EXHIBIT 2.2
Execution Copy
AGREEMENT AND PLAN OF MERGER
Dated as of March 15, 2004
among
GENERAL ELECTRIC COMPANY,
JET ACQUISITION SUB, INC.
and
INVISION TECHNOLOGIES, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I The Merger........................................................................ 1
Section 1.1 The Merger.............................................................. 1
Section 1.2 Closing................................................................. 1
Section 1.3 Effective Time.......................................................... 1
Section 1.4 Effects of the Merger................................................... 2
Section 1.5 Certificate of Incorporation and By-laws of the Surviving Corporation... 2
Section 1.6 Directors of the Surviving Corporation.................................. 2
Section 1.7 Officers of the Surviving Corporation................................... 2
ARTICLE II Effect of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates; Company Stock Options................................... 2
Section 2.1 Effect on Capital Stock................................................. 2
Section 2.2 Surrender of Certificates............................................... 4
Section 2.3 Company Stock Options................................................... 5
Section 2.4 Withholding Taxes....................................................... 6
Section 2.5 Adjustments............................................................. 6
ARTICLE III Representations and Warranties of the Company..................................... 6
Section 3.1 Organization, Standing and Corporate Power.............................. 7
Section 3.2 Capitalization.......................................................... 8
Section 3.3 Authority; Noncontravention; Voting Requirements........................ 9
Section 3.4 Governmental Approvals.................................................. 10
Section 3.5 Company SEC Documents; Undisclosed Liabilities.......................... 11
Section 3.6 Absence of Certain Changes or Events.................................... 13
Section 3.7 Legal Proceedings....................................................... 14
Section 3.8 Compliance With Laws; Permits........................................... 14
Section 3.9 Information in Proxy Statement.......................................... 15
Section 3.10 Tax Matters............................................................. 15
Section 3.11 Employee Benefits and Labor Matters..................................... 16
Section 3.12 Environmental Matters................................................... 21
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TABLE OF CONTENTS
(continued)
PAGE
Section 3.13 Contracts............................................................... 23
Section 3.14 Government Contracts.................................................... 25
Section 3.15 Title to Properties..................................................... 27
Section 3.16 Intellectual Property................................................... 27
Section 3.17 Insurance, Claims and Warranties........................................ 29
Section 3.18 Opinion of Financial Advisor............................................ 30
Section 3.19 Brokers and Other Advisors.............................................. 30
Section 3.20 State Takeover Statutes................................................. 30
ARTICLE IV Representations and Warranties of Parent and Merger Sub........................... 31
Section 4.1 Organization, Standing and Corporate Power.............................. 31
Section 4.2 Authority; Noncontravention............................................. 31
Section 4.3 Governmental Approvals.................................................. 32
Section 4.4 Information Supplied.................................................... 32
Section 4.5 Ownership and Operations of Merger Sub.................................. 32
Section 4.6 Financing............................................................... 32
Section 4.7 Brokers and Other Advisors.............................................. 32
ARTICLE V Covenants and Agreements.......................................................... 32
Section 5.1 Preparation of the Proxy Statement; Stockholder Meeting................. 32
Section 5.2 Conduct of Business of the Company...................................... 33
Section 5.3 No Solicitation by the Company; Etc..................................... 37
Section 5.4 Further Action; Reasonable Best Efforts................................. 40
Section 5.5 Public Announcements.................................................... 42
Section 5.6 Access to Information; Confidentiality.................................. 42
Section 5.7 Notification of Certain Matters......................................... 43
Section 5.8 Indemnification and Insurance........................................... 43
Section 5.9 Securityholder Litigation............................................... 44
Section 5.10 Fees and Expenses....................................................... 44
Section 5.11 Employee Benefits....................................................... 44
Section 5.12 Sale of Company NDT Business............................................ 45
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VI Conditions Precedent.............................................................. 45
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.............. 45
Section 6.2 Conditions to Obligations of Parent and Merger Sub...................... 46
Section 6.3 Conditions to Obligation of the Company................................. 47
Section 6.4 Frustration of Closing Conditions....................................... 48
ARTICLE VII Termination....................................................................... 48
Section 7.1 Termination............................................................. 48
Section 7.2 Effect of Termination................................................... 50
Section 7.3 Termination Fee......................................................... 50
ARTICLE VIII Miscellaneous..................................................................... 51
Section 8.1 Nonsurvival of Representations and Warranties........................... 51
Section 8.2 Amendment or Supplement................................................. 52
Section 8.3 Extension of Time, Waiver, Etc.......................................... 52
Section 8.4 Assignment.............................................................. 52
Section 8.5 Counterparts; Facsimile; Electronic Transmission........................ 52
Section 8.6 Entire Agreement; No Third-Party Beneficiaries.......................... 52
Section 8.7 Governing Law; Waiver of Jury Trial..................................... 53
Section 8.8 Specific Enforcement.................................................... 53
Section 8.9 Consent to Jurisdiction................................................. 53
Section 8.10 Notices................................................................. 53
Section 8.11 Severability............................................................ 55
Section 8.12 Definitions............................................................. 55
Section 8.13 Interpretation.......................................................... 59
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of March 15, 2004 (this
"Agreement"), is among GENERAL ELECTRIC COMPANY, a New York corporation
("Parent"), JET ACQUISITION SUB, INC., a Delaware corporation and a direct,
wholly owned Subsidiary of Parent ("Merger Sub"), and INVISION TECHNOLOGIES,
INC., a Delaware corporation (the "Company"). Certain terms used in this
Agreement are used as defined in Section 8.12.
WHEREAS, the respective Boards of Directors of the Company and Merger
Sub have approved and declared advisable, and the Board of Directors of Parent
has approved, this Agreement and the merger of Merger Sub with and into the
Company (the "Merger"), on the terms and subject to the conditions provided for
in this Agreement;
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, Parent, Merger Sub and the Company hereby agree as
follows:
ARTICLE I
The Merger
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), at the Effective Time, Merger Sub shall
be merged with and into the Company, and the separate corporate existence of
Merger Sub shall thereupon cease, and the Company shall be the surviving
corporation in the Merger (the "Surviving Corporation").
SECTION 1.2 Closing. The closing of the Merger (the "Closing") shall
take place at 10:00 a.m. (New York City time) on a date to be specified by the
parties, which date shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VI (other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or waiver of such conditions), unless another time
or date, or both, are agreed to in writing by the parties hereto. The date on
which the Closing is held is herein referred to as the "Closing Date". The
Closing will be held at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another place is agreed to in writing
by the parties hereto.
SECTION 1.3 Effective Time. Subject to the provisions of this
Agreement, on the Closing Date the parties shall file with the Secretary of
State of the State of Delaware a certificate of merger (the "Certificate of
Merger"), executed in
accordance with the relevant provisions of the DGCL. The Merger shall become
effective upon the filing of the Certificate of Merger or at such later time as
is agreed to by the parties hereto and specified in the Certificate of Merger
(the time at which the Merger becomes effective is herein referred to as the
"Effective Time").
SECTION 1.4 Effects of the Merger. From and after the Effective Time,
the Merger shall have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
SECTION 1.5 Certificate of Incorporation and By-laws of the Surviving
Corporation.
(a) The certificate of incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be amended in the Merger to be in
the form of Exhibit A hereto and, as so amended, such certificate of
incorporation shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended as provided therein or by applicable Law.
(b) At the Effective Time and without any further action on the part of
the Company and Merger Sub, the by-laws of Merger Sub as in effect immediately
prior to the Effective Time shall be the by-laws of the Surviving Corporation
until thereafter amended as provided therein or by applicable Law.
SECTION 1.6 Directors of the Surviving Corporation. Parent shall take
all necessary actions to cause the directors of Merger Sub immediately prior to
the Effective Time to be the directors of the Surviving Corporation immediately
following the Effective Time, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.
SECTION 1.7 Officers of the Surviving Corporation. The officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation until their respective successors are duly appointed and
qualified or their earlier death, resignation or removal in accordance with the
certificate of incorporation and by-laws of the Surviving Corporation.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates; Company Stock Options
SECTION 2.1 Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
common stock, par value $0.001 per share, of the Company ("Company Common
Stock") or any shares of capital stock of Merger Sub:
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(a) Capital Stock of Merger Sub. Each issued and outstanding share of
capital stock of Merger Sub shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value $.01 per
share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Any shares
of Company Common Stock that are owned by the Company as treasury stock, and any
shares of Company Common Stock owned by Parent or Merger Sub, shall be
automatically canceled and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Common Stock. Each issued and outstanding
share of Company Common Stock (other than shares to be canceled in accordance
with Section 2.1(b) and Appraisal Shares) shall be converted into the right to
receive $50.00 in cash, without interest (the "Merger Consideration"). As of the
Effective Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and
each holder of a certificate which immediately prior to the Effective Time
represented any such shares of Company Common Stock (each, a "Certificate")
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration to be paid in consideration therefor upon surrender of
such Certificate in accordance with Section 2.2(b), without interest.
(d) Appraisal Rights. Notwithstanding anything in this Agreement to the
contrary, shares (the "Appraisal Shares") of Company Common Stock issued and
outstanding immediately prior to the Effective Time that are held by any holder
who is entitled to demand and properly demands appraisal of such shares pursuant
to, and who complies in all respects with, the provisions of Section 262 of the
DGCL ("Section 262") shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.1(c), but instead such holder shall be
entitled to payment of the fair value of such shares in accordance with the
provisions of Section 262. At the Effective Time, all Appraisal Shares shall no
longer be outstanding and shall automatically be canceled and shall cease to
exist, and each holder of Appraisal Shares shall cease to have any rights with
respect thereto, except the right to receive the fair value of such Appraisal
Shares in accordance with the provisions of Section 262. Notwithstanding the
foregoing, if any such holder shall fail to perfect or otherwise shall waive,
withdraw or lose the right to appraisal under Section 262 or a court of
competent jurisdiction shall determine that such holder is not entitled to the
relief provided by Section 262, then the right of such holder to be paid the
fair value of such holder's Appraisal Shares under Section 262 shall cease and
such Appraisal Shares shall be deemed to have been converted at the Effective
Time into, and shall have become, the right to receive the Merger Consideration
as provided in Section 2.1(c). The Company shall deliver prompt notice to Parent
of any demands for appraisal of any shares of Company Common Stock, and Parent
shall have the right to direct all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, the Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands, or agree to do any of the foregoing.
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SECTION 2.2 Surrender of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall designate a
bank or trust company to act as agent for payment of the Merger Consideration
upon surrender of the Certificates (the "Paying Agent"). Promptly after the
Effective Time, Parent shall deposit, or cause to be deposited, with the Paying
Agent cash sufficient to pay the aggregate Merger Consideration payable pursuant
to Section 2.1(c) upon surrender of outstanding shares of Company Common Stock.
Such funds provided to the Paying Agent are referred to herein as the "Payment
Fund".
(b) Payment Procedures. Promptly after the Effective Time, the Paying
Agent shall mail to each holder of record of a Certificate (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent, and which shall be in such form and shall have
such other provisions as Parent may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions (and such other customary
documents as may reasonably be required by the Paying Agent), the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of cash
into which the shares of Company Common Stock formerly represented by such
Certificate shall have been converted pursuant to Section 2.1(c), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Company Common Stock that is not registered
in the transfer records of the Company, the proper amount of cash may be paid in
exchange therefor to a Person other than the Person in whose name the
Certificate so surrendered is registered if such Certificate shall be properly
endorsed or shall otherwise be in proper form for transfer and the Person
requesting such payment shall pay any transfer and other Taxes required by
reason of the payment to a Person other than the registered holder of such
Certificate or establish to the satisfaction of the Surviving Corporation that
such Tax either has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2(b), each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration. No interest will be paid or will accrue on
the cash payable upon surrender of any Certificate.
(c) Transfer Books; No Further Ownership Rights in Company Stock. All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock previously represented
by such Certificates. At the close of business on the day on which the Effective
Time occurs, the stock transfer books of the Company shall be closed and there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. Subject to Section 2.2(e),
if, at any time after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be canceled
and exchanged as provided in this Article II.
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(d) Lost, Stolen or Destroyed Certificates. If any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent, the posting by such Person of a bond, in such
reasonable amount as Parent may direct, as indemnity against any claim that may
be made against it with respect to such Certificate, the Paying Agent will pay
the Merger Consideration to such Person in exchange for such lost, stolen or
destroyed Certificate.
(e) Termination of Fund. Any portion of the Payment Fund (including the
proceeds of any investments thereof) that remains undistributed to the holders
of the Certificates for 180 days after the Effective Time shall be delivered by
the Paying Agent to the Surviving Corporation upon demand. Any holders of
Certificates who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation for payment of the Merger
Consideration.
(f) No Liability. Notwithstanding any provision of this Agreement to
the contrary, none of Parent, the Surviving Corporation or the Paying Agent
shall be liable to any Person for any amount properly paid from the Payment Fund
or delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(g) Investment of Payment Fund. The Paying Agent shall invest the
Payment Fund as directed by Parent. Any interest and other income resulting from
such investment shall be the property of, and shall be paid promptly to, Parent.
SECTION 2.3 Company Stock Options.
(a) Prior to the Effective Time, the Company shall take all actions
necessary to provide that each option outstanding immediately prior to the
Effective Time (whether or not then vested or exercisable) that represents the
right to acquire shares of Company Common Stock (each, an "Option") shall be
cancelled and terminated and converted at the Effective Time into the right to
receive a cash amount equal to the Option Consideration (as hereinafter defined)
for each share of Company Common Stock then subject to the Option. Except as
otherwise provided below, the Option Consideration shall be paid as soon after
the Closing Date as shall be practicable. Prior to the Effective Time, the
Company shall make any amendments to the terms of the Company Stock Plans and
use its best efforts to obtain any consents from holders of Options that, in
each case, are necessary to give effect to the transactions contemplated by this
Section 2.3 and, notwithstanding anything to the contrary, payment may be
withheld in respect of any Option until any necessary consents are obtained.
Without limiting the foregoing, the Company shall take all actions necessary to
ensure that the Company will not at the Effective Time be bound by any options,
SARs, warrants or other rights or agreements which would entitle any Person,
other than Parent and its subsidiaries, to own any capital stock of the
Surviving Corporation or to receive any payment in respect thereof (other than
pursuant to this Section 2.3). Prior to the Effective Time, the Company shall
take all actions necessary to terminate all its Company Stock Plans, such
termination to be effective at or before the Effective Time. For purposes of
this Agreement, "Option Consideration" means, with respect to any share of
Company
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Common Stock issuable under a particular Option, an amount equal to the excess,
if any, of (i) the Merger Consideration per share of Company Common Stock over
(ii) the exercise price payable in respect of such share of Company Common Stock
issuable under such Option.
(b) The Company shall take such steps as may be reasonably requested by
any party hereto to cause dispositions of Company equity securities (including
derivative securities) pursuant to the transactions contemplated by this
Agreement by each individual who is a director or officer of the Company to be
exempt under Rule 16b-3 promulgated under the Exchange Act in accordance with
that certain No-Action Letter dated January 12, 1999 issued by the Securities
and Exchange Commission (the "SEC") regarding such matters.
SECTION 2.4 Withholding Taxes. Parent, the Surviving Corporation and
the Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable to a holder of shares of Company Common Stock or Options
pursuant to this Agreement such amounts as may be required to be deducted or
withheld with respect to the making of such payment under the Code, or under any
provision of state, local or foreign Tax Law. To the extent that amounts are so
deducted and withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the Person in respect of which such deduction
and withholding was made.
SECTION 2.5 Adjustments. If during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
Company Common Stock, or securities convertible or exchangeable into or
exercisable for shares of Company Common Stock, shall occur by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares of Company Common Stock, or any similar transaction, or
any stock dividend thereon with a record date during such period, the Merger
Consideration shall be appropriately adjusted to reflect such change.
ARTICLE III
Representations and Warranties of the Company
Except as set forth in the disclosure schedule (each section of which
qualifies the correspondingly numbered representation and warranty to the extent
expressly specified therein and such other representations and warranties to the
extent a matter in such section of the disclosure schedule is disclosed in such
a way as to make its relevance to the information called for by such other
representation and warranty readily apparent) delivered by the Company to Parent
simultaneously with the execution of this Agreement (the "Company Disclosure
Schedule"), the Company represents and warrants to Parent and Merger Sub that:
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SECTION 3.1 Organization, Standing and Corporate Power.
(a) Each of the Company and its Subsidiaries is a corporation duly
organized, validly existing and, to the extent applicable in such jurisdiction,
in good standing under the Laws of the jurisdiction in which it is incorporated
and has all requisite corporate power and authority necessary to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted and as currently proposed by its management to be conducted. Each of
the Company and its Subsidiaries is duly licensed or qualified to do business
and is in good standing in each U.S. state and, to the extent applicable in such
jurisdiction, each other jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary, except where
the failure to be so licensed, qualified or in good standing, individually or in
the aggregate, has not had and would not reasonably be expected to have a
Company Material Adverse Effect. For purposes of this Agreement, the term
"Company Material Adverse Effect" shall mean any change, event, occurrence or
state of facts which has had, or would reasonably be expected to have, a
material adverse effect on (i) the business, assets, results of operations or
financial condition of the Company and its Subsidiaries taken as a whole;
provided, however, that none of the following shall be deemed either alone or in
combination to constitute, and none of the following shall be taken into account
in determining whether there has been or will be a Company Material Adverse
Effect: (1) any effect, change, event, occurrence or state of facts relating to
the U.S. or the global economy in general and not specifically relating to (and
to the extent not disproportionately affecting) the Company; (2) any effect,
change, event, occurrence or state of facts resulting from any reduction in the
U.S. federal budget for Homeland Security programs and not specifically relating
to (and to the extent not disproportionately affecting) the Company, (3) any
effect, change, event, occurrence or state of facts that arises out of or
results from the announcement or pendency of this Agreement or any of the
Transactions; and (4) any effect, change, event, occurrence or state of facts
resulting from (x) any action taken by the Company or its Subsidiaries with
Parent's express written consent or (y) the disposition of the Company NDT
Business in accordance with this Agreement or (ii) the Company's ability to
perform its obligations under this Agreement or consummate the Transactions.
Notwithstanding anything to the contrary contained in this Agreement, for
purposes of determining whether the conditions set forth in Sections 6.2(a) and
6.2(d) have been satisfied and whether Parent may terminate this Agreement
pursuant to Section 7.1(c)(i), a "Company Material Adverse Effect" shall be
deemed to have occurred if (and only if) the applicable change, event,
occurrence or state of facts (or aggregation of changes, events, occurrences or
state of facts) has resulted in or would reasonably be expected to result in
liability to Parent or its Subsidiaries (including, for purposes hereof, the
Company (or its Subsidiaries)) or diminution in the value of the Company
(including its Subsidiaries) (however arising, including as a result of a
diminution of the current or future revenues, earnings or net asset value of the
Company (including its Subsidiaries)) of $90,000,000 or more in the aggregate.
(b) Exhibit 21.1 of the Company's Form 10-K for the year ended December
31, 2003 lists all Subsidiaries of the Company together with the jurisdiction of
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organization of each such Subsidiary. All the outstanding shares of capital
stock of, or other equity interests in, each such Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable and are owned
directly or indirectly by the Company free and clear of all liens, pledges,
charges, mortgages, encumbrances, adverse rights or claims and security
interests of any kind or nature whatsoever (including any restriction on the
right to vote or transfer the same, except for such transfer restrictions of
general applicability as may be provided under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the "Securities
Act"), and the "blue sky" laws of the various States of the United States)
(collectively, "Liens"). Except as set forth in Exhibit 21.1 of the Company's
Form 10-K for the year ended December 31, 2003 or in Section 3.1(b) of the
Company Disclosure Schedule, the Company does not own, directly or indirectly,
any capital stock, voting securities or equity interests in any Person.
(c) The Company has delivered or made available to Parent complete and
correct copies of its certificate of incorporation and by-laws (the "Company
Charter Documents") and complete and correct copies of the certificates of
incorporation and by-laws (or comparable organizational documents) of each of
its Subsidiaries (the "Subsidiary Documents"), in each case as amended to the
date of this Agreement. All such Company Charter Documents and Subsidiary
Documents are in full force and effect and neither the Company nor any of its
Subsidiaries is in violation of any of their respective provisions. The Company
has made available to Parent and its representatives correct and complete copies
of the minutes (or, in the case of minutes that have not yet been finalized,
drafts thereof) of all meetings of stockholders, the Board of Directors and each
committee of the Board of Directors of the Company and each of its Subsidiaries
held since January 1, 2001 through the date of this Agreement.
SECTION 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of 60,000,000
shares of Company Common Stock and 5,000,000 shares of preferred stock, par
value $0.001 per share ("Company Preferred Stock"). At the close of business on
March 5, 2004 (except with respect to the information in clause (ii) below,
which is as of the close of business on March 11, 2004), (i) 17,995,656 shares
of Company Common Stock were issued and outstanding (of which 687,153 shares of
Company Common Stock were held by the Company in its treasury), (ii) 4,557,462
shares of Company Common Stock were reserved for issuance under the Company
Stock Plans (of which 4,210,931 shares of Company Common Stock were subject to
outstanding Options granted under the Company Stock Plans), (iii) no shares of
Company Preferred Stock were issued or outstanding and (iv) 3,906,250 shares of
Company Common Stock were reserved for issuance upon conversion of the Company's
3% Convertible Senior Notes due 2023 ("Convertible Notes") issued pursuant to an
Indenture, dated as of September 19, 2003, between the Company and U.S. Bank
National Association (the "Indenture") (a complete and correct copy of which has
been delivered or made available to Parent). All outstanding shares of Company
Common Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Included in Section 3.2(a) of the
Company Disclosure Schedule is a correct and complete list, as of
8
March 11, 2004, of all outstanding options or other rights to purchase or
receive shares of Company Common Stock granted under the Company Stock Plans or
otherwise, and, for each such option or other right, (1) the number of shares of
Company Common Stock subject thereto, (2) the date of grant, (3) the expiration
date, (4) exercise price thereof, (5) the name of the holder thereof and (6) the
number of options that are vested. The weighted average exercise price as of
February 10, 2004 of the then outstanding Options granted under the Company
Stock Plans was not less than $22.50. Between March 5, 2004 and the date of this
Agreement, the Company has not issued any shares of its capital stock, voting
securities or equity interests, or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock, voting
securities or equity interests, other than pursuant to the outstanding options
referred to above in this Section 3.2(a). Except (A) as set forth above in this
Section 3.2(a) or (B) as otherwise expressly permitted by Section 5.2 hereof, as
of the date of this Agreement there are not, and as of the Effective Time there
will not be, any shares of capital stock, voting securities or equity interests
of the Company issued and outstanding or any subscriptions, options, warrants,
calls, convertible or exchangeable securities, rights, commitments or agreements
of any character providing for the issuance of any shares of capital stock,
voting securities or equity interests of the Company, including any representing
the right to purchase or otherwise receive any Company Common Stock.
(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, none of the Company or any of its Subsidiaries is bound by any
outstanding subscriptions, options, warrants, calls, convertible or exchangeable
securities, rights, commitments or agreements of any character providing for the
issuance or disposition of any shares of capital stock, voting securities or
equity interests of any Subsidiary of the Company. There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock, voting securities or equity
interests (or any options, warrants or other rights to acquire any shares of
capital stock, voting securities or equity interests) of the Company or any of
its Subsidiaries.
(c) Section 3.2(c) of the Company Disclosure Schedule sets forth a
complete and correct list of the following information, as of the date of this
Agreement, with respect to the Convertible Notes: (i) the aggregate principal
amount thereof, (ii) the aggregate amount of accrued and unpaid interest thereon
and (iii) the conversion price thereof as of the date hereof.
SECTION 3.3 Authority; Noncontravention; Voting Requirements.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and, subject to obtaining the Company
Stockholder Approval, to perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by the Company of this
Agreement, and the consummation by it of the Transactions, have been duly
authorized and approved by its Board of Directors, and except for obtaining the
Company Stockholder Approval for the adoption of this Agreement, no other
corporate action on the part of the Company is necessary to authorize the
execution, delivery and performance by the Company of this
9
Agreement and the consummation by it of the Transactions. This Agreement has
been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery hereof by the other parties hereto, constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general application affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity, whether considered in a proceeding at law or in equity
(collectively, the "Bankruptcy and Equity Exception").
(b) The Company's Board of Directors, at a meeting duly called and
held, has by unanimous vote of all directors present (i) approved and declared
advisable this Agreement and the Transactions, including the Merger, and (ii)
resolved to recommend that stockholders of the Company adopt this Agreement (the
"Company Board Recommendation").
(c) Neither the execution and delivery of this Agreement by the Company
nor the consummation by the Company of the Transactions, nor compliance by the
Company with any of the terms or provisions hereof, will (i) conflict with or
violate any provision of the Company Charter Documents or any of the Subsidiary
Documents or (ii) assuming that the authorizations, consents and approvals
referred to in Section 3.4 and the Company Stockholder Approval are obtained and
the filings referred to in Section 3.4 are made, (x) violate any Law, judgment,
writ or injunction of any Governmental Authority applicable to the Company or
any of its Subsidiaries or any of their respective properties or assets, or (y)
materially violate or conflict with, result in the loss of any material benefit
under, constitute a material default (or an event which, with notice or lapse of
time, or both, would constitute a material default) under, result in the
termination of or a right of termination or cancellation under, accelerate the
performance required by, or result in the creation of any Lien upon any of the
respective properties, Intellectual Property Rights or other assets of, the
Company or any of its Subsidiaries under, any of the terms, conditions or
provisions of any loan or credit agreement, debenture, note, bond, mortgage,
indenture, deed of trust, license, lease, contract or other agreement,
instrument or obligation (each, a "Contract") that is listed in Section 3.13(a)
of the Company Disclosure Schedule or that is otherwise material to the business
of the Company or its Subsidiaries or any Permit.
(d) The affirmative vote (in person or by proxy) of the holders of a
majority of the outstanding shares of Company Common Stock at the Company
Stockholders Meeting or any adjournment or postponement thereof in favor of the
adoption of this Agreement (the "Company Stockholder Approval") is the only vote
or approval of the holders of any class or series of capital stock of the
Company or any of its Subsidiaries which is necessary to adopt this Agreement
and approve the Transactions.
SECTION 3.4 Governmental Approvals. Except for (i) the filing with the
SEC of a proxy statement relating to the Company Stockholders Meeting (as
amended or supplemented from time to time, the "Proxy Statement"), and other
filings required under, and compliance with other applicable requirements of,
the Securities
10
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), and the rules of The Nasdaq Stock Market, (ii)
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware pursuant to the DGCL, (iii) filings required under, and compliance
with other applicable requirements of, the HSR Act, (iv) filings required under,
and compliance with other applicable requirements of, non-U.S. Laws intended to
prohibit, restrict or regulate actions or transactions having the purpose or
effect of monopolization, restraint of trade or harm to competition
(collectively, "Foreign Antitrust Laws"), and (v) filings with the U.S.
Department of State required under Section 122.4 of the International Traffic in
Arms Regulations, no consents or approvals of, or filings, declarations or
registrations with, any Governmental Authority are necessary for the execution
and delivery of this Agreement by the Company and the consummation by the
Company of the Transactions, other than such other consents, approvals, filings,
declarations or registrations that, if not obtained, made or given, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the Company's ability to, in a timely manner, perform its
obligations under this Agreement or consummate the Transactions.
SECTION 3.5 Company SEC Documents; Undisclosed Liabilities.
(a) The Company has filed and furnished all required reports,
schedules, forms, prospectuses, and registration, proxy and other statements
required to be filed or furnished by it with or to the SEC since January 1, 2001
(collectively, together with the Company's Annual Report on Form 10-K for the
year ended December 31, 2003 (the "2003 Form 10-K ") in the form included in
Section 3.5(a) of the Company Disclosure Schedule, and in each case including
all exhibits and schedules thereto and documents incorporated by reference
therein, the "Company SEC Documents")). None of the Company's Subsidiaries is
required to file periodic reports with the SEC pursuant to the Exchange Act. As
of their respective effective date (in the case of Company SEC Documents that
are registration statements filed pursuant to the requirements of the Securities
Act) and as of their respective SEC filing dates and the date of each amendment
thereto filed with the SEC (in the case of all other Company SEC Documents), the
Company SEC Documents complied (or, in the case of the 2003 Form 10-K, will
comply) in all material respects with the requirements of the Exchange Act and
the Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder, each as in effect on the applicable date referred to
above, applicable to such Company SEC Documents, and none of the Company SEC
Documents as of such respective dates contained (and, in the case of the 2003
Form 10-K, will not contain) any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
(or, in the case of the 2003 Form 10-K, will be) made, not misleading. No
investigation by the SEC with respect to the Company or any of its Subsidiaries
is pending or, to the Knowledge of the Company, threatened. The 2003 Form 10-K
will be filed with the SEC on the date hereof in the form included in Section
3.5(a) of the Company Disclosure Schedule.
(b) The consolidated financial statements of the Company included in
the Company SEC Documents comply as to form in all material respects with
applicable
11
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited quarterly statements, as indicated in the notes thereto) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) 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 and cash flows
for the periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments, none of which has been or will
be, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole). Without limiting the generality of the
foregoing, with respect to each Annual Report on Form 10-K and each Quarterly
Report on Form 10-Q included in the Company SEC Documents, the financial
statements and other financial information included in such reports fairly
present (within the meaning of the Xxxxxxxx-Xxxxx Act of 2002) in all material
respects the financial condition and results of operations of the Company as of,
and for, the periods presented in such Company SEC Documents.
(c) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and Rule 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Company, including its consolidated
Subsidiaries, required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to the
Company's principal executive officer and its principal financial officer to
allow timely decisions regarding required disclosure; and, except as may be
disclosed in reports filed by the Company with the SEC after the date of this
Agreement in accordance with applicable SEC requirements with respect to
disclosure controls and procedures maintained by the Company after the date
hereof (it being understood that any such disclosure in such reports shall not
have the effect of modifying the representation set forth in this sentence, to
the extent this representation relates to the period prior to the date hereof),
such disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms. The Company's principal
executive officer and its principal financial officer have disclosed, based on
their most recent evaluation, to the Company's auditors and the audit committee
of the Board of Directors of the Company (x) all significant deficiencies and
material weaknesses in the design or operation of internal controls which are
reasonably likely to adversely affect the Company's ability to record, process,
summarize and report financial data and have identified for the Company's
auditors any material weaknesses in internal controls and (y) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company's internal controls. The Company has provided to
Parent a correct and complete summary of any such disclosure made by management
of the Company to the Company's auditors and audit committee since January 1,
2002. With respect to each Annual Report on Form 10-K, each Quarterly Report on
Form 10-Q and each amendment of any such report included in the Company SEC
Documents filed since January 1, 2001, the principal executive officer and the
principal financial officer of Company have made (or, in the case of the 2003
Form 10-K, will make at the time of filing thereof) all certifications required
by the Sarbanes-
12
Oxley Act of 2002 and any related rules and regulations promulgated by the SEC,
and the statements contained in such certifications are complete and correct.
(d) The Company is in compliance in all material respects with the
provisions of Section 13(b) of the Exchange Act. Neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any director, officer,
agent, employee or other Person acting on behalf of the Company or any of its
Subsidiaries, has (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures. Except as set forth in the Filed
Company SEC Documents or for events (or series of related matters) as to which
the amounts involved do not exceed $60,000, between the Company's proxy
statement dated May 9, 2003 and the date of this Agreement, no event has
occurred that would be required to be reported pursuant to Item 404 of
Regulation S-K promulgated by the SEC.
(e) Since July 30, 2002, (x) neither the Company nor any of its
Subsidiaries nor, to the Knowledge of the Company, any director, officer,
employee, auditor, accountant or representative of the Company or any of its
Subsidiaries has received or otherwise had or obtained knowledge of any material
complaint, allegation, assertion or claim, whether written or oral, regarding
the accounting or auditing practices, procedures, methodologies or methods of
the Company or any of its Subsidiaries or their respective internal accounting
controls, including any material complaint, allegation, assertion or claim that
the Company or any of its Subsidiaries has engaged in questionable accounting or
auditing practices, and (y) no attorney representing the Company or any of its
Subsidiaries, whether or not employed by the Company or any of its Subsidiaries,
has reported evidence of a material violation of securities Laws, breach of
fiduciary duty or similar violation by the Company or any of its officers,
directors, employees or agents to the Board of Directors of the Company or any
committee thereof or to any director or officer of the Company.
(f) Neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) whether or not required, if known, to be reflected or reserved
against on a consolidated balance sheet of the Company prepared in accordance
with GAAP or the notes thereto, except liabilities (i) as and to the extent set
forth on the audited balance sheet of the Company and its Subsidiaries as of
December 31, 2003 (the "Balance Sheet Date") (including the notes thereto)
included in the 2003 Form 10-K, (ii) incurred after the Balance Sheet Date in
the ordinary course of business consistent with past practice that, individually
or in the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect or (iii) incurred after the date hereof in
accordance with Section 5.2.
SECTION 3.6 Absence of Certain Changes or Events. Since the Balance
Sheet Date, there have not been any events, changes, occurrences or state of
facts that, individually or in the aggregate, have had or would reasonably be
expected to
13
have a Company Material Adverse Effect. Except as disclosed in the Filed Company
SEC Documents, between the Balance Sheet Date and the date of this Agreement (a)
the Company and its Subsidiaries have carried on and operated their respective
businesses in all material respects in the ordinary course of business
consistent with past practice and (b) neither the Company nor any of its
Subsidiaries has taken any action described in Section 5.2 hereof that if taken
after the date hereof and prior to the Effective Time without the prior written
consent of Parent would violate such provision. Without limiting the foregoing,
since the Balance Sheet Date there has not occurred any damage, destruction or
loss (whether or not covered by insurance) of any material asset of the Company
or any of its Subsidiaries which materially affects the use thereof.
SECTION 3.7 Legal Proceedings. There is no pending or, to the Knowledge
of the Company, threatened, material legal, administrative, arbitral or other
proceeding, claim, suit or action against, or, to the Knowledge of the Company,
governmental or regulatory investigation of, the Company or any of its
Subsidiaries, nor is there any injunction, order, judgment, ruling or decree
imposed (or, to the Knowledge of the Company, threatened to be imposed) upon the
Company, any of its Subsidiaries or the assets of the Company or any of its
Subsidiaries (including their respective Intellectual Property Rights) by or
before any Governmental Authority, including, in each case, in connection with
an alleged violation of applicable Laws relating to (i) the export of goods and
services to any foreign jurisdiction against which the United States or the
United Nations maintains sanctions or export controls, including applicable
regulations of the US Department of Commerce and the US Department of State
("Export Control Requirements"), or (ii) improper payments, including the
Foreign Corrupt Practices Act.
SECTION 3.8 Compliance With Laws; Permits.
(a) The Company and its Subsidiaries are (and since January 1, 2002
have been) in compliance in all material respects with all laws (including
common law), statutes, ordinances, codes, rules, regulations, decrees and orders
of Governmental Authorities (collectively, "Laws") applicable to the Company or
any of its Subsidiaries, any of their properties or other assets or any of their
businesses or operations (including those Laws related to Export Control
Requirements and improper payments). Without limiting the generality of the
foregoing, except as set forth in Section 3.8(a) of the Company Disclosure
Schedule, none of the Company, its Subsidiaries or any of their respective
Affiliates is a party to any Contract or bid with, or has conducted business
with (directly or, to the Knowledge of the Company, indirectly), a third party
located in Cuba, Myanmar (Burma), Iran, Iraq, North Korea, Libya or Sudan. Since
January 1, 2002, neither the Company nor any of its Subsidiaries has made or has
been ordered to make any payment in respect of any Governmental Damages. Since
January 1, 2002, neither the Company nor any of its Subsidiaries has received
written notice to the effect that a Governmental Authority claimed or alleged
that the Company or any of its Subsidiaries was not in compliance in a material
respect with any Law applicable to the Company or any of its Subsidiaries, any
of their material properties or other assets or any of their businesses or
operations (including those Laws related to Export Control Requirements and
improper payments).
14
(b) The Company and each of its Subsidiaries hold all material
licenses, franchises, permits, certificates, approvals and authorizations from
Governmental Authorities, or required by Governmental Authorities to be
obtained, in each case necessary for the conduct of their respective businesses,
including the manufacture and sale of their respective products (collectively,
"Permits"). The Company and its Subsidiaries are (and since January 1, 2002 have
been) in compliance in all material respects with the terms of all Permits.
Since January 1, 2002, neither the Company nor any of its Subsidiaries has
received written notice to the effect that a Governmental Authority was
considering the amendment, termination, revocation or cancellation of any
Permit. The consummation of the Merger, in and of itself, will not cause the
revocation or cancellation of any Permit that is material to the Company and its
Subsidiaries taken as a whole.
SECTION 3.9 Information in Proxy Statement. The Proxy Statement and any
other document filed with the SEC by the Company in connection with the Merger
(taking into account any amendment thereof or supplement thereto), at the date
first mailed to the stockholders of the Company, at the time of the Company
Stockholders Meeting and at the time filed with the SEC, as the case may be,
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading; provided, however, that no representation is made by the Company
with respect to statements made therein based on information supplied in writing
by Parent or Merger Sub specifically for inclusion in such documents. The Proxy
Statement and such other documents filed with the SEC by the Company will comply
in all material respects with the provisions of the Exchange Act.
SECTION 3.10 Tax Matters.
(a) Each of the Company and its Subsidiaries has timely filed, or has
caused to be timely filed on its behalf (taking into account an extension of
time within which to file), all Tax Returns required to be filed by it
(including all Section 338 elections relating to the Company's acquisition of
Yxlon International Holding GmbH and its Subsidiaries), and all such Tax Returns
and elections are correct and complete in all material respects. All Taxes shown
to be due on such Tax Returns have been timely paid.
(b) The most recent financial statements contained in the Company SEC
Documents reflect an adequate reserve for all Taxes payable by the Company and
its Subsidiaries for all taxable periods and portion thereof through the date of
such financial statements. No deficiency with respect to Taxes has been
proposed, asserted or assessed against the Company or any of its Subsidiaries.
(c) The Federal income Tax Returns of the Company and each of its U.S.
Subsidiaries have been examined by and settled with the IRS (or the applicable
statute of limitations has expired) for all years through September 1996. All
assessments for Taxes due with respect to such completed and settled
examinations or any concluded litigation have been fully paid.
15
(d) Neither the Company nor any of its Subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code since the
effective date of Section 355(e) of the Code.
(e) No audit or other administrative or court proceedings are pending
with any Governmental Authority with respect to Taxes of the Company or any of
its Subsidiaries and no written notice thereof has been received and is
outstanding.
(f) Neither the Company nor any of its Subsidiaries is a party to any
contract, agreement, plan or other arrangement that, individually or
collectively, would give rise to the payment of any amount which would not be
deductible by reason of Section 162(m) or Section 280G of the Code or would give
rise to an excise Tax pursuant to Section 4999 of the Code.
(g) The Company has made available to Parent complete and correct
copies of (i) all income and franchise Tax Returns of the Company and its
Subsidiaries for the preceding three taxable years and (ii) any audit report
issued within the last three years (or otherwise with respect to any audit or
proceeding in progress) relating to income and franchise Taxes of the Company or
any of its Subsidiaries.
(h) The Company is not a "United States real property holding
corporation" within the meaning of Section 897 of the Code during the 5-year
period ending on the Closing Date.
(i) For purposes of this Agreement: (i) "Taxes" shall mean (a) all
federal, state, local or foreign taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, (b) all interest,
penalties, fines, additions to tax or additional amounts imposed by any Taxing
Authority in connection with any item described in clause (a), and (c) any
transferee liability in respect of any items described in clauses (a) and/or (b)
payable by reason of contract, assumption, transferee liability, operation of
Law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor
thereof of any analogous or similar provision under Law) or otherwise, and (ii)
"Tax Returns" shall mean any return, report, claim for refund, estimate,
information return or statement, tax election or other similar document relating
to or required to be filed with any Governmental Authority with respect to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
SECTION 3.11 Employee Benefits and Labor Matters.
(a) Section 3.11(a) of the Company Disclosure Schedule sets forth a
complete and correct list, separately with respect to each country in which the
Company
16
or any of its Subsidiaries has employees, of the following matters as of the
date of this Agreement: (i) all "employee benefit plans" (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and without regard to whether ERISA applies thereto), and (ii) all
other employee benefit plans, agreements, policies or arrangements or payroll
practices, including employment, consulting or other compensation agreements,
collective bargaining agreements, and all plans, agreements, policies or
arrangements providing for bonus or other incentive compensation, equity or
equity-based compensation, retirement, deferred compensation, change in control
rights or benefits, termination or severance benefits, stock purchase, sick
leave, vacation pay, salary continuation, hospitalization, medical insurance,
life insurance, fringe benefits or other compensation, or educational
assistance, in each case pursuant to which the Company or any of its
Subsidiaries has any obligation or liability (contingent or otherwise)
thereunder for current or former directors or employees of the Company or any of
its Subsidiaries (the "Employees"); but excluding all plans, agreements,
policies, arrangements or practices providing for "at will" employment which can
be terminated without liability in excess of $200,000 in the aggregate or
$50,000 for any single such plan, agreement, policy, arrangement or practice
(collectively, including the Company Stock Plans, the "Company Plans"). Section
3.11(a) of the Company Disclosure Schedule separately sets forth as of the date
of this Agreement each Company Plan which is a "multiemployer plan", as defined
in Section 3(37) of ERISA (a "Multiemployer Plan"), or is or has been subject to
Sections 4063 or 4064 of ERISA.
(b) True, current and complete copies of the following documents, with
respect to each of the Company Plans (other than a Multiemployer Plan), have
been delivered or made available to Parent by the Company, to the extent
applicable: (i) any plans, all amendments thereto and related trust documents,
insurance contracts or other funding arrangements, and amendments thereto; (ii)
the most recent Forms 5500 and all schedules thereto and the most recent
actuarial report, if any; (iii) the most recent IRS determination letter; (iv)
summary plan descriptions, or if there is none for a particular Company Plan,
the primary written explanation to employees of that plan; and (v) written
descriptions of all non-written agreements relating to the Company Plans.
(c) Except as disclosed in Section 3.11(c) of the Company Disclosure
Schedule, since January 1, 2001, the Company Plans have been maintained, in all
material respects, in accordance with their terms and with all applicable
provisions of ERISA, the Code and other applicable Laws, and neither the Company
nor any of its Subsidiaries nor any "party in interest" or "disqualified person"
with respect to the Company Plans has engaged in a non-exempt "prohibited
transaction" within the meaning of Section 4975 of the Code or Section 406 of
ERISA or in a violation of any other applicable Laws comparable to such
provisions of the Code or ERISA. No fiduciary has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any Company Plan.
(d) Each Company Plan that is intended to meet the requirements for
country specific tax-favored treatment under Subchapter B of Chapter 1 of
Subtitle A of the Code (in the case of tax-favored treatment for U.S. federal
income tax purposes)
17
or other applicable Laws (other than the Laws of the United States or
jurisdictions located within the United States and its territories) meets such
requirements, including (i) any Company Plans intended to qualify under Section
401 of the Code are so qualified and (ii) any trusts intended to be exempt from
federal income taxation under Section 501 of the Code are so exempt. Except as
disclosed in Section 3.11(d) of the Company Disclosure Schedule, nothing has
occurred with respect to the operation of the Company Plans that would
reasonably be expected to cause the loss of such tax favored treatment,
qualification or exemption, or the imposition of any liability, penalty or tax
under ERISA, the Code or other applicable Law.
(e) Neither the Company, any of its Subsidiaries or any other Persons
who are treated as a single employer together with the Company or any of its
Subsidiaries pursuant to Section 414(b), (c), (m) (o) of ERISA ("ERISA
Affiliates") has any unsatisfied liability with respect to any complete or
partial withdrawal from any Multiemployer Plan, or the termination or
reorganization of any Multiemployer Plan. Parent will not have by reason of the
consummation of the Transactions any additional obligation or liability
(contingent or otherwise) (i) with respect to any Multiemployer Plan, or (ii)
any collective bargaining agreement (or any memorandum of understanding or other
modification of any collective bargaining agreement).
(f) With respect to each Company Post-Employment Benefit Plan (as
defined below), the Company has provided or made available to Parent separately
as to each such plan as of December 31, 2003: (i) a statement of the liabilities
under such plan (as determined using actuarial assumptions consistent with U.S.
GAAP (regardless of whether U.S. GAAP applies), (ii) a list of all assets of
such plan, (iii) the amount of any book reserves or other amounts set aside for
payment of liabilities arising under such plan, and (iv) the amount or a
description of any undisclosed liabilities arising under such plan. A "Company
Post-Employment Benefit Plan" is any Company Plan providing for post-employment
benefits other than (v) a governmental plan (within the United States) to which
contributions are mandatory, such as Social Security or Medicare, (w) a defined
contribution plan within the meaning of Section 414(i) of the Code, (x) a plan
the liability for which is contingent on an event (such as death or disability)
occurring while the employee is still an employee and the benefit is provided
pursuant to one or more insurance policies or annuity contracts for which the
premiums have been paid currently, (y) a plan for which the sole post-employment
benefit is required under COBRA or similar laws of any state within the United
States or (z) where all liabilities under such plan are fully provided for or
otherwise fully satisfied by one or more fully paid up insurance policies or
annuity contracts with a person unaffiliated with the Company or any of its
Subsidiaries.
Except as disclosed in Section 3.11(f) of the Company Disclosure
Schedule, each Company Post-Employment Benefit Plan primarily covering current
or former employees of the Company or any of its Subsidiaries is funded through
assets held in a trust or similar funding vehicle, insurance, annuity contracts
or similar agreements, or amounts reserved on the financial statements of the
Company or any of its Subsidiaries such that the liabilities arising under such
plan (as calculated using actuarial assumptions and methods consistent with U.S.
GAAP regardless of whether U.S. GAAP applies) are
18
fully satisfied or provided for. Each Company Plan complies in all material
respects with all applicable Laws and to the extent such plan is intended or
required to register with any Governmental Authority such plan is and has been
properly registered.
(g) Except as disclosed in Section 3.11(g) of the Company Disclosure
Schedule, all contributions (including all employer contributions and employee
salary reduction contributions) required to have been made under any of the
Company Plans (including workers compensation) or by law (without regard to any
waivers granted under Section 412 of the Code) to any funds or trusts
established thereunder or in connection therewith have been made by the due date
thereof (including any valid extension). As of the date of the most recent
consolidated balance sheet of the Company included in the Company SEC Documents
for the period ending as of the Closing Date and for the three preceding years,
all contributions that are not yet due will have been paid or sufficient
accruals for such contributions and other payments in accordance with GAAP are
duly and fully provided for on such balance sheets. No accumulated funding
deficiencies exist in any of the Company Plans or Title IV Plans subject to
Section 412 of the Code.
(h) There is no "amount of unfunded benefit liabilities" as defined in
Section 4001(a)(18) of ERISA in any of the Company Plans subject to Title IV of
ERISA, as determined in accordance with the actuarial assumptions used by the
Pension Benefit Guaranty Corporation ("PBGC") to determine the level of funding
required in the event of the termination of such Company Plan.
(i) Neither the Company nor any of its Subsidiaries or ERISA Affiliates
has terminated any Title IV Plan, or incurred any outstanding liability under
Section 4062 of ERISA to the PBGC or to a trustee appointed under Section 4042
of ERISA. All premiums due the PBGC with respect to the Title IV Plans have been
timely paid.
(j) Except as otherwise disclosed in Section 3.11(j) of the Company
Disclosure Schedule, no liability under any Company Plan is funded, nor has any
such obligation been satisfied, with the purchase of a contract from an
insurance company that is not rated AA (or better) by Standard & Poor's
Corporation or the equivalent by a nationally recognized rating agency.
(k) Neither the Company nor any of its Subsidiaries or ERISA
Affiliates, or any organization to which the Company is a successor or parent
corporation within the meaning of Section 4069(b) of ERISA, has engaged in any
transaction within the meaning of Section 4069 or 4212(c) of ERISA as to which
the Company or any of its Subsidiaries has any obligation or liability,
contingent or otherwise.
(l) There are no pending actions, claims or lawsuits which have been
asserted or instituted against the Company Plans, the assets of any of the
trusts under such plans or the sponsor or administrator of any of the Company
Plans, or against any fiduciary of the Company Plans (other than routine benefit
claims), nor does the
19
Company have any Knowledge of facts that would reasonably be expected to form
the basis for any such claim or lawsuit.
(m) All amendments and actions required to bring the Company Plans into
conformity in all material respects with all of the applicable provisions of the
Code, ERISA and other applicable laws have been made or taken, except to the
extent that such amendments or actions are not required by law to be made or
taken until a date after the Closing Date.
(n) None of the Company Plans provide for post-employment life or
health insurance, or other welfare benefits coverage for any participant or any
beneficiary of a participant, except as may be required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") or similar laws
of any state within the United States, and at the expense of the participant or
the participant's beneficiary. Each of the Company and any ERISA Affiliate which
maintains a "group health plan" within the meaning Section 5000(b)(1) of the
Code has complied with the notice and continuation requirements of Section 4980B
of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA.
(o) Except (i) as set forth in Section 3.11(o) of the Company
Disclosure Schedule or (ii) as set forth in Sections 2.1 and 2.3, neither the
execution and delivery of this Agreement nor the consummation of the
Transactions will (i) result in any payment becoming due to any Employee, (ii)
increase any benefits otherwise payable under any Company Plan or (iii) result
in the acceleration of the time of payment or vesting of any such benefits under
any such plan.
(p) Neither the Company nor any of its Subsidiaries has a contract,
plan or legally binding commitment to create any additional Company Plan or to
modify any existing Company Plan. Neither the Company nor any of its
Subsidiaries has announced in writing an intention to create any additional
Company Plan or to modify any existing Company Plan.
(q) No stock or other security issued by the Company or any of its
Subsidiaries forms or has formed a material part of the assets of any Company
Plan. For purposes of this Section 3.11(q), a Company Stock Plan shall not be
deemed to be a Company Plan.
(r) Any individual who performs services for the Company or any of its
Subsidiaries and who is not treated as an employee of the Company or any of its
Subsidiaries for federal income tax purposes is not an employee for such
purposes.
(s) Except as disclosed in Section 3.11(s) of the Company Disclosure
Schedule, (i) none of the Employees is represented in his or her capacity as an
employee of the Company or any of its Subsidiaries by any labor organization or
works council or similar representative ("labor organization") and (ii) neither
the Company nor any of its Subsidiaries has recognized any labor organization,
nor has any labor organization been elected as the collective bargaining agent
of any Employees, nor has the Company or any
20
of its Subsidiaries entered into any collective bargaining agreement or union
contract recognizing any labor organization as the bargaining agent of any
Employees. To the extent that any consultation or other obligations with respect
to any labor organizations arise as a result of or are required to effect the
Transactions, either under Law or Contract, the Company will fully satisfy all
such obligations prior to Closing. There is no union organization activity
involving any of the Employees, pending or, to the Knowledge of the Company,
threatened, nor has there ever been union representation involving any of the
Employees. There is no picketing pending or, to the Knowledge of the Company,
threatened, and there are no strikes, slowdowns, work stoppages, other job
actions, lockouts, arbitrations or other similar labor disputes involving any of
the Employees pending or, to the Knowledge of the Company, threatened. There are
no complaints, charges or claims against the Company or any of its Subsidiaries
pending or, to the Knowledge of the Company, threatened that would reasonably be
expected to be brought or filed with any Governmental Authority or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment or failure to employ by the Company or
any of its Subsidiaries, of any individual. The Company and its Subsidiaries are
in compliance with all Laws relating to the employment of labor, including all
such Laws relating to wages, hours, the Worker Adjustment and Retraining
Notification Act and any similar state or local "mass layoff" or "plant closing"
law ("WARN"), collective bargaining, discrimination, civil rights, safety and
health, workers' compensation and the collection and payment of withholding
and/or social security taxes and any similar tax, except for immaterial
non-compliance. There has been no "mass layoff" or "plant closing" (as defined
by WARN) with respect to the Company or any of its Subsidiaries since September
1, 2003.
SECTION 3.12 Environmental Matters.
(a) Except (i) as set forth in Section 3.12(a) of the Company
Disclosure Schedule and (ii) for those matters that, individually or in the
aggregate, would not reasonably be expected to give rise to Environmental
Liabilities in excess of $1,000,000, (A) each of the Company and its
Subsidiaries is, and has been, in compliance with all applicable Environmental
Laws, (B) there is no investigation, suit, claim, action or proceeding pending
or, to the Knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries or any real property owned, operated or leased by the
Company or any of its Subsidiaries relating to or arising under Environmental
Laws; (C) since January 1, 2001, neither the Company nor any of its Subsidiaries
has received any notice of or entered into or assumed by contract or operation
of Law or otherwise, any obligation, liability, order, settlement, judgment,
injunction or decree relating to or arising under Environmental Laws, and (D) no
facts, circumstances or conditions exist with respect to the Company or any of
its Subsidiaries or any property currently, or to the Knowledge of the Company,
formerly owned, operated or leased by the Company or any of its Subsidiaries or
any property to which the Company or any of its Subsidiaries arranged for the
disposal or treatment of Hazardous Materials that would reasonably be expected
to give rise to Environmental Liabilities. The matters set forth in Section
3.12(a) of the Company Disclosure Schedule, individually or in the aggregate,
have not had and would not reasonably be expected to have a Company Material
Adverse Effect.
21
(b) The Company has made available correct and complete copies of
all environmentally related audits, studies, reports, analyses and results of
investigations that are in the Company's possession or in the possession of a
third party that performed such services on the Company's behalf and have been
performed with respect to currently or previously owned, leased or operated
properties of the Company or any of its Subsidiaries.
(c) The Transactions do not require the consent of or filings with
any Governmental Authority with jurisdiction over the Company or any of its
Subsidiaries on environmental matters; and no real estate owned or leased by the
Company or any of its Subsidiaries is located in New Jersey or Connecticut.
(d) (i) The Company and its Subsidiaries have obtained and currently
maintain all Permits necessary under Environmental Laws for their operations,
(ii) there is no investigation known to the Company, suit, claim, action or
proceeding pending or, to the Knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any real property owned,
operated or leased by the Company or any of its Subsidiaries to revoke such
Permits, and (iii) neither the Company nor any of its Subsidiaries has received
any notice from any Person to the effect that there is lacking any Permit
required under Environmental Law for the current use or operation of any
property owned, operated or leased by the Company or any of its Subsidiaries.
(e) Except to the extent the following would not, individually or in
the aggregate, reasonably be expected to give rise to Environmental Liabilities
in excess of $1,000,000, there is not now, nor has there been in the past, on,
in or under any real property owned, leased or operated by the Company or any of
its Subsidiaries or to the Knowledge of the Company, any of their respective
predecessors (i) any underground storage tanks, above-ground storage tanks,
dikes or impoundments, (ii) any asbestos-containing materials, (iii) any
polychlorinated biphenyls or (iv) any radioactive substances.
(f) Neither the Company nor any of its Subsidiaries has (i)
manufactured or distributed or otherwise incorporated into any product it
manufactured or distributed, or (ii) ever acquired any company that manufactured
or distributed or otherwise incorporated into any product it manufactured or
distributed, any asbestos or asbestos-containing materials.
(g) For purposes of this Agreement:
(i) "Environmental Laws" means all Laws relating in any way to the
environment, preservation or reclamation of natural resources, the
presence, management or Release of, or exposure to, Hazardous Materials,
or to human health and safety, including the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
22
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.), as each has been amended and the regulations promulgated pursuant
thereto and all analogous state, local or foreign laws and regulations.
(ii) "Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, remedial actions, losses,
damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of
counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as
a result of any claim or demand by any other Person or arising under any
Environmental Law, whether known or unknown, accrued or contingent,
whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, in any case to the extent based
upon, related to, or arising under or pursuant to any Environmental Law,
environmental permit, order or agreement with any Governmental Authority
or other Person under Environmental Laws.
(iii) "Hazardous Materials" means any material, substance of waste
that is regulated, classified, or otherwise characterized under or
pursuant to any Environmental Law as "hazardous", "toxic", "pollutant",
"contaminant", "radioactive" or words of similar meaning or effect,
including petroleum and its by-products, asbestos, polychlorinated
biphenyls, radon, mold, urea formaldehyde insulation, chlorofluorocarbons
and all other ozone-depleting substances.
(iv) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migrating into or through the environment or any natural or
man-made structure.
SECTION 3.13 Contracts.
(a) Set forth in Section 3.13(a) of the Company Disclosure Schedule
is a list as of the date of this Agreement of each of the following Contracts to
which the Company or any of its Subsidiaries is a party and under which the
Company or any of its Subsidiaries has any rights or obligations (contingent or
otherwise): (i) Contract that would be required to be filed as an exhibit to a
Registration Statement on Form S-1 under the Securities Act or an Annual Report
on Form 10-K under the Exchange Act if such registration statement or report was
filed by the Company with the SEC on the date hereof, (ii) Contract that
purports to limit, curtail or restrict the ability of the Company or any of its
existing or future Affiliates (excluding natural persons) to compete in any
geographic area or line of business, (iii) partnership or joint venture
agreement, (iv) Contract for the acquisition, sale or lease of material
properties or assets (by merger, purchase or sale of stock or assets or
otherwise) entered into since January 1, 2001 (other than acquisitions or leases
of supplies, office equipment or raw materials for operations in the ordinary
course of business consistent with past practice), (v) Contract with any (A)
Governmental Authority that involves consideration (whether or not measured in
cash) in
23
fiscal year 2003 in excess of $2,500,000 or that is reasonably likely to
involve consideration in fiscal year 2004 or fiscal year 2005 in excess of
$2,500,000 or (B) director, officer or other Affiliate of the Company, (vi) loan
or credit agreement, mortgage, indenture, note or other Contract or instrument
evidencing indebtedness for borrowed money by the Company or any of its
Subsidiaries or any Contract or instrument pursuant to which indebtedness for
borrowed money may be incurred or is guaranteed by the Company or any of its
Subsidiaries, (vii) voting agreement, (viii) license or royalty-bearing Contract
(including all Intellectual Property Licenses, but excluding such licenses
related to Intellectual Property related to Software embedded in or intended to
be installed on products of the Company or any of its Subsidiaries which
licenses are incorporated in its product sales and service agreements in the
ordinary course of business ("Embedded Licenses"), licenses of commercial
off-the-shelf Software and contract manufacturing Contracts and equipment or
component testing Contracts entered into in the ordinary course of business),
(ix) customer, client or supply Contract of the Company or any Subsidiary of the
Company that involves consideration (whether or not measured in cash) in fiscal
year 2003 in excess of $2,500,000 or that is reasonably likely to involve
consideration in fiscal year 2004 or fiscal year 2005 in excess of $2,500,000,
(x) sales representative or distribution Contract, (xi) collective bargaining
agreement, (xii) "standstill" or similar agreement, (xiii) lease or rental
Contract involving real property or payments in excess of $100,000 per year,
(xiv) Contract (other than Embedded Licenses and contract manufacturing
Contracts, equipment or component testing Contracts, product sale and service
agreements and agreements to manufacture components, in each case entered into
in the ordinary course of business) providing for indemnification by the Company
or any of its Subsidiaries against any charge of infringement of any
Intellectual Property Rights, (xv) consulting Contract that is not terminable by
the Company or its Subsidiaries on notice of 90 days or less, (xvi) to the
extent material to the business or financial condition of the Company and its
Subsidiaries, taken as a whole, (A) product design or development Contract or
(B) Contract granting a right of first refusal or first negotiation, (xvii)
Contract that is otherwise material to the business of the Company or its
Subsidiaries whether or not entered into in the ordinary course of business
consistent with past practice and (xviii) commitment or agreement to enter into
any of the foregoing (the Contracts and other documents required to be listed on
Section 3.13(a) of the Company Disclosure Schedule, together with any and all
other Contracts of such type entered into in accordance with Section 5.2, each a
"Material Contract"). The Company has heretofore made available to Parent
complete and correct copies of each Material Contract in existence as of the
date hereof, together with any and all amendments and supplements thereto and
material "side letters" and similar documentation relating thereto.
(b) Each of the Material Contracts is valid, binding and in full
force and effect and is enforceable in accordance with its terms by the Company
and its Subsidiaries party thereto, subject to the Bankruptcy and Equity
Exception. Except as separately identified in Section 3.13(b) of the Company
Disclosure Schedule, no Material Contract will cease to be valid and binding and
in full force and effect as a result of the consummation of the Transactions and
no approval, consent or waiver of any Person is needed in order that any
Material Contract continue to be valid, binding and in full force and effect
following the consummation of the Transactions. Neither the Company nor
24
any of its Subsidiaries is in default in any material respect under any Material
Contract, nor does any condition exist that, with notice or lapse of time or
both, would constitute a default in any material respect thereunder by the
Company or its Subsidiaries party thereto. To the Knowledge of the Company, no
other party to any Material Contract is in default in any material respect
thereunder, nor does any condition exist that with notice or lapse of time or
both would constitute a default in any material respect by any such other party
thereunder. Neither the Company nor any of its Subsidiaries has received any
notice of termination or cancellation under any Material Contract, received any
notice of breach or default in any material respect under any Material Contract
which breach has not been cured, or granted to any third party any rights,
adverse or otherwise, that would constitute a breach of any Material Contract.
SECTION 3.14 Government Contracts. In connection with the business
of the Company and its Subsidiaries:
(a) With respect to each Government Contract and Government
Subcontract, since January 1, 2000 (i) each of the Company, its Subsidiaries and
their respective Affiliates have complied in all material respects with the
terms and conditions of such Government Contract or Government Subcontract,
including all clauses, provisions and requirements incorporated expressly, by
reference, or by operation of law therein; (ii) each of the Company, its
Subsidiaries and their respective Affiliates have complied in all material
respects with all applicable Laws or agreements pertaining to such Government
Contract or Government Subcontract, including, where applicable, the Truth in
Negotiations Act and the Company's Cost Accounting Standards disclosure
statement, if any; (iii) all representations and certifications executed,
acknowledged or set forth in or pertaining to such Government Contract or
Government Subcontract were complete and correct as of their effective date and
each of the Company, its Subsidiaries and their respective Affiliates have
complied in all material respects with all such representations and
certifications; (iv) no Governmental Authority nor any prime contractor,
subcontractor or other Person has notified the Company, its Subsidiaries or any
of their respective Affiliates, either in writing or orally, that the Company,
its Subsidiaries or any such Affiliate has breached or violated any enactment,
certification, regulation, representation, clause, provision or requirement
pertaining to such Government Contract or Government Subcontract; (v) no
termination for convenience, termination for default, cure notice, show cause
notice, or stop work order is currently in effect pertaining to such Government
Contract or Government Subcontract; (vi) to the Knowledge of the Company, no
cost incurred by the Company, its Subsidiaries or any of their respective
Affiliates pertaining to such Government Contract or Government Subcontract has
been challenged, is the subject of any audit or investigation or has been
disallowed by any Governmental Authority and (vii) no money due to the Company
or any of its Subsidiaries pertaining to such Government Contract or Government
Subcontract has been withheld, reduced or set off nor has any claim been made to
withhold or set off money and, to the Knowledge of the Company, the Company and
its Subsidiaries are entitled to all progress payments received with respect
thereto.
(b) None of the Company, its Subsidiaries or any of their respective
Affiliates nor, to the Knowledge of the Company, any of their respective
directors,
25
officers, employees, consultants or agents is, or since January 1, 2000 has
been, under administrative, civil or criminal investigation, indictment or
information by any Governmental Authority or any audit or investigation by the
Company, its Subsidiaries or any of their respective Affiliates with respect to
any alleged act or omission arising under or relating to any Government Contract
or Government Subcontract and since January 1, 2000, none of the Company, its
Subsidiaries or any of their respective Affiliates has conducted or initiated
any internal investigation or made a voluntary disclosure to any Governmental
Authority with respect to any alleged act or omission arising under or relating
to a Government Contract or Government Subcontract.
(c) There are (i) no outstanding claims against the Company, its
Subsidiaries or any of their respective Affiliates, either by any Governmental
Authority or by any prime contractor, subcontractor, vendor or other Person,
arising under or relating to any Government Contract or Government Subcontract
and (ii) no disputes between the Company, its Subsidiaries or their respective
Affiliates, on the one hand, and the United States government, on the other
hand, under the Contract Disputes Act or any other U.S. federal statute or
between the Company, its Subsidiaries and their respective Affiliates, on the
one hand, and any prime contractor, subcontractor or vendor, on the other hand,
arising under or relating to any Government Contract or Government Subcontract.
None of the Company, its Subsidiaries and their respective Affiliates has any
direct financial interest in any pending or potential claim against any
Governmental Authority or any prime contractor, subcontractor or vendor arising
under or relating to any Government Contract or Government Subcontract.
(d) Since January 1, 2000, (i) none of the Company, its Subsidiaries
or any of their respective Affiliates has been debarred or suspended from
participation in the award of Contracts with any Governmental Authority; (ii) to
the Knowledge of the Company, there exist no facts or circumstances that would
warrant the institution of suspension or debarment proceedings or the finding of
nonresponsibility or ineligibility on the part of the Company, its Subsidiaries
or any of their respective Affiliates, or any director, officer or employee of
the Company, its Subsidiaries or any of their respective Affiliates and (iii)
the Company's and its Subsidiaries' cost accounting and procurement systems and
the associated entries reflected in the Company's financial statements included
in the Filed Company SEC Documents with respect to the Government Contracts and
Government Subcontracts are in compliance in all material respects with
applicable Laws.
(e) Since January 1, 2000, (i) all test and inspection results
provided by the Company, its Subsidiaries or any of their respective Affiliates
to any Governmental Authority pursuant to any Government Contract or Government
Subcontract or to any other Person pursuant to a Government Contract or
Government Subcontract or as a part of the delivery to any Governmental
Authority or other Person pursuant to a Government Contract or Government
Subcontract of any article designed, engineered, manufactured or repaired by the
Company, its Subsidiaries or any of their respective Affiliates were complete
and correct in all material respects as of the date so provided and (ii) the
Company and its Subsidiaries have provided all test and inspection results to
any Governmental Authority or to any other Person pursuant to a Government
26
Contract or Government Subcontract as required by applicable Law and the terms
of the applicable Government Contract or Government Subcontract.
(f) No statement, representation or warranty made by the Company,
its Subsidiaries or any of their respective Affiliates to any Governmental
Authority in connection with any Government Contract or Government Subcontract
or to another party where the ultimate contracting party is a Governmental
Authority contained on the date so furnished or submitted any untrue statement
of material fact, or failed to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they are
made, not misleading.
(g) For purposes of this Section 3.14, the term "Affiliates" shall
be deemed to exclude natural persons and entities controlled by such natural
persons.
SECTION 3.15 Title to Properties. Each of the Company and its
Subsidiaries (i) has good and marketable title to all properties and other
assets which are reflected on the most recent consolidated balance sheet of the
Company included in the Filed Company SEC Documents as being owned by the
Company or one of its Subsidiaries (or acquired after the date thereof) and
which are, individually or in the aggregate, material to the Company's business
or financial condition on a consolidated basis (except properties sold or
otherwise disposed of since the date thereof in the ordinary course of business
consistent with past practice and not in violation of this Agreement), free and
clear of all Liens except (x) statutory liens securing payments not yet due, (y)
security interests, mortgages and pledges that are disclosed in the Filed
Company SEC Documents that secure indebtedness that is reflected in the most
recent consolidated financial statements of the Company included in the Filed
Company SEC Documents and (z) such other imperfections or irregularities of
title or other Liens that, individually or in the aggregate, do not and would
not reasonably be expected to materially affect the use of the properties or
assets subject thereto or otherwise materially impair business operations as
presently conducted or as currently proposed by the Company's management to be
conducted, and (ii) is the lessee or sublessee of all leasehold estates and
leasehold interests reflected in the Filed Company SEC Documents (or acquired
after the date thereof) which are, individually or in the aggregate, material to
the Company's business or financial condition on a consolidated basis (other
than any such leaseholds whose scheduled terms have expired subsequent to the
date of such Filed Company SEC Documents). Each of the Company and its
Subsidiaries enjoys peaceful and undisturbed possession under all such leases in
all material respects. Section 3.15 of the Company Disclosure Schedule sets
forth a correct and complete list of all real property owned or leased by the
Company and its Subsidiaries as of the date of this Agreement.
SECTION 3.16 Intellectual Property.
(a) Except as disclosed in Section 3.16(a) of the Company Disclosure
Schedule, the Company and its Subsidiaries are the sole and exclusive owner of,
or have a valid right to use, sell or license, as the case may be, all
Intellectual Property and Technology ("Intellectual Property Rights"), and have
a continuing right to use, sell or
27
license, as the case may be, all material Intellectual Property Rights, used,
sold or licensed by the Company and its Subsidiaries, as applicable, in the
business of the Company and its Subsidiaries as presently conducted and as
currently proposed by the Company's management to be conducted.
(b) Except as disclosed in Section 3.16(b) of the Company Disclosure
Schedule, the products and operation of the business of the Company and its
Subsidiaries and the use of the Intellectual Property and Technology owned by
the Company and its Subsidiaries in connection therewith, and their present and
currently proposed business practices and methods, do not infringe, constitute
an unauthorized use of, or violate any Intellectual Property right of any third
party. The Intellectual Property owned by or licensed to each of the Company and
its Subsidiaries includes all of the Intellectual Property necessary to enable
the Company and its Subsidiaries to conduct their business in the manner in
which such businesses have been and are currently being conducted, and as
currently proposed to be conducted by the Company's management.
(c) Except with respect to licenses of commercial off-the-shelf
Software, and except pursuant to the licenses listed in Section 3.16(c) of the
Company Disclosure Schedule, as of the date of this Agreement, neither the
Company nor any of its Subsidiaries is obligated to make any payments, whenever
due, by way of royalties, fees or otherwise to any owner or licensor of, or
other claimant to, any Intellectual Property, with respect to the use thereof or
in connection with the conduct of its business.
(d) Section 3.16(d) of the Company Disclosure Schedule sets forth a
complete and correct list of all Patents, registered Marks, pending applications
for registration of any Marks, material unregistered Marks currently used,
registered Copyrights, and pending applications for registration of Copyrights
owned by the Company or any of its Subsidiaries as of the date of this
Agreement, including the jurisdictions in which such Patents, Marks and
Copyrights have been issued or registered or in which such applications have
been filed as of the date of this Agreement.
(e) Except as disclosed in Section 3.16(e) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has licensed any of
its Intellectual Property to any Person on an exclusive basis, nor has the
Company or any of its Subsidiaries entered into any Contract limiting its
ability to exploit fully any of its Intellectual Property (excluding
nonexclusive Embedded Licenses).
(f) Except as disclosed in Section 3.16(f) of the Company Disclosure
Schedule, no non-public, proprietary Intellectual Property material to the
business of the Company or any of its Subsidiaries as presently conducted have
been authorized to be disclosed or, to the Knowledge of the Company, actually
disclosed by the Company or any of its Subsidiaries to any employee or third
party other than pursuant to a non-disclosure agreement or subject to other
confidentiality obligations that protects the proprietary interests of the
Company and its Subsidiaries in and to such Intellectual Property. The Company
and its Subsidiaries have taken reasonable security measures to protect the
confidentiality of confidential Intellectual Property Rights of the Company and
its Subsidiaries.
28
(g) Except as disclosed in Section 3.16(g) of the Company Disclosure
Schedule, the Company and its Subsidiaries are not the subject of any pending
or, to the Knowledge of the Company, threatened legal, administrative, arbitral
or other proceeding, claim, suit or action which involve a claim or notice of
infringement of, unauthorized use of, or violation of any Intellectual Property
of any third party or challenging the ownership, use, validity or enforceability
of any material Intellectual Property Rights, and have not received written
notice of any such threatened claim, and, to the Knowledge of the Company, there
are no facts or circumstances which management reasonably believes are likely to
form the basis for any claim of infringement of, unauthorized use of, or
violation of any Intellectual Property of any third party or challenging the
ownership, use, validity or enforceability of any material Intellectual Property
Rights. To the Knowledge of the Company, all material Intellectual Property
owned by the Company or any of its Subsidiaries are valid and, except with
respect to Patents for which applications are pending and rights extending
beyond common law rights in Marks for which applications are pending,
enforceable.
(h) Except as disclosed in Section 3.16(h) of the Company Disclosure
Schedule, to the Knowledge of the Company, no third party is infringing,
violating, misusing or misappropriating any material Intellectual Property
Rights of the Company or any of its Subsidiaries, and no such claims have been
made against a third party by the Company or any of its Subsidiaries.
SECTION 3.17 Insurance, Claims and Warranties.
(a) All material insurance policies of the Company and its
Subsidiaries (the "Policies") are in full force and effect. Neither the Company
nor any of its Subsidiaries is in material breach or default, and neither the
Company nor any of its Subsidiaries have taken any action or failed to take any
action which, with notice or the lapse of time, would constitute such a breach
or default, or permit termination or modification of any of the Policies. No
notice of cancellation or termination has been received by the Company with
respect to any such Policy (except with respect to Policies that have been
replaced with similar policies). With respect to each of the legal proceedings
relating to events occurring on September 11, 2001 set forth in the Company SEC
Documents, no carrier of any Policy has asserted any denial of coverage and,
with respect to each of the other legal proceedings set forth in the Company SEC
Documents, no carrier of any Policy has asserted any denial of coverage as of
the date of this Agreement. The Transactions will not cause the Policies not to
remain in full force and effect, and the Policies will not in any way be
affected by, and will not terminate or lapse by reason of, the Transactions.
(b) Section 3.17(b) of the Company Disclosure Schedule sets forth,
as of the date of this Agreement, a correct and complete list and summary
description of all claims, duties, responsibilities, liabilities or obligations
arising since January 1, 2001 from, or alleged to arise from, any injury to any
Person (including current and former employees) or property as a result of the
manufacture, sale, ownership, possession or use of any product of the Company or
any of its Subsidiaries. All such existing claims are or will be fully covered
by product liability insurance. No circumstances exist affecting the
29
safety of the products of the Company or any of its Subsidiaries that,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect.
(c) Section 3.17(c) of the Company Disclosure Schedule contains a
complete and correct statement of all warranties, warranty policies, service
agreements and maintenance agreements of the Company and any of its Subsidiaries
in effect as of the date of this Agreement that provide for warranty coverage
for a period in excess of 12 months. All products of each of the Company and its
Subsidiaries manufactured, processed, assembled, distributed, shipped or sold
and any services rendered in the conduct of the business of the Company or any
of its Subsidiaries have been in material conformity with all applicable
standards, contractual commitments and all express or implied warranties.
SECTION 3.18 Opinion of Financial Advisor. The Board of Directors of
the Company has received the opinions of Deutsche Bank Securities Inc.
("Deutsche Bank") and Dresdner Kleinwort Xxxxxxxxxxx ("Dresdner"), each dated as
of the date of this Agreement, to the effect that, as of such date, and subject
to the various assumptions and qualifications set forth therein, the
consideration to be received in the Merger by holders of the Company Common
Stock is fair from a financial point of view to holders of such shares (the
"Fairness Opinions"). A complete and correct copy of each Fairness Opinion has
been delivered to Parent. The Company represents and warrants that it has been
authorized by Deutsche Bank and Dresdner, as applicable, to permit the inclusion
of their respective Fairness Opinions and references thereto in the Proxy
Statement.
SECTION 3.19 Brokers and Other Advisors. Except for Deutsche Bank
and Dresdner, the fees and expenses of which will be paid by the Company, no
broker, investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission, or
the reimbursement of expenses, in connection with the Transactions based upon
arrangements made by or on behalf of the Company or any of its Subsidiaries. The
Company has heretofore delivered or made available to Parent correct and
complete copies of the Company's engagement letter with each of Deutsche Bank
and Dresdner, which letters describe all fees payable to Deutsche Bank and
Dresdner, as the case may be, in connection with the Transactions, all
agreements under which any such fees or any expenses are payable and all
indemnification and other agreements related to the engagement of Deutsche Bank
and Dresdner, as the case may be (the "Engagement Letters").
SECTION 3.20 State Takeover Statutes. No "fair price", "moratorium",
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States (with the exception of
Section 203 of the DGCL ("Section 203")) applicable to the Company is applicable
to the Merger or the other Transactions. The action of the Board of Directors of
the Company in approving this Agreement (and the Transactions) is sufficient to
render inapplicable to this Agreement (and the Transactions) the restrictions on
"business combinations" (as defined in Section 203) as set forth in Section 203.
30
ARTICLE IV
Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub jointly and severally represent and warrant to
the Company:
SECTION 4.1 Organization, Standing and Corporate Power. Each of
Parent and Merger Sub is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction in which it is incorporated.
SECTION 4.2 Authority; Noncontravention.
(a) Each of Parent and Merger Sub has all necessary corporate power
and authority to execute and deliver this Agreement and to perform their
respective obligations hereunder and to consummate the Transactions. The
execution, delivery and performance by Parent and Merger Sub of this Agreement,
and the consummation by Parent and Merger Sub of the Transactions, have been
duly authorized and approved by their respective Boards of Directors (and prior
to the Effective Time will be adopted by Parent as the sole stockholder of
Merger Sub) and no other corporate action on the part of Parent and Merger Sub
is necessary to authorize the execution, delivery and performance by Parent and
Merger Sub of this Agreement and the consummation by them of the Transactions.
This Agreement has been duly executed and delivered by Parent and Merger Sub
and, assuming due authorization, execution and delivery hereof by the Company,
constitutes a legal, valid and binding obligation of each of Parent and Merger
Sub, enforceable against each of them in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
(b) Neither the execution and delivery of this Agreement by Parent
and Merger Sub, nor the consummation by Parent or Merger Sub of the
Transactions, nor compliance by Parent or Merger Sub with any of the terms or
provisions hereof, will (i) conflict with or violate any provision of the
certificate of incorporation or bylaws of Parent or Merger Sub or (ii) assuming
that the authorizations, consents and approvals referred to in Section 4.3 are
obtained and the filings referred to in Section 4.3 are made, (x) violate any
Law, judgment, writ or injunction of any Governmental Authority applicable to
Parent or any of its Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of, Parent or Merger Sub or any of their respective Subsidiaries under,
any of the terms, conditions or provisions of any Contract to which Parent,
Merger Sub or any of their respective Subsidiaries is a party, or by which they
or any of their respective properties or assets may be bound or affected except,
in the case of clause (ii), for such violations, conflicts, losses, defaults,
terminations, cancellations, accelerations or Liens as, individually or in the
aggregate, would not reasonably be
31
expected to prevent or materially delay or materially impair the ability of
Parent or Merger Sub to consummate the Transactions (a "Parent Material Adverse
Effect").
SECTION 4.3 Governmental Approvals. Except for (i) filings required
under, and compliance with applicable requirements of, the Securities Act, the
Exchange Act and the rules of The New York Stock Exchange, (ii) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL and (iii) filings required under, and compliance with other
applicable requirements of, the HSR Act and Foreign Antitrust Laws, no consents
or approvals of, or filings, declarations or registrations with, any
Governmental Authority are necessary for the execution and delivery of this
Agreement by Parent and Merger Sub or the consummation by Parent and Merger Sub
of the Transactions, other than such other consents, approvals, filings,
declarations or registrations that, if not obtained, made or given, would not,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect.
SECTION 4.4 Information Supplied. The information furnished in
writing to the Company by Parent and Merger Sub specifically for inclusion in
the Proxy Statement will not, at the time the Proxy Statement is first mailed to
the stockholders of the Company and at the time of such Company Stockholders
Meeting, contain any untrue statement of a material fact or omit 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.
SECTION 4.5 Ownership and Operations of Merger Sub. Parent owns
beneficially and of record all of the outstanding capital stock of Merger Sub.
Merger Sub has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
SECTION 4.6 Financing. Parent has, and will have at the Effective
Time, sufficient cash resources available to pay the aggregate Merger
Consideration pursuant to the Merger.
SECTION 4.7 Brokers and Other Advisors. No broker, investment
banker, financial advisor or other Person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or any of
its Subsidiaries.
ARTICLE V
Covenants and Agreements
SECTION 5.1 Preparation of the Proxy Statement; Stockholder Meeting.
(a) As promptly as practicable following the date of this Agreement,
the Company shall prepare and file the Proxy Statement with the SEC. The Company
shall use its reasonable best efforts to (i) respond to any comments on the
Proxy Statement or requests for additional information from the SEC with respect
thereto as
32
soon as practicable after receipt of any such comments or requests and (ii)
cause the Proxy Statement to be mailed to the stockholders of the Company as
promptly as practicable following the date of this Agreement. The Company shall
promptly (A) notify Parent upon the receipt of any such comments or requests and
(B) provide Parent with copies of all correspondence between the Company and its
Representatives, on the one hand, and the SEC and its staff, on the other hand,
with respect to the Proxy Statement. Prior to responding to any such comments or
requests or the filing or mailing of the Proxy Statement, (x) the Company shall
provide Parent with a reasonable opportunity to review and comment on any drafts
of the Proxy Statement and related correspondence and filings, (y) the Company
shall include in such drafts, correspondence and filings all comments reasonably
proposed by Parent and (z) to the extent practicable, the Company and its
outside counsel shall permit Parent and its outside counsel to participate in
all communications with the SEC and its staff (including all meetings and
telephone conferences) relating to the Proxy Statement, this Agreement or any of
the Transactions. Subject to Section 5.3(c), the Proxy Statement shall include
the Company Board Recommendation and a copy of the written opinions of Deutsche
Bank and Dresdner referred to in Section 3.18. If at any time prior to the
Effective Time any event shall occur, or fact or information shall be
discovered, that should be set forth in an amendment of or a supplement to the
Proxy Statement, the Company shall, in accordance with the procedures set forth
in this Section 5.1(a), prepare and file with the SEC such amendment or
supplement as soon thereafter as is reasonably practicable and to the extent
required by applicable Law, cause such amendment or supplement to be distributed
to the stockholders of the Company. Parent agrees to furnish to the Company all
information concerning Parent and its Subsidiaries, officers and directors as
may be reasonably requested in connection with the foregoing.
(b) The Company shall, as soon as practicable following the date of
this Agreement, establish a record date for, duly call, give notice of, convene
and hold a special meeting of its stockholders (the "Company Stockholders
Meeting") solely for the purpose of obtaining the Company Stockholder Approval.
Subject to Section 5.3(c), the Company shall, through its Board of Directors,
make the Company Board Recommendation. Without limiting the generality of the
foregoing (but subject to Section 7.1(d)(ii)), the Company's obligations
pursuant to the first sentence of this Section 5.1(b) shall not be affected by
(i) the commencement, public proposal, public disclosure or communication to the
Company of any Takeover Proposal or (ii) the withdrawal or modification by the
Board of Directors of the Company or any committee thereof of the Company Board
Recommendation or such Board of Directors' or such committee's approval of this
Agreement or the Merger.
SECTION 5.2 Conduct of Business of the Company. Except as expressly
permitted by this Agreement, as set forth on Section 5.2 of the Company
Disclosure Schedule or as required by applicable Law, during the period from the
date of this Agreement until the Effective Time, unless Parent otherwise agrees
in writing (which agreement will not be unreasonably withheld or delayed), the
Company shall, and shall cause each of its Subsidiaries to, (w) conduct its
business in the ordinary course consistent with past practice, (x) use
reasonable best efforts to comply in all material respects with all applicable
Laws (including making appropriate voluntary disclosures to
33
Governmental Authorities) and the requirements of all Material Contracts and
Permits, (y) use commercially reasonable efforts to (i) maintain and preserve
intact its business organization and the goodwill of those having business
relationships with it and (ii) retain the services of its present officers and
key employees, and (z) use commercially reasonable efforts to keep in full force
and effect all material insurance policies maintained by the Company and its
Subsidiaries, other than changes to such policies made in the ordinary course of
business consistent with past practice. Without limiting the generality of the
foregoing, except as expressly permitted by this Agreement, as set forth on
Section 5.2 of the Company Disclosure Schedule or as required by applicable Law,
during the period from the date of this Agreement to the Effective Time, the
Company shall not, and shall not permit any of its Subsidiaries to, without the
prior written consent of Parent (which consent will not be unreasonably withheld
or delayed):
(a) (i) issue, sell, grant, dispose of, pledge or otherwise encumber
any shares of its capital stock, voting securities or equity interests, or any
securities or rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for any shares of its capital stock, voting
securities or equity interests, or any rights, warrants, options, calls,
commitments or any other agreements of any character to purchase or acquire any
shares of its capital stock, voting securities or equity interests or any
securities or rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for, any shares of its capital stock, voting
securities or equity interests, provided that the Company may issue shares of
Company Common Stock (A) to participants in the Company's 2002 Employee Stock
Purchase Plan in accordance with the terms thereof as of the Balance Sheet Date,
or upon the exercise of options granted under the Company Stock Plans in
accordance with the terms thereof as of the Balance Sheet Date and (B) upon the
conversion of Convertible Notes, in each case, that are outstanding on the date
of this Agreement and in accordance with the terms thereof; (ii) redeem,
purchase or otherwise acquire any of its outstanding shares of capital stock,
voting securities or equity interests, or any rights, warrants or options to
acquire any shares of its capital stock, voting securities or equity interests;
(iii) declare, set aside for payment or pay any dividend on, or make any other
distribution in respect of, any shares of its capital stock or otherwise make
any payments to its stockholders in their capacity as such (other than dividends
by a direct or indirect wholly owned Subsidiary of the Company to its parent);
(iv) split, combine, subdivide or reclassify any shares of its capital stock; or
(v) amend or waive any of its rights under, or accelerate the vesting under, any
provision of the Company Stock Plans or any agreement evidencing any outstanding
stock option or other right to acquire capital stock of the Company or any
restricted stock purchase agreement or any similar or related contract, except
such vesting as required (A) pursuant to employment agreements in effect on the
date of this Agreement (complete and correct copies of which have been delivered
or made available to Parent by the Company) or (B) as a result of the
Transactions in accordance with the terms of the applicable Company Stock Plan
as of the Balance Sheet Date;
(b) incur any indebtedness for borrowed money or guarantee any
indebtedness (or enter into a "keep well" or similar agreement), other than (i)
borrowings from the Company by a direct or indirect wholly owned Subsidiary of
the Company, (ii) indebtedness in respect of performance bonds and letters of
credit issued in the ordinary
34
course of business consistent with past practice under the Company's existing
credit facility with Silicon Valley Bank and (iii) borrowings by Yxlon
International X-Ray GmbH under its credit facilities existing on the date hereof
with Dresdner and Vereins und Westbank, in the ordinary course of business
consistent with past practice;
(c) sell, transfer, lease, license, mortgage, encumber or otherwise
dispose of (including pursuant to a sale-leaseback transaction or an asset
securitization transaction) any of its properties or assets (including
securities of Subsidiaries) to any Person, except (A) sales of products and
Embedded Licenses, in each case in the ordinary course of business consistent
with past practice, (B) pursuant to Contracts in force at the date of this
Agreement and listed on Section 5.2(c) of the Company Disclosure Schedule,
complete and correct copies of which have been made available to Parent, or (C)
dispositions of obsolete or worthless assets;
(d) make any capital expenditures, except in the ordinary course of
business consistent with past practice and in an amount not in excess of
$2,000,000 in the aggregate for the Company and its Subsidiaries taken as a
whole during any three-consecutive month period;
(e) make any acquisition (by purchase of securities or assets,
merger or consolidation, or otherwise) of any other Person, business, division
or assets (other than acquisitions of supplies and raw materials for operations
in the ordinary course of business consistent with past practice, and capital
expenditures to the extent permitted under clause (d) above);
(f) make any investment (by contribution to capital, property
transfers, purchase of securities or otherwise) in, or loan or advance (other
than travel and similar advances to its employees in the ordinary course of
business consistent with past practice) to, any Person other than a direct or
indirect wholly owned Subsidiary of the Company in the ordinary course of
business consistent with past practice;
(g) (i) enter into, terminate or amend any Material Contract, or any
other Contract that would be a Material Contract if such Contract were entered
into during the period from the date of this Agreement until the Effective Time,
other than in the ordinary course of business consistent with past practice,
(ii) enter into a real estate lease (other than for immaterial office and
storage space) or Intellectual Property license (as licensee) (excluding
licenses of commercial off-the-shelf Software), (iii) enter into or extend the
term or scope of any Contract that purports to restrict the Company, or any
Subsidiary or existing or future Affiliate of the Company (other than natural
persons and entities controlled by such persons), from engaging in any line of
business or in any geographic area (other than agreements with sales
representatives and distributors entered into after reasonable consultation with
Parent), (iv) amend or modify either of the Engagement Letters, (v) enter into
any Contract that would be breached by, or require the consent of any third
party in order to continue in full force following, consummation of the
Transactions (other than immaterial Contracts that would not materially impact
the nature of the Company's business), (vi) release any Person from, or modify
or waive any provision of, any confidentiality, nondisclosure or similar
agreement related to the
35
Company's proprietary Intellectual Property or other non-public information or
(vii) take any action to render the restrictive provisions of Section 203
inapplicable to any transaction (other than the Transactions) or any Person
(other than Parent and Merger Sub);
(h) increase in any manner the compensation of any of its directors,
officers or employees or enter into, establish, amend, modify or terminate any
employment, consulting, retention, change in control, collective bargaining,
bonus or other incentive compensation, profit sharing, health or other welfare,
stock option or other equity (or equity-based), pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan
(including any plan that would constitute a Company Plan), policy, agreement,
trust, fund or arrangement with, for or in respect of, any stockholder,
director, officer, other employee, consultant or Affiliate, other than (i) as
required pursuant to applicable law or the terms of agreements in effect as of
the date of this Agreement as set forth on Section 5.2(h) of the Company
Disclosure Schedule (complete and correct copies of which have been delivered or
made available to Parent by the Company), (ii) increases in salaries, wages and
benefits of employees (other than officers) made in the ordinary course of
business consistent with past practice and in amounts and in a manner consistent
with past practice and (iii) the termination (with respect to a terminated
employee or consultant) of any agreements or arrangements with a terminated
employee or consultant;
(i) make or change any material election concerning Taxes or Tax
Returns, file any amended Tax Return, enter into any closing agreement with
respect to Taxes, settle any material Tax claim or assessment or surrender any
right to claim a refund of Taxes or obtain any Tax ruling;
(j) make any changes (other than immaterial changes made in the
ordinary course of business consistent with past practice) in financial or tax
accounting methods, principles or practices or change an annual accounting
period, except insofar as may be required by a change in GAAP or applicable Law;
(k) amend the Company Charter Documents or the Subsidiary Documents;
(l) adopt a plan or agreement of complete or partial liquidation,
dissolution, restructuring, recapitalization, merger, consolidation or other
reorganization;
(m) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), including payment or prepayment of long-term
indebtedness of the Company, other than the payment, discharge, settlement or
satisfaction in the ordinary course of business consistent with past practice or
in accordance with their terms of other liabilities, claims or obligations
reflected or reserved against in the most recent consolidated financial
statements (or the notes thereto) of the Company included in the Filed Company
SEC Documents or incurred since the date of such financial statements in the
ordinary course of business consistent with past practice;
36
(n) settle or compromise any litigation or proceeding to the extent
that such settlement or compromise (i) requires that the Company or its
Subsidiaries pay more than $1,000,000 in the aggregate or (ii) does not provide
for a full release of the Company and its Subsidiaries, as applicable (this
covenant being in addition to the Company's agreement set forth in Section 5.9
hereof);
(o) enter into any transaction that would be required to be reported
pursuant to Item 404 of Regulation S-K promulgated by the SEC;
(p) take any action of the type referred to in the second sentence
of Section 3.8(a); or
(q) agree, in writing or otherwise, to take any of the foregoing
actions or take any action or agree, in writing or otherwise, to take any
action, which would cause any of the conditions to the Merger set forth in this
Agreement not being satisfied.
SECTION 5.3 No Solicitation by the Company; Etc.
(a) The Company shall, and shall cause its Subsidiaries and the
Company's and its Subsidiaries' respective directors, officers, employees,
investment bankers, financial advisors, attorneys, accountants, agents and other
representatives (collectively, "Representatives") to, immediately cease and
cause to be terminated any discussions or negotiations with any Person with
respect to a Takeover Proposal, and use reasonable best efforts to obtain the
return from all such Persons or cause the destruction of all copies of
confidential information provided to such parties by the Company, its
Subsidiaries or Representatives that are still in the possession of such
Persons. The Company shall not, and shall cause its Subsidiaries and
Representatives not to, directly or indirectly (i) solicit, initiate or
knowingly facilitate or encourage the initiation of any inquiries or proposals
that constitute, or may reasonably be expected to lead to, any Takeover Proposal
or (ii) participate in any discussions with any third party regarding, or
furnish to any third party any non-public information with respect to any
Takeover Proposal; provided, however, that notwithstanding anything to the
contrary contained in this Section 5.3 or elsewhere in this Agreement, if the
Board of Directors of the Company receives an unsolicited, bona fide written
Takeover Proposal that was made in circumstances not involving a breach of this
Agreement or any standstill agreement and that the Board of Directors of the
Company determines in good faith is reasonably likely to result in a Superior
Proposal and with respect to which such Board determines in good faith, after
considering applicable provisions of state Law and after consulting with and
receiving the advice of outside counsel, that the taking of such action is
necessary in order for such Board to comply with its fiduciary duties to the
Company's stockholders under Delaware law, then the Company and its
Representatives may (but only prior to obtaining the Company Stockholder
Approval), in response to such Takeover Proposal and after providing Parent not
less than 24 hours written notice of its intention to take such actions, (A)
furnish information with respect to the Company and its Subsidiaries to the
Person making such Takeover Proposal, but only after such Person enters into a
customary confidentiality agreement with the Company (which confidentiality
agreement must be no less favorable to the Company (i.e., no less restrictive
with respect to the
37
conduct of such Person) than the Confidentiality Agreement), provided that (1)
such confidentiality agreement may not include any provision calling for an
exclusive right to negotiate with the Company and (2) the Company advises Parent
of all such non-public information delivered to such Person concurrently with
its delivery to such Person and concurrently with its delivery to such Person
the Company delivers to Parent all such information not previously provided to
Parent, and (B) participate in discussions and negotiations with such Person
regarding such Takeover Proposal. The Company shall take all action necessary to
enforce each confidentiality, standstill or similar agreement to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
(in each case, other than any such agreement with Parent). Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
this Section 5.3(a) by the Company, its Subsidiaries or their respective
Representatives shall be deemed to be a breach of this Section 5.3(a) by the
Company.
(b) In addition to the other obligations of the Company set forth in
this Section 5.3, promptly (and in no event later than 48 hours) after any
officer or director of the Company becomes aware that any proposal, offer,
inquiry or other contact is received by, any information is requested from, or
any discussions or negotiations are sought to be initiated or continued with,
the Company in respect of any Takeover Proposal, the Company shall advise
Parent, orally and in writing, of such proposal, offer, inquiry or other contact
and shall, as part of so advising Parent, indicate the identity of the Person
making such proposal, offer, inquiry or other contact and the material terms and
conditions of any proposals or offers or the nature of any inquiries or contacts
(and, in connection therewith, shall simultaneously provide to Parent copies of
any written materials received from or on behalf of such Person relating to such
proposal, offer, inquiry or request), and thereafter shall keep Parent informed,
on a timely basis and in reasonable detail, of all material developments
affecting the status and terms of any such proposals, offers, inquiries or
requests (and the Company shall provide Parent with copies of any additional
written materials received that relate to such proposals, offers, inquiries or
requests) and of the status of any such discussions or negotiations.
(c) Except as expressly permitted by this Section 5.3(c), neither
the Board of Directors of the Company nor any committee thereof shall (i)(A)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent, the Company Board Recommendation or (B) approve or recommend,
or propose publicly to approve or recommend, any Takeover Proposal or (ii)
allow, cause or authorize the Company or any of its Subsidiaries to enter into
any letter of intent, agreement in principle, memorandum of understanding,
merger, acquisition, purchase or joint venture agreement or other agreement
providing for or contemplating the consummation of any Takeover Proposal (other
than a confidentiality agreement in accordance with Section 5.3(a)) (each, a
"Company Acquisition Agreement"). Notwithstanding the foregoing or any other
provision of this Agreement, (x) the Board of Directors of the Company may
withdraw or modify the Company Board Recommendation, or recommend a Superior
Proposal, if such Board determines in good faith, after reviewing applicable
provisions of state Law and after consulting with and receiving advice from
outside counsel, that the failure to make such withdrawal, modification or
recommendation would constitute a breach by the Board of Directors of the
Company of its fiduciary duties to the Company's
38
stockholders under Delaware law and (y) if the Board of Directors of the Company
receives an unsolicited, bona fide written Takeover Proposal that was made in
circumstances not involving a breach of this Agreement or any standstill
agreement and that such Board determines in good faith constitutes a Superior
Proposal, the Board of Directors of the Company may, in response to such
Superior Proposal and within 48 hours after the expiration of the three business
day period described below, enter into a definitive agreement with respect to
such Superior Proposal but only if the Company shall have concurrently with
entering into such definitive agreement terminated this Agreement pursuant to
Section 7.1(d)(ii) and prior thereto or concurrently therewith paid the
Termination Fee required pursuant to Section 7.3, but in any event only after
the third business day following Parent's receipt of written notice (the
"Notice") from the Company advising Parent that the Board of Directors of the
Company is prepared to enter into a definitive agreement with respect to such
Superior Proposal and terminate this Agreement (it being understood that the
Company shall be required to deliver a new Notice in respect of any revised
Superior Proposal (other than immaterial revisions) from such third party or its
Affiliates that the Company proposes to accept), attaching the most current
version of such agreement to such Notice (which version shall be updated on a
current basis), and only if, during such three business day period, the Company
and its Representatives shall have negotiated in good faith with Parent and
Parent's Representatives to make such adjustments in the terms of this Agreement
as would enable Parent to proceed with the Transactions on such adjusted terms
and, at the end of such three business day period, after taking into account any
such adjusted terms as may have been proposed by Parent since its receipt of
such Notice, the Board of Directors of the Company has again in good faith made
the determination referred to above in this clause (y).
(d) For purposes of this Agreement:
"Takeover Proposal" means any inquiry, proposal or offer from any
Person (other than Parent and its Affiliates) relating to any (A) direct or
indirect acquisition (whether in a single transaction or a series of related
transactions) of assets of the Company and its Subsidiaries (including
securities of Subsidiaries, but excluding sales of assets in the ordinary course
of business consistent with past practice) having a fair market value equal to
15% or more of the Company's consolidated assets or to which 15% or more of the
Company's revenues or earnings on a consolidated basis are attributable, (B)
direct or indirect acquisition (whether in a single transaction or a series of
related transactions) of 15% or more of any class of equity securities of the
Company, (C) tender offer or exchange offer that if consummated would result in
any Person beneficially owning 15% or more of any class of equity securities of
the Company or (D) merger, consolidation, share exchange, business combination,
recapitalization, liquidation or dissolution (other than liquidation or
dissolution of wholly-owned Subsidiaries of the Company) or similar transaction
involving the Company or involving any Subsidiary (or Subsidiaries) (other than
mergers, consolidations, business combinations or similar transactions involving
solely the Company and/or one or more Subsidiaries of the Company and mergers in
order to effect acquisitions by the Company or its Subsidiaries that if
consummated would result in a Person beneficially owning not more than 14.9% of
any class of equity securities of the Company or any of its Subsidiaries) or any
assets
39
of the Company and its Subsidiaries having a fair market value equal to 15% or
more of the Company's consolidated assets or to which 15% or more of the
Company's revenues or earnings on a consolidated basis are attributable; in each
case, other than the Transactions.
"Superior Proposal" means a bona fide written offer obtained not in
breach of this Agreement or any standstill agreement to acquire, directly or
indirectly, for consideration consisting of cash and/or securities, all of the
equity securities of the Company or all or substantially all of the assets of
the Company and its Subsidiaries on a consolidated basis, made by a third party,
which is not subject to a financing contingency and which is otherwise on terms
and conditions which the Board of Directors of the Company determines in its
good faith judgment (after consultation with a financial advisor of national
reputation) to be more favorable to the Company's stockholders from a financial
point of view than the Merger and the other Transactions, taking into account at
the time of determination the ability of the Person making such proposal to
consummate the transactions contemplated by such proposal (based upon, among
other things, the availability of financing and the expectation of obtaining
required approvals).
(e) Nothing in this Section 5.3 shall prohibit the Board of
Directors of the Company from taking and disclosing to the Company's
stockholders a position contemplated by Rules 14d-9 and 14e-2(a) or Item 1012(a)
of Regulation M-A promulgated under the Exchange Act if such Board of Directors
determines in good faith, after consultation with outside counsel, that failure
to so disclose such position would constitute a violation of applicable Law;
provided, however, that if such disclosure has the effect of withdrawing or
modifying the Company Board Recommendation in a manner adverse to Parent or the
approval of this Agreement by the Board of Directors of the Company, Parent
shall have the right to terminate this Agreement to the extent set forth in
Section 7.1(c)(iii) of this Agreement; provided further, however, that in no
event shall the Company or its Board of Directors or any committee thereof take,
or agree or resolve to take, any action prohibited by Section 5.3(c).
SECTION 5.4 Further Action; Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties hereto shall, and shall cause their respective
Affiliates to, use reasonable best efforts to take, or cause to be taken, all
actions necessary, proper and advisable under applicable Laws to consummate the
Transactions as promptly as practicable. In furtherance and not in limitation of
the foregoing, each party shall: (i) make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
Transactions as promptly as practicable and supply as promptly as practicable
any additional information and documentary material that may be requested
pursuant to the HSR Act; (ii) make any additional filings required by any
applicable Competition Law and take all other actions reasonably necessary,
proper or advisable to cause the expiration or termination of the applicable
waiting periods under the HSR Act or other Competition Laws, and comply with
applicable Foreign Antitrust Laws, as promptly as practicable; and (iii) subject
to applicable Laws relating to access to and the exchange of information, use
its reasonable best efforts to (A) cooperate with each other
40
in connection with any filing or submission and in connection with any
investigation or other inquiry under or relating to any Competition Law; (B)
keep the other parties informed of any communication received by such party
from, or given by such party to, the Federal Trade Commission (the "FTC"), the
Antitrust Division of the Department of Justice (the "DOJ") or any other
Governmental Authority and of any communication received or given in connection
with any proceeding by a private party, in each case regarding any of the
Transactions; and (C) permit the other parties hereto to review in advance any
communication intended to be given by it to, and consult with the other parties
in advance of any meeting or conference with, the FTC, the DOJ or any such other
Governmental Authority, and to the extent permitted by the FTC, the DOJ or such
other applicable Governmental Authority, give the other parties the opportunity
to attend and participate in such meetings and conferences.
(b) In furtherance and not in limitation of the covenants of the
parties contained in Section 5.4(a), but subject to Section 5.4(c): (i) in the
event that any legal, administrative, arbitral or other proceeding, claim, suit
or action is instituted (or threatened to be instituted) by a Governmental
Authority or private party challenging any of the Transactions or in the event
that any Governmental Authority shall otherwise object to any of the
Transactions, each of Parent, Merger Sub and the Company shall cooperate with
each other and use its respective reasonable best efforts: (A) to vigorously
defend, contest and resist any such proceeding, claim, suit, action or
challenge; (B) to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Transactions; and (C) to resolve objections; and (ii) in
order to resolve any proceeding, claim, suit, action or objection of the type
referred to in clause "(i)" of this sentence and to otherwise obtain clearance
under any Competition Law, Parent shall offer and agree to the disposition (and
to any other action related thereto as may be reasonably required) of the
Company NDT Business.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall Parent or any of its Subsidiaries or Affiliates be
obligated to propose or agree to accept any undertaking or condition, enter into
any consent decree, make any divestiture, accept any operational restriction or
take or commit to take any action that would reasonably be expected to limit:
(i) the freedom of action of Parent or its Subsidiaries or Affiliates with
respect to the operation of, or Parent's ability to retain, the Company or any
businesses, product lines or assets of the Company other than the Company NDT
Business, or (ii) Parent's or its Subsidiaries' or Affiliates' ability to
retain, own or operate any portion of the businesses, product lines or assets of
Parent or any of its Subsidiaries or Affiliates, or alter or restrict in any way
the business or commercial practices of Parent or its Subsidiaries or Affiliates
or, except with respect to the Company NDT Business, the Company or its
Subsidiaries.
(d) Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 5.4 shall limit a party's right to terminate
this Agreement pursuant to Section 7.1(b)(i) so long as such party has up to
then complied in all material respects with its obligations under this Section
5.4.
41
(e) The Company shall (i) take all action necessary to ensure that
no state takeover statute or similar Law is or becomes applicable to any of the
Transactions and (ii) if any state takeover statute or similar Law becomes
applicable to any of the Transactions, take all action necessary to ensure that
the Transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise minimize the effect of such Law on
the Transactions.
(f) For purposes hereof, "Competition Laws" means the Xxxxxxx Act,
as amended, the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other applicable Laws issued by a
Governmental Authority that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.
SECTION 5.5 Public Announcements. The initial press release with
respect to the execution of this Agreement shall be a joint press release to be
reasonably agreed upon by Parent and the Company. Thereafter, neither the
Company nor Parent shall issue or cause the publication of any press release or
other public announcement (to the extent not previously issued or made in
accordance with this Agreement) with respect to the Merger, this Agreement or
the other Transactions without the prior consent of the other party (which
consent shall not be unreasonably withheld or delayed), except as may be
required by Law or by any applicable listing agreement with a national
securities exchange or Nasdaq as determined in the good faith judgment of the
party proposing to make such release, in which case (except in connection with
press releases or announcements to be issued with respect to actions taken by
the Company or its Board of Directors pursuant to and in accordance with Section
5.3(c)) neither the Company nor Parent shall issue or cause the publication of
such press release or other public announcement without prior consultation with
the other party, to the extent practicable.
SECTION 5.6 Access to Information; Confidentiality. Subject to
applicable Laws relating to access to and the exchange of information, the
Company shall, and shall cause each of its Subsidiaries to, afford to Parent and
Parent's Representatives reasonable access during normal business hours and on
reasonable advance notice to the Company's and its Subsidiaries' properties,
books, Contracts, commitments, records (including materials filed or furnished
by it or any of its Subsidiaries with any Governmental Authority with respect to
compliance with applicable Laws), officers, employees, accountants, counsel,
financial advisors and other Representatives (such access not to materially
disrupt or interfere with the business operations of the Company) and the
Company shall furnish (or otherwise make available, including through the SEC
XXXXX system) promptly to Parent (i) a copy of each report, schedule and other
document filed, furnished or received by it or any of its Subsidiaries pursuant
to the requirements of Federal or state securities Laws and (ii) all other
information concerning its and its Subsidiaries' business, properties and
personnel as Parent may reasonably request. Except for disclosures permitted by
the terms of the Confidentiality Agreement, dated as of December 1, 2003,
between Parent and the Company (as it may be amended from time to time, the
"Confidentiality Agreement"), Parent shall hold information received from the
Company pursuant to this Section in
42
confidence in accordance with the terms of the Confidentiality Agreement. No
investigation, or information received, pursuant to this Section 5.6 will affect
or modify any of the representations and warranties of the Company.
SECTION 5.7 Notification of Certain Matters. The Company shall use
reasonable best efforts to give prompt notice to Parent, and Parent shall use
reasonable best efforts to give prompt notice to the Company, of (i) any notice
or other communication received by such party from any Governmental Authority in
connection with the Transactions or from any Person alleging that the consent of
such Person is or may be required in connection with the Transactions, if the
subject matter of such communication or the failure of such party to obtain such
consent would reasonably be expected to be material to the Company, the
Surviving Corporation or Parent, (ii) any actions, suits, claims, investigations
or proceedings, to such party's Knowledge, commenced or threatened against,
relating to or involving or otherwise affecting such party or any of its
Subsidiaries which relate to the Transactions, (iii) the discovery of any fact
or circumstance that, or the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which, would cause any representation or
warranty made by such party contained in this Agreement (A) that is qualified as
to materiality or Material Adverse Effect to be untrue and (B) that is not so
qualified to be untrue in any material respect, and (iv) any material failure of
such party to comply with or satisfy any covenant or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.7 shall not (nor shall any information
provided pursuant to Section 5.6) (x) be considered in determining whether any
representation or warranty is true for purposes of Article VI or Article VII,
(y) cure any breach or non-compliance with any other provision of this Agreement
or (z) limit the remedies available to the party receiving such notice;
provided, further, that the failure to deliver any notice pursuant to this
Section 5.7 shall not be considered in determining whether the condition set
forth in Section 6.2(b) or 6.3(b) has been satisfied or the related termination
right in Article VII is available except to the extent that a party hereto is
actually prejudiced by such failure to give notice.
SECTION 5.8 Indemnification and Insurance.
(a) From and after the Effective Time, the Surviving Corporation
shall (and Parent shall cause the Surviving Corporation to) indemnify, defend
and hold harmless the individuals who at or prior to the Effective Time were
directors or officers of the Company (collectively, the "Indemnitees") with
respect to all acts or omissions by them in their capacities as such at any time
prior to the Effective Time, to the fullest extent required by (A) the Company
Charter Documents as in effect on the date of this Agreement and (B) any
applicable contract as in effect on the date of this Agreement; provided,
however, that (i) the Surviving Corporation shall not be required to indemnify
any Indemnitee for such Indemnitee's responsibility for breach of this Agreement
and (ii) such indemnification shall only be to the fullest extent a corporation
is permitted under the DGCL to indemnify its directors and officers.
(b) Parent shall provide, or cause the Surviving Corporation to
provide, for a period of not less than six years after the Effective Time, the
Indemnitees
43
(as defined to mean those persons currently insured under the Company's
directors' and officers' insurance and indemnification policy) with an insurance
and indemnification policy that provides coverage for events occurring at or
prior to the Effective Time (the "D&O Insurance") that is no less favorable than
the existing policy of the Company or, if substantially equivalent insurance
coverage is unavailable, the best available coverage; provided, however, that
Parent and the Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of 150% of the annual premium currently
paid by the Company for such insurance; provided, further, that if the annual
premiums of such insurance coverage exceed such amount, Parent or the Surviving
Corporation shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(c) The Indemnitees to whom this Section 5.8 applies shall be third
party beneficiaries of this Section 5.8. The provisions of this Section 5.8 are
intended to be for the benefit of each Indemnitee, his or her heirs and his or
her representatives.
(d) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or a majority of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation shall succeed to the obligations set forth in this Section 5.8.
SECTION 5.9 Securityholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any
securityholder litigation against the Company and/or its directors relating to
the Transactions, and no such settlement shall be agreed to without Parent's
prior consent (which consent shall not be unreasonably withheld or delayed).
SECTION 5.10 Fees and Expenses. Whether or not the Merger is
consummated, all fees and expenses incurred in connection with this Agreement,
the Merger and the Transactions shall be paid by the party incurring such fees
or expenses, except as otherwise provided in Section 7.3.
SECTION 5.11 Employee Benefits.
(a) For a period of at least one year following the Effective Time
(such period of time, the "Protected Period"), Parent shall cause the Surviving
Corporation or any of its Affiliates to provide to employees of the Company and
its Subsidiaries pay (which shall include rates of base salary or wages and
annual bonus opportunities), and benefits which are substantially comparable in
the aggregate to those provided by the Company and its Subsidiaries to the
employees of the Company and its Subsidiaries on the date hereof. For purposes
of the preceding sentence, all stock option and similar equity grant or purchase
programs or plans maintained by the Company or its Subsidiaries shall be
disregarded.
44
(b) Employees of the Company and its Subsidiaries as of the Closing
shall also be provided credit for all service with the Company and its
subsidiaries, to the same extent as such service was credited for such purpose
by the Company and its Subsidiaries for such employees, under (i) all employee
benefit plans, programs, policies and fringe benefits arrangements to be
provided to such employees for purposes of eligibility and vesting, (ii)
severance plans, programs and policies to be provided to such employees for
purposes of calculating the amount of each such employee's severance benefits
and (iii) vacation and sick leave plans, programs and policies for purposes of
calculating the amount of each such employee's vacation and sick leave. With
respect to each employee benefit plan, program or policy of Parent or its
Subsidiaries that is a "welfare benefit plan" (as defined in Section 3(1) of
ERISA) in which current employees of the Company or its Subsidiaries participate
following the Effective Time, Parent or its Subsidiaries shall cause there to be
waived any pre-existing condition limitations not otherwise applicable under the
Company Benefit Plans.
(c) Parent shall, or shall cause the Surviving Corporation to,
assume and either shall, or shall cause the Surviving Corporation to, discharge
the obligations under each employment or severance agreement listed in Section
3.11(a) of the Company Disclosure Schedule.
(d) Notwithstanding anything in this Agreement to the contrary,
nothing in this Section 5.11 shall impede or limit Parent, Merger Sub, the
Company, the Surviving Corporation or any of their Affiliates from terminating
any of their employees at any time for any reason or no reason, subject to the
provisions of applicable Law.
SECTION 5.12 Sale of Company NDT Business. Promptly following the
execution of this Agreement, the Company shall prepare such information
(including financial information) and take such other actions as Parent shall
reasonably request and shall otherwise be reasonably appropriate to effect the
disposition of the Company NDT Business in connection with obtaining clearances
under Competition Laws as contemplated by Section 5.4 (it being understood that
the Company shall not be required to dispose of the Company NDT Business unless
the Transactions are consummated). Without limiting the provisions of Section
5.2, Parent shall be entitled to participate in the identification of potential
purchasers of the Company NDT Business and to review all proposals received from
and to participate in all discussions and negotiations with potential
purchasers.
ARTICLE VI
Conditions Precedent
SECTION 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party hereto to effect the Merger
shall be subject to the satisfaction (or waiver, if permissible under applicable
Law) on or prior to the Closing Date of the following conditions:
45
(a) Stockholder Approval. The Company Stockholder Approval shall
have been obtained in accordance with applicable Law and the Company Charter
Documents;
(b) Antitrust. Any waiting period (and any extension of such period)
under the HSR Act applicable to the Transactions shall have expired or shall
have been terminated and the applicable filings, approvals or expiration or
termination of any applicable waiting periods under Foreign Antitrust Laws in
jurisdictions in which such filings, approvals or expiration or termination are
required by Law to be made, obtained or expired, or terminated prior to the
Closing, shall have been made, obtained or expired, or terminated; and
(c) No Injunctions or Restraints. No Law, injunction, judgment or
ruling enacted, promulgated, issued, entered, amended or enforced by any
Governmental Authority (collectively, "Restraints") shall be in effect
enjoining, restraining, preventing or prohibiting consummation of the Merger or
making the consummation of the Merger illegal.
SECTION 6.2 Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are further subject to
the satisfaction (or waiver, if permissible under applicable Law) on or prior to
the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement (without giving effect to
any materiality or Company Material Adverse Effect qualification (other than
such qualifications set forth in Sections 3.5(a), 3.5(b), 3.5(c), 3.9, 3.13(a),
3.13(b) (as used in the term "Material Contract") and 3.16(d) and the first and
last sentences of Section 3.6)) shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date (except
to the extent such representations and warranties expressly relate to an earlier
date, in which case as of such earlier date), except as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect; provided, however, that (i) the representations and warranties made in
Section 3.2(a) shall be true and correct except for immaterial inaccuracies as
of the date of this Agreement and as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date, in which case as of such earlier date and (ii) in the
event the Initial Outside Date is automatically extended in accordance with
Section 7.1(b)(i), the representation and warranty set forth in the first
sentence of Section 3.6 shall be true and correct as of the date of this
Agreement and as of the Initial Outside Date;
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date;
46
(c) Officer's Certificate. Parent shall have received a certificate,
signed on behalf of the Company by the chief executive officer or chief
financial officer of the Company, certifying as to the matters set forth in
Sections 6.2(a) and 6.2(b);
(d) Company Material Adverse Effect. Since the date of this
Agreement through the Initial Outside Date or, if sooner, the Closing Date,
there shall have been no change, event, occurrence or state of facts that,
individually or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect;
(e) No Litigation. There shall not be any action, investigation,
proceeding or litigation instituted, commenced, pending or threatened by or
before any Governmental Authority in which a Governmental Authority is a party
that would or is reasonably likely to (i) restrain, enjoin, prevent, prohibit or
make illegal the acquisition of some or all of the shares of Company Common
Stock by Parent or Merger Sub or the consummation of the Merger or the other
Transactions, (ii) impose limitations on the ability of Parent or its Affiliates
effectively to exercise full rights of ownership of all shares of the Surviving
Corporation or (iii) result in a Governmental Investigation or material
Governmental Damages being imposed on Parent or the Surviving Corporation or any
of their respective Affiliates;
(f) No Restraint. No Restraint that would reasonably be expected to
result, directly or indirectly, in any of the effects referred to in Section
6.2(e) shall be in effect;
(g) Certifications. None of the Company's or its Subsidiaries'
explosive detection systems shall have failed to maintain their respective
certifications (or successor certifications) from the Transportation Security
Administration or the Federal Aviation Administration, or failed to obtain
re-certification if necessary.
(h) Director Resignations. Parent shall have received written
resignation letters from each of the members of the Board of Directors of the
Company effective as of the Effective Time;
(i) Xxxxxxxx-Xxxxx Certifications. With respect to any applicable
reports of the Company filed with the SEC after the date of this Agreement,
neither the chief executive officer nor the chief financial officer of the
Company shall have failed to provide the necessary certifications (i) as and in
the form required under Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and (ii)
as required under Section 906 of the Xxxxxxxx-Xxxxx Act of 2002 and in the form
previously filed by the Company.
SECTION 6.3 Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the satisfaction (or
waiver, if permissible under applicable Law) on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement (without giving
effect
47
to any materiality or Parent Material Adverse Effect qualification) shall be
true and correct as of the date of this Agreement and as of the Closing Date as
though made on the Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such earlier
date), except as would not reasonably be expected to have, individually or in
the aggregate, a Parent Material Adverse Effect;
(b) Performance of Obligations of Parent and Merger Sub. Parent and
Merger Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date; and
(c) Officer's Certificate. The Company shall have received a
certificate, signed on behalf of Parent by a Vice President of Parent,
certifying as to the matters set forth in Sections 6.3(a) and 6.3(b).
SECTION 6.4 Frustration of Closing Conditions. None of the Company,
Parent or Merger Sub may rely on the failure of any condition set forth in
Section 6.1, 6.2 or 6.3, as the case may be, to be satisfied if such failure was
caused by such party's failure to perform any of its obligations under this
Agreement.
ARTICLE VII
Termination
SECTION 7.1 Termination. This Agreement may be terminated and the
Transactions abandoned at any time prior to the Effective Time:
(a) by the mutual written consent of the Company and Parent duly
authorized by each of their respective Boards of Directors; or
(b) by either of the Company or Parent:
(i) if the Merger shall not have been consummated on or before
October 31, 2004 (the "Initial Outside Date"); provided, however, that:
(A) if the Merger shall not have been consummated on or before such date
because the condition set forth in Section 6.1(b) (or in Section 6.2(e) or
6.2(f) as a result of an action, investigation, proceeding, litigation or
Restraint under Competition Laws) has not been satisfied or waived, then
such date shall be automatically extended to January 31, 2005 (the
"Outside Date"), and (B) the right to terminate this Agreement under this
Section 7.1(b)(i) shall not be available to a party if the failure of the
Merger to have been consummated on or before the Initial Outside Date or
the Outside Date, as the case may be, was primarily due to the failure of
such party to perform any of its obligations under this Agreement;
(ii) if any Restraint having the effect set forth in Section 6.1(c)
shall be in effect and shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement under this
Section 7.1(b)(ii) shall not be available to a party if such Restraint was
primarily due to the failure of such party to perform any of its
obligations under this Agreement; or
48
(iii) if the Company Stockholder Approval shall not have been
obtained at the Company Stockholders Meeting duly convened therefor or at
any adjournment or postponement thereof; or
(c) by Parent:
(i) if the Company shall have breached or failed to perform any of
its representations, warranties, covenants or agreements set forth in this
Agreement, or if any representation or warranty of the Company shall have
become untrue, in either case such that the conditions set forth in
Section 6.2(a) or (b) would not be satisfied (a "Terminating Company
Breach"); provided, however, that if such Terminating Company Breach is
curable by the Company by the Initial Outside Date or the Outside Date, as
the case may be, through the exercise of reasonable best efforts and for
so long as the Company continues to exercise such reasonable best efforts,
Parent may not terminate this Agreement under this Section 7.1(c)(i);
(ii) if any Restraint having the effect of granting or implementing
any relief referred to Section 6.2(e) shall be in effect and shall have
become final and nonappealable; provided, however, that the right to
terminate this Agreement under this Section 7.1(c)(ii) shall not be
available to Parent if such Restraint was primarily due to the failure of
Parent or Merger Sub to perform any of its respective obligations under
this Agreement; or
(iii) if (x) the Company enters into a Company Acquisition Agreement
or (y) the Board of Directors of the Company or any committee thereof (A)
shall have withdrawn or modified, in a manner adverse to Parent, the
Company Board Recommendation or its approval of any of the Transactions,
(B) shall have approved or recommended to the stockholders of the Company
a Takeover Proposal, (C) shall not have rejected any proposal respecting a
Takeover Proposal within ten (10) business days of the making thereof
(including, for these purposes, by taking no position with respect to the
acceptance of a tender offer or exchange offer by its stockholders, which
shall constitute a failure to recommend against acceptance of such tender
offer or exchange offer) or (D) shall have failed to publicly reconfirm
the Company Board Recommendation or its approval of any of the
Transactions within five (5) business days after receipt of a written
request from Parent that it do so if such request is made following the
making by any Person of a Takeover Proposal; or
(d) by the Company:
(i) if Parent or Merger Sub shall have breached or failed to perform
any of its representations, warranties, covenants or agreements set forth
in this Agreement, or if any representation or warranty of Parent or
Merger Sub shall have become untrue, in either case such that the
conditions set forth in Section 6.3(a) or (b) would not be satisfied (a
"Terminating Parent Breach"); provided, however, that if such Terminating
Parent Breach is curable by Parent or Merger Sub by the Initial Outside
Date or the Outside Date, as the case may be, through
49
the exercise of reasonable best efforts and for so long as Parent or
Merger Sub continues to exercise such reasonable best efforts, the Company
may not terminate this Agreement under this Section 7.1(d); or
(ii) if (A) the Company has not breached Section 5.3 (other than
immaterial breaches that have not directly or indirectly resulted in the
making of a Takeover Proposal), (B) the Company Stockholder Approval has
not been obtained (other than as a result of the breach of this Agreement
by the Company) and (C) concurrently the Company enters into a definitive
Company Acquisition Agreement providing for a Superior Proposal in
accordance with Section 5.3; provided that prior thereto or simultaneously
therewith the Company shall have paid or caused to be paid the Termination
Fee to Parent in accordance with Section 7.3 (and such termination of this
Agreement by the Company shall not take effect unless and until the
Termination Fee shall have been paid to Parent).
SECTION 7.2 Effect of Termination. In the event of the termination
of this Agreement as provided in Section 7.1, written notice thereof shall be
given to the other party or parties, specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall forthwith become null
and void (other than the provisions of the first sentence of Section 3.19, the
penultimate sentence of Section 5.6, Sections 5.10, 7.2 and 7.3, and Article
VIII, all of which shall survive termination of this Agreement), and there shall
be no liability on the part of Parent, Merger Sub or the Company or their
respective directors, officers and Affiliates, except (i) the Company may have
liability as provided in Section 7.3, and (ii) nothing shall relieve any party
from liability for fraud or any willful breach of this Agreement or willful
misrepresentation herein.
SECTION 7.3 Termination Fee.
(a) In the event that (A)(x) this Agreement is terminated by the
Company or Parent pursuant to (i) Section 7.1(b)(i) (and (1) at the time of such
termination a vote to obtain the Company Stockholder Approval has not been held,
(2) prior to such termination a Takeover Proposal shall have been made known to
the Company or shall have been made directly to its stockholders generally, or
any Person shall have publicly announced an intention (whether or not
conditional or withdrawn) to make a Takeover Proposal and (3) the failure to
hold such vote is not the result of a breach of this Agreement by Parent) or
(ii) Section 7.1(b)(iii) (and, prior to such termination, a Takeover Proposal
shall have been made known to the Company and announced or disclosed to the
Company's stockholders or shall have been made directly to its stockholders
generally, or any Person shall have publicly announced an intention (whether or
not conditional or withdrawn) to make a Takeover Proposal), and (y) within
twelve (12) months of the date this Agreement is terminated, the Company
consummates any Takeover Proposal or enters into a definitive agreement with
respect to a transaction contemplated by any Takeover Proposal that is
subsequently consummated, (B) this Agreement is terminated by Parent pursuant to
Section 7.1(c)(iii) or (C) this Agreement is terminated by the Company pursuant
to Section 7.1(d)(ii), then in any such event under clause (A), (B) or (C) of
this Section 7.3(a), the Company shall pay to Parent a
50
termination fee of $32,000,000 in cash (the "Termination Fee"). For purposes of
this Section 7.3, 40% shall be substituted for 15% in the definition of Takeover
Proposal.
(b) Any payment required to be made pursuant to clause (A) of
Section 7.3(a) shall be made to Parent promptly following (and in any event not
later than two business days after) the consummation of any transaction
contemplated by a Takeover Proposal; any payment required to be made pursuant to
clause (B) of Section 7.3(a) shall be made to Parent promptly following (and in
any event not later than two business days after) termination of this Agreement
by Parent pursuant to Section 7.1(c)(iii)); any payment required to be made
pursuant to clause (C) of Section 7.3(a) shall be made to Parent prior to or
simultaneously with (and as a condition to the effectiveness of) termination of
this Agreement by the Company pursuant to Section 7.1 (d)(ii).
(c) In the event that the Company shall fail to pay the Termination
Fee required pursuant to this Section 7.3 when due, such fee shall accrue
interest for the period commencing on the date such fee became past due, at a
rate equal to the rate of interest publicly announced by Citibank from time to
time, in the City of New York, as such bank's Prime Lending Rate. In addition,
if the Company shall fail to pay such fee, when due, the Company shall also pay
to Parent all of Parent's costs and expenses (including attorneys' fees) in
connection with efforts to collect such fee. The Company acknowledges that the
fee and the other provisions of this Section 7.3 are an integral part of the
Transactions and that, without these agreements, Parent would not enter into
this Agreement.
ARTICLE VIII
Miscellaneous
SECTION 8.1 Nonsurvival of Representations and Warranties. Except as
otherwise provided in this Agreement, the representations, warranties and
agreements of each party hereto shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any other party
hereto, any Person controlling any such party or any of their officers,
directors or representatives, whether prior to or after the execution of this
Agreement, and no information provided or made available shall be deemed to be
disclosed in this Agreement or in the Company Disclosure Schedule, except to the
extent actually set forth herein or therein. The representations, warranties and
agreements in this Agreement shall terminate at the Effective Time or, except as
otherwise provided in Section 7.2, upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that the agreements set
forth in Article II and Sections 5.8, 5.9, 5.10 and 5.11 and any other agreement
in this Agreement which contemplates performance after the Effective Time shall
survive the Effective Time indefinitely and those set forth in Sections 5.10,
7.2 and 7.3 and this Article VIII shall survive termination indefinitely. The
Confidentiality Agreement shall (i) survive termination of this Agreement in
accordance with its terms and (ii) terminate as of the Effective Time.
51
SECTION 8.2 Amendment or Supplement. At any time prior to the
Effective Time, this Agreement may be amended or supplemented in any and all
respects, whether before or after receipt of the Company Stockholder Approval,
by written agreement of the parties hereto, by action taken by their respective
Boards of Directors; provided, however, that following approval of the
Transactions by the stockholders of the Company, there shall be no amendment or
change to the provisions hereof which by Law would require further approval by
the stockholders of the Company without such approval.
SECTION 8.3 Extension of Time, Waiver, Etc. At any time prior to the
Effective Time, any party may, subject to applicable Law, (a) waive any
inaccuracies in the representations and warranties of any other party hereto,
(b) extend the time for the performance of any of the obligations or acts of any
other party hereto or (c) waive compliance by the other party with any of the
agreements contained herein or, except as otherwise provided herein, waive any
of such party's conditions. Notwithstanding the foregoing, no failure or delay
by the Company, Parent or Merger Sub in exercising any right hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right hereunder. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
SECTION 8.4 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, in whole or in
part, by operation of Law or otherwise, by any of the parties without the prior
written consent of the other parties, except that Merger Sub may assign, in its
sole discretion, any of or all its rights, interests and obligations under this
Agreement to any wholly owned Subsidiary of Parent, but no such assignment shall
relieve Merger Sub of any of its obligations hereunder. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors and permitted
assigns. Any purported assignment not permitted under this Section shall be null
and void.
SECTION 8.5 Counterparts; Facsimile; Electronic Transmission. This
Agreement may be executed in counterparts (each of which shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties. The exchange
of copies of this Agreement and of signature pages by facsimile or electronic
transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the parties transmitted by facsimile or electronic
transmission shall be deemed to be their original signatures for all purposes.
SECTION 8.6 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Company Disclosure Schedule, the Confidentiality Agreement and
the Joint Defense Agreement (a) constitute the entire agreement, and supersede
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and thereof
and (b) except for the provisions of
52
Section 5.8, are not intended to and shall not confer upon any Person other than
the parties hereto any rights or remedies hereunder.
SECTION 8.7 Governing Law; Waiver of Jury Trial.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the principles of
conflicts of laws thereof.
(b) Each of the parties hereto hereby irrevocably waives any and all
rights to trial by jury in any legal proceeding arising out of or related to
this Agreement or the Transactions.
SECTION 8.8 Specific Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.
It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Chancery Court
located in the City of Wilmington, State of Delaware, without bond or other
security being required, this being in addition to any other remedy to which
they are entitled at law or in equity.
SECTION 8.9 Consent to Jurisdiction. Each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of the Chancery Court
located in the City of Wilmington, State of Delaware, in the event any dispute
arises out of this Agreement or any of the Transactions, (ii) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (iii) agrees that it will not bring
any action relating to this Agreement or any of the Transactions in any court
other than the Chancery Court located in the City of Wilmington, State of
Delaware.
SECTION 8.10 Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be deemed given if
delivered personally, facsimiled (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses:
53
If to Parent or Merger Sub, to:
GE Infrastructure
000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with copies (which shall not constitute notice) to:
General Electric Company
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Vice President and Senior Counsel, Transactions
Facsimile: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Company, to:
Invision Technologies, Inc
0000 Xxxxxxx Xxxx.
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 P.M. in the place of
receipt and such day is a business day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
54
SECTION 8.11 Severability. If any term or other provision of this
Agreement is determined by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other terms, provisions and conditions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
Transactions are fulfilled to the extent possible.
SECTION 8.12 Definitions.
(a) As used in this Agreement, the following terms have the meanings
ascribed thereto below:
"Affiliate" shall mean, as to any Person, any other Person that,
directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For this purpose, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person, whether through the ownership
of securities or partnership or other ownership interests, by contract or
otherwise.
"business day" shall mean a day except a Saturday, a Sunday or other
day on which the SEC or banks in the City of New York are authorized or required
by Law to be closed.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Company NDT Business" shall mean the non-destructive testing
business of Yxlon International Holding GmbH and its Subsidiaries (other than
Yxlon International Security GmbH) and Yxlon International Inc., including the
employees of such business.
"Company Stock Plans" shall mean the following plans of the Company:
InVision 1991 Equity Incentive Plan, InVision 2000 Non-Officer Equity Incentive
Plan, InVision 2000 Equity Incentive Plan, InVision Change in Control Equity
Acceleration Plan, InVision 2002 Employee Stock Purchase Plan and Quantum
Magnetics 1994 Qualified and Non-Qualified Stock Option Plan.
"Filed Company SEC Documents" means the Company SEC Documents filed
by the Company and publicly available prior to the date of this Agreement and
the 2003 Form 10-K.
"GAAP" shall mean generally accepted accounting principles in the
United States.
55
"Government Contract" means a Contract between the Company, any of
its Subsidiaries or any of their respective Affiliates (excluding natural
persons and entities controlled by such persons) on the one hand, and any
Governmental Authority on the other hand, including any facilities Contract for
the use of government-owned facilities. Government Contracts include, as
appropriate, all bids and proposals submitted to any Governmental Authority by
the Company, any of its Subsidiaries or any of their respective Affiliates
(excluding natural persons and entities controlled by such persons) that may
result in the award of a Government Contract.
"Government Subcontract" means a Contract that is a subcontract
between the Company, any of its Subsidiaries or any of their respective
Affiliates (excluding natural persons and entities controlled by such persons)
on the one hand, and any third party on the other hand, relating to a Contract
between such third party and (a) any Governmental Authority or (b) another party
where the ultimate contracting party is a Governmental Authority. Government
Subcontract includes all bids and proposals submitted to any party that may
result in the award of a Government Subcontract.
"Governmental Authority" shall mean any government, court,
arbitrator, regulatory or administrative agency, commission or authority or
other governmental instrumentality, federal, state or local, domestic, foreign
or multinational.
"Governmental Damages" shall mean (i) any penalties or fines paid by
the Company or any of its Subsidiaries to a Governmental Authority or (ii) any
restitution paid by the Company or any of its Subsidiaries to a third party, in
each case, resulting from the (x) conviction (including as a result of the entry
of a guilty plea, a consent judgment or a plea of nolo contendre) of the Company
or any of its Subsidiaries of a crime or (y) settlement with a Governmental
Authority for the purpose of closing a Governmental Investigation.
"Governmental Investigation" shall mean an investigation by a
Governmental Authority for the purpose of imposing criminal sanctions on the
Company or any of its Subsidiaries.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Intellectual Property" of any Person shall mean all intellectual
property rights arising from or in respect of the following, whether protected,
created or arising under any Law, including: (i) all patents and applications
therefor, including continuations, divisionals, continuations-in-part, or
reissues of patent applications and patents issuing thereon (collectively,
"Patents"); (ii) all trademarks, service marks, trade names, service names,
brand names, trade dress rights, logos, Internet domain names and corporate
names, together with the goodwill associated with any of the foregoing, and all
applications, registrations and renewals thereof, (collectively, "Marks"); (iii)
copyrights and registrations and applications therefor, works of authorship and
mask work rights (collectively, "Copyrights"); (iv) discoveries, concepts,
ideas, research and development, know-how, formulae, inventions, compositions,
manufacturing and production processes
56
and techniques, technical data, procedures, designs, drawings, specifications,
databases and other proprietary and confidential information, including customer
lists, supplier lists, pricing and cost information, and business and marketing
plans and proposals, in each case excluding any rights in respect of any of the
foregoing that comprise or are protected by Copyrights or Patents (collectively,
"Trade Secrets"); and (v) all Software.
"Intellectual Property License" shall mean any grant to a Person of
any right to use any Intellectual Property.
"Joint Defense Agreement" shall mean that Joint Defense Agreement
among Parent, the Company and the other parties thereto.
"Knowledge" of any Person that is not an individual shall mean, with
respect to any matter in question, the actual knowledge after due inquiry of
such Person's executive officers and all other officers and managers having
primary responsibility relating to the applicable matter.
"Options" shall mean options representing the right to acquire
shares of Company Common Stock.
"Person" shall mean an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity,
including a Governmental Authority.
"Software" means any and all (i) computer programs, including any
and all software implementations of algorithms, models and methodologies,
whether in source code or object code, (ii) databases and compilations,
including any and all data and collections of data, whether machine readable or
otherwise, (iii) descriptions, flow-charts and other work product used to
design, plan, organize and develop any of the foregoing, screens, user
interfaces, report formats, firmware, development tools, templates, menus,
buttons and icons, and (iv) documentation including user manuals and other
training documentation related to any of the foregoing.
"Subsidiary" when used with respect to any party, shall mean any
corporation, limited liability company, partnership, association, trust or other
entity the accounts of which would be consolidated with those of such party in
such party's consolidated financial statements if such financial statements were
prepared in accordance with GAAP, as well as any other corporation, limited
liability company, partnership, association, trust or other entity of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power (or, in the case of a partnership,
more than 50% of the general partnership interests) are, as of such date, owned
by such party or one or more Subsidiaries of such party or by such party and one
or more Subsidiaries of such party.
"Technology" shall mean, collectively, all designs, formulae,
algorithms, procedures, methods, techniques, ideas, know-how, research and
development, technical data, programs, subroutines, tools, materials,
specifications, processes, inventions (whether patentable or unpatentable and
whether or not reduced to practice), apparatus,
57
creations, improvements, works of authorship and other similar materials, and
all recordings, graphs, drawings, reports, analyses, and other writings, and
other tangible embodiments of the foregoing, in any form whether or not
specifically listed herein, and all related technology.
"Transactions" refers collectively to this Agreement and the
transactions contemplated hereby, including the Merger, and the transactions
contemplated thereby.
The following terms are defined on the page of this Agreement set
forth after such term below:
2003 Form 10-K.............................................................. 11
Agreement................................................................... 1
Appraisal Shares............................................................ 3
Balance Sheet Date.......................................................... 13
Bankruptcy and Equity Exception............................................. 10
Certificate................................................................. 3
Certificate of Merger....................................................... 1
Closing..................................................................... 1
Closing Date................................................................ 1
COBRA....................................................................... 20
Company..................................................................... 1
Company Acquisition Agreement............................................... 38
Company Board Recommendation................................................ 10
Company Charter Documents................................................... 8
Company Common Stock........................................................ 2
Company Disclosure Schedule................................................. 6
Company Material Adverse Effect............................................. 7
Company Plans............................................................... 17
Company Preferred Stock..................................................... 8
Company SEC Documents....................................................... 11
Company Stockholder Approval................................................ 10
Company Stockholders Meeting................................................ 33
Competition Laws............................................................ 42
Confidentiality Agreement................................................... 42
Contract.................................................................... 10
Convertible Notes........................................................... 8
D&O Insurance............................................................... 44
Deutsche Bank............................................................... 30
DGCL........................................................................ 1
DOJ......................................................................... 41
Dresdner.................................................................... 30
Effective Time.............................................................. 2
Embedded Licenses........................................................... 24
Employees................................................................... 17
Engagement Letters.......................................................... 30
ERISA....................................................................... 17
ERISA Affiliates............................................................ 18
Exchange Act................................................................ 11
Export Control Requirements................................................. 14
Fairness Opinions........................................................... 30
Foreign Antitrust Laws...................................................... 11
FTC......................................................................... 41
Indemnitees................................................................. 43
Indenture................................................................... 8
Initial Outside Date........................................................ 48
Intellectual Property Rights................................................ 27
labor organization.......................................................... 20
Laws........................................................................ 14
Liens....................................................................... 8
Material Contract........................................................... 24
Merger...................................................................... 1
Merger Consideration........................................................ 3
Merger Sub.................................................................. 1
Multiemployer Plan.......................................................... 17
Notice...................................................................... 39
Option...................................................................... 5
Option Consideration........................................................ 5
Outside Date................................................................ 48
Parent...................................................................... 1
Parent Material Adverse Effect.............................................. 32
Paying Agent................................................................ 4
Payment Fund................................................................ 4
PBGC........................................................................ 19
Permits..................................................................... 15
Policies.................................................................... 29
Protected Period............................................................ 44
Proxy Statement............................................................. 10
Representatives............................................................. 37
Restraints.................................................................. 46
SEC......................................................................... 6
Section 203................................................................. 30
Section 262................................................................. 3
58
Securities Act.............................................................. 8
Subsidiary Documents........................................................ 8
Superior Proposal........................................................... 40
Surviving Corporation....................................................... 1
Takeover Proposal........................................................... 39
Tax Returns................................................................. 16
Taxes....................................................................... 16
Terminating Company Breach.................................................. 49
Terminating Parent Breach................................................... 49
Termination Fee............................................................. 51
WARN........................................................................ 21
SECTION 8.13 Interpretation.
(a) When a reference is made in this Agreement to an Article, a
Section, Exhibit or Schedule, such reference shall be to an Article of, a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted successors and assigns.
(b) The parties hereto have participated jointly in the negotiation
and drafting of this Agreement and, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as jointly
drafted by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.
[signature page follows]
59
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
GENERAL ELECTRIC COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and CEO
GE Infrastructure
JET ACQUISITION SUB, INC.
By: /s/ Xxxxx Xxxx
-------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
INVISION TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and CEO
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and COO
[AGREEMENT AND PLAN OF MERGER]
