities and
franchises of either the Company or Merger Sub, the officers and directors of
each such corporation are fully authorized in the name of such corporation or
otherwise to take, and shall take, all such lawful and necessary action.
2.11 Closing. The closing of the Merger (the "Closing") shall take place at
the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, at 9:00 a.m., local time on the second (2nd) Business Day
after the satisfaction or waiver of the conditions set forth in Article VIII, or
at such other place and time as the parties may mutually agree.
2.12 Transfer of Shares After Effective Time. At the Effective Time, the
stock transfer books of the Company shall be closed with respect to the Shares
outstanding immediately prior to the Effective Time. There shall be no further
registration of transfers on the stock transfer books of the Company of Shares
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this Article II.
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ARTICLE III
STANDARDS FOR REPRESENTATIONS AND WARRANTIES OF THE
COMPANY; DISCLOSURE
3.1 Standards. EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE IV, THE COMPANY
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE WHATSOEVER AND
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARISING BY COURSE
OF DEALING OR PERFORMANCE, CUSTOM OR USAGE IN THE TRADE OR OTHERWISE.
3.2 Disclosure Letter.
(a) On or prior to the date hereof, the Company has delivered to Purchaser
a disclosure letter (the "Disclosure Letter"), setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Article IV, as applicable; provided, that the mere inclusion of an item in the
Disclosure Letter as an exception to a representation or warranty shall not be
deemed an admission by the Company that such item represents a material
exception or fact, event or circumstance or that such item has resulted or would
result in a Material Adverse Effect.
(b) At any time prior to the tenth (10th) day before the Closing Date, the
Company shall have the right by notice to Purchaser in the manner provided in
Section 10.2 to update or supplement the Disclosure Letter without the consent
or approval of Purchaser; provided, however, that if the disclosure in the
updated Disclosure Letter represents a change from the matters previously
disclosed therein and such change results in the representation or warranty (A)
if qualified by materiality, not to be true and correct or (B) if not qualified
by materiality, not to be true and correct in all material respects, Purchaser
shall have the right to terminate this Agreement by delivering, within ten (10)
days after receipt of such updated or supplemented Disclosure Letter, written
notice of its election to terminate.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser and Merger Sub as follows:
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the power and authority (corporate and other) to own its
properties and to carry on its business as it is now being conducted. The
Company is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified would not have a Material Adverse
Effect.
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4.2 Subsidiaries. Each of the Company's Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the power and authority (corporate and
other) to own its properties and to carry on its business as it is now being
conducted. Each such Subsidiary is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties, owned or leased, or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect. All of the outstanding shares of capital stock
of each of the Subsidiaries are validly issued, fully paid and nonassessable and
are owned by the Company or by a wholly owned Subsidiary of the Company, free
and clear of all liens, claims, or encumbrances, and there are no proxies
outstanding with respect to such shares. Section 4.2 of the Disclosure Letter
sets forth a true and complete list of the ownership interests of the Company in
the Subsidiaries and in any other corporation, partnership, joint venture or
other business association or entity.
4.3 Capitalization. As of the date hereof, the authorized capital stock of
the Company consists of 20,000,000 Common Shares, 1,000,000 shares of
Convertible Preferred Stock, $1.25 par value per share, and 4,000,000 shares of
Convertible Preferred Stock, $2.00 par value per share, of which 270,000 shares
have been designated as Class A Shares and 730,000 shares have been designated
as Class B Shares. As of the date hereof, (i) 7,872,006 Common Shares were
outstanding, all of which were validly issued, fully paid and nonassessable,
(ii) no shares of Convertible Preferred Stock were outstanding, (iii) 29,168
Class A Shares were outstanding, all of which were validly issued, fully paid
and nonassessable, (iv) 12,500 Class B Shares were outstanding, all of which
were validly issued, fully paid and nonassessable, (v) 973,842 Common Shares
were held in the treasury of the Company, (vi) 893,150 Common Shares were
reserved for issuance pursuant to Company Stock Options, and (vii) 125,000
Common Shares were reserved for issuance upon the conversion of the Warrants.
Section 4.3 of the Disclosure Letter sets forth a true and complete listing of
all outstanding Company Stock Options, the number of Company Stock Options held
by each Person and the exercise prices of such Company Stock Options. Pursuant
to the Rights Agreement, the Company has issued to the holders of its Common
Stock rights to purchase shares of capital stock of the Company. Except as set
forth above and except as set forth in Section 4.3 of the Disclosure Letter,
there are not now, and at the Effective Time there will not be, any shares of
capital stock or other equity securities of the Company issued or outstanding or
any options, warrants or other rights, agreements, arrangements or commitments
obligating the Company or any of its Subsidiaries to issue or sell any shares of
capital stock of the Company or of any Subsidiary. Except as set forth in
Section 4.3 of the Disclosure Letter or as contemplated by this Agreement, there
are no outstanding contracts of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any capital stock or other equity securities of the
Company or any Subsidiary.
4.4 Authority Relative to this Agreement. The Company has the power and
authority (corporate and other) to enter into this Agreement and to perform its
obligations hereunder. 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 the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement and the transactions contemplated hereby, except for
the
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approval of the Merger by the Company's stockholders. This Agreement has been
duly executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally, and subject to general principles of
equity, whether applied in a court of law or equity. Except as set forth in
Section 4.4 of the Disclosure Letter, the execution and delivery of this
Agreement by the Company does not, and the performance of this Agreement by the
Company will not (i) conflict with or violate the Company's or its Subsidiaries
respective Certificate or Articles of Incorporation, Memorandum of Association,
Code of Regulations or By-Laws (true, correct and complete copies of the
Company's Certificate of Incorporation and By-Laws, each as amended through the
date hereof, are annexed to Section 4.4A of the Disclosure Letter); (ii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default), or impair the Company's or any
Subsidiary's rights or alter the rights or obligations of any third party under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on
(including a right to purchase) any of the properties or assets of the Company
or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract
(other than purchase orders for components used in the manufacture of the
Company's products in the ordinary course of business), 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 any of their respective properties is bound or affected, except where any
such breach, violation, right of termination, amendment, acceleration,
cancellation, lien or encumbrance results in damages of less than $150,000 under
any individual contract or $500,000 in the aggregate for all contracts; or (iii)
violate any law, regulation, order, judgment or decree, applicable to the
Company or any Subsidiary or by which any of their respective properties is
bound or affected, or in respect of which a right of termination or acceleration
or a loss of a material benefit or any encumbrance on any of its assets would be
created or suffered by its execution and performance of this Agreement, except
where such violation, right of termination, acceleration or encumbrance,
individually or in the aggregate, would not have a Material Adverse Effect.
Except as set forth in Section 4.4 of the Disclosure Letter, the execution and
delivery by the Company of this Agreement and consummation of the Merger by the
Company will not require the consent or approval of or registration or filing
with any Governmental Authority or other Person, other than (i) approval of the
Company's stockholders, (ii) applicable requirements, if any, of the Exchange
Act, state "blue sky" laws, the HSR Act and the Investment Canada Act, (iii)
Purchaser's filing with the CFIUS pursuant to the Exon-Xxxxxx Provision all
requisite documents and notifications (if any) in connection with this Agreement
and the transactions contemplated hereby, (iii) filing and recordation of the
Certificate of Merger, (iv) ISRA Clearance (as defined in Section 8.3(f)), and
(v) where failure to obtain such consents or approvals or to make such
registration or filing would not have individually or in the aggregate a
Material Adverse Effect on or prevent or materially delay the Company from
performing its obligations under this Agreement.
4.5 Financial Statements. The audited consolidated balance sheet of the
Company as of December 31, 2000 (the "Company Balance Sheet") together with the
consolidated income statements and statements of cash flows for the 12-month
period then ended have been prepared in accordance with GAAP and fairly present,
in all material respects, the consolidated financial
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position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations, changes in
stockholders' equity and statements of cash flow for the periods then ended.
4.6 SEC Filings. The Company has filed and made available to Purchaser or
its legal counsel all forms, reports and documents required to be filed by the
Company with the SEC since January 1, 1998 (collectively, the "SEC Documents").
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder and applicable to such SEC Documents, and none
of the SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements of the Company and
its Subsidiaries included in the SEC Documents previously provided to Purchaser
comply as to form in all material respects with applicable accounting
requirements and published rules of the SEC with respect thereto, have been
prepared in accordance with GAAP (except as may be indicated in the notes
thereto and except, in the case of unaudited statements, as permitted by Form
10-Q and Regulation S-X of the SEC) and fairly present, in all material
respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations, changes in stockholders' equity and statements of cash flow
for the periods then ended, subject, in the case of the unaudited consolidated
interim financial statements, to normal year-end adjustments and any other
adjustments described therein.
4.7 Absence of Certain Changes or Events. Since the date of the Company
Balance Sheet, the Company and its Subsidiaries have conducted their businesses
only in the ordinary course in a manner consistent with past practice (except as
disclosed in the Company SEC Reports filed and publicly available prior to the
date of this Agreement), and since such date there has not been any Material
Adverse Effect or any facts or circumstances that could reasonably be expected
to result in a Material Adverse Effect.
4.8 Absence of Undisclosed Liabilities.Except as disclosed in Section 4.8
of the Disclosure Letter or in the SEC Documents, or which arise out of or
relate to the transactions expressly contemplated by this Agreement, the Company
and its Subsidiaries do not have any liabilities in excess of $250,000 in the
aggregate, either accrued or contingent (whether or not required to be reflected
in financial statements in accordance with GAAP), whether due or to become due,
other than normal or recurring liabilities incurred since December 31, 2000 in
the ordinary course of business consistent with past practices.
4.9 Litigation and Liabilities. Section 4.9 of the Disclosure Letter sets
forth a listing of all actions, suits or proceedings pending against the Company
or any of the Subsidiaries. Except as disclosed in Section 4.9 of the Disclosure
Letter or SEC Documents, there are no actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against the Company or any of the
Subsidiaries or any judgment decree, injunction, rule or order of any
governmental authority or arbitrator outstanding against the Company or any of
its Subsidiaries
-16-
that are reasonably likely, in the aggregate, to have a Material Adverse Effect
or that would be required to be disclosed in an Annual Report on Form 10-K of
the Company.
4.10 Employee Benefits.
(a) True and complete copies of all documents comprising Benefit Plans
together with any trust agreements or documents comprising summary plan
descriptions or other participant summaries relating to such Benefit Plans, and
all annual reports required to be filed on Form 5500 series during the three
years preceding the Effective Time for such Benefit Plans, have been provided to
Purchaser. For purposes of this Agreement, the term "Benefit Plan" includes any
plan, contract or arrangement (regardless of whether funded or unfunded, or
foreign or domestic) which is sponsored by the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries makes
contributions or which covers any employee of the Company or any Subsidiary in
his or her capacity as an employee or to which the Company or any Subsidiary has
any obligation with respect to any current or former employee, and which is (i)
an "Employee Benefit Plan" within the meaning of Section 3(3) of ERISA, (ii) a
severance contract with (an) employee(s) or any severance plan applicable to
employees, or (iii) a stock option plan or any plan of deferred compensation
including, without limitation in the case of (i), (ii) or (iii) any such plan,
benefit or obligation arising under an employment agreement.
(b) All Benefit Plans are valid and binding and in full force and effect
and there are no material defaults or defects thereunder. Each Benefit Plan
complies currently, and has complied in the past, in all respects in form and
operation, with its own provisions and all applicable provisions of ERISA, the
Code, and other applicable law, except for failures to comply which would not
have a Material Adverse Effect. Except as set forth in Section 4.10 the
Disclosure Letter, the Company does not sponsor any "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA ("Pension Plan") which is
intended to be qualified under Section 401(a) of the Code or any retiree health
and life benefits under any Benefit Plan (excluding (i) continuation coverage
required under the Consolidated Omnibus Budget Reconciliation Act of 1985 and
(ii) to the extent not material, any written arrangements for post-termination
of employment medical or life coverage between the Company and any individual).
Any such employee pension benefit plan intended to qualify under Section 401(a)
of the Code has been determined by the IRS to qualify in all respects with the
requirements for which the remedial amendment period has not expired as of the
Effective Time or is a prototype plan for which the sponsor of such plan has
received an opinion letter from the IRS as to such plan's tax-qualified status
with respect to all requirements for which the remedial amendment period has not
expired as of the Effective Time. Neither the Company nor any of the
Subsidiaries has engaged in a transaction with respect to any Benefit Plan that
is reasonably likely to subject the Company or any of the Subsidiaries to a tax
or penalty imposed by either Section 4975, 4980B or 4980D of the Code or Section
502(i), 502(c), 502(1) and 601 through 608 of ERISA or has failed to engage in
any transaction necessary to avoid any such tax or penalty.
(c) No Benefit Plan subject to Title IV of ERISA (including any
"multiemployer plan" as defined in ERISA) has been sponsored or contributed to
by the Company or any Subsidiary nor has the Company or any Subsidiary had an
obligation to
-17-
contribute to any such Benefit Plan during the six year period immediately
preceding the date of this Agreement.
(d) All contributions required to be made, and claims to be paid, under the
terms of any Benefit Plan have been timely made or reserves therefor on the
balance sheet of the Company have been established, which reserves are adequate
in all material respects.
4.11 Taxes.
(a) The Company and each of its Subsidiaries: (i) have duly filed all Tax
Returns required to be filed by them on or before the date hereof (taking into
account any lawful extensions) and such Tax Returns are true, correct and
complete in all material respects; (ii) have duly paid all Taxes shown to be due
on such Tax Returns and have adequate reserves on their financial statements for
any Taxes in excess of the amounts so paid; and (iii) have not requested or
obtained any extension of time within which to file any Tax Returns in respect
of any taxable year which have not since been filed.
(b) Except as set forth in Section 4.11 of the Disclosure Letter or the SEC
Documents: (i) neither the Company nor any of its Subsidiaries is the subject of
any currently ongoing Tax audit; (ii) no assessments or additional Taxes have
been proposed or threatened against the Company or any of its Subsidiaries and
(iii) neither the Company nor any of its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency. No Taxing Authority has advised the Company,
formally or informally, of such Taxing Authority's intention to assess any
additional Taxes against the Company for any period for which the Company has
filed Tax Returns.
(c) There are no liens with respect to Taxes upon any of the properties or
assets, real or personal, tangible or intangible, of the Company or any of its
Subsidiaries, other than liens for Taxes not yet due.
(d) Neither the Company nor any of its Subsidiaries has filed an election
under Section 341(f) of the Code to be treated as a consenting corporation. The
Company is not a party to any agreement, contract, arrangement or plan that
would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Code Section 280G as a result of the
transactions contemplated by this Agreement. The Company is not a United States
real property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii). The
Company has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Code Section 6662. The Company is not a party to any
Tax allocation, Tax sharing, Tax indemnification or similar agreement. The
Company is not required to make any adjustments to income under Section 481 of
the Code for any period ending after the Closing Date or to otherwise include in
Taxable income any amount that is attributable to a transaction occurring in a
period ending on or prior to the Closing Date.
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(e) Neither the Company nor any of its Subsidiaries has any material
liability for any Taxes of any Person other than any of the Company and its
Subsidiaries under Treas. Reg.ss.1.1502-6 or any comparable provision of state,
local or foreign law, as a transferee or successor, by contract, or otherwise.
(f) The Company and each of its Subsidiaries have in all material respects
withheld and duly paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party.
(g) Except as set forth in Section 4.11 of the Disclosure Letter, neither
the Company nor any Subsidiary is treated for federal income tax purposes as a
partner of any partnership.
4.12 Proprietary Rights.
(a) The Company and its Subsidiaries own and possess all right, title and
interest in the patents, patent registrations, patent applications, trademarks,
service marks, trademark and service xxxx registrations and applications
therefor, copyrights, copyright registrations, copyrights applications, trade
names, corporate names, technology, inventions, computer software, data and
documentation (including electronic media), product drawings, trade secrets,
know-how, customer lists, processes, other intellectual property and proprietary
information or rights used in the business of the Company and its Subsidiaries
as presently conducted, and permits, licenses or other agreements to or from
third parties regarding the foregoing (the "Proprietary Rights"). Section 4.12
of the Disclosure Letter sets forth a listing of all patent registrations,
trademark and service xxxx registrations, copyright registrations and
applications therefor and all permits, licenses and other agreements, included
in the Proprietary Rights.
(b) Except as disclosed in Section 4.12 of the Disclosure Letter, neither
the Company nor any of its Subsidiaries is, or will be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in breach of any license, sublicense or other agreement
relating to the Proprietary Rights or any license, sublicense or other agreement
pursuant to which the Company or any of its Subsidiaries is authorized to use
any third party patents, trademarks or copyrights, including software, which are
incorporated in or form a part of any product of the Company or any Subsidiary,
except where such breach, individually or in the aggregate, would not have a
Material Adverse Effect
(c) Except as disclosed in Section 4.12 of the Disclosure Letter, (i) all
patents, registered trademarks, service marks and copyrights which are held by
the Company or any Subsidiary, and which are material to the business of the
Company and the Subsidiaries, taken as a whole, are to the best knowledge of the
Company valid and subsisting; (ii) the Company is not subject to any pending
suit, action or proceeding which involves a claim of infringement of any
patents, trademarks, service marks, copyrights or violation of any trade secret
or other proprietary right of any third party; (iii) to the best knowledge of
the Company the manufacturing,
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marketing, licensing or sale of the Company's products does not infringe any
patent, trademark, service xxxx, copyright, trade secret or other proprietary
right of any third party known to the Company; and (iv) to the knowledge of the
Company, no third party is infringing upon any patent, trademark, service xxxx,
copyright, trade secret or other proprietary right of the Company.
4.13 Licenses and Permits; Governmental Notices.
(a) The Company and the Subsidiaries hold all licenses and permits
necessary to conduct their respective businesses and to own and operate their
respective assets and such licenses and permits are valid and in full force and
effect, except where the failure to obtain or maintain such licenses or permits
would not, individually or in the aggregate, have a Material Adverse Effect. No
defaults or violations exist or have been recorded in respect of any license or
permit of the Company and the Subsidiaries other than defaults or violations
which would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. Except as disclosed in Section 4.13 of the
Disclosure Letter, no proceeding is pending or, to the knowledge of the Company,
threatened looking toward the revocation, limitation or non-renewal of any such
license or permit, except for pending or threatened proceedings that would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Since September 30, 2000, except as set forth in the SEC Documents and
Section 4.13 of the Disclosure Letter, the Company has not received any written
notice regarding, and has not been made a party to, any proceeding which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect brought by any Governmental Authority alleging that (i) the
Company is, or may be in, violation of any law, governmental regulation or
order, (ii) the Company must change any of its business practices to remain in
compliance with any law, governmental regulation or order, (iii) the Company has
failed to obtain any license or permit required for the conduct of its business,
or (iv) the Company is in default under or violation of any license or permit.
4.14 Compliance with Laws. Except as set forth in Section 4.14 of the
Disclosure Letter, the Company and the Subsidiaries have complied in a timely
manner with all laws and governmental regulations and orders relating to any of
the property owned, leased or used by them, or applicable to their business
(excluding Environmental Laws, ERISA and other employee and employee benefit
laws, and tax laws) except where the failure to so comply would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.15 Insurance. Section 4.15 of the Disclosure Letter sets forth a listing
of all insurance policies maintained by the Company and its Subsidiaries. All
such policies are in full force and effect and all premiums (excluding
retroactive adjustments) due and payable in respect of such policies have been
paid.
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4.16 Contracts.
(a) Section 4.16 of the Disclosure Letter sets forth a list of all written
agreements of the Company or its Subsidiaries (other than contracts or leases
for the sale in the ordinary course of business of the Company's services or
products) that are currently in effect and that are (i) leases for real property
with annual base rental costs of at least $150,000 per year; (ii) personal
property leases, sales contracts and other agreements with respect to any
personal property of the Company or its Subsidiaries which provide for the
receipt or expenditure by the Company or its Subsidiaries, after the date of
this Agreement, of more than $250,000; (iii) contracts or commitments for
capital expenditures or acquisitions in excess of $250,000 for one project or
set of related projects; (iv) guarantees of obligations of Persons that are not
Affiliates of the Company or its Subsidiaries; (v) agreements (including
non-competition agreements) which restrict the kinds of businesses in which the
Company or its Subsidiaries may engage or the geographical area in which any of
them may conduct their business; (vi) indentures, mortgages, loan agreements or
other agreements relating to the borrowing of money by the Company involving an
amount in excess of $100,000; (vii) material licenses, agreements, assignments
or contracts (whether as licensor or licensee, assignor or assignee) relating to
any Proprietary Rights; (viii) brokerage or finder's agreements; (ix) joint
venture agreements or partnership agreements; (x) stock purchase agreements,
asset purchase agreements or other acquisition or divestiture agreements
executed within the last five years, in each case, involving an amount in excess
of $500,000; or (xi) related to employment, including without limitation the
payment of severance or bonuses, (all items listed in Section 4.16 of the
Disclosure Letter being hereinafter referred to as "Contracts").
(b) Each of the Contracts is valid and enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally, and subject to general principles of
equity, whether applied in a court of law or equity. The Company, and to the
knowledge of the Company each of the other parties thereto, are in compliance
with the provisions of each of the Contracts, except where such noncompliance
would neither give rise to a right of termination in such other parties nor
would result in the payment of damages by the Company in excess of $150,000
under any individual Contract or $500,000 in the aggregate for all Contracts,
the Company, and to the knowledge of the Company each of the other parties
thereto, is not in default thereunder, except where such default would neither
give rise to a right of termination in such other parties nor would result in
the payment of damages by the Company in excess of $150,000 under any individual
Contract or $500,000 in the aggregate for all Contracts; and no event has
occurred which would constitute a default thereunder, except where such event
would neither give rise to a right of termination in another party nor would
result in the payment of damages by the Company in excess of $150,000 under any
individual Contract or $500,000 in the aggregate for all Contracts.
(c) To the Company's knowledge, as of the date hereof none of the other
parties to any such Contracts has given written notice to the Company or a
Subsidiary that it intends to terminate or materially alter the provisions of
such Contracts either as a result of the transactions contemplated hereby or
otherwise.
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(d) Neither the Company nor any Subsidiary has received written notice that
it is in, nor has either the Company or a Subsidiary given written notice of,
any default or claimed, purported or alleged default, or facts that, with notice
or lapse of time, or both, would constitute a default (or give rise to a
termination right) on the part of any party in the performance of any obligation
to be performed under any of the Contracts, except for defaults that would
result in the payment of damages by the Company in an amount less than $150,000
under any individual Contract or $500,000 in the aggregate for all Contracts.
(e) True and complete copies of all written Contracts, including any
amendments thereto, have been delivered to Purchaser (other than those Contracts
and amendments that are included in the SEC Documents).
4.17 Labor Matters. There are no collective bargaining or other labor union
agreements to which the Company or any of its Subsidiaries is a party or by
which any of them is bound. To the knowledge of the Company, since September 30,
1999, neither the Company nor any of its Subsidiaries has encountered any labor
union organizing activity, or had any actual or threatened employee strikes,
work stoppages, slowdowns or lockouts.
4.18 Environmental Matters. (a) Except as set forth in Section 4.18 of the
Disclosure Letter or in the SEC Documents, the Company and its Subsidiaries have
complied in all material respects with all Environmental Laws.
(b) Neither the Company nor any of its Subsidiaries, nor any of their
respective officers, employees, representatives or agents, nor, to the knowledge
of the Company, any other person, has utilized, treated, stored, processed,
discharged, spilled or otherwise disposed of any Regulated Substances at any
real property or any other facility currently or formerly owned or leased by the
Company or any of its Subsidiaries, in violation of any Environmental Laws,
which violations may reasonably be expected to have a Material Adverse Effect.
(c) There are no past, pending or threatened Environmental Claims against
the Company or any of its Subsidiaries, and neither the Company nor any of its
Subsidiaries are aware of any circumstances which could reasonably be expected
to form the basis of any Environmental Claim against the Company.
(d) To the Company's knowledge, there are no (i) underground storage tanks,
active or abandoned, (ii) polychlorinated biphenyl-containing equipment, or
(iii) asbestos-containing material at any property currently or formerly owned
or leased by the Company or any of its Subsidiaries.
(e) There have been no environmental investigations, studies, audits, tests
or reviews or other analyses conducted by, on behalf of, or which are in the
possession of the Company or any of its Subsidiaries with respect to any
property currently or formerly owned or leased by the Company or any of its
Subsidiaries which have not been made available to Purchaser.
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4.19 Board Recommendation; Required Vote. The Board of Directors of the
Company, at a meeting duly called and held, has by unanimous vote of those
directors present (i) adopted a resolution approving this Agreement, and the
transactions contemplated hereby, and declaring the Agreement to be advisable,
and (ii) resolved to recommend that the holders of the Shares approve this
Agreement and the transactions contemplated herein, including the Merger. The
affirmative vote of holders of a majority of the outstanding Shares to approve
the Merger is the only vote of the holders of any class or series of Company
securities necessary to adopt the Agreement and approve the transactions
contemplated hereby.
4.20 Rights Agreement. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will trigger the
exercisability of any right under the Rights Agreement or otherwise affect any
rights or obligations under the Rights Agreement.
4.21 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of the Company, other than
arrangements with Xxxxxxx Xxxxx & Company L.L.C. A true and complete copy of the
engagement letter between the Company and Xxxxxxx Xxxxx & Company L.L.C. has
previously been delivered to Purchaser.
4.22 State Takeover Law. The Company has taken all actions necessary to
render Section 203 of the DGCL inapplicable to the execution, delivery or
performance of this Agreement or the consummation of the Merger or the other
transactions contemplated hereby.
4.23 Opinion of Financial Advisor. The Board of Directors of the Company
has been advised by its financial advisor, Xxxxxxx Xxxxx & Company L.L.C., to
the effect that in its opinion, as of the date of this Agreement, the
consideration to be received by the holders of the Shares is fair to the holders
of Shares from a financial point of view.
4.24 Proxy Statement. The information provided by the Company for inclusion
in the proxy statement (the "Proxy Statement") to be sent to the stockholders of
the Company in connection with the special meeting of the Company's stockholders
to consider this Agreement (the "Stockholders Meeting") shall not, on the date
the Proxy Statement is first mailed to stockholders of the Company, or at the
time of the Stockholders Meeting, contain any statement which, at such time and
in light of the circumstances under which it was made, is false or misleading
with respect to any material fact, or omit to state any material fact necessary
in order to make the statements made in the Proxy Statement not false or
misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Stockholders Meeting which has become false or misleading. No
representation is made by the Company with respect to information supplied by
any Person other than the Company for inclusion in the Proxy Statement. If at
any time prior to the Effective Time any event relating to the Company or any of
its affiliates should be discovered by the Company which should be set forth in
a supplement to the Proxy Statement, the Company shall promptly inform
Purchaser.
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4.25 Accuracy of Representations. No representation or warranty made by the
Company pursuant to this Article IV contains or, as of the Closing Date, will
contain any untrue statement of a material fact or omits or, as of the Closing
Date, will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
5.1 Organization and Qualification. Each of Purchaser and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization and has the power and authority (corporate
and other) to own its respective properties and to carry on its respective
business as now conducted.
5.2 Authority Relative to this Agreement. Each of Purchaser and Merger Sub
has the power and authority (corporate and other) to enter into this Agreement
and to carry out its respective obligations hereunder. The execution and
delivery of this Agreement by Purchaser and Merger Sub and the consummation by
Purchaser and Merger Sub of the transactions contemplated hereby have been duly
authorized by the respective Boards of Directors of Purchaser and Merger Sub and
by Purchaser as the sole stockholder of Merger Sub, and no other corporate
proceedings on the part of Purchaser or Merger Sub, or their respective
stockholders, are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and Merger Sub and constitutes a valid and binding obligation of each
such company, enforceable against each such company in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally, and subject to general principles of
equity, whether applied in a court of law or equity. Neither Purchaser nor
Merger Sub is subject to or obligated under any provision of (i) its respective
Certificate or Articles of Incorporation, Memorandum of Association, Code of
Regulations or By-Laws, (ii) any contract, agreement, mortgage, indenture or
other document, (iii) any license, franchise or permit or (iv) any law,
regulation, order, judgment or decree, which would be breached or violated or in
respect of which a right of termination or acceleration or any encumbrance on
any of its assets would be created by its execution and performance of this
Agreement, except, as to (ii), (iii) or (iv) above, where such breach, violation
or right would not individually, or in the aggregate, prevent or materially
delay Purchaser or Merger Sub from performing its obligations under this
Agreement. The consummation of the Merger by Purchaser and Merger Sub will not
require the consent or approval of any Governmental Authority or other Person,
other than (i) satisfaction of applicable requirements, if any, of the Exchange
Act, state "blue sky" laws and the HSR Act, (ii) filing and recordation of the
Certificate of Merger, and (iii) where failure to obtain such consents or
approvals would not prevent or materially delay Purchaser or Merger Sub from
performing its obligations under this Agreement.
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5.3 Financing. The Purchaser has cash, marketable securities and credit
available for use in connection with the acquisition of the Company in an
aggregate amount necessary to consummate the Merger and pay the Merger
Consideration.
5.4 Merger Sub. Merger Sub was formed solely for the purpose of engaging in
the transactions contemplated hereby, has engaged in no other business
activities (other than those incident to its organization and the execution of
this Agreement) and has conducted its operations only as contemplated hereby.
5.5 Ownership of Shares. As of the date hereof, neither Purchaser nor any
subsidiary of Purchaser (including Merger Sub) is the beneficial owner of any
Shares.
5.6 Brokers. Except for arrangements with Quarterdeck Investment Partners,
Inc., no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger based upon
arrangements made by or on behalf of Purchaser or Merger Sub.
5.7 Proxy Statement. The information provided in writing by Purchaser or
Merger Sub expressly for inclusion in the Proxy Statement shall not, on the date
the Proxy Statement is first mailed to stockholders of the Company, or at the
time of the Stockholders Meeting, contain any statement which, at such time and
in light of the circumstances under which it was made, is false or misleading
with respect to any material fact, or omit to state any material fact necessary
in order to make such statements expressly provided by Purchaser or Merger Sub
for inclusion in the Proxy Statement not false or misleading. No representation
is made by Purchaser with respect to information supplied by any Person other
than Purchaser or Merger Sub for inclusion in the Proxy Statement.
5.8 Accuracy of Representations. No representation or warranty made by
Purchaser or Merger Sub pursuant to this Article V contains or, as of the
Closing Date, will contain any untrue statement of a material fact or omits or,
as of the Closing Date, will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 Conduct of Business by the Company Pending the Merger. Prior to the
Effective Time, unless Purchaser shall otherwise agree in writing, or as
otherwise expressly contemplated by this Agreement, the Company shall:
(a) conduct its business, and shall cause its Subsidiaries to conduct
their respective businesses, only in, and the Company and its Subsidiaries
shall not take any action except in, the ordinary course of business and
consistent with past practice;
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(b) not (i) sell or pledge or agree to sell or pledge any stock owned
by it in any of its Subsidiaries; (ii) amend its Certificate of
Incorporation or By-Laws; or (iii) split, combine or reclassify any shares
of its outstanding capital stock or, except pursuant to the terms of the
Class A Shares and the Class B Shares, declare, set aside or pay any
dividend or other distribution payable in cash, stock or property or,
except pursuant to any obligation under any existing Benefit Plan or
program of the Company with respect thereto, redeem or otherwise acquire
any shares of its capital stock or shares of the capital stock of any of
its Subsidiaries;
(c) except as set forth in Section 6.1 of the Disclosure Letter, not,
and shall cause each of its Subsidiaries not to, (i) authorize for
issuance, issue or sell any additional shares of, or rights of any kind to
acquire any shares of, its capital stock of any class (whether through the
issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise), except for unissued Common Shares
reserved for issuance upon the exercise of Company Stock Options or the
Warrants and Common Shares issuable upon the conversion of the Class A
Shares or the Class B Shares; (ii) acquire, dispose of, transfer, lease,
license, mortgage, pledge or encumber any fixed or other substantial assets
other than in the ordinary course of business and consistent with past
practices; (iii) incur, assume or prepay any indebtedness for borrowed
money other than in the ordinary course of business under the Credit
Agreement (including hedging transactions) and consistent with past
practices or as set forth in Section 6.1 of the Disclosure Letter, (iv)
other than commitments set forth in Section 6.1 of the Disclosure Letter,
assume, endorse (other than in the ordinary course of business consistent
with past practices), guarantee or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the material obligations
of any other person other than a Subsidiary; (v) make any loans, advances
or capital contributions to, or investments in, any other Person, other
than to Subsidiaries, or otherwise enter into any Contract other than in
the ordinary course of business and consistent with past practices; (vi)
other than commitments set forth in Section 6.1 of the Disclosure Letter or
advances of expenses to employees in the ordinary course of business, make
any loans to employees; (vii) undertake, make or commit to undertake or
make any capital expenditures, other than commitments set forth in Section
6.1 of the Disclosure Letter or capital expenditures made between the date
hereof and the Effective Time in an average amount of no more than $100,000
per month (on a combined basis for the Company and the Subsidiaries) over
such period; or (viii) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(d) use reasonable best business efforts to preserve intact the
business organization of the Company and its Subsidiaries, to keep
available the services of its and their present officers and key employees,
and to preserve the goodwill of those having business relationships with it
and them;
(e) not and shall cause its Subsidiaries not to (i) enter into any new
agreements or amend or modify any existing agreements with any of their
respective officers, directors or employees or with any "disqualified
individuals" (as defined in Section 280G(c) of the Code); (ii) grant any
increases in the compensation of their respective directors, officers and
employees or any "disqualified individuals" other than increases in the
ordinary course of business and consistent with past practice to persons
who are not directors or corporate officers
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of or "disqualified individuals" with respect to the Company or any
Subsidiary, provided, that the Company provides Purchaser with written
notice of any such increase (except for increases of less than 5% of annual
salary); (iii) enter into, adopt, amend or terminate, or grant any new
benefit not presently provided for under, any employee benefit plan or
arrangement, except as required by law or to maintain the tax qualified
status of the plan; provided, however, it is understood that the Company is
permitted to pay bonuses and change in control payments and to amend
existing plans as contemplated by this Agreement or as described in Section
6.1 of the Disclosure Letter; or (iv) except as contemplated by this
Agreement or as described in Section 6.1 of the Disclosure Letter, take any
action with respect to the grant of any severance or termination pay other
than in the ordinary course of business and consistent with past practice
and pursuant to policies in effect on the date of this Agreement;
(f) not, and shall not permit any Subsidiary to, acquire or agree to
acquire by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets (other
than inventory, equipment and supplies in the ordinary course of business);
(g) after the date hereof, invest, and cause its Subsidiaries to
invest, any excess cash or cash equivalents of the Company solely in (i)
direct obligations of the United States of America, or of any agency
thereof, or obligations guaranteed as to principal and interest by the
United States of America, or of any agency thereof, in either case maturing
not more than 180 days from the date of investment; (ii) certificates of
deposit issued by any bank or trust company having capital, surplus of at
least $500,000,000, maturing not more than 180 days from the date of
investment; (iii) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Corporation or Xxxxx'x Investors Services, Inc., respectively,
maturing not more than 180 days from the date of investment; (iv) bank
money market; (v) repurchase agreements with any bank, trust company or
national banking association; or (vi) any mutual fund or separate account
all of the investments of which are limited to those instruments set forth
in clauses (i) through (v) above; and
(h) take all actions reasonably necessary so that the conditions to
Purchaser's or Merger Sub's obligations to consummate the Merger are
satisfied on a timely basis, except as contemplated by this Agreement,
unless the Board of Directors of the Company determines in good faith,
following consultation with its outside counsel as to legal matters, that
its fiduciary duties under applicable law require otherwise.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Proxy Statement. As soon as practicable after the date hereof, the
Company shall prepare and (subject to Purchaser's approval) file with the SEC
under the Exchange Act, and shall use all reasonable best efforts to have
cleared by the SEC as soon as reasonably practicable after such filing, the
Proxy Statement relating to the adoption of this Agreement and approval of
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the transactions contemplated hereby by the stockholders of the Company at the
Stockholders Meeting. The Proxy Statement, and all amendments and supplements
thereto, will, as of their respective dates, comply as to form in all material
respects with the applicable requirements of the Exchange Act and the rules and
regulations thereunder.
7.2 Meeting of Stockholders of the Company. The Company will cause the
Stockholders Meeting to be duly called and held as soon as practicable after
final comments are received from the SEC relating to the proxy statement, in
accordance with the DGCL and the Company's Certificate of Incorporation and
By-Laws. The Board of Directors of the Company will recommend that the
stockholders of the Company vote to adopt and approve the Merger and this
Agreement and will not rescind such recommendation, which recommendation shall
be contained in the Proxy Statement; provided, however, that such Board of
Directors shall not be required to make, and shall be entitled to withdraw or
modify, such recommendation if (i) the Company has complied with Section 7.3 and
(ii) in the reasonable good faith judgment of such Board of Directors, on the
basis of advice of outside corporate counsel of the Company, the making of, or
the failure to withdraw or modify, such recommendation would be contrary to the
fiduciary duties of such Board of Directors to the Company's stockholders under
applicable law.
7.3 No Solicitation.
(a) The Company agrees that, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement in accordance
with Section 9.1, it shall not, directly or indirectly, and shall cause its
officers, directors, employees, representatives, agents, and affiliates, to not
(i) solicit, initiate, or encourage any inquiries or proposals that constitute,
or could reasonably be expected to lead to, a proposal or offer for a merger,
consolidation, sale or purchase of substantially all of the assets or stock,
tender or exchange offer, or other business combination or change in control or
similar transaction involving the Company or any of its Subsidiaries, other than
the transactions contemplated or permitted by this Agreement (any of the
foregoing inquiries or proposals being referred to in this Agreement as a
"Acquisition Transaction Proposal"), (ii) engage in negotiations or discussions
concerning, or provide any non-public information to any person or entity
relating to, any Acquisition Transaction Proposal, or (iii) enter into any
agreement with respect to, agree to, approve or recommend any Acquisition
Transaction Proposal; provided, however, that nothing contained in this
Agreement shall prevent the Company or its Board of Directors, directly or
through representatives or agents on behalf of the Board of Directors, from (A)
furnishing non-public information to, or entering into discussions or
negotiations with, any person or entity in connection with an unsolicited bona
fide written Acquisition Transaction Proposal by such person or entity, if and
only to the extent that (1) such Acquisition Transaction Proposal would, if
consummated, result in a transaction that would, in the reasonable good faith
judgment of the Board of Directors of the Company, after consultation with its
financial advisors, result in a transaction more favorable to the Company's
stockholders from a financial point of view than the Merger (any such more
favorable Acquisition Transaction Proposal being referred to in this Agreement
as a "Superior Proposal") and, in the reasonable good faith judgment of the
Board of Directors of the Company, after consultation with its financial
advisors, the person or entity making such Superior Proposal has the financial
means or access to credit to conclude such
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transaction, (2) the failure to take such action would in the reasonable good
faith judgment of the Board of Directors of the Company, on the basis of the
advice of the outside corporate counsel of the Company, be contrary to the
fiduciary duties of the Board of Directors of the Company to the Company's
stockholders under applicable law; (3) prior to furnishing such non-public
information to, or entering into discussions or negotiations with, such person
or entity, such Board of Directors receives from such person or entity an
executed confidentiality agreement with provisions not less favorable to the
Company than those contained in the Confidentiality Agreement between Purchaser
and the Company, and (4) the Company shall have fully complied with this Section
7.3; or (B) complying with Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with regard to a Acquisition Transaction Proposal.
(b) The Company shall notify Purchaser no later than forty-eight (48) hours
after receipt by the Company (or its advisors) of any Acquisition Transaction
Proposal or any request for nonpublic information in connection with a
Acquisition Transaction Proposal or for access to the properties, books or
records of the Company by any person or entity that informs the Company that it
is considering making, or has made, a Acquisition Transaction Proposal. Such
notice to Purchaser shall be made orally and in writing and shall indicate in
reasonable detail the identity of the person or entity making the Acquisition
Transaction Proposal and the terms and conditions of such proposal, inquiry or
contact. If the financial terms of such Acquisition Transaction Proposal are
modified, then the Company shall notify Purchaser of the terms and conditions of
such modification within forty-eight (48) hours of the receipt of such
modification. The Company shall also notify Purchaser simultaneously with the
delivery of notice to the directors of the Company of, and in any event at least
twenty-four (24) hours prior to (unless a longer period is required by Section
7.3(c)), each meeting of the Board of Directors at which the Company will
consider taking definitive action with respect to withdrawing or modifying, in a
manner adverse to Purchaser, its recommendation to the Company's stockholders in
favor of approval of the Merger.
(c) Notwithstanding the foregoing, in the event that there exists a
Superior Proposal before the Board of Directors of the Company and in the
reasonable good faith judgment of the Company, on the basis of the advice of the
outside corporate counsel of the Company, the failure to accept such Superior
Proposal would be contrary to the fiduciary duties of the Board of Directors of
the Company to the Company's stockholders under applicable law, the Board of
Directors of the Company may pursuant to Section 9.1(f) (subject to this and the
following sentences) terminate this Agreement prior to the Stockholders Meeting
and concurrently with such termination, cause the Company to enter into an
acquisition agreement with respect to such Superior Proposal. Prior to entering
into such an acquisition agreement with respect to such Superior Proposal, the
Company shall have (i) provided written notice to Purchaser, two days prior to
entering into such an acquisition agreement, that the Board of Directors of the
Company is prepared to accept a Superior Proposal, specifying the material terms
and conditions of such Superior Proposal and identifying the person making such
Superior Proposal; (ii) caused its financial and legal advisors to negotiate in
good faith with Purchaser to make such changes to the terms and conditions of
this Agreement as would enable the Company to proceed with the transactions
contemplated hereby; and (iii) paid the Termination Fee to Purchaser, in full
and in immediately available funds.
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(d) During the period from the date of this Agreement through the Effective
Time, the Company shall not terminate, amend, modify or waive any provision of
any confidentiality or standstill agreement (other than any entered into in the
ordinary course of business not in connection with any possible Acquisition
Transaction Proposal) to which it or any of its Subsidiaries is a party.
(e) The Purchaser shall keep confidential, under the terms of the
Confidentiality Agreement (i) the existence and content of all notices to
Purchaser or Merger Sub under this Section and (ii) the content of all
communications between Company and Purchaser or Merger Sub.
7.4 Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement,
including (i) filing the Certificate of Merger, (ii) using reasonable efforts to
remove any legal impediment to the consummation or effectiveness of such
transactions and (iii) using reasonable efforts to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
including, but not limited to, filings under the HSR Act and submissions of
information requested by governmental authorities.
7.5 Indemnification; Officers' and Directors' Insurance.
(a) For a period of six years after the Effective Time, Purchaser shall
cause the Surviving Corporation to maintain in effect the current provisions of
the Certificate of Incorporation and By-laws of the Company (which shall be
contained in the Certificate of Incorporation and By-laws of Merger Sub and the
Surviving Corporation) relating to the rights to indemnification of officers and
directors with respect to indemnification for acts and omissions occurring prior
to the Effective Time.
(b) The Company shall purchase policies of officers', directors', fiduciary
and employer liability insurance comparable to such insurance most recently
maintained by the Company (the "Tail Policy"), which Tail Policy shall continue
in effect for six years from the Effective Time; provided, however, that the
Company shall not pay more than $135,000 (net of refunds from the cancellation,
as of the Effective Time, of the Company's existing insurance policies) for the
Tail Policy.
(c) In the event that the Surviving Corporation, or Purchaser or any of
their successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation thereof or (ii)
sells, leases, transfers or otherwise disposes of all or substantially all of
its properties and assets to any Person, whether in a single transaction or a
series of related transactions, then and in each such case, proper provision
shall be made so that the successors and assigns of the Surviving Corporation or
Purchaser, as the case may be, shall assume its obligations set forth in this
Section 7.5 or such obligation shall be assumed by an
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Affiliate of Purchaser with a net worth equal to or greater than the net worth
of the Surviving Corporation immediately prior to such transfer or sale.
7.6 Notification of Certain Matters. The Company shall give prompt notice
to Purchaser, and Purchaser shall give prompt notice to the Company, of (i) the
occurrence, or failure to occur, of any event, which occurrence or failure would
be likely to cause any representation or warranty of such party contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Effective Time, and (ii) any material failure of the
Company or Purchaser, as the case may be, or any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder, provided, however, that the
delivery of any notice pursuant to this Section 7.6 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
7.7 Access to Information. The Company shall, and shall cause its
Subsidiaries, officers, directors, employees and agents to, afford the officers,
employees and agents of Purchaser complete access at all reasonable times, from
the date hereof to the Effective Time, to its officers, employees, agents,
properties, books and records, and shall furnish Purchaser all financial,
operating and other data and information as Purchaser, through its officers,
employees or agents, may reasonably request. No investigation by a party
heretofore or hereafter made shall modify or otherwise affect any
representations and warranties of the other party, which shall survive any such
investigation, or the conditions to the obligation of such party to consummate
the transactions contemplated hereby. Purchaser shall keep all information
discovered in the course of such investigation confidential in accordance with
the terms of the Confidentiality Agreement.
7.8 Employee Benefits. For greater certainty, Sections 7.8(b), (c) and (d)
do not apply in respect to those Benefit Plans that apply exclusively to Company
Employees employed in Canada. Those Benefit Plans that apply exclusively to
Company Employees employed in Canada shall continue to be in effect for such
period of time as Purchaser may determine.
(a) Purchaser and the Company agree that all employees of the Company and
its Subsidiaries immediately prior to the Effective Time (the "Company
Employees") shall be employed by the Surviving Corporation immediately after the
Effective Time, it being understood that, except for Company Employees with
fixed term employment agreements, Purchaser shall not have any obligation to
continue employing Company Employees for any length of time thereafter.
(b) As of the Closing Date, the Company Employees shall be eligible to
participate in Purchaser employee benefit plans, programs, practices, policies
and arrangements ("Purchaser Benefit Plans") in which similarly situated
employees of Purchaser participate (including, without limitation, plans that
provide for benefits in the nature of severance or termination pay or similar
benefits following a "change in control" (as defined in such plans) of
Purchaser), to the same extent as similarly situated employees of Purchaser;
provided, however, that the benefits received by the Company Employees under
such plans shall be no less, taken as
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a whole, than the benefits currently provided to the Company Employees under the
existing Benefit Plans (other than the Company's supplemental retirement plan),
through one year from the Effective Time. From and after one year from the
Effective Time, the Company Employees shall be entitled to and shall receive
such benefits as the then constituted management of the Surviving Corporation
deems necessary and appropriate.
(c) With respect to each Purchaser Benefit Plan, for purpose of determining
eligibility to participate, vesting and entitlement to benefits, including
vacation entitlement, service with the Company shall be treated as service with
Purchaser. Such service shall also apply for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
pre-existing condition limitations. Each Purchaser Benefit Plan shall waive
pre-existing condition limitations with respect to any Company Employee who
timely applies for coverage under such plan. Company Employees shall be given
credit for amounts paid under a corresponding Benefit Plan during the same
period for purposes of applying deductibles, co-payments and out-of-pocket
maximums as though such amounts had been paid in accordance with the terms and
conditions of the Purchaser Benefit Plan.
(d) Prior to the Closing Date, the Company shall (i) amend the Company's
401(k) deferred compensation plan to provide that the accounts of all Company
Employees thereunder shall be fully vested upon the Effective Time; (ii) amend
and restate the Company's 401(k) deferred compensation plan effective as of or
prior to the Effective Time in the form of a nonstandardized prototype plan;
(iii) amend and terminate the Company's supplemental retirement plan to provide
that all benefits of Company Employees thereunder shall be fully vested and paid
to such Company Employees upon the Effective Time, and that no further benefits
shall accrue thereunder to any participant after the Effective Time; (iv) use
its best efforts to secure any necessary consents, and thereafter terminate and
distribute the assets of the rabbi trust used in connection with the Company's
supplemental retirement plan effective as of or prior to the Effective Time; and
(v) amend each other Benefit Plan which is either funded by a trust or insurance
or which provides severance benefits to provide for cessation of participation
by all Company Employees as of the Effective Time.
(e) Prior to the Effective Time, the Company may establish a severance
program in connection with the Merger pursuant to which a Company Employee may
receive severance payments in the event that (i) such Company Employee's
employment with the Surviving Corporation is terminated within one year after
the Effective Time by the Surviving Corporation without cause, or (ii) such
Company Employee terminates employment with the Surviving Corporation within one
year after the Effective Time and after either (x) being required by the
Surviving Corporation to relocate more than fifty (50) miles from such Company
Employee's current residence, or (y) being required by the Surviving Corporation
to accept a material reduction in base salary or material diminution in duties
and responsibilities, provided that the aggregate of all payments that may be
payable under any such program shall not exceed $80,000.
7.9 Consents; Approvals. The Company and Purchaser shall each use its
commercially reasonable efforts to obtain all consents, waivers, approvals,
authorizations or
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orders (including, without limitation, all United States and non-United States
governmental and regulatory rulings and approvals), and the Company and
Purchaser shall promptly after the date hereof make all filings (including,
without limitation, all filings with United States and non-United States
governmental or regulatory agencies) required in connection with the
authorization, execution and delivery of this Agreement by the Company and
Purchaser and the consummation by them of the transactions contemplated hereby.
The Company and Purchaser shall furnish all information required to be included
in the Proxy Statement, or for any application or other filing to be made
pursuant to the rules and regulations of any United States or non-United States
governmental body in connection with the transactions contemplated by this
Agreement. Each party hereto shall each make an appropriate filing of a
notification and report form pursuant to the HSR Act with respect to the
transactions contemplated hereby within twenty (20) days after the date hereof
and shall promptly supply any additional information and documentary material
that may be requested pursuant to the HSR Act. Each party hereto shall use
commercially reasonable efforts to obtain early termination of the waiting
period under the HSR Act. In addition, each party hereto shall promptly make any
other filing that may be required under any antitrust law or by any antitrust
authority. Purchaser shall file with the CFIUS pursuant to the Exon-Xxxxxx
Provision all requisite documents and notifications (if any) in connection with
this Agreement and the transactions contemplated hereby within twenty (20) days
after the date hereof and shall promptly supply any additional information and
documentary material that may be requested pursuant to the Exon-Xxxxxx
Provision.
7.10 Public Announcements. Purchaser and Merger Sub, on the one hand, and
the Company, on the other hand, shall use reasonable efforts to consult with the
other party prior to issuing any press release or otherwise making any public
statement or responding to any press inquiry with respect to this Agreement or
the transactions contemplated hereby, and shall not issue any such press release
or make any such public statement without the prior consent of the other party,
which shall not be unreasonably withheld provided, however, that either party
may, without the prior consent of the other, issue such press release or make
such public statements as may, upon the advice of counsel, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or national securities
quotation system on which or through which such party's or its Affiliate's
securities are traded.
7.11 Purchaser and Merger Sub Covenant. Prior to the Closing, neither
Purchaser nor Merger Sub, nor any subsidiary or Affiliate of Purchaser shall (a)
take any action or omit to take any action that will (i) result in any of the
representations or warranties contained in Article V (excluding those
representations and warranties made as of a specified date) being inaccurate or
incomplete on and as of the date of Closing, or (ii) prevent Purchaser or Merger
Sub from consummating the transactions contemplated by this Agreement; or (b)
acquire or enter into an agreement to acquire all or substantially all of the
stock or assets of any Person other than the Company or an Affiliate of the
Company (including any such acquisition structured as a merger or consolidation)
or make any loan of money to or investment in any other company, in each case,
that would reasonably be expected to prevent Purchaser or Merger Sub from
consummating the transactions contemplated by this Agreement.
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7.12 Outstanding Loans. On or prior to the Closing Date, all outstanding
loans made in connection with the purchase of Common Shares (collectively, the
"Loans") owed from the Company's officers, directors and employees
(collectively, the "Loan Obligors") to the Company shall be repaid in full.
Notwithstanding the foregoing, in accordance with written documentation executed
by each such Loan Obligor, the Loan of any Loan Obligor may be repaid in whole
or in part by a reduction in the payment to be made on the Closing Date to such
Loan Obligor under Section 2.6 of this Agreement (collectively, the "Loan
Reduction Amounts").
7.13 Company Stock Options.
(a) Prior to the Closing Date, the Company shall provide written notice to
each holder of Company Stock Options issued under the Stock Option Plan, which
notice shall provide each such holder with the terms of the Amendment to the
Stock Option Plan adopted on the date hereof pursuant to which each Company
Stock Option held by such holder shall be automatically exercised on the Closing
Date.
(b) Prior to the Closing Date, each holder of a Company Stock Option which
is not subject to the Stock Option Plan shall have surrendered such holder's
Company Stock Options in exchange for an amount equal to (i) the excess of the
Per Share Common Consideration over the exercise price for each Company Stock
Option, if any, and (ii) the number of Common Shares subject thereto.
ARTICLE VIII
CONDITIONS
8.1 Conditions to Obligation of Each Party to Effect the Merger. The
obligation of each party hereto to effect the Merger is subject to the following
conditions:
(a) this Agreement and the Merger shall have been approved and adopted
by the requisite vote of the stockholders of the Company pursuant to the
DGCL and the certificate of incorporation of the Company;
(b) the waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated and no action by the Department of Justice or Federal Trade
Commission challenging or seeking to enjoin the consummation of the Merger
shall have been instituted and be pending; and
(c) no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal or regulatory restraint or prohibition shall have been issued
and be in effect (i) restraining or prohibiting the consummation of the
Merger or any of the transactions contemplated hereby or (ii) prohibiting
or limiting in any material respect the ownership, operation or control by
the Company, Purchaser or any of their respective subsidiaries of any
portion of the business or assets of the Company, Purchaser or any of their
respective subsidiaries, or compelling the Company, Purchaser or any of
their respective subsidiaries to dispose of, grant rights in respect of, or
hold separate any material
-34-
portion of the business or assets of the Company, Purchaser or any of their
respective subsidiaries; nor shall any action have been taken by any
Governmental Authority or any statute, rule, regulation or order have been
enacted, entered or enforced or be deemed applicable to the Merger which
makes the consummation of the Merger illegal or prevents or prohibits the
Merger.
8.2 Additional Conditions to Obligation of the Company. The obligations of
the Company to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to the Closing of each of the
following conditions:
(a) Each of the representations and warranties of Purchaser and Merger Sub
set forth in this Agreement that is qualified by materiality shall be true and
correct at and as of the Closing Date and each of such representations and
warranties that is not so qualified shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of the Closing Date,
in each case except as contemplated by this Agreement, and Purchaser shall have
duly performed or complied with, in all material respects, all of the covenants,
obligations and conditions to be performed or complied with by each of them
under the terms of this Agreement on or prior to or at the Closing.
(b) Prior to or at the Closing, Purchaser shall have delivered to the
Company the following documents as shall be reasonably requested by the Company
in form and substance reasonably acceptable to the Company's counsel:
(i) a certificate of the President or any Vice President of Purchaser
and Merger Sub, dated the Closing Date, to the effect that the conditions
specified in Section 8.2(a) have been satisfied;
(ii) certificates of the Secretary or Assistant Secretary of Purchaser
and Merger Sub, dated the Closing Date, as to the incumbency of any officer
of Purchaser or Merger Sub executing this Agreement or any document related
thereto and covering such other customary matters as the Company may
reasonably request;
(iii) certified copies of the resolutions of Purchaser's Board of
Directors and Merger Sub's Board of Directors authorizing the execution,
delivery and consummation of this Agreement and the transactions
contemplated hereby and thereby; and
(iv) certified copies of the resolutions of Merger Sub's sole
stockholder adopting and approving this Agreement, the Merger and the
transactions contemplated hereby.
(c) The Company shall have received evidence satisfactory to it that the
Agent has received irrevocable deposit of the Merger Consideration at Closing.
8.3 Additional Conditions to Obligation of Purchaser and Merger Sub. The
obligations of Purchaser and Merger Sub to consummate the transactions
contemplated by this
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Agreement shall be subject to the fulfillment prior to or at Closing of each of
the following conditions:
(a) Each of the representations and warranties of the Company set
forth in this Agreement that is qualified by materiality shall be true and
correct at and as of the Closing Date as if made at and as of the Closing
Date and each of such representations and warranties that is not so
qualified shall be true and correct in all material respects at and as of
the Closing Date as if made at and as of the Closing Date, in each case
except as contemplated by this Agreement, and the Company shall have duly
performed or complied with, in all material respects, all of the covenants,
obligations and conditions to be performed or complied with by it under the
terms of this Agreement on or prior to or at Closing, except that the
Company shall have duly performed or complied with each of the covenants
set forth in Section 7.12 and Section 7.13 on or prior to or at Closing.
(b) Prior to or at the Closing, the Company shall have delivered the
following documents as shall be reasonably requested by Purchaser in form
and substance reasonably acceptable to Purchaser's counsel:
(i) a certificate of the President or any Vice President of the
Company, dated the Closing Date, to the effect that the conditions
specified in Section 8.3(a) have been satisfied; and
(ii) a certificate of the Secretary or Assistant Secretary of the
Company, dated the Closing Date, as to the incumbency of any officer
of the Company executing this Agreement or any document related
thereto and covering such other customary matters as Purchaser may
reasonably request;
(iii) a certified copy of the resolutions of the Company's Board
of Directors authorizing the execution, delivery and consummation of
this Agreement and the transactions contemplated hereby; and
(iv) a certified copy of the resolutions of the stockholders of
the Company adopting and approving this Agreement, the Merger and the
transactions contemplated hereby.
(c) No Litigation. There shall not be pending or threatened any suit,
action or proceeding by any Governmental Authority before any court or
governmental authority, agency or tribunal, domestic or foreign, (i)
seeking to restrain or prohibit the consummation of the Merger or any of
the other transactions contemplated by this Agreement or seeking to obtain
from the Company, Purchaser or Merger Sub damages in connection therewith
that Purchaser reasonably determines is likely to result in money damages
in excess of $1,000,000 (net of insurance proceeds applicable thereto), or
(ii) seeking to prohibit or materially limit the ownership, operation or
control by the Company, Purchaser or any of their respective Subsidiaries
of any material portion of the business or assets of the Company, Purchaser
or any of their respective Subsidiaries, or to compel the Company,
Purchaser or any of their respective
-36-
Subsidiaries to dispose of, grant rights in respect of, or hold separate
any material portion of the business or assets of the Company, Purchaser or
any of their respective Subsidiaries.
(d) Absence of Material Adverse Effect on the Company. No Material
Adverse Effect with respect to the Company shall have occurred.
(e) ISRA. Prior to Closing, the Company shall obtain and provide to
Purchaser either: (1) a letter from the New Jersey Department of
Environmental Protection ("NJDEP") stating that the New Jersey Industrial
Site Recovery Act, N.J.S.A. 13:1K-6 et. seq. and the regulations
promulgated thereunder (collectively "ISRA") are not applicable to the
transaction contemplated by this Agreement; or (2) an approved Negative
Declaration (as defined by ISRA) or No Further Action Letter (as defined by
ISRA) (the letter described in clause (1) of this sentence, the Negative
Declaration or No Further Action Letter, as the case may be, are
hereinafter referred to collectively as the "ISRA Clearance") with respect
to each and every Industrial Establishment (as defined by ISRA) involved in
the transaction contemplated by this Agreement. If the Company is unable to
obtain ISRA Clearance by the Closing for each and every Industrial
Establishment in New Jersey involved in the transaction contemplated by
this Agreement, then the Company shall apply for and, prior to Closing,
enter into a Remediation Agreement (as defined by ISRA) with NJDEP or an
amendment to an existing Remediation Agreement with NJDEP for each and
every Industrial Establishment for which ISRA Clearance has not been
obtained. In any such Remediation Agreement, the Company shall pay for and
be identified as the sole party responsible for: (1) compliance with the
Remediation Agreement after Closing; and (2) obtaining ISRA Clearance after
the Closing. In addition, the Company shall provide all necessary financial
assurance required by NJDEP under any such Remediation Agreement.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the Merger may be
abandoned, notwithstanding the approval thereof by the stockholders of the
Company, at any time prior to the Effective Time:
(a) by mutual written consent of the Company and Purchaser;
(b) by either Purchaser or the Company if:
(i) any Governmental Authority shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining
or otherwise prohibiting the Merger and such order, decree or ruling
or other action shall have become final and nonappealable;
(ii) if the Merger shall not have been consummated on or before
11:59 p.m., New York City time, on July 31, 2001, unless the failure
to so consummate by such time is
-37-
due to the breach of any representation, warranty or covenant made in
this Agreement by the party seeking to terminate; or
(iii) if, at the Stockholders Meeting (including any adjournment
or postponement thereof), the requisite vote of the Company
stockholders in favor of this Agreement and approval of the Merger
shall not have been obtained;
(c) by Purchaser if (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified its recommendation of
this Agreement or the Merger to the Company's stockholders in a manner
materially adverse to Purchaser; (ii) an Alternative Transaction involving
the Company shall have taken place or the Board of Directors of the Company
or any committee thereof shall have recommended such an Alternative
Transaction (or a proposal or offer therefor) to the stockholders of the
Company or shall have publicly announced its intention to recommend such an
Alternative Transaction (or a proposal or offer therefor) to the
stockholders of the Company or to engage in an Alternative Transaction or
shall have failed to recommend against such Acquisition Transaction
Proposal; or (iii) a tender offer or exchange offer for any of the
outstanding shares of the Company Common Stock shall have been commenced
(other than by Purchaser or an affiliate thereof) and the Board of
Directors of the Company or any committee thereof shall have (A)
recommended that the stockholders of the Company tender their shares in
such tender or exchange offer or (B) publicly announced its intention to
take no position with respect to such tender or exchange offer; or
(d) by Purchaser if a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement shall
have occurred which if uncured would cause any condition set forth in
Sections 8.3(a) or 8.3(b) not to be satisfied, and such breach is incapable
of being cured or, if capable of being cured, shall not have been cured
within ten (10) business days following receipt by the Company of written
notice of such breach from Purchaser; or
(e) by the Company if a breach of any representation, warranty,
covenant or agreement on the part of Purchaser set forth in this Agreement
shall have occurred which if uncured would cause any conditions set forth
in Section 8.2(a) or 8.2(b) not to be satisfied, and such breach is
incapable of being cured or, if capable of being cured, shall not have been
cured within ten (10) business days following receipt by Purchaser of
written notice of such breach from the Company; or
(f) by the Company in accordance with Section 7.3(c).
9.2 Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 9.1, there shall be no liability or obligation on
the part of Purchaser, the Company, Merger Sub, or any of their respective
officers, directors, stockholders or affiliates, except as set forth in Section
9.3. The foregoing limitations shall not apply, and the remedies provided by
Section 9.3 shall not be exclusive, to the extent that such termination results
from the willful breach by a party of any of its material representations,
warranties, covenants or agreements in
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this Agreement. The provisions of Sections 7.7, 7.10 and 9.3 of this Agreement
shall remain in full force and effect and survive any termination of this
Agreement.
9.3. Fees and Expenses.
(a) Except as set forth in this Section 9.3, all fees and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses, whether or not the Merger is
consummated. The Company shall pay all professional fees, including the fees of
Xxxxxxx Xxxxx & Company L.L.C. and the fees of the Company's attorneys and
accountants incurred in connection with this Agreement and the transactions
contemplated hereby, on or prior to the Closing Date.
(b) If any Acquisition Transaction Proposal is made between the date hereof
and the termination of this Agreement, and this Agreement is terminated by
Purchaser or the Company pursuant to Section 9.1(b)(iii) or Section 9.1(d) due
to any breach of any covenant or agreement, then if an Alternative Transaction
involving the Company shall take place or the Company shall enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement with respect to an Alternative Transaction within twelve (12) months
of such termination, then the Company shall pay to Purchaser a termination fee
in the amount of three million dollars ($3,000,000) (the "Termination Fee")
simultaneously with the consummation of such Alternative Transaction.
(c) If this Agreement is terminated by Purchaser pursuant to Section
9.1(c), then the Company shall pay to Purchaser the Termination Fee no later
than one business day following such termination.
(d) If this Agreement is terminated by the Company pursuant to Section
9.1(f), then the Company shall pay to Purchaser the Termination Fee prior to,
and as a condition to, effectiveness of such termination.
(e) Any Termination Fee payable under this Section 9.3 shall be paid in
immediately available funds.
(f) As used in this Agreement, an "Alternative Transaction" involving the
Company means (i) a transaction or series of transactions pursuant to which any
person or group (as such term is defined under the Exchange Act), other than
Purchaser or Merger Sub, or any affiliate thereof (a "Third Party"), acquires
(or would acquire upon completion of such transaction or series of transactions)
from the Company more than thirty-five percent (35%) of the equity securities or
voting power of the Company or any of its Subsidiaries; (ii) a transaction or
series of transactions pursuant to which any Third Party acquires (or would
acquire upon completion of such transaction or series of transactions) more than
fifty percent (50%) of the equity securities or voting power of the Company or
any of its Subsidiaries pursuant to a tender offer or exchange offer made
directly to existing stockholders of the Company; (iii) a merger, consolidation,
share exchange or other business combination involving the Company or any of its
Subsidiaries pursuant to which any Third Party acquires ownership (or would
acquire ownership
-39-
upon consummation of such merger, consolidation, share exchange or other
business combination) of more than thirty-five percent (35%) of the outstanding
equity securities or voting power of the Company or any of its Subsidiaries or
of the entity surviving such merger or business combination or resulting from
such consolidation, (iv) any other transaction or series of transactions (except
for tender offers or exchange offers made directly to existing stockholders of
the Company) pursuant to which any Third Party acquires (or would acquire upon
completion of such transaction or series of transactions) control of assets of
the Company or any of its Subsidiaries (including, for this purpose, outstanding
equity securities of Subsidiaries of such party) having a fair market value
equal to more than thirty-five percent (35%) of the fair market value of all the
consolidated assets of the Company immediately prior to such transaction or
series of transactions, or (v) any transaction or series of transactions (except
for tender offers or exchange offers made directly to existing stockholders of
the Company) pursuant to which any Third Party acquires (or would acquire upon
completion of such transaction or series of transactions) control of the Board
of Directors of the Company or by which nominees of any Third Party are (or
would be) elected or appointed to a majority of the seats on the Board of
Directors of the Company.
9.4 Amendment. This Agreement may be amended by the parties at any time
before or after the approval of the Merger by the Company's stockholders;
provided, however, that after any such approval, there shall be made no
amendment that by law requires further approval by such stockholders without the
further approval of such stockholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
9.5 Waiver. 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 any other party hereto or (b) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid if set
forth in an instrument in writing signed on behalf of such party by a duly
authorized officer. The failure of a party hereto to assert any of its rights
hereunder shall not constitute a waiver of such rights.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representation, Warranties and Agreements. No
representations or warranties contained herein shall survive beyond the
Effective Time. This Section 10.1 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Effective
Time.
10.2 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, by facsimile,
by overnight courier or sent by certified or registered mail, postage prepaid,
and shall be deemed given when so delivered personally, or when so received by
facsimile or courier, or if mailed, three (3) calendar days after
-40-
the date of mailing, as follows (or at such other address for a party as shall
be specified by like notice):
(a) if to Purchaser or Merger Sub:
Smiths Industries Aerospace & Defense Systems Inc.
c/o Smiths Industries plc
000 Xxxxxxxx Xxxx
Xxxxxx, XX00 0XX
Xxxxxx Xxxxxxx
Attention: Corporate Secretary
Telephone: 000-00-000-000-0000
Facsimile: 011-44-208-209-1315
With copies to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Company:
Xxxxxxxxx Technologies Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10.3 No Third Party Beneficiaries. Except for the current officers and
directors of the Company (who are third-party beneficiaries of the provisions
set forth in Section 7.6 hereof), there are no third party beneficiaries of this
Agreement and nothing in this Agreement, express or
-41-
implied, is intended to or shall confer upon any person other than the parties
hereto and their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities.
10.4 Miscellaneous. This Agreement (including the documents and instruments
referred to herein) (i) constitutes the entire agreement and supersedes all
other prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof except that
the Confidentiality Agreement shall continue in full force and effect; (ii)
shall not be assigned by operation of law or otherwise, provided, that Purchaser
or Merger Sub may assign its rights and obligations hereunder to a direct or
indirect subsidiary of Purchaser, but no such assignment shall relieve Purchaser
or Merger Sub, as the case may be, of its obligations hereunder; and (iii) shall
be governed in all respects, including validity, interpretation and effect, by
the internal laws of the State of Delaware without giving effect to the
principles of conflict or choice of laws thereof. This Agreement may be executed
in one or more counterparts which together shall constitute a single agreement.
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IN WITNESS WHEREOF, Purchaser, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
duly authorized officers.
SMITHS INDUSTRIES
AEROSPACE &
DEFENSE SYSTEMS INC.
By: /s/ XXXXXXX XXXXX
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
BLOODHOUND ACQUISITION,
INC.
By: /s/ XXXX XXXXXXXX
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: President
XXXXXXXXX TECHNOLOGIES INC.
By: /s/ XXXXXXX XXXXXX
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman and Chief
Executive Officer
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